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Displaying items by tag: Taiheiyo Cement
Update on the Philippines, July 2024
24 July 2024Congratulations to Taiheiyo Cement Philippines (TCPI) this week for inaugurating its new 3Mt/yr production line at its Cebu plant. The US$220m line replaces the old line at the site that was closed in late 2021.
The plant was originally built by Grand Cement Manufacturing in the early 1990s. Japan-based Taiheiyo Cement took over in 2001 and later made the decision to upgrade the site in 2017. It then contracted China-based Anhui Conch and Sinoma (Handan) Construction for the project in 2021 and groundbreaking took place in mid-2022. Commercial operation of the new line was previously scheduled from May 2024. TCPI has also invested around US$140m in related projects such as its Jetty and Marine Belt Conveyor project, which links the Cebu plant to the coast via a conveyor. Other parts of this expenditure encompass the Luzon Distribution Terminal Project at Calaca in Batangas and general port development in San Fernando.
The Department of Trade and Industry (DTI) was keen to promote this example of a foreign-owned company investing in local manufacturing. DTI Secretary Fred Pascual pointed out that Japan is the country’s “second-largest trading partner and third-largest source of foreign investment.” He also linked the project to the national Build Better More infrastructure development programme and the Tatak Pinoy Act that was introduced in early 2024 to promote local industry. Along these lines, Republic Cement was awarded the Domestic Bidder’s Certificate of Preference this week. It is the first cement company to receive it. The initiative promotes the use of local manufactured materials in government projects as part of the Tatak Pinoy Act. As one might expect, the Cement Manufacturers Association of the Philippines (CEMAP) supports the Tatak Pinoy Act. It voiced its support for the legislation in June 2024 when the DTI started to implement it. It noted that cement imports were just under 7Mt/yr in 2023 despite the anti-dumping duties imposed on a number of Vietnam-based producers and traders. This compares to a local production capacity of nearly 50Mt/yr.
CEMAP mentioned that new production lines from both TCPI and Solid Cement were expected in 2024. The latter project is a new production line being built at Solid Cement’s Antipolo plant near Manilla in Rizal province. Cemex Philippines held a groundbreaking ceremony for the 1.5Mt/yr line at its subsidiary back in 2019. However, Cemex said it was selling its Philippines-based business to DMCI Holdings and related companies in April 2024. As part of this process Cemex sold its local cement brands to the Consunji family, the owners of DMCI Holdings, in June 2024. Regulatory approval of the divestment is still pending but the sale of the brands suggest that the transaction is progressing. Completion is expected by the end of 2024. Operation of the new line at the Antipolo plant is anticipated from September 2024.
Another forthcoming plant project was announced by PHINMA Corporation in June 2024. It signed a joint venture deal with investment company Anflo Group to build a 2Mt/yr cement plant in Davao del Norte. The project is scheduled to be operational by 2026. Cement from the plant will be marketed under the Union Cement brand. The sums involved suggest a grinding plant but PHINMA’s cement division, Philcement Corporation, is involved with both manufacture and importation. PHINMA also signed a deal to buy Petra Cement in May 2024. The latter company runs a 0.5Mt/yr cement grinding plant in Zamboanga del Norte. PHINMA re-entered the cement market in the late 2010s when it bought the Union Cement brand and built a cement processing plant at Mariveles, Bataan in 2020.
The battles between cement producers and importers continue to play out in the Philippines as the country’s infrastructure plans gather pace. Yet the balance seems to be tilting more towards the favour of the local manufacturers at the moment, as new capacity gets proposed and built. Anti-dumping duties on imports, particularly those from Vietnam, have now been followed up with local procurement rules in the guise of the Tatak Pinoy Act. Whether this is enough remains to be seen. This kind of environment and the departure of Cemex may also start to revive questions about whether any other foreign-owned cement companies might be considering their options too.
Japan: Taiheiyo Cement recorded a profit of US$276m for the financial year ending March 2024, following a loss of US$212m in 2023. Sales significantly increased to US$5.7bn. Domestic demand for cement is stable due to urban redevelopment projects and the construction of new logistics facilities. On the other hand, rising costs and delays to construction work and longer construction periods due to a shortage of workers resulted in output declining by 7.3% year-on-year to 34.6Mt.
Looking ahead to the 2025 financial year, Taiheiyo Cement expects a 43% year-on-year rise in net profit to US$396m and anticipates sales to grow by 8.3% year-on-year to US$6.1bn.
Japan: Taiheiyo Cement will install a gas engine power system at its Fujiwara cement plant in Inabe-shi, Mie Prefecture. The system replaces the existing thermal power system at the plant, which uses petcoke. Construction is set to begin in 2025 and the facility will be operational by the end of 2026. The new system will reduce the plant’s CO₂ emissions by 130,000t/yr.
President and representative director Masafumi Fushihara said "Taiheiyo Cement positions the reduction of CO₂ emissions from its cement production as an important growth strategy and will work to continue to achieve carbon neutrality through various countermeasures and the promotion of further energy conservation."
Japan: Taiheiyo Cement's nine-month results for the 2024 financial year showed a 9.9% year-on-year rise in sales, to US$4.44bn from US$4.04bn. Dow Jones Institutional News has reported that the producer’s net profit rebounded to US$194m, against a US$119m loss in the first nine months of the 2023 financial year.
Taiheiyo Cement Philippines to more than double capacity of San Fernando cement plant
17 August 2023Philippines: Taiheiyo Cement Philippines plans to install a second production line at its 0.8Mt/yr San Fernando cement plant in Cebu. The Philippines Department of Trade and industry says that the new line will more than double the plant’s capacity to 3Mt/yr. It will also entail an upgrade to reduce its total energy-related CO2 emissions by 10%. The Philippine Daily Enquirer newspaper has reported that the producer will additionally build a 700,000t/yr terminal at Calaca in Batangas. The facility will cost US$68.4m. Altogether, the company expects its growth plans to generate 2000 new jobs in the Philippines. The Philippines government has committed 6% of gross domestic product (GDP) to infrastructure investments annually.
Taiheiyo Cement Philippines previously indicated in August 2022 that the San Fernando cement plant might eventually expand to a capacity of 5Mt/yr. At that time, it expected to commission the new Line 2 in May 2024.
Special trade representative to the Philippine Trade and Investment Centre in Tokyo, Dita Angara-Mathay, said "The company's latest announcement materialises its plans to expand to Luzon from its long-time base in the Visayan region."
Taiheiyo Cement increases sales in first quarter of 2023
08 August 2023Japan: Taiheiyo Cement's sales were US$1.35bn in the first quarter of the 2024 financial year, up by 9.6% year-on-year. Meanwhile, its profit before tax rose by 36% to US$20.8m.
Nikkei Financial Summary News has reported that Taiheiyo Cement has maintained its forecast of sales of US$6.43bn and profit before tax of US$392m for the full 2024 financial year, which ends on 31 March 2024.
Taiheiyo Cement to participate in Tohoku West Coast carbon capture and storage project
02 August 2023Japan: A Taiheiyo Cement plant will be one of two facilities to host carbon capture systems under the Tohoku West Coast carbon capture and storage (CCS) project. The Japan Organisation for Metals and Energy Security selected the project to advance to the feasibility study stage on 2 August 2023. The partners will now investigate technical issues in the entire CCS value chain, as well as commercial and social issues around transporting captured CO2 by ship to temporary storage sites. Identification of permanent underwater storage sites is scheduled for 2024, with the design stage of capture, transport and storage systems scheduled to conclude in 2026. The Tohoku West Coast carbon capture and storage project will commence in 2030.
Taiheiyo Cement is committed to a 20% reduction of its CO2 emissions between 2000 and 2030, while the Japanese government is committed to a 46% reduction between 2013 and 2030.
Taiheiyo Cement to dispose of future disaster wastes for Hidaka City and Saitama Prefecture
14 July 2023Japan: Taiheiyo Cement has concluded an agreement to dispose of waste produced by any natural disasters that should occur in Hidaka City and Saitama Prefecture. Under the agreement, Taiheiyo Cement will establish a disposal system with realises the potential of disaster waste as a resource. This will work alongside another recycling programme for conventional wastes. The cement producer says that this will help to build a safe and secure community.
Fortera continues construction of low-carbon cementitious material plant at CalPortland's Redding cement plant
10 July 2023US: In 2022, Fortera began building a 15,000t/yr-capacity plant to produce its low-carbon cementitious material, Fortera Reactive Calcium Carbonate (RCC), at CalPortland's Redding cement plant in California. The commercial-scale plant will produce a reactive form of calcium carbonate using CO2 from the kiln of the 600,000t/yr cement plant. Fortera's process converts 1t of limestone into 1t of Fortera RCC by capturing and mineralising CO2 from the cement plant's kiln. Fortera cement production emits 60% less CO2 than ordinary Portland cement (OPC). The 15,000t/yr plant will operate at 20 times the scale of previous pilot tests. The Redding Record newspaper has reported that 15 workers will be employed at the site.
Former Redding cement plant owner Lehigh Hanson formed an agreement with Fortera to collaborate on the low-carbon cement plant project in March 2021. The plant subsequently switched ownership to Martin Marietta Materials in October 2021, before CalPortland bought it in July 2022.
Update on cement diversification, June 2023
07 June 2023Taiwan Cement said this week that it is aiming for cement to account for less than half of its sales by 2025. At the annual shareholders’ meeting chair Nelson Chang defended the cement sector as a core business but said that the company was expanding more into the green energy sector through its energy storage and vehicle charging lines. Chang directly linked the strategy to growing carbon taxes around the world, such as the European Union Emissions Trading Scheme, where the carbon price has been occasionally close to pushing past Euro100/t since early 2022. Taiwan Cement formed a joint venture with Türkiye-based Oyak Group in 2018 that runs Cimpor in Portugal.
Company |
Cement share of business |
Other main sectors |
CNBM |
45% |
Aggregates, concrete, gypsum, wind turbines, batteries, engineering |
Anhui Conch |
78% |
Aggregates, concrete, sand, trading |
Holcim |
51% |
Aggregates, concrete, lightweight building materials |
Heidelberg Materials |
44% |
Aggregates, concrete, asphalt |
UltraTech Cement |
95% |
Concrete |
Taiwan Cement |
68% |
Power supply, rechargeable lithium-ion battery, sea and land transportation |
Taiheiyo Cement |
70% |
Aggregates, concrete |
Table 1: Cement business share by revenue of selected cement producers. Source: Corporate annual reports.
Taiwan Cement’s plan to decrease its reliance on cement is becoming a familiar one. Holcim notably revealed in 2021 that it was growing its light building materials division. Its cement division represented 60% of sales in 2020 with concrete and aggregates making up most of the rest to 92% and the remaining 8% on other products including light building materials. This started to change with the acquisition of roofing and building envelope producer Firestone Building Products in 2021. Other similar acquisitions have followed. Holcim’s current target is to grow the Solutions & Products division to around 30% by 2025, with cement reduced to somewhere between a third and half of sales. Earlier this year Japan-based Taiheiyo Cement said it was doing a similar thing as part of its medium-term strategy to 2035. In its case cement represented 70% of its sales in 2022 but it is now aiming to reduce this to 65% by 2025 and 50% by 2035.
A common pattern for the business composition of European cement companies is a mixture of heavy building materials made up of cement, concrete and aggregate. However, not every cement company follows the same route. Some cement companies are simply parts of larger conglomerates. UltraTech Cement, for example, is mostly just a cement company. However, it is also part of Aditya Birla Group, which runs a wide range of industries including chemicals, textiles, financial services, telecoms, mining and more. Depending on how one looks at it, UltraTech Cement’s cement business ratio is large or Aditya Birla Group’s ratio is small. Siam Cement Group (SCG) in Thailand is another example of a cement producer operated by a conglomerate with other major businesses.
A different approach that some cement producers take is to mix cement production with complimentary businesses outside of heavy building materials. A good example of this is Votorantim Cement in Brazil, which manufactures cement and steel. Companhia Siderúrgica Nacional (CSN) is another Brazil-based cement producer that is also well known for steel production. Adani Group in India, meanwhile, was well known for logistics, power generation and airports before it purchased Ambuja Cements and ACC from Holcim in 2022.
The driver for cement companies looking to reduce cement as a proportion of their businesses has varied between the three examples presented above. Holcim’s approach has been in response to growing European carbon costs but it also fits with a general desire to broaden its business as the company has sought to reshape itself following the merger between Lafarge and Holcim. Taiheiyo Cement’s plans also have a sustainability angle but the Japanese market has been in slow decline since the 1990s and this has been made worse by the spike in energy prices since 2022. Investing in new businesses makes sense for either of these reasons. Lastly, Taiwan Cement says it is taking action in response to carbon prices around the world. However, its proximity to many other large-scale producers in the Far East may also be a factor. Whether more companies follow suit and also start to reduce the ratio of their cement businesses remains to be seen. Yet, mounting carbon taxes and global production overcapacity look set to make more of the larger cement producers consider their options in certain places.