South Korea: A total of 8200 truck drivers have gone on strike to request higher wages and an extension of the government’s freight charge system. The Korea JoongAng Daily newspaper has reported that 50% of the country’s 2700 cement truck drivers are unionised. Under the freight charge system, drivers receive minimum monthly payments in order to tackle the problem of overloading.

India: UltraTech Cement plans to invest US$1.67bn to expand its cement production capacity to 160Mt/yr. This corresponds to a capacity cost of US$76m/Mt/yr. The Business Standard newspaper has reported that the investment is part of parent company Aditya Birla’s planned US$9.91bn spending package to expand existing capacities and enter new sectors, including paints, via its subsidiary Grasim Industries. The investments will affect both its Indian operations and those overseas.

India: Star Cement plans to invest US$129m to establish a new 3Mt/yr clinker line. BusinessLine Online News has reported that producer currently operates 2.8Mt/yr-worth of clinker capacity across two units in Meghalaya. Star Cement says that it plans to increase its presence in the Northeast India, Bihar and West Bengal markets. It will additionally invest US$90 – 103m to establish two new grinding units with a combined capacity of 4Mt/yr at Guwahati and Silchar in Assam.

Star Cement said that projected infrastructure investment growth in Northeast India inspired its investment decision, while it opted for a 3Mt/yr kiln over a 2Mt/yr alternative due to the improved efficiencies it offers.

India: State-owned coal supplier Coal India has recorded a 17% year-on-year decline in deliveries of coal to cement plants in May 2022. Its coal supply to captive power plants also dropped in the month, by 40% year-on-year.

Coal India is the leading coal mining company globally. Its main customers are energy, cement and steel companies.

Philippines: The Philippines imported 6.47Mt of cement from Vietnam in 2021, 91% of a total 7.11Mt of cement imported in the year. The Cement Manufacturers Association of the Philippines (CeMAP) recorded that total imports increased by 14% year-on-year from 6.25Mt of cement in 2020, while imports from Vietnam increased by 20% year-on-year from 5.4Mt.

The Manila Bulletin newspaper has reported that Philippine cement producers increased their production capacity by 23% year-on-year to 35.3Mt/yr at the beginning of 2022. CeMAP projected further capacity growth of 55% to 54.8Mt/yr by the end of 2025, against a domestic demand that year of 66Mt/yr.

Germany: Fuchs Lubritech has merged into Fuchs Schmierstoffe. Following the merger, the latter also rebranded as Fuchs Lubricants Germany on 3 June 2022. Fuchs Lubricants Germany will assume all contractual responsibilities of Fuchs Lubritech.

One big story in India in recent weeks has been the start of action by the central government to tackle rising cement prices. First it reduced tax duties on petrol and diesel in late May 2022. Finance minister Nirmala Sitharaman also said that they were looking at ways of improving the availability of cement in the country, including better logistics, to help lower its cost. A delay to a change in the Goods and Services Tax (GST) rate structure is also being considered to slow inflation generally. Local press then reported a few days later that the government had set up a panel to explore ways of reducing the price of cement by distributing supplies better around the country. Specifically, it was talking to the South India Cement Manufacturers’ Association to work out ways for their members to meet the rising demand in other parts of the country. Reported options included looking at better use of rail and sea connections.

Chart 1: Map of Indian regions showing integrated/clinker production capacity per capita. Note: the chart does not include standalone grinding plant capacity. Source: Global Cement Directory, Indian census data. Map image adapted from Filpro CC BY-SA 4.0.

The map above (Chart 1) summarises the general problem the country faces from a clinker production point of view. More clinker can be produced in the south of the country than elsewhere. This map is partly a reflection where the limestone reserves are. However, it does not show that the East region of India has a higher concentration of cement grinding plants than elsewhere. Additionally, a number of new integrated/clinker plants have been built in the East and more have been proposed. The data in Chart 1 suggests that India has an integrated production capacity of 312kg/capita nationally. This compares to a cement consumption of 200 – 250kg/capita as reported by the ratings agency Crisil.

Data from Crisil indicates that cement prices grew by 9% from the start of 2021 to March 2022. A similar rise of 8.1% month-on-month was reported in April 2022. It is not a direct comparison but retail inflation in India was reported as being 7.8% in April 2022. The cause of this has been blamed on a general tightening in energy supplies in the autumn of 2021 followed by the effects of the war in Ukraine that started in early 2022. Rising international coal and petcoke prices have made manufacturing cement more expensive. Growing petrol and diesel prices have made moving it around costlier still. Looking at the cement market generally, Crisil noted that demand for cement grew sharply in the first half of the 2022 financial year but then slowed in the second half due to poor weather, issues with sand supply and a labour shortage. The ratings agency has forecast stable growth in the 2023 financial year but with the caveat that the mounting costs of construction, including building materials, could dent this.

The fundamentals for the world’s second largest cement market look good as Adani Group’s recent deal to buy Holcim’s Indian assets for US$6.34bn attests. This won’t be much comfort for end-users though who are watching the price of cement rocket upwards. Yet how far the central government will be able to help the southern cement producers move their wares around more easily remain to be seen. If it succeeds, it may slow the rise in prices but it seems unlikely to halt it. The reaction of the more northerly producers is also key, since one option they have is to slacken their own price increases by just enough to fight off the new competition. Already they are facing the dilemma of raising their prices to cover input costs versus the effect this may have on overall demand. All of this looks set to put pressure on the producers’ margins. Indian cement prices look set to go up whatever happens next, making everyone unhappy. Some may be more unhappy than others.

Argentina: Holcim Argentina has appointed Julio Asnal as its Director of Sales and Integral Solutions. He will lead the company’s sales strategy.

Asnal’s prior professional experience includes working as a regional director for Danone and as a commercial director for Coca-Cola FEMSA, where he also held marketing and strategic planning roles. Most recently he has worked in management positions for Promedon over the last decade. He holds a bachelor’s degree in Business Administration from the National University of Córdoba and a master's degree in Business Administration from IAE in Buenos Aires.

Germany: Beumer Group has appointed Rudolf Hausladen as its chief executive officer (CEO). He succeeds Christoph Beumer, who has been in post since 2000. Beumer will remain a member of the management board until the end of 2022 and then move to the advisory board.

Hausladen, aged 52 years, holds a university degree in mechanical engineering as well as a master’s in business administration (MBA). Previously he worked in management positions for logistics companies including Swisslog and Gebhardt Logistic Solutions. His most recent position outside of Beumer was as the group CEO of electronic company ERNI.

Sweden: Cementa has completed its feasibility study for a carbon capture and storage (CCS) system at Slite cement plant in Gotland. The producer says that it will now proceed to the next stage of the project, with the aim of producing climate positive cement from 2030. Sister company Norcem is currently building a 400,000t/yr CCS system at its Brevik cement plant in Norway. Cementa says that its new system will have four times the capacity of that at the Brevik plant, and reduce Sweden's total CO₂ emissions by 3%. One or more of 'several storage solutions' currently under development in the North Sea will serve to store the plant's captured CO₂ emissions.

General manager Giv Brantenberg said "With the knowledge we have built up through our pioneering project at Norcem in Brevik, we now have a good picture of how to move forward in Sweden. The Nordic countries have what it takes to lead the climate transition in the construction sector."