Malaysia: Malayan Cement has agreed to acquire YTL Cement’s cement and ready-mix concrete operations in Malaysia. MarketLine News has reported the value of the deal as US$1.25bn.

France: Hoffman Green Cement Technologies has supplied cement for Groupe GCC’s construction of a new secondary school in Aizenay, Vendée department. The Le Moniteur newspaper has reported that the cement will be used in concrete features of the Level-3 Biobased building. Groupe GCC will supply other elements made of wood. The project is the first use of Hoffman Green Cement Technologies’ products in a public building.

Japan: Taiheiyo Cement recorded full-year consolidated net sales of US$7.89bn in its 2021 financial year to 31 March 2021, down by 2% year-on-year from US$8.07bn in the 2020 financial year. The group’s net profit rose by 20% to US$427m from US$357m. Domestic cement sales volumes fell by 4.8% to 13.8Mt and exports sales dropped by 2.2% to 3.8Mt. The cement producer attributed this to falling local demand for cement since June 2020 due to the suspension of construction work in response to the coronavirus pandemic. It also noted a shortage of construction workers.

India: Shree Cement has received approval from the state government of Karnataka for its planned US$81.5m Doddaballapur cement grinding and bagging plant. The Hindu newspaper has reported that, when operational, the plant will employ 300 local people.

India: Birla Corporation’s consolidated revenue fell by 1.6% year-on-year to US$936m in its 2021 financial year that ended on 31 March 2021 from US$951m in its 2020 financial year. Its cement sales volumes decreased by 1.8% to 13.4Mt from 13.6Mt. However, its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 1.2% to US$195m from US$193m. It blamed falling sales on the coronavarus pandemic but it said it was able to increase earnings and profits by ‘aggressively’ rationalising costs.

"In the light of the massive disruptions faced at the beginning of the financial year, the 2021 financial year wasn't disappointing from the standpoint of profitability. Our performance reflected the resilience we have built over the years to external shocks. We also benefited from the stimulus provided by the government. But in the wake of the second wave of the pandemic, the year ahead looks more challenging. To my mind, India's ability to contain the pandemic through rapid inoculation and other means holds the key to economic revival," said Harsh Vardhan Lodha, chairman of Birla Corporation.

The cement producer also said that work on its new 3.9Mt/yr integrated cement plant in Mukutban, Maharashtra had been delayed due to a shortage of workers related to the ongoing health crisis. The plant is currently scheduled for commissioning by the end of the 2021 calendar year.

Jamaica: Caribbean Cement has announced plans to invest US$11.5m in total in capacity-expanding upgrades and modernisation of its cement production over the next three years to 2024. The Jamaica Information Service has reported that the company reached its current installed cement production capacity of 1.3Mt/yr after US$82.4m-worth of investments between 2016 and 2020. The subsidiary of Mexico-based Cemex operates an integrated cement plant at Rockford in Kingstown.

UK: Tarmac has renewed its partnership with the Peak District National Park until 2026. Under the partnership, the company organises volunteering and funds an engagement conservation job role at the national park in Derbyshire. Since 2016, volunteers from Tarmac’s Tunstead quarry have built dry stone walls, restored a footbridge and helped to manage ancient hay meadows. In several areas of the park, volunteers have also replaced benches.

Tunstead quarry stone and powders director Pete Butterworth said that he was ‘delighted’ about the renewal. He added, “By sponsoring the engagement role, we also enable many people to get involved in practical projects which make a significant contribution to the maintenance and improvement of this beautiful area.”

Burkina Faso: Germany-based Gebr Pfeiffer is supplying a MVR 6000 C-6 type vertical roller mill for Cim Metal Group’s upgrade to its Cimasso cement grinding plant in Bobo Dioulasso. The mill, with an installed gear power of 6800kW, will be used on the plant’s second production line. The vertical mill can be used for different cement types between 4000cm²/g and 5000cm²/g according to Blaine and produces more than 400t/hr with its six active grinding rollers. The mill will be equipped with a SLS VC type classifier. The order also includes the delivery of a replacement gearbox. The upgrade project is being managed by Germany-based Intercem Engineering with Gebr Pfeiffer supplying the mill and the process design. The supplier says that this will be the first MVR mill to be installed in the country.

Reporting from Egypt this week suggests that the government may be finally taking action to aid the country’s beleaguered cement sector. Sources quoted by Reuters indicate that a production cut of at least 14% has been proposed. One of the cement industry sources broke it down into a 10.5% baseline reduction with a further 3.7% reduction per production line at a cement plant with an additional cut of 0.7% per year of operation. The Ministry of Trade and Industry has declined to comment on the story.

Graph 1: Cement production and capacity utilisation in Egypt. Source: Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries.

Graph 1 above shows the key problem facing the sector: cement production has fallen each year since 2016. Added to this, local capacity utilisation took a knock when the 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened in 2018. Before it opened the natural utilisation rate was around 80%. By 2020 it had sunk to 60%.

The coronavirus pandemic was another problem that the building materials market didn’t need and the last time this column covered Egypt (GCW 475), HeidelbergCement was restructuring its local subsidiaries in the country. Most producers were holding on for better days in the future but hoping for some form of government intervention such as production limits or an export subsidy programme. Meanwhile, analysts have been waiting for divestments. However, the prospect of the situation becoming worse was also present, in the guise of the Egyptian Cement Group’s new integrated 2Mt/yr plant, scheduled to open at Sohag later in 2021. Since then there’s not been much of a change until now.

Some very rough calculations by Global Cement suggest that the alleged government measures could have created an artificial utilisation rate of 78% in 2020 before the age of the plants was taken into account. For example, the El-Arish Cement plant with its six production lines would potentially see its production cut by around 33% and capped at 8.7Mt/yr. In theory a measure like this could better share out the market between the smaller producers or those with less market share. However, how this would play out with actual plant running costs or existing market share is unknown, although, as mentioned above, some of the multinational producers have been publicly calling out for these kinds of controls.

Playing around with the proposed caps could potentially create some absurd situations. For example, if a single line plant had been running for over 120 years (!) then it wouldn’t be allowed to produce any cement at all. It is lucky then that the earliest plant in the country opened in 1911 and it’s likely long gone. It’s a silly example, but the point is, if production limits do come in, there are likely to be winners and losers. The question for the local producers then is whether a system like this would be better than the current situation.

South Africa: Duan Classen, the Operations Executive of Sephaku Cement, has been appointed as its acting chief executive officer (CEO) following the admission of Pieter Fourie to hospital. The cement producer said that Fourie, its current CEO, had been receiving medical care after suffering a stroke and was responding well to treatment.

Classen has been a member of the executive management in charge of operations since the construction of Sephaku Cement’s plants. He holds a bachelor degree in Metallurgical Engineering from the University of Pretoria, and has previously participated in the Young Managers Development Programme at INSEAD in France and a Management Development Programme at Duke University in the US. Classen completed his graduate engineer training at De Beers before joining Blue Circle Cement in 1997, where he was involved in Blue Circle Cement's integration into Lafarge in 1998. He subsequently worked for PPC before being appointed to DCSA in early 2008.