Global Cement Newsletter

Issue: GCW351 / 02 May 2018

Headlines


There is lots to mull over for the cement industry from last week’s Global Slag Conference that took place in Prague.

One striking map from Michael Connolly, TMS International, showed the status of slag and steel products in the US. It was a multi-coloured patchwork of different regulatory statuses from approval to be used as a product to regulatory exclusion. This won’t come as a surprise to many readers but even within one country the way slag can be used legally varies.

As this column reported last year after the Euroslag Conference, the European Union can be presented in a similar way. The irony here is that increased use of slag and other secondary cementitious materials (SCM) is exactly the kind of change the cement and concrete industries need to make to decrease their carbon emissions. Constant quibbles over whether slag is a product or a waste undermine this. Happily then that Connolly was able to report progress in the US as lobbying by industry and the US National Slag Association have led to more states legally accepting slag as a product.

However, cement producers have other concerns in addition to environmental ones when it comes to slag usage as Doug Haynes from Smithers Apex explained. Haynes, a former UK steel industry worker turned consultant, spoke around a market report on the future of ferrous slag. His take on Basic Oxygen Furnace (BOF) slag was that despite fuel savings, decreased CO2 emissions and the benefits of embodied iron when it is used as a raw material for clinker production, it is in the interests of cement producers for slag to be a waste because they then get it for free or at a reduced rate. It’s a similar story to the use of waste-derived fuels powering cement plant kilns where producers want lower fuel costs but waste collectors want value for their product. Unsurprisingly, Haynes wanted cement producers to accept the value embodied in BOF slag.

Charles Zeynel of ZAG International, an SCM trader, then laid out the situation where global SCM supplies are remaining static but cement demand is growing. Coal-fired power station closures are reducing supplies of fly ash, another SCM, placing pressure on existing granulated blast furnace slag (GBS) slag supplies. The message was very much in a slag trader’s favour but instructive nethertheless. If slag is in demand then the price will rise. Anecdotally, the increased number of cement producers at the conference seemed to indicate increased interest of the cement industry in the product.

Lots more speakers followed on topics such as slag beneficiation, grinding advances and new innovations. On grinding, one surprise that popped up was that Spain’s Cemengal has sold a Plug & Grind Vertical mill to CRH Tarmac’s cement plant at Dunbar in Scotland. It is the first such sale of this product in Europe. The last speaker, Jürgen Haunstetter of the German Aerospace Centre, stuck out particularly with his presentation on using slag as a thermal energy storage medium in a concentrated solar power (CSP) plant. This may not seem connected to the cement industry but it is along similar lines to Italcementi’s project at the Aït Baha cement plant in Morocco, which uses a CSP process that can be used with the plant’s waste heat recovery unit.

The Global Slag Conference will return in April 2019 in Aachen, Germany.

Read the full review of the 13th Global Slag Conference 2018


UK: Breedon Group has appointed Amit Bhatia as its non-executive deputy chairman with immediate effect. Bhatia joined Breedon’s board as a non-executive director in August 2016, following the group’s acquisition of Hope Construction Materials. He is a director of Abicad Holding, a shareholder in Breedon, and vice chairman of Queens Park Rangers FC.


Spain: LafargeHolcim Spain has appointed Alberto del Valle as its director of Human Resources and Communications. Del Valle, an industrial engineer trained at the Charles III University of Madrid, holds over 15 years of experience in the construction industry. In 2008 he became the Director of Compensation and Benefits for Holcim Spain, before later becoming the Compensation and Benefits Manager Europe Region for LafargeHolcim in 2014 and the Career and Talent Manager Europe and Trading at LafargeHolcim Europe in 2016. His latest position also sees him become a member of the management committee of LafargeHolcim Spain.


Thailand: Amir Reza Sinai has been appointed as the managing director of Beumer Group’s subsidiary in Thailand. The local company, which has 59 employees, acts as Beumer’s regional headquarters in South East and East Asia, where it covers the divisions Conveying & Loading Systems and Palletising & Packaging Systems. It also provides solutions for the cement industry.

Prior to working for Beumer, Amir Reza Sinai was the chief executive officer of the Indonesian subsidiary of a global plant engineering and construction company. He joined Beumer’s Thai subsidiary in early 2017, and for almost a year he headed the company’s office in Jakarta, Indonesia. He took up his current post on 1 January 2018.


Rwanda: Upgrade work at Cimerwa’s plant at Bugarama has led to local cement prices rising by up to nearly 50%. The plant has been shut for nearly a month for improvements to its mill, heat exchanger bypass, clinker cooler plate, bag filter and limestone weigh feeder, according to the New Times newspaper. However, the work has been delayed by bad weather and delays waiting for imported parts to arrive.

The total cost of the upgrade project is US$3.3m. An unnamed German contractor has been involved with the work. The plant has a nominal production capacity of 0.6Mt/yr but it currently produces 0.5Mt/yr. Normal supply from the plant is expected to resume by the end of May 2018.


Pakistan: GE Power has won a contract to design, manufacture and deliver a 132/6.3kV air-insulated switchgear (AIS) grid station to support a new production line being built at Power Cement’s plant in Nooriabad. The project is expected to be completed in early 2019. It will supply the cement plant with a reliable electricity supply from the Hyderabad Electric Supply Company.


Trinidad & Tobago: Union members from the Trinidad Cement branch of the Oilfields Workers Trade Union have protested at the Port of Chaguaramas over cement imports from Turkey. A union member claimed that a batch of imported cement had no import duties paid, according to the Trinidad Guardian newspaper. Trinidad Cement has taken legal action in the Caribbean Court of Justice against Turkey’s Sonmez Cimento for breaking local tariff rules. In 2016 Trinidad Cement made an official complaint to Caricom, the Caribbean Community organisation, about tax concerns for a cement import from Turkey.


Indonesia: Semen Indonesia’s net profit fell by 45% year-on-year to US$29.6m in the first quarter of 2018 from US$54m in the same period in 2017. It blamed the decline on fuel costs and rising debt payments, according to Reuters. Despite this, its sales revenue rose by 3.4% to US$476m from US$460m. Its cement sales volumes rose by 4% to 6.79Mt from 6.53Mt. The majority of this rise came from exports, which increased by 44.9% to 0.6Mt from 0.41Mt.


India: Shree Cement is to buy Raipur Handling & Infrastructure for US$8.9m. The railway company operates a railway terminal at Hathbandh in Chhattisgarh near to the cement producer's plant at Baloda Bazar. The acquisition is expected help Shree Cement manage its railway logistics better.


Pakistan: Kohat Cement has started commercial operation of a 105t/hr cement mill at its plant. The cement producer operates a single integrated plant at Kohat-Rawalpindi. It is also upgrading the site with a new 7800t/day production line.


Saudi Arabia: Najran Cement has received a clinker export licence from the Ministry of Commerce and Investment. The licence is valid for one year from 30 April 2018.


Kenya: Cement consumption has fallen for the first time since 2000. It fell by 8.2% year-on-year to 6.2Mt in 2017 from 6.7Mt in 2016, according to data from the Kenya National Bureau of Statistics reported on by the Daily Nation newspaper. Reduced demand for building materials in the construction sector occurred at the same time as a fall in the value of building plans approved in 2017.


Colombia: Cement production fell by 3.3% year-on-year to 2.9Mt in the first quarter of 2018 from 3Mt in the same period in 2017. Local despatches fell by 5.45 to 2.84Mt from 3Mt, according to data from the National Administrative Department of Statistics (DANE).


France: ArcelorMittal plans to increase its stake in Ecocem France to 49% from 30% by the end of May 2018. The transaction is subject to the approval of the Irish Competition Authority. The French subsidiary of Ireland’s Ecocem was set up in 2007 by ArcelorMittal and Ecocem Materials.

Ecocem produces slag cement from ground granulated blast furnace slag. Ecocem France operates a 0.7Mt/yr grinding plant at Fos-sur-Mer near to an ArcelorMittal plant. It plans to open a second 0.7Mt/yr grinding plant at Dunkirk in May 2018. The new plant is intended to target western and northern France as well as export markets in the UK and Belgium.


Czech Republic: Cement Hranice’s cement sales rose by nearly 9% year-on-year in 2017 due to despatches to fellow subsidiaries of Buzzi Unicem in the Czech Republic and Slovakia. Its overall sales rose by 6.3% to Euro61.5m from Euro57.9m, according to the Czech News Agency. Board member Roman Michalcik said that the local construction sector had grown in 2017 due to good weather towards the end of the period and large local infrastructure projects.


Pakistan: Lucky Cement’s earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 21.6% year-on-year to US$114m in the nine month of its financial year to the end of March 2018 from US$145m in the same period in 2016. It noted that its cost of sales rose by 16.9% due to rising coal and other fuel prices. Its gross revenue rose by 7.1% to US$439m from US$410m. Cement production rose by 11.1% to 5.79Mt from 5.2Mt.

The cement producer added that it is expanding production at its Pezu plant by 2.6Mt/yr due to delays with its expansion plans elsewhere in the north of the country. Approvals from the government have been secured. The US$152m upgrade project is scheduled to be completed by the fourth quarter of 2019. It is also building a US$109m integrated cement plant at Samawah in Iraq. The joint-venture project with a local partner will have a cement production capacity of 1.2Mt/yr when operational. Commercial production is currently scheduled for end of 2019.


Peru: UNACEM’s cement despatches for the first quarter of 2018 have fallen slightly due to a contraction in the construction market, delayed infrastructure projects and political instability leading to lower private investment. The cement producer’s income rose by 8.9% year-on-year to US$147m in the first quarter of 2018 from US$135m in the same period in 2017. Its clinker production fell by 12.9% to 1Mt and its cement production fell by 0.6% to 1.2Mt. It attributed the fall in production to a scheduled maintenance shutdown of its Atocongo plant. However, clinker exports through the Port of Conchán increased to 0.28Mt in the period.


Russia: An investment deal has been signed between the Government of Bashkortostan, the Sichuan-Sibay Industrial Park and Jiunghe Sichuan Environmental Protection Company to build a 1.8Mt/yr cement plant in Sibay. The project has a cost of Euro168m, according to the RBC News Agency. Once operational the unit is expected to create around 200 jobs. The project as orignally scheduled to open in 2018 but construction work at the site has not started yet. Further repoting by the Russian Construction trade magazine says that the general contractor for the project will be Sinoma.


China: China National Building Materials' operating revenue rose by 40% year-on-year to US$394m in the first quarter of 2018 from US$281m in the same period of 2017. Its net profit more than doubled to US$77.4m from US$23.6m.


France: The French government reportedly asked the US not to target Lafarge Syria’s Jalabiya cement plant during military operations in 2014. Emails seen and reported upon by Reuters suggest that France's Syria envoy, Franck Gellet, asked the French Foreign Ministry to protect the cement plant while it was in Islamic State controlled territory. The request to ‘not to do anything about this site without checking with us first’ was then passed to US officials. Neither the French Foreign Ministry nor LafargeHolcim commented on the emails when asked by Reuters.

LafargeHolcim is being investigated in France over claims that Lafarge Syria had paid extremist groups to keep a cement plant operational after the outbreak of war in Syria. Six former Lafarge executives have been charged so far with financing a terrorist organisation.


India: UltraTech Cement’s consolidated net sales rose by 34% year-on-year to US$1.39bn in the fourth quarter of its 2017 financial year from US$1.04bn in the same period in the previous year. Its profit before interest, depreciation and taxation increased by 20% to US$283m from US$236m.

The group benefitted from its acquisition of assets from Jaiprakash Associates in mid-2017. Its cement production capacity grew by 28% to 85Mt/yr from 66.3Mt/yr. However, its capacity utilisation rate fell slightly to 80% from 82%. Its local sales rose by 32% to 17.6Mt from 13.4Mt and exports increased by 15% to 0.82Mt from 0.72Mt. The cement producer also warned that a rise in petcoke and coal prices following a government ban had caused its input costs to inflate during the reporting quarter.


India: South Central Railway has signed a long-term tariff contract with Ramco Cements and Zuari Cements to transport freight at fixed rates. Ramco and Zuari have signed agreements for five and three years respectively. The railway company has previously signed similar deals with UltraTech Cement, India Cements, Orient Cements and Kesoram Industries.


Nigeria: Joe Makoju, the Group Chief Executive Officer of Dangote Cement, has revealed that the cement producer exports 0.21Mt of cement to Ghana, Togo and Niger in the first quarter of 2018. The company’s revenue grew by 16% year-on-year to US$668m from US$575m, according to the Vanguard newspaper. Its profit increased by 29% to US$199m from US$154m. Cement sales rose by 2.8% to 6.2Mt from 6.03Mt.


UK: Spain’s Cemengal is supplying a 0.5Mt/yr Plug & Grind Vertical mill to Tarmac’s Dunbar cement plant. Work started in April 2018 and the project is expected to be completed by July 2019. The unit follows the Plug & Grind product line’s modular format and it includes a FLSmidth OK Mill 37.3. The mill will be used to grind clinker at the cement plant although the subsidiary of CRH may also use the mill to grind slag. The order is Cemengal’s first Plug & Grind Vertical in Europe.


Ireland: CRH says it has reduced its proposed executive salary increases following votes by a significant minority of its shareholders against a remuneration report. The board said that it would take into account the views of 39.7% of its shareholders by providing a lower salary increase to its finance director, although it had offered other benefits to the director instead. It added that the remuneration committee of the company intends to hold a consultation later in 2018.


Mexico: Cemex’s first quarter operating earnings have fallen due to poor weather and fewer business days. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 4% year-on-year to US$535m in the first quarter of 2018 from US$557m in the same period in 2016. Its new sales rose by 8% to US$3.38bn from US$3.14bn and its cement sales volumes rose slightly to 16.1Mt from 15.9Mt.

“Our EBITDA generation during the quarter was affected by seasonal effects, including adverse weather in our European and US operations, fewer business days and an inventory costing-variation effect. We expect the impact of the fewer business days and the inventory effect to revert in the upcoming months, while we expect most of the pent-up demand caused by adverse weather to be recovered during the rest of the year,” said chief executive officer Fernando A Gonzalez.


Ireland: CRH’s sales fell by 2% year-on-year for the first quarter of 2018. It failed to provide figures for the decline but blamed it on bad weather and poor timing of holidays. Sales fell by 2% in Europe, 3% in the Americas and by 5% in the Philippines. By region in its Europe Heavyside division CRH reported falling sales in most countries with the exception of Switzerland, the Netherlands, Denmark and Finland.

The group reported that it finalised an agreement to merge Suwannee American Cement, acquired in November 2017, with American Cement Company, a 50:50 joint venture based in Florida. CRH now owns 80% of the enlarged business following this non-cash deal. This deal is intended to strengthen Americas Materials’ position in existing markets in Central and Northern Florida, optimise market coverage and achieve operating and vertical integration synergies. It also said that its deal to buy Ash Grove Cement is progressing through regulatory approval in the US and is expected to close in May 2018.


Nigeria: Germany’s Gebr. Pfeiffer has struck a deal to sell a MVR 6000 R-4 mill for raw material grinding and a MPS 3350 BK mill for processing coal for kiln firing for Dangote Cement’s new plant at Okpella in Edo State. The mill order is the first for Gebr. Pfeiffer from the Nigerian cement producer. The order was placed by the China’s Sinoma International Engineering.

The MVR mill featuring a total drive power of 4000kW will be grinding 550t/hr of cement raw material to a fineness of 10% R 90µm. The MPS 3350 BK with a drive power of 1100kW is designed for a throughput rate of 50 - 70t/hr and will grind Nigerian coal, imported coal and/or pet coke, to a fineness of 12% R 90µm. Gebr. Pfeiffer’s own staff will supervise erection and commissioning.


Morocco: China’s CBMI has signed a contract with LafargeHolcim to build a cement grinding plant near Agadir. The deal for the SSS 13 & 14 Grinding Plant EPC Contract was signed on 21 March 2018 at the LafargeHolcim Technology Centre in Lyon, France. Once operational the plant will be run by LafargeHolcim Maroc.


Denmark: FLSmidth plans to change its internal business structure to focus on two industries: cement and mining. The reorganisation will see it change its focus from four divisions to two industries and from a country setup into a regional structure. Sales and service will be decentralised in seven regions, while ownership for the full life cycle offering will be anchored in the two industries. This is intended to create a productivity-driven organisation with a strong, unified digital approach and strengthen the engineering firm’s local presence.

"With the end markets recovering, our customers accelerate to invest in productivity enhancing and digital solutions. To support our customers' growth, the two industries, Cement and Mining, will deliver integrated productivity offerings through the regions. Our decentralised organisation will give us a strong point of entry to offer our customers key products, shorter delivery times and a strong service setup," said group chief executive officer Thomas Schulz.

Its two industry grouping, Cement and Mining, will develop and drive the life-cycle offering and the product portfolio. The two industries will be supported by seven regions: North America; South America; Europe, Russia & North Africa; Sub-Saharan Africa & Middle East; Asia; Subcontinental India; and Australia. The regions will drive customer relations, sales and service for both industries. A central digital organisation will drive an enhanced, unified approach to digitalisation. The realigned organisation will become effective from 1 July 2018.


Lithuania: Claudius Peters has commissioned a turnkey cement silo and discharge equipment for stevedoring company Bega at the Port of Klaipėda. Its scope of supply comprised a rail car unloading system and a storage silo with pneumatic conveying for ship loading to unload three railcars simultaneously up to a capacity of 200t/hr. The storage silo is a Claudius Peters 3300T Conventional Cone cement storage silo 27m high and 12.5m in diameter equipped with a silo bottom fluidisation system.

The pneumatic conveying system utilises a size 350 Claudius Peters X-pump and enables a total conveying distance of 205m. Originally the project was based on a conveying distance of 148m. During the project phase the customer decided to use two different quays with a conveying distance of 148m and 205m. Commissioning was competed at the end of March 2018.


US: The Portland Cement Association (PCA) has announced the winners of the 2018 Safety Innovation Awards. The awards recognise creative safety-enhancing projects in the cement industry. Winners were determined by a panel of judges that evaluated submissions from across the country for milling/grinding, distribution, pyroprocessing and general facility.

Cemex USA’s Miami plant Florida won the milling/grinding category with its new process to load ball mills. The site developed a new mill loading process that uses a small hopper for grinding media, and an incline transport system with buckets to convey the grinding media directly to the mill. This new system eliminates the interaction between the employee and the machine, reduces the number of people needed to load the mill from five to two, and eliminates the need for employees to stand on top of the mill. This new system also improves mill loading rates from seven drums/hr to 30 drums/hr.

Cemex USA’s Houston operations in Texas won the pyroprocessing category for it use of drones for hazardous inspections. It has implemented a system for using protected air drones to inspect enclosed and confined spaces. Visual inspections of enclosed areas (preheater towers, tanks, silos, process ducts, etc) normally require intrusive equipment, long delays for system cooling, and placement of employees on scaffolding in confined spaces. These drones utilise an outer protective cage to minimize the risk of breakage due to impact. The drone program has eliminated the risk of putting staff in confined spaces, reduced the cost of scaffolding, and reduced the overall time for inspections.

LafargeHolcim US’ Corporate Program in Chicago won the distribution category for its X-Factor barge cover. It has developed a process for barge cover removal that reduces the risk of falls from employees stepping on to the barge. The X-Factor barge cover, developed over the last three years with a contractor, uses the latest technology and a no-touch design to allow a crane operator to perform all functions associated with barge lid handling without additional human assistance. Barge workers will no longer be required to step onto the barge to remove or replace barge covers, eliminating a potential fall risk.

Ash Grove Cement’s Louisville plant in Nebraska won the general facility category for its use of magnets as duct hole patches. Ash Grove has developed a hole-patch technique using magnets. Magnetic patches are quick, simple, and effective at preventing or limiting the release of materials from holes created in ducts caused by abrasion, leading to a cleaner plant, reduced slip, trip and fall risks, and fewer related Mine Safety and Health Administration housekeeping citations.

Cemex USA’s Brooksville in Florida also won the general facility category for its filters moved to ground level project. It redesigned the blower housings to move the filter from the top of the blower housings to an easily accessible location at ground level. The redesigned blower housing eliminates the need for employees to climb up and down a ladder, reducing overexertion and fall hazard.


US: CalPortland has been awarded the 2018 Energy Star Partner of the Year - Sustained Excellence by the Environment Protection Agency (EPA). It received the award for its commitment to high-level leadership in energy management throughout the company.

Key 2017 accomplishments for the award include: reaching a 16% improvement in 2017 from a baseline year of 2003 for cumulative savings of US$109m; promoting energy management across the US cement industry through the chief executive officer’s leadership of the trade association and an offer of the company’s assistance to others in the industry; earning EPA’s Energy Star plant certification for two cement plants where one was recently purchased and required extensive upgrades and energy improvements to qualify in less than two years; expanding energy management into its fleet of ready mix concrete trucks by 118 units that run on compressed natural gas; continuing to invest in operations through new plant hardware such as a high efficiency separator for a mill, efficient new equipment to improve raw feed processing, and computational fluid dynamic software to better manage process air and material flows; developing innovative methods for training employees and motivating them to manage energy in their work; and outreaching to inform employees, over 106,000 community members and schools, competitors, and others on how they can manage energy and use Energy Star to save.

The latest award is the 14th consecutive recognition, from 2005 to 2018, by US EPA Energy Star for CalPortland.