Global Cement Newsletter

Issue: GCW498 / 24 March 2021

Headlines


Two fairly serious investments in Peru made the industry headlines this week. The first was Yura’s plans to upgrade its Arequipa cement plant at a cost of US$200m. The project will involve increasing the plant’s clinker production capacity as well as installing a new mill and a 4.3km conveyor. The second was the latest instalment in Cementos Interoceanicos’ long held ambition to build a plant. It has struck a deal with France-based Satarem to build a 1Mt/yr plant near Puno. The deal also includes Satarem buying a 30% stake in Cementos Interoceanicos and plans to construct two lime units as well.

Graph 1: Local cement sales in Peru, January 2020 to February 2021 compared to January 2019 to February 2020. Source: ASOCEM.

Graph 1: Local cement sales in Peru, January 2020 to February 2021 compared to January 2019 to February 2020. Source: ASOCEM.

These projects follow a squeeze for the local industry due to coronavirus-related containment measures. Data from the Association of Cement Producers (ASOCEM) shows that cement sales collapsed during the lockdown to just 11,000t in April 2020 before recovering in the autumn. Total annual local sales fell by 17% year-on-year to 9.7Mt from 11.6Mt. Sales have also remained high in January and February 2021.

The experience from the larger cement producers mirror the data from ASOCEM. Cementos Pacasmayo’s sales revenue fell by 7% year-on-year to US$354m in 2020 and its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 21% to US$86.3m. Unión Andina de Cementos’ (UNACEM) income fell by 14% year-on-year to US$467m in 2020. Despite this, UNACEM managed to sign a deal to buy Cementos La Unión Chile for US$23m in December 2020. The purchase consists of a 0.3Mt/yr cement grinding plant and a 0.34Mm3/yr ready-mix concrete business with multiple concrete plants and trucks. UNACEM described Chile as its main clinker export destination and it holds concrete and precast subsidiaries in the country.

Yura’s general manager Ramón Pizá reportedly called his company’s plans a “vote of faith in Peru.” This is not an understatement considering the market shocks caused by coronavirus in 2020. The country implemented public health measures relatively early during the pandemic but still ended up with one of the worst death rates per capita in Latin America so far. As the British Medical Journal (BMJ) pointed out earlier this month, the timing was right but tragically the application of public health measures has been found wanting. Yet, the fundamentals for the Peruvian cement market are strong. Annual sales mounted from 2017 to 2019, and were showing signs of continuing this in early 2020 before the lockdown shut the market down. This growth pattern has continued so far in 2021.


Ireland: CRH has appointed Jim Mintern as group finance director with effect from 1 June 2021. He will also join the company’s board of directors at the same time. He succeeds Senan Murphy who is retiring.

Mintern, aged 54 years, is a chartered accountant and holds a Bachelor of Commerce degree from University College Dublin. He has over 30 years of experience in the building materials industry, nearly 20 years of which have been with CRH.

He joined CRH in Ireland as finance director for Roadstone in 2002 and since then has held several senior positions across the group, including country manager for Ireland and managing director of each of the Western and Eastern regions of our Europe Materials business. Mintern is an executive vice president of CRH and a member of the group’s Global Leadership Team. In his most recent role as chief of staff to the chief executive officer he worked with divisional and operational leadership, having oversight of group performance programmes and leading the planning and execution of some of the group’s recent large acquisitions including Ash Grove in North America in 2018.


Nigeria: Dangote Cement has appointed Guillaume Moyen as its group chief financial officer (CFO).

Moyen joined Dangote Cement in February 2019 as group CFO (operations) and was appointed acting group chief financial officer in March 2019. He is in charge of finance and information technology (IT) and has more than 20 years’ experience in multi-national industrial and services companies notably operating in emerging and frontier markets.

During his career he has worked in finance, risk management, internal control, audit, information technology and procurement working in senior positions in manufacturing, engineering, oil and gas, nuclear energy, mining and consulting sectors notably with the Areva Group, the Ola Energy Group and KPMG. Guillaume is a chartered accountant and holds a Master of Business Administration (MBA) degree from Columbia Business School.


UK: CRH subsidiary Tarmac has appointed Chris Bradbury as the plant manager at its integrated Dunbar cement plant in East Lothian, Scotland. He previously worked at Tarmac’s Tunstead plant in Derbyshire. Bradbury began working in the cement industry as an apprentice in 1994 and has held many roles at plants both in the UK and in Nigeria and the Philippines.


China: Germany-based Schmersal Group has appointed Michele Seassaro as the managing director of Schmersal Industrial Switchgear based in Shanghai. He has been managing the group’s China-based subsidiary since the start of March 2021.

Seassaro, aged 52 years, was born in Milan, Italy and has more than 20 years of international management experience, including in Europe, North Africa and Asia Pacific. Over the past ten years, he has held senior positions in various companies in the consumer goods and food industry in China. He holds a law background as well as an Executive Master of Business Administration (EMBA) degree from China Europe International Business School (CEIBS) and studied the Chinese language at Shanghai Jiao Tong University.

Schmersal operates a production plant in the Qingpu district of Shanghai. It produces position and safety switches as well as lift switchgear for the Asian market. The company also operates a number of sales offices across China.


Uzbekistan: Germany-based IKN has secured a contract for process integration and equipment design for a new kiln line at Qizilqumsement’s Qizilqumsement cement plant. The supplier’s remit includes the pyroprocessing line, preheater, kiln and cooler including ID fan, kiln drive and burners. It plans to use a six-stage preheater, the region’s first. Commissioning is scheduled for 2022.


Russia: SibCem subsidiary Iskitimcement has added an eighth cement to its product line. The company has launched production of a CEM-I special Portland cement for use in roads and airstrips. It says that the product produces concrete with increased resistance to aggressive media, frost and water resistance and strength, lower heat generation during hardening and longer service life than concrete produced with Ordinary Portland Cement (OPC).

Managing Director Vladimir Skakun said, “Considering that the strategy for the development of the building materials industry until 2030 provides for an increase in the share of cement-concrete roads in the total volume of new roads in the country to 50%, we are preparing to increase the demand for road cements.” He added, “The development of a new type of product is another step in matching consumers’ changing needs.”


US: The Portland Cement Association (PCA) has welcomed expanded, comprehensive Covid-19 safety guidance from the Mine Safety and Health Administration (MSHA). The association said that the guidance is a valuable and flexible resource for cement facilities facing the shifting effects of the Covid-19 threat. Plants have successfully relied on the advice of the MSHA, Centers for Disease Control and Occupational Safety and Health Administration.

PCA government affairs senior vice president Sean O’Neill said, “Protecting our workforce during the Covid-19 emergency has been job number one for US cement manufacturers. The men and women of the cement industry, from our quarries to our cement plants and shipping operations, are designated as Essential Critical Infrastructure Workers. PCA and its member companies are committed to protecting miners and their families while continuing to provide critical building materials needed to maintain and improve our nation’s vital infrastructure.”


US: ScrapeTec has announced the launch of PrimeTracker, a belt tracker designed to tackle misalignment. The supplier says that the tracker differs from other products of its kind in using free rotation, thereby avoiding abrasion and damage from sliding over the belt surface. The tracker is able to swing and tilt while remaining in full contact with the belt.

Sales and distribution head Thorsten Koth said, “For optimum performance of a conveyor system, it is critical that the belt always runs straight on the conveyor, without sideways movement. Our new PrimeTracker belt tracker has been designed to automatically guide a conveyor belt back into the correct straight-line position, to prevent costly downtime and component replacement.” He added, “An advantage of the ScrapeTec PrimeTracker is that it is operates in the idling position at all times, unless there is sideways movement of the belt. This system corrects misalignment immediately, by guiding the belt back into the correct position, with no damage or abrasion to the belt or tracker.”


Germany: Flender and Schaeffler have launched the Schaeffler Modular Adaptable Returnable Transport (SMART) Box, a packaging system for bearings. Flender says that the reusable box reduces waste by replacing disposable packaging.

Chief executive officer Andreas Evertz said, “Over the past few years, Flender has systematically minimised its own CO2 emissions and was able to reduce them by 83% between 2015 and 2020. We want to be completely CO2-neutral by 2030. In addition, close cooperation with customers and suppliers is another important step towards achieving complete climate neutrality. It is therefore important for us to also focus on potential savings in the supply chain. We are pleased to have a partner in Schaeffler who is also thinking in this direction. With the introduction of SMART Box for one type of gearbox, we are already reducing the use of wood as one-way packaging material by more than 100t/yr.”


Taiwan: Taiwan Cement’s revenue fell by 7% year-on-year to US$4.02bn in 2020 from US$4.32bn in 2019. Net income grew by 4% to US$881m.

Senior vice president Edward Huang said, "In 2020, Taiwan Cement made achievements in many aspects. In additional to our sound financial performance, we also committed to the Global Cement and Concrete Association (GCCA)’s Climate Ambition aspiring to deliver carbon neutral concrete to society by 2050. Even though challenges such as Covid-19, global economic volatility and climate change remain in 2021, Taiwan Cement is well-prepared as we continue to see stable profits in the cement industry, expand our waste treatment and energy businesses and move towards our carbon emissions reduction targets."


China: China Tianrui Group Cement recorded consolidated sales of US$1.87bn in 2020, up by 1% year-on-year. ET Net News has reported that consolidated profit attributable to the owners rose by 2% year-on-year to US$286m.


Greece: Titan Cement’s consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 7% year-on-year to Euro286m from Euro267m in 2019. Sales remained level year-on-year at Euro1.61bn and net profit after taxes and minorities (NPAT) fell by 97% to Euro1.50m from Euro50.9m. The group attributed the profit slump to one-off charges, namely the full write-off of the Euro46.6m goodwill of subsidiary Titan Cement Egypt and the derecognition of Euro17.3m of accumulated deferred Egyptian tax assets. If not for these, the group says its consolidated NPAT would have increased by 28% to Euro65.4m.

Cement sales were 17.1Mt, up by 1% from 17.0Mt. The group called the impacts of the coronavirus outbreak ‘less severe than expected.’ Ready-mixed concrete sales rose by 3% to 5.4Mm3 from 5.2Mm3.

Construction activity continued under coronavirus lockdown in most of the group’s countries of operation. As a result, sales remained resilient across all markets. US sales fell by 2% to Euro938m from Euro952m due to negative currency exchange effects. Greece and Western Europe sales rose by 1% to Euro247m from Euro245m. Southeastern Europe sales rose by 3% to Euro938m from Euro952m and Eastern Mediterranean sales rose by 1% to Euro152m from Euro150m.

Group executive committee chair Dimitri Papalexopoulos said “In 2020, we delivered strong financial performance while taking care of our employees and those around us, ensuring high-quality, uninterrupted customer service and accelerating progress towards our digital and sustainability aspirations. In the face of uncertainty caused by Covid-19, we remained confident in our business model. We adapted to shifting market conditions and continued to pursue operational excellence while laying the groundwork to capture future growth.” The group anticipates a positive market trend in all regions in 2021.


India: Germany-based Gebr. Pfeiffer has won a contract to supply a vertical roller mill for grinding coal to Deccan Cement’s Bhavanipuram cement plant in Andhra Pradesh. Gebr. Pfeiffer India will be responsible for processing the order and supervising production and installation at the plant’s 3500t/day kiln line. The mill will be the company’s second from the supplier. It chose an MPS 250 BK mill, which can also grind petcoke or a mixture of coal and petcoke. Commissioning is scheduled for before mid-June 2022.


India: The Climate Action Programme 2.0° has awarded ACC its Orientated award for efforts towards CO2 emissions reduction. United News of India has reported that the award assesses companies on the basis of the Confederation of Indian Industry’s climate-maturity model and the Business Excellence Framework. ACC claimed the national award in the energy, mining and heavy industries category.

Managing director and chief executive officer Sridhar Balakrishnan said, "Sustainable construction and environmental conservation are our core corporate objectives. Through our consistent focus on sustainable business practices, we have emerged as one of the companies with the lowest carbon footprints in the cement industry. This award will motivate us further to continue working towards building a greener planet." He added, “As part of global cement major LafargeHolcim, the company is committed to the Net Zero vision of the group and is an industry leader in combating climate change through consistent commitment to sustainable practices. ACC's sustainability mission is defined by the Triple Bottom Line, which signifies accomplishing three interdependent and mutually reinforcing goals of economic development, social development, and environmental protection.” ACC also became a partner of the UK-based Global Cement and Concrete Association (GCCA).


China: The Chinese construction industry has reversed a downward trend in 2020 to grow value-added output by 46% year-on-year in the first two months of 2021. The Xinhua News Agency has reported that the Ministry of Industry and Information Technology recorded a 61%year-on-year rise in cement production to 240Mt in the period.


Cambodia: China-based Conch International Holding subsidiary Conch KT Cement has announced plans for a new 2.0Mt/yr integrated cement plant in Kampong Speu province. The Phnom Penh Post newspaper has reported the cost of the proposed plant as US$263m. It will generate up to 500 jobs, according to the producer. The company also operates the 2.0Mt/yr Ratanak Mondol cement plant in the province that started operation in mid-2018. It says that the new plant will lower domestic cement prices, reducing the demand for imports.

2700 people are employed across Cambodia’s five cement plants. National installed cement capacity is currently 8.0Mt/yr. The Cement Manufacturers Association of Cambodia reports that production grew by 7% year-on-year to 7.9Mt in 2020.


Peru: Cementos Interoceanicos has contracted Switzerland-based Satarem to establish a 1.0Mt/yr cement plant in Puno. The Gestión newspaper has reported that Satarem intends to buy a 30% stake in the producer. The scheduled completion date for the work, which also includes setting up two new lime plants, is mid-late 2022. The total estimated cost of the project is US$158m.

The producer is reportedly seeking to expand its area of operations in other areas within Peru.


Palestine: Jericho Cement Company plans to establish the first cement plant in Palestine by 2022. The Arab News newspaper has reported that the planned 1.1Mt/yr plant will cost US$85m. Funding will come from a group of companies and the Palestinian Investment Fund.

The State of Palestine presently imports its cement from Israel and Jordan.


Togo: CimCo says that its 2.5Mt/yr Lomé cement plant in Maritime Region will open by September 2021 following a total investment of US$118m. Agence Ecofin reports that work on the project is 65% complete. The producer said that the plant will create 500 direct jobs and a further 1000 indirect jobs.


Switzerland: LafargeHolcim has expanded former chief sustainability officer Magali Anderson’s role to chief sustainability and innovation officer. The new role additionally includes leadership of the group’s research and development strategy and organisation. Anderson will also oversee external innovation collaborations with the academic world. The group says that the combination of sustainability and innovation aims to increase impact across both areas.

Chief executive officer Jan Jenisch said, “I am delighted to appoint Magali as our chief sustainability and innovation officer. Under her leadership, we opened a new chapter in our climate action with our Net Zero pledge and growing range of green building solutions, from ECOPact to Ecolabel. Sustainability is a game-changer in our industry and innovation is the most effective catalyst to scale up our impact. By aligning our sustainability and research and development organisations under Magali’s direction, I look forward to stepping up our pace and pipeline of innovation to build a net zero future.”

Anderson, a French national and mechanical engineer, holds international industry experience, acquired in a variety of general management, operational and functional roles in countries such as Brazil, Nigeria, Indonesia, Angola, Romania and China. She joined LafargeHolcim in 2016 as Head of Health & Safety before taking on the role of Chief Sustainability Officer. She is on the advisory boards of the World Green Building Council (WGBC), MIT Climate & Sustainability Consortium, LafargeHolcim Foundation for Sustainable Construction and Business for Nature, as well as co-chair of the World Business Council for Sustainable Development (WBCSD) Built Environment and the Global Concrete and Cement Association (GCCA) 2050 roadmap projects. She is also a mentor at the Creative Destruction Lab (CDL) in Paris, a nonprofit organisation that delivers an objectives-based program for massively scalable, seed-stage, science- and technology-based companies.

LafargeHolcim publishes its first Climate Transition report in 2022.


Indonesia: Semen Baturaja has signed a memorandum of understanding with Huadian Buket Asam Power. Under the agreement, the producer will supply the power company with limestone for its flue gas desulfurisation (FGD) process in exchange for fly ash, bottom ash and gypsum. The agreement will last two years until March 2023.

The cement producer’s managing director Sumsal Saifudin said, “This collaboration is a form of synergy between the two companies to improve competitiveness, which is much-needed in facing an increasingly competitive industrial environment, by taking advantage of opportunities for the creation of new revenue streams and cost transformation.”


Germany: Beumer has partnered with technology start-up Elara Digital to launch a cloud-based database product to provide overviews, orchestrate communication and access information for repairs and the smooth operation of machinery. Relevant information such as work orders, checklists, machine documentation or guides for trouble shooting can be created and accessed at any time creating a knowledge database for maintenance teams. The supplier says that the application is compatible with a simple mobile application, giving cement plant workers, ‘the factory know-how in your pocket.’

Managing Director Robert Bach said, "My job is to find young entrepreneurs with business ideas that are relevant to us."


Germany: Schenck Process reported operating sales of Euro592m in 2020, down by 6% year-on-year from Euro632m in 2019. Adjusted group earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 11% to Euro91.4m from Euro102m. New orders for the year totalled Euro619m, down by 6% from Euro659m, but rose by under 1% to Euro292m from Euro291m in the Americas region. Demand for aftermarket service also fell, partly due to reduced production output and capacity utilisation in the global cement industry. The supplier said that construction and steel were also ‘hard hit.’ It attributed the decline to the effects of the Covid-19 pandemic on markets and customer demand. Corrective actions ‘partly mitigated’ the effects of this on income.

The group said that staff reduction have led to lower personnel expenses in the first quarter of the 2021 financial year.


Germany: Flender says it has resumed trading as an ‘independent’ company following the completion of its sale by Siemens to Carlyle Group for Euro2.04bn. The mechanical and electrical drive system supplier said that its existing contract remained unchanged, adding, “With our skilled employees, excellent range of products, and a growth-oriented new owner, we are in an ideal position to act even more effectively.”

The ownership change coincides with the launch of Flender’s new Jaegger Direct supplier portal. The portal succeeds SCM Star, the tool used by Simens, in handling requests for quotation, tender management and company profile data. The company asked customers to register with Jaggaer Direct to confirm the transfer of their data from SCM Star. It said that it will dispatch email invitations and login links in the coming days.


Peru: Yura plans to upgrade its Arequipa cement plant at a cost of US$200m. The planned upgrade will increase the plant’s clinker production capacity to 8000t/day from 5000t/day. The La República newspaper has reported that the sustainability-enhancing expansion involves the installation of a new vertical roller mill, packing, storage and dispatch equipment and a 4.3km raw materials conveyor. General manager Ramón Pizá called the modernisation a “vote of faith in Peru.”


Germany: Mexico-based Cemex subsidiary Cemex Zement has set up an innovation acceleration partnership called Carbon Neutral Alliance to support its work to achieve net zero CO2 emissions at its Rüdersdorf cement plant by 2030. The association will work to develop industrial-scale demonstration projects in line with the company’s Future in Action programme. Its scope will include carbon capture and storage (CCS), the transformation of captured CO2 into building materials, synthetic fuels and green hydrocarbons, hydrogen production and waste heat recovery (WHR). Cemex plans to share the knowledge gained by the alliance across its global cement network.

Managing director and Rüdersdorf plant manager Stefan Schmorleiz said, "It is expected that CO2 will be further processed to convert to new forms of energy and materials for use locally by industrial, residential, and transport sectors. Together with our partners, we will take feasibility studies through to economic solutions to decarbonising cement production.”


Spain: Mexico-based Cemex subsidiary Cemex España has announced plans to resume activity at its Lloseta cement plant in Majorca at a limited production level. The UltimaHora newspaper has reported that the company will employ the staff who stayed on for maintenance purposes from the plant’s January 2019 closure. After suspending activity at the plant the company had until mid-April 2021 to inform the local government of its plans for the site.

Cemex is in the process of establishing a green hydrogen plant at Lloseta with a Euro10m EU grant. It said, "We do not rule out that in the future the cement plant may adapt and become an industrial benchmark in the use of green hydrogen for the production of cement with a low carbon footprint."


Greece: Titan Cement group has accelerated its efforts towards sustainability with new environmental, social and governance (ESG) targets. The targets include an updated CO2 emissions reduction target of 35% by 2030 compared to 1990 levels, zero workplace fatalities and a cement industry top-three lost time injury frequency rate, increased female leadership participation and 70% supplier sustainability in line with the producer’s own ESG standards by 2025. It also set a water consumption target of 280L/t of cementitious material produced and 50% certified Zero Waste to landfill production by 2025.

Chief sustainability officer Leonidas Canellopoulos said, “We are building on our strong track record on sustainability and aspire to increase our positive impact on people, society, and the environment. We are committing to ambitious targets that aim to generate more value for all our stakeholders and set the foundations for sustainable growth in a carbon-neutral and digitalised world.”


Germany: ThyssenKrupp says that the four cement producer members of Cement Innovation for Climate (CI4C) are preparing to launch an industrial-scale trial of its Polysius Pure Oxyfuel carbon capture and storage (CCS) process. The renewably-powered process produces ‘refuel’ synthetic fuels such as kerosene for aviation.

Senior Proposal Manager Markus Sauer said,“CI4C and ThyssenKrupp are currently investigating the use of our polysius pure oxyfuel technology in a demonstration plant. Working with our long-standing customers, we would be delighted if we could demonstrate the efficiency of our technology for the first time on an industrial scale. By using this technology, the cement industry could significantly reduce its process-related CO2 emissions and thus make an important contribution to climate protection.”