Displaying items by tag: Sustainability

UK: The Global Cement and Concrete Association (GCCA) has expanded its Innovandi innovation programme with the addition of a new Open Challenge innovation accelerator programme. The Open Challenge programme will bring together start-ups and leading cement and concrete producers to innovate for CO₂ emissions reduction in the cement industry. Its aim is carbon neutral concrete production by 2050.

GCCA chief executive officer Dinah McLeod said “The GCCA is delighted to be expanding Innovandi to encompass both the Research Network and the upcoming Open Challenge. By connecting innovative start-ups with cement and concrete producers we can help accelerate the development of solutions that address the emissions reduction challenges our industry faces.”

Switzerland: The Solar Impulse Foundation has certified 10 LafargeHolcim products with its ‘Efficient Solutions’ label. The label designates products which protect the environment in a profitable way. The following LafargeHolcim products now bear the label: 14Trees 3D concrete printing technology; Aggneo recycled aggregate; Airium insulating foam; Bio-Active Concrete for coastal ecosystem rehabilitation; Ductal ultra-lightweight concrete; Durabric earth-based block; ECOPact green concrete; TerraFlow low-carbon cement; Kawach water-repellent cement; and the ORIS digital road design platform.

Chief executive officer Jan Jenisch said “I’m very proud of our strong contribution to the Solar Impulse Foundation’s goal of finding 1000 environmentally positive solutions. With more than half of our research and development efforts focused on sustainable building solutions, we are committed to enabling a net-zero future that works for people and the planet. Today’s endorsement of our clean technologies is a great encouragement for our teams to keep on pushing the boundaries of innovation for sustainable building.”

Brazil: Votorantim Cimentos’ consolidated net sales were US$6.41bn in 2020, up by 19% year-on-year from US$5.41bn in 2019. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) also rose, by 35% to US$1.21bn from US$899m. The group attributed the growth to increased cement volumes sold in Brazil, Canada and the US. Total global cement sales increased by 8% to 32.4Mt. Net revenue grew in all regions, but the sharpest growth was reported in North America at 43% to US$945m.

Chief financial officer Osvaldo Ayres Filho said, “The past year has been extremely challenging due to the pandemic and its impacts across the planet. We have implemented a contingency plan to protect people's lives and preserve operations. This allowed us to respond with agility both in Brazil and in the other markets in which we have operations, ending the year with increased sales, cash generation growth and the lowest leverage in the past ten years.”

During the year, the group unified its joint-venture in Uruguay, with Cementos Molins, at a single site and merged its Canadian and US businesses under a new 83% owned subsidiary. It suspended its Pecém grinding plant expansion in Brazil due to the coronavirus pandemic and resumed it in September 2020. Completion of the project is scheduled for the first half of 2021. The producer also released its Sustainability Commitments for 2030 in November 2020.

India: Ambuja Cement has successfully sent two cement shipments to their destinations using biofuel-powered ships. Two of the company’s cement carriers delivered cement in India while running using biofuel derived from soya extract.

The biodiesel blend (B20) was in compliance with International Maritime Organisation sulphur content requirements and met International Convention for the Safety of Life at Sea (SOLAS) levels in terms of flash point requirements. No increase of NOx was observed with biodiesel blend as compared to low sulphur high-speed diesel (LSHSD), rather the emission level was found to be less. The reduction in CO₂ was found to be around 7% and the total life cycle reduction of CO₂ by life cycle analysis was measured to be around 21%, as the biodiesel from soya extract had a reduction of life cycle greenhouse gas emissions by 70%.

Following the successful initiative, the Directorate General of Shipping has approved biofuels trials for the rest of Ambuja Cement’s fleet, which are mainly deployed on the Indian coastal route.

US: The Portland Cement Association (PCA) has received the 2021 Energy Star Partner of the Year award from the US Environmental Protection Agency and the US Department of Energy. It is the second year in a row the association has been recognised in this way. Each year, the Energy Star program recognises a group of businesses and organisations that have made outstanding contributions to protecting the environment through superior energy achievements.

“The PCA and its members are proud to be recognised for continuously improving energy efficiency to reduce emissions,” said PCA President and chief executive officer Michael Ireland. “The cement and concrete industry is leading the way towards a more sustainable future as PCA and its members are developing an industry roadmap across the entire value chain to reach carbon neutrality by 2050."

In addition to PCA’s Partner of the Year recognition, two PCA member companies, CalPortland and Cemex USA, earned corporate Partner of the Year awards and 13 US cement plants earned Energy Star certification for superior energy performance in 2020.

Japan: Sumitomo Osaka Cement plans to set up a ‘Sustainability Promotion Office’ in April 2021 as part of the company’s efforts towards carbon neutrality by 2050. It follows the company’s medium and long-term sustainability targets that were set in December 2020.

Azerbaijan: Holcim Azerbaijan, part of Switzerland-based LafargeHolcim, has launched its participation in the Azerbaijan Ministry of Ecology and Natural Resources’ National Green Marathon with the planting of 1000 trees at its Garadagh cement plant. Turan Information Agency News has reported that the initiative aims to plant 1 million trees nationally in 2021.

Technical director Ali Huseynov said, "We have a common goal and value - sustainable development. We should apply principles of sustainability in each work and in every step. We are ready to demonstrate our best practices in environmental protection.” He added, “Our work is not over. We should also care for these trees and install an irrigation system. For this purpose, the work necessary for treatment and use of the wastewater in the irrigation system has started, and with this we can save clean water, contributing to the environmental protection."

UK: Tarmac, part of Ireland-based CRH, has relocated reptiles to purpose-built bespoke habitats at its Bellhouse, Essex, quarry. The reptiles lived in an area of planned quarry expansion. Work began in 2016 on the new habitat for grass snakes, common lizards and slow worms, consisting of acid grassland, tussocks and ponds. The company plans to expand the reserve under its site restoration process. It says that this will enable reptile populations to grow.

Restoration manager Enrique Moran Montero said, “The restoration phase of a quarry provides so many opportunities to promote local fauna and flora, and we pride ourselves in making the most of this land. From nature reserves to parks and wildlife learning zones for schools to use, we always strive to provide benefits for local wildlife as well as the communities we work in.”

Financial results for 2020 from the major Chinese cement companies are now out, making it time for a recap. Firstly, information from the China Cement Association (CCA) is worth looking at. The country had a cement production capacity of 1.83Bnt/yr in 2020. For an idea of the current pace of industry growth, 26 new integrated production lines were built in 2020 with a clinker production capacity of just under 40Mt/yr.

This is as one might expect from the world’s biggest cement market. However, the CCA also revealed that the country has over 3400 domestic cement companies, of which two thirds are independent cement grinding companies. Most of these were reportedly created during the late 2000s as dry kilns started to predominate. The CCA is concerned with the quality of the cement some of these companies produce and the lack of order in this part of the market such as regional imbalances. This suggests that the government’s attempts to consolidate the cement industry as a whole had led to the independent companies heading down the supply chain. It also raises the possibility that the government-led consolidation drive may move to grinding next. One news story to remember here is that in February 2021 the CCA called for its industry to respect competition laws following a government investigation. Later in the month it emerged that eight cement companies in Shandong Province had been fined US$35m for price fixing in a sophisticated cartel whereby the perpetrators went as far arranging a formal price management committee to regulate the market.

The CCA described 2020 as a year of sudden decline, rapid recovery and stability. Coronavirus hit cement output in the first quarter of 2020 leading to unprecedented monthly year-on-year declines before it bounced right back in a classic ‘V’ shaped recovery pattern. Despite the pandemic and bad weather later in the year, annual output rose by 2% year-on-year to 2.37Bnt in 2020 from 2.32Bnt in 2019. This has carried on into 2021 with a 61% increase in January and February 2021 to 241Mt from 150Mt in the same period in 2020. That’s not surprising given that China was suffering from the pandemic in these months in 2020 but the growth also suggests that the industry may have gone past stability and is growing beyond simply compensating for lost ground.

Graph 1: Year-on-year change in cement output in China, January 2010 - February 2021. Source: National Bureau of Statistics of China. Note that accumulated data is issued for January and February each year so these months show a mean figure.

Chart 2: Annual cement production growth by Province in 2020. Source: China Cement Association.

Chart 2 above shows cement production in 2020 from a provincial perspective. Note the sharp decline, more than 10% year-on-year, in Hubei Province (shown in dark green). Its capital Wuhan is where the first documented outbreak of coronavirus took place followed by a severe lockdown. Zooming further out, China’s clinker imports grew by 47% year-on-year to 33.4Mt in 2020. This is the third consecutive year of import growth, according to the CCA. The leading sources were Vietnam (59%), Indonesia (10%), Thailand (10%) and Japan (8%). China has become the main export destination for South East Asian cement producers and Chinese imports are expected to continue growing in 2021.

Graph 2: Revenue of large Chinese cement producers in 2020 and 2019. Source: Company reports.

Moving to the financial figures from the larger Chinese cement producers, CNBM and Anhui Conch remain the world’s two largest cement producing companies by revenue, beating multinational peers such as CRH, LafargeHolcim and HeidelbergCement. Anhui Conch appeared to be one of the winners in 2020 and Huaxin Cement appeared to be one of the losers. This is misleading from a cement perspective because Anhui Conch’s increased revenue actually arose from its businesses selling materials other than clinker and cement products. Its cement sales and cement trading revenue remained stable. On the other hand, Huaxin Cement was based, as it describes, in the epicentre of the epidemic and it then had to contend with flooding along the Yangtze River later in the year. Under these conditions, it is unsurprising that its revenue fell.

CNBM’s cement sales revenue fell by 3% year-on-year to US$19.5bn in 2020 with sales from its new materials and engineering compensating. Anhui Conch noted falling product prices in 2020 to varying degrees in most of the different regions of China except for the south. CNBM broadly agreed with this assessment in its financial results. Anhui Conch also reported that its export sales volumes and revenue fell by 51% and 45% year-on-year respectively due to the effects of coronavirus in overseas markets. The last point is interesting given that China increasingly appears in lists of major cement and clinker exporters to different countries. This seems to be more through the sheer size of the domestic sector rather than any concerted efforts at targeting exports.

One major story on CNBM over the last 15 months has been its drive to further consolidate its subsidiaries. In early March 2021 it said it was intending to increase its stake in Tianshan Cement to 88% from 46% and other related transactions. This followed the announcement of restructuring plans in mid-2020 whereby subsidiary Tianshan Cement would take control of China United Cement, North Cement, Sinoma Cement, South Cement, Southwest Cement and CNBM Investment. The move was expected to significantly increase operational efficiency of its constituent cement companies as they would be able to start acting in a more coordinated manner and address ‘fundamental’ issues with production overcapacity nationally.

In summary, the Chinese cement market appears to have more than compensated for the shocks it faced in 2020 with growth in January and February 2021 surpassing the depression in early 2020. Market consolidation is continuing, notably with CNBM’s efforts to better control the world’s largest cement producing company. Alongside this the CCA may be starting to suggest that rationalisation efforts previously focused on integrated plants should perhaps be now looking at the more independent grinding sector. The government continues to tighten regulations on new production capacity and is in the process of introducing new rules increasing the ratio of old lines that have to be shut down before new ones can be built. Finally, China introduced its interim national emissions trading scheme in February 2021, which has large implications for the cement sector in the future, even if the current price lags well behind Europe at present.

US: The California Nevada Cement Association (CNCA) has published a plan for the Californian cement industry to meet its target of carbon neutrality by 2045. The plan consists of three pathways, namely: a reduction in process emissions including by alterations to clinker factor and type of additives; an increase in alternative fuel (AF) substitution; and a switch to renewable energy. The association said that the aims are achievable by close stakeholder coordination, constructive public policy engagement and a situational approach based on a flexible portfolio of pathways.