Displaying items by tag: Sinoma International Engineering

Malaysia: The state government of Sabah has denied rumours that an investor has departed from the Tongod cement plant project. Industrial Development and Entrepreneurship Minister Datuk Phoong Jin Zhe told the Sabah State Legislative Assembly that Borneo Cement had confirmed that all parties involved in the project remain committed, according to the Star newspaper. He added that the project had received approval for earthworks but that construction work was waiting for the approval from an Environmental Impact Assessment report.

China-based Sinoma Industrial Engineering is preparing to build the 1.75Mt/yr plant. Two-thirds of the unit’s output is intended for the local market in Sabah. The rest will be exported. Ground-breaking work at the site was previously reported in April 2024. However, Borneo Cement subsequently faced accusations of unauthorised forest clearances later in the year.

China: Sinoma International Engineering has appointed Yin Ling as its chief financial officer and as a vice president. She succeeds Wang Yuan in the post. Yuan will continue to work as a vice president for the company.
Ling holds a bachelor’s degree in economics and is trained as an accountant. She has worked for Huazheng Certified Public Accountants, China Fiberglass and as the general manager for the finance department of China National Building Materials.

Iraq: Sinoma International Engineering, China's largest provider of cement engineering services, has secured a US$351.5m engineering procurement contract to build a 1000MW solar power plant in Iraq for Mass Renewable Energy Production, part of the Mass Group which also operates a 6Mt/yr cement plant in Bazian, Iraq.

The turnkey contract, to be built in Al-Kut, will take 21 months to build, leading to completion by the third quarter of 2026.

Nigeria: The Mangal Cement plant in Iluagba, Kogi State has successfully produced its first bag of cement. The plant is capable of producing 6000t/day of cement. The US$1.5bn facility aims to transform the local cement industry and will create 10,000 new direct and indirect jobs, Dateline Nigeria has reported. Mangal Industries has partnered with China-based Sinoma International Engineering for the plant’s construction, with a reported cost of US$600m.

Finland-based Wärtsilä has won a 10-year operations and maintenance agreement for a 50MW captive power plant to power the facility. Initially, the plant will use liquid fuel, but a pipeline will be constructed to allow it to use natural gas.

Chair Alhaji Dahiru Mangal said “This factory will employ the latest technology and adhere to the highest environmental standards. It is part of our ambitious programme to address Nigeria’s infrastructure and housing deficits, while demonstrating our confidence in the region’s economic outlook.”

Ethiopia: The Lemi National Cement Factory is preparing to start production. The 8Mt/yr plant is expected to be completed in March 2024, according to the Xinhua News Agency. China-based Sinoma International Engineering is building the unit. The US$600m project is a joint venture between West International Holding, a subsidiary West China Cement, and the East African Holding Company. The plant is located at the Lemi Building Materials Industrial Park around 150km north of Addis Ababa.

World: The Global Cement and Concrete Association (GCCA) has signed a new agreement with the China Cement Association (CCA). The agreement constitutes an historic ‘partnership pledge’ to accelerate cement decarbonisation globally in 2024 – 2026. The partners says that their collaboration will contribute to the development and launch of the upcoming China Cement Carbon Neutrality Roadmap. Equipment supplier Sinoma International Engineering and the European Cement Research Academy (ECRA) will also help to develop the roadmap. The GCCA previously launched its own global net zero roadmap in 2021. Together, GCCA and CCA members account for 90% of global cement production in capacity terms.

GCCA CEO Thomas Guillot, said “The world needs leadership and collaboration like never before, especially on addressing the key issue of our time, climate change. This agreement between the China industry and the global industry is a signal to the world that we stand ready to deliver the essential decarbonised building materials that our planet needs. Cement and concrete enable the key infrastructure, thriving and resilient communities, clean water, safe homes and the shift to clean energy that are essential to a future sustainable world.”

CCA Executive president Kong Xiangzhong said “This important agreement marks a win-win cooperation, and shows where we can collaborate effectively to bring insights, technical know-how and greater focus to our shared decarbonisation mission. I am sure this will create a mutually-beneficial and long-term partnership that will be crucial in building a more sustainable world.”

Eastern Province Cement said this week that it had awarded a new production line project to Sinoma CDI. The subsidiary of China-based CNBM Group and Sinoma International Engineering has picked up the contract to build a 10,000t/day plant from design to installation at the cement producer’s Al Khursaniyah plant. Word on project finance is to follow later and the contract should be signed by the end of March 2024. The cement company last mentioned the project to the Saudi Exchange back in March 2023, when it suggested that it was focusing on upgrading existing lines at its Al Khursaniyah plant rather than building a brand new clinker plant at Najibiyah. The plans for the latter project date back to 2015. Eastern Province Cement holds limestone extraction licences in both locations.

It is worth noting that the last couple of new conventional production line projects announced in Saudi Arabia have been picked up by Sinoma International Engineering and related companies. Sinoma International Engineering won an engineering, procurement and construction (EPC) contract to build Southern Province Cement's upcoming Jizan cement plant in May 2023. This followed the awarding of a new 10,000t/day line by Yamama Cement, also to Sinoma International Engineering, in November 2022. However, Germany-based IBAU Hamburg was confirmed by Hoffmann Green Cement Technologies (HGCT) in September 2023 as being the company that would build a ‘clinker-free’ cement plant in Saudi Arabia in 2024. This will be a copy of HGCT’s H2 plant in France, which uses a combination of activated clay, ground granulated blast furnace slag (GGBFS) and gypsum to manufacture its products. HGCT has signed a deal with Shurfah Group to build several Hoffman plants under a 22-year exclusive licensing agreement.

Arguably though, despite all these new plant news stories, the bigger issue so far this year was Saudi Aramco's decision to raise its feedstock and fuel prices from the start of 2024. Several Saudi cement producers released warnings in response that production costs would rise and earnings would fall. Al Jouf Cement, Arabian Cement, Qassim Cement, Saudi Cement, Yamama Cement and Yanbu Cement each made statements to shareholders on the issue, saying that they were working out the impact, would announce what this might be when known and that it was likely to make a difference from the first quarter results onwards.

The timing of Aramco's price hike is poor given that after a tough year, with falling sales for some producers, demand was expected to pick up somewhat. Aljazira Capital, for example, in a cement sector report released in late December 2023, forecast a 3% year-on-year increase in cement sales volumes in 2024 following an estimated fall of 8% in 2023. Its reasoning was that the domestic housing construction market had declined in 2023, leading to high levels of competition in the central region of the country caused by high levels of company inventory. Looking ahead, the competition was expected to ease as more projects were generated outside the central region and demand from the country’s various large-scale infrastructure plans took off. We will have to wait for Aljazira Capital’s next report to find out how they think the market will cope with higher fuel costs, but it seems likely that business may remain tougher than expected for the cement producers in the short term at least.

Finally, one more story to consider is that Al Jouf Cement signed a deal with Rabou’ Al-Taybeh Company this week to export cement and clinker to Jordan. The initial period covers six months with the option for renewal. Up until 2022, at least, clinker exports from Saudi Arabia were growing most years since the export rules were relaxed in 2017. With a difficult market reported domestically in 2023, the appetite to focus on exports may be growing and this could be a sign of that. Another example this week of Saudi-based cement companies looking outside the domestic market could be detected when Northern Region Cement said it had sold a 49% stake in its Iraq business to Al-Diyar Al-Iraqia for Investments Company. The cement company said that the new strategic partnership would help it to further expand its investments in the promising market. It will use the proceeds of the deal to repay loans and for ‘external investments.’ It valued the transaction at just under US$44m. For more on what Northern Region Cement and others have been up to in Iraq, see Global Cement Weekly’s analysis from November 2023.

The steady stream of new clinker production lines suggests confidence in the cement sector in Saudi Arabia in the medium to long term. It is also fascinating to witness a secondary cementitious material plant like the one HGCT is planning on the way too. Unfortunately though, the recent fuel price rise looks like it might ruin the party in the short term for those hoping for better things in 2024.

The 26th Arab International Cement & Building Materials Conference and Exhibition takes place in Cairo on 15 - 17 January 2024. Visit Global Cement at stand N3

Sinoma International Engineering revealed this week that it has signed a Euro218m contract to supply a new clinker production line for Holcim Belgium. The scope of the deal covers building the new line from limestone unloading via train to clinker transportation and storage. Provisional acceptance and first clinker are stipulated to occur within about four years, by late 2027. Holcim Belgium operates the Obourg Plant, its only integrated unit in the country, and the unit has been preparing to build a new line as part of its Go4Zero project.

Two main points compete for one’s attention with the project at the Obourg Plant. Firstly, this may be the first time a large Europe-based cement producer has publicly contracted a China-based supplier to build a new production line. Secondly, the new line is part of a process to first replace two wet kilns at the site with a dry kiln. This is part of a grand plan at the site to add oxyfuel technology to the plant and then start capturing most of the CO₂ emitted for sequestration in the North Sea.

On the first point, China-based Sinoma International Engineering reported to the Shanghai Stock Exchange in early December 2023 that it had signed a contract for the project. Holcim Belgium has not said that it has appointed the subsidiary of CNBM but this is not unusual. Buyers are at liberty to name suppliers, or not as may be the case. Holcim has been talking about the Go4Zero project for several years though, so appointing a lead contractor is not surprising.

Yet, some cement companies in Europe have previously been circumspect about revealing the use of China-based suppliers. Lafarge France, for example, did not appear to publicly name the involvement of Sinoma International Engineering and its subsidiaries on the construction of a new line at its Martres-Tolosane cement plant between 2019 and 2022, although Lafarge Poland did say in 2020 that it had contracted China Triumph International Engineering for an upgrade to its Małogoszcz cement plant. No doubt there have been other plant projects in Europe from China-based suppliers that Global Cement Weekly is unaware of. It is also worth considering that just because a lead contractor on a plant project is from a particular country it doesn’t mean that the equipment and other sub-contractors necessarily are. And, of course, to add to the confusion, some Europe-based equipment suppliers are owned by companies based in China.

This leads to the second point. Holcim Belgium’s eventual goal is to set up a full-scale carbon capture, transportation and sequestration (CCUS) operation at Obourg using oxyfuel technology by the end of the 2020s. Spending over Euro200m on building a new (but conventional) production line is not trivial but it is being presented as one step towards creating a cement plant for the net zero age. To this end Holcim Belgium has been less shy in naming its partners for the second phase of the project: Air Liquide; Fluxys; and TotalEnergies. This may be due to the collaborative nature of this phase though and the need to apply for European Union (EU) funding to support it. In July 2023 Holcim disclosed that the EU Innovation Fund had allocated grants for three of its projects including the one at Obourg.

For reference, a number of other full-scale oxyfuel projects have been announced in Europe including in Germany at Heidelberg Materials' Geseke cement plant, Holcim Deutschland's Lägerdorf plant in Germany and Schwenk Zement’s Mergelstetten plant. Another one is planned for Heidelberg Materials’ CBR's Antoing cement plant in Belgium. Most of these are planned for the late 2020s or with pilots sooner. The key bit of information to consider here is that adding oxyfuel technology to a cement kiln (or building one with it to start with) makes it easier to capture CO₂ from the flue gas as it is more concentrated. However, the technology is newer and less-tested than many post-combustion carbon capture methods. Hence, the world’s first full-scale CCUS unit at a cement plant, at Brevik in Norway, will use a post combustion method.

All of this begs the question about where the value will lie in building cement plants for the age of net zero? The planned work at Holcim Belgium’s Obourg Plant pretty much summarises this quandary. Building a cement production line is expensive but the cost of disposing of CO₂ may become the single-biggest driver of whether a plant is profitable or not if governments are serious about reaching net zero. To that end today’s announcement from the 2023 United Nations Climate Change Conference (COP28) calling on the parties to “transition away from fossil fuels to reach net zero” is another sign of the increasing effects of the so-called ‘carbon agenda’ upon the cement sector. In which case the companies that can supply equipment to take care of the CO₂ emissions start becoming more important and discussions over who supplies the rest of the kit less so. Naturally, some cement equipment suppliers are already pivoting towards this approach. Others may find different solutions. Whether this works or not is a question for the future. In the mean-time, building new plants is looking increasingly collaborative.

Belgium: China National Building Material subsidiary Sinoma International Engineering won a contract to build a new clinker line for Holcim Belgique on 8 December 2023. Yicai Global News has reported that Sinoma International Engineering will design the line, supply its mechanical and electrical equipment, procure steel structures and provide technical services under a contract worth Euro218m. The supplier expects to commission the line within 38 months of commencement of the project.

Holcim Belgique operates the 1.7Mt/yr Obourg cement plant in Mons. The plant is upgrading to net zero CO₂ cement production under the GO4ZERO project, as part of which Holcim Belgique previously announced plans to install a new kiln in the place of the plant’s existing ones.

China: China National Building Material (CNBM) plans to rearrange shareholding in Sinoma Cement between its subsidiaries. On 4 December 2023, fellow CNBM subsidiary Sinoma International Engineering agreed to buy US$174m-worth of shares in Sinoma Cement. Upon completion of this, Sinoma International Engineering and New Tianshan Cement will together buy US$975m-worth of shares. Following these subscriptions, Sinoma Cement’s share capital will rise by 67%, to US$436m. New Tianshan Cement’s total stake in the company will be 60%.

The group’s first-half 2023 interim report recorded Sinoma Cement as a 100% subsidiary of New Tianshan Cement.