Global Cement Newsletter

Issue: GCW383 / 12 December 2018

Headlines


Germany: Markus Schröder has been appointed as the director of Elogic Filtration. It follows Elogic’s acquisition of Ruhr Montan Environmental (RME) and the incorporation of the company into its Elogic Filtration division. Schröder was the director of RME. Previous to this he was the director of Intensiv-Filter in Langenberg.


Research from the Global Carbon Budget (GCB) this week forecasts that fossil CO2 emissions from the Indian cement industry will rise by 13.4% in 2018. This is in stark contrast to the smooth mood music from the Cement Sustainability Initiative (CSI) last week, which stated that the local industry was on track to meet its commitments towards decarbonisation. So what’s going on?

The situation is akin to the fable about the blind men and the elephant. Both the GCB and the CSI are approaching the emissions of the Indian cement industry from different directions. The GCB is using available data (including data from the CSI) to try and estimate what the CO2 emissions are. It takes cement production data using a method adapted from a paper published by Robbie M Andrew of Norway’s CICERO Center for International Climate Research in 2018 and then it takes into account the types of cement being produced and the clinker factor. This is then converted into an estimated clinker production figure and this is then converted into a CO2 figure.

However, the CSI meanwhile actually has direct data from its local members. At the moment these include ACC, Ambuja Cements, CRH, Dalmia Cement (Bharat), HeidelbergCement, Orient Cement, Shree Cement, UltraTech and Votorantim Cimentos. As part of the Getting the Numbers Right (GNR) database it collects production and sustainability related data from its members. However, for reasons of competition, it maintains a year gap before it reports its data. This means that the GCB can report its estimate ahead of the CSI data.

There is nothing to stop the CSI reporting its progress against its targets though. And this is exactly what it has done in India with the recent document outlining progress towards the 2030 targets from the low carbon technology roadmap (LCTR). The headline CSI metric was direct CO2 emission intensity. According to the CSI, this has fallen by 32kgCO2/t cement to 588kgCO2/t cement in 2017 mainly due to an increased uptake of alternative fuel and blended cement production, as well as a reduction in the clinker factor. This is bang on target with its aim of hitting 320kgCO2/t in 2050 (around 560 kgCO2/t in 2020, assuming a linear decrease).

The problem is that cement production growth in India suddenly sped up in 2018. Global Cement estimates that India’s cement production is set to rise by 7% year-on-year to 296Mt in 2018 from 280Mt in 2017. Data from the Ministry of Commerce & Industry shows that cement production rose by nearly 16% year-on-year to 244Mt in the first nine months of 2018 from 211Mt in the same period in 2017. Along these lines the Cement Manufacturers Association of India has forecast growth of 10% in the 2019 financial year to the end of March 2019. It reckons that this is the fastest growth in the sector since the industry slowed down in 2011.

India’s per capita cement consumption is low (222kg/capita) and its urban population is also low (around 30%). That’s a lot of cement that’s going to be used as it shifts to developed global rates and already it’s the globe’s second biggest cement market. The CSI was right to get in there eight years ago. Yet, the question now is can CO2 emissions decrease whilst the market grows? Research in the US suggests that the real reason for emission drops in the 2010s was the economic recession, not policy shifts or changes in the energy mix. If that holds in India then the cement industry will have a hard time reducing its carbon footprint irrespective of the work the CSI has done.


UK: Aggregate Industries UK has appointed Guy Edwards as its chief executive officer (CEO) starting in January 2019. He succeeds François Petry, who was recently appointed Country CEO of Lafarge France and Market Head for France and Belgium.

Edwards holds over 30 years of experience in the construction industry, with 25 years of this in the UK. He is currently CEO for the company’s Aggregates and Construction Materials (ACM) business in the US. Over the years, he has held a variety of senior roles within Aggregate Industries, both in the UK and US. In 2013, Guy served as a UK Executive Committee member responsible for European operations and, in 2014, was named chief operating officer (COO) for the AI US business.

Edwards received a Bachelor of Science in Engineering from Leeds University in England, graduating with honours in 1988. He has also completed the International Leadership Program at the International Institute for Management Development in Switzerland.


UK: Tarmac has appointed Graeme Bride as the plant manager of its Aberthaw cement plant. He takes over the role from Chris Bradbury, who has been appointed Cement Plant Manager of Tarmac’s Tunstead operations.

Bride, aged 46 years, graduated as a mechanical engineer from the University of Birmingham and has an MBA from Manchester Business School. He has over 24 years of operational experience gained in the cement, sugar and power generation industries across Europe, Asia and Africa. His most recent role was Health and Safety Director in Lafarge Africa. He holds 19 years cement plant management experience from his time spent working in Nigeria and the Philippines.


Germany: Klaus Keysberg has been appointed as the chief executive officer of ThyssenKrupp Materials Services, with effect from 1 January 2019. He was previously working as the division’s chief financial officer (CFO). In addition, Ilse Henne will join the board of the business area as chief operating officer (COO).

Keysberg has been a member of the board of the business area since 2011 and CFO since 2014. He is to retain this post until further notice. As CEO, Keysberg will succeed Joachim Limberg, who will retire. Before his appointment as CFO of Materials Services, Keysberg was COO of the business area from 2011 to 2014 and also held various management roles at operating units.

Henne has worked as the CEO of ThyssenKrupp Schulte and the Western Europe and Asia-Pacific regions. She will continue to hold this post until a successor is found.


Germany: Schmersal has appointed Axel Schneider as its new chief technology officer (CTO). The 49-year old is a graduate in electrical engineering. Previously, he worked in senior positions at international companies in the automation and telecommunications industry. He holds experience in product development, network technology and industrial IT systems. Schneider has also completed various additional courses on agile product development and project and change management and is a certified Professional Scrum Product Owner.

As head of the research and development (R&D) Division at the Schmersal Group, Schneider will be responsible for the global coordination and reconciling of development capacities and innovation projects. This includes, among other things, the establishment of group wide R&D standards and the continuous advancement of Schmersal’s global product portfolio.


India: The board of ACC has approved plans to build a new cement plant at Ametha, District Katnl in Madhya Pradesh. The unit will have a clinker production capacity of 3Mt/yr and a cement production capacity of 1Mt/yr. The subsidiary of Switzerland’s LafargeHolcim plans to expand a 1.6Mt/yr grinding plant at Tikaria, Uttar Pradesh and a 2.2Mt/yr grinding plant also in Uttar Pradesh. The board also agreed to build a 1.1Mt/yr grinding plant at an existing unit at Sindri in Jharkhand. The projects are expected to cost around US$417m.


Kazakhstan: Gezhouba Shieli Cement has launched its 1Mt/yr oil well cement plant in the Kyzylorda region. 260 jobs have been created at the site and 48 of the local staff were trained in China. The project is a joint venture majority owned by Chinese investors with a minority stake from a local cement company. China Triumph International Engineering built the plant.


Jamaica: Caribbean Cement has taken out a five-year loan for US$3bn from the National Commercial Bank Jamaica to repay debt. It also said that some of the loan would be used for general corporate purposes, according in the Gleaner newspaper. The cement producer is also planning to expand its gypsum and limestone operations at two sites but it is unknown if the new borrowing will be used to fund this. The latest loan follows a US$102m loan from its parent company, Cemex España in June 2018.


Slovenia: Salonit Anhovo has spent Euro10m towards upgrades at its Anhovo cement plant. Most of the funding went towards automation and environmental works, according to the Slovenian Press Agency. The unit built new cement silos, set up devices to reduce NOx emissions, purchased new machinery for its quarry, reduced noise levels and upgraded its business information system. The company has also started to replace asbestos roofing on an old building and started demolishing disused buildings. These two last projects are valued at around Euro3m and are expected to be completed by the end of 2020.


UK: The MPA has released its Sustainable Development Report 2018 covering the performance of the local cement industry to 2017. Key indicators include a alternative fuels co-processing rate of 43.8% in 2017 compared to 39.2% in 2016. This is the second highest rate since 2010, just below 44% in 2013. It reported CO2 emissions from calcination (process emissions) of 465kgCO2/tPCe, a slight increase from 2016. Emissions of NOx, SO2 and particulate matter all fell or remained stable. Cement production from MPA members remained stable at 9.4Mt in 2017.


Germany: Holcim Deutschland’s Lägerdorf cement plant has won a training award from the Chamber of Industry and Commerce (IHK). Peter Krohn of the IHK praised the plant’s quality of training, focus on younger people and attention to worker development. Holcim Deutschland employs around 2100 people in Germany and the Netherlands. Around 40 young people are undergoing training at Lägerdorf in various engineering and mechanical disciplines.


Philippines: China’s Huaxin Cement is preparing to sign a US$245m engineering, procurement and construction (EPC) contract with Holcim Philippines to build a new production line at its Davao plant. The Kalayaan 2 project includes a 6000t/day clinker production line, a 7MW waste heat recovery unit and upgrades to a 3000t/day production line. The contract follows a previous project between the companies on a mill at the plant.


Iran: Masoumeh Mousavi, the head of the office of industries affairs for Industries, Mining and Trade Organisation of Hormozgan province says that around 0.4Mt of clinker was exported from the Hormozgan plant in the first eight months of the Iranian year that started on 20 March 2018. Exports from the plant rose by 40% year-on-year, according to the Islamic Republic News Agency. The region has been exporting clinker to Oman, the UAE, Tanzania and South Africa. The plant has a cement production capacity of 1.9Mt/yr.


Algeria: Hafid Aouchiche, the import and export head at LafargeHolcim Algeria, has called for improvements to how the country manages its exports of cement and clinker. At a logistics symposium he emphasised the importance of better storage and loading infrastructure at ports, according to the El Moudjahid newspaper. He also noted the higher rates at Algerian ports for exporting clinker compared to ports in other countries. The cement producer has exported nearly 0.35Mt of cement and clinker so far in 2018.


Spain: The regional government of Andalucia has fined Cementos Cosmos’ Córdoba plant Euro3000 for dust emissions in September 2016. The local environmental board criticised the subsidiary of Brazil’s Votorantim for only reporting the incident after the board contacted the plant about a dust cloud, according to the ABC newspaper. However, the fine was small because the dust pollution had no effects on the environment or local residents.


India: The state government of Himachal Pradesh has invited tenders for the Chamba cement plant project for a second time. To attract sufficient bids the government has also decided to build a US$2m road to the project site, according to the Times of India newspaper. Other rules and regulations surrounding the project have also been relaxed. All of the clinker used at the plant must be produced in the state and a quarter must be ground into cement in the region. The project has a proposed budget of US$140m. It has been in development since 2002.


Nepal: Local residents have staged a protest at Shalimar Cement Industry in Jitpur Simara in Bara district. They closed the main gate of the plant, claiming that their complaints of pollution from the site had been ignored by the authorities, according to the Himalayan Times newspaper. Local government officials said that production at the site would be stopped until the company’s management agreed to meet previously agreed environmental limits.


Pakistan: Bestway Cement has promoted its environmental credentials following the Supreme Court’s mandated investigation into water usage by cement companies near the Katas Raj Temples in 2018. The cement producer says that all of its cement plants are ISO 14001:2004 Environment Management Systems certified. Specifically on the issue of water conservation, it has installed air-cooled condenser systems at two of its plants at Chakwal and Kallar Kahar respectively and it has built rain-harvesting ponds. In total the company has spent around US$14m on water conservation measures. Altogether it says that it has achieved 80% and 88% reductions in consumption of ground water for industrial use, respectively, at the two plants.

Other environmental measures the company has made include installing waste heat recovery (WHR) units at all four of its cement plants. Its total WHR capacity is 45.5MW giving it 28% of its total power needs. The company is recognised by the United Nations Framework Convention on Climate Change (UNFCCC) under its Clean Development Mechanism (CDM) Program for its initiative to reduce carbon emissions/footprint. It has also implemented tree plantation at its plants and surrounding areas, it uses drip irrigation and sewerage waste management and its head office in Islamabad has been certified as a Green Office by the World Wide Fund for Nature (WWF).


Pakistan: Two employees of DG Khan Cement have been killed in a gun attack. A third worker was seriously injured in the incident, according to the Dawn newspaper. Police report that unidentified motorcyclists in Dera Ghazi Khan opened fire on a company security van whilst it was transporting workers to a nearby plant. The victims died at the DG Khan Medical College.


Ireland: Irish Cement has been fined Euro4000 for dust emissions in December 2017. The subsidiary of CRH pleaded guilty at Limerick District Court to breaking the terms of the industrial licence at its plant in Limerick in early December 2017, according to the Irish Times newspaper. The cement producer reportedly unsuccessfully attempted to clear a build-up of dust in the plant’s kiln. A ‘significant’ amount of dust polluted the local neighbourhood subsequently leading to 21 complaints to the Environment Protection Agency. The cement producer was fined previously in mid-2018 for dust emissions occurred in April and May 2017.


Italy: Bedeschi has signed a contract to supply a clinker storage system to Cementeria Costantinopoli in Barile. The order includes a type STK P bridge stacker and a type BEL C bridge reclaimer. The storage system consists of: a belt conveyor (15m x 1m); a belt conveyor (60m x 1m); a STK P 25/1000 bridge stacker; and a BEL C 160/21 bridge reclaimer. The system will have a stacking capacity of 100t/hr and a reclaiming capacity of 130t/hr.


Oman: The board of directors of Oman Cement has agreed to move ahead with the construction of an integrated cement plant at Duqum. The unit will have a clinker production capacity of 5000t/day and an expected investment of US$212m. The project is being financed by the company and its shareholders. Previously the project was linked to Raysut Cement as a joint venture run under the Al Wusta Cement brand.


Argentina/US: US law firm Howard G Smith has filed a class action lawsuit against Argentina’s Loma Negra on behalf of investors that purchased securities in the company’s initial public offering (IPO) in late 2017. The legal complaint alleges that the cement producer misled investors by: misrepresenting Loma Negra's exposure to a corruption scandal affecting its owner, Brazil’s InterCement; misrepresenting demand for Loma Negra’s products; misrepresenting the general state of the Argentine economy; and including references to known potential risks that had already happened.

Loma Negra launched its IPO in November 2017. Since then cement sales in Argentina have fallen year-on-year in the second half of 2018 and the general economy has floundered. The local competition body, the National Commission for Protection of Competition, also started an investigation into alleged collusion and coordinated behaviour in the cement industry in May 2018


Dominican Republic: The Dominican Association of Portland Cement Producers (ADOCEM) says that the local industry is on track for 4.1% year-on-year growth in cement consumption in 2018. This follows a decrease of 2% in 2017, according to the Acento newspaper. The association’s president Rayza Rodriguez forecast the growth was likely to continue in the short to medium term.


Paraguay: Industria Nacional del Cemento (INC) has launched a new masonry cement product ‘CAB 4.5.’ The new offering is intended for small scale applications. It will be sold in 40kg bags. However, local media has questioned whether the state-owned producer should be launching a new product during a cement shortage.


Fiji: The Department of Environment has issued a Stop Work Notice to Pacific Cement’s Lami plant due to complaints about dust emissions. The notice was issued following a visit by Sandeep Singh, the Director of Environment, to the unit, according to the Fiji Sun newspaper. The work orders are normally temporary to give industries time to implement mitigation measures.

Nouzab Fareed, the chief executive officer (CEO) of Pacific Cement’s parent company Fijian Holdings, acknowledged that the plant emitted dust ‘sometimes.’ However, he pointed out that the site imports over 0.1Mt/yr of clinker and that this comes from another plant.


Nigeria: Four workers of Dangote Cement have faced criminal charges at the Ogun State High Court by the Economic and Financial Crimes Commission (EFCC) for an alleged US$40,000 fraud. Adewale Dalmeida, Ibrahim Lawal, Afeez Olaniba and Lukman Adam were arraigned before the court on two counts of conspiracy and stealing, according to the Punch newspaper. The defendants allegedly diverted nine cement trucks, which were meant to be delivered to Togo. The EFCC alleges that the individuals used fake identity cards and truck number plates to carry out the misdemeanour. The defendants have pleaded not guilty to the charges. The case will now go to trial.


Vietnam: Prime Minister Nguyen Xuan Phuc has approved an upgrade to the Long Son cement plant in Thanh Hoa province. The plant will have two new production lines with a total production capacity of 2.3Mt/yr, according to the Viet Nam News newspaper. The new lines will also include waste treatment systems. Line 3 is expected to begin operation in 2020 and line 4 in 2021. The Ministry of Construction has been assigned to work with the Ministry of Natural Resources and Environment and the provincial People’s Committee to supervise the project.


India: The board of directors of Sagar Cements has approved investments in new cement plants in Madhya Pradesh and Odisha. It plans to invest US$21m in Satguru Cement towards building a new 1Mt/yr plant at Indore in Madhya Pradesh. The project will also include a waste heat recovery unit. The total cost of the project is US$60m. Sagar Cements will hold a 65% equity share in Satguru Cement upon completion.

In Odisha the company has approved an investment of US$15m in Jajpur Cements in Jajpur. This project will build a new 1.5Mt/yr cement plant. The project has a total budget of US$43m. It is subject to approval by the Government of Odisha and other regulatory authorities as required.


Guinea: LafargeHolcim Guinée has ordered a modular grinding plant from China’s CBMI. The deal was signed in late November 2018 and was launched in early December 2018. The project will be based at Dubréka, north of Conakry. For CBMI it is the first modular grinding plant it has officially sold.


India: Power stations owned by the Government of Madhya Pradesh are struggling to dispose of fly ash. The power companies were required to dispose of all fly ash in applications such as cement production or construction projects by the end of 2017, according to the Times of India newspaper. However, less than 20% of fly ash has been disposed of from the Shri Singaji Thermal Power Station (SSTPS) and only 20% fly ash has been disposed of at the Satpura Thermal Power Station (STPS).

An employee of a power plant quoted by the newspaper said that the power companies were able to dispose of fly ash where cement plants were nearby but that they found it a ‘great struggle’ elsewhere. A K Nanda, the managing director of the Madhya Pradesh Power Generation Company, said that the STPS had received no interest for an expression of interest since mid-2018. He added that the company was also approaching cement-based industries through social-media channels.


Australia: Research by the Global Carbon Budget (GCB) forecasts that CO2 emissions will grow by 2.7% year-on-year to a 37.1 ± 2 Gt CO2 in 2018. This follows a rise of 1.6% to 36.2Gt after a three-year hiatus with stable global emissions. The 2018 forecast is based on preliminary data for the first 6 – 9 months indicate a renewed growth in fossil CO2 emissions based on national emission projections for China, the US, the European Union (EU) and India and projections of gross domestic product corrected for recent changes in the carbon intensity of the economy for the rest of the world.

In 2017 the GCB estimates that cement sector constituted 4% of global fossil CO2 emissions, a rise of 1.2% from 2016. Emissions are expected to grow by 4% in China in 2018, in part due to a 1% rise in cement production. In the EU emissions are projected to fall by 0.7% with stable cement sector emissions. In India emissions are forecast to increase by 6.3% with a 13.4% rise in cement sector emissions.

Fossil CO2 emissions are based on energy statistics and cement production data. The research makes its estimate of emissions from the cement industry using a method adapted from a paper published by Robbie M Andrew of Norway’s CICERO Center for International Climate Research in 2017.


US: France’s Fives has opened a new sales office for its cement and minerals businesses. The new location is intended to better address the US market to promote FCB technologies and services for the cement and minerals industries, in the fields of equipment, systems, revamping and complete line projects.