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Displaying items by tag: lobbying
Udayapur Cement seeks US$3.82m government loan
24 October 2022Nepal: Udayapur Cement has urged the Nepalese government's Ministry of Finance to process its application for a loan of US$3.82m. The Kathmandu Post newspaper has reported that the producer plans to invest in an upgrade to its 800t/day-capacity Gaighat cement plant in Province No.1. The plant is reportedly unable to meet its capacity due to frequent issues with its 33-year-old equipment. The producer hopes that an upgrade will increase the plant's production capacity by 41% to 2.5m bags/yr. It also expects its expenditure on coal to fall by 25% as a result.
Director general Gopi Neupane noted the Gaighat cement plant's access to high quality limestone not available elsewhere in the country. He said "We will turn the factory into a profit-making enterprise if the additional investment is provided. We have huge scope for exporting cement to Uttar Pradesh and Bihar (in India)."
Update on the Philippines, October 2022
12 October 2022Cement imports are back on the agenda this week in the Philippines with the news that the Tariff Commission has backed repealing the duties currently being implemented. If it’s anything like what happened last time, back in 2019, the commission’s opinion will once again be passed back to the Department of Trade and Industry (DTI) for the final decision. The safeguard measure the commission wants to cut covers Ordinary Portland Cement (OPC) and Blended Cement. It summarised the situation as follows, “There is no existence of an imminent threat of serious injury and significant overall impairment to the position of the domestic cement industry in the near future.”
The commission reviewed the sector between 2019 and 2021 and concluded that the domestic cement industry maintained its market position, increased its mill capacities, stabilised its manufacturing costs and improved its profitability. It found that local producers recovered their profits in 2021, following the coronavirus pandemic. It also noted that imports continued to rise whilst the safeguard measure was in force. Volumes of imported OPC and blended cements increased at levels above 10% year-on-year in both the 2019 – 2020 and 2020 – 2021 periods. They also rose by 7% year-on-year to 3.51Mt in the first half of 2022 compared to the half-year average from 2019 - 2021. In the commission’s view, relaxing the duties on imported cement would slow price rises for both locally produced and imported cement leading to an overall national economic benefit.
Local cement producers in the Philippines are likely to be unhappy with the Tariff Commission’s recommendation. The Cement Manufacturers Association of the Philippines (CEMAP) spent the summer of 2022 lobbying for the safeguard measure to be extended past October 2022. It too pointed out that imports of cement had continued to grow even whilst the increased duties had been levied from 2019. A few days before the commission’s decision was published, APO Cement said that it had temporarily suspended operations at its Davao terminal. The subsidiary of Cemex Philippines blamed imports of cement, particularly from Vietnam, for the decision.
Yet, the local sector has been active over the last year with a number of capacity upgrades being launched or underway. In January 2022 the government gave tax breaks to San Miguel Equity Investments for the construction of a 2Mt/yr cement plant in Mindanao. In February 2022 San Miguel subsidiary Southern Concrete Industries said it was doubling the capacity of an upgrade to its grinding plant at Davao del Sur, with initial commissioning planned in mid-2022. Meanwhile, Solid Cement’s upgrade of a new production line at its integrated plant in Antipolo, Rizal, has been ongoing since it officially started in 2019. The current commissioning date for the subsidiary of Cemex is now expected in early 2024. In August 2022 Taiheiyo Cement Philippines held a groundbreaking ceremony for the start of construction of a new production line at its integrated San Fernando plant in Cebu. The US$85m project is due to be commissioned in mid-2024. Finally, importer Philcement revealed in late September 2022 that it had taken out a US$1.73m loan for an expansion and upgrades to its Mariveles cement terminal in Bataan.
Holcim Philippines’ president and chief executive officer Horia Adrain told local press in July 2022 that the cement sector was continuing to recover in 2022, following the coronavirus pandemic in 2020, but that the pace would be slower. And so it proved, with reduced revenue, earnings and profits reported by Holcim for the first half of 2022. Costs rose due to higher fuel and energy prices like elsewhere in the world but a construction ban in connection with the presidential election in May 2022 didn’t help either. Both CRH and Cemex Philippines reported a similar situation in their financial results. However, Eagle Cement did manage to raise its revenue in the same period.
The Tariff Commission has been explicit with its opinion about the impact of imports upon the local cement sector. Investment by the local producers has been forthcoming with a number of new plants and upgrades on the way. Finally, despite the market recovering since 2020, there has been less growth in the first half of 2022 due to global energy prices and the country’s elections. This last point has handed a gift to the cement producers as any further reductions in growth can be blamed on imports, whether it is connected or not. One thing is certain, if or when the safeguard measures are lifted, then the regular calls to restrict imports will resume just like they did prior to 2019.
Pakistan: Pakistani cement companies sold 9.61Mt of cement during the first quarter of the 2022 financial year, down by 25% year-on-year from 12.8Mt in the first quarter of the 2021 financial year. Exports declined by 34% to 1.01Mt of cement, from 1.55Mt. The All Pakistan Cement Manufacturers Association (APCMA) said that current economic conditions impacted both domestic and export sales.
Separately, the APCMA has expressed its concern over State Bank of Pakistan limits on the use of letters of credit by companies for the purchase of spare parts and other machinery. The association says that present restrictive conditions will create operational difficulties for the industry.
Cemex USA loses Dowe Flats quarry dispute
30 September 2022US: The Board of County Commissioners of Boulder, Colorado, has denied Cemex USA’s application for a 15-year extension to its Dowe Flats quarry mining licence, following its expiry on 30 September 2022. Commissioner Claire Levy cited dust, traffic, noise and disturbances to wildlife as reasons behind the decision.
Cemex USA’s nearby Lyons cement plant has previously relied on the quarry for the supply of 760,000t/yr of limestone.
Heidelberg Materials considering shutting plants in Germany based on future energy prices
28 September 2022Germany: Heidelberg Materials says it is considering shutting down plants in Germany due to the high cost of gas and electricity. In comments reported by Reuters chief executive officer Dominik von Achten said, "If power prices won't come down sustainably, we would have to take individual plants in Germany completely off the grid. That's what we have prepared for." He added that the company is shifting production to times and days when power prices are lower including at the weekend. However, changing staff shift patterns has required ongoing discussions with labour unions.
The building materials company expects its energy bill to rise by around half year-on-year to over Euro3bn in 2022. It has called on the German government to place a cap on energy prices despite measures the company has already taken to protect itself from soaring costs, such as using alternative fuels.
Clean Energy Ministerial CCUS and the GCCA to collaborate to scale up cement carbon capture deployment
26 September 2022UK: Clean Energy Ministerial CCUS (CEM CCUS) and the Global Cement and Concrete Association (GCCA) have announced a new partnership aimed at scaling up the deployment of carbon capture technologies in global cement and concrete production over the 10-year period up to 2033. The partners will explore incentives, policy frameworks and finance solutions that can best facilitate industrial-scale CCUS projects. Additionally, they will seek to ensure the long-term development of CCUS via technological developments.
CEM CCUS Norway initiative co-lead Henriette Nesheim said “This is a great opportunity to work together with a vitally important industry. In Norway we are already building our first cement CCS project in Brevik, and we look forward to sharing the experience with others.”
Electricity supplies to cement plants in Europe
07 September 2022Cembureau called for urgent action on electricity prices from European governments this week to protect cement plants. Its maths was crushingly simple. One tonne of cement takes around 110kWh of electricity to produce. Electricity prices started to top Euro700mWh in some European Union (EU) countries at the end of August 2022. The association says that this represents added costs of Euro70/t of cement and a tripling of the total cost of production. This kind of sudden extra cost to cement production could lead to the widespread closure of cement plants and lead to chaos in the construction supply chain.
Previously, Cembureau reported in 2020 that electricity accounts for about 12% of a cement plant’s energy mix. In a dry production process plant 43% of this is used for cement grinding, 25% goes into raw material preparation, another 25% on clinker production and the final portion is typically used for raw material extraction, fuel grinding and for packing and loading. However, the cost of the electricity can make a big difference to the overall energy bill for a cement plant. When a report by the European Commission’s (EC) Joint Research Centre (JRC) modelled a reference northern European cement plant with a production capacity of 1.0Mt/yr back in 2016, it concluded that the EU cement industry was spending around half of its energy costs on electricity compared to smaller ratios at plants in China, Egypt, Algeria and... Ukraine. That last country in the list is poignant given its unwitting participation in the current energy crisis. One other thing to note is that cement producers, as large scale users, may well be paying less than the wholesale prices Cembureau appears to be quoting.
The timing of Cembureau’s proclamation is pertinent because the EU and individual states have mostly been waiting until the autumn before revealing their energy support plans. However, the dilemma for Cembureau, and other industry lobbying groups, is how to protect their sectors whilst domestic consumers are threatened. The aftermath of the coronavirus lockdowns has shown what can happen when production of key commodities stops: supply chain disruption, shortages and price rises. One ironic shortage in the UK during the lockdown periods was that of CO2, as high gas prices forced the main producer to shut down, leading to unexpected knock-on problems along the supply chain in areas such as food production. The same situation is reportedly at risk of happening again now too.
Cembureau’s wider solution is to link domestic and industrial consumers of electricity. So, some of its suggestions to policymakers are to use all available means of power generation, implement emergency measures such as price caps immediately, change the rules of the electricity market more generally to prevent future price shocks and to promote large scale renewable power source development. These are all things that could help both individual and industrial users of electricity.
Compare and contrast, then, with the MPA’s (Mineral Products Association) approach to the same problem in the UK. Its strategy instead has been to ask the UK government for tax cuts and freezes and to hurry along the forthcoming policy on support for Energy Intensive Industries. That’s not to say that Cembureau’s suggestions don’t also include some sector specific requests. It has asked that the EU temporary state aid framework adopted in late March 2022 should allow all energy intensive industries to have access to state aid covering 70 - 80% of eligible costs. It has also encouraged the wider use of alternative fuels, although it doesn’t link the reason why beyond reducing imports of fossil fuels. Lastly, it bangs the drum for its recent preoccupation, the EU Carbon Border Adjustment Mechanism, this time adding electro-intensity as a main criterion for eligibility for compensation under EU emission trading scheme (ETS) indirect state aid guidelines.
Government support packages for the energy crisis are starting to be announced in European countries but the question for everyone is whether they and other actions will be enough. One problem for the cement industry will be simply staying on the radar of policy makers facing a crisis looming over their citizens. Yet if there is not enough energy to go around then rationing of some kind will be inevitable and heavy industrial users will be the first obvious targets to be told to cut back. Some months later building material supply shortages will hit. One national cement sector to watch in the coming months may be the Spanish one as it has long warned of the risks of high electricity prices.
30% of Indian captive power plants close
15 August 2022India: 30% of plants in India’s 78GW captive power plant network have temporarily closed due to high coal prices. 40GW-worth of capacity (55%) is coal-fired, with an annual consumption of 200Mt/yr. The Business Standard newspaper has reported that total Indian coal imports fell by 10% to 23.8Mt in July 2021 from 26.3Mt in June 2021. Deliveries of coal to non-power sector consumers fell by 33% year-on-year at the beginning of August 2021. The Indian Cement Manufacturers Association (CMA) and nine other national industry associations have contacted the government to urge the formation of policies for the equitable distribution of available coal.
India Cements has imported two shipments of Russian coal for use in cement production. The company’s power and fuel costs rose by 54% year-on-year in the first quarter of its 2023 financial year, which began on 1 April 2022. Its vice-chair and managing director Narayanaswami Srinivasan said “Most of our plants have coal-based captive power generation. The cost of captive generation is now more than the grid cost. Hence, we shut down all captive power units and resorted to grid power.”
Colombia: Federación Interamericana del Cemento (FICEM) and the Global Cement and Concrete Association (GCCA) have announced their next steps to accelerate the decarbonisation of cement production in Latin America and the Caribbean. The partners have named Colombia as the region’s first Net Zero Accelerator host country. The initiative works to identify barriers to decarbonisation and to recommend policy changes to make an immediate impact. Along with fellow Net Zero Accelerator host countries Egypt, India and Thailand, Colombia brings the total coverage of the initiative to 10% of global cement capacity.
GCCA chief executive officer Thomas Guillot said “The urgency of addressing climate change becomes clearer every day. Last year, our industry made a breakthrough Net Zero global commitment to reduce our carbon footprint, and we are now driving action in Latin America to make real change in one of the regions predicted to use the most concrete and cement in the coming decades. Our Roadmap Accelerator programme, previewed today by our members and affiliate (FICEM) at Latin America and the Caribbean Climate Week, highlights the tailored policies and tools we will use to ensure that Net Zero concrete and cement is achieved by 2050.”
Belgium: Cembureau, the European Cement Association has welcomed the adoption of the European Parliament reports on the European Union (EU) Emission Trading Scheme (ETS) and the EU Carbon Border Adjustment Mechanism (CBAM).
Koen Coppenholle, the chief executive officer of Cembureau, said “Our sector needs a coherent and predictable regulatory framework to deliver on its carbon neutrality ambitions. The texts adopted today offer significant improvements on key issues – such as the reinforcement of CBAM, the inclusion of indirect emissions, the need for a strong export solution for CBAM sectors, the inclusion of waste incineration in the EU ETS and the support for key breakthrough technologies - which we welcome.” He added that the association regretted the compromise reached suggesting delaying the implementation of the CBAM by one year as cement imports into the EU were growing “exponentially”.
Eurostat data cited by Cembureau shows that EU cement imports have increased by 300% in the past five years from 2016 to 2021, with specific spikes when the EU carbon price was at its highest level. The association is lobbying for what it calls a ‘watertight’ CBAM and a ‘realistic’ with the phase-out of free allocation of carbon credits to cement producers.