Displaying items by tag: Regulations

Ireland: New regulations effective from 1 September 2024 require all state-funded building projects in Ireland - including roads, schools, and hospitals - to use low-carbon cement. The directive prohibits the use of CEM I cement, mandating a minimum of 30% replacement of clinker with low-carbon alternatives for public projects.

A couple of stories have popped up this week regarding restrictions on cement imports. First, authorities in Taiwan have launched an anti-dumping investigation into Vietnamese cement. Secondly, and perhaps more surprisingly given its growing economy, the authorities in Kyrgyzstan are planning to ban overland imports of cement from within Central Asia. More on that later…

First, to the Far East, where Taiwan’s Trade Remedies Authority has launched an anti-dumping investigation into cement and clinker imported from Vietnam. It will assess imports covering the year from 1 July 2023 to 30 June 2024 and target seven specific Vietnamese cement producers among others. The Vietnamese companies are mandatory respondents – they will be compelled to answer investigators’ questions.

Vietnamese cement has long been among the cheapest in the region due to the country’s drive to hit production targets, rather than simply meeting demand. The situation has resulted in a vast amount of cement available for export. This, coupled to Vietnam’s long, indented coastline, makes it easy to ship cement overseas.

Even with export volumes falling by 1.2% year-on-year to 31.3Mt in 2023, around a third of Vietnam’s capacity, this is a massive volume of cement - and it’s only getting cheaper. The average export value of Vietnamese cement and clinker fell from US$46-48/t at the start of 2023 to just US$31-32/t in May 2024, a decline of 30-35%. These changes have been due, in part, to an increase in tax on clinker exports from 5% to 10% on 1 January 2023 and an anti-dumping investigation launched by the Philippines in March 2023. Falling prices and volumes represent a ‘double-whammy’ for producers, several of which have announced that they made losses in the first half of 2024. Vicem’s top management said that challenges also arose at home due to a reduced demand following limited civil engineering projects and a stagnant real estate market.

It is easy to see why Taiwanese cement producers may feel threatened by the prospect of greater volumes of cheap cement on their doorstep. Taiwan only made 4.9Mt/yr of cement in the first half of 2024. With domestic prices in the region of US$65-70/t according to Cement Network, this provides a very attractive margin of US$33-39/t for Vietnamese producers to export to Taiwan. It will be interesting to see how far the country’s authorities are willing to go to protect the country’s producers and whether any anti-dumping policies lead to further falls in the landed volumes of Vietnamese cement.

Meanwhile, 4600km to the west, Kyrgyzstan has announced that it will enforce a six-month road import ban on several types of cement including Portland cement, alumina cement and slag cement. The ban, affecting both cement and clinker, will take effect on 1 October 2024 and last for six months. According to the State Statistical Committee of Kyrgyzstan, the country saw a 76% year-on-year increase in cement imports – mainly from Iran, Kazakhstan, China and Uzbekistan - between January 2024 and May 2024. The total import volume over the five months was 125,737t. For a country that made just 1Mt over the same period, this is a major change.

The overland import ban is more of a surprise than the Taiwan / Vietnam situation, as Kyrgyzstan recently reported that the North of the country was experiencing a ‘construction boom’ and cement shortages. However, two new plants due to start production in the coming months could help the country out... unless it too would like to export its newly-developed cement production capacity.

And here we arrive at a ‘classic’ impasse. From Pakistani cement in South Africa, to price arguments in West Africa, import bans in Central Asia and Vietnamese cement in Philippines and Taiwan, more and more exporters are finding that their markets are already self-sufficient in cement, with the US perhaps the notable exception. Soon there will be nowhere left for cement to be exported to. Are we at peak cement?

Pakistan: The All-Pakistan Cement Distributors Association (APCDA) has asked the government to take heed of their strike call issued on 13 July 2024. The association is threatening action in response to new taxes and ordinances. These include a new sales tax, an increase in the 236-H income tax from 1% to 2.5% and the introduction of point-of-sale systems. APCDA said that the measures together made it ‘extremely difficult’ for cement dealers to operate. It called for exemptions or inclusion in a different presumptive tax regime in order to prevent industry collapse.

The News International newspaper has reported that association chair Chaudhry Sajid said that the new taxes will have to be passed on as additional costs for customers. He criticised the classification of cement as a fast-moving consumer good, as not all dealers are sufficiently ‘tech-savvy’ to adopt the requisite digital systems.

Ukraine: The Ukrainian cement industry, represented by the Ukrcement Association, is urging the government to revise the recent changes in electricity import regulations under martial law. Following the increase from a 30% EU electricity import requirement to 80%, mandated by Resolution No. 661 on 1 June 2024, the industry faces heightened costs and technical challenges due to limited border crossing capacities.

The association said "Given that cement production is energy-intensive and it is the main component for military and civilian construction, we ask the Ukrainian government to return to the previous 30/70 proportion. This proportion will ensure reliable energy supply to industrial enterprises of Ukraine, which will help maintain the current pace of economic recovery in Ukraine in the face of military aggression by the Russian Federation."

The industry's proposals to mitigate the situation include reducing the minimum import share to 50%, enhancing interstate crossing capacities and revising the distribution of mandatory imported electricity purchases.

Changes are underway in South Asia’s second largest cement sector, with two legal developments that affect the industry set in motion in the past week. At a national level, the Competition Commission of Pakistan recommended that the government require cement producers to include production and expiry dates on the labels of bagged cement. Meanwhile, in Pakistan’s largest province, Punjab, a new law tightened procedures around the establishment and expansion of cement plants. At the same time, the country’s cement producers began to publish their financial results for the first nine months of the 2024 financial year (FY2024).

During the nine-month period up to 31 March 2024, the Pakistani cement industry sold 34.5Mt of cement, up by 3% year-on-year. Producers have responded to the growth with capacity expansions, including the launch of the new 1.3Mt/yr Line 3 of Attock Cement’s Hub cement plant in Balochistan on 17 April 2023. China-based contractor Hefei Cement Research & Design executed the project, including installation of a Loesche LM 56.3+3 CS vertical roller mill, giving the Hub plant a new, expanded capacity of 3Mt/yr.

Pressure has eased on the operating costs of Pakistani cement production, as inflation slowed and the country received a new government in March 2024, following political unrest in 2022 and 2023. Coal prices also settled back to 2019 levels, after prolonged agitation. Pakistan Today News reported the value of future coal supply contracts as US$93/t for June 2024, down by 2% over six months from US$95/t for January 2024.

Nonetheless, cost optimisation remained a ‘strong focus’ in the growth strategy of Fauji Cement, which switched to using local and Afghan coal at its plants during the past nine months. Its reliance on captive power rose to 60% of consumption, thanks to its commissioning of new waste heat recovery and solar power capacity. During the first nine months of FY2024, the company’s year-on-year sales growth of 14% narrowly offset cost growth of 13%, leaving it with net profit growth of 1%.

Looking more closely, the latest sales data from the All Pakistan Cement Manufacturers Association (APCMA) shows a stark divergence within cement producers’ markets. While exports recorded 68% year-on-year growth to 5.1Mt, domestic sales fell, by 4% to 29.4Mt. The association further breaks down Pakistani cement sales data into South Pakistan (Balochistan and Sindh) and North Pakistan (all other regions). Domestic sales dropped most sharply in South Pakistan, by 6% to 5.16Mt. In the North, they dropped by 3% to 24.2Mt. Part of the reason was a high base of comparison, following flooding-related reconstruction work nationally during the 2023 financial year. Meanwhile, the government finished rolling out track-and-trace on all cement despatches during the opening months of the current financial year, and commenced the implementation of axle load requirements for cement trucks. APCMA flagged both policies as potentially disruptive to its members’ domestic deliveries, amid a strong infrastructure project pipeline.

Pakistani producers suffer from overcapacity, but have established themselves as an important force in the global export market. They continue to locate new markets, including the UK in January 2024. Lucky Cement was among leading exporters overall, with a large share of its orders originating from Africa.

On 17 April 2024, the government of Punjab province set up a committee to assess new proposed cement projects, with the ultimate goal of conserving water. Falling water tables are considered a significant economic threat in agricultural Punjab. Besides completing an inspection by the new committee, proposed projects must also secure clearance from six different provincial government departments and the local government. While acknowledging the necessity of the cement industry, the government insisted that it will take legal action against any cement plant that exceeds water allowances.

Pakistan’s cement plants have grown in anticipation of a local market boom. Without this strong core of sales, underutilisation will remain troublesome, especially in North Pakistan where exposure is highest. At the same time, APCMA has given expression to the perceived lack of support affecting production and distribution. For an industry with expansionist aims, new restrictions on its growth and operations can feel like an existential menace.

Pakistan: The Punjab government has decided to amend the Local Government Act 2022 to remove discrepancies and has called for proposals from all relevant departments. It aims to ensure that all necessary clearances are obtained before approving the establishment of new cement plants, according to Pakistan Official News. Due to water shortages, expansions or new establishments of cement plants must undergo a feasibility study. Committee members will personally inspect sites for the approval of these plants and the Irrigation Department will pursue legal action against any cement plants exceeding prescribed water usage limits.

Pakistan: The Competition Commission of Pakistan (CCP) has issued a policy note to the Ministry of Science and Technology and the Pakistan Standards and Quality Control Authority, recommending amendments to the Pakistan Standard Specification for cement. It also recommends mandatory disclosure by cement producers of manufacturing dates and expiry dates on cement. The CCP claims that cement absorbs moisture and loses its strength within 4 - 6 weeks under normal storage conditions, or even sooner under adverse weather conditions or high humidity.

The CCP said "The non-disclosure of such material information can mislead consumers and put them at risk of purchasing expired cement, which may compromise the strength and effectiveness of construction projects."

Ghana: A nine-member committee has been established to monitor and coordinate the local cement industry in Ghana, in line with the Manufacture of Cement Regulations (LI 2480).

The committee, inaugurated in Accra on 5 April 2024, is chaired by Professor Alex Dodoo of the Ghana Standards Authority (GSA). Other members include representatives from the GSA, Ministry of Trade and Industry, Ministry of Environment, Science, Technology and Innovation, Environmental Protection Agency, Ghana Institution of Engineering, Association of Ghana Industries, Chamber of Cement Manufacturers of Ghana, and an expert in cement production nominated by the Minister.

During the inauguration, Trade and Industry Minister Kobina Hammond said “The committee will appraise, evaluate and approve local content and local participation plans and reports of cement manufacturing entities. They will also promote the production, wholesale and retail of cement and cement components.”

According to LI 2480, there is a requirement for manufacturers of cement to register with the Committee. Regulation 11 in LI 2480 state that ‘A person shall not manufacture cement in the country unless the person registers with the Cement Manufacturing Development Committee in accordance with these Regulations.’ The regulations state that a person who did not register with the Cement Manufacturing Development Committee to manufacture cement shall not be granted a licence to manufacture cement under these regulations.

Tajikistan: Cementi Tojik announced the closure of the 1.1Mt/yr Dushanbe cement plant and its disbandment as a company on 26 December 2023. Asia-PLUS News has reported the reason for the company’s departure from the industry as a government regulation issued in mid-2023, which ordered the closure of the plant due to ‘serious’ emissions violations.

Europe: The European Parliament voted in favour of multiple amendments to the European Commission’s Packaging and Packaging Waste Regulation (PPWR) on 22 November 2023. The amendments remove, modify or make non-binding the PPWR’s 2040 reuse targets. Meanwhile, 2030 targets were made adjustable to recycling rates. Total packaging volumes are still required to drop by 5% by 2030 and by 15% by 2040 in each member state.

Sustainability lobbying organisation Environmental Coalition on Standards (ECOS) described the introduction of recycling rates into a lower schema of waste targets as ‘comparing apples with pears.’ ECOS attributed the amendments to a ‘barrage’ of false claims, scaremongering and lobbying from industry players.

ECOS programme manager Mathias Falkenberg said “This decision will not sufficiently address rising plastic and packaging waste or the pollution crisis. The European Parliament has just weakened a perfectly feasible solution to tackle throwaway culture without offering an alternative. It is very frustrating that the European Commission’s progressive prevention and reuse agenda has not received full support from the Parliament today.”

ECOS founded the Alliance for Low-Carbon Cement & Concrete (ALCCC), an association of companies focused on alternative building materials production, in May 2023.