Displaying items by tag: Türkiye
Çimsa launches white cement product at World of Concrete trade fair
12 February 2020US: Turkey’s Çimsa has launched a new white cement product for the US market at the World of Concrete trade fair in Las Vegas. The subsidiary of Sabancı Holding has showcased its Çimsa Aluminates and Çimsa Super White product ranges.
“As one of the largest grey cement producers of Turkey, Çimsa is among the top three in the global league of white cement. We have increased our visibility in the global cement industry through our investments abroad,” said, Çimsa’s chief executive officer (CEO) Ülkü Özcan. He added that the cement producer founded its Cimsa Americas Cement Manufacturing and Sales Corp in the US in 2017. It then started operations at a grinding mill in Houston, Texas in 2019.
Belarusian cement production increases by 4.6% year-on-year in 2019
07 February 2020Belarus: Belarusian cement producers recorded production volumes of 4.7Mt in 2019, corresponding to capacity utilisation of over 100%. Volumes increased by 4.6% from 4.5Mt in 2018. The Arab Times has reported that the country imported 0.5Mt of cement with a value of US$28m. US$18m of this came from Russia, while a further US$3.7m, US$2.8m and US$2.0m came from Latvia, Ukraine and Turkey respectively.
On 6 February 2020 the State Council of Ministers reinstated protectionist licencing laws requiring importers of cement to have special permissions to bring cement from outside of the Eurasian Economic Union into the country. This affects all current sources of imported cement to Belarus apart from Russia.
Metso Corporation to centralise European warehouse operations
27 January 2020Finland: Machinery manufacturer Metso Corporation has announced plans to consolidate its European warehouse operations, currently spread over Norway, Sweden, the UK, France, Spain, the Czech Republic, Turkey and Russia, into a single location. Metso Corporation customer logistics senior vice president Jarkko Aro said the move ‘would also enable considerable savings in end-to-end freight costs and reduced CO2 emissions.’ 40 employees are potentially affected. Metso Corporation has not disclosed any locations under consideration for the facility.
Schmersal opens Turkey branch
24 January 2020Turkey: Germany-based safety specialist Schmersal announced its entry into business at a new branch in Istanbul, Turkey on 21 January 2020. In partnership with Satech Safety Technology, it will supply its full range of products and comprehensive services to the Turkish and Azerbaijani cement sectors. Bariş Yücel, managing director of Schmersal Turkey, said, "Schmersal is already a well-known manufacturer on the Turkish market. Our goal is to become customers’ first choice supplier.”
Turkey: Sabanci Holding and HeidelbergCement joint subsidiary Akçansa achieved an undisclosed Turkish record figure for nine-month cement exports over the period ending 30 September 2019. The exports included 1Mt of clinker. Akçansa general manager Umat Zenar said, “We achieved a 46% increase in our port capacity utilisation rate,” in attributing the growth to its logistics advantage over competitors and effective port management.
2019 in cement
18 December 2019It’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
Cemex changes its US profile
27 November 2019Cemex pushed ahead yesterday and announced that it had sold the Kosmos Cement Company to Eagle Materials for around US$665m. It owns a 75% stake in the company, with Italy’s Buzzi Unicem owning the remaining share, giving it roughly US$449m once the deal completes. Proceeds from the sale will go towards debt reduction and general corporate purposes. The sale inventory includes a 1.7Mt/yr integrated cement plant in Louisville, Kentucky as well as seven distribution terminals and raw material reserves.
The decision to sell assets makes sense given Cemex’s financial results so far in 2019. It reported falling sales, cement volumes and earnings in the first nine months of the year although much of this was down to poor market conditions in Mexico. However, the US, along with Europe, was one of its stronger territories with rising sales. Earnings were impaired in the US, possibly due to bad weather in the southeast and competition in Florida, but infrastructure and residential development were reported to be promising.
Graph 1: Portland & Blended Cement shipments in 2018 and 2019. Source: United States Geological Survey (USGS).
Graph 2: Change in imports of hydraulic cement & clinker to the US in 2018 and 2019 from selected countries. Source: USGS.
United States Geological Survey (USGS) data also supports a picture of a growing US market. Shipments of Ordinary Portland Cement and blended cements grew by 2.4% year-on-year to 66.9Mt for the first eight months of 2019 from 65.4Mt in the same period in 2018. By region growth can be seen in the North-East, South and imports. Declines were reported in the West and Midwest. The states of Alabama, Kentucky, Tennessee – the area where the Kosmos plant is located – saw shipments grow by 4% to 4.77Mt from 4.58Mt. It is worth noting that Louisville is in the north of Kentucky near the border with Indiana, where shipments also grew.
The Portland Cement Association’s (PCA) fall forecast may also have helped Cemex’s decision. Ed Sullivan, PCA Senior Vice President and Chief Economist, said that he expected cement consumption in the US to continue growing in 2019 and 2020 but with a slowing trend into 2021 following general gross domestic product (GDP) predictions. The PCA’s view is that pent-up demand following the recession in 2008 was gone and the economy was gradually weakening. Crucially though it didn’t think a recession was impending. In this scenario Cemex might be taking a medium-term view with regards to the Kosmos Cement Company.
Another more general interesting data point from the USGS was the change in import origins to the US. Imports grew by 11.3% to 66.9Mt in January to August 2019. The top five importing countries and their overall share remained the same but there was some movement between them. Turkish and Mexican imports surged at the expensive of Chinese ones as can be seen in Graph 2. The go-to explanation for this would be the on-going US - China trade war. Cemex is a Mexican company with a strong presence in both the US and Mexico. This change in the make-up of the import market in the US may also have informed its decision to sell Kosmos Cement as it looked at the macro scale.
More generally the US market is looking buoyant in the short to medium term. Plants are being sold like Kosmos Cement to Eagle Cement and the Keystone cement plant in Bath, Pennsylvania to HeidelbergCement and a major upgrade project is underway on the new production line at the Mitchell plant in Indiana. In Cemex’s case, as ever with asset sales, the seller sometimes has to make the hard decision of whether to divest a plant in a growing region to help the business in other places that might not be doing so well. The growth of America’s largest locally owned producer, Eagle Cement, may also give cheer to the US’ current ‘America First’ administration.
Brazil: Markets in Brazil and North America have supported Votorantim Cimentos’ sales so far in 2019, despite setbacks in Turkey and Latin America. Its sales revenue rose by 2% year-on-year to US$907m in the first nine months of 2019 from US$891m in the same period in 2018. Overall sales volumes of cement fell slightly to 8.4Mt. The cement producer’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 5% to US$188m from US$199m, with declines reported in all operation regions except North America.
Taiwan Cement’s profit rises on cement prices
19 November 2019Taiwan: Taiwan Cement’s profit has risen so far in 2019 due to stable cement prices and falling coal prices. Its net profit increased by 11.1% year-on-year to US$214m in the first nine months of 2019, according to the Taipei Times newspaper. However, its sales revenue fell by 3.5% to US$2.87bn. The cement producer says it has a production capacity of 102Mt/yr following the formation of a joint venture in Turkey and an acquisition in Portugal in 2018.
The company reported higher labour, transportation and raw material costs in China in the third quarter of 2019. Its expenses were also inflated by environmental upgrades. Company president John Li said, that despite falling prices in Guizhou province, demand in regional markets, including Guangdong, Guangxi and Jiangsu provinces was expected to remain beneficial.
Fuchs opens Izmir lubricant plant
06 September 2019Turkey: Fuchs Petrolub and Opet Petrolcülüks’ joint venture Opet Fuchs has completed construction of its 60,000t/yr plant for the production of assorted oil products, including lubricants for the cement industry. The facility was the result of Euro24m in investment.