Global Cement Newsletter

Issue: GCW472 / 09 September 2020

Headlines


The Bureau of Indian Standards (BIS) has warned local cement producers to rein in their more outlandish claims. In a letter reported upon by the Economic Times newspaper this week, the government department has accused some manufacturers of making both objective and subjective claims about their products that strained credulity and didn’t fit the corresponding official standards. One industry source from the newspaper blamed the crackdown on some producers claiming that their cement products helped protect people from Covid-19! In their view the bureau was now over-enforcing its rules in retaliation. Given the severity of the outbreak in India - it has the second highest number of reported cases in the world this week - the response of the authorities is understandable to say the least.

The distinction between objective and subjective exaggeration that the BIS makes it worth looking at in more detail. For example, objective or supposedly fact-based claims the BIS cited included: ‘Protect Steel in Concrete’; ‘Protect Concrete from Corrosion’; ‘Corrosion Resistant’; ‘Weather Proof’; and ‘Damp Proof.’ Then, there were subjective, or more emotionally evocative, claims along the lines of ‘strong’ or ‘high performance.’ The BIS then outlines the specific ways in which objective and subjective assertions can be used. Objective claims should be avoided on marketing and packaging material. Subjective claims should, “explicitly indicate that such claims are not covered under the scope of BIS licence granted to them and the responsibility of such claims lies with them.”

Marketing is a big part of standing out in the crowded Indian cement market with producers sponsoring major sports teams. This might seem odd to readers elsewhere in the world but it demonstrates the target market, the importance of cement as a commodity to the general public and the power of brand awareness. Amubja Cement’s logo of a man with a Charles Atlas style physique cuddling a building sums up the message they want to convey: strength. No wonder producers are wary of the BIS wading in.

Standards also appeared in another news story this week with the announcement that Taiwan Cement Corporation (TCC) had obtained the first cement product carbon footprint label issued by the Environmental Protection Administration (EPA) in the country. Its products will be marked with carbon footprint labels from the fourth quarter of 2020.

This shows a general trend in cement products towards showing sustainability credentials from putting environmental footprint data in front of specifiers for large projects towards making it a more basic retail selling point. Lots of other cement producers around the world have done and/or are doing similar things, from the dedicated slag cement manufacturers to the larger producers routinely releasing and promoting new low-CO2 products. To pick one example from many, in July 2020 LafargeHolcim France introduced ‘360Score CO2 emissions reduction ratings’ to its bagged cement range. The score, between ’A’ and ’D,’ corresponds to the factor of CO2 compared to CEM-I Ordinary Portland Cement (OPC), with ‘A’ products producing less CO2 than ‘D’ products in their overall creation.

To look at an older example of the need for standards generally, building collapses in Nigeria appeared to increase post-2000, with the misuse of lower-grade cements blamed for the situation. The Standards Organisation of Nigeria (SON) took action in 2014, local producers introduced higher strength cements and the problem was reduced. Given the intangible nature of measuring sustainability in cement products there is a need for reliable standards. Unlike performance metrics, such as a strength or durability, the CO2 footprint of a cement product will generally remain utterly intangible for most end-users. The effects of CO2 emissions are continually analysed and debated, but the negative climate effects of cement products are more akin to someone else’s house flooding on the other side of the world 50 years later, than one’s own house falling down a decade later due to using the wrong strength cement. So, some form of trustworthy enforcement for sustainability standards is crucial. Standards may represent ‘boring’ bureaucratic red tape at its most officious but we need them. In India and elsewhere though, the debate on enforcement continues.


China: Tongfang Kontafarma has appointed Chai Hongjie as its chairman. He succeeds Huang Yu, who will become the company’s president. The company, through its subsidiaries, mainly manufactures and sells cement, clinker and slag, trades cement and provides technical services with operations in Shandong province and Shanghai.

Chai, aged 46 years, has experience in corporate management and strategic planning for business development. He is currently the chairman of the board of directors of Shenzhen Waranty and a director of Shenzhen Huakong Seg. Prior to joining Tongfang Kontafarma group, Chai held positions as chairman of the board, directors and senior management in various companies and organisations, including the Changzhi Division of China Banking Regulatory Commission, Shanxi Guoxin Investment Group, Zhonghesheng Capital, Shanxi Financial Investment Holding Group and Shanxi Guotou Sports Industrial Group.

Chai obtained a bachelor’s degree in Economics from Department of Finance, Shanxi Institute of Economics (now known as Shanxi University of Economics) in 1996. He was qualified as an intermediate accountant in 1997.


Gabon: A new 0.35Mt/yr production line has started production at Ciments d'Afrique’s (CIMAF) Owendo grinding plant. Spain-based Cemengal supplied a 50t/hr Plug&Grind X-treme grinding plant for the project. Successful commissioning and start-up of the unit was managed remotely from Madrid in Spain due to the coronavirus pandemic. The upgrade cost around US$16m.

The addition brings the plant’s total production capacity to 0.85Mt/yr, according to Direct Infos Gabon. The cement producer is also planning to spend US$120m towards building an integrated plant in the country. Nationally, the country reportedly now has a production capacity of around 1.2Mt/yr.


Democratic Republic of Congo: China-based Zijin Mining Group and Lualaba Carrilu have launched a new 0.8Mt/yr cement plant near Kolwezi, the capital of Lualaba province. A start-up ceremony at the unit was attended by Julien Paluku Kahongya, the Minister of Industry, and Richard Muyej, the governor of Lualaba, according to L'Agence congolaise de presse (ACP). The plant is expected to create up to 1000 jobs.


Pakistan: Fauji Cement recorded a net loss of US$354,000 in the 2020 financial year, which ended on 30 June 2020, compared to a profit of US$17.0m in the 2019 financial year. MarketScreener News has reported that sales fell by 18% year-on-year to US$103m from US$125m.


Taiwan: Taiwan Cement has been awarded the first product carbon footprint label by the local Environmental Protection Administration (EPA). It follows its completion of the structure of product category rules (PCR) in early August 2020 and inspection by the EPA. TCC's products will be marked with carbon footprint labels from the fourth quarter of 2020. The Taiwan-based cement producer has also announced support for the Global Cement and Concrete Association’s (GCCA) 2050 Climate Ambition plan.

TCC started its Science-Based Target project in 2019 and says it became the first cement company in the Greater China region to complete target setting and was approved by Science-Based Target initiatives (SBTi) in June 2020. Following the science-based methods promoted by the Intergovernmental Panel on Climate Change (IPCC) from the United Nations, TCC set a target to reduce carbon emissions by 11% in 2025, using 2016 emissions as the base. TCC completed carbon footprint certification for the most popular cement products, Portland Type I cement and Ready-Mixed Concrete 3000psi, in July 2020.


Uzbekistan: The Ministry of Transport has secured a US$274m loan from the Asian Development Bank for investment in the construction of a 240km road in Karakalpakstan. Asian Development Bank senior transport specialist Pavan Karki said, “As a landlocked country, Uzbekistan has made regional connectivity a central element of its transport policy. This project will help develop the country's potential as a regional transport and logistics hub between Europe and Southeast Asia, contributing to economic growth.” The road will be part of the Central Asia Regional Economic Cooperation Programme Corridor 2. Uzbekistan Newsline has reported that the project will generate ‘significant demand’ for the country’s cement producers.


Europe: Cembureau, the European Cement Association, has announced that its ‘Cementing Europe’s Future: Building the Green Deal’ webinar will take place on 13 October 2020. The programme includes keynote speeches from association president Raoul de Parisot and German Minister of Environment, Nature Conservation and Nuclear Safety Jochen Flasbarth. Additionally, members of the European Parliament and representatives of the European Commission, LafargeHolcim, HeidelbergCement and several other companies involved in the European cement industry will speak.


India: The state government of Uttar Pradesh has granted approval to three planned grinding plant projects with a total value of US$115m. The Hindustan Times newspaper has reported that Kanodia Cement ’s Amethi grinding plant will cost US$39.6m, Eco Plus Cement Industries’ Prayagraj grinding plant will cost US$38.6m and Eco Plus Cement Industries’ Mirzapur grinding plant will cost US$37.1m.


India: The Bureau of Indian Standards (BIS) has warned producers to avoid the use of objective product descriptions which may subsequently be proven as false claims. The Economic Times newspaper has reported that the advice follows an internal circular of the Ministry of Consumer Affairs, Food and Public Distribution detailing plans for a tightening of standards around the use of objective terms such a ‘corrosion resistant,’ ‘weather proof’ and ‘damp proof’ by cement producers.


Colombia: Cemex España has requested authorisation by the Colombian Financial Superintendency (SFC) to make offers to buy the shares of all Cemex Latam Holdings shareholders with a view to taking over a 100% stake in the company. El Ceo News has reported that after receiving authorisation Cemex España must place a bid within five working days.


Egypt: HeidelbergCement subsidiary Suez Cement recorded a net loss of Euro38.0m in the first half of 2020, up by 99% year-on-year from 19.1m in the first half of 2019. The company made sales worth Euro145m over the period, down by 18% from Euro177m. The causes of the decline were market saturation and reduced demand in the short term due to the coronavirus lockdown from 19 March 2020 to 27 June 2020.


Taiwan: Asia Cement has bought all shares in Taiwan Chiahui Power Corporation belonging to co-owner Electric Power Development Company (J-Power). Electronic News has reported that the two companies have jointly owned Taiwan Chiahui Power Corporation since December 2002. The deal awaits ratification by the Taiwan Ministry of Economic Affairs Investment Commission.


Pakistan: Cement dispatches increased by 5% year-on-year to 3.52Mt in August 2020 from 3.35Mt in August 2019. Domestic sales rose by 4.8% to 2.79Mt from 2.67Mt, while exports rose by 5.8% to 0.73Mt from 0.69Mt. Plants in northern Pakistan produced 2.49Mt of cement (52% of total production), while those in the South produced 2.35Mt (48%).


Egypt: HeidelbergCement subsidiary Egyptian Tourah Portland Cement recorded a second-quarter loss of Euro4.65m in 2020, down by 79% year-on-year from Euro21.9m in 2019. The company made sales worth Euro1.81m over the period, down by 81% Euro9.74m, according to Reuters. In line with its position regarding future losses at 31 December 2019, the company called a shareholder’s meeting to decide on its continuity.


Algeria/Belarus: Belarus-based automobiles producer Belaz says that it has received an order for twelve dump trucks from Groupe des Ciments d'Algérie (GICA), Algeria’s leading cement producer with 13.5Mt/yr installed cement production capacity. Business World Magazine News has reported that the company will use the trucks for conveying raw materials in its Saoura quarry in Adrar Province. It previously bought twelve 60t-capacity Belaz-7555I trucks and nine front-loaders in mid-2020. The latest order is due for arrival in September 2020.

Belaz produces the 450t-capacity Belaz-75710, the largest-capacity dump truck in the world.


India: Ramco Cement has increased its stake in Lynks Logistics to 69% following its acquisition of a 23% stake in the company for US$273,000. The group previously invested US$700 in a 46% stake on 27 January 2020.


Mexico: Cemex has announced the awarding by its Scholarship Council of the Marcelo Zambrano Scholarship to architect Gonzalo Mendoza. The group says that the funding will support Mendoza through his post-graduate study abroad at the Architectural Association School of Architecture in London, UK.

Cemex said Scholarship Council member Jimena Hogrebe said, "Choosing a profile like Gonzalo's, due to his experience and interests, is important today because we are facing global situations in which it seems essential to have critical professionals who dare to propose new possibilities for architecture."


Mexico: Cemex has announced that its chief executive officer (CEO), Fernando González, will host a ‘virtual conversation,’ in which he will discuss aspects of the group’s financial and business strategy and its operation resilience post-Covid-19 performance enhancement programme, on 10 September 2020. The company says that chief financial officer (CFO) Maher Al-Haffar and strategic planning and business development executive vice president José González will also be on hand to answer questions.


India: The Odisha State Level Single Window Clearance Authority (SLSWCA) has approved two cement and slag grinding plant projects in Odisha. It has granted JSW Cement permission for an upgrade to its upcoming 1.2Mt/yr Kalinga Nagar, Odisha slag cement grinding plant that will increase the finished plant’s capacity to 2.4Mt/yr at an additional investment cost of US$359,000. JSW Cement restarted work on the facility, which will grind Ordinary Portland Cement (OPC) and granulated blast furnace slag (GGBS), in September 2018 after suspending the project due to leasing issues in 2016.

Sagar Cements subsidiary Jajpur Cements has also received clearance from the SLSWCA for the construction of a 1.5Mt/yr grinding plant on the site of the existing 0.5Mt/yr Jajpur Cements grinding plant in the Kalinga Nagar Industrial Complex in Jajpur District, Odisha. The project, valued by the company at US$44m, is scheduled for completion in March 2021. Sagar Cements acquired Jajpur Cements on 7 May 2019 for US$16m.


Colombia: Argos has supplied 220,000t of cement and 765,000m3 of ready-mixed concrete to the site of the 8500m-long Túnel de La Línea road tunnel in Quindío and Tolima Departments.

Colombia regional vice president Tomás Restrepo said, “We are proud to have participated as allies in the construction of this mega-work that represents a great milestone for the infrastructure of our country and Latin America. This was a project that represented great logistical and technical challenges that Argos has faced with commitment. We are sure that this strategic work of interconnection will contribute enormously to the progress of Colombia and its people. This reflects our high purpose to continue contributing to the construction of dreams that drive development and transform lives"


Czech Republic: Domestic cement production was 4.57Mt in 2019, up by 3.2% year-on-year from 4.43Mt in 2018. CTK Business News has reported a corresponding increase in domestic sales, up by 1.5% to 3.84Mt from 3.78Mt, and exports, up by 1.9% to 761,000t from 747,000t. Slovakia received 380,000t (50%), Germany received 221,000t (29%), Austria received 114,000t (15%) and Poland received 68,500t (9%). Imports fell by 15% to 490,000t, of which Slovakia supplied 245,000t (50%), Poland supplied 122,000t (25%), Germany supplied 98,000t (20%) and Austria supplied 39,200t (8%).


India: GM Iron & Steel Company Limited has published plans for the construction of a 0.4Mt/yr slag cement grinding plant in Dhenkanal, Odisha. United News of India has reported that the plant is part of an upcoming construction materials complex, including a 46MW captive power plant, that will cost US$82.7m, according to the company.


Germany: Schenck Process has launched CONiQ Control, a control and automation system “with many options for use in industrial measuring, weighing and automation technology in the cement industry,” according to the company. It says that the product “standardises the use of a common controller platform for a wide variety of processes” through a Reddot Intuitive Design Award 2019-winning web-based interface.


Sweden: Cementa says that it has added a second biogas-powered Volvo FH460 LGB truck to its logistics fleet. Based at the 0.6Mt/yr Skövde cement plant in Västergötland, the company says that the truck will supply customers in western Sweden with cement. Finland-based Gasum will fuel the trucks with biogas, which it says emits 90% less nitrous oxides (NOx) than diesel.


India: Shree Cement has signed a sponsorship deal with East Bengal Kolkata, one of two Kolkata, West Bengal-based football teams that compete in the I-League, the top flight of Indian football. The Economic Times newspaper has reported that the company has promised to let the club retain its ‘iconic red-and-yellow jersey’ and crest.