Global Cement Newsletter

Issue: GCW459 / 10 June 2020

Headlines


Exports are the theme this week with news that the value of Turkey’s cement exports fell by 26% year-on-year in April 2020. Reporting from the Trend News Agency showed that the export market has been stable so far for the year to date, with some countries, like Kazakhstan, increasing exports and others, like France, decreasing exports. However the change in April may mark the start of a new trend.

As Tamer Saka, the chairman of the Turkish Cement Manufacturers’ Association (TÇMB), said earlier in the year, his country is one of biggest cement exporters in the world and among its most important markets are the US, Israel, Ghana and Ivory Coast. To look at one of these countries, United States Geology Survey (USGS) data shows that cement and clinker imports from Turkey to the US grew by 26% year-on-year to 1Mt for the first quarter of 2020 but that exports fell by 24% year-on-year to 0.11Mt in March 2020. Each of these countries is being affected in different ways by the coronavirus pandemic and at different times. Overall though, Saka’s and the TÇMB’s forecast in February 2020 that exports would rise by 15% year-on-year in 2020 is looking decidedly shaky. Any knock to the export market in Turkey is particularly unwanted given the poor state of the Turkish economy at the moment.

What would be useful to know here is how other major cement exporters are coping with the global situation. Data from the Pakistan Bureau of Statistics shows that Pakistan’s cement exports dropped by 31% year-on-year to 0.36Mt in April 2020. Data from the All Pakistan Cement Manufacturers Association (APCMA) for the same month tells a similar story. Its data shows a 57% drop in exports to 0.25Mt in April 2020, with a bigger share lost by plants in the north of the country than those in the south.

The other country to note is Vietnam. Here, data from the General Department of Vietnam Customs shows that cement exports fell by 9.7% year-on-year to 7.73Mt in the first quarter of 2020. This follows the announcement by Vietnam Cement Association (VCA) chair Nguyễn Quang Cung in May 2020 that all cement plant projects scheduled to begin in 2020 would be suspended. Luckily those currently being built avoided this fate. This has included a new line at Thanh Thang Group Cement’s integrated Bong Lang cement plant, which Germany’s Loesche has just sent a pair of clinker mills to this week.

These changes from the major cement exporters are bad for their host countries but the other side of the chain is how their destinations are affected. For example, Australia’s clinker imports nearly doubled between 2010 – 2011 and 2018 – 2019 to 4.1Mt. This compares to local clinker production of 5.6Mt in 2018 – 2019, according to the Cement Industry Federation and the Australian Bureau of Statistics. With this in mind, this week saw the resolution to a legal dispute between Wagners Holdings and Boral over a cement supply contract. Boral found a cheaper source of cement from Cement Australia in early 2019 and the two parties argued over their contract. This dispute may have nothing to do with foreign import levels but Wagners Holdings, Boral and Cement Australia all operate standalone clinker grinding plants and will all be subject to general market pricing trends. Higher international clinker levels may add pressure to pricing issues surrounding cement supply contracts in Australia and elsewhere.

Finally, cement trade flows aren’t the only commodity that has been affected by coronavirus disruption. The mass movement of workers home and then back to work is expected to complicate India’s return to business, as discussed in last week’s column. In this context it’s pleasing to come across one sign of normality. Local press in Hubei, China reported this week that workers from Huaxin Cement finally flew back to Uzbekistan. They were originally meant to commission a new plant in March 2020 but became stranded at home when they returned for the Chinese New Year. Commissioning of the plant is now planned for later in June 2020.

The Virtual Global CemTrans Conference and Exhibition 2020 on cement & clinker, shipping & trade, transport & logistics takes place on 16 June 2020. To find out more information and to register click here.


US: Germany’s Beumer Group has appointed Joseph Dzierzawski as the president and chief executive officer (CEO) of Beumer Corporation, its US subsidiary based in Somerset, New Jersey. He has been in post since April 2020. He is responsible for the Conveying & Loading Systems, Palletizing and Packaging Technology, and Sortation and Distribution Systems business lines in the North American market.

Dzierzawski holds a degree in metallurgical engineering from the University of Michigan. Later he attended executive management programs at the University of Michigan School of Business and the INSEAD business school in Fontainebleau, France. He joins Beumer from Hatch Metals & Minerals group where he worked as Global Director, Technology & Business Development. Prior to this he worked at SMS, where he held a series of positions, eventually serving as president and CEO for SMS USA and Chief Technology Officer for SMS Group.


Austria: Semperit has appointed Gabriele Schallegger as its chief financial officer (CFO) with effect from October 2020. Her term of office will end in October 2023.

Schallegger, aged 48 years, studied business administration in Graz and Exeter in the UK followed by several international management programmes, including one in St. Gallen, Switzerland. She most recently worked as the finance director of the Uncoated Fine Paper division at Mondi. Prior to this she held the position of CFO of Mondi Syktyvkar in Russia as well as finance director of the Kraft Paper Business division. She started her career in auditing and tax consulting at Arthur Andersen in Vienna. Subsequently she worked for the American pharmaceutical company Baxter and the Norwegian Orkla Foods Group, among others.

She succeeds Petra Preining, who had taken over the CFO role on an interim basis and will return to the supervisory board and audit committee of Semperit in October 2020.

Semperit develops, produces and sells a wide variety of products including conveyor belts, escalator handrails, construction profiles, cable car rings, products for railway superstructures, rubber products for the medical and industrial sectors and hydraulic and industrial hoses.


Nigeria: Sinoma Construction Nigeria says it has completed the construction of a second 6000t/d line at BUA Group subsidiary Obu & Edo Cement’s Edo cement plant, bringing the plant’s total integrated capacity to 5.5Mt/yr. The subsidiary of China-based Sinoma said that it completed the work in spite of an outbreak of malaria and electricity shortages. It said, “The successful fulfilment of the project has laid a solid foundation for the company's in-depth localised operation and comprehensive cooperation with the BUA Group.”


Honduras: The government says that it will not raise import duties on cement so as not to impact negatively upon “the construction industry and consumer.” The La Prensa newspaper has reported that Minister of the Secretariat of Economic Development María Antonia Rivera said, “The Government is defining regulations on the quality of imported cement and cement made in Honduras. We have no plans to increase tariffs; rather we are promoting price stability.”


Bolivia: Fábrica Nacional de Cemento (Fancesa) has announced that no cuts will be made to transport spending until after the end of the coronavirus lockdown. Plans to reduce operating expenditure in this area have been opposed by the company’s drivers. Fancesa head of transportation Jhonny Palma said, “Both parties now have the time to analyse the proposals. In due course we will present our operating cost sheets and these will be put up for debate.”


Pakistan: The government has announced plans to complete the construction of the Daimer-Basha Dam on the River Indus in Khyber Pakthunkhwa and Gilgit Baltistan. Daimer-Basha Consultants Group holds a consultancy contract worth US$169m for the project, and the government has awarded the energy supply contract for the dam’s 21MW hydroelectric power plant to a joint venture of the military Frontier Works Organisation and China-based Power China. Besides power generation, the aims of the project are to increase the area of land useable for agriculture and to stop floods and droughts. Flare Business News has reported that the dam, construction of which first began in 1998, will generate a demand for ‘huge quantities’ of cement and steel and create 16,500 jobs.


Burkina Faso: In response to Burkina Faso’s blood shortage due to the coronavirus pandemic, Cimasso has begun giving away one bag of cement to each person who attends blood donation clinics in the city of Bobo-Dioulasso. Sputnik News has reported that, as a result of Cimasso’s efforts in partnership with the National Centre for Blood Transfusion (CNST), medical staff have so far collected 400 bags of blood towards Burkina Faso’s World Health Organisation (WHO)-verified blood needs of 202,000 bags/yr. Cimasso director general Abdoul Rahim said that the initiative will continue, “since no one is immune to diseases that can trigger blood needs, and these actions can save lives.”


Germany/Vietnam: Loesche says that it has dispatched two LM 53.3+3 CS vertical roller mills from its plant in North Rhine-Westphalia for a new line at Thanh Thang Group Cement’s integrated Bong Lang cement plant. The mills have a combined capacity of 180t/hr and grind clinker to a fineness of 4000 Blaine. The new line, installed by Sinoma-NCDRI, will be commissioned in late-2021. Loesche will also supply two cellular wheel feeders, metal detectors and sealing air blowers.


Uzbekistan: Huaxin Cement has announced that 112 of its employees took the first charter flight from Hubei Province since the coronavirus lockdown began, arriving in Jizzakh, Jizzakh Oblast on 6 June 2020. Hubei Daily News has reported that Huaxin Cement’s upcoming 1.5Mt/yr integrated Jizzakh cement plant, previously scheduled for commissioning in March 2020, will now start operation in June 2020. Huaxin Cement thanked the Chinese Ministry of Foreign Affairs and Civil Aviation authority for their support.


UK: Tarmac says that it is the first cement company to have signed up to the EV100, a scheme that targets net-zero carbon emissions in transportation. Under the initiative, Tarmac will replace its fleet of 2000 corporate cars and vans with electric models by 2030.

Tarmac procurement director Jonathan Harry said, “We are fully committed to supporting the UK’s ambition of net-zero carbon emissions by 2050 and have been proactive in making significant changes to our business and product portfolio for many years. The road to a reduction in carbon requires collective action and sustainable procurement strategies have an important role to play in supporting these ambitions. By taking progressive actions such as adopting electric vehicle (EV) technology and switching to clean electricity, we can lead by example and begin to effect real change.”


Austria: Four local fire brigades attended a fire at Lafarge Zement’s 1.2Mt/yr Mannersdorf plant in Lower Austria on 7 - 8 June 2020. ORF News has reported that the damage to the plant is extensive. A Lower Austria State Fire Service spokesperson said that none of the five employees on site when the fire broke out were harmed. The cause of the blaze remains unidentified.


Philippines: Eagle Cement has announced the start of reduced production and distribution of cement from its 7.1Mt/yr Bulacan plant following the partial easing of the coronavirus lockdown in the Philippines in May 2020. Eagle Cement president and chief executive officer (CEO) Paul Ang said, “We are starting to ramp up production as local demand for cement picks up following the easing of restriction in markets that we serve. We fully support the government's call to prioritise critical infrastructure projects to help reboot the economy. We hope to be able to safely return to a semblance of normality, mobilise our supply chains, create jobs and stimulate consumer spending.”


Russia: Iskitimcement has completed the modernisation of the grinding plant at its 2.1Mt/yr integrated Iskitimcement plant in Novosibirskskaya following the installation of a closed-circuit dynamic separator and bag filter supplied by Christian Pfeiffer at a cost of US$3.69m. Iskitimcement director general Vladimir Skakun said that the upgrade aims, “to provide customers with separated cement that surpasses the quality of products produced with open-circuit grinding.”

The company said that the closed-circuit unit has increased productivity and reduced the temperature of cement. Dust emissions have fallen by over 90%, bringing the plant in line with current environmental strictures. “We are ready to meet the customers’ demand for quality products even at the peak of the construction season,” said Skakun.

Iskitimcement says that it is planning a modernisation of its stacks with the installation of new filters by 2024.


Russia: The Ministry of Construction, Housing and Utilities has announced that a technical certificate will suffice for new building materials to enter production. Glavgosexpertiza of Russia has said that the maximum period for the issuance of technical certificates for products including fibre and asbestos cement and concrete is five working days. The measures aim to support the construction industry in meeting demand in the new construction season following the coronavirus outbreak. The ministry will review the measure in mid-June 2020.


US: A lawsuit raised by the US Equal Employment Opportunity Commission (EEOC) against CCC Group alleges that black construction workers were subject to racial discrimination and harassment during the construction company’s work on an upgrade at the Lafarge Ravena cement plant in 2016. The EEOC says that the workers were the target of racial language, were threatened and made to carry out more dangerous and physically taxing tasks. It added that it only took legal action after first attempting to reach a pre-litigation settlement through the agency’s conciliation process.

CCC Group says it investigated the claims from one former employee in 2017 about ‘inappropriate comments’ after it was reported to the EEOC. However, it says that the complaint was never reported internally and that the EEOC refused to share information about the allegations. Subsequently, it was unable to determine what happened. The construction company only became aware of the other allegations when the EEOC filed its lawsuit in June 2020. CCC Group said, “We take all such allegations very seriously and continue to thoroughly investigate these claims. Regardless, CCC Group will continue its commitment to ensure that any such conduct is not tolerated or allowed to occur in our workplaces.”

800 workers were involved in the upgrade to the plant in New York State, which brought it to its present integrated capacity of 2Mt/yr.

This story was updated on 16 June 2020 following comment from CCC Group


India: UltraTech Cement has cuts its capital expenditure budget to around US$130m due to the coronavirus pandemic. Work on its 2.2Mt/yr Cuttack grinding unit, which was scheduled for commissioning in March 2021, has been slowed down. Upgrades at its West Bengal and Bihar grinding plants are nearly completed and a waste heat recovery system (WHRS) at its UltraTech Nathdwara Cement subsidiary will be completed in the current financial year.

The leading Indian cement producer said that government directives in response to the health crisis had ‘adversely’ affected revenue. Since ‘select’ activities were allowed to re-open from 20 April 2020 and the company says it is now, ‘dispatching cement from all locations.’ It added that the majority of demand was currently coming from retail markets as some institutional projects restart construction. It operates 22 operational integrated plants, 23 grinding units and 6 bulk terminals. The company said that ‘conserving cash’ is its motto in 2020.


Australia: The Queensland Supreme Court has ruled that Wagners must meet lower prices offered by a competitor in the market in its cement supply contract with Boral. Wagners suspended its supply of cement products to Boral for six months in early 2019 when Boral said it found cheaper cement from Cement Australia, according to the Australian newspaper. However, the court found that an October 2019 pricing notice for cheaper supplies from Cement Australia was ‘valid and effective’. Boral will continue buying cement from Wagners until 2031.


Denmark: FLSmidth has said that, following the appointment of Mikko Tepponen as its chief digital officer (CDO), it is embarking on an acceleration of digitisation projects and an expansion to its portfolio based on ‘direct collaboration and co-creation’ with customers. FLSmidth said that this aims at ‘increasing productivity in the cement industry through optimisation and efficiency, including by reduction of fuel and raw material consumption and of process heat, time and emissions, security enhancement and many other areas’ that would benefit from a digitally integrated approach.

Tepponen said, “Digitisation and sustainability go hand in hand. When you succeed in digitising key processes in any large-scale industry, you tend to see clear benefits in areas such as energy consumption, waste reduction and resource use. Without a serious focus on digitisation, it will be impossible for us at FLSmidth to reach our MissionZero sustainability ambitions.”


US: The Portland Cement Association (PCA) has lauded the introduction of a bill to reauthorise infrastructure spending until 2025 in the legislative assembly. Called the INVEST in America Act, the Democratic bill proposes to increase investment and shift towards more sustainable infrastructure and transport.

PCA president and chief executive officer (CEO) Mike Ireland said the boosts to funding, “are critically important as our nation deals with high unemployment and economic stagnation as result of the Covid-19 pandemic.” He added, “The PCA stands ready to work with Democrats and Republicans in the House and Senate in delivering a robust and bipartisan surface transportation reauthorisation bill.”


Russia: Eurocement subsidiary Maltovsky Portland Cement has announced that it will be selling wholesale and retail products from its plant in Dyadkovsky, Bryansk Oblast from a newly opened shop at the site. While the new sales format is being trialled, customers are able to purchase 50kg bags or big-bags of CEM-II cement or 1750kg pallets of CEM-III cement. Eurocement commercial director Natalya Strzhalkovskaya said, “Customers thereby eliminate the risk of buying counterfeit goods and can be sure that they are purchasing reliable and high-quality Maltovsky Portland Cement products.”


Brazil: Votorantim Cimentos has joined in the global condemnation of racism by encouraging its employees and external stakeholders to use its Ethics Line ‘in case of any lack of respect in the work environment.’ The line is open for 24 hours a day. Votorantim Cimentos reminded people that they can also speak to a member of its leadership, the Business Ethics Agency or the Ombudsman ‘with anonymity and without fear of retaliation’. Votorantim Cimentos said, “Not being racist is not enough: we need to be anti-racists. We count on you to transform Votorantim Cimentos and our society into a more respectful, humane and inclusive place.”


Nigeria: Denmark-based FLSmidth has secured a contract with Dangote Cement for the supply of hot kiln alignment services for 16 kiln lines across Africa. 10 of the lines are installed across three plants in Nigeria, with the remaining six situated in Republic of the Congo, Ethiopia, South Africa, Tanzania and Zambia. The contract will endure until 2026.

Dangote Cement said that it chose FLSmidth to help it achieve ‘uninterrupted cement production and dispatch around the clock. Dangote Group deputy managing director Arvind Pathak said, “The equipment health audits, services, and support extended by FLSmidth have helped us maintain our pyro process equipment with good reliability. Hot kiln alignment is an excellent preventative maintenance strategy.”

FLSmidth says that it conducts 250 hot kiln alignments worldwide annually.


Brazil: The Brazilian Portland Cement Association (ABCP) has joined with the Brazilian street cleaning, waste management and biogas associations in launching the Brazilian Waste Energy Recovery Front for the reuse of waste in energy production. The partners estimated that some 14.5GWh/yr of energy is available for generation from Brazil’s 79Mt/yr of solid urban waste alone. The ABCP said that it was enthused by the possibilities the waste holds for cement producers, and urged the Environment Ministry to ‘reduce regulations that hinder its use.’


Philippines: Eagle Cement says it will continue to provide food packages containing rice and tinned food to 18,000 families impacted upon by the coronavirus outbreak. The Manila Bulletin has reported that the provision will not end with the partial easing of the country’s lockdown but will continue until no longer needed.

Eagle Cement chairman Ramón Ang said, “Eagle Cement is committed to continue helping our partner communities where we operate, during the crisis and beyond. We were able to expand the reach of our relief operations and extend assistance to more people in need including front liners in Bulacan and to families in our community in Cebu,” where the company is planning to build a new integrated cement plant.

"The livelihoods of many residents of our communities have been affected by this pandemic and do not have the means to provide for their families. We hope that our relief operations are able to help them in addressing their crucial needs during this vulnerable time. No matter what crisis our fellow Filipinos may experience, they can rely on Eagle to support them. As a company, it is our duty to help and serve," said Ang.