World: Three cement producers - Cemex, Dalmia Cement and Holcim – are founding members of COP26’s First Movers Coalition public-private partnership. The partnership plans to use its global purchasing power to create markets for emerging CO₂ emissions reduction technologies, in order to accelerate and scale collective impact towards the global realisation of emissions reduction targets.

The coalition expects technologies currently on the market to account for 82% of CO₂ emissions reduction before 2030 and 50% before 2050, while it expects future technologies to account for 15% before 2030 and 46% before 2050.

Ukraine: The Ukrainian cement association Ukrcement has forecast a 17% year-on-year rise in domestic cement consumption in 2021 from 9Mt in 2020. Business World Magazine has reported that demand previously exceeded 10Mt in 2014.

Association head Pavlo Kachur said that the Ukrainian cement industry operated at 66% capacity utilisation in the first nine months of 2021. He added “Therefore, we have room to grow.”

Switzerland: Holcim Schweiz has partnered with Sweden-based Volvo Autonomous Solutions to test and develop automated electric dumpsters at its Gabenchopf quarry in the Siggenthal. The companies aim to develop a safe, efficient and sustainable dumpster for use in the cement industry.

CEO Simon Kronenberg said “We are very excited to be working with Volvo on this project. For us, this project means a further step towards realising our sustainability goals: in order to make a contribution to a sustainably built future, we continuously invest in measures to reduce our ecological footprint and look for solutions that are both innovative and sustainable."

UK: Cemex has agreed to sell its Cardenden, Dundee, Greenock and Perth ready-mix concrete plants to Tillicoultry Quarries. The company thanked its employees at the sites for their commitment. It said that the asset sale is part of a portfolio rebalancing strategy aimed at high growth metropolitan markets.

Germany: HeidelbergCement recorded consolidated sales of Euro14bn in the first nine months of 2021, up by 7% year-on-year from Euro13.1bn in the corresponding period of 2020. Revenues rose in all regions, except for North America, where they fell by 0.1% to Euro3.51bn. The company’s cement sales were 95.7Mt, up by 6% from 90.1Mt, while its ready-mixed concrete sales were 35.7Mm3, up by 4% from 34.4Mm3. Cement sales grew across every region, and recorded the sharpest increase in Western and Southern Europe, of 11% to 23Mt from 20.7Mt.

The group said that ‘significant’ energy cost inflation impacted upon results in the period. It launched a Euro500m cost mitigation programme and initiated the divestment of some Spanish assets and the acquisition of Tanga Cement in Tanzania.

Germany: Cementos Molins has concluded its acquisition of calcium aluminate cement producer Calucem following all regulatory approvals. Calucem operates the Pula grinding plant in Istria, Croatia and a bauxite quarry in Turkey. The new acquisition positions Cementos Molins as the world's second largest calcium aluminate cement producer. The company said that it expands and enhances its innovative and sustainable product range in line with its sustainable growth strategy.

CEO Julio Rodríguez said “I warmly welcome the Calucem team into the Cementos Molins family. Today marks a new and exciting milestone in the history of Calucem and Cementos Molins and, with this integration, we have excellent business development opportunities for a new step forward to our strategy of profitable and sustainable growth.”

Calucem CEO Yuri Bouwhuis said “We are excited about the integration into Cementos Molins, where we will accelerate our development and create together more value for all our stakeholders.”

Uzbekistan: The government has extended its suspension of tariffs on imports of cement until 1 November 2021. Business World Magazine News has reported that the policy aims to reduce the cost of housing. In order to support the domestic cement industry, producers’ tax rate will be reduced to 15% from 20%. The government will also halve taxes on natural resources.

India: The government of Kerala plans to increase its cement production in order to help lower the price of cement in the state. The Times of India newspaper has reported that the state owns 10% of its cement industry. It plans for state-owned Travancore Cements to increase grey cement, white cement and wall putty production at its Nattakom grinding plant in Moolavattom. Its other cement company, Malabar Cement, previously increased its cement production.

The state government also convened a meeting of private sector cement producers in order to discuss the possibility of a reduction in the price of cement.

US: Charah Solutions has signed a contract with Associated Electric Cooperative (AECI) to receive bottom ash, fly ash and boiler slag from its Thomas Hill Energy Center coal-fired power plant in Missouri until 2026. Charah Solutions will recycle the by-products to produce supplementary cementitious products and redistribute these through its MultiSource materials network. The network consists of 40 locations across the US.

President and CEO Scott Sewell said "We are delighted to partner with AECI to manage their ash marketing needs at Thomas Hill while supplying our concrete producers with the high-quality material they need."

The news from Sri Lanka this week is that Lanwa Sanstha Cement is preparing to commission a new 3Mt/yr grinding plant in January 2022. The timing is apposite given the current shortages in the country.

Some inkling of local problems can be seen in the cement news over the last few months. In August 2021 Insee Cement said that it was operating at full capacity utilisation across its network. Later, at the end of October 2021, the government intervened in the import market by opening up the use of Trincomalee Harbour. This was followed by the nation’s other main producer, Tokyo Cement, announcing that it too was operating its grinding plant at Trincomalee at full capacity. It also said that, at the government’s behest, it was going to increase its import rate.

The new Lanwa Sanstha Cement unit originally came to international attention when Germany-based Gebr. Pfeiffer revealed details in 2019 of an order of two MVR 5000 C-4 type roller mills from Onyx Group. Lanwa Sanstha Cement has since said that the plant will cost US$80m. Once operational the unit at the Mirijjawila export processing zone of the Hambantota International Port will manufacture ordinary Portland cement, Portland slag cement, Portland limestone cement and blended hydraulic cement. A further equipment order for the project was announced this week when the Chinese-run Hambantota International Port Group signed an agreement with Lanwa Sanstha Cement to build a conveyor from the port to the plant. The deal also includes two ship unloaders.

Other new cement units on the horizon include an integrated plant project from Nepalese businessman Binod Chaudhary that was announced in mid-2019. The US$150m plant was planned for Mannar in the north of the island. However, not much more has been heard since then. Chaudhary’s company CG Cement operates a grinding plant in Nepal. More recently, in October 2021, local press reported that the government had tentative plans to build a new plant at the old state-owned Kankesanthurai site, also in the north. The plant was originally built in the 1950s and production ran until 1990 when the military took over the unit amid the then on-going civil war. Earlier in 2021 the government agreed to sell off the machinery at the site. However, much of it has gone missing in the intervening period! Proposals to revive the plant have circulated since the mid-2010s.

Graph 1: Cement production and imports in Sri Lanka, 2015 – 2021. Estimate for 2021 based on January to August data. Source: Central Bank of Sri Lanka.

The Sri Lankan cement market has faced a tough time over the last two years. First, total local production and imports fell by 11% year-on-year to 7.2Mt in 2020 from 8.1Mt in 2019. Then, imports fell by 18% year-on-year to 1.83Mt from January to August 2021 from 2.24Mt in the same period in 2020. Local production has more than compensated though, leading to growth in the total so far in 2021. There have been general economic reasons for why the ratio of imports to local production has fallen in 2020 and 2019 and this is explained in more detail below. Yet, imports hit a high of 5.68Mt in 2017 and have been declining since then both in real terms and proportionately.

Insee Cement summed up the local situation in its third quarter results by blaming cement shortages on input cost rises, supply chain disruption and negative exchange rates effects. The first two problems are issues everywhere around the world as economies speed up again following the coronavirus lockdowns but the last one is more specific to Sri Lanka. The country has faced a recession in its economy because the pandemic shut down tourism. The government initially introduced import limits to try and control foreign currency reserves. It then imposed price controls on essential foods and commodities, including cement, in September 2021 to try and stop shortages but this plan was abandoned a month later. Focusing on cement, some idea of the input cost inflation facing the sector can be seen in Tokyo Cement’s latest quarterly financial results. Its cost of sales rose by 72% year-on-year to US$59.5m in the six months to end of September 2021 from US$34.5m in the same period in 2020.

Lasantha Alagiyawanna, the State Minister of Consumer Protection, said at the end of October 2021 that it would take three weeks to import the required cement into the country. Whether this is enough to end the shortage remains to be seen. Yet, whatever does happen, it is likely that more production capacity from the likes of Lanwa Sanstha Cement and others will be welcome in 2022 and beyond.