Global Cement Newsletter

Issue: GCW483 / 25 November 2020

Headlines


There were mixed feelings evoked by HeidelbergCement’s good news last week that its French subsidiary Ciments Calcia is to set to spend Euro400m on a modernisation project. Sadly, this came with the bad news that the integrated plants at Gargenville and Cruas will be downgraded into a grinding plant and a terminal respectively, and there will be a review of the company’s headquarters in Guerville. All of this will cut 160 jobs but create 20 new ones.

Make no mistake, this is serious money to invest. Euro300m alone will go towards an upgrade of the integrated Airvault cement plant in the former Poitou-Charentes administrative region. HeidelbergCement didn’t say it in its press release but French press reported that the pyroprocessing line at Airvault will be rebuilt starting in 2022 with commissioning scheduled for 2025. If correct then this certainly suits an investment on this scale for a single plant. Smaller investments in the region of Euro25 – 50m were also said be earmarked for the integrated plants at Bussac-Forêt, Beaucaire and Couvrot. These are serious commitments to HeidelbergCement’s production base in France.

Generally speaking, the French cement and construction market has done as well as expected for a country forced to implement two coronavirus lockdowns so far in 2020. Half-way through the year the major cement producers were reporting sales declines of around 10% year-on-year with business picking up again over the summer. Vicat, for example, reported a 9% fall in sales volumes in the first half followed by ‘solid business growth’ in June 2020. LafargeHolcim, CRH and HeidelbergCement all reported a similar situation for their local subsidiaries.

Looking at the wider construction industry, in October 2020 analyst company GlobalData stuck by its forecast of a contraction of construction output by 11.6% in France in 2020. It noted a 35.5% quarter-on-quarter rebound in the third quarter, although it reckoned output was still down by around 5% in the quarter year-on-year, using French National Institute of Statistics and Economic Studies (INSEE) data. With a second national lockdown initiated in late October 2020, it said that INSEE expected a contraction in the fourth quarter of 2020 even with construction sites being allowed to stay open. This follows a peak of cement production above 20Mt in the late 2000s before hitting a low of around 15.5Mt in 2015 and a gradual recovery since then, according to data from the French cement industry union (SFIC).

Ciments Calcia’s upgrade at Airvault is noteworthy for the whole of Europe because it is one of only a few new pyroprocessing line projects in the last decade. The last major one was the new 4000t/day line at HeidelbergCement’s Burglengenfeld plant in Germany that was commissioned in 2018. The trend since then has generally been one of integrated plants slowly closing as markets shrank following the 2008 financial crisis, international clinker levels boomed and environmental measures tightened. Dominik von Achten, chairman of the managing board of HeidelbergCement, addressed this last point directly with the announcement of the Airvault project when he said, “This is why we focus our initiatives on the main CO2-emitting plants in France.” The competitors to the larger established cement producers in France are certainly thinking about CO2. Alongside the general European trend of fewer new clinker production lines has been rise in France of the smaller cement producers with grinding and/or reduced-clinker factor models like Cem’In’Eu, Hoffmann Green Cement Technologies and Ecocem. Anyone spending Euro300m on a clinker kiln spewing out CO2 would do well to consider how much the CO2 price might be in fifty years time.


UK: Breedon Group has appointed James Brotherton as its chief financial officer (CFO) designate with effect from 1 January 2021. He was previously the CFO of Tyman between 2010 and 2019, prior to which he was Director of Corporate Development for five years. Prior to Tyman, Brotherton worked in investment banking roles at Citi and HSBC, after qualifying as a chartered accountant at Ernst and Young. He is currently a director of the Quoted Companies Alliance (QCA) and represents the QCA on the Takeover Panel.

As announced previously, Rob Wood, Breedon Groups' current Group Finance Director, will succeed Pat Ward as chief executive officer (CEO) upon Ward’s retirement during 2021. It is anticipated that Brotherton will be appointed to the board as CFO at that point to ensure an orderly transition.


Kuwait: Spain-based Cemengal says that it has received a second order from ACICO Cement for a 1Mt/yr ball mill with a XP4i-130 type Magotteaux classifier for a new grinding plant. The company said that the project, which it expects to commission in the first quarter of 2021, encompasses “full engineering and complete supply of mechanical, process, electrical and automation equipment, as well as steel manufacturing from the raw materials handling areas up to the silos cement discharge. In addition to the delivery of technology, the site supervision, training and commissioning activities.”

The supplier said that the new mill “will help our Kuwaiti client to satisfy the growing demand for high quality cements for major infrastructure developments” in the country.


Thailand: Siam City Cement has signed a new contract with US-based SAP Ariba for the further digitisation of its end-to-end procurement processes by using the latter’s software products. The producer first partnered with the company for “sourcing, contracts, catalogues, supplier information management and supplier collaboration” in 2016. Following the latest release in August 2020, SAP Ariba’s products support the Thai language, “making it easier for buyers and suppliers to communicate and transact over Ariba Network.”

Head of group procurement Benjamin Goodwin said, “From the beginning, we saw our procurement transformation as an opportunity to bring more value to the organisation and to our network of suppliers in Thailand and beyond. Our recent renewal of SAP Ariba solutions is a result of the successful partnership cultivated over the years, which set us up to achieve process efficiencies and cost savings from automation, standardization and improved collaboration with suppliers. We look forward to continuing our journey with SAP Ariba.”


Germany: HeidelbergCement has strengthened its climate neutrality commitments by joining the Stiftung 2° support group, a network of private companies lobbying for climate goals. The group says that it wants “to develop cross-sector approaches and concepts for Germany and Europe in order to make climate protection a sustainable and successful business model.”

Managing board chair Dominik von Achten said, "For the development of a carbon neutral construction industry, we need the right social and political framework as well as strong partners with whom we can also be economically successful on our path to climate neutrality. As one of the leading companies in the building materials industry, we have been committed to sustainable construction for a long time. Through our involvement in Stiftung 2°, we want to work with other like-minded companies and set the course for a successful, climate neutral future now."


Americas: Switzerland-based LafargeHolcim has begun its roll-out of ECOPact low-carbon concretes in its Latin America region, launching the product range in Ecuador, Colombia and Mexico to “meet growing demand for green products.” The company says that the launch in other markets will follow in early 2021. It said “this roll-out of ECOPact builds on its successful market adoption across Europe, the UK, the US and Canada.” The producer additionally plans to introduce its ECOLabel “to transparently communicate the environmental benefits of its green cement range” across the Disensa retail network from December 2020, enabling customers to “easily identify products that comply with the company’s green criteria, including lower carbon dioxide (CO2) footprint and recycled content.” Every country in the region will have at least one ECOlabel product, according to the company.

Latin America regional head Oliver Osswald said, “With the roll-out of the widest range of green building materials in Latin America, we are committed to leading the way in sustainable construction. Building on our region’s excellent third quarter 2020 results, demonstrating strong resilience despite an unparalleled health crisis, Latin America is well positioned to tackle the challenges ahead. We have a clear and unified strategy supported by two strong pillars: a rapidly expanding Disensa retail franchise network, and a fully orchestrated regional push toward green building solutions.”

LafargeHolcim’s Latin America retail network Disensa will reach 2500 stores in 2020, almost double the number in 2018. The company said, “Disensa will become the central network to reach millions of consumers with a diverse product portfolio, based on quality and environmental benefits by offering ECOLabel products on a wide scale. Disensa will also introduce new digital experiences to the buying process and eventually become a full line of stores from Disensa Express to Disensa MAX!”

LafargeHolcim will host the First Latam Virtual Convention for current and potential Disensa franchisees from 25 – 27 November 2020, with participants from eight Latin American countries.


Ireland: CRH recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$3.40bn in the first nine months of 2020, up by 2% year-on-year on a like-for-like basis from the corresponding period of 2019. The company said that it now expects full-year EBITDA in 2020 to exceed 2019 levels on a like-for-like basis at over US$4.40bn. Sales fell by 3% to US$20.6b but group added that it had “continued strong cash generation.”

Chief executive officer (CEO) Albert Manifold said, “Markets continue to be impacted by the global pandemic and, while we have seen some lower activity levels, I am pleased to report further improvement in trading performance, with an advance in both profitability and margins. The outlook for the coming months remains uncertain and visibility is limited, however I am confident that we are well positioned for the challenges and opportunities that lie ahead.”


Greece: Titan Cement has signed a new service agreement with Denmark-based FLSmidth. The agreement covers sustainability, digitisation and productivity support across 17 of the producer’s cement plants in Europe, Africa and the Americas.

Titan Group strategic planning director Antonis Kyrkos said, “We are constantly on the lookout for more efficient ways of running our operation. With this service partnership agreement, we tap into a wealth of knowhow and hundreds of specialists without carrying the full cost. The two-and-a-half-year agreement allows both parties to work strategically on maintenance programmes and upgrade projects based on data and the best allocation of resources.”

FLSmidth Europe, North Africa, Russian and Commonwealth of Independent States regional head of cement sales Carsten Pustelnik said, “The agreement reaffirms our belief in planned maintenance programmes, supported by digitalised processes, as the next level in service optimisations. We have invested heavily in acquiring the skills and infrastructure to provide online condition monitoring and safely handle and analyse data from our customers.”


Philippines: LafargeHolcim subsidiary Holcim Philippines has announced plans to merge with its subsidiaries Bulkcem Philippine Incorporated and MabiniGrinding Mill Corporation. The Philippine Star newspaper has reported that the board has approved the planned merger, and that a special stockholders’ meeting will take place on 15 January 2021 to finalise the transactions.

Bulkcem Philippine Incorporated leases the Iloilo cement terminal in Western Visayas, while MabiniGrinding Mill Corporation leases the Mabini grinding plant in Calabarzon.

The board also approved the dissolution of Holcim’s Business Service Center, HuBB Stores and Services and British Virgin Islands-based WellBorne Group International.


Austria: Loesche subsidiary A TEC has won a contract for the supply and installation of a Flash Dryer for alternative fuels (AFs) in the kiln line of Lafarge Zementwerke's 1.1Mt/yr Mannersdorf cement plant in Lower Austria. The supplier said that it will complete the project in early 2021.

The company said, “Reaching high thermal substitution rates (TSR) requires firing of alternative fuels at the kiln burner. To reach a stable sintering zone for the required clinker quality a high fuel quality (high LCV, small particle size) is needed, otherwise the clinker quality may suffer or the TSR can be limited. With the A TEC Flash Dryer various waste heat sources can be used (clinker cooler flue gas, bypass gas, preheater gas, etc.). The material is dosed to the hot gas flow in the flash dryer and transported with this gas flow, while the moisture is evaporated, to a cyclone and a subsequent filter where the fuel is separated from the gas flow and on-line fed to a kiln burner or a satellite burner. In addition to the drying the lifting effect of the gas can separate 3D impurities which contributes in a further increase of the fuel quality.”


Germany: Denmark-based COBOD has supplied its BOD2 3D construction printer to the site of the world’s first 3D printed commercial apartment building in Wallenhausen, Bavaria. COBOD partner PERI will use the product to print a 380m2 complex, consisting of five apartments across three stories.

General manager and founder of COBOD Henrik Lund-Nielsen said, “We are incredibly pleased, that we are beginning to see the fruits of the many 3D construction printers we have sold. The actual building projects have been delayed by the Coronavirus outbreak, but now they start to be revealed. This new German project is really a great milestone as the commercial nature of the building proves the competitiveness of the 3D construction printing technology for three floors buildings and apartment buildings. This, again, opens entirely new markets for our printers.”


Vietnam: The government of Quang Ninh Province has ordered the closure of two cement plants in Ha Long, the 2.0Mt/yr Ha Long cement plant and 2.3Mt/yr Thang Long cement plant, to close in 2030. The Viet Nam News newspaper has reported that the closures aim to protect the local environment and nature as part of the city’s move towards becoming a tourism and service hub centred on Cua Luc Bay. In 2014 the provincial government advised the cement plants to stop expanding and relocate before 2030.


Indonesia: The La Tofi School of Corporate Social Responsibility (CSR) has named Semen Indonesia as the winner in three categories at the Nusantara CSR Awards 2020. Indonesia Government News has reported that the three categories are: Health and Economic Assistance for Emergency Management of Covid-19, Leaders Inspiring CSR Practices and Community Involvement in Handling Waste.

General manager of CSR Edy Saraya said that the Covid-19 outbreak requires “integrated countermeasures, including the involvement of all components of society.” He added, “Through the programme implemented, we hope to help prevent and control the spread of Covid-19 and to be able to accelerate the implementation of (health protocol) adaptation of new habits. Especially for those affected by the pandemic, it can improve the economy of the community and the environment around the operational area."


Spain: Against a backdrop of the Covid-19 pandemic, staff at Cementos Portland Valderrivas’ Alcalá de Guadaíra cement plant spent the working week of 16 – 20 October engaged in workshops and attending talks as part of the plant’s second annual Healthy Week. Workshops including stretching and health-affective communication, while talks covered areas including balanced diets and quitting smoking. The company says that throughout the week staff competed to offer the Best Healthy Proposal, by developing “ideas to implement actions that reinforce safety within the plant facilities and improve the factory in the field of health.”


Canada: The Royal Canadian Mounted Police’s serious crime unit has launched an investigation into the death of one person at Lafarge Canada’s Richmond, British Columbia integrated cement plant on 19 November 2020. The Vancouver Sun newspaper has reported that the incident caused the plant to be evacuated.

Spokesperson Jill Truscott said, "We are in shock and are extremely concerned about the impact to this individual's family and friends. Steps have been taken to protect all employees on site and the surrounding community."

WorkSafe British Columbia is conducting a separate investigation.


UK: DB Group has supplied its Cemfree concrete product to a site in Birmingham, West Midlands for use by the Environment Agency in a flood defence project. It says that the agency will use the concrete “for kerb bedding and backing over several kilometres in conjunction with various recycled products in an effort to reduce the projects’ carbon footprint.” Cemfree is a low carbon concrete made using ground blast furnace slag (GGBS) and pulverised fly ash.


Pakistan: The Competition Commission of Pakistan (CCP) conducted a search and inspection of the Karachi offices of the All Pakistan Manufacturers Association (APCMA) on Thursday 19 November 2020. The search was carried out as part of an enquiry launched in May 2020 to investigate possible anti-competitive activities by cement producers. Two different CCP teams entered and searched the offices of the Chairman and Vice Chairman of APCMA and impounded relevant records.

The enquiry began based on the information gathered through various media reports and concerns expressed regarding a concurrent increase in cement prices across Pakistan, particularly during April 2020. The APCMA stands accused of orchestrating a price rise among producers.

The CCP previously searched and inspected the APCMA’s main offices in Lahore. That search allegedly led to the discovery of WhatsApp messages and emails that led investigators to believe there were grounds for further investigation.


Switzerland/France: Along with its partner Batica, LafargeHolcim is optimising the design of a low-carbon house, bringing together the latest innovations developed by the group's global research and development centre in Lyon, France.

Construction of the House of Tomorrow began at the end of October 2020 in Saint-Caprais-de-Bordeaux, Gironde. The materials used for its construction will have a CO2 footprint more than 40% lower than a traditional house, and an optimised energy performance. The integration of these innovations in the house has made it possible for such a property to remain financially accessible to buyers thanks to controlled costs.

To achieve low CO2 emissions performance, LafargeHolcim used its innovative cement and concrete products, all of which are available on the French market. Foundations were poured using ECOPact AA concrete, with emissions 80% lower than standard concrete. ECOPact A concrete, with CO2 emissions 50-70% lower than standard concrete, will be used for the compression slab of the VS floor (crawl space). Airium, an insulating mineral foam, will be used to insulate the walls. A very low density concrete – 40-300kg/m3 depending on the mix – Airium represents an environmentally friendly, healthy and affordable insulation solution. LafargeHolcim’s Agilia Chape Thermic fluid screed will be used to coat the under-floor heating elements.


Taiwan: Taiwan Cement’s revenue came to US$2.88bn in the first nine months of 2020, a year-on-year decrease of 6%. However, its operating income was US$800m, a 9% year-on-year increase compared to the first nine months of 2019. Its net income was US$640m, 4% higher than a year earlier.

“The fourth quarter is the traditional peak season for the cement market and we remain optimistic about our performance,” said Edward Huang, Senior Vice President and Spokesperson of Taiwan Cement.


Sri Lanka: Tokyo Cement Company (Lanka) has announced that it expects to sign an agreement to increase the production of OPC and other hydraulic cement products by 1Mt/yr. The investment will be made at its existing cement grinding plant in Trincomalee on the north east coast of Sri Lanka.

Tokyo Cement said that the project would cost approximately US$12m. Global Cement notes that this amount is fairly low for such a large increase in cement capacity and therefore may represent increases in cement handling capacity, rather than grinding capacity. Tokyo Cement said that it expects the project to be completed within 24 months.


Qatar: Qatar witnessed robust month-on-month cement production growth during September 2020 as the country scaled back its Covid-19 restrictions. Cement production increased by 9.1%. Cement was one of a number of sectors to buck a wider trend of a continued industrial slowdown, according to the Planning and Statistics Authority (PSA). However, the volume of cement produced was 3.1% lower than in September 2019.


Germany: Buzzi Unicem subsidiary Dyckerhoff has received general building inspection approval from the German Institute for Building Technology for the Portland composite cement CEM II / CM (S-LL) produced in the Amöneburg and Deuna factories. It is the first to receive approval to sell this class of cement, which contains both slag and limestone, in Germany.

The use of CEM II / C cements reduces CO2 emissions from building with cement and concrete due to their lower clinker factor. CEM II / CM (S-LL) emits 39% less CO2 per tonne of cement compared to CEM I cement. Compared to the current status quo of the binder mix, CEM II / C cements have the potential to reduce CO2 intensity by 25%.

The CEM II / CM (S-LL) ‘Amöneburg’ and ‘Deuna’ is authorised for use in strength classes 32.5 N, 32.5 R, 42.5 N, 42.5 R, 52.5 N and 52.5 R. It may be used for the production of concrete, reinforced concrete and prestressed concrete in the following exposure classes: X0, XC1 to XC4, XD1 to XD3, XS1 to XS3, XF1, XA1 to XA3, XM1 to XM3.


US: The US Environmental Protection Agency (EPA) has awarded its 2020 Energy Star® certification to Buzzi Unicem USA plants in Chattanooga, Tennessee and in Festus, Missouri. This certification is awarded to a facility for superior energy performance in comparison to similar plants. This marks the 12th consecutive year that the Chattanooga and Festus plants have received certification.

In order to qualify for Energy Star® recognition, cement plants must score at least 75 on the Energy Performance Indicator (EPI) system used by the EPA to measure energy efficiency. In addition, the plant must have a satisfactory environmental compliance record for the past three years. Receipt of the Energy Star certification means these two plants perform in the top 25% of similar facilities in the US.


France: HeidelbergCement’s subsidiary Ciments Calcia plans to stop clinker production at two plants as part of a Euro400m investment and reorganisation programme for several of its sites in France. Around Euro300m of this will be spent at the integrated Airvault cement plant. The company also intends to: convert its integrated Gargenville cement plant into a grinding plant and shut down its kiln systems and quarry operations; convert its integrated Cruas white cement plant into an automated cement terminal for the distribution of white cement; and adapt the organisation at its French headquarters at Guerville. The plan will cut 162 jobs and create 20 new ones.

“As part of our global business excellence initiative, we intend to further optimise effectiveness, processes and structures of our French sites,” said Dominik von Achten, chairman of the managing board of HeidelbergCement. “We want to considerably speed up the modernisation of our plants in order to enhance our performance in France, while ensuring alignment with the goals of the Paris agreement. This is why we focus our initiatives on the main CO2-emitting plants in France.”


Germany: The Catch4Climate project has moved into the planning stage of its oxyfuel pilot plant at the Mergelstetten cement plant. The group, comprising Buzzi Unicem’s subsidiary Dyckerhoff, HeidelbergCement, Schwenk Zement and Vicat, signed a letter of intent with the state’s prime minister and transport minister in Stuttgart in mid-November 2020.

The consortium intends to build and operate its own demonstration plant on a semi-industrial scale, to use the oxyfuel process to capture CO2. In the future, the captured CO2 will be used to produce so-called ‘reFuels’, climate-neutral synthetic fuels such as kerosene for air traffic, with the help of renewable electrical energy.

The cement producers formed CI4C – Cement Innovation for Climate in late 2019. The aim of the Catch4Climate project is to create the basis for a large-scale application of CO2 capture technologies in cement plants enabling the later use of CO2 as a raw material in other processes such as a carbon capture and utilisation/storage.


Mozambique: China-based Sino Energy has signed a non-legally-binding memorandum of understanding with Hong Kong Construction Group in which it agreed to buy a 65% stake in a 0.4Mt/yr cement plant in Northern Pemba City, Cabo Delgado Province. Sino Energy will conduct due diligence and further negotiations on the proposed acquisition over the next four months. No value for the proposed purchase has been disclosed.

Sino Energy’s main business is manufacturing and selling of casual footwear, apparel and related accessories in mainland China. The company is also developing petrol station operations.


Cameroon: Dangote Cement’s subsidiary in Cameroon estimates that it had a market share of 39% in the first nine months of 2020. It reckons the total cement market in the country was over 2.6Mt in the same period and that it sold around 1Mt, according to the Ecofin Agency. It said that the market was mainly driven by individual construction projects and public housing estates. In February 2020 the subsidiary of the Nigeria-based company said it planned to do better business in 2020 by focusing on the construction sites of stadiums, roads, hotels and other construction projects in preparation for the 2021 Africa Cup of Nations, postponed to 2022.

The cement producer operates a 1.5Mt/yr cement grinding plant in Douala, with a dedicated jetty for offloading clinker that opened in 2015.


India: ACC plans to sell its National Limestone Company subsidiary to Ghadiya Group for around US$2.5m. National Limestone Company holds mining leases for limestone in the state of Rajasthan. Ghadiya Group operates in the construction and mining sector.