Global Cement Newsletter

Issue: GCW426 / 09 October 2019

Headlines


The race to find a buyer for Emami Cement heated up this week with the announcement in the local press that both LafargeHolcim and HeidelbergCement had submitted expressions of interest. The Hindu newspaper and others were also linking Nuvoco Vistas Corporation, Shree Cement and Dalmia Bharat to the sale. India’s market leader UltraTech Cement was also in talks with the company back in June 2019.

The subsidiary of Emami Group is being sold by the parent company to cut debt. Speculation on the value of Emami Cement has varied in the media from US$800m to up to US$1.26bn. This variation is possibly linked to upgrades that the company has on the way. It operates a 2.5Mt/yr integrated plant at Risda in Chhattisgarh and a 2.5Mt/yr grinding plant at Panagarh in West Bengal. It acquired a 0.6Mt/yr grinding plant at Bhabua, Bihar in 2018. This unit is being upgraded to 1.8Mt/yr. It is also yet to commission a 2.5Mt/yr grinding plant at Jaipur in Odisha. In addition, the firm has mining assets in Guntur in Andhra Pradesh and near Jaipur in Rajasthan.

Global Cement Magazine staff are attending a variety of industry events this week including the Cembureau Energy Market Prospects (CemProspects) conference in Krakow, Poland, the TÇMB International Technical Seminar in Antalya, Turkey and the European Slag Association (Euroslag) conference in Thessaloniki, Greece. Watch out for reviews of each of these either in forthcoming issues of the magazine or on the website.

Of note to India, various speakers on the first day at CemProspects were extolling the virtues of that market. The country was reported as ‘promising’ in a general review of world cement markets amongst a very mixed situation. Specifically on energy markets, Darren Malone, IHS Markit said that coal imports were ‘ahead’ so far in 2019 as US suppliers benefitted from power plants maintaining orders in an election year. Imports are growing at 7%/yr as the country’s industries need energy. In the long term his view was that India would become the world’s biggest coal importer unless domestic production increases its share. Anecdotal evidence was also raised on exporting SRF from the UK to India as cement kiln coprocessing rates slowly start to rise. This point is matched by the various Indian waste deals we’ve been noticing on our sister website Global CemFuels in recent years.

Coal markets are pertinent to the Emami Cement sales because some sources quoted in the Indian media have pointed out that the cement producer does not have any coal linkages. As such it is more vulnerable to market variations. This kind of talk is clearly part of the bargaining process but, in the wider picture, cement producers’ energy sources are critical. In the context of the Emami Cement sale, this might just determine which side of US$1bn the transaction ends up on. The sale continues.


UK: Dr Nina Cardinal has joined Hanson Cement as its new national technical manager. She heads up the division’s technical team, which offers customers advice, information and support on all cement and cementitious issues.

Nina previously worked at Tata Speciality Steels for more than 20 years, latterly as technical director responsible for a 70-strong team, before joining the University of Sheffield as director of operations in the Faculty of Science in 2016.

“I am delighted to join the Hanson team,” said Cardinal. “I am looking forward to building on our market-leading technical support and working with our customers to ensure they get the best possible customer service.”

Mark Hickingbottom, commercial director bulk products, added, “Nina has an excellent understanding of product and service development and will be working with customers and operational teams across our cement and concrete business lines.”


Malaysia: Malayan Cement has appointed Ho Say Keng as its company secretary. Serene Lee Huey Fei and Koh Poi San have resigned from the post.

Ho Say Keng is the company secretary/accountant of the YTL Corporation Group, YTL Power Group, YTL Land & Development Group and YTL Cement Group. She is a fellow of the Chartered Association of Certified Accountants (FCCA), a registered member of the Malaysian Institute of Accountants and an affiliate member of the Malaysian Institute of Chartered Secretaries and Administrators. She obtained her Diploma of Commerce (Financial Accounting) from Kolej Tunku Abdul Rahman in 1981. She joined the YTL Corporation Berhad Group in May 1986 and her responsibilities include coordination of the group's treasury, banking and corporate finance matters.


Australia: Adelaide Brighton has appointed Emma Stein as an independent non-executive director. She holds over 30 years’ experience in board and senior executive positions in the building materials, oil and gas, energy and utilities, mining and resources, water and waste management sectors. Before emigrating to Australia, she was the UK Managing Director for Gaz de France Energy. Currently she is director of Alumina, Cleanaway Waste Management and Infigen Energy.

Arlene Tansey has retired from Adelaide Brighton following eight years of service as an independent non-executive director. She worked as the chairman of the Audit, Risk and Compliance Committee, as a member (and former chairman) of the People and Culture Committee and former chairman of the board’s previous Corporate Governance Committee. Zlatko Todorcevski, deputy chairman and lead independent director, will chair the Audit, Risk and Compliance Committee following Tansey’s departure.


Vietnam: State-owned Vietnam Cement Industry Corporation (VICEM), the country’s leading cement producer, produced 18.74Mt of cement and 15.63Mt of clinker in the first nine months of 2019, increases of 8% and 4% year-on-year respectively, according to the Dau Tu (Investment) newspaper.

During the period, VICEM sold 21.82Mt of cement and clinker, a 3% year-on-year rise. The sum included 18.83Mt of cement, a 7% year-on-year increase. Over the same period, VICEM’s pre-tax profit rose by 35% year-on-year to US$90.52m, including US$58.16m from its cement subsidiaries, a 20% year-on-year increase.

In 2018, VICEM produced a total of 20.4Mt of clinker and 25Mt of cement. In 2019 it aims to produce and sell 31Mt of cement and clinker, including 26.8Mt of cement, a targeted increase of 10% year-on-year.


India: The excise department in the Indian state of Kerala has come to an agreement with Malabar Cement in which Malabar will burn seized contraband cigarettes and other tobacco products in its cement kilns. The company’s plant at Walayar is expected to receive up to 2t of material per month, in exchange for bags of cement from Malabar.


Kazakhstan: Steppe Cement has announced that its revenue fell by 10% during the third quarter of 2019 on the back of lower sales volumes. The UK-listed, Kazakhstan-based producer of construction materials said that revenue for the third quarter was US$27.0m compared with US$29.9m in the year earlier period. The company said that sales volumes for the quarter fell by 11% to 576,692t. For the first nine months of 2019, Steppe Cement’s revenue rose by 10% to US$630m.


Italy: The Italian cement industry decreased its overall CO2 emissions by 8.9% in 2018 compared to 2017, in part by replacing a higher proportion of fossil fuels with alternative fuels and biomass fuels. The proportion of alternative fuels used increased to 19.7% in 2018 compared to 17.3% in 2019, according to Federbeton. This translates to 387,000t of alternative fuels.


Spain: Cement consumption in Andalusia fell by 3.3% in August 2019 to 221,970t. For January – August 2019 total consumption was 1.87Mt. It is thought that this is due to reduction in the region’s construction sector and a lack of civil works.

Exports fell by 58% year-on-year, reaching 88,136t, around 124,719t less than in August 2018. The accumulated value for 2019 is currently 46% lower year-on-year, at 731,720t.


Puerto Rico: Cement sales in Puerto Rico experienced a year-on-year fall of 7.4% in September 2019, to stand at 43,500t, the eighth consecutive monthly fall. Meanwhile, overall domestic cement production rose by 1.0% in the month under review, to reach 41,000t. This is the third increase reported to be observed during the first nine months of 2019.


Tunisia: Carthage Cement has announced a general improvement in its financial indicators as it forecast a gross operating income of US$25m for 2019. This would represent a 123% improvement from US$11.2m in 2018. Ibrahim Sana, Carthage Cement’s CEO anticipates a gross operating income as high as US$55m in 2023, with a targeted turnover of US$140m.

The company also announced a 0.1Mt export contract for cement to be sent to Spain.


Georgia: Oman’s Raysut Cement is set to start building a new 2Mt/yr integrated cement plant near Tbilisi with an investment of US$200m. Raysut Cement’s subsidiary Pioneer Cement is managing the project. It owns a concession to a limestone mine in the country that will be used to support the proposed plant. Construction work at the site is scheduled to start in mid-November 2019.


Ukraine: Antidumping duties on clinker and Ordinary Portland Cement (OPC) from Russia, Belarus and Moldova introduced by Ukraine in mid-2019 have benefitted local producers. Mykola Kruts, the chairman of the board of Ivano-Frankivskcement, said that his company has been operating at a 90% capacity utilisation rate, according to Interfax-Ukraine.


Morocco: Cement deliveries by members of the l'Association Professionnelle des Cimentiers (APC) grew by 2% year-on-year to 10Mt in the first nine months of 2019 from 9.8Mt in the same period in 2018. The growth was driven by building construction, according to Médias 24. However, cement used by the infrastructure segment fell by 15% in the reporting period.


Pakistan: Gharibwal Cement has blamed reduced exports due to tensions on the Pakistan-Indian border and rising input costs for a reduction in its sales. Its net sales fell by 3% year-on-year to US$72.3m in the year to 30 June 2019 from US$74.5m in the same period in 2018. Its cement dispatches fell by 11.4% to 1.68Mt from 1.89Mt. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 6.5% to US$18.7m from US$20m.

The cement producer said that work on a new 0.15Mt clinker silo is in progress and this is expected to be completed by June 2020. It is also building a rainwater reservoir to capture precipitation for use in the production process. The company operates a 2.1Mt/yr integrated plant at Ismailwal in Punjab Province.


Pakistan: Pioneer Cement’s sales fell by 4% year-on-year to US$62m in the year to 30 June 2019 from US$64.5m in the same period in 2018. Its costs and expenses grew by 7% to US$3.4m from US$3.2m. Its profit after taxation halved to US$5m from US$10.5m. The cement producer operates a 2Mt/yr integrated plant at Chenki in Punjab Province.


Costa Rica: The government plans to approve legislation charging a 5% tax on both locally produced and imported cement by the end of December 2019. The new rules will standardise existing laws that have only been applicable to the provinces of Cartago, San José and Guanacaste so far, according to the La Republica newspaper. The previous system was only being levied on two of the three cement companies with a presence in the country based on the location of their operations.


UK: The Global Cement and Concrete Association (GCCA) has launched the GCCA Industry EPD Tool (Version 2.0) to support the publication of environmental product declarations (EPDs) by cement and concrete producers. Originally commissioned by the World Business Council for Sustainable Development Cement Sustainability Initiative, the new GCCA Industry EPD Tool includes the latest database of energy impacts from cement production from across the world, supporting the output of more accurate EPD data. The GCCA is making the tool available to all producers and organisations in the cement and concrete industry to increase availability to designers and clients of EPDs to support the sector deliver a sustainable built environment.

“We are committed to supporting the cement and concrete industry to reduce its environmental impact and support global sustainability goals. With the launch of the new EPD Tool, we are enabling the industry and its customers to better quantify and verify the life cycle environmental impact of existing products and to develop lower-impact products in the future,” said Andrew Minson, GCCA Concrete and Sustainable Construction Director.

The GCCA Industry EPD Tool has been developed by Quantis, verified by Studio Fieschi, and the GCCA says it is the first industry tool in the International EPD System. It is based on internationally recognised standards and product category rules.


India: LafargeHolcim and HeidelbergCement have joined a bidding war for Emami Cement. LafargeHolcim is reported to have submitted an expression of interest via its subsidiary Ambuja Cement, according to the Hindu newspaper. HeidelbergCement has submitted its bids through HeidelbergCement India. Emami Cement has an expected value of around US$845m. Nuvoco Vistas Corporation, Shree Cement and Dalmia Bharat have also been linked to the sale.

Emami Cement operates a 2.5Mt/yr integrated plant at Risda in Chhattisgarh and a 2.5Mt/yr grinding plant at Panagarh in West Bengal. It acquired a 0.6Mt/yr grinding plant at Bhabua, Bihar in September 2018. In addition, the firm has mining assets in Guntur in Andhra Pradesh and near Jaipur in Rajasthan. Its main markets are in West Bengal, Chhattisgarh, Odisha, Jharkhand, Bihar, Maharashtra and Madhya Pradesh. It markets its products under the Double Bull brand.


Democratic Republic of the Congo: The government has decided to resume the construction of the Maiko cement plant in Kisangani. Work on the project had been stalled, according to Radio Okapi. Industry Minister Julien Paluku said that contacts are already underway with a new partner to continue the work on the unit. Work on the 1Mt/yr plant started in 2007 with an investment of US$250m. China’s Satarem Hong Kong was previously linked to the project as an investor.


Zambia: Jimmy Khan, the chief executive officer (CEO) of Lafarge Zambia, has complained about production overcapacity and competition to the president of Zambia. He said that local cement consumption is 2.2Mt/yr compared to production of 5Mt/yr, according to the Lusaka Times newspaper. He made the visit to the president of the country to inform him of a 25% rise in the price of cement. Khan blamed the price hike on business losses.

However, Khan praised the government for its infrastructure development and said that the subsidiary of LafargeHolcim has moved much of its despatches from road to railway. At present the cement producer has a 33% market share. It also intends to continue using the Mpulungu Port in Northern Province to export cement to the east African market.


Laos: An explosion at a quarry related to a cement plant near Phonemany village, Nam Bak district in Luang Prabang province has killed one person and injured over 20. The nearby village was affected by the blast causing damage to houses and vehicles, according to Radio Free Asia. A villager alleged that the Chinese-owned plant never warned locals of the blasting schedule and that the explosion was larger than usual. Khammany Inthirath, Minister of Energy and Mines, said that the government had sent a team to investigate what happened.


Philippines: Cemex Philippines has ordered a MVR type mill for cement raw material grinding from Germany’s Gebr. Pfeiffer for a plant in Antipolo. The order also includes a MPS mill to grind coal. Gebr. Pfeiffer said that the order was received through a Chinese general contractor. No value for the order or timescale was disclosed.


Philippines: Phinma Corporation is spending around US$50m on a new cement plant at Bataan with a production capacity of 2Mt/yr. Philcement, a subsidiary of Phinma Corp. and Seasia Nectar Port Services (SNPS), have signed a deal to take over certain construction-in-progress assets, including the usage rights to pier facilities and land currently under lease by Philcement, for a terminal for US$15.5m, according to the Philippine Daily Inquirer newspaper. Eduardo Sahagun, the president and chief executive officer (CEO) said that the company would need up to US$35m to complete the project. Once competed it will be possible to expand the unit to 4Mt/yr depending on market demand.


Egypt: The government has reduced the price of natural gas for cement producers to US$5 per one million British thermal units (BTU). Previously the price was US$8MBtu, according to Mubasher. The government has reduced the price at a similar rate for other industrial users including iron, steel, aluminium, cooper, ceramic, and porcelain plants. It will now review the price of gas every six months.


Malaysia: Lafarge Malaysia has been renamed as Malayan Cement. It follows the divestment of the cement producer from LafargeHolcim to YTL Cement in May 2019.


Netherlands: Cementir Holding has moved its registered office to the Netherlands. The building materials producer approved the decision in late June 2019. The transfer will not affect the company’s listing on the Italian Stock Exchange or its tax residence, which will remain in Italy. At the time chairman Francesco Caltagirone, Jr said that the decision to move the company’s headquarters was a, “purely technical choice that in no way disregards our group's deep Italian roots.”

Cementir Holding is a multinational manufacturer of grey and white cement, ready-mixed concrete, aggregates and concrete products, exporting to over 70 countries worldwide. It is a global leader in white cement and the group employs approximately 3100 people in 18 countries. The group sold its principal Italian business, Cementir Italia, and its shares in related companies to Italcementi in early 2018.


US: People living near the Cemex Lyons cement plant in Colorado have complained about dust emissions. The Save Our St. Vrain Valley group has filed a report with Boulder County Public Health about dust clouds rising from site, according to the Associated Press. The local authorities say that the clouds don't appear to violate any existing regulations but Cemex officials have promised to look into the issue. The cement producer has also said that it has ways to mitigate dust emissions and it welcomes hearing from people so it can address any concerns.


US: Staff members at Ash Grove Cement, GCC and Cemex have won awards at the Portland Cement Association’s (PCA) 2019 John P Gleason, Jr Leadership Awards. The awards recognise PCA members who have exhibited leadership in advancing industry programs and initiatives. The scheme is named after John ’Jay’ Gleason, who served as PCA president from 1986 until his retirement in 2007.

Curtis Lesslie, Vice President of Environmental Affairs at Ash Grove Cement, won the Business Continuity award. He has served on the PCA’s Environment and Energy Committee working on numerous environmental initiatives that benefit sustainability and continuity of cement manufacturing. He has promoted information sharing and benchmarking between companies and supported PCA's Occupational Health and Safety Committee as well as the PCA-MSHA (Mine Safety and Health Administration) alliance

David Gray, Market Manager, GCC of America won the Market Development award. The PCA said that he had been a consistent example to industry professionals, customers, and industry associates on how promotion can be both a “fun and rewarding experience.” At the customer level he has raised awareness of the potential gains for cement and concrete in a broad range of construction markets and helped companies and associations create successful promotion initiatives.

Nathan Kimball, Vice President, Safety & Health, Lehigh Hanson won the Young Leaders award. He is an active member of PCA’s Occupational Health and Safety Committee. His work with Mine Safety and Health Administration leaders through information exchange and engagement has helped advance the shared interests of the industry.


UK: Aggregate Industries has acquired Maxi Readymix Concrete, an independent readymix concrete (RMX) business based in Leicestershire and the East Midlands. The company operates a Betomix 2.66m3 twin shaft wet batch plant capable of producing 110m3/hr of compacted concrete with a silo capacity of 400t and aggregate capacity of 650t. It was supplied by Germany’s Liebherr and commissioned in 2014.


UK: Hanson has opened a new ready-mixed concrete (RMX) plant in Rochester, Kent, to supply growing demand for construction projects in the South East. The new unit replaces the subsidiary of HeidelbergCement’s former concrete plant in the town. The group says it provides increased capacity, improved productivity, lower power consumption and reduced ongoing maintenance costs.


Romania/Switzerland: Romania’s anti-trust authority has completed its review of LafargeHolcim’s takeover of the precast concrete manufacturer Someco for an undisclosed sum. SeeNews has reported that the body found that “no significant obstacles to effective competition” were raised by the deal.

Somaco’s five precast concrete and one aerated concrete block production plants, which employ 750 people, made sales of Euro56m in 2018.


Nigeria: Lafarge Africa CEO Michael Puchercos re-introduced the company’s fast-setting and early-strengthening Supaset cement at a product launch in Lagos on 2 October 2019. The Guardian Nigeria has reported that the new and improved Supaset has been specially refined to suit climate conditions across the country. In line with the ‘Building for Growth’ pillar of its Strategy 2022, the cement is packaged in horizontal bags for ease of block making.


US: A court in South Carolina has ruled against a dismissal motion submitted by Lafarge North America, Argos USA and six other manufacturers of ready-mix concrete which stand accused of fixing prices, rigging project bids and allocating territories and customers amongst themselves. Class Action Reporter has stated that the defendants asserted that the complainants, who claim to have suffered injury by the alleged conspiracy, have failed to provide actionable facts pertaining to the role of each accused party, the duration of the purported anti-competitive behaviour and its geographic scope including the court’s jurisdiction. Lafarge further contested that the Statute of Limitations precludes its prosecution, because it ceased concrete trading in the region in 2011. The court concluded that the claim contained sufficient fact for further examination to be reasonably expected to reveal evidence of an illegal agreement. It will hear the case against all defendants.