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Update on France, April 2024
10 April 2024Heidelberg Materials announced this week that it is preparing to close its integrated cement plants at Beffes and Villiers-au-Bouin in France by October 2025. It framed the restructuring as a response to ‘a significant decline in cement sales in France’ and a plan to focus on low-carbon products. Unfortunately, local media reported that around 170 jobs will be lost at the two sites. The company says it is looking at ‘socially acceptable solutions’ including redeployment to other locations in the country.
Investment has been forthcoming from Heidelberg Materials France in recent years. It reminded everyone that it initiated a Euro400m scheme at its France-based subsidiary Ciments Calcia in late 2020. Most of this was earmarked towards a new production line at the Airvault plant, which is currently being built. Other schemes at the Beaucaire, Bussac-Forêt and Couvrot integrated plants followed. More recently, Heidelberg Materials launched a carbon capture, utilisation and storage (CCUS) project at Airvault, part of the GOCO2 initiative, with the aim of starting initial capture in 2030 with full 1Mt/yr capture planned later. What the company didn’t mention though was at the time of that 2020 investment it was also preparing to convert the integrated Gargenville plant into a grinding unit, stop white cement production at its Cruas plant with the intention of turning the site into a terminal and it wanted to reduce its workforce by around 140. To be fair to Heidelberg Materials though, it did have the same goal of reducing its specific net CO2 emissions. The added detail this week was that the group aims to generate half of its revenue from sustainable products that are either low-carbon or circular by 2030.
Heidelberg Materials France is not alone with its ambitions for low-carbon products. Holcim notably opened in early 2023 what it said was the first calcined clay unit in Europe at its Saint-Pierre-la-Cour cement plant. Heidelberg Materials then followed in May 2023 with the announcement of a calcined clay project at its Bussac-Forêt cement plant. Other clay projects from Vicat, NeoCem and Neo-Eco have been reported since then. The other prominent France-based blended cement producer that has steadily been building its business in recent years is Hoffmann Green Cement. More general plant upgrade projects that are also worth mentioning include Eqiom’s (CRH) upgrade to its Lumbres plant in February 2024 and the ignition of a new kiln at Lafarge France’s Martres-Tolosane plant in October 2023. Both of these projects have been framed as driving sustainability.
Graph 1: Cement production in France, 2014 - 2022. Source: France Ciment.
Heidelberg Materials’ assessment about the poor state of the cement market has been confirmed by local media. Sales reportedly started falling in 2022, were down by 6% year-on-year in 2023 and further downward pressure is expected in 2024. Production data shown in Graph 1 above released by France Ciment, the national cement association, doesn’t really show what has been happening with sales. Over the last 20 years production hit a high of around 22Mt in the mid-2000s before settling around 16 - 17Mt/yr from 2015 onwards. The more telling trend, perhaps, has been the increase in CEM II blended cements from 50% in 2012 to 64% in 2022. Cement production may have stayed roughly the same over the last decade but it is using less clinker than it used to. Hence the pressure on companies like Ciments Calcia to reduce clinker capacity.
A further cost pressure facing cement producers in France is the impending end to the price cap on electricity scheduled by the end of 2025. The government enacted the scheme in late 2021 at the end of the Covid-19 pandemic, but then carried on as energy prices spiked following the Russian invasion of Ukraine. France Ciment lobbied in August 2023 for further protection for the sector using the argument that decarbonisation was not possible without electricity available for a reasonable price. It added that decarbonising the cement sector in France with carbon capture would cost around Euro3.5bn. Electricity prices started rising in February 2024 as part of the government’s phase out of the scheme.
Finally, 17 people were arrested on 5 April 2024 in connection with a demonstration at Lafarge France’s Val-de-Reuil ready-mixed concrete plant in Eure. Environmental activists reportedly trespassed on the site, according to local press, causing an estimated Euro450,000 in damages with acts such as spraying foam into machinery, ripping up bags of cement, breaking windows and more. The activists presented their actions as a response to both the environmental impact of cement and concrete production and the ongoing legal allegations about Lafarge’s actions in Syria in the early 2010s. Lafarge France’s La Malle integrated plant was also similarly targeted in December 2022 when around 200 activists stormed the site and caused damage to machinery and property. Lafarge’s response at the time was to remark that there was a feeling of misunderstanding given that the La Malle plant was piloting various decarbonisation methods.
All of this presents a febrile picture of the cement sector in France. Sales are down, electricity costs are set to go up and producers are switching to low-carbon cement products. Alongside this they are also closing clinker production plants but are also investing in new decarbonisation projects. At the same time environmental protestors have also been targeting cement and concrete plants and Lafarge’s association with its former actions in Syria appear to have made it more of a target than the other manufacturers. It is unsurprising then that Holcim, the parent company of Lafarge France, has raised the risk of damage to the group’s reputation, with both the general public and investors, should it fail to meet its targets. Reaching net zero was never going to be easy but setting unrealistic targets is increasingly not an option.
India: Shree Cement has begun construction of two new 3.5Mt/yr cement plants at Etah and Prayagraj in Uttar Pradesh. The Hindustan Times newspaper has reported that the projects represent the company’s delivery on a memorandum of understanding (MoU) with the Uttar Pradesh government, that it signed in February 2023. The producer aims to reach 9Mt/yr in installed capacity in Uttar Pradesh by February 2026, with estimated investments of US$241m. It currently operates a 2Mt/yr integrated cement plant at Bulandshahr.
The company said "The company’s 3.5Mt/yr plant in Etah is expected to be operational in the next 12 months, while another 3.5Mt/yr plant will be set up in Prayagraj, targeting production commencement in 24 months."
India: Dalmia Cement has launched new branding identifying itself as a Roof Column Foundation Expert. The identity is accompanied by the slogan ‘Roof, column, foundation strong, home strong.’ The company says that the branding will help it to position its cement as first choice in business-to-consumer (B2C) building materials retailing. The campaign especially targets towns of 20,000 – 100,000 people, outside of India’s metropolitan centres. The producer aims to raise its B2C sales from 65% to 70% in the 2025 financial year. It now operates a 45,000-strong retail network. In order to support further growth in the segment, the company plans to deploy 600 technical staff and 150 vans across India.
Chief operating officer Sameer Nagpal said “We believe that the brand must play a vital role in consumer’s lives so that they can make informed choices. Dalmia Cement has over the years developed proprietary know-how of optimising cement recipes that makes it most suitable for roof, column and foundation.”
Managing director and CEO Shri Puneet Dalmia said “Our new brand campaign manifests not just an eminent legacy, but also a commitment to consumer centricity – it conveys a core message that building a home with due care means building it for generations to come.”
JSW Group to build 10Mt/yr cement plant in Odisha
19 February 2024India: JSW Group’s new upcoming cement plant in Odisha will have a capacity of 10Mt/yr, the Hindu Business Line newspaper has reported. The plant will be situated in an upcoming steel complex, complete with a 900MW power plant and a 52Mt/yr port.
JSW Group’s cement subsidiary JSW Cement operates 19Mt/yr in installed capacity across Andhra Pradesh, Karnataka, Maharashtra, Odisha and West Bengal. The producer plans to invest US$2.17bn to more than triple its capacity to 60Mt/yr by 2028. It has reportedly entered talks with financial institutions to raise US$723m through an initial public offering (IPO). JSW Group has invested US$3.61bn in Odisha to date, and is committed to investing
US$7.83bn there.
France: Hoffmann Green Cement Technologies recorded a turnover of Euro6m in 2023, more than double the figure for 2022. The company sold 21,378t of its clinker-free alternative cement, up by 78% year-on-year, but under its target of 24,000t. It strengthened its order book by 8% to 260,000t.
The company confirmed its existing financial objectives, namely: to achieve positive earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2024; an operating profit in 2025; and a turnover of Euro130m by 2026.
Cementir reports earnings growth in 2023
13 February 2024Italy: Cementir's full-year 2023 results show sales of Euro1.69bn, down by 1.7% year-on-year from full-year 2022 levels. Nonetheless, the company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 23% to Euro411m. The company more than doubled its net cash position to Euro218m. Under its Plan 2024 – 2026, Cementir aims to raise its sales by 18% to Euro2bn, its EBITDA by 3.4% to Euro425m and to more than double its net cash position again to Euro600m in two years.
Chair and chief executive officer Francesco Caltagirone said "Despite an increasingly uncertain macroeconomic scenario due to growing geopolitical tensions and more restrictive monetary conditions, in 2023 the group demonstrated significant resilience, setting new records thanks to an even more diversified geographical and product mix. The general weakness in volumes, with the exception of Türkiye and China, was balanced by the improvement in operational efficiency. The new industrial plan to 2026 continues to place sustainable organic growth at the centre of our strategy, confirming all medium and long-term objectives and continuing on our path towards decarbonisation."
US: The Portland Cement Association (PCA) has voiced its concerns over the Environmental Protection Agency (EPA)'s newly finalised standard for particulate matter 2.5 (PM2.5). The new standard reduces the level of particulate matter below 2.5μm diameter permitted in flue gas emissions to 9μg/m3 from 12μg/m3. The PCA says that it is concerned that the new rule may restrict US cement producers’ operations and ‘further complicate’ their efforts to achieve net zero emissions by 2050.
President and CEO Mike Ireland said “This new rule strikes at the heart of the US cement industry's ability to deliver on the Biden Administration's infrastructure goals, as it would lead to fewer hours of operation at plants, which would mean layoffs, as well as less American cement and concrete at a time when the country needs more.” He added “The previous EPA standard on particulate matter emissions — arrived at by government officials working with industry — significantly drove down those emissions by 37% over the last 20 years. This downward trend would have continued without the new standard imposed."
However, EPA administrator Michael Stanley Regan said that the updated standard will prevent 4500 premature deaths and 290,000 lost workdays annually by 2032. Regan said “We do not have to sacrifice people to have a prosperous and booming economy.”
Huaxin Cement Tanzania Maweni Company commissions new clinker line at Maweni cement plant
05 February 2024Tanzania: Huaxin Cement Tanzania Maweni Company has commissioned a new 4000t/day clinker line at its Mavini cement plant, after completing the Phase 2 of the plant’s construction. China Industrial and Economic Information Database has reported that this phase of construction commenced in August 2022. The new line is equipped with a 15MW biomass-fired power plant.
During the 14th Five-Year Plan (2021 – 2025), Huaxin Cement aims to quadruple its production capacity outside of China to 16.5Mt/yr. 6.07Mt/yr-worth of this will come online in 2024 and 2025. The company says that its strategy partly reflects the slowing of its domestic market since 2022.
Monarch Cement and Evergy Energy Solutions to build 20MW solar power plant at Humboldt cement plant
02 February 2024US: Monarch Cement and Evergy Energy Solutions plan to build a 20MW solar project in Humboldt, Kansas. The project is scheduled to commence in early 2024, and will serve as a ‘benchmark for integrating renewable energy in business operations,’ according to the partners.
Monarch Cement president Kent Webber said “The board of directors and management of Monarch Cement are extremely excited about this win-win venture, where we are making a giant movement toward achieving our 2050 carbon neutrality goals, being socially responsible and providing a more than significant return on investment to our shareholders." He added "Evergy Energy Solutions has done an incredible job of leading and providing solutions at every obstacle. We couldn't be happier with Evergy Energy Solutions’ performance, professionalism and command of the subject."
Titan Cement International buys Vezirhan pozzolana quarry
30 January 2024Türkiye: Titan Cement International (TCI) has acquired concession rights to the Vezirhan pozzolana quarry in East Marmara. The quarry will help TCI to expand its low-carbon cement production capacity. By 2030, the company aims to reduce its CO2 emissions by 35% from 1990 levels, and include 50% green products in its portfolio.
Titan Group Eastern Mediterranean regional director Christos Panagopoulos said “Access to Vezirhan quarry’s strong reserves potential and high-quality material will allow Titan to further broaden the portfolio of low-carbon cementitious products available to its customers. The quarry has access to a deep port and railway transport, facilitating both land and seaborne distribution across Titan's global locations.”
Group chief sustainability and innovation officer Leonidas Canellopoulos said “Being future-ready for a net zero world is more than just an ambition for Titan, and the acquisition of concession rights in Vezirhan is part of our solid roadmap that entails over 100 initiatives, covering the entire scope of our geographic operations and span of our value chain.”