
Displaying items by tag: Outlook
Siam Cement Group forecasts 5% sales growth in 2025
03 February 2025Thailand: Siam Cement Group (SCG) has forecast a 5% year-on-year rise in its full-year revenues due to economic revival and the government’s current stimulus package. President and CEO Thammasak Sethaudom said that increased customer purchasing power in Vietnam will raise SCG’s local cement and building material sales
SCG’s additional focuses will be on entering the Australia and North America markets and developing its high value-added products segment.
Vietnamese cement surplus to remain in 2025
03 February 2025Vietnam: The general director of Vietnam Cement Industry Corporation (VICEM), Nguyen Thanh Tung, says that Vietnam will suffer continued cement overcapacity amid high production costs in 2025. Full-year production is forecast at 125Mt, 96% greater than an expected domestic demand of 63.5Mt. Việt Nam News has reported that Vietnam’s cement exports face an on-going investigation in Taiwan, and are already subject to anti-dumping duties in the Philippines.
VICEM aims to raise its domestic clinker sales volumes by 8% year-on-year to 18Mt, in order to generate sales of US$1.16bn. To this end, Tung urged the government to adopt cement reinforcement in roadbuilding, as well as lifting the export tax on cement.
New developments in alternative cement
16 October 2024One unusual thing about coverage of cement in the media is the way that discussions often centre precisely on its absence – that is, on alternatives to cement. These alternatives boast unique chemistries and performance characteristics, but are all produced without Portland cement clinker. They are generally called ‘alternative cements,’ perhaps because ‘cement-free cement’ does not have such a commercially viable ring to it. This contradictory tendency reached a new high in the past week, with developments in alternative cement across Asia, Europe, the Middle East and North America. Together, they hint at a more diverse future for the ‘cement’ industry than the one we know today.
Asia
In Indonesia, Suvo Strategic Minerals has concluded tests with Makassar State University of a novel nickel-slag-based cement. Huadi Nickel-Alloy Indonesia supplied raw materials, and tests showed a seven-day compressive strength of 37.5MPa. Suvo Strategic Minerals says that a partnership with Huadi Nickel-Alloy Indonesia for commercial production is a likely next step.
Europe
Cement producer Mannok and minerals company Boliden partnered with the South Eastern Applied Materials (SEAM) research centre in Ireland to launch a project to develop supplementary cementitious materials (SCMs) from shale on 7 October 2024. The project will additionally investigate CO2-curing of cement paste backfill for use in mines. Irish state-owned global commerce agency Enterprise Ireland has contributed €700,000 in funding.
UK-based SCM developer Karbonite expects to launch trial production of its olivine-based SCM with a concrete company in 2025. The start-up launched Karbonite Group Holding BV, with offices in the Netherlands, to facilitate this new phase. Karbonite’s SCM is activated at 750 – 850°C and sequesters CO2 in the activation process, resulting in over 56% lower CO2 emissions than ordinary Portland cement (OPC). Managing director Rajeev Sood told Global Cement that talks are already underway for subsequent expansions into the UAE and India.
Back in the UK, contractor John Sisk & Son has received €597,000 from national innovation agency Innovate UK. John Sisk & Son is testing fellow Ireland-based company Ecocem’s <25% clinker cement technology in concrete for use in its on-going construction of the Wembley Park mixed development in London.
At the same time, Innovate UK granted a further €3.23m to other companies for concrete decarbonisation. Recipients included a calcined clay being developed by Cemcor, an SCM being developed from electric arc furnace byproducts by Cocoon, a geopolymer cement technology being developed by EFC Green Concrete Technology UK and an initiative to develop alternative cement from recycled concrete fines at the Materials Processing Institute in Middlesbrough. Also included was the Skanska Costain Strabag joint venture, which is working on the London stretch of the upcoming HS2 railway. The joint venture, along with partners including cement producer Tarmac and construction chemicals company Sika UK, will test low-kaolinite London clay as a raw material with which to produce calcined clay as a cement substitute in concrete structures in HS2’s rail tunnels.
Middle East
Talks are underway between UK-based calcined clay producer Next Generation SCM and City Cement subsidiary Nizak Mining Company over the possible launch of a joint venture in Riyadh, Saudi Arabia. The joint venture would build a 350,000t/yr reduced-CO2 concrete plant, which would use alternative cement based on Next Generation SCM’s calcined clay.
North America
Texas-based SCM developer Solidia Technologies recently patented its carbonatable calcium silicate-based alternative cement, which sequesters CO2 as it cures.
Meanwhile, C-Crete Technologies made its first commercial pour of its granite-based cement-free concrete in New York, US. C-Crete Technologies says that the product offers cost and performance parity with conventional cement, with net zero CO2 emissions. Its raw material is globally more abundant than the limestone used as a raw material for clinker. Other abundantly available feedstocks successfully deployed within C-Crete Technologies’ repertoire include basalt and zeolite.
Across New York State, in Binghamton, KLAW Industries has succeeded in replacing 20% of concrete’s cement content with its powdered glass-based SCM, Pantheon. KLAW Industries has delivered samples to local municipalities and the New York State Department of Transportation. Its success expands the discussion of possible circular cement ingredients from the industrial sphere into post-consumer resources.
In Calgary, Canada, a novel SCM has drawn attention from one of the major cement incumbents: Germany-based Heidelberg Materials. It invested in local construction and demolition materials (CDM)-based SCM developer EnviCore on 9 October 2024. The companies plan to build a pilot plant at an existing Heidelberg Materials CDM recycling centre.
Conclusion
Alternative cement developers are still finding the words to talk about their products. They may be more than ‘supplementary’ up to the point of entirely supplanting 100% of clinker. Product webpages offer ‘hydraulic binder,’ ‘pozzolan’ and even ‘cement.’ As alternative ‘cements’ are developed, they build on the work of pioneers like Joseph Aspdin and Louis Vicat. Start-ups and their backers are now reaching commercial offerings, on a similar-but-different footing to cement itself. None of these novel materials positions itself as the sole, last-minute ‘super sub’ in the construction sector’s confrontation with climate change. Rather, they are a package of solutions which can combine into a net zero-emissions heavy building materials offering, hopefully before 2050.
Related to this is the need for ‘technology neutral’ standards, as championed this week by the Alliance for Low-Carbon Cement and Concrete (ALCCC), along with 23 other European industry associations, civil society organisations and think tanks. The term may sound new, but the concept is critical to the eventual uptake of alternative cements: standards, the ALCCC says, should be purely performance-based. They ought not attempt to define what technology, for example cement clinker, makes a suitable building material. According to the ALCCC, Europe’s building materials standards are not technology neutral, but instead ‘gatekeep’ market access, to the benefit of conventional cement and the exclusion of ‘proven and scalable low-carbon products.’
At the same time, cement itself is changing. Market research from USD Analytics showed an anticipated 5% composite annual growth rate in blended cement sales between 2024 and 2032, more than doubling throughout the period from US$253bn to US$369bn. If you can’t beat it, blend with it!
Update on the Central Balkans, August 2024
28 August 2024The mountainous eastern shore of the Adriatic Sea and its hinterlands in Europe’s Balkan Peninsula have one of the world’s highest densities of countries: six, across a broad equilateral triangle of 212,000km2. All six states – Albania, Bosnia & Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia – are historically characterised by political non-alignment, carrying over from the Cold War period, and all the more notable for the presence of the EU to the north (Croatia, Hungary and Romania) and east (Bulgaria and Greece).
A nine-plant, 9Mt/yr local cement sector serves the 16.8m-strong population of the unconsolidated ‘bloc.’ Albania has 2.8Mt/yr (31%), Serbia 2.7Mt/yr (30%), Bosnia & Herzegovina 1.6Mt/yr (18%), North Macedonia 1.4Mt/yr (15%) and Kosovo 500,000t/yr (6%), while Montenegro has no cement capacity – for now. Altogether, this gives this quarter of South East Europe a capacity per capita of 539kg/yr. The industry consists entirely of companies based outside of the region. Albania’s two plants are Lebanese and Greek-owned (by Seament Holding and Titan Cement Group respectively). Titan Cement Group also controls single-plant Kosovo and North Macedonia, and competes in the Serbian cement industry alongside larger and smaller plants belonging to Switzerland-based Holcim and Ireland-based CRH, respectively. Lastly, Bosnia & Herzegovina’s capacity is shared evenly between Germany-based Heidelberg Materials and Hungary-based Talentis International Construction, with one plant each.
Lafarge Srbija, Holcim's subsidiary in Serbia, announced plans for its second plant in the country, at Ratari in Belgrade, last week. No capacity has yet emerged, but the plant will cost €110m, making something in the region of the country’s existing 0.6 – 1.2Mt/yr plants seem likely. This would give Serbia over a third of total capacity in the Central Balkans and twice the number of plants of any other country there, expanding its per-capita capacity by 22 – 44%, from a regionally low 408kg/yr to 500 – 590kg/yr.
In announcing the upcoming Ratari cement plant, Lafarge Srbija laid emphasis on its sustainability. The plant will use 1Mt/yr of ash from the adjacent Nikola Tesla B thermal power plant as a raw material in its cement production. In this way, it will help to clear the Nikola Tesla B plant’s 1600 hectare ash dumps, from which only 180,000t of ash was harvested in 2023. Circularity has been front and centre of Holcim’s discussions of its growth in Serbia for some time. When Lafarge Srbija acquired aggregates producer Teko Mining Serbia in 2022, the group indicated that the business would play a part in its development of construction and demolition materials (CDM)-based cement and concrete.
Holcim’s Strategy 2025 growth plan entails bolt-on acquisitions in ‘mature markets,’ backed by strategic divestments elsewhere. Other companies have been more explicit about a realignment towards metropolitan markets, above all in North America, at a time when they are also diversifying away from cement and into other materials. Just why a leading producer should look to build cement capacity in Serbia warrants investigation.
Serbia is the only Central Balkan member of Cembureau, the European cement association. In a European market report for 2022, the association attributed to it the continent’s fastest declining cement consumption (jointly with Slovakia), down by 11% year-on-year. Like the rest of Europe, Serbia is also gradually shrinking, its population dwindling by 0.7% year-on-year to 6.62m in 2023, which limits hopes for a longer-term recovery. Serbia remains the largest country in the Central Balkans, with 39% of the total regional population.
Several factors have compounded Serbia’s difficulties as a cement-producing country. Firstly, like the Nikola Tesla B thermal power plant, its kilns run on coal. 50% of this coal originated in Russia and Ukraine in 2021, causing the entire operation to become ‘imperilled’ after the former’s brutal invasion of the latter in February 2022, according to the Serbian Cement Industry Association. In planning terms, this was a case of putting half one’s eggs in two baskets – and dropping them both.
Secondly, Serbia’s choice of export markets is mainly confined to either the EU or global markets via the River Danube, Black Sea and Mediterranean. Either way, it is in competition with a cement exporting giant: Türkiye. Serbia sold €19.7m-worth of cement in the EU in 2023, up by 63% over the three-year period since 2020 – 31% behind Türkiye’s €28.8m (more than double its 2020 figure).1 One other Central Balkan country had a greater reliance on the EU market: Bosnia & Herzegovina. It exported €48.4m-worth of cement there, quadruple its 2020 figure and behind only China (€133m) and the UK (€54.7) in cement exports to the bloc by value.
Bosnia & Herzegovina’s cement industry underwent a different permutation at the start of 2024: an acquisition, replacing one EU-based player with another. Lukavac Cement, which operates the 800,000t/yr Lukavac cement plant in Tuzla, changed hands from Austria-based building materials producer Asamer Baustoffe to Hungary-based property developer Talentis International Construction. Talentis International Construction belongs to one of Hungary’s major family-owned conglomerates, Mészáros Csoport.
Besides Central Europe, Balkan countries have found a ready source of investments in the past decade in China. In construction alone, Chinese investments total €13.2bn in Serbia, €2.4bn in Bosnia & Herzegovina, €915m in Montenegro and €650m in North Macedonia.2 This can be a booster shot to all-important domestic cement markets, but has some risks. Montenegro previously faced bankruptcy after Export-Import Bank of China began to call in an €847m loan for construction of the still upcoming A1 motorway in the country’s Northern Region. This did not put off the Montenegrin government from signing a new memorandum of understanding (MoU) with China-based Shandong Foreign Economic and Technical Cooperation and Shandong Luqiao Group for construction of a new €54m coast road in the Coastal Region in mid-2023.
In Montenegro, UK-based private equity firm Chayton Capital is currently funding a feasibility study for a partly state-owned cement plant and building materials complex at the Pljevlja energy hub in the Northern Region. Along with an upgrade to the existing Pljevlja coal-fired power plant, the project will cost €700m.
In 2026, EU member states will begin to partly tax third-country imports of cement and other products against their specific CO2 emissions, progressing to the implementation of a 100% Carbon Border Adjustment Mechanism (CBAM) by 2034. Montenegro led the Central Balkans’ preparations for the EU’s CBAM roll-out with the introduction of its own emissions trading system in early 2021. Bosnia & Herzegovina will follow its example by 2026, but other countries in the region have struggled to conceive of the arrangement except as part of future EU accession agreements.
Based on the average specific CO2 emissions of cement produced in the EU, the World Bank has forecast that exporters to the bloc will be disadvantaged if their own specific emissions exceed 5.52kg CO2eq/€.3 By contrast, any figure below this ought to offer an increased competitive edge. Albanian cement has average emissions of 4.71kg CO2eq/€, 15% below ‘biting point’ and 13% below Türkiye’s 5.39CO2eq/€. Albania’s government consolidated its anticipated gains by quintupling the coal tax for 2024 to €0.15/kg. The figure is based on the International Monetary Fund’s recommended minimum CO2 emissions tax of €55.80/t, 21% shy of the current EU Emissions Trading Scheme (ETS) credit price of €70.49/t.4
The Central Balkans is a region of apparently slow markets and industry growth regardless – to 11 cement plants, following the completion of current and upcoming projects. A recurrent theme of capital expenditure investments and the way investors talk about them may help to explain this: sustainability. Looking at the mix of technologies in the current nine plants, these include wet kilns and fuels lines built for conventional fossil fuels. This is not to presume that any given plant might not be happy with its existing equipment as is. Nonetheless, the overall picture is of a set of veteran plants with scope to benefit from the kind of investments which all four global cement producers active in the region are already carrying out elsewhere in Europe. Such plans may already be in motion. In late 2023, Titan Cement Group’s North Macedonian subsidiary Cementarnica Usje secured shareholder approval to take two new loans of up to €27m combined.
As the latest news from Serbia showed, taking care of existing plants does not preclude also building new ones. The cement industry of the Central Balkans is finding its position in the new reduced-CO2 global cement trade – one in which old and new work together.
References
1. Trend Economy, ‘European Union – Imports and Exports – Articles of cement,’ 28 January 2024, https://trendeconomy.com/data/h2/EuropeanUnion/6810#
2. American Enterprise Institute, 'China Global Investment Tracker,' 3 February 2024 https://www.aei.org/china-global-investment-tracker/
3. World Bank Group, ‘Relative CBAM Exposure Index,’ 15 June 2023, https://www.worldbank.org/en/data/interactive/2023/06/15/relative-cbam-exposure-index
4. Ember, 'Carbon Price Tracker,' 26 August 2024, https://ember-climate.org/data/data-tools/carbon-price-viewer/
Holcim publishes first-quarter results
25 April 2024Switzerland: Holcim recorded net sales of €5.71bn in the first quarter of 2024, down by 2% year-on-year from €5.85bn in the first quarter of 2023. Nonetheless, recurring earnings before interest and taxation (EBIT) grew by 8% to €543m from €503m. The group noted continuing profitable growth. Its Solutions & Products unit raised roofing sales by 67% in local currencies, including 38% organic growth. The unit also acquired Germany-based advanced green roofing systems producer ZinCo and Argentina-based precast and pre-stressed concrete construction systems producer Tensolite. Additionally, Holcim closed three separate acquisitions in the ready-mix concrete, aggregates and construction-demolition materials segments.
In North America, Holcim grew its recurring EBIT by 3.9% in local currency, and anticipates continuing growth in 2024. In its Latin America region, the group noted a strong pipeline of infrastructure projects and increased nearshoring in Mexico. Europe yielded double-digit recurring EBIT growth, while Asia, Middle East & Africa remained profitable in local currency terms.
Breedon Group reports first-quarter 2024 drop in sales
24 April 2024UK: Breedon Group's sales dropped by 5% year-on-year in the first quarter of 2024, according to a trading update from the company. It attributed this to macroeconomic uncertainty and unfavourable weather conditions in the UK. Sales volumes of its materials ‘softened,’ but prices remained ‘resilient,’ partly offsetting the decline. The quarter brought three new acquisitions, including the company’s first in the US. Two scheduled cement kiln shutdowns took place within budget and on schedule.
CEO Rob Wood said "We have laid good foundations for the remainder of the year: progressing pricing, pursuing efficiencies, completing two bolt-on acquisitions and launching our third platform by entering the US market. Although the economic landscape remains uncertain, I am confident our discipline and focus, coupled with our strong customer relationships, will see us deliver against our unchanged expectations for 2024."
China: Beijing-based China National Building Material (CNBM) anticipates its first-quarter losses to increase by more than 50% to US$180m, up from US$72.6m in 2023. The company attributes the increased losses to lower selling prices for its key products, worsening performance of associates, and higher currency losses, despite a decrease in cost of sales. Following a meeting with CNBM, Citi analysts reported a 10% year-on-year fall in demand for the cement sector in the first quarter of 2024, with a forecasted full-year decline of 3%-5%.
World: Investment firm Insight Partners has forecast a composite annual growth rate (CAGR) of 3.3% in the global green cement and concrete market between 2023 and 2030. This will result in a total value of US$990m in 2030, compared to US$806m in 2023. Regionally, the firm expects the sharpest growth in South and Central America, with a CAGR of 10% to US$7.9m in 2030. North America is expected to grow at a rate of 5.4% annually, to US$190m, followed by Europe, at 4.5% to US$226m, Middle East and Africa, at 2.9% to US$13m, and Asia-Pacific, at 1.4% to US$553m. In 2023, Asia-Pacific commanded a 61% share of the global market. Europe’s share was 20% and that of North America was 16%.
US: Global Cement understands from material published publicly on Breedon Group’s website that the UK-based company acquired ready-mix concrete, aggregates and building products company BMC Enterprises for US$300m on 6 March 2023. This marks the group’s first entry into the US building materials sector. Breedon Group described the acquisition as a ‘compelling opportunity’ in the ‘fragmented and growing’ market. It described BMC Enterprises as a highly attractive, established business upon which to grow a new group platform in the US, in addition to its existing platforms in the UK and Ireland.
Breedon Group CEO Rob Wood said “The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform. BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth. As a high-quality aggregates and concrete business that has grown at pace, organically and through acquisitions, with a strong management team and deep local knowledge, BMC’s culture and values are fully aligned with the Breedon business model.” Wood added "The acquisition is expected to be earnings-enhancing for shareholders, while allowing Breedon to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions across each of our platforms as opportunities arise.”
Summit Materials raises full-year sales in 2023
16 February 2024US: Summit Materials has published its financial results for 2023, its last full year prior to its merger with Argos North America on 15 January 2024. The building materials producer’s sales rose by 10% year-on-year to US$2.4bn, while its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 18% to US$578m. Cement contributed 16% of sales revenue, at US$383m, up by 7%. This was despite a 7% decline in sales volumes.
President and chief executive officer Anne Noonan said "Summit is at an exciting and pivotal point in our company’s history. Our team has effectively capitalised on dynamic yet constructive market conditions to drive record revenue and profitability.” She continued “We're building on our record-setting performance by swiftly and safely advancing our Argos integration – a move that we expect will only strengthen our materials-led business. For 2024, with an improved footprint and increased scale, we anticipate delivering another year of strong growth and returns. Our positive outlook is supported by robust commercial conditions, an improving demand backdrop and a full set of growth opportunities that are unique to Summit Materials. Crucially, our high-quality execution, financial performance and strategic focus has afforded us the balance sheet flexibility to continue our pursuit of value-accretive capital allocation priorities. Today and moving forward, we firmly believe Summit is very well-positioned to generate superior value creation for our shareholders."