Spain: LafargeHolcim España plans to spend Euro4m on upgrades to its Sagunto cement plant, according to the Las Provincias newspaper. The work will include automating the laboratory, adding a new control system for the plant, making environmental changes, improving lighting and acoustics and remodelling the unit’s white cement line.

Switzerland: LafargeHolcim is considering options, including divestments, for its businesses in the Middle East and Africa. Unnamed sources quoted by Bloomberg say that the company has held early talks with advisors about selling assets and it is also looking at an initial public offering (IPO). If it decides to sell its entire business in this region it may seek up to US$8bn. However, the sources thought that finding a buyer at this scale might prove difficult given market conditions. In 2018 the building materials producer operated 44 integrated and cement grinding plants in the region, 30 aggregates plants and 212 ready-mix concrete plants. LafargeHolcim has declined to comment on the report.

Libya: The Libyan Fund for Internal Investment and Development and the National Company for Building Material Industry have signed a partnership deal to build a 1.6Mt/yr cement plant at Nalut. The agreement follows collaboration between the Presidential Council and the Central Bank of Libya in order to build the economy, according to the Libya Observer.

Pakistan: Thatta Cement’s sales rose by 35% to US$16.7m in the half-year to 31 December 2018 from US$12.4m in the same period in 2017. Its cost of sales rose by 48% to US$12.5m from US$8.4m. Its profit for the period fell by 6.5% to US$2.2m from US$2.3m.

Saudi Arabia: Hail Cement’s profits have been reduced by a fall in prices, weakened demand and ‘tough’ competition. Its sales rose by 19% year-on-year to US$52.3m in 2018 from US$43.9m. However, its total profit fell by 77% to US$3.2m from US$13.5m.

Two supplier news stories this week presented a snapshot of the global cement industry. The first was FLSmidth’s annual results for 2018. The second was the announcement by France’s Fives that it had signed a collaboration agreement with China’s CNBM.

Overall FLSmidth reported its highest order intake in six years with revenue growth driven by its minerals division. On the cement side though the equipment manufacturer was blunt, describing the market for new cement capacity as, “subdued with low plant utilisation globally.” In its assessment a slow increase in global consumption outside of China was not enough to absorb overall production overcapacity. It said it saw a ‘healthy’ level of small to mid-sized orders for grinding plants, upgrades, retrofits and single equipment orders. The market for replacements and upgrades was identified as a strategic focus. It also noted environmental upgrades for plants in China and India as environmental regulations tighten.

Fives’ news touched on the rivalry that western-based manufacturers have faced from Chinese competitors. Fives and CNBM have agreed to explore projects together in new plants, expansions and upgrades. Although the press release was brief, this seems to involve CNBM using Fives technology such as grinding mills, pyro-lines and burners. Like the rest of the industry Fives has had a tough time of it in recent years in the cement sector although 2018 seemed to have improved considerably at the nine-month stage in September 2018. So signing an agreement with a competitor at this stage is interesting. FLSmidth did a similar deal with CNBM in mid-2018 when it signed a framework agreement for future collaboration.

The context here is that the new plants that are being built are often part of China’s One Belt, One Road Initiative, typically in Central Asia or Africa. Mostly these plants are being financed by Chinese joint ventures and built by Chinese suppliers. This week Reuters published a map of new cement plants being built in 2018 with Chinese involvement along the silk road using Global Cement data. Rightly, FLSmidth and Fives are taking steps to be a part of this growth.

Figure 1: New Chinese cement plant projects outside of China in 2018. Source: Reuters using Global Cement data.

There is a tendency in the western press to play up Chinese imperial ambitions exemplified by US Vice President Mike Pence’s comments at the Asia-Pacific Economic Cooperation summit in Papua New Guinea in November 2018. Yet, Sinoma International Engineering, one of CNBM’s engineering subsidiaries, reported that its new order intake fell by 14% year-on-year to US$4.56bn in 2018. No reason for the decrease was given but most of this fall seemed to come from its construction division. In turn most of this came from a fall in foreign orders. The implication is that China’s attempts to move its cement industry out of the country may not be happening fast enough to preserve the size of these companies.

Returning to European equipment suppliers, FLSmidth summed up its response to this situation in its annual report. The cement market is split between premium and mid-market projects, with the latter dominated by Asian suppliers. FLSmidth says it is targeting the mid-market by becoming the preferred original equipment manufacturer (OEM) of choice. They are not alone in their ambition as the Fives deal shows.

Australia: Jack Truong has been officially appointed as the chief executive officer (CEO) and executive director of James Hardie. He was first announced as CEO successor in September 2018. He succeeds Louis Gries, who has stepped down from the post in a structured transition process.

Truong has been President of International Operations at James Hardie since April 2017. Prior to James Hardie, he was the president and CEO of Electrolux North America and worked for 22 years at 3M Company, where he held senior leadership roles throughout the US, Europe and Asia-Pacific, including Vice President and General Manager of the Global Construction and Home Improvements Division and Global Office Supplies Division. Truong holds a PhD in chemical engineering from the Rensselaer Polytechnic Institute in New York.

Australia/New Zealand: George Agriogiannis has been appointed as the chief executive officer (CEO) at Holcim Australia and New Zealand. He succeeds Mark Campbell, according to the Australian newspaper. Agriogiannis was previously the executive general manager of concrete and aggregates at Adelaide Brighton. His departure coincides with new CEO Nick Miller officially taking up the post. Agriogiannis starts the new job with the LafargeHolcim subsidiary on 11 March 2019.

Nigeria: Olusegun Olusanya has resigned from the board of Dangote Cement. He was appointed as an independent non-executive director in late 2010. Prior to this, Olusanya held a number of management positions at banks, including Savannah Bank Nigeria, Afribank Nigeria, Union Bank and the National Bank of Nigeria. He is an accountant who holds a BSc in Accounting from the London School of Economics and an MSc in Economics & Finance.

Austria: Franz Struzl, the former chief executive officer (CEO) of RHI, has died at the age of 76 years. He was the CEO of the refractory producer from 2011 to 2016.

Struzl studied at the Vienna University of Economics and Business in 1965. After more than 40 years at Alpine Steel Group (later Voestalpine), he became the chairman of Voestalpine in 2001. He held this position until 2004 and soon afterwards became CEO of Voestalpine, Brazil (Villares Metals), remaining there until 2010. In 2011, he joined RHI as CEO. Struzl also participated in the first negotiations regarding the merger of RHI and Magnesita. He retired in 2016 due to illness.