Displaying items by tag: Myanmar

Myanmar: Police say that protestors rioting about the Alpha Cement plant at Patheingyi, Kyaukse district in the Mandalay region in mid-May 2019 caused over US$40,000 worth of damage to the site. Residents armed with slings and rocks entered the site and set fire to buildings and vehicles, according to the Myanmar Times newspaper. A petrol bomb was also thrown at a building. The police are still looking for several people in relation to the incident.

Local residents were complaining about compensation related to the project as well as the use of Chinese nationals at the site. The plant, previously known as Myanmar Conch Cement, is a joint venture between Myanmar's Myint Investment Group and China's Anhui Conch. The unit is currently being upgraded to a production capacity of 5000t/day. Construction work started in late 2017. The unit is expected to be operational in 2021.

Myanmar: 17 residents have been injured in a protest against the Alpha Cement Plant at Patheingyi in the Kyaukse district or the Mandalay region. Police fired rubber bullets and tear gas at the protestors, according to Radio Free Asia. The local residents were complaining about compensation for a road that is being built as part of the project. Concerns have also been raised over the use of Chinese nationals at the site.

The Alpha Cement Plant, previously known as Myanmar Conch Cement, is a joint venture between Myanmar's Myint Investment Group and China's Anhui Conch. The unit is currently being upgraded to a production capacity of 5000t/day. Construction work started in late 2017.

China: Anhui Conch’s revenue grew by 70.5% year-on-year to US$19.1bn in 2018 from US$11.2bn in 2017. Its sales volumes of cement rose by 25% to 368Mt. Its net profit increased by 88% to US$4.44bn from US$2.36bn. The cement producer attributed this to ‘significant’ growth in its prices.

During the reporting year the group commissioned four cement grinding units for its Yueqing Conch Cement and Jiande Conch subsidiaries. It also acquired Guangdong Qingyuan Cement, increasing its production capacity of clinker and cement by 2.7Mt and 4Mt respectively.

Outside of China, the group completed and commissioned two clinker production lines and four cement grinding units at Battambang Conch Cement in Cambodia and PT Conch North Sulawesi Cement in Indonesia. Its Luangprabang Conch Cement project in Laos has moved to the equipment installation phase and construction of Myanmar Conch Cement (Mandalay) in Myanmar has begun. Preliminary work has also started for the Vientiane Conch Cement project in Laos and the Qarshi Conch Cement project in Uzbekistan.

At the end of 2018 the group has a clinker and cement production capacities of 252Mt/yr and 353Mt/yr respectively.

Myanmar: The Ministry of Natural Resources and Environmental Conservation (MNREC) is seeking expressions of interest from foreign and local investors to run a feasibility project ahead of building a new cement plant at Hakha Township in Chin State. Early studies suggest that the area has sufficient limestone reserves to support a 5000t/day plant, according to the Myanmar Times newspaper. A new unit in the region is expected to boost the local economy as Chin State has no cement plants.

Myanmar: General Saw Johnny, chief of staff of the Karen National Liberation Army (KNLA), says that the group has not granted permission for Yadanar Sai Kaung Myat Kyaw Company to build a new cement plant at Hnget Pyaw Taw near Hlaingbwe. The representative of the military wing of the Karen National Union, a local political organisation, said that it had met with the company but that no final decision had been made, according to Burma News International. Yadanar Sai Kaung Myat Kyaw Company plans to build a 10,000t/day plant with an investment of US$760m. It intends to pay compensation to the owners of farmlands and plantations that are included in the project area and it has reached an initial agreement with respective state ministry to build the plant.

Myanmar: Three local activists have been arrested for protesting against a new cement plant being built at Patheingyi Township in Mandalay Region. In late July 2018 local residents marched on environmental grounds from Mandalay to Nay Pyi Taw in protest against the construction of a 5000t/yr coal-fired cement plant in Dahattaw Village-tract, Patheingyi Township, according to the Asia News Network. However, police intervened and started legal action against some of the protestors.

China: Anhui Conch’s sales revenue grew by 35% year-on-year to US$11.9bn in 2017 from US$8.85bn in 2016. Its net profit nearly doubled to US$2.51bn from US$1.36bn. The cement producer said that it had, ‘seized the favourable opportunities arising from the state’s further deepening of supply-side structural reform and the promotion of off-peak season production.’

During the year Anhui Conch opened eight cement grinding plants including Quanjiao Conch Cement, Anhui Xuancheng Conch Cement and Nantong Conch Cement. Outside of China the company completed phase two of its Merak grinding plant in Indonesia and started cement production and completed construction of the North Sulawesi Conch plant in Indonesia and the Battambang Conch plant in Cambodia. The units in Indonesia and Cambodia are due to start production in 2018. A new plant, Luang Prabang Conch, is being built in Laos and preliminary work on projects at Volga Conch in Russia, Vientiane in Laos and Mandalay in Myanmar is underway. At the end of 2017 Anhui Conch says it has a clinker and cement production capacity of 246t/yr and 335Mt/yr respectively.

The cement producer also announced that its Baimashan Cement plant was intending to start operating a CO₂ collection and purification pilot project in the first half of 2018. The initiative is part of the group’s moves to implement the government’s low-carbon development strategy.

A couple of news stories this week from Myanmar present an opportunity to look at the country. Lafarge has opened a cement repacking plant in the Thilawa special economic zone (SEZ). Upcountry meanwhile, Anhui Conch has had a joint venture approved by the government for an upgrade to an existing cement plant in Kyaukse.

Towards the end of 2013 the government announced that 13 companies were to establish joint ventures with the local state-owned cement plants. In addition the Myanmar Investment Commission had approved the construction of nine new cement plants with an aim of a target cement production capacity of 10.53Mt/yr. Following this, Siam Cement Group's on-going investment in a 1.8Mt/yr plant is due for completion in 2016. Semen Indonesia have been pushing for a joint venture since mid-2014 although it was still trying to agree terms in September 2014, according to local media. Italcementi's chief executive Carlo Pesenti also expressed his company's interest in setting up a joint venture in early 2014.

Association of Southeast Asian Nations (ASEAN) investment bank CIMB placed cement demand in Myanmar at 4Mt in 2012 and a local cement production capacity of 3Mt/yr. Cement consumption was placed at 76kg/capita for the country's population of 52.8 million. In contrast, Thai cement engineering supplier LV Technology reported demand of 6Mt in 2012. CIMB recorded Myanmar's capacity utilisation rate at 60%. Cement sales were broken down as 95% by bag and 5% by bulk.

This kind of supply-demand gap excites foreign investors. Neighbouring Thailand has a consumption of 515kg/capita, Myanmar imports cement from Thailand, Indonesia and India and the country's GDP growth rate is currently estimated to be around 8%.

Yet what's notable about Myanmar's industry are the high number of small, low production capacity cement plants. Many of them are wet process plants. Only one plant is reported as being capable of producing over 0.5Mt/yr with the Siam Cement plant project due to significantly bust this record when it is commissioned in 2016. Limited limestone deposits in the country may also make plants larger than 1.5Mt/yr unviable. Fuel is also an issue, with LV Technology advocating a wholesale industry conversion from state-subsidised gas to coal due to power shortages and impending competition issues.

In 2015 Myanmar is set to enact free trade tariffs from its ASEAN membership. Without protection or preparation, its cement plants could face serious consequences from cheaper imports from Thailand, Indonesia and Vietnam. The move by the government to encourage joint ventures with foreign partners looks like one way to mitigate this. In a market report in 2013 CIMB described the situation for investors as 'high-growth, high-barrier.' This seems to be an apt description given the experiences of Semen Indonesia.

One of the ideas aired by several speakers at last week's 6th Brazilian Cement Congress was that using cement as a construction material is inherently a sustainable option.

The reasons for this included the durability of cement's construction products and the role cement plays in improving the living standards of a country. For example, under the onslaught of extreme weather like hurricanes, concrete structures are more likely to remain standing. Or, for a country like Brazil with sections of society living in long-term 'temporary' buildings in its favelas or shanty towns, providing affordable cement to help the country build better housing for its inhabitants is the only sustainable future that could be considered.

Perhaps in line with this concept of cement-as-sustainable-construction-material we see Semen Indonesia this week announcing expansion plans in three countries in South and Southeast Asia.

In West Sumatra a Semen Indonesia subsidiary has started building a 3Mt/yr cement plant in Padang. Then in Bangladesh Semen Indonesia revealed its intention to buy a 1Mt/yr plant. Finally, the state-owned Indonesian cement producer said that its Semen Gresik subsidiary was planning to build a new cement plant in Central Java at Rembang in June 2014. From previous press releases we can see that both new plants are FLSmidth builds. Both orders were announced in early 2014. Each has a capacity of 8000t/day.

The plans to expand outside of Indonesia echo reports that Semen Indonesia was set to buy a minority share in a Myanmar cement producer. Although the producer was unnamed as of early May 2014, Semen Indonesia CEO Dwi Soetjipto valued the stake at US$30m and the producer's production capacity at 1.5Mt/yr in comments to the Jakarta Globe.

Altogether the two new plants in Indonesia will place Semen Indonesia's total cement production capacity at 40Mt/yr by 2017 according to company figures. This would be enough to place the company within the top 20 of the world's largest cement producers by production capacity following the research from Global Cement's 'Top 75 global cement companies'.

In a nice coincidence, the company with a production capacity of 40Mt/yr on that list was Eurocement. Last week the Russian cement producer announced that it had signed contracts worth Euro387m with Chinese companies - including Sinoma, CNB, Sinomach and CAMC Engineering Co - to add 17Mt/yr cement production capacity across six plants in Russia. Another six or seven more construction agreements for cement plants are also expected to be signed in the coming months.

Certainly for the countries Semen Indonesia is focusing on – Indonesia, Bangladesh and Myanmar, with low gross domestic product per capita – providing the raw material for stronger and more durable buildings covers some of the sustainability bases. Yet if all these new plants only use fossil fuels and are subject to few environmental restrictions then that undermines some of this. However, whether all this expansion is sustainable or not, the cement industry never remains stationary.

There has been an interesting knock-on effect from further economic integration of the Association of Southeast Asian Nations (ASEAN) this week. Holcim Philippines may delay the construction of a 2.5Mt/yr cement plant in Bulacan province due to a drop in import tariffs in 2015. Vietnam or Indonesia were named as possible sources of clinker due to their excess capacity.

The ASEAN group comprises 10 countries including Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam, Laos, Myanmar and Cambodia. Their respective cement production capacities range from 0.3Mt/yr at a clinker grinding plant in Singapore to Indonesia's integrated cement production capacity of 45Mt/yr. In total the ASEAN countries have a production capacity of around 220Mt/yr for a population of about 600m with national gross domestic products (GDP) per capita ranging from US$900 (Laos) to US$52,000 (Singapore).

One scenario for cement producers in the ASEAN countries is that they might be swamped by exports from places like Vietnam. That country had a production capacity of 73Mt/yr in 2013 with cement sales predicted to rise to 63Mt in 2014. Assuming the government released figures are correct, that leaves at least a 10Mt of cement production-sales gap that could torpedo a neighbouring country's cement industry in the free trade area.

Indonesia, the other potential source of clinker that Holcim Philippines mentioned, has seen construction growth slow and production capacity grow. Holcim reported in its nine-month report in November 2013 that, while national cement sales had risen by 5.3% to 41.6Mt, supply capacity had risen by 9% to 59Mt/yr. Assuming equal sales distribution throughout this suggests a capacity gap of 4Mt.

Some politicians in the region have complained that impending free trade area will create winners and losers. At a recent ASEAN meeting in Yangon, Myanmar a Myanmar planning minister raised the issue of a development gap within the ASEAN region calling for renegotiation for countries like Myanmar, Cambodia and Laos.

Meanwhile both the cement industries in Vietnam and Indonesia have clearly anticipated the implications of the ASEAN Economic Community. The Vietnam National Cement Association expects to remain competitive within the ASEAN region and against Chinese imports after 2015. In Indonesia State Enterprises Minister Dahlan Iskan stated this week that the cement industry was ready for the ASEAN Economic Community thanks to the government's strategy to consolidate its major cement producers within one company, Semen Indonesia. Consistent cement industry growth in South East Asia may be about to change.