Displaying items by tag: Plant

Philippines: Thailand-based producer Shera announced that its upcoming fibre cement plant in Mabalacat, Pampanga, has reached 60% completion and is on schedule to commence commercial operations by January 2025. The plant will be the company’s first production facility outside Thailand, capable of producing 0.24Mt/yr of fibre cement. The Mabalacat facility will also export to Taiwan, South Korea and parts of North Asia and Oceania and will create jobs for up to 150 people.

Ongek Taechamahaphant, chair and director, said “Our Mabalacat plant is a major step in Shera’s plan to expand further in the Philippine market. We know that once this facility is fully operational by 2025, more Filipinos will easily be able to access our eco-friendly and durable fibre cement products.”

Uzbekistan: Shriram EPC, a subsidiary of India-based conglomerate SEPC, has been awarded a US$325m contract from JV Ohongron Sement to build a 3Mt/yr greenfield cement plant in Urgaz Village, Akhangaran District, reports NDTV Profit. Shriram EPC will handle design, engineering, project management, civil works, supply, erection, testing and commissioning at the plant. The project will be completed over the next 30 months, according to an exchange filing.

Uganda: West International Holding has commenced construction of a US$200m cement factory on 50 acres in Buikwe District, reports the Daily Monitor. The plant is located in Njeru municipality and construction is expected to complete by August 2025. It will employ 1800 workers and produce 4000t/day of cement.

Ambrose Byona, group director, said “This factory is going to support markets in the Central (Kampala areas), Mwanza in Tanzania and Mugingo in Kenya. We also want to use the railway to transport these products to avoid wearing out the road with loaded trucks.” The project will also provide a health centre and a school for the community.

Balaam Barugahara, state minister for gender, labour and social development, assured that local youth employment will be prioritised. However, Njeru municipality mayor Yassin Kyaze asked the company not to exploit employees like most plants in Njeru municipality are allegedly doing, saying such conduct has cast most plants negatively in the public domain.

India: Thiruvananthapuram city Corporation has conducted a trial run of its refuse-derived fuel (RDF) plant at Sanmathi Park, Chala. The plant processes up to 1t/day of legacy waste, which is hard to segregate, to produce fuel for cement plants. The plant processes 40kg of materials per 15-minute cycle. Currently, non-recyclable materials are sent to Tamil Nadu cement plants. The government plans to establish at least one RDF plant per district as a permanent solution.

Nigeria: An update has been released on the cement plant planned in Bauchi State, on which Global Cement previously reported on 11 June 2024. On 7 August 2024, the Bauchi State government signed a Memorandum of Understanding (MoU) worth US$1.5bn with Resident Cement Company to establish a cement plant in Gwana District, the Nigerian Tribune reports. The plant is expected to produce 10Mt/yr of cement. The project includes a 100MW power plant, a dam and other amenities for the community, which will reportedly help to attract foreign investment and boost the local economy.

Cemex announced this week that it is preparing to divest its operations in the Dominican Republic for US$950m. At first this seems a little close to home for the Mexico-based company but it felt similar at the start of 2022 when it sold its businesses in Costa Rica and El Salvador to the same company, Cementos Progreso. Readers may also recall that the business press reported, correctly we now know, in mid-2023 that Cemex was seriously considering its options in the Dominican Republic.

The current agreement will see Cemex sell one cement plant in the Dominican Republic along with related cement, concrete, aggregates and marine terminal assets for US$950m. The deal is expected to close towards the end of 2024. Cemex says that it is making the transaction to reduce its exposure to emerging markets and refocus its capital upon priority markets, such as the US. This reasoning is very much in line with its international peers in the building materials sector, which have been doing likewise.

This is the potential biggest divestment Cemex will have made since 2009. It is bigger than the agreement to sell the share of its business in the Philippines, revealed earlier in 2024, for an enterprise value of US$660m. Back in 2000, Cemex sold its Australia-based subsidiary to Holcim for US$1.7bn. Holcim still operates in Australia today via Cement Australia, a joint-venture with Heidelberg Materials. Plus, CRH, one of Cemex’s competitors that has also shown a keen interest in the US market previously, concluded a deal to buy a stake in AdBri in July 2024. Infamously, Cemex took over building products company Rinker in 2007 just as the 2007 - 2008 financial crisis burst. It then spent the next decade-and-a-half reducing its debt levels. In April 2024 it was pleased to announce that it had been awarded full investment grade status by rating agency Fitch Ratings.

Selling up in the Dominican Republic seems curious at first but, as mentioned at the start, we’ve been here before with Cemex’s subsidiaries in Central America and the Caribbean, plus the company has been working on it for at least a year. It is worth noting though that Cemex reopened a second production line at its San Pedro de Macorís site in 2022 giving the plant a cement production capacity of 2.4Mt/yr. That gives the current deal a value of US$380/t based on capacity. Local competitor Domicem also started up a second line at its Sabana Grande de Palenque cement plant in late 2023, demonstrating that other cement companies have also been investing in the market. Cemex’s sales from its business in the country were reasonable in 2023 but its operating earnings were the fourth biggest in the group after Mexico, the US and the UK. In its results for the first half of 2024 the group noted that tourism projects were driving demand in the country.

Graph 1: Mix of sales by region for Cemex, 2019 - 2023. Source: Company reports.

Graph 1 above presents the general way Cemex has been directing its business internationally over the last five years. Sales were roughly half-and-half between Mexico & the US and the rest of the world in 2019. In 2023 the ratio was more like 60:40. Operating earnings have tracked the same way with an even greater emphasis on Mexico and the US. It should be noted though that despite sales revenue being higher in the US, operating earnings remain higher in Mexico.

Pretty much every western international cement company is watching the US market intently right now. So, Cemex’s decision to sell a profitable business in the Dominican Republic to fund further investment in the US makes sense. Although what it might actually want to buy at US prices right now might be a tough call. CRH, for example, paid US$2.1bn in late 2023 to buy the 2.1Mt/yr Hunter cement plant, a network of cement terminals and 20 ready-mix concrete batching plants in South Texas. This was arguably quite a high price. One last point to consider is that the financial press was reporting falls in the global stock markets this week amid fears over the outlook of the US economy. Whatever happens next, at least Cemex is selling rather than buying this time round.

Lithuania: Akmenės Cementas has completed a €30m upgrade to its Akmenės cement plant. BNS News has reported that the upgrade will enable the plant to raise its alternative fuels (AF) substitution rate to 90%. The work included the construction of supporting infrastructure, including a storage facility. The Lithuanian Environmental Project Management Agency granted the project €4.3m under its Climate Change Programme.

Akmenės Cementas sold 1.1Mt of cement in 2023, 74% of it on the local Lithuanian market, with the remainder exported to other EU markets.

Serbia: Lafarge Serbia will open a new €110m plant in Obrenovac to produce cement from thermal power plant ash, with the aim to address Serbia's waste management problem, according to a government announcement on 5 August 2024. A 2019 report by the European Environmental Agency found that Serbia has around 100 municipal landfills and over 3000 illegal dumpsites.

Lafarge Serbia executive Dimitrije Knjeginjic said "This production will benefit Serbia and its economy, and it is absolutely acceptable from an environmental point of view because it solves the problem of ash landfills."

India: Ambuja Cements will invest US$190m to establish a 6Mt/yr grinding plant in Warisaliganj, Bihar. The project is scheduled in three phases, with the first phase of 2.4Mt/yr costing US$131m, according to the company. The plant has secured environmental clearance and land allocation for potential future expansions, The Telegraph India reports. The project will reportedly create 250 direct jobs and 1000 indirect jobs and will contribute US$30m/yr to Bihar’s economy. It is targeted for completion by December 2025.

Pranav Adani, director of Adani Enterprises, said “This investment aligns with the state government’s development programmes and our growth plans. The cement industry is witnessing healthy volumes due to the government’s infrastructure thrust, and Ambuja Cements is well positioned to support sustainable infrastructure development in the country.”

Mexico: Cooperativa Cruz Azul has announced the upcoming construction of a new cement plant in Seybaplaya, Campeche, with an investment exceeding US$300m. The plant will occupy a site previously used for lime and cement production in order to minimise environmental impact. Construction started on 1 August 2024, with completion of the first production line anticipated by the end of 2026, Noticias Financieras News has reported. The plant will produce 3000t/day of cement. The project is expected to create 2000 temporary construction jobs and 350 permanent positions.