Displaying items by tag: Sweden

More details from HeidelbergCement this week on its divestment strategy. It has sold its half-share in Ciment Québec in Canada and a minority share in a company in Syria. A closed cement plant in Egypt is being sold and it is working on divesting its business in Ukraine. Altogether these four sales will generate Euro150m for the group. Chairman Bernd Scheifele said that the company expects to rake in Euro500m from asset sales in 2018. It has a target of Euro1.5bn by the end of 2020.

In purely cement terms that is something like seven integrated plants. So the usual game follows of considering what assets HeidelbergCement might consider selling. The group offered a few clues in a presentation that Scheifele was due to give earlier this week at the Commerzbank German Investment Seminar in New York.

First of all the producer said that it was hopeful for 2019 due to limited energy cost inflation, better weather in the US, the Indonesian market turning, general margin improvement actions and sustained price rises in Europe. It then said that its divestments would focus on three main categories: non-core business, weak market positions and idle assets. The first covers sectors outside of the trio of cement, aggregates and ready-mix concrete. Things like white cement plants or sand lime brick production. Countries or areas it identified it had already executed divestments in included Saudi Arabia, Georgia, Syria and Quebec in Canada. Idle assets included depleted quarries and land.

The first obvious candidate for divestment could be the company’s two majority owned integrated plants in the Democratic Republic of Congo. These might be considered targets due to the political instability in the country. However, this is balanced by the potential long-term gains once that country stabilises. Alternatively, some of the plants in Italy seem like a target. The company had seven integrated plants, eight grinding plants and one terminal in 2018.

The presentation also pointed out the sharp rise in European Union (EU) Emissions Trading Scheme (ETS) CO₂ emissions allowances, from around Euro5/t in 2017 to up to Euro20/t by the end of 2018. In late 2018 Cementa, a subsidiary of HeidelbergCement in Sweden, said it was considering closing Degerhamn plant due to mounting environmental costs. The group reckons it can fight a high carbon price through consolidation, capacity closure, higher utilisation, limited exports and pricing. It also pointed out that it is a technology leader in carbon reduction projects. It will be interesting to see how environmental costs play into HeidelbergCement’s divestment decisions.

Finally, a tweet by Sasja Beslik, the head of sustainable finance at Nordea, flagged up a few cement companies as being the worst companies for increasing CO₂ emissions between 2011 and 2016. HeidelbergCement was 19th on the list after LafargeHolcim and CRH. Sure, cement production makes CO₂ but it’s far from clear whether the data from MSCI took into account that each of these companies had expanded heavily during this time. In HeidelbergCement’s case it bought Italcementi in 2016. Cement companies aren’t perfect but sometimes there’s just no justice.

Sweden: Cementa’s Skövde plant working on project to optimise its grinding process and reduce the clinker factor of the cement it produces. The project is looked at grinding limestone separately as opposed to grinding it with clinker and gypsum, which it currently does. The plant is using a mill it only uses occasionally to grind the limestone to the desired size. A full-scale trial was run in the autumn of 2018. Products from the trial are now being tested at a laboratory.

Sweden: LafargeHolcim has been named by Sasja Beslik, the head of sustainable finance at Nordea, as the second worst company for increasing CO₂ emissions in the five years between 2011 and 2016. Other cement companies in the list that Beslik published via his Twitter account include CRH, HeidelbergCement and Shree Cement. The list, entitled ‘The CO₂ Culprits Top 100’, was assembled using data from financial services company MSCI.

Sweden: Yara is simplifying its operating model to three segments from the start of 2019. The change follows its decision to focus its strategy on the crop nutrition market.

Its Sales & Marketing segment will comprise all of Yara's existing Crop Nutrition business units. Former industry segment divisions Base Chemicals, Industry Reagents and Animal Nutrition (excluding South Africa) will also be transferred to it. Its New Business segment will include businesses to establish commercial innovation within decarbonisation and the circular economy, a business for autonomous logistics operations including the Yara Birkeland autonomous electric ship project and a portfolio of businesses to cover Environmental Solutions, Mining Applications, Animal Nutrition South Africa and Industrial Nitrates.

"Earlier this year, we set out our strategy as the crop nutrition company for the future, and we are now adapting and simplifying our operating model accordingly. Following a period of substantial investments, our main focus going forward will be on operational excellence, innovation and growing scalable crop nutrition solutions," said Svein Tore Holsether, president and chief executive officer (CEO) of Yara International.

Yara's offerings to the cement industry include NO_x emissions control products.

Sweden: Cementa says it is has supply problems delivering its Bascement product. The delivery issues have been caused by frequent power cuts to its Slite plant, weather-related delays to its shipping schedule and high cement demand. The subsidiary of Germany’s HeidelbergCement said that it was keeping its customers regularly updated.

Well, it turns out that the European cement industry wasn’t kidding when it raised the risks of the climate mitigation on the sector. This week three (!) integrated plants have been earmarked for closure.

Cementa in Sweden said that it was considering closing its Degerhamn plant due to increased environmental regulations. Today, local press in Spain is reporting that Cemex España is planning to shut down two of its plants. These are plants in different parts of Europe with different local market dynamics but both are within the European Union (EU). That’s three plants closing out of 219 in the EU, or a loss of around 1% of production capacity.

Last week’s column on the United Nations’ (UN) Intergovernmental Panel on Climate Change (IPCC) report on Global Warming raised the way the cement sector is tackling climate change and the existing and impending legislation. President of the German Cement Works Association (VDZ) Christian Knell’s opening words at the VDZ Congress in September 2018 seem prescient. He said, “To be able to realise our efforts in terms of climate protection and at the same time not to lose competitiveness, we need research policy-related support for our investment in breakthrough technologies and the corresponding demonstration projects.” The add-on was that the industry needed to focus on how the development of carbon abatement technologies can meet the 2050 climate goals and, specifically, that suitable boundary conditions would have to be created. The press releases accompanying his speech emphasised that, “on-going trends in European emissions trading and the ‘rapidly increasing’ price of CO₂ were already today leading to considerable costs for cement manufacturers.”

These words are similar to the comments Albert Scheuer, a board member of HeidelbergCement, made at the Innovation in Industrial Carbon Capture Conference early in 2018 about dividing the mounting environmental costs of cement and concrete between producers and society in general. Considering how much cementitious building materials most people use throughout their lives compared to the relative low price of cement, this argument carries some weight. In addition, the sustainability credentials of concrete buildings through longer lifespan and durability through extreme weather events is another argument that industry advocates such as the Portland Cement Association (PCA) in the US have been hawking in recent years.

Cementa, a subsidiary of HeidelbergCement, blamed anticipated tightening of environmental regulations for its decision. Although it said that the plant had made improvements over the years, the expected difficulty (read: cost) to make further improvements was becoming too hard. Shifting production to the company’s other two plants in the region, Slite on Gotland and Brevik in Norway, will reduce CO₂ emissions by 260,000t/yr.

In Spain, the news from Cemex follows a half-year report from Oficemen, the local cement association, that predicted growth for the year but not as fast as previously expected. The problem was that continued declines in the export market, the 13th decline month-by-month in a row, offset the domestic growth. Oficement president Jesús Ortiz also took time to blame rising electricity costs, expected to rise by 20% year-on-year by the end of 2018.

Market issues in Spain aren’t in doubt, but the real question for both Sweden and Spain is whether EU CO₂ legislation right now is causing cement producers to shut plants. The CO₂ emissions allowance price hit a high of Euro22/t in September 2018, the highest price in a decade. Allowances have stayed below Euro10/t since 2011 and the price has more than doubled in 2018. Throw in the mood music of the IPCC and the trend seems irresistible. How many more plants in Europe are at risk to shut next? No doubt the European cement producers have charts marking the viability of their plants against the CO₂ price. This would be a very interesting graph to get our hands on.

The 2nd FutureCem Conference on CO₂ reduction strategies for the cement industry will take place in May 2019 in London, UK

Sweden: Cementa says it is considering decommissioning clinker and cement production at its 0.3Mt/yr Degerhamn plant due to increased environmental regulations. Production will be shifted to other local plants at Slite on Gotland and Brevik in Norway, and the site retained as a port terminal.

The subsidiary of Germany’s HeidelbergCement said that although the unit had made several investments over the years to reduce its environmental impact its production equipment was difficult to adapt to future requirements for lower CO₂ emissions. Concentrating production to the other plants would mean a reduction in CO₂ emissions of 260,000t/yr.

75 employees work at the plant at Degerhamn. Union negotiations will start immediately and upon their conclusion the cement producer will make a final decision about the future of the plant. If decommissioning goes ahead then clinker and cement production will cease in 2019.

Sweden: Cementa plans to electrify its cement plant at Slite in Gotland as part of its Cemzero project. The subsidiary of Germany’s HeidelbergCement plans to make its plant CO₂ neutral by 2030, according to Helagotland. However, the plan is limited by a lack of technology to fully electrify large-scale manufacturing at the site. The company also holds concerns about where it would source larger quantities of electricity.

Sweden: Cementa has appointed Jenny Larsson as the district manager for its south region. She succeeds Lars-Åke Andersson, who has held the role for 20 years. Andersson will retire in the spring of 2019 and the pair will work together until this time.

Sweden: Cementa, a subsidiary of HeidelbergCement, has handed its environmental roadmap to Minister of Trade and Innovation Mikael Damberg and Deputy Prime Minister and Climate Minister Isabella Lövin. The initiative is part of the Fossil-free Sweden plan to coordinate reduced reliance of industry on fossil fuels and increased competitiveness.