Global Cement Newsletter

Issue: GCW471 / 02 September 2020

Headlines


It’s back to work for many in Europe this week following the summer break and so too for the Global Cement and Concrete Association (GCCA) with the release of its 2050 Climate Ambition mission statement. Talk about setting the bar high for the rest of us struggling to remember how to log into our computers! The short version is that the association aspires to deliver society with carbon neutral concrete by 2050. The actual detail will be published in the second half of 2021.

What it does say is that, “detailed actions and milestones” will be set out in the forthcoming roadmap. This will include, “working across the built environment value chain to deliver the vision of carbon neutral concrete in a circular economy, whole life context.” This focus on concrete and end-product life-cycles looks likely to be the wriggle room cement and building materials producers need to actually meet the goal. To put it another way, as the press release helpfully reminds us, things that people need are made out of concrete. So, until a viable alternative to clinker turns up, the cost in CO2 emissions needs to be spread as far and wide as possible. At the same time everyone needs to be continually told how much they need cementitious products: don’t think of the CO2 released to build your new house. Rather: think of the CO2 saved annually by living in a well-constructed dwelling, as opposed to the alternatives, and consider what happens to the concrete once the structure is demolished.

A few ideas of what strategies the roadmap may use to reach its target are revealed. This is fairly standard current thinking including: cutting direct energy-related emissions; increasing co-processing; increased renewable electricity usage; reducing process emissions through new technologies and deployment of carbon capture at scale; reducing the content of both clinker in cement and cement in concrete; more efficient use of concrete in construction; reprocessing concrete from construction and demolition waste to produce recycled aggregates; and quantifying and enhancing the level of CO2 uptake of concrete through recarbonation in a circular economy, whole life context.

It’s early days yet, with the roadmap not due for at least a year, but deploying carbon capture methods at scale will be expensive and difficult. Whatever target the GCCA sets here will be keenly observed, especially so given that the association is a global concern. So far carbon capture in the cement industry has generally been linked to regions with market or legislative encouragement. How, for example, would a producer in a country with low environmental restrictions react to its peers trying to get it to make cement production more expensive? The rest of the points seems more tangible at the moment but will require lots of work to realise. They are also interlinked and this reinforces the need for someone to continually remind society about the life cycle of concrete. Taking concrete recycling into the mainstream is great but the world has to be told that it is happening.

This last point brings us to the perceived success of the GCCA’s ambitions: will a successfully realised strategy to make carbon neutral concrete by 2050 be enough to make environmental activists like Greta Thunberg happy? Probably not. Pure environmentalists seem unlikely to accept whole lifecycle thinking while limestone decomposition in kilns continues without capture or cessation. Even if the cement and concrete industries hit the target they will have to shake off the taint that the achievement was at least partly down to sneaky carbon accounting. Suddenly saying that concrete buildings have been sucking up CO2 all along and that the industry is now, say, 20% closer to its carbon neutral target may feel like cheating to some observers. Step forward a global association to say otherwise. The need for industry associations making the case for the sector’s aspirations seems more essential than ever.


UK: The Mineral Products Association (MPA) has appointed Simon Willis as its chairman for the next two years. He succeeds Martin Riley, Senior Vice President at Tarmac, as the eighth incumbent in the role. Willis is currently the chief executive officer (CEO) of HeidelbergCement subsidiary Hanson UK. He holds experience in the aggregates and construction materials industry and has held previous directorship roles at Eurovia Infrastructure, Midland Quarry Products and Tarmac.


India: Ambuja Cement has appointed Rajani Kesari as its chief financial officer (CFO). She succeeds Sonal Shrivastava, who has moved to a new role in LafargeHolcim Group.

Kesari holds over 26 years of experience in accounting, finance, taxation, audit and general management in manufacturing, pharmaceutical as well as auditing and consulting companies. She is currently the CFO of ACC, another subsidiary of LafargeHolcim. Prior to that she was the Head of Finance for Asia Region for LafargeHolcim Group. She joined LafarqeHolcim Group in 2018 from Schneider Electric, an energy management and automation company where she was the CFO for East Asia and Japan Zone.

Kesari started her career in 1991 in finance and auditing with Lovelock & Lewes. Apart from LafargeHolcim Group, she has worked in senior positions with organisations including KPMG, Dr Reddy's Laboratories and Schneider Electric. Kesari is a qualified chartered accountant from ICAI, a Cost Accountant from ICWAI and a certified public accountant from the American Institute of Certified Public Accountant.


India: JK Cement has appointed Sushila Devi Singhania as the chairperson of its board. She has been a director of the cement producer since 2014. She also holds directorships with Yadu International and GH Securities, as well as leading roles with several educational organisations in Kanpur, Uttar Pradesh.


Denmark: FLSmidth has appointed Tamer Eid as the new president for the Australia region, with effect from 14 September 2020, and Claudio Garcia Bernal as president for the South America region. The group also announced that Ramanathan (Ram) Chandran, who was appointed president for the Subcontinental India region in August 2020, will start his role on 4 September 2020.

Tamer Eid has held various senior executive and technical roles in the mining and oil and gas sectors including working with Weir in the US and UK and in various senior roles within Outotec. He holds an MBA and a degree in mechanical engineering. He will be based out of FLSmidth’s Welshpool facility in Perth, Australia.

Claudio Garcia Bernal previously served as acting president for the South America region since April 2020. Ramanathan Chandran joins FLSmdith from Minerals Technologies Inc. where he was Vice President (Minteq Asia) & MD (Minerals Technologies India).


US: Bulk Handling Systems (BHS) has appointed Thomas Brooks as its chief technology officer (CTO). He previously worked as BHS’ Director of Technology and Product Development. Brooks was recently named a Waste360 40 Under 40 award winner. He has served in management and new product development roles in the aerospace, biomedical, industrial and automotive industries, among others. He holds a Bachelor’s Degree from Tennessee Tech University in Mechanical Engineering with a focus on controls and fluid dynamics.


Canada: Brazil-based Votorantim Cimentos is in talks with Caisse de dépôt et placement du Québec (CDPQ) over possible acquisition of the investment company majority stake in McInnis Cement. Quebec Premier François Legault said, “Quebecers have already invested a lot in the cement plant. For nationalism reasons, I would like a Quebec company to be ready to invest,” according to the Journal de Montreal newspaper. Béton Provincial has registered for a government grant of US$115m in order to acquire the stake, which has been for sale since January 2020. Investissement Québec and the Beaudier Group are both minority shareholders.


Rwanda: Prime Cement has inaugurated its new 0.6Mt/yr grinding plant in Rwanda in Musanze, Northern Province. It also announced the start of commercial production at the US$40m unit, according to the Rwanda New Times newspaper. It plans to ramp up production to 1.2Mt/yr by mid-2022. Germany-based Loesche installed a Loesche Jumbo CCG (Compact Cement Grinding plant) with type LM 30.2 mill at the site.

The cement plant is owned by Milbridge Holding, a group of companies involved in manufacturing and distribution of construction materials in Angola, the UAE, Rwanda and South Africa. It employs 110 workers directly.


China: Huaxin Cement’s sales and profit fell in the first half of 2020 due to the coronavirus outbreak. It said that the health situation, “resulted in grave insufficient demand in the markets of main products and rapid slump in price, coupled with restrictions on personnel flow and traffic, equipment maintenance plan was affected severely.” The cement producer disposed of medical waste for free at its Yangxin, Wuxue and Yichang plants before the market recovered in the second quarter.

Huaxin’s sales revenue fell by 12.7% year-on-year to US$1.84bn in the first half of 2020 from US$2.11bn in the same period in 2019. Its net profit dropped by 29% to US$330m from US$463m. Cement sales and concrete volumes declined by 8% to 32.7Mt. The company also started clinker production at its 2Mt/yr Jizzakh cement plant in Uzbekistan in June 2020.


Kazakhstan: Private businessperson Azmi Wan Hamzah has increased his stake in Steppe Cement to 31% of issued share capital from 29%. RNS News has reported that Wan Hamzah holds shares in Steppe Cement via Alwah Fund Limited, Halfmoon Bay Capital and Mango Bay Enterprises.


Brazil: Aumund Brazil will supply a type BZB bucket apron conveyor to Votorantim’s Xambioá integrated cement plant in Tocatins. It will replace a pan conveyor being used to transport clinker from the cooler to the silo. The new conveyor will have a centre distance of 92m and a conveying capacity of up to 170t/hr. The upgrade is expected to reduce dust levels at the site. Supply and commissioning of the new bucket apron conveyor in Xambioá is due to take place in October 2020. The order follows a previous order to Aumund for a similar project at Votorantim’s at Vidal Ramos plant in Santa Catarina.


Brazil: RHI Magnesita plans to spend Euro30m towards building a rotary kiln in its mining site at Brumado, Bahia. The upgrade is expected to increase the production at the unit by more than 30% as the kiln is designed to process up to 140,000t/yr. The announcement follows a planned investment of nearly Euro40m towards the construction of a new headquarters for its South American operations in Contagem, Minas Gerais that was revealed in 2019.

“This investment in the construction of a rotary kiln with innovative technology will enable us to develop a new portfolio of raw materials, in addition to those already available on the market. The new raw materials include noble sinters at very competitive costs on the international market. This will bring operational flexibility, the ability to offer differentiated value-added products to our customers in the Brazilian market, and will put us in an even more competitive position in the global environment,” said Francisco Carrara, president of RHI Magnesita in Brazil and South America. He added that the group was seeing a ‘considerable’ recovery in the steel and cement segments in Brazil.


Mexico: Workers at Holcim Mexico’s 1.6Mt/yr Hermosillo cement plant in Sonora have voted to award a contract for their collective union representation to Confederation of Workers of Mexico (CTM) member Cement Industry Worker’s Union (STIC). The El Economista newspaper has reported that 50 workers at the plant, which employs 95 people, voted for the STIC. The runner up, the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic (SNTMMSSMR), garnered 17 votes.

The STIC said, “In the framework of this day, under an atmosphere of respect and civility, with rich and enthusiastic participation, the workers have chosen the Cement Industry Workers Union as responsible for continuing to represent with honour the workers of this noble industry."


France: LafargeHolcim has said that Lafarge Béton is not responsible for the discharge of ‘particles of cement, treatment liquids and plastic microfibers’ from its Bercy concrete plant in Paris Department. The La Télégramme newspaper has reported that the plant has been under environmental inspection since late August 2020. The company says that the pollution resulted from a single incident ‘caused by malicious parties’ who knew of the on-going investigation.

The mayor of Paris has contacted the public prosecutor to request a criminal action against LafargeHolcim.


UK: The Global Cement and Concrete Association (GCCA) has published its 2050 Climate Ambition, a joint industry commitment to net-zero carbon dioxide (CO2) emissions by 2050. The association’s 40 members have committed to, “eliminating direct energy-related emissions and maximizing the co-processing of waste from other industries, reducing and eliminating indirect energy emissions through renewable electricity sources, reducing process emissions through new technologies and deployment of carbon capture at scale, reducing the content of both clinker in cement and cement in concrete, as well as more efficient use of concrete in buildings and infrastructure, reprocessing concrete from construction and demolition waste to produce recycled aggregates to be used in concrete manufacturing and quantifying and enhancing the level of CO2 uptake of concrete through re-carbonation and enhanced re-carbonation in a circular economy, whole-life context.”

President Albert Manifold said, “The 2050 Climate Ambition represents our industry’s commitment to further reducing emissions and ensuring that the vital product we provide can be delivered on a carbon-neutral basis by 2050. There is a significant challenge involved in doing so and achieving alignment across our industry on a sustainable way forward is an important first step. We cannot however succeed alone and in launching our ambition statement we are also highlighting the need for our industry to work collaboratively with other stakeholders in support of our ambition for a more sustainable future.”


Vietnam: Cement producers increased the total domestic output of cement by 3.9% year-on-year to 64.2Mt in the first eight months of 2020 from 61.8Mt over the corresponding period of 2019. Continuing at this rate, Vietnam will produce 96.3Mt of cement in 2020, down by 0.2% from 96.5Mt in 2019.


India: JK Cement’s profit in the three months ended 30 June 2020, the first quarter of the 2021 financial year, was US$6.85m, down by 62% year-on-year from US$18.1m in the first quarter of the 2020 financial year. Revenues fell by 28% to US$138m from US$191m. The company said, “The operations and business performance of the group during the quarter ended 30 June 2020 was adversely impacted by the shutdown of the group's plants at various locations due to the lockdown announced by the government after the outbreak of the Covid-19 pandemic in March 2020.”


India: JK Cement says that it will sell its white cement, formerly JK White Cement, under the new name ‘WhitemaxX.’ The Economic Times newspaper has reported that the new name “strengthens JK Cement’s core commitment to delivering the maximum to its consumers and partners with a focus on consistent and premium product quality,” according to the company.

JK Cement is the world’s third largest white cement producer and it exports WhiteMaxX to 43 countries.


Pakistan: France-based Schneider Electric will provide a ‘comprehensive electrification solution’ to improve the efficiency and sustainability of cement production at DG Khan Cement’s 3.2Mt/yr integrated Hub cement plant in Karachi, Balochistan. The Nation Newspaper has reported that the supplier’s ECOStruxure product will give operators ‘a full view of energy use across the plant,’ according to the company. Additionally, “artificial intelligence (AI)-powered software will help the company to take a predictive approach to maintenance,” it said.

Hub cement plant general manager Arif Bashir said, “Our goal is to monitor and manage power across our infrastructure efficiently, find electrical faults sooner, fix issues quicker and achieve a faster return on investment. Schneider Electric’s energy efficiency solutions that will improve our performance.”


Uzbekistan: State-owned Uzpromstroymaterialy has announced the start of cement production at a new 0.1Mt/yr integrated cement plant, called the Qurilish Ashyo Sifat Servis cement plant, in Fergana Region following a total investment of US$25.0m. The company has reported that the new plant represents part of the country’s efforts to increase its installed cement capacity by 60% to 20.0Mt/yr in 2020 from 12.5Mt/yr in 2019.


Australia: Adelaide Brighton has extended its lease over its Sellicks Hill quarry in South Australia until 2090. The Advertiser newspaper has reported that the signing of the lease, which secures the company’s local supply of limestone, “coincides with a rise in local cement consumption due to the government’s South Australia HomeBuilder building and renovation subsidy scheme,” according to the company. In August 2020 Adelaide Brighton signed supply contracts with BHP and OZ Minerals for infrastructure projects in the state.


Estonia: Cement producers achieved a total output of 129,000t of cement in the first half of 2020, down by 31% year on year from 187,000t in the first half of 2019. Eesti Statistika has reported that the sharpest decline was in June 2020, by 41% year-on-year to 25,800t from 43,700t. Estonian clinker production ended on 27 March 2020 with the closure of Kunda Nordic Cement’s 0.8Mt/yr integrated Kunda cement plant in Lääne-Viru County.


India: Sustainable roofing specialist Visaka Industries has acquired a 20-year patent for production of ATUM, a roofing system consisting of cement boards with integrated solar panels. The company says that the product, which has been in development since 2016, is both insulative and capable of generating up to 28W/m2 of power.


Denmark: FLSmidth has announced the reinstatement of its 2020 guidance. The guidance predicts full-year sales of Euro2.28bn, down by 18% year-on-year from Euro2.77bn. Earnings before taxation, interest, depreciation and amortisation (EBITDA) margin is expected to decline to 6.0% from 8.1%. The company said that the guidance is “subject to higher uncertainty than usual” and conditional upon “no further escalation of Covid-19, no further extensive lockdowns or travel restrictions occurring before year-end, a gradual improvement in business sentiment for the remainder of 2020, and business improvement implementation of around Euro28.2m, of which Euro18.8m relate to the previously communicated improvement activities and around Euro9.40m relate to further improvement activities in cement.” It added, “The cement industry has been severely impacted, and the timing and extent of a rebound remain uncertain. Our goal for the cement business is to generate more stable, higher-margin earnings.”


Australia: Adelaide Brighton has recorded a net profit of US$21.1m in the first half of 2020, compared to a US$13.0m loss in the first half of 2019. Revenues fell by 7.3% to US$508m from US$548m due to a 12% construction decline over the period, according to the company. Residential construction fell by 16%, however mining and infrastructure activity remained consistent with levels in the first half of 2019. Adelaide Brighton said, “Cement demand is likely to continue to benefit from a strong production outlook for gold, nickel, and iron ore in particular, and stable demand from the alumina sector.”


Pakistan: Lucky Cement’s profit for the 2020 financial year ended 30 June 2020 was US$19.9m, down by 68% year-on-year from US$62.4m in the 2019 financial year. The company recorded a 13% sales drop to US$249m from US$285m, which it said was due to the impacts of the coronavirus pandemic.


UK: The Competition and Markets Authority (CMA) has said that Breedon Group’s acquisition of a minority of Cemex UK’s ready-mix and aggregates operations “may lead to a substantial lessening of competition in the supply of ready-mixed concrete, non-specialist aggregates or asphalt in 15 local markets across the UK” in a letter to the group. The Herald newspaper has reported that the potentially affected markets are in localities where Breedon Group is already dominant, such as eastern Scotland and the East Midlands.

CMA senior director Colin Rafferty said, “As consumers source the majority of these materials locally, it’s vital to ensure that enough competition will remain at the local level so there’s enough choice and prices remain fair.” If it fails to respond to the CMA’s concerns by 2 September 2020, Breedon Group will face an in-depth Phase 2 investigation into the deal.


Malaysia: Cahya Mata Sarawak recorded a profit of US$8.72m in the first half of 2020, down by 63% year-on-year from US$23.4m in the first half of 2019. Total sales declined by 40% to US$117m from US$196m. Cement sales also declined, by 31% to US$46.8m from US$68.1m. The company attributed this to the impacts of the coronavirus lockdown.


Pakistan: Leading cement producers have said that prices will rise by 10% before 2021 if a reduction in Federal Excise Duty (FED) to US$5.95/t of cement from US$11.9/t does not materialise. DG Khan Cement owner Nishat Group chair Mian Mansha said, “Failing this, producers will take a US$119m total hit on revenues,” according to the Express Tribune newspaper.