Displaying items by tag: Sinoma International Engineering

Iraq: China-based Sinoma International Engineering has won a contract to build a 2.19Mt/yr cement plant in Samawa, Muthanna, for Al-Diyar Company for Cement Industry and Industrial Investment. Yicai Global News has reported that Sinoma International Engineering will carry out engineering, procurement and construction on the project. The value of the contract is US$220m.

China: Yin Zhisong has been elected as the chair of Sinoma International Engineering. He succeeds Liu Yan, who has resigned. Zhisong has held of number of management positions with subsidiaries of China National Building Material (CNBM) and Sinoma. Notably he has worked as the general manager of Suzhou Sinoma Construction, the general manager of Sinoma International Engineering and a vice president at Sinoma International Engineering.

Ethiopia/India: Sinoma International Engineering and its subsidiaries have signed contracts to upgrade cement plants for Ethiopia-based Derba MIDROC Cement and India-based Ambuja Cement.

Sinoma International Engineering has signed a contract worth US$290m with Derba MIDROC Cement to build a 5000t/day clinker production line at the cement producer’s plant at Deba in Oromia. The project includes supplying a full line from raw material crushing to cement packaging. Once payment conditions are confirmed the project should take around 30 months.

Ambuja Cement has signed a contract with Sinoma subsidiary Tianjin Cement Industry Design and Research Institute (Sinoma TCDRI) to supply upgrades to its integrated Bhatapara plant in Chhattisgarh and its Farakka and Sankrail grinding plants in West Bengal. The clinker plant’s production capacity will be expanded to 4Mt/yr and both grinding plants will be increased to 2Mt/yr respectively. The value of the contract is around US$285m. Schedules for the proposed work will be agreed subject to further negotiation.

Saudi Arabia: Southern Province Cement has secured a loan worth US$373m from Saudi National Bank. The loan will cover its construction of a 5000t/day production line at its upcoming Jizan cement plant, as well as the construction of infrastructure for a second new line of the same capacity at the plant. The producer appointed China-based Sinoma International Engineering to build the plant in May 2023.

Reuters has reported that the loan has a duration of 10 years and a two-year grace period.

India: Sinoma subsidiary LNV Technology has won an engineering, procurement and construction (EPC) contract in India. Reuters News has reported that the contract is in the area of 'cement production.' Its value is US$53.8m.

LNV Technology is headquartered in Chennai, Tamil Nadu. It previously supplied grinding systems and other equipment for JK Lakshmi Group, Jaiprakash Associates (now part of Dalmia Bharat) and Holcim India (now part of Adani Group).

Sinoma International Engineering was revealed this week as the winner of a contract to build a new production line at Southern Province Cement’s Jizan plant. The China-based engineering firm said that the US$330m contract was to build a full line, from limestone crushing to bagging, with an output of 5000t/day. The construction period is expected to take just over two years, suggesting a commissioning date in mid-2025 if work starts now. The project has been in the pipeline for a while with an announcement in mid-2021. It was previously reported that the new line is intended to replace the two existing production lines at the site once completed.

Other recent projects in the country include Yamama Cement’s plans to move its cement plant near Riyadh to a new location. Sinoma International Engineering was also selected as the main contractor in November 2022 for the US$220m project. The relocated line – using both old and new equipment – will have a production capacity of 10,000t/yr. Project duration was estimated at around two-and-a half years following financial contractual commitments. So the earliest this one might be completed is also mid-2025. Eastern Province Cement also started making moves to build a new major upgrade in March 2023 when it started the tendering process for a planned 10,000t/day production line at its Al Khursaniyah Plant. The intention is to replace some of the obsolete lines at the unit. The project dates back to 2015, when it was first announced.

Graph 1: Domestic cement sales and clinker exports in Saudi Arabia, 2013 – 2022. Source: Yamama Cement

The timing of these new projects is compelling given that sales by the local industry peaked in 2015. They declined in 2018 to a low of around 40Mt before stabilising at around 50Mt for the last three years. However, one trend to note is how clinker exports reached 7.1Mt in 2022, the highest figure in a decade, since export rules were relaxed in 2017. They have grown year-on-year since 2018 with the exception of 2020. Cement exports have been lower since 2013 hitting a high of 1.9Mt in 2019, although 2022 was nearly as good at 1.8Mt.

The other big news story from the local sector in 2023 was the US$37m fine that the General Authority for Competition (GAC) levied for price fixing in April 2023. 14 of the 17 main cement companies in the country were found to have broken local competition law following an investigation. Detail on specifically what happened is light, but the GAC said that it took exception to companies “controlling prices of commodities and services meant for sale by increasing, decreasing, fixing their prices or in any other manner detrimental to lawful competition.”

As ever with the Saudi construction market, government spending is expected to keep things buoyant. Although input and logistic costs have risen like everywhere else, energy costs have also risen. This, no doubt, is useful to a government planning on building a bunch of so-called ‘Giga’ projects. Local sales of cement may have dipped slightly in 2022 but building all these big new projects will require plenty of cement. A report by the SICO Bank in January 2023 forecast that local cement demand was expected to remain ‘flat’ in 2023 but that it would grow by 5% year-on-year in 2024. Interestingly, it added that demand from the tourism and exhibition sector would also fuel demand in the run-up to 2030 as various schemes connected to the ‘Giga’ projects reached fruition.

Each of the three projects detailed above are intended to replace existing capacity. This suggests that none of these companies expect the market to grow significantly anytime soon. These cement producers are likely to be focusing on improving efficiencies from their existing market share. Alongside this, exports of cement and clinker have grown, giving combined local and export sales that are similar to the market peak in 2015. Efficiency savings and adapting to a mature market appear to be the way forward for Saudi cement producers in the near-term.

Saudi Arabia: China-based Sinoma International Engineering has won an engineering, procurement and construction (EPC) contract to build Southern Province Cement's upcoming Jizan cement plant, in the province of the same name. YiCai Global News has reported that the plant will have a capacity of 1.83Mt/yr. Commissioning is scheduled to follow 27 months after the start of construction. Sinoma International Engineering's contract covers installation of the entire line, from limestone crushing to cement bagging. The value of the work is US$300m.

Fellow CNBM subsidiary Sinoma Overseas Development previously won a US$220m contract with Yamama Cement for transferal of its Riyadh cement plant's new Line 7 from its old plant to its new location.

Kenya: Savannah Clinker, an associate company of Savannah Cement, has raised around US$480m to build a new integrated cement plant in Kitui county. It said it generated the funding through a privately placed debt arrangement with the bond set to be listed at regulated international exchange, according to the Business Daily newspaper.

Benson Ndeta, chairman of Savannah Cement Group, said “I am extremely proud to have the support of a major international investor who shares our vision and beliefs in what is required to deliver the growth and development of our key infrastructure and affordable housing.”

It was announced in December 2022 that China-based Sinoma International Engineering had been contracted to build the 2.92Mt/yr plant with a completion date planned for late 2024.

Ethiopia: China-based Sinoma International Engineering has signed an agreement with National West International Holding (WIH) Building Materials to build an industrial park development project at Dire Dawa. The project has an investment of US$600m and will include a 6000t/day cement plant and a 1000t/day lime unit, according to the Xinhua News Agency. The proposed industrial park is relatively close to the Port of Djibouti, in neighbouring Djibouti, to allow for access to raw materials and potential export markets.

WIH, a joint-venture between companies based in Ethiopia and China, already operates a cement plant at Lemi in Amhara Region.

Ethiopia: China-based China National Building Material (CNBM) and its engineering subsidiary Sinoma International have expressed interest in investing in the local cement sector. The comments were made in a meeting with Tefera Derbew, Ethiopia’s ambassador to China, and Liu Yan, an executive director of CNBM and the chair of Sinoma International, according to Fana. During the gathering Derbew noted Sinoma’s contribution so far towards helping build cement plants in the country. CNBM has accepted an invitation to participate in the Invest Ethiopia forum taking place in Addis Ababa in late April 2023.