Global Cement Newsletter

Issue: GCW501 / 14 April 2021

Headlines


Burkina Faso: Cim Metal Group has ordered an upgrade to its Cimasso cement grinding plant in Bobo Dioulasso from Germany-based Intercem Engineering. The cement producer has decided to double the plant’s production capacity to at least 4Mt/yr by ordering an extension production line and upgrading the original line. The plant, which was also supplied by Intercem, was originally commissioned in 2018.

The new order includes: three truck unloading stations; raw material handling systems; a raw material hopper station; a cement grinding unit with a vertical roller mill; four 5400t cement silos; five 12 spout rotary packers; ten truck loading stations; ten truck weighing bridges; and one upgrade to the existing cement grinding plant. Intercem is in charge of the engineering, all mechanical and electrical plant components, project management and is also responsible for the supervision activities for the civil, mechanical and electrical assembly works and the commissioning of the plant. No date for commissioning has been announced.


A great question was asked at yesterday’s Virtual Global CemTrans Seminar: what impact did the recent blockage of the Suez Canal cause to the cement industry? Luckily, Rahul Sharan from Drewry was on hand discussing freight costs following the start of the coronavirus pandemic.

As most readers will know, the Suez Canal was blocked in late March 2021 when the 200,000dwt Ever Given ran aground, at around six nautical miles from the southern entry of the canal. The ultra large container vessel was subsequently refloated and towed away just under a week later. While this was happening the fate of the ship became a global news story with business analysts totting up the cost of the obstruction. 40 bulk carriers were reported as waiting to transit the waterway the day after the blockage started and some of these were carrying cement. Reporting by the BBC noted that 369 ships were stuck waiting on either side of the blockage on the day before the ship was finally freed. The Suez Canal Authority (SCA) estimated their loss of revenue from the incident at US$14 – 15m/day. Analysts like Allianz placed the cost to the global economy at US$6 - 10bn/day.

In Sharan’s view the blockage of the Suez Canal happened at a potentially risky moment for cement and clinker shipping because there was already congestion in shipping lanes built up on the east coast of South America and around Australia. However, a delay of a week around the canal, followed by the resulting congestion dispersing quickly over the following days, does not seem to have had any major impact so far.

Sharan’s presentation at Global CemTrans also included a summary of cement shipping. The key takeaways were that clinker shipping overtook cement shipping in 2019 with a connected increase in fleets investing in handymax-sized vessels. He also pointed out the key cement and clinker importing countries in 2019, before the coronavirus pandemic started causing market disruption. For cement: the US, the Philippines and Singapore. For clinker: China, Bangladesh and the Philippines. Turkey and Vietnam were the biggest exporters for both in that year.

The Ever Given incident has highlighted the continued importance of the Suez Canal for global trade for commodities. Goods still need to be physically moved around, however much stuff we digitise. It also contrasts with the issues that the Egyptian cement sector has faced in recent years such as production overcapacity. While domestic cement plants have struggled to maintain their profits, plenty of cement carriers have been transiting through the Isthmus of Suez. Local producers may well have gazed at them and wondered where they were going.

One of them, Al-Arish Cement Company, took action in this direction this week with its first export shipment of clinker. The Clipper Isadora ship disembarked East Port Said port for Ivory Coast. Future shipments are planned for West Africa, Canada, the US and Europe. Ship tracking reveals that the Clipper Isadora has not taken the Suez Canal on this occasion.

The proceedings pack for the Virtual CemTrans Seminar 2 2021 is available to buy now


Switzerland: Oscar Fanjul has decided to step down as the vice-chairman of LafargeHolcim. The group said that in line with the its commitment to continuity of leadership, the board of directors has proposed the appointment of chief executive officer (CEO) Jan Jenisch as a member of the board of directors in addition to his CEO role.

Fanjul was elected to the board of directors of LafargeHolcim in 2015. He began his career working for the industrial holding INI in Spain and later became the chairman founder and CEO of Repsol. He has been chairman of Hidroeléctrica del Cantábrico and of Deoleo. He has also been a board member of the London Stock Exchange, Unilever, Areva, and BBVA. He holds a PhD in Economics.


Brazil: Votorantim Cimentos’ consolidated net sales were US$6.41bn in 2020, up by 19% year-on-year from US$5.41bn in 2019. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) also rose, by 35% to US$1.21bn from US$899m. The group attributed the growth to increased cement volumes sold in Brazil, Canada and the US. Total global cement sales increased by 8% to 32.4Mt. Net revenue grew in all regions, but the sharpest growth was reported in North America at 43% to US$945m.

Chief financial officer Osvaldo Ayres Filho said, “The past year has been extremely challenging due to the pandemic and its impacts across the planet. We have implemented a contingency plan to protect people's lives and preserve operations. This allowed us to respond with agility both in Brazil and in the other markets in which we have operations, ending the year with increased sales, cash generation growth and the lowest leverage in the past ten years.”

During the year, the group unified its joint-venture in Uruguay, with Cementos Molins, at a single site and merged its Canadian and US businesses under a new 83% owned subsidiary. It suspended its Pecém grinding plant expansion in Brazil due to the coronavirus pandemic and resumed it in September 2020. Completion of the project is scheduled for the first half of 2021. The producer also released its Sustainability Commitments for 2030 in November 2020.


Nigeria: Dangote Cement says that the price of cement from its plants in Nigeria is the same as from plants in other countries in Africa or cheaper. The cement producer made the announcement in response to local media reports that its prices were allegedly lower in Ghana or Zambia, according to the Vanguard newspaper. It added that it had control over its ex-factory prices but that it could not set the end market price.

Dangote Group Executive Director, Strategy, Portfolio Development and Capital Projects Devakumar Edwin explained that Dangote Cement has a 60% share of the local cement market at present. Demand for cement has risen following the coronavirus pandemic and the company has had to suspend exports from its recently commissioned export terminals in order to meet local demand. He added that it has also reactivated its 4.5Mt/yr Gboko plant in Benue State, which was closed in 2018, to cope with the situation.


Brazil: Cement sales grew by 19% yearn-year to 15.3Mt in the first quarter of 2021 from 12.8Mt in the same period in 2020. The National Cement Industry Association (SNIC) attributed the growth to poor weather and the beginning of the coronavirus pandemic in early 2020. Residential and home-improvement construction work in 2021 were also seen as contributing factors. However, association president Paulo Camillo Penna called for caution due to a decline in sales per working day so far in 2021 despite the apparent growth in absolute figures. The association also called for the local coronavirus vaccination campaign to be accelerated.


Canada: St Marys Cement, part of Brazil-based Votoronatim Cimentos, has installed a US$19.9m wet scrubber at its Bowmanville cement plant in Ontario. The installation will reduce the plant’s sulphur dioxide (SO2) emissions by 90%. The producer says it is the first wet scrubber installed at a cement plant in Canada.

Operations Manager Jim Storey said “This investment in technology to improve the plant’s environmental performance has proven to be effective in removing SO2 produced in the cement manufacturing process. We are also pleased that the scrubber was assembled on-site and installed by local Ontario contractors and crews during our annual scheduled plant shutdown.”


India: Ambuja Cement has successfully sent two cement shipments to their destinations using biofuel-powered ships. Two of the company’s cement carriers delivered cement in India while running using biofuel derived from soya extract.

The biodiesel blend (B20) was in compliance with International Maritime Organisation sulphur content requirements and met International Convention for the Safety of Life at Sea (SOLAS) levels in terms of flash point requirements. No increase of NOx was observed with biodiesel blend as compared to low sulphur high-speed diesel (LSHSD), rather the emission level was found to be less. The reduction in CO2 was found to be around 7% and the total life cycle reduction of CO2 by life cycle analysis was measured to be around 21%, as the biodiesel from soya extract had a reduction of life cycle greenhouse gas emissions by 70%.

Following the successful initiative, the Directorate General of Shipping has approved biofuels trials for the rest of Ambuja Cement’s fleet, which are mainly deployed on the Indian coastal route.


US: The Portland Cement Association (PCA) has received the 2021 Energy Star Partner of the Year award from the US Environmental Protection Agency and the US Department of Energy. It is the second year in a row the association has been recognised in this way. Each year, the Energy Star program recognises a group of businesses and organisations that have made outstanding contributions to protecting the environment through superior energy achievements.

“The PCA and its members are proud to be recognised for continuously improving energy efficiency to reduce emissions,” said PCA President and chief executive officer Michael Ireland. “The cement and concrete industry is leading the way towards a more sustainable future as PCA and its members are developing an industry roadmap across the entire value chain to reach carbon neutrality by 2050."

In addition to PCA’s Partner of the Year recognition, two PCA member companies, CalPortland and Cemex USA, earned corporate Partner of the Year awards and 13 US cement plants earned Energy Star certification for superior energy performance in 2020.


Germany: Beumer has enlarged its stake in logistics software provider Codept. The company’s product offers warehouse management and fulfilment throughout Europe. The start-up company was founded with the support from the Berlin-based, autonomous company builder Beam, a spin-off of Beumer Group

Managing Director Felix Ostwald said "We are happy to seal a long-term partnership with Beumer. During the past two years we have cooperated successfully and are therefore glad to intensify this cooperation."


Kazakhstan: Sharcem, part of Singapore-based International Cement Group (ICG), plans to acquire US$16.3m-worth of cement assets in Kazakhstan. The Business Times newspaper has reported that the sellers are Kazakhcement and the Development Bank of Kazakhstan. Kazakhcement currently operates the 1.0Mt/yr Shar plant in Charsk, East Kazakhstan. ICG said that the opportunity presented an ‘attractive’ foothold in the growing Central Asian market. The acquisition is scheduled for completion by 31 May 2021 once the conditions of the sales and purchase agreement are finalised.


Philippines: Eagle Cement recorded full-year consolidated net sales of US$286m in 2020, down by 30% year-on-year from US$408m in 2019. The company said that it recorded a stronger performance in the second half of 2020, according to the Manila Times newspaper. Second-half sales fell by 14% year-on-year to US$165m. Its full-year net income fell by 44% to US$70.1m from US$124m.

Chief executive officer Paul Ang said "The halting of our operations due to pandemic-related restrictions took a hit on our results in the first half of 2020 but the remaining half proved that we are well-positioned to bounce back. We saw improvement in our volume and we are able to bring down our production cost in 2020.” He added "We will continue to work on aggressive marketing and better pricing strategies for this year and this will be complemented by focusing on cost control initiatives in our operations, which will enable us to deliver better returns in 2021."


Poland: Italy-based Bedeschi has won a contract with China-based Nanjing Kisen International Engineering, part of China National Building Materials, to carry out equipment supply for the modernisation of crushing and storage facilities at a Lafarge Polska cement plant in Poland. The supplier says that it will provide a crushing system featuring two RI 450/15000 double rollers and two Pal SP 130/18 portal reclaimers for raw materials storage.


China: Asia Cement (China) has predicted a year-on-year increase of 110 - 130% in its consolidated net profit in in the first quarter of 2020. The company has attributed the anticipated growth to increased sales volumes during the quarter.


France: Mexico-based Cemex has signed an agreement to buy assets in Paris metropolitan area. The new acquisitions consist of two aggregates quarries and a rail platform. The assets previously belonged to Ireland-based CRH subsidiary Equiom Granulats. The purchase is expected to be completed during the second quarter of 2021.

Europe, Middle East, Africa and Asiaregional president Sergio Menendez said, "This acquisition will allow us to better serve our customers by integrating and complementing our portfolio to provide a comprehensive and sustainable offering, directly aimed at the rapidly growing needs of the North Paris Metropolitan Area." He added "This is a clear example of the efforts that we are doing to foster earning before interest, taxation, depreciation and amortisation growth by investing in key high-growth urban centres worldwide."


China: Huaxin Cement has forecast consolidated net profit growth of 104% - 111% year-on-year to US$55.7m – US$59.6m in the first quarter of 2021 from US$53.7m in the same period in 2020. The group said that cement volumes rose by 60% and concrete and aggregate volumes grew by over 200%. The cement producer has attributed the growth to the impact of coronavirus upon its business at the start of 2020.


India: Ambuja Cement, part of Switzerland-based LafargeHolcim, plans to commission its upcoming Mundwa cement plant in Rajasthan by September 2021. The plant will have a total capacity of 5Mt/yr, consisting of 3Mt/yr of integrated and 2.0Mt/yr of grinding capacity. The Hindu newspaper has reported that the company aims to achieve 50Mt/yr total installed capacity in the medium term. It said that it is evaluating possible plant upgrades at Bhatapara in Chhattisgarh and Maratha in Maharashtra.


India: Birla Corporation has commissioned a 28MW solar power plant at a cement plant in Uttar Pradesh. EQ International has reported that Waaree Energies supplied 330kW and 335kW solar modules for the project. The subsidiary of Waaree Group is one of the largest solar photovoltaic module manufacturers in the country.


Central America: Imports from Vietnam accounted for 30% of total cement imports to Central America in the first nine months of 2020. The country accounted for no significant share of cement imports to the region as recently as 2016. Central America Data has reported that Turkey supplied 18% of regional cement imports in the first nine months of 2020. Mexico supplied 8% and Barbados 4%.


US: The Portland Cement Association (PCA) has predicted a rise in US cement demand in 2021 and 2022 in its Spring 2021 Cement Consumption and Construction Activity Outlook. The report stated that mortgage rates are expected to remain low throughout 2021, prompting single-family construction. Non-residential cement consumption declines are expected to continue from 2020 in to 2021 and 2022, though with decreasing impact. Predicted oil price rises will increase oil well cement consumption.

The association welcomed a proposed US$2.2Tn eight-year federal government infrastructure spending programme. Chief economist and senior vice president Ed Sullivan warned of the proposal’s inherent political weakness in its inclusion of US$1.2Tn-worth of low or no-cement projects. He said that the opposition would latch on to this as grounds to oppose the necessary tax rises for the funding.

Sullivan said, “This recovery is predicated on continued progress in fighting Covid-19. The rapid pace of vaccinations and increased mask usage have resulted in a decline in death rates from over 3,000 daily in January 2021 to less than 825 daily in April 2021.” said Sullivan. “The Institute of Health Metrics and Evaluation (IHME)’s current forecast suggests a sustained and significant decline in daily Covid-19 deaths to less than 170. Progress associated with Covid-19 is the critical factor in the near-term outlook.” He added, “After committing to spending US$5.2Tn in Covid-19 relief and adding another US$2.0Tn in operations, the federal US debt could rise by US$7.0Tn in 2020 - 2021. This puts the discussion of the Biden US$2.2Tn infrastructure proposal into context. The proposal must pay for itself, which means higher taxes. While investing in traditional infrastructure such as roads and bridges has bi-partisan appeal, tax increases and some programmes dubiously labelled as infrastructure have caused concern. This concern threatens the potential passage of the initiative.”


Mali: Sacko Holding has completed a feasibility study at the site of its upcoming integrated cement plant in Bema, Bamako District. Mali Actu has reported that the plant will directly employ up to 300 people, increasing to up to 400 people after 2 – 3 years. Chief executive officer Ousmane Koné said that the plant would aim to meet local demand and export some cement. Construction is set to begin by the end of 2021.


Thailand: Germany-based Beumer has replaced the belt of a 3.5km raw materials conveying system at TPI Polene’s cement plant. It used a process that allows the new belt to be inserted into the system and the old belt to be pulled out only in one go, instead of exchanging the single belt sections one after other. The supplier says that this resulted in ‘substantial’ time saving for the customer and avoided unplanned system failures.

Beumer originally commissioned the conveying system in 2015. The 2200t/hr system consists of two regenerative belt conveyors with system control, transfer stations and filter systems, as well as foreign material separators. 989m of further belt conveying systems are used to remove the material from the blending bed and to feed the primary hopper of the raw mills complete the system. Installation took 11 months, followed by a three-month commissioning period.


US: Salt River Materials subsidiary Phoenix Cement Plant is working with ST Equipment & Technology (STET) on a fly ash separation system at a power plant in Utah. The cement producer previously secured a contract with a power plant in the state for the supply of fly ash to its Clarkdale cement plant in Yavapai county, Arizona. STET is supplying the separation equipment, engineering and commissioning services, and an exclusive technology operating license for Salt River Materials. Operations are schedule to start in mid-2021.

Pozzolan business senior vice president Dale Diulus said "Salt River Materials and STET have been working closely to develop a commercially effective beneficiation process improving the quality of the fly ash." He added "We look forward to many years of fly ash sales into the southwestern US markets."


US: The Texas Commission on Environmental Quality has approved a request by Holcim US to use more petcoke at its integrated Midlothian plant. Local health and environmental campaigners had hoped to challenge the decision at a meeting in late March 2021, according to the Fort Worth Star-Telegram newspaper. The changes will enable the company, part of Switzerland-based LafargeHolcim, to more than double the plant’s carbon monoxide (CO) emissions to 7000t/yr. 35 local residents submitted requests for a hearing to query the application. Holcim US was identified from state data as the leading emitter of industrial pollutants in North Texas in 2019.


US: Cemex USA, part of Mexico-based Cemex, has won a contract to supply 90,700t of cement and 153,000m3 of concrete for the latest phase of construction of the Houston Grand Parkway. The cement and concrete will help build the road’s I-1 and I-2 sections. The ring road around Houston is the longest of its kind in the US. Cemex USA will provide a portable central mix plant for the project.

Texas regional president Scott Ducoff said “Cemex USA is proud to be part of an iconic infrastructure project in our headquarters city of Houston, and one that will help ease traffic and improve local travel for commuters.” He added “Completing the Grand Parkway is a significant endeavour and opportunity for us to continue to innovate how we efficiently and effectively deliver our best-in-class materials to meet the demands of inspiring projects such as this one.”


Germany: Messe Düsseldorf has announced that the next Interpack processing and packaging fair will take place in Düsseldorf on 4 – 10 May 2023. The organiser said that attendees will be able to attend live web sessions alongside the exhibition.


Qatar: Qatar National Cement Company recorded a profit of US$19.3m in the first quarter of 2021. Reuters has reported that the figure represents a 29% year-on-year rise from US$14.9m from the same period in 2019. The cement producer reported a 6% year-on-year fall in revenue to US$182m and a 13% fall in net profit to US$40.8m in 2020.


Bolivia: Empresa Publica Productiva Cementos de Bolivia (ECEBOL) has signed a contract for the supply of 337,000m3/yr of natural gas to its Potosí cement plant. The La Razón newspaper has reported that the supplier will be Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). The cement producer will use a 8km pipeline to connect to the network. The value of the deal is US$4.06m.

General manager Fátima Pacheco said that the pipeline will realise "the dream of the Potosí people of becoming a benchmark for cement and clinker production in the south of the country."


Cuba: Cuba’s full-year cement exports totalled 21,200t in 2020, down by 40% year-on-year from 35,200t in 2019. ADN Cuba has reported that the value of exports fell by 45% to US$1.04m from US$1.89m. The vast majority of exported cement went to Colombia. Cuba is currently experiencing domestic shortages of cement.


India: Dalmia Bharat subsidiary Dalmia Cement and other companies are introducing a raft of new safety measures to counteract an increase in coronavirus cases, according to the Economic Times newspaper. The companies’ efforts include creating bio-bubbles for workers, reintroducing working from home where possible, changing shift patterns, conducting rapid testing and, not allowing outsiders into facilities without a negative coronavirus test and organising vaccination stations.


India: JK Lakshmi Cement has launched an advertising campaign called ‘Show Strength.’ The campaign draws attention to the strength of the company’s cements while encouraging Indians to rely on the strength of their own effort and expertise to overcome the negativity holding the country back, according to Exchange4media. The advertising agency involved with the promotion said, “Show Strength captures the brand’s values, leadership stance and social intent. We are hoping to bring in desired results for the company through this campaign.”