Global Cement Newsletter

Issue: GCW502 / 21 April 2021

Headlines


LafargeHolcim retained its ability to surprise this week with the news that it may be making preparations to leave Brazil. Local press in Minas Gerais revealed on 20 April 2021 that the company was about to try and sell its operations in the country. The building materials producer has not made a public statement yet on the matter, it may not until a deal is done and/or this could all be a great big misunderstanding. So treat the following with caution.

Firstly, LafargeHolcim deciding to sell in Brazil fits with the selective approach increasingly shown by the non-Chinese cement multinationals in recent years. It famously decided to sell up in South-East Asia from 2018 and it got as far as divesting assets in Indonesia and Malaysia. It also tried to sell in the Philippines but the local competition commission didn’t give permission for the proposed deal in the end. As Global Cement Weekly mentioned at the time this was a bold move and doing the same in Brazil seems similarly decisive now. It’s a big market to leave! CRH and HeidelbergCement have both talked openly as well about taking a value-first approach to their divestment strategies rather than trying to retain blanket coverage. However, just because a sale in Brazil by LafargeHolcim sounds right doesn’t mean it is right.

Secondly, data from the National Cement Industry Association (SNIC) shows that the Brazilian cement industry had a good year in 2020. Despite the relentlessly bad news from the coronavirus pandemic, the Brazilian government decided to keep the economy mostly open, allowing the cement industry to continue its recovery since 2018. The sector reported an 11% rise year-on-year in cement sales to 60Mt in 2020. So far in 2021 it has noted a 19% rise year-on-year to 15.3Mt in the first quarter of 2021. Yet, the association forecast slower growth in 2021 as a whole and has warned that the first quarter figures in 2021 don’t show a true picture due to a decline in sales per working day so far in 2021 despite an apparent growth in absolute figures. On the surface it’s a good time to sell cement assets in the country since the sector has been riding a recovery but the general outlook for the country is looking gloomy especially considering the ongoing scale of its coronavirus outbreak and the uncertain damage this may do to the economy as a whole.

Whether or not LafargeHolcim is actually selling up in Brazil or not it, follows the conclusion of the CRH Brazil acquisition by Buzzi Unicem’s Companhia Nacional de Cimento (CNC) joint-venture that was also announced this week after approval by the completion authority. The assets that CRH Brasil has now sold include three integrated cement plants and two grinding plants in the south-east of the country. The subsidiary sold approximately 2.8Mt of cement in 2020. If nothing else this suggests that there should be companies out there pursuing a different strategy to LafargeHolcim, CRH, HeidelbergCement and the rest who will be only too happy to build their portfolio if LafargeHolcim’s Brazilian business does go on sale.

CRH originally bought its plants in Brazil as part of a package deal when Lafarge and Holcim merged in 2015 and any potential sales by LafargeHolcim also link back to this. LafargeHolcim has spent much of the last six years working out what kind of company it wants to be. Certainly, since the current chief executive officer Jan Jenisch took charge it has had the air of a company with a mission. The Firestone Building Products acquisition earlier in 2021 is an example of this, propelling the group away from the triad of cement, concrete and aggregates as the carbon risks of heavy building materials heat up. There is something fitting perhaps that at the company’s next annual general meeting its shareholders will be asked whether they want to change the company’s name to Holcim at the group level. It’s a small thing, all market brands will remain as they are, but it may bookend the post-merger era as much as asset divestments in Indonesia and... potentially Brazil.


Kenya: Bamburi Cement has appointed John Stull as a non-executive director following the resignation of Pierre Deleplanque. The latter was appointed to the company’s board in mid-2018 and is its Area Manager - East, South Africa & Indian Ocean.

Stull, an American national, is the Head of Strategy and Mergers & Acquisitions for LafargeHolcim Middle East & Africa region, and has over 28 years’ experience in the LafargeHolcim Group having joined it in 1992 as Operations Manager, Alpena Michigan - USA. In 1996 he was promoted to Vice President, Manufacturing - USA Region, and thereafter held several leadership positions including: President, Missouri Division, Ready Mix and Aggregates; Senior Vice President, Marketing and Supply Chain - Lafarge France; Regional President, Sub-Saharan Africa; President and Chief Executive Officer (CEO) LafargeHolcim USA; CEO US CEM; and prior to his latest role as President & CEO -LafargeHolcim Philippines. He holds a Bachelor of Science Degree in Chemical Engineering from the University of Akron and an Advanced Management Degree from Harvard University.


Brazil: LafargeHolcim Brasil, part of Switzerland-based LafargeHolcim, is reportedly seeking to sell its assets. The Diario do Comercio newspaper has reported the rumour without detailing its sources. LafargeHolcim has not commented on the matter. However, local government officials in Borosso, Minas Gerais said they were waiting for an official confirmation from the cement producer before they could comment. The newspaper also speculated that the group may have already notified the Brazil government of its intent to sell. Under Brazilian law, any sale would require the approval of the Administrative Council for Economic Defence (CADE). The producer operates three cement plants and two grinding plants in the country.


Nigeria: The Senate of Nigeria has called for the federal government to introduce policies, such as tax breaks, to encourage local investments in cement production. The upper legislative chamber made the resolution following a debate about a bill intended to relax rules surrounding cement policy in the country, according the Punch newspaper. It also requested the federal government to provide more industrial incentives and protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cement, reduce prices and encourage more ‘valuable’ local producers.

Senator Lola Ashiru, one of the co-sponsors of the bill, noted that cement was one of the few building materials in which Nigeria was self-sufficient with production capacity reportedly over twice as high as estimated consumption in 2018. However, he said that cement prices in the country were about 240% higher than the global average.


Saudi Arabia: Yamama Cement plans to transfer and install the seventh production line from its old plant in the south of Riyadh to the new plant’s location in Northern Halal in Al-Kharj governorate of the Riyadh region. The line has a clinker production capacity of 10,000t/day. Following the completion of the move by the end of 2024 the new plant will have a capacity of 30,000t/day. The cement producer said that cost of the move would be funded from the available company's resources.


Saudi Arabia: Yanbu Cement says that a two months modernisation project on Line 4 at its integrated Yanbu plant that was first reported in mid-February 2021 has been delayed. This has been caused by a hold up in receiving certain spare parts. The cement producer said that the financial impact would be limited to the increase in production costs only since the start of the shutdown date. It also stressed that sales would not be affected by the stoppage due to its existing clinker stocks.


France: LafargeHolcim France, part of Switzerland-based LafargeHolcim, plans to invest Euro6.2m in 2021 in upgrading its integrated La Malle cement plant in Bouc-Bel-Air, Bouches-du-Rhône department. The La Provence newspaper has reported that the plans include a Euro4.5m modernisation of the flue gas desulphurisation system of the plant’s Line 2 using equipment ordered from Italy-based Boldrocchi. The company said that it plans to maintain similar investment levels in the plant in 2022 and 2023.

The plant had reportedly received complaints about sulphurous smells in the local area. The producer attributed this to the high sulphur content in its clay, which is sometimes over 70%. It said that it is altering supply arrangement to include clay from its L'Estaque, Bouc-Bel-Air and Bellegarde, Ain quarries in its clinker mix in order to reduce sulphur content by 20%.


France: A fire has been reported at LafargeHolcim France’s integrated Saint-Pierre-la-Cour plant. It appears to have been caused by a fuel supply line explosion attached to the plant’s kiln, according to the Ouest France newspaper. No casualties have been reported by local fire fighters. The single kiln 1.5Mt/yr plant is the company’s largest in the country.


Japan: Taiheiyo Cement plans to start a CO2 capture demonstration project at its Kumagaya plant in Kumagaya City, Saitama. It will use technology for CO2 chemical absorption supplied by UK-based Carbon Clean, which has been awarded by Japan-based Marubeni Protechs in Japan. The project will have a capacity of 10t/day and demonstration tests will begin in September 2021. Taiheiyo Cement says that it believes that CO2 recovery technology from cement kiln flue gas will require compact equipment that could be installed in cement plants and that suitable amine solvents for cement kiln flue gas are essential conditions. Its ultimate goal is to establish a technology that can be used to help it reach carbon neutrality by 2050.

The cement producer has been developing this technology as a sole grant recipient of the ‘Development of Carbon Circulation Technology for the Cement Industry,’ a project funded by the New Energy and Industrial Technology Development Organization (NEDO) which was awarded in June 2020. It also launched its internal Carbon Neutral Technology Development Project Team in April 2020, which has led on the project.

Marubeni Protechs, a wholly owned subsidiary of Marubeni Corporation, which invested in Carbon Clean, have been involved in a variety of domestic and international projects involving equipment supply and construction. The project at the Kumagaya plant is expected to be the first CO2 capture plant that Marubeni Protechs and Carbon Clean have introduced in Japan. Marubeni Protechs and Carbon Clean intend to jointly introduce CO2 capture plants in the future.


Japan: Researchers from the University of Tokyo have developed a new method for producing cement-free concrete from sand. The method reacts sand with alcohol in the presence of a catalyst, according to ChemEurope. When dehydrated, this produces tetraalkoxysilate. The research team then reintroduced water, and thus allowed the reactants to move back and forth between tetraalkoxysilate and sand. In this way, the sand particles progressively bonded together. The resulting concrete is reportedly more resilient to chemical, temperature and humidity changes than concrete produced from Ordinary Portland Cement (OPC).

In the report of the findings, researcher Ahmad Farahani wrote that various sources of sand tested suitable for use, including silica sand, glass beads and simulated moon sand. This gives the method the advantage that it is non-specific to raw materials or locations, and can be integrated into waste management.


UK: The Global Cement and Concrete Association (GCCA) has expanded its Innovandi innovation programme with the addition of a new Open Challenge innovation accelerator programme. The Open Challenge programme will bring together start-ups and leading cement and concrete producers to innovate for CO2 emissions reduction in the cement industry. Its aim is carbon neutral concrete production by 2050.

GCCA chief executive officer Dinah McLeod said “The GCCA is delighted to be expanding Innovandi to encompass both the Research Network and the upcoming Open Challenge. By connecting innovative start-ups with cement and concrete producers we can help accelerate the development of solutions that address the emissions reduction challenges our industry faces.”


Spain: Cementos Cosmos and the Cooperativa Apícola del Bierzo have installed 25 bee hives at the Corullón quarry, which supports the integrated Toral de los Vados plant in Leon. The collaboration agreement aims to promote the production of honey, propolis and pollen. The hives will be cared for by the Bierzo Beekeeping Cooperative and the adaptation and maintenance of the land where they will be located will be carried out by Cementos Cosmos. The cement company will also become the preferred customer for the production of the beehives located in the quarry. Following the signing of the agreement plant director Jaime Santoalla said, "we are convinced of the coexistence and synergies between our industry and other sectors of Bierzo, such as the agricultural-food sector.”


Ghana: Italy-based Bedeschi has been awarded a contract to supply and install cargo handling equipment for the Port of Takoradi. The project includes the supply of handling equipment and services for importing clinker and exporting bauxite and manganese. Bedeschi will supply five conveyor belts with a total length of 3km, two type 50/1400 A frame shiploaders and one eco-hopper. The shiploaders and the eco-hopper will be delivered fully erected from the supplier’s shipyard directly to the client jetty with a dedicated heavy lift vessel.

The project will adhere to ‘state of the art’ environmental standards with the use of dust collection and de-dusting system specifically designed for this application. All the conveyors will be closed, included the section where tippers and eco hoppers are in operation. Bedeschi will also provide the computerised control system too. No value for the contract or date of commissioned has been released.


India: Road Transport and MSME Minister Nitin Gadkari says that ‘huge demand’ is being created for steel and cement companies due to the rapid construction of road infrastructure. However, he also accused the industries of creating cartels and exploiting people, according to the Press Trust of India. The minister said that the government is now looking for some alternative for steel and cement. At a webinar Gadkari said that road construction has reached 37km/day day.


US: Australia-based Boral Limited says that as part of the review of its North American Fly Ash business, it is considering options such as a potential joint venture, a strategic alliance, divestment to a third-party or continued ownership. Boral has appointed advisors to support an assessment and intends to release an update by August 2021 or earlier if appropriate.

“We have conducted a detailed study of the US fly ash industry and remain confident in the long term demand dynamics for the industry, including significant incremental demand growth potential from the US Government’s proposed new infrastructure program,” said Boral’s chief executive officer and managing director Zlatko Todorcevski. “New opportunities for supply exist from harvesting landfills, imports and natural pozzolans, which we expect will more than offset the decline in fresh fly ash supply as the US transitions away from coal fired power generation.”


Chile: Inform has set up a joint venture with its Chilean partner, Workforce Solutions. Previously, Workforce Solutions previously acted as a local partner for the German-based software development and business process optimisation supplier. Inform says it will invest ‘significantly’ in the new joint venture and acquire shares, while the remaining stock will be held by former shareholders and executives of Workforce Solutions. The new company has officially been operating as Inform Software since mid-April 2021. It has its headquarters in Santiago de Chile.

“We see the Latin American countries as a strategically important growth market in which we are happy to invest,” said Andreas Meyer, chief executive officer of Inform. “As we move forward with this joint venture, we will expand personnel resources for sales, project delivery and customer support. It will enable us to enhance our service to our customers in Latin America and further expand our market position.”

The joint venture is intended to allow Inform to expand its presence in Latin America across all of its business areas including logistics, transportation, workforce management, airline and airport operations and fraud prevention. In addition, the company will continue to work with its two longstanding partners Portia LAC in Brazil and Quantomm Tech in Colombia, which will continue to assist in serving Inform’s customers. Inform’s artificial intelligence software products are already used in Latin America by companies including Volkswagen México, LATAM Airlines, Zurich Insurance Mexico, Zurich Insurance Argentina, Brazilian retail company Via Varejo and Chilean Mercedes-Benz importer Kaufmann.


Brazil: Companhia Nacional de Cimento (CNC), part of Italy-based Buzzi Unicem’s 50% subsidiary BCPAR, has acquired CRH Brasil following approval by the Brazilian antitrust authority (CADE). The deal was originally agreed for US$218m although changes in the financial positions of the acquired companies changed this. Buzzi Unicem supplied CNC with US$242m to support the deal.

CRH Brasil’s assets included three integrated cement plants and two grinding plants in the south-east of the country. The company sold approximately 2.8Mt of cement in 2020.


US/Canada: XPrize has named CarbonBuilt and CarbonCure Technologies as the winners of carbon capture and storage (CCS) design prizes worth US$20.0m. The competition ran at two power plants in Wyoming, US and Alberta, Canada. CarbonBuilt won the contest at the Wyoming plant with a concrete-curing based system. The concrete produced has a lower carbon footprint than conventionally produced concrete, according to XPrize. CarbonCure Technologies won the Alberta contest with a design based on carbonating the water used in washing cement trucks. This reportedly formed a concrete-strengthening slurry.

XPrize has partnered with Elon Musk and the Musk Foundation to launch a second round of CCS design prizes worth a total US$100m.


India: The board of directors of Sagar Cements is considering merging its wholly-owned subsidiary Sagar Cement (R) (SCR) into the company. A meeting has been scheduled for the company’s board of directors to consider the matter in late April 2021. SCRL, formerly BMM Cements, operates the 1.0Mt/yr Yadiki Mandalam cement plant in Anantapur district, Andhra Pradesh.


Vietnam: The Provincial Department of Trade and Industry (PDTI) of the northern province of Quang Ninh has announced a second-quarter cement production target of 879,000t in 2021. Viet Nam News has reported that the figure represents a significant increase as part of a local plan to increase gross regional domestic product (GRDP) by 10% in 2021. In the second quarter of the year, the PDTI is targeting US$2.1bn-worth of private investment in the provincial economy.


US: A research team at Washington State University has developed admixtures using chitin derived from seashells. The Moscow-Pullman Daily News has reported that the substance enhances concrete’s performance when substituted for some of the cement content. The lower clinker factor may also decrease net emissions. Work has shown that lower volumes of the supplementary material are required compared to existing admixtures.


Tanzania: Tanzania Portland Cement has announced plans to invest a total of US$15.0m in modernising its 2.0Mt/yr-capacity Tanzania Portland Cement plant in 2021. The Tanzania Daily News newspaper has reported that the producer says its main challenge is cargo delays at the port of Dar es Salaam. This has caused concern for potential investors, according to the company. Senior commercial manager Danford Semwenda lobbied the government to help solve the problem.


Kazakhstan: Steppe Cement’s cement sales in the first quarter of 2021 were US$11.3m, up by 22% year-on-year from US$9.27m in the first quarter of 2020. Volumes increased by 13% to 266,000t from 236,000t. The company said that it remained close to full capacity utilisation. It says that it increased its Kazakh cement market share to over 13%. The market grew by 12% year-on-year in total. The producer reported an 11% price rise and constant levels of tariffs and rental expenses.

Steppe Cement forecast an increase in domestic cement demand due to government infrastructure and housing projects.


Qatar: Switzerland-based Sika has expanded concrete admixture production capacity at it Doha admixture plant. The company has also announced the start of epoxy resin production in the country. It says that its present investments target growth to serve the expanding regional construction market. Numerous major projects and the expansion of energy and utilities infrastructure have driven a growing demand. Qatar’s state sourcing policy further increases consumption of building materials produced in the country.

Europe, Middle East and Africa regional manager Ivo Schädler said "Our latest investment in Qatar positions us for continued growth and strengthens our competitiveness in the country. In expanding our production, we are anticipating a substantial increase in demand and volumes for our high-value adhesives and flooring solutions. Our building sector customers will benefit from an expanded and locally produced portfolio of Sika solutions which, in addition, eliminates long-distance transportation."


Germany: Italy-based Buzzi Unicem subsidiary Dyckerhoff has received Concrete Sustainability Council (CSC) Gold certification for all seven of its German cement plants. All 10 of its concrete plants also received Gold certification. The company’s seven cement plants previously received Silver certification from the CSC in 2018. It said that it was especially pleased with its latest achievement giving the more rigorous checks under the certification body’s updated 2.1 version.


Germany: HeidelbergCement’s consolidated net sales grew by 1% year-year to Euro3.96bn in the first quarter of 2021 from Euro3.93bn in the first quarter of 2020. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 23% to Euro538m from Euro436m. The group said that the preliminary results are ‘significantly’ above market expectations.


India: Larsen & Toubro has won a contract for the construction of a 3.5Mt/yr-capacity integrated cement plant at Nimbahera in Rajasthan. The Press Trust of India newspaper has reported that the supplier classed the order’s value as ‘significant,’ meaning between US$134m and US$336m.


Spain: Domestic cement consumption was 3.38Mt in the first quarter of 2021, up by 8% year-on-year from 3.12Mt in 2020. The Spanish Cement Industry Association (Oficemen) partly attributed the increase to export growth, to 665,000t in March 2021, up by 18% from March 2020 levels.

President Víctor Brosa said, ‘A stable year is expected in 2021 compared to 2020 despite the uncertainty surrounding the arrival of funds to reactivate the economy and the evolution of the pandemic."


Malaysia: Malayan Cement is expected to raise US$55.0m through a proposed placement of 10% of its shares. Bernama Daily Malaysian News has reported that the company plans to use US$13.1m as working capital. The remainder will repay its bank debts.


Philippines: Holcim Philippines, part of Switzerland-based LafargeHolcim, has announced the launch of its new Holcim Aqua X concrete. The product contains ‘active water-repellent boosters’ giving it increased resistance to water damage.

The BusinessWorld newspaper has reported that president and chief executive officer Horia-Ciprian Adrian said that Aqua X ‘highlights our great advantage in developing exciting products.’ He added that the product outperforms other concretes on environmental indicators due to its low clinker factor.


Senegal: China-based Sinoma Group subsidiary CBMI Construction has awarded a contract to Denmark-based FLSmidth for the supply of three control systems for one new and two existing lines at the Kirène cement plant in Thiès region. The lines will share a digital infrastructure built on the FLSmidth ECS/ControlCenter platform with ECS/PlantDataManagement software. Additionally, the supplier will equip the new Line 3 with its ECS/CemScanner and QCX/BlendExpert. It said that the setup will use 12,000 data points on Line 3 alone.

Group digital general manager Jens Adler said, “With more than 1500 active product and process control installations in the cement industry, this order reaffirms our strong digital expertise.” He added “Digitalisation is transforming how many in the cement industry respond to increasing demands for emission reductions and efficiency. This is reflected in the emphasis on digital solutions as part of our MissionZero ambition to offer cement producers zero emission cement production by 2030.”


Cuba: Corporacion Cementos Cubanos’ integrated Siguaney plant has resumed production of grey cement after stopping in late 2020 due to technical problems. The plant is targeting grey cement production of 65,000t in 2021, according to the Escambray newspaper. In 2020 local media reported that the plant produced 87,000t of grey cement and 3000t of white cement. At present the plant has 4000t of white cement in inventory and its annual production target for 2021 is 8000t.


Mexico: Cemex has joined a partnership for the development of OpenBuilt, a digital platform aimed at connecting supply chains for the construction industry. The initiative is intended to increase the safety and sustainability of construction practices. Companies using the system will be able to securely connect their current technology and digital platforms to partners, suppliers or subcontractors in their supply chain via a single integration hub. The platform will be developed on the Red Hat OpenShift hybrid cloud platform and run on the IBM Cloud.

Chief executive officer Fernando Gonzalez said "OpenBuilt is a strategic initiative that will help integrate the construction value chain by increasing productivity, innovation, and collaboration." He added "We are constantly seeking to provide a superior experience to our customers through the innovative use of digital technologies."


Switzerland: The Solar Impulse Foundation has certified 10 LafargeHolcim products with its ‘Efficient Solutions’ label. The label designates products which protect the environment in a profitable way. The following LafargeHolcim products now bear the label: 14Trees 3D concrete printing technology; Aggneo recycled aggregate; Airium insulating foam; Bio-Active Concrete for coastal ecosystem rehabilitation; Ductal ultra-lightweight concrete; Durabric earth-based block; ECOPact green concrete; TerraFlow low-carbon cement; Kawach water-repellent cement; and the ORIS digital road design platform.

Chief executive officer Jan Jenisch said “I’m very proud of our strong contribution to the Solar Impulse Foundation’s goal of finding 1000 environmentally positive solutions. With more than half of our research and development efforts focused on sustainable building solutions, we are committed to enabling a net-zero future that works for people and the planet. Today’s endorsement of our clean technologies is a great encouragement for our teams to keep on pushing the boundaries of innovation for sustainable building.”


Oman: Raysut Cement has been granted the CE and NF markings by France-based AFNOR Certification for some of the cement products manufactured at its Salalah plant. The cement producer has been advised that it is now able to export its CEM I 42.5R CE PM CP2 NF and CEM II/B-LL 32.5N CE products to the European Union. It follows the plant upgrading its quality management to meet the CE and NF requirements. The producer has also passed certifications for CE002:2020 or NF002:2019, NFP 15-317:2006 and NFP 15-318:2006, allowing it to export cement to islands in the Indian Ocean. Raysut Cement was advised by Switzerland-based Quadra Trading on how to comply with the quality requirements of the international standards.