Global Cement Newsletter

Issue: GCW398 / 03 April 2019

Headlines


The European Union’s (EU) verified CO2 emissions figures were released earlier this week on 1 April 2019. The good news is that no cement plant is within the top 100 largest emitters. All the top spots are held by power plants, iron and steel producers and the odd airline. Indeed, out of all of the verified emissions, cement clinker or lime production only represents 7% of the total emissions. Of course this is too much if the region wants to meet its climate change commitments but it is worth remembering that other industries have a long way to go as well and they don’t necessarily face the intrinsic process challenges that clinker production has. If the general public or governments are serious about cutting CO2 emissions then they might consider, for example, taking fewer flights with airlines before picking on the cement industry.

The EU emitted 117Mt of CO2 from its clinker and lime producers in 2018, a 2.7% year-on-year decrease compared to 120Mt in 2017. This compares to 158Mt in 2008, giving a 26% drop in emissions over the decade to 2018. However, there are two warnings attached to this data. First, there are plants on this list that have closed between 2008 and 2018. Second, there are plants that provided no data in 2018, for example, all the plants in Bulgaria. Climate change think tank Sandbag helpfully pointed out in its analysis of the EU emissions data that industrial emissions have barely decreased since 2012. The implication here being that the drop from 2008 to 2012 was mainly due to the economic recession. Sandbag also made the assertion that 96% of the cement industry’s emissions were covered by free allocations in the EU Emissions Trading Scheme (ETS) thereby de-incentivising sector willingness to decarbonise.

By country the emissions in 2018 from cement and lime roughly correspond with production capacity, although this comes with the caveat that emissions link to actual production not potential capacity. So, Germany leads followed by Spain, Italy, Poland and France. Of these Poland is a slight outlier, as will be seen below.

Plant Company Country CO2 Emissions (Mt)
Górazdze Plant Górazdze Cement (Heidelberg Cement) Poland 2.73
Rørdal Plant Aalborg Portland Cement Denmark 2.19
Ozarów Plant Grupa Ozarow (CRH) Poland 2.01
Slite Plant Cementa (HeidelbergCement) Sweden 1.74
Kamari Plant Titan Cement Greece 1.7
Warta Plant Cementownia Warta Poland 1.55
Volos Plant Heracles General Cement (LafargeHolcim) Greece 1.27
Vassiliko Cement Plant Vassiliko Cement Cyprus 1.21
Małogoszcz Plant Lafarge Cement Polska (LafargeHolcim) Poland 1.18
Kujawy w Blelawach Plant Lafarge Cement Polska (LafargeHolcim) Poland 1.15

Table 1: Top 10 CO2 emitting plants in the European Union in 2018. Source: European Commission.

Poland leads the count in the top 10 EU CO2 emitting cement plants in 2018 with five plants. Greece follows with two plants. This list is deceptive as all of these plants are large ones with production capacities of 2Mt/yr and above. As it contains many of the largest plants in the EU no wonder the emissions are the highest. It is also worth considering that there are far larger plants outside of the EU.

In summary, as most readers will already know, the cement industry is a significant minority CO2 emitter in the EU. Countries with larger cement sectors emit more CO2 as do larger plants. So far, so obvious. Emissions are down since 2008 but this mostly seems to have stalled since 2012, bar a blip in 2017. The change though has been the rising carbon price in the EU ETS in 2018. Coincidentally the carbon price has been fairly low and stable since 2012. If the mechanism is working properly then changes should start to appear in 2019. Already in 2018 a few European cement producers announced plant closures and blamed the carbon price. Watch this space.

The Global Future Cement Conference & Exhibition on low and zero CO2 cement production will take place in Brussels, Belgium on 22 - 23 May 2019


Brazil: Eduardo Mazzilli de Vassimon has been announced as the president of Votorantim. He will succeed Raul Calfat on 1 May 2019 following a transition period in April 2019. Calfat has worked for Votorantim since 1992 when it acquired Papel Simão. He later became chairman of the board of directors in 2014.

Vassimon, a 60-year old, graduated in business administration at the Escola de Administração de Empresas de São Paulo (FGV EAESP) and in economics at the School of Economics, Business and Accounting of the University of São Paulo (FEA USP) with a postgraduate degree at EAESP and at the HEC business school in France. He has worked for more than 30 years in the financial market, including for Itaú-Unibanco. His last position was as director general at Itaú-Unibanco's wholesale bank and president of Itaú BBA.


Canada: Lafarge Canada has appointed David Redfern as the chief executive officer (CEO) of its Eastern Canada operations. Previously Product Line General Manager for Western Canada Aggregates and the Greater Vancouver area, Redfern joined LafargeHolcim in 1999 and has held numerous roles of increasing responsibility throughout Canada and France. He holds more than 25 years of experience in the construction materials business.

Redfern received his Bachelor of Political Science degree from Queen's University in Kingston. He also holds certificates of achievement from Duke University, INSEAD and the University of Toronto. He is a Board member of the National Zero Waste Council and Business Council of British Columbia.


Germany: Reinhard Schäfer has joined the management board of Bosch Rexroth. He succeeds Bertram Hoffmann, who left the company at the end of March 2019.

Schäfer, aged 54 years, takes on Hoffmann’s responsibilities for manufacturing and quality management at the engineering company. The mechanical engineer began his career in 1986 as a trainee at the former Rexroth Star in Schweinfurt and advanced to the position of technical plant director and managing director. He then held a number of executive positions in manufacturing and quality management in different areas within the automotive division of the Bosch Group in Germany, the Netherlands and China.


US: Data from the United States Geological Survey (USGS) shows that national shipments of Ordinary Portland Cement (OPC) and blended cement rose by 1.3% year-on-year to 85.3Mt in 2018 from 84.2Mt in 2017. Imports rose by 10% to 12.4Mt from 11.3Mt. Overall, shipments rose by 2.3% to 97.6Mt. The top clinker producing regions in 2018 were Texas, California, Missouri and Florida. The country imported 15.1Mt of cement and clinker from, in order of descending volume, Canada, Turkey, China, Greece and Mexico.


US: Cemex USA’s Clinchfield Cement Plant in Georgia has been awarded the ISO 14001:2015 certification for its environmental management system (EMS). It is the first Cemex cement operation in the country to earn this certification. The EMS at the plant follows a continuous cycle of environmental policy: planning, support and operation, performance evaluation, then improvement.

The International Organization of Standardisation (ISO) developed ISO 14001:2015 as a standard of processes for organisations to use when setting up, improving or maintaining their environmental management systems to follow established environmental policies and requirements. The guidelines are designed to help organisations improve efficiency, reduce waste, improve overall environmental impact and manage environmental obligations.

The Clinchfield Cement Plant is also one of several Cemex sites to achieve certification from the Wildlife Habitat Council. The plant is also active in the Georgia Black Bear Project. Cemex is currently in the process of achieving ISO 14001:2015 Certification at its eight other active cement plants in the US.


Italy: Colacem says has purchased Cemitaly's Spoleto cement plant in Perugia. No value for the transaction has been disclosed, according to the Il Sole 24 Ore newspaper. Colacem said that it was confident that the cement sector will have a ‘significant’ role in the future. HeidelbergCement’s subsidiary Italcementi acquired Cementir and the Spoleto plant in 2017. In February 2019 unions at the plant were told that the cement producer was selling it to the newly-created company Spoleto Cementir.


Afghanistan/Pakistan: The share of exports of cement from Pakistan to Afghanistan fell to 24% in the first eight months of the current 2019 Pakistan financial year compared to 48% in the 2018 period. The Cement Manufacturers And Export Association has blamed this on Afghanistan opening its market to imports from other countries including Iran, according to the Frontier Star newspaper. It has urged the government to take measures to cut local production costs and force anti-dumping tariffs on Iranian cement imports.

The association said that the cement industry in Punjab and Khyber Pakhtunkhwa has been most affected by the decline in exports to Afghanistan. Exports from these regions fell by 16% year-on-year in the first nine months of the current Pakistan financial year to February 2019.


Nepal: Cement producers including Narayani Cement, Kalash Cement and Bishwokarma Cement have reported damage from a heavy thunderstorm that has hit the south of the country. At least 30 people were killed in the bad weather and other 600 people were injured, according to the Kathmandu Post newspaper.

Umesh Chandra Thakur, manager at Narayani Cement, said the storm had knocked down walls, a roof and power lines at the plant, leading to a halt in production. Kalash Cement also reported that the roof of its plant had been blown off. The storm has also caused widespread disruption to the electricity distribution system in Bara and Parsa districts.


Vietnam: A 8.36% rise in electricity prices in late March 2019 is set to cause an increase in the price of cement. The Vietnam Cement Industry Corporation (VICEM) said that cement producers had also been hit by an increase in coal prices, according to the Vietnam News Agency. The rise in the price of coal follows a lack of supply from the Vietnam National Coal and Minerals Industry Holding Group (VINACOMIN) leading to producers to import coal. Cong Thanh Cement has not raise its retail prices but has charged distributors more. Nguyen Quang Cung, chairman of the Vietnam Cement Association, said that producers were not surprised by increase in electricity prices and had been preparing for it.


France/Thailand: SCG Cement has signed a Memorandum of Understanding with France’s Constant Energy to build 50MW of solar photovoltaic (PV) units at its plants and associated companies. The target is to deploy and commission the solar PV plants over the next three years, through rooftop-based, ground-mounted and floating solar PV plants. Engineering of a first solar PV plants has started and the pre-construction permitting and licensing process will be handled in the second quarter of 2019, followed by construction.


Bolivia/Mexico/US: The US District Court of Colorado has confirmed compensation of US$36.1m awarded to Bolivian investment company Compania de Inversiones Mercantiles (CIMSA) from Mexico’s Grupo Cementos de Chihuahua (GCC). The arbitration follows a dispute that started in 2011 between CIMSA and GCC about the sales of shares in the Sociedad Boliviana de Cemento (SOBOCE) to Consorcio Cemento del Sur de Perú.

GCC said that it will continue to dispute the ruling and that it would continue to fight the legal case in Bolivia. In 2015 local courts in Bolivia overturned damages imposed by the Inter-American Commercial Arbitration Commission (CIAC) upon GCC.


Morocco: Ciments du Maroc’s turnover fell slightly to Euro371m in 2018. Its net profit grew by 3.4% year-on-year to Euro96m in 2018 from Euro92.8m in 2017. Its cement sales volumes fell by 2.7% in 2018 compared to a drop in local cement consumption of 3.7%. The board of the cement producer said that it was continuing its development plan at Nador in the south of the country.


Tanzania: Twiga Cement’s revenue rose by 30% year-on-year to US$151m in 2018 from US$116m in 2017. Its net profit grew by 60% to US$24.6m from US$15.4m. Its cement sales volumes increased by 9%. The subsidiary of Germany’s HeidelbergCement said that the local cement market saw continued growth in 2018 and that, despite production overcapacity, it maintained its ‘market leadership.’


Moldova: The Rybnitsky Cement plant has significantly cut its production costs due to a cheap gas deal. According to Radio Chișinău and the Infotag News Agency, the cement producer is paying four times less for its gas than its local competitor, the LafargeHolcim-owned Rezinsky Cement plant. In 2018 the Moldovan government held off renewing a supply contract with Russia’s Gazprom to see if cheaper options were available elsewhere.


UK: Construction work has started on a new flood embankment west of the Cemex’s South Ferriby cement plant in North Lincolnshire. New brick-clad walls will also be built around Ferriby Sluice. The project, led by the Environment Agency, has an investment of around Euro14m. The scheme is scheduled for completion by 2021.

“We are delighted to be contributing building materials to construct the new flood defences. In December 2013 floods damaged the plant putting it out of production for over 12 months and causing immense damage to local homes and businesses. It was estimated that over Euro55m worth of damage was caused,” said Piotr Klepak, Cemex Plant Director.


US: Timken has acquired the Diamond Chain Company from Amsted Industries for an undisclosed sum. The US-based chain manufacturer supplies a range of industrial markets, which include material handling, mining and aggregates.

"The acquisition of the Diamond Chain Company adds another strong industrial brand with a reputation for quality, reliability and performance to Timken's growing power transmission portfolio," said Richard G Kyle, Timken president and chief executive officer. He added that the purchase was an ‘excellent strategic fit’ with Timken’s drives chain business and that it would aid its manufacturing presence in Asia.

The Diamond Chain Company was founded in 1890 and it has its headquarters in Indianapolis, Indiana. It has manufacturing operations in the US and China. It employs approximately 370 people.


Germany: Siemens is presenting new products from its Digital Enterprise portfolio for process industries at the Hannover Messe trade fair. These include new versions of its Comos computer-aided engineering (CAE), XHQ Operations Intelligence and its PCS 7 Plant Automation Accelerator software products. The latest version of Comos includes a portal to help users choose components from a range of manufacturers. The new version of XHQ Operations Intelligence includes better access to remote data and simplified integration of engineering data. The update to PCS 7 Plant Automation Accelerator includes increased system openness based on GSDML and NE150 standards.


China/France: Song Zhi Ping, president of China National Building Material Company (CNBM), and Frédéric Sanchez, chairman of Fives, have signed strategic agreement towards climate change and cooperation in third countries. This agreement develops the collaboration plans drawn up in January 2019 between cement plant manufacturer CNBM the engineering group Fives. It forecasts a volume of business of at least Euro600m over three years, and forms part of CNBM’s stated strategy of developing in partnership with western companies. The agreement was signed at the Elysée Palace in Paris during a state visit to France by China’s President Xi Jinping.

The agreement focuses on upgrading CNBM’s cement plants in China, building new plants outside of China and creating a Joint Engineering Centre to implement these projects and share information. The Joint Engineering Centre was inaugurated on 28 February 2019 in Shanghai. With regards to modernising its cement production lines in China, Fives said that its technologies, in grinding in particular, would ‘significantly’ improve performance and return on investment with regards to modernising CNBM’s domestic cement production lines. Fives said that the agreement is in full alignment with the Paris Agreement. It added that the agreement also shows the ‘mutual trust’ between the two companies with respect to intellectual property.


Philippines: Holcim Philippines has ordered power monitoring equipment from CMR Philippines for its 2.3Mt/yr Lugait cement plant in Misamis Oriental. It includes the development, delivery, installation, testing and networking of the electrical installation at the unit. Current and voltage transformers are to be supplied as part of a package of engineering support that also sees CMR completing the integration and connection of plant wide power monitoring to Siemens PCS 7 process control technology.

“Winning the Holcim contract reflects the expertise we can bring to successfully delivering complex and technologically advanced industrial projects,” said Rojel Rivera, general manager at CMR Philippines.

CMR Philippines is part of the CMR Group, which designs, manufactures and commissions automation, control system and turnkey project solutions for global industrial and renewable energy sectors, alongside specialist instrumentation for high power diesel engines.


Nepal: IME Group plans to build a US$90m cement plant at Chormara of Nawalparasi. The unit is scheduled to be commissioned in early 2024, according to the Kathmandu Post newspaper. This will follow one year of preliminary work, one year for fund raising and the next two years for construction. The plant will mine limestone from a quarry in the Madanpur and Sisdi Rural Municipalities of Palpa district. The quarry will be 25km from the designated plant site. The mine has 18.7Mt of limestone according to a report by Investment Board Nepal.


Nepal: Dhruba Raj Thapa, president of Cement Manufacturer Association of Nepal (CMAN), has warned that the industry is worried about new investments in cement production given that the country has become self sufficient in the commodity. Clinker imports have stopped due to increased domestic production, according to the Republica newspaper. He added that cement produced locally is sufficient to meet local demand until 2029. He then warned that if investment in the sector continues producers might have to reduce their production capacity by half.

Data from the Department of Industries shows that 114 cement factories, both government-owned and private, have been registered so far with an estimated investment of over US$1.8bn. However, Tara Prasad Pokharel, the general secretary of CMAN, said that only 68 registered industries are currently in operation.


India: Penna Cement has signed a five years freight tariff deal with South Central Railway (SCR). As part of the agreement the rate will remain fixed for one year, according to the New Indian Express newspaper. The contract also offers incentives including discounts if the freight volume exceeds the previous year’s amount. Penna Cement is the eighth company to sign such an agreement with the SCR.


Lebanon: Industry Minister Wael Abu Faour has revoked the license of the Al Arz Cement plant project. It follows protests by local residents, according to the Daily Star newspaper. A report by environmental non-government organisation (NGO) Green Globe ranked the region as the 11th most polluted area in the country due to quarrying and crusher activity. The cement plant project was launched in 2017 by entrepreneur Pierre Fattoush.


China: Huaxin Cement’s sales revenue rose by 32% year-on-year to US$4.09bn in 2018 from US$3.11bn in 2017. Its net profit grew by nearly 150% to US$772m from US$309m. Its cement sales volumes increased by 3% to 70.7Mt and its ready-mix concrete (RMX) sales increased by 11% to 3.56Mm3. By region is operating revenue grew in all domestic regions, except for Jiangxi.

During 2018 the cement producer completed its acquisition of Chongqing Lafarge Shui On Cantian Cement. Its Tibet Shannan Third Phase 3000t/day and Shigatse Second Phase 3000t/day project were put into operation. In total the group added 4.77Mt/yr of cement production capacity in 2018. In its future risk analysis it said that production capacity reduction in the cement industry is ‘yet to be improved and that the ‘fundamental contradiction’ of the overcapacity has not been solved.

Switzerland’s LafargeHolcim’s runs Huaxin Cement as a joint venture. The company operates almost 200 subsidiaries in nine provinces in China as well units in Tajikistan and Cambodia. It has a cement production capacity of 100Mt/yr, RMX capacity of 23.3Mm3/yr and an aggregate capacity of 25Mt/yr.


China: Dongwu Cement sales rose by to US$77.4m in 2018 from US$53.3m in 2017. Its profit more than tripled to US$13.4m from US$3.7m. Its cement sales volumes grew by 5% to 1.45Mt. It attributed its sales and profit growth to increasing cement prices.


Vietnam: Xuan Thanh Cement has ordered a new production line for a plant in Ha Nam province from Denmark’s FLSmidth for around Euro74m. FLSmidth will design and engineer the new clinker production line and deliver equipment for the entire production from crushing to clinker silo. The order is due to be fully delivered by the end of 2020, and, once operational the production line will have a capacity of 12,500t/day. In 2015, Xuan Thanh Cement placed a similar order for a production line that has been operating since 2017.


Singapore: International Cement Group is planning to build new cement plants in Central Asia, Africa and South-east Asia to complement China’s Belt and Road Initiative. The company, formerly known as Compact Metal Industries, has held a ceremony to mark its listing at the Singapore Stock Exchange, according to the Business Times Singapore newspaper.

The company holds a 65% stake in a 1.2Mt/yr cement plant in Tajikistan. This unit’s production capacity was recently upgraded to 1.35Mt/yr. In mid-2018 it said it was building a new plant in Kazakhstan. This project is scheduled for commissioning by the end of 2019. In late 2018 the group said it had failed to buy a majority stake in a partially-built cement plant at Salamanga in Mozambique. In March 2019 the group agreed to buy a majority stake in Namibia’s Ohorongo Cement from Schwenk Namibia for US$104m.


Philippines: Holcim Philippines plans to build a new cement plant in Bulacan province have been approved by the Board of Investments. The 2.5Mt/yr Bulacan Line 3 plant is part of the company US$300m investment drive to increase its production capacity by 30% by 2020, according to the Manila Times newspaper. The approval also grants the projects tax incentives covered by the government’s investment code.


Mexico: Rogelio Zambrano, president of the board of directors of Cemex, says that the group intends to spend US$850m towards expanding existing cement plants and promoting renewable energy projects in 2019. Around US$160m will be invested in Mexico, mainly in central and southeastern plants, according to the Expansión newspaper. Zambrano made the comments at an annual investors meeting. The group has also published its integrated report for 2018. It reported a 27.1% alternative fuels substitution rate for the business and a 26% rate of power consumption for cement production from renewable sources.


Pakistan: Two workers have died at DG Cement’s Khairpur plant. They were both killed by ammonia gas poisoning after falling into a sewer at the site, according to the Dawn newspaper. The investigation continues.


Colombia: Argos Group plans to invest US$819m in its cement, construction and energy subsidiaries in 2019. The spending at Cementos Argos will aim to double the company’s earnings from 2018 to 2023.


Ivory Coast: Prestige Cement has inaugurated a 1.2Mt/yr plant at Abidjan. The Chinese-Ivorian joint venture had an investment of around US$35m, according to the Agence de Presse Africaine. The unit has two 0.6Mt/yr production lines using vertical roller mills. Souleymane Diarrassouba, Minister of Commerce, Industry and SME Promotion, attended the event on behalf of the government. Chinese ambassador Tang Weibin was also in attendence.


Kuwait: Kuwait Cement has hired Belgium’s Magotteaux to modernise three of its cement mills. The project consists of closing the open circuit with fourth generation XP4i separators, installing new mill internals components, including diaphragms, and adapting a new ball charge gradation. The aim of the project is to increase the production rate, reduce the specific energy consumption and improve the product quality, by reducing the residue on 45μm by keeping the same Blaine value.


Uzbekistan: Qizilqumsement has started building a US$110m upgrade to its Qizilqum cement plant. The project is intended to increasing the plant’s clinker production capacity and decrease energy costs. It is scheduled for completion in 2020.


Afghanistan/Uzbekistan: Uzbekistan’s Almalyk Mining and Metallurgical Complex (AMMC) has started exporting cement to Afghanistan. A trial consignment of Ordinary Portland Cement (OPC) was despatched from the company’s new 1.5Mt/yr Sherabad cement plant in Surkhandarya, according to the Trend News Agency. It intends to export 0.5Mt/yr to Afghanistan. As part of a contract signed with the Hamid Company just under 1000t of cement has been sent by train to Mazar-i-Sharif.


France: LafargeHolcim France has started the second phase of a Euro100m upgrade project its Martres-Tolosane cement plant. It is starting the construction phase of a new production line following the completion of site preparation and civil engineering. French company Boccard is coordinating the work. Commissioning of the upgrade is scheduled for mid-2020.


Russia: Eurocement is close to completing a Euro2.5m upgrade to a cement grinding mill at its Katavsky cement plant. The project was intended to improve the quality of its cement products and to replace the mill’s filter sleeves. The unit uses which Christian Pfeiffer separators, Aumund elevators, Siemens automation systems and mill grinders and Vega grinding media. Pre-commissioning is currently being completed and cement from the mill is being tested at a laboratory.

The cement producer’s Kavkaztsement plant is building a captive power plant scheduled for commissioning in August 2019. It has completed the construction of the building that will house the gas piston power station as well as other connecting structures. Employees from the plant are being trained by Wärtsilä in preparation for the start up. The project has an investment of around Euro15m.


US: A fire has damanged Dragon Products’ Thomaston cement plant in Maine. The incident took place on evening of 26 March 2019 following a spill of fuel oil, according to the Portland Press Herald newspaper. The blaze was stopped by firefighters as it started to enter a laboratory and control rooms. No employees were injured.

Plant manager Martin Turecky said that no customers would be affected by the fire and that it was continuing to distribute cement. He added that the cement grinding plant had not been affected. An investigation into how the fire started is underway.


Argentina: Loma Negra has secured two loans to upgrade its L'Amalí cement plant. The loans are worth US$40.9m and US$12.5m respectively, according to the Bae Negocios newspaper. The cement producer will use the funds to import equipment to the plant as part of a project to build a new US$350m production line at the unit.


Sri Lanka: Tokyo Cement has agreed to amalgamate its subsidiary Tokyo Super Cement into the main company. The amalgamation of its wholly-owned subsidiary will take place around the end of May 2019.


Germany: Siemens is extending its Simogear portfolio with a new synchronous-reluctance drive system consisting of Simogear standard gear unit, Simotics reluctance motor and a Sinamics frequency converter for controlling speed. The product has an output range of 0.55 – 4kW and is available for Sinamics G110M, G120D, G120 and S120 converters.

The engineering company says that its efficiency class is comparable to IE4 and it is offers advantages in comparison to asynchronous motors when operating under partial load due to its greater efficiency and lower losses. In addition, the drive system is characterised by high dynamics due to the low moment of inertia and optimised control. An external fan is not required due to the constant torque/speed curve up to the nominal speed and the drive system is certificated to CE, UL/CSA and CCC is in preparation. It also says that commissioning is easy as the motor code can be entered into the convertor.

Siemens sells a portfolio of frequency converters, motors, couplings and gearboxes for many industries and applications, including the cement and mineral sectors.