Displaying items by tag: Sustainability

Mexico: Cemex has shared its 2019 sustainability achievements in an integrated report entitled ‘Innovating for a Better World,’ which analyses the company’s strategic vision, operational performance and corporate governance against its commitment to drive innovation in the cement sector. Throughout the year, the company introduced its new Climate Action strategy to reduce CO2 emissions by 35% by 2030 and established an ambition to deliver net-zero CO2 concrete by 2050. It achieved an alternative fuel substitution rate of 28%, its highest since 2014, bringing its net specific CO2 emissions per tonne of cementitious product to 624kg.

Cemex’s net income was US$179m in 2019, down by 69% year-on-year from US$570m in 2018. Its sales declined by 8%, to US$4.3bn from US$4.7bn

Mexico: Cemex has worked with AES Mexico, the Mexican Fund for the Conservation of Nature (FMCN), the Mexican Ministry of Environment and Natural Resources (SEMARNAT) through the General Wildlife Direction, and the National Commission of Natural Protected Areas (CONANP) to successfully reintroduce 19 American bison specimens (Bison bison) in El Carmen Nature Reserve, in Coahuila, to establish the second conservation herd of this species in Mexico.

“For almost two decades, we have carried out different alliances with companies and conservation organisations to protect and increase biodiversity in El Carmen. Examples of this include the reintroduction of the American bison, the bighorn sheep, and the pronghorn, as well as the increase in the populations of desert mule deer, white-tailed deer, and black bear,” said Vicente Saisó, director of sustainability at Cemex.

El Carmen Nature Reserve is a private cross-border conservation area in Mexico and the US that contains five different ecosystems and habitats to diverse species of plants, birds, mammals, reptiles, and amphibians over more than 140,000 hectares.

The American bison is the largest land mammal in North America and was present in the plains of Canada, the US and Mexico. In Mexico, American bison lived in the states of Sonora, Chihuahua, Coahuila, Nuevo León, and Durango; however, it the species was depleted in the second half of the 19th century. Currently, it is a species that is in danger of extinction in Mexico.

Prior to this collaboration, the only herd of bison considered genetically pure was at Rancho El Uno, owned by FMCN, located within the Janos Biosphere Reserve, Chihuahua. 19 specimens from this herd were moved to El Carmen, located in Maderas del Carmen Flora and Fauna Protection Area by a team of wildlife management specialists. The plan to reintroduce the American bison in El Carmen Nature Reserve was launched in April of 2019, and it will continue until 2021 with the translocation of additional specimens.

EU: Cembureau has responded to the European standardisation organisation Cenelec’s CEN/TC 350 ‘sustainability of construction works’ rules by amending its European Environmental Product Declarations (EPDs) for CEM I, CEM II and CEM III, corresponding to Portland cement, Portland-composite cement and blast furnace cement respectively. It says the update brings the three main cement types into ‘full alignment with the EU Commission strategy for a sustainable built environment.’

Canada: McInnis Cement, Écotech Québec and the Gaspésie Cleantech Hub, in collaboration with the Québec Ministère de l’Économie et de l’Innovation, have launched a call for innovations to identify carbon capture and utilisation technologies for the Port-Daniel-Gascons, McInnis cement plant. This call for innovations will run until May 2020 and then selected organisations will be invited to explore future options.

“From the moment the company was founded, McInnis Cement has been exploring the option of replacing some of the hydrocarbons used as fuel for the plant with locally generated residual forest biomass so as to reduce its environmental emissions,” said Maryse Tremblay, Director of Communications and Corporate Social Responsibility at McInnis Cement. She added that a study to verify the feasibility of using this type of alternative fuels is underway and that this may be followed by a pilot project.

Écotech Québec is a non-profit organisation, funded by the provincial government, which represents Québec's ‘clean’ technology cluster. It supports businesses, researchers, investors and associations to help accelerate the development, financing and commercialisation of clean technologies. The Gaspésie Cleantech Hub is an economic development organisation created to help the region increase the economic benefits of establishing the McInnis cement plant.

Denmark: FLSmidth has increased the sales from its cement division despite ‘challenging’ marketing conditions. Its revenue grew by 3% year-on-year to Euro1.13bn in 2019 from Euro1.10bn in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 28% to Euro65m from Euro51m. It achieved this despite its order intake falling by 16% to Euro1bn from Euro1.19bn. It attributed its revenue increase to high order backlog conversion and positive currency exchange effects. Internal efficiency measures and a ‘selective’ approach to large projects were also said to have helped.

“We were pleased to see that the financial performance of our Cement business showed a positive development despite challenging market conditions,” said FLSmidth Group chief executive officer (CEO) Thomas Schulz. He added that sustainability and digitalisation would be key differentiators in the coming years and that the engineering company was ‘well-positioned’ in both areas.

Mexico: Grupo Cementos de Chihuahua (GCC) says it will commit to setting greenhouse gas reduction targets in line with climate science by joining the Science Based Targets initiative (SBTI). GCC will set science-based emission reduction targets in line with the level of decarbonisation required to keep global temperature increase well-below 2°C compared to pre-industrial temperatures, as described in the latest Special Report of the Intergovernmental Panel on Climate Change (IPCC).

“By joining the SBTI, GCC will ensure that the company´s low-carbon transformation is aligned with climate science and is a further reflection of our unwavering commitment to implement global best practices related to sustainability,” said Enrique Escalante, GCC´s chief executive officer (CEO).

Here’s a fun idea: providing building materials as a service. Instead of the owner of a building possessing all the materials in it forever, they simply rent them. It would be like a music or television streaming service. A ‘Netflix’ or ‘Spotify’ for the construction industry. ‘Rentacrete’ if you will…

The Guardian Cities series has been discussing the idea this week in a feature on whether buildings should be demolished at the end of their lifetime. The feature largely looks at the ideas of Dutch architect and commentator Thomas Rau, the author of Material Matters. He talks about his ‘materials passport’ concept whereby all the materials in a building are logged with their properties to highlight their value when the structure is demolished. This is a refinement of the Building Information Modelling (BIM) system. Rau has put his passport premise into action for a couple of projects through his firm and the Madaster Foundation promotes its use.

The next steps that he envisages are buildings where the materials that constitute it are simply rented from the manufacturer. Since the material owners would now become companies they would have an interest in efficiency where the materials can be refitted, such as lighting, and/or recycled for when the building is torn down. In Rau’s view these companies would be in a better position to recoup the value of these materials when a building is demolished. He estimates that 18% of a building’s original construction cost can be preserved in this way. Suddenly, sustainability becomes much easier by changing one’s perspective on who owns what exactly in a building.

How this idea would work in practice raises all sorts of questions. For example, most buildings in the developed world last for as least as long as humans do. Which companies could be relied on to hang around this long? Building materials as a service might work for soft materials that are replaced more often, such as lighting and other interior fittings, but could this extend to a structure’s shell? One answer to this is that people invest in pension schemes and use banks quite happily over long periods time, so why not a building’s very fabric? Another issue is of liability and whether a manufacturer would want to take on additional responsibilities for its products decades later. This, and the idea in general, have similarities to the extended product responsibility strategy. Obviously someone needs to try out building materials as a service for real to tackle these questions and many more.

Building materials as a service is compelling but one reason that the construction industry has proved resistant to the digital revolution across the entire business, so far, is because it ultimately deals with physical products that people need permanently. Consumer digital renting services for media, like Netflix and Spotify, are ‘disposable’. Hence, the mindset is different. That’s not to say that building materials as a service is impossible just that it is a harder shift in thinking. A country with a high level of residential renting, for example, might find it easier to move to this model than one with high levels of home ownership.

One more thing to consider is that the media renting companies mentioned above are dependent on other companies producing the content. Due to this they have moved towards vertical integration as the producers themselves, notably Disney in 2019 which has started to set up its own online rental platform. The point here being that in a product rental environment, whoever produces the product, holds a large amount of influence. Building materials manufacturers take note. Building materials as a service might just be a talking point on the lecture circuit along the road towards sustainability in the construction industry. Yet if it did happen at any scale then the producers of concrete, mortar, bricks, steel and all the rest would be well placed to benefit from it.

It’s the end of the year so it’s time to look at trends in the sector news over the last 12 months. It’s also the end of a decade, so for a wider perspective check out the feature in the December 2019 issue of Global Cement Magazine. The map of shifting production capacity and the table of falling CO₂ emissions per tonne are awesome and inspiring in their own way. They also point towards the successes and dangers facing the industry in the next decade.

Back on 2019 here are some of the main themes of the year in the industry news. This is a selective list but if we missed anything crucial let us know.

European multinationals retreat

LafargeHolcim left the Philippines, Malaysia and Indonesia, HeidelbergCement sold up in Ukraine and reduced its stake in Morocco and CRH is reportedly making plans to leave the Philippines and India, if local media speculation can be believed. To be fair to HeidelbergCement it has also instigated some key acquisitions here and there, but there definitely has been a feel of the multinationals cutting their losses in certain places and retreating that bit closer to their heartlands.

CRH’s chief executive officer Albert Manifold summed it up an earnings meeting when he said, “…you're faced with a capital allocation decision of investing in Europe or North America where you've got stability, certainty, overlap, capability, versus going for something a bit more exotic. The returns you need to generate to justify that higher level of risk are extraordinary and we just don't see it.”

The battle for the European Green Deal

One battle that’s happening right now is the lobbying behind the scenes for so-called energy-intensive industries in Europe as part of the forthcoming European Green Deal. The cement industry is very aware that it is walking a tightrope on this one. The European Union (EU) Emissions Trading Scheme (ETS) CO₂ price started to bite in 2019, hitting a high of Euro28/t in August 2019 and plant closures have been blamed on it. The rhetoric from Ursula von der Leyen, the new president of the European Commission, has been bullish on climate legislation and the agitation of Greta Thunberg internationally and groups like Extinction Rebellion has kept the issue in the press. Cembureau, the European Cement Association, is keen to promote the industry’s sustainability credentials but it is concerned that aspects of the proposed deal will create ‘uncertainty and risks.’ Get it wrong and problems like the incoming ban on refuse-derived fuel (RDF) imports into the Netherlands may proliferate. What the Green Deal ends up as could influence the European cement industry for decades.

The managed march of China

Last’s week article on a price spike in Henan province illustrated the tension in China between markets and government intervention. It looks like this was driven by an increase in infrastructure spending with cement sales starting to rise. Cement production growth has also picked up in most provinces in the first three quarters of 2019. This follows a slow fall in cement sales over the last five years as state measures such as consolidation and peak shifting have been implemented. The government dominates the Chinese market and this extends west, as waste importers have previously found out to their cost.

Meanwhile, the Chinese industry has continued to grow internationally. Rather than buying existing assets it has tended to build its own plants, often in joint ventures with junior local partners. LafargeHolcim may have left Indonesia in 2018 but perhaps the real story was Anhui Conch's becoming the country's third biggest producer by local capacity. Coupled with the Chinese dominance in the supplier market this has meant that most new plant projects around the world are either being built by a Chinese company or supplied by one.

India consolidates but watches dust levels

Consolidation has been the continued theme in the world's second largest cement industry, with the auction for Emami Cement and UltraTech Cement’s acquisition of Century Textiles and Industries. Notably, UltraTech Cement has decided to focus its attention on only India despite the overseas assets it acquired previously. Growth in cement sales in the second half of 2019 has slowed and capacity utilisation rates remain low. Indian press reports that CRH is considering selling up. Together with the country's low per capita cement consumption this suggests a continued trend for consolidation for the time being.

Environmental regulations may also play a part in rationalising the local industry, as has already happened in China. The Indian government considered banning petcoke imports in 2018 in an attempt to decrease air pollution. Later, in mid-2019, a pilot emissions trading scheme (ETS) for particulate matter (PM) was launched in Surat, Gujarat. At the same time the state pollution boards have been getting tough with producers for breaching their limits.

Steady growth in the US

The US market has been a dependable one over the last year, generally propping up the balance sheets of the multinational producers. Cement shipments grew in the first eight months of the year with increases reported in the North-Eastern and Southern regions. Imports also mounted as the US-China trade war benefitted Turkey and Mexico at the expense of China. Alongside this a modest trade in cement plants has been going on with upgrades also underway. Ed Sullivan at the Portland Cement Association forecasts slowing growth in the early 2020s but he doesn’t think a recession is coming anytime soon.

Mixed picture in Latin America

There have been winners and losers south of the Rio Grande in 2019. Mexico was struggling with lower government infrastructure spending hitting cement sales volumes in the first half of the year although US threats to block exports haven’t come to pass so far. Far to the south Argentina’s economy has been holding the cement industry back leading to a 7% fall in cement sales in the first 11 months of the year. Both of these countries’ travails pale in comparison to Venezuela’s estimated capacity utilisation of just 12.5%. There have been bright spots in the region though with Brazil’s gradual return to growth in 2019. The November 2019 figures suggest sales growth of just under 4% for the year. Peru, meanwhile, continues to shine with continued production and sales growth.

North and south divide in Africa and the Middle East

The divide between the Middle East and North African (MENA) and Sub-Saharan regions has grown starker as more MENA countries have become cement exporters, particularly in North Africa. The economy in Turkey has held back the industry there and the sector has pivoted to exports, Egypt remains beset by overcapacity and Saudi Arabian producers have continued to renew their clinker export licences.

South of the Sahara key countries, including Nigeria, Kenya and South Africa, have suffered from poor sales due to a variety of reasons, including competition and the local economies. Other countries with smaller cement industries have continued to propose and build new plants as the race to reduce the price of cement in the interior drives change.

Changes in shipping regulations

One of the warning signs that flashed up at the CemProspects conference this year was the uncertainty surrounding the new International Maritime Organistaion (IMO) 2020 environmental regulations for shipping. A meeting of commodity traders for fuels for the cement industry would be expected to be wary of this kind of thing. Their job is to minimise the risk of fluctuating fuel prices for their employers after all. Yet, given that the global cement industry produces too much cement, this has implications for the clinker and cement traders too. This could potentially affect the price of fuels, input materials and clinker if shipping patterns change. Ultimately, IMO 2020 comes down to enforcement but already ship operators have to decide whether and when to act.

Do androids dream of working in cement plants?

There’s a been a steady drip of digitisation stories in the sector news this year, from LafargeHolcim’s Industry 4.0 plan to Cemex’s various initiatives and more. At present the question appears to be: how far can Industry 4.0 / internet of things style developments go in a heavy industrial setting like cement? Will it just manage discrete parts of the process such as logistics and mills or could it end up controlling larger parts of the process? Work by companies like Petuum show that autonomous plant operation is happening but it’s still very uncertain whether the machines will replace us all in the 2020s.

On that cheery note - enjoy the winter break if you have one.

Global Cement Weekly will return on 8 January 2020

Mexico: Cemex Ventures has partnered with BCG and Tracxn to launch a list of 2019’s global 50 ‘most promising’ construction start-ups. Assessment categories were technical innovation, project management and sustainability. Companies like the UK’s Cloud Cycle, a concrete management platform provider, and the US’s Concrete Sensors, which provides remote concrete strength, temperature and relative humility measurement solutions, typify the promising developments in how the construction industry uses its cement.

Uzbekistan: The State Committee for Ecology and Environmental Protection plans to ask cement plants to establish sampling and analysis stations for sources of air pollution by the start of 2022. If they don’t the government will take measures up to and including suspension of production, according to the Trend News Agency. Uzbekistan was ranked in 16th place by AirVisual in a listing of the countries with the most air pollution in 2018.