Displaying items by tag: Plant

India: Chettinad Cement Corporation is moving forward with plans for projects in Andhra Pradesh, Maharashtra and Karnataka costing a total of US$616m.

The Indian cement producer is building a greenfield 3.5Mt/yr integrated cement plant in the Guntur district of Andhra Pradesh at a cost of US$181m. It is expanding its cement plant at Gulbarga in Karnataka to 5.75Mt/yr from 2.5Mt/yr and adding a 130MW captive thermal power plant at a cost of US$330m. It is also building two 2Mt/yr grinding plants and two 50MW thermal power plants at Solapur, Maharashtra at a cost of US$108m.

Chettinad Cement has received all the necessary clearances for its greenfield project in Andhra Pradesh and an expansion project in Karnataka, according to local media. The projects in Andhra Pradesh and Karnataka are expected to be operational within three years of the start of construction. The company has acquired 1000 acres for its proposed cement plant in Andhra Pradesh and 120 acres for its grinding plant in Maharashtra.

"In the last 20 years, the installed capacity of the cement units has increased from 1Mt/yr to 13.5Mt/yr. With the commissioning of new and expanded units, it is possible to scale up to 20Mt/yr,'' said Chettinad Cement Group Managing Director MAMR Muthiah.

Muthiah added that the company had a debt-equity ratio of 1:1. The upcoming projects will be financed through a combination of debt and internal accruals. Chettinad Cement is also considering expansion opportunities in Gujarat, Madhya Pradesh and Rajasthan. At present, Chettinad Cement is currently operating at 50% of its production capacity due to 'sluggish' market conditions.

Indonesia: PT Semen Indonesia is considering the construction of a cement plant in Papua in a bid to supply the market in the country's easternmost province. Semen Indonesia president director Dwi Soetjipto said the location of the plant would be either in Jayapura or Manokwari, the two largest cities close to limestone reseerves, according to local media. The plant will have a cement production capacity of 0.6 – 1Mt/yr with an investment of up to US$100m.

"We hope the study can conclude soon so that we can include the investment needed for the plant in our next year's capital expenditure budget. It might take around three years to construct the facility before it can commence commercial operations," said Dwi Soetjipto.

According to Semen Indonesia's estimates, Papua consumes around 600,000t/yr of cement, or 40% of the total eastern Indonesia cement consumption of 1.5Mt/yr. Semen Indonesia supplies around half of Papua's cement market. With the new factory, it is expected to increase its market share to around 70%.

The company has projected that cement demand in Papua will hit around 900,000t/yr from around the time the company has finished building its new plant.

Increasing its market share in the region will place Semen Indonesia in competition with Indocement Tunggal Prakarsa and Semen Bosowa. Currently the company supplies the Papua market from its subsidiaries Semen Gresik in East Java and Semen Tonasa in South Sulawesi.

In 2013 Semen Indonesia built a rotary packing plant in Sorong, West Papua at a cost of US$13.8m. The plant produces 2200 bags per hour and currently supplies 300 - 400t/day of cement to the West Papua area.

Myanmar: Cargotec's Siwertell has received an order from CITIC Heavy Industries Co Ltd (CITIC) for a rail-travelling ship unloader. The ST-640 M-type unloader has been ordered to support the energy production requirements for a new cement plant in Myanmar and will unload coal from barges at a rate of 800t/hr. The plant is being built as part of a collaboration between CITIC and Siam Cement's subsidiary, Mawlamyine Cement Ltd (MCL).

Colombia: Cementos Argos plans to expand its Sogamoso cement plant, located in the Boyacá department of Colombia, with a new 2.3Mt/yr line, involving an investment of US$450m.

The strategic location of the Sogamoso plant will enable Cementos Argos to serve the Bogota market as well as growing demand in the centre of Colombia, where around 70% of cement consumption for the country's infrastructure plant will be concentrated. As well as Bogota, the location of the plant allows for efficient access to the Eastern Plains, Santander and North Santander.

"This investment reflects our confidence and commitment to the development of Colombia," said Jorge Mario Velásquez, Argos' CEO. "Factors such as institutional and regulatory strengthening for infrastructure development; the important 4G projects for more than US$25Bn and greater resources for housing development, will drive the growth in cement consumption in the next few years. As a Colombian company, we are committed to assisting the country in its development."

The new project will boost Argos' installed capacity in Colombia from 9.5Mt/yr to 11.8Mt/yr, an increase of 24%. Completion of the Sogamoso expansion is scheduled for 2018. Argos said that up to 40% of fossil fuels would be replaced with alternative fuels. Water and fuel consumption will be 24% and 18% lower than at standard plants, respectively, while emissions of particulate matter will be 67% below the national limit. Cementos Argos will also invest in developing the local community's educational infrastructure.

"The intensive infrastructure programmes carried out in neighbouring countries such as Panama, Peru and Ecuador, have propelled the simultaneous decrease in unemployment rates and upsurge in home construction, creating a virtuous cycle to improve people's quality of life, which we wish to see in Colombia," added Velásquez.

South Africa: PPC has warned that slower economic growth and falling infrastructure spending has led to a 'particularly tough' domestic market. Low single-digit volume declines across Africa's second-biggest economy were partly offset by higher sales prices in the 10 months to July 2014. South Africa's economy is forecast to grow at the slowest pace since the 2009 recession in 2014 after strikes in the platinum mining and metalworkers industries hurt output.

Meanwhile, a new plant in Rwanda is expected to be commissioned early 2015 as PPC seeks growth opportunities in other markets. Indeed, PPC is expanding in several other African countries, including Rwanda, Zimbabwe and Ethiopia, as demand for cement grows in sub-Saharan Africa. It is targeting 40% of sales outside South Africa by 2017, compared with 26% in the six months to March 2014.

India: Bhavya Cements has received approval from the State Level Single Window Clearance Authority (SLSWCA) for the construction of a 3Mt/yr capacity cement grinding plant in Dhenkanal, Odisha, with a capital investment of US$60m. Separately, Shree Cement also plans to set up a 3Mt/yr capacity cement plant in the same location for US$74.4m.

There were two telling stories from Vietnam this week that show the level to which demand has been overestimated in the centrally-planned cement sector. Firstly, the country reported that exports in the period between January and July 2014 increased by nearly a quarter year-on-year to 13.1Mt. Secondly, the Prime Minister announced that another five cement plant projects were to be axed, following nine others that bit the dust in 2013.

All this is against a backdrop of chronic lower-than-expected domestic cement demand. When we look at the figures, it’s not hard to see that domestic consumers have had trouble consuming all the cement produced in Vietnam. The government forecast for cement production in 2015 is in the region of 75 - 76Mt. If this was spread evenly between Vietnam’s 88.8m people, each person would have to consume ~850kg of cement. That’s possible but it is quite a lot for a lower middle income economy. However, separate reports state that a 10% rise in domestic sales on 2013 levels would lead to just 60Mt of domestic cement sales in 2015. This equates to a more realistic 675kg/capita.

These figures leave a massive and increasing amount of cement for export. Read again that figure from the first seven months of 2014 – 13.1Mt – Roughly the capacity of South Africa (~12.5Mt/yr), Tunisia (12.9Mt/yr) of Colombia (12.9Mt/yr)! Also, while cement exports volumes were up by nearly a quarter, the value of those same exports rose by only 20%. This indicates a drop in export prices and represents additional pressure to halt capacity expansion.

Against a backdrop of 90Mt/yr expected capacity in 2015 and falling export prices, the latest cement project cull certainly makes sense but even in a best-case scenario the country is looking at a capacity utilisation rate of just 66 - 67%. Some cement plant project owners have even found themselves trapped by the situation. Having indebted themselves on the promise of ever-increasing cement demand, they now face the prospect of throwing good money after bad, continuing to build and operate just to service debts. This is a very unenviable position indeed. The lifting of trade restrictions within the ASEAN Community on 1 January 2015 might help export volumes, but might also also drive prices down further.

Culling new cement plant projects is one thing, but could the next step be more drastic? North of the border, China is gradually reducing its overcapacity by removing older and less efficient capacity. Perhaps Vietnam would do well to follow suit.

Ecuador: Peru's UNACEM plans to invest US$58m in Condorcocha, Junin and Atocongo, San Juan de Miraflores in 2015, following US545m of investments in 2014. The sum will primarily be allocated to the acquisition of Lafarge's cement plant in Ecuador.

A total of US$374m will be invested in the Atocongo and Condorcocha plants between 2014 and 2018, with a focus on the cement mill, the development of the Carpapata III hydroelectricity project and the construction of bagging facilities in Condorcocha. UNACEM will invest US$939m over the next five years, while it anticipates sales of US$190m in 2014. The company expects its revenues to exceed US$200m form 2016 and projects a turnover of US$256m in 2020.

US: Arcadis, a natural and built asset design and consultancy firm, has announced that it will oversee the construction on a multi-million dollar modernisation project set to transform Lafarge North America's Ravena cement plant in New York State into one of the most advanced dry-kiln facilities in the country.
Arcadis will oversee the replacement of the existing 50-year old kiln, supporting Lafarge's commitment to quickly implement industry-leading mercury emissions caps. The improvements will further reduce SO₂ and mercury emissions by an additional 20% over the next three years.

Slated for completion in 2016, the construction will create hundreds of jobs and retain over 100 current positions. Arcadis will coordinate all aspects of construction, including locating and purchasing materials, oversight of up to eight contracting companies, overall schedule coordination, management of materials and security of the site.

Vietnam: Prime minister Nguyen Tan Dung has agreed to eliminate five more cement projects from the Zoning plan for the 2011 - 2020 period due to lower domestic cement consumption. The projects removed from the master plan have a combined capacity of 910,000t/yr. Earlier the prime minister had also approved the Ministry of Construction's proposal for removing nine clinker projects with a capacity of less than 2500t/day.

In 2013 the Vietnamese government decided to postpone the construction of nine other cement plants in Thanh Son, Tan Phu Xuan, Tan Tao, Yen Mao, Sai Gon Tan Ky, Phu Son, My Duc, Nam Dong and Minh Tam. While these cement plants face the axe, the government approved a project to develop Long Son Cement Plant, which will have a production capacity of 2.3Mt/yr in the northern province of Thanh Hoa. Construction commenced in early 2014 and will be put into operation in 2018.

Despite admitting the current cement glut on the local market, a number of projects are still underway as such schemes are enlisted in the nation's Zoning plan and project owners have invested huge sums in such plants, according Nguyen Van Thien, chairman of the Vietnam Cement Association. Project owners have no other choice but to continue the projects after injecting big funds, otherwise they cannot recover capital to service bank loans.

According to the Vietnam Cement Association, the combined capacity of all the country's cement plants is expected to reach more than 90Mt/yr by 2015, in line with the Zoning plan. Meanwhile, cement demand is forecast at 75 – 76Mt/yr by 2015. Vietnamese cement consumption was only 48Mt in 2012. Should demand rise by 5 - 10%/yr in 2014 and 2015, sales volumes would reach 60Mt, much lower than the expected figure.