Displaying items by tag: Workers

India: JK Cement’s sales rose by 10% year-on-year to US$763m in the financial year to 31 March 2020 from US$691m in the same period in 2019. Its sales volumes of cement decreased slightly to 9.8Mt and its profit after tax nearly doubled to US$63.5m. However, its sales fell slightly in the fourth quarter, sales volumes of cement dropped by 7% year-on-year to 2.9Mt and it reported a significantly reduced standalone net profit.

The cement producer said that its operations had gradually stabilising since coronavirus lockdown measures were relaxed. All of its integrated and cement grinding plants had resumed production and despatch. It noted that due to lower power demands less fly ash was available so it is sourcing this from other locations. Labour shortages are also affecting bag supplies and the availability of drivers. As part of cash conservation measures it has restricted capital expenditure to US$66m in the current financial year.

Uzbekistan: Huaxin Cement has announced that 112 of its employees took the first charter flight from Hubei Province since the coronavirus lockdown began, arriving in Jizzakh, Jizzakh Oblast on 6 June 2020. Hubei Daily News has reported that Huaxin Cement’s upcoming 1.5Mt/yr integrated Jizzakh cement plant, previously scheduled for commissioning in March 2020, will now start operation in June 2020. Huaxin Cement thanked the Chinese Ministry of Foreign Affairs and Civil Aviation authority for their support.

India: Construction work has yet to return to normality following the easing of the coronavirus lockdown in Uttar Pradesh as cement and other materials have not reached building sites. The Hindustan Times has reported that restrictions to the movement of goods across state and district borders have caused extensive disruption of supply chains. The website for travel permits needed by workers who do not live at the site at which they are employed has reportedly crashed multiple times due to oversubscription, leading to some staffing issues. Confederation of Real Estate Developers Association of India (CREDAI) deputy chair Uttar Pradesh West Amit Modi said, “We can only resume work once these things get back to normal."

Sweden: Refractories specialist Höganäs Borgestad opened its new headquarters at Gävle, Gävleborg county on 27 April 2020. The facility will house the Energy and Kiln Engineering, Installation and Management departments.

During the coronavirus lockdown one project of note for Höganäs Borgestad has been refractory maintenance at Germany-based HeidelbergCement subsidiary Norcem’s 1.2Mt/yr Brevik cement plant in Telemark, Norway, for which it supplied 600t of refractories and 45 workers over a three week period.

Data is starting to emerge about how the Chinese cement industry has coped with the economic effects of government action regarding the coronavirus. National cement industry output fell by 29% year-on-year to 150Mt in the combined months of January and February 2020. Output then picked up to 149Mt in March 2020, a drop of 17% compared to March 2019. These are massive figures, larger than the annual output of most countries, but they give some idea of what shutting down economies does to demand for cement and concrete.

Graph 1: Year-on-year change in cement output in China, April 2018 - March 2020. 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.

Graph 1 above gives the general picture of changes in cement output in China over the last couple of years. Growth fell in early 2018 as the government implemented its supply-side reforms, including measures such as industry consolidation and peak shifting. This improved in the second half of the year and throughout 2019. January and February output has been steady for the last few years, possibly due to peak shifting, but this year the trend was massively more pronounced. In March 2020, meanwhile, output fell by 17% compared to a rise of 17% in 2019. On the demand side, reporting from the Chinese Cement Association reveals that national infrastructure investment (excluding electricity) decreased by 19.7% year-on-year in the first quarter of 2020. National real estate development investment fell by 7.7% to US$310bn.

The figures above are for the whole of China whilst the outbreak was centered in Wuhan in Hubei province. The government implemented its toughest public health measures in this city and the surrounding Hubei province, with other regions using social distancing and tracking methods to various degrees. The Chinese Cement Association explains that, once other cities in Hubei province were released from lockdown, construction projects were allowed to resume but that progress was limited due to a lack of workers. Three weeks after measures were relaxed, the average shipping rate for cement producers was only 60% in these outer regions. In Wuhan the situation was more stark with demand for cement at only 20% of expected levels at the time the lockdown ended on 8 April 2020. Data from the Hubei Cement Association reports that on 30 March 2020 only half of Hubei province’s 57 clinker production lines were producing cement. The rest were suspended. To compound the problems here once logistics networks started to reopen imports of cement from other provinces flooded in taking advantage of price differences.

Few if any of the larger domestic producers have released their first quarter financial results for the first quarter of 2020. Huaxin Cement has said that its sales fell by 36% and that this is expected to cause a profit drop of 46% year-on-year to US$100m. Shanshui Cement has said likewise, although it has not released any forecasts. In its annual report for 2019 released in early April 2020, Anhui Conch said that the coronavirus had exerted a ‘short-term negative impact’ on the group’s business due to the slowdown in supply and demand in the construction materials industry. CNBM also acknowledged the situation in its 2019 report saying that it would, ‘impact on economic activity.’ CNBM’s subsidiary BNBM, a gypsum wallboard manufacturer, has released a forecast for the first quarter predicting a 90% drop in net profit due to poor sale volumes.

How this can inform the cement industries of other countries around the world that have enacted restrictions on their populations is unclear. China, as ever, is an exceptional outlier both economically and as a cement producer. Plus, the severity of how a country enacts a lockdown is crucial here. If the early reports above are indicative then half of Hubei’s clinker lines were forced to suspend production, demand for cement fell by 80% at the time the lockdown ended and imports headed in once transport networks were reopened. Issues were also noticed with labour shortages. Forewarned is forearmed as they say. The next point of focus will be how fast the Hubei and Chinese cement industry recovers from this shock. More on this as we have it.

Germany: HeidelbergCement started the new year better than ever before, according to chief executive officer (CEO) Dominik von Achten. He reported that this had been mainly due to good weather before the onset of the coronavirus outbreak. Von Achten warned that the situation had already changed beyond recognition since mid-February 2020 for the multinational.

He said that the coronavirus outbreak had not only caused plants to be closed, either by enforcement or due to a lack of demand, but because migrant workers are unable to travel to construction sites. For example, workers from Eastern Europe are increasingly lacking in Western Europe. In Indonesia, a market that is important for HeidelbergCement, the lack of Chinese construction workers is stark, as they remain confined to their home country.

According to Von Achten, HeidelbergCement is now paying particular attention to its costs, has deferred all unnecessary investments and has considerable liquidity leeway. He added that the group is likely to benefit significantly from lower fuel costs as conditions improve over the course of 2020. HeidelbergCement is currently particularly affected in Lombardy, where its Italcementi subsidiary has its headquarters. HeidelbergCement has shut down its factories in Italy and imposed a freeze on hiring and non-essential spending. "You can see it's hitting the world like a wave," says Von Achten. "It's a tough test."

India: 13 employees of Jammu and Kashmir Cements Limited (J&K Cements) have been suspended following an incident in which J&K Cements managing director Ishtiyaq Drabu was locked inside the 0.4Mt/yr J&K Cements Khrew plant, where he says he was ‘held hostage and threatened.’ In a charge sheet against the employees, he further alleged that they had ‘left their place of duty unauthorised’ in order to assemble at the main gate, where the trap was sprung. The Daily Excelsior newspaper has reported that the action was taken by the employees in order to demand payment of their salaries. “The intervention of the police saved my life,” said Drabu.

550 J&K Cements employees have not received wages since December 2018 and US$3.91m is missing from the state-owned producer’s pension fund. Drabu has been able to draw his salary every month since his appointment in January 2019.

US: Ireland’s CRH’s subsidiary Ash Grove Cement has engaged the education technology services provider Zovio Employer Services for the development of its higher education opportunities programme in partnership with Ashford University. “This provides employees with access to education to gain the right skill-set to advance into management positions. We also see the programme as a tool to attract new talent,” said Darcy Pugh, Ash Grove Cement Employment and Compensation Manager. Ash Grove plans to offer a tuition assistance benefit to 3000 employees for bachelor’s or master’s degrees at Ashford University. The university will also provide some full tuition grants.

India: Demonstrations are underway at the gates of Uma Cement Industries’ Udhampur plant. Early Times has reported the cause as the alleged laying off of drivers without legal cause or notice. Drivers’ union president Rakesh Raina alleged harassment by Uma Cement Industries as well as irresponsible practices in forcing employees to drive overloaded vehicles.

Philippines: Republic Cement has held a rally assembling over one thousand construction workers at its Norzagaray Plant to aim for five million safe man hours. The cement producer has reached 4.5 million man hours at its expansion projects at Bulacan, Batangas and Iligan. This includes no lost-time injuries or fatalities.

“Safety is not a punishment. It’s not a punishment to wear your helmet, boots, or harness. It’s a gift of life - the life of your fellow workers and of your family,” said
Roy Ruedas, Project Lead at Aboitiz Construction.