Global Cement Newsletter

Issue: GCW540 / 19 January 2022

Headlines


The cement output data for December 2021 is out for China and we’re starting to see the effects of a rather tough autumn. Lower coal supplies, consumer prioritisation for energy supplies, higher input costs and a slowing real estate market all contributed to a reduction in output.

Graph 1: Cement output by quarter in China, 2019 –2021. Source: National Bureau of Statistics of China.

Graph 1: Cement output by quarter in China, 2019 –2021. Source: National Bureau of Statistics of China.

As can be seen in Graph 1 above, output took off after the shock of the coronavirus outbreak receded at the start of 2020. This then continued until mid-2021 when things changed. Overall cement out was 2.36Bnt in 2021, an annual drop of nearly 1.2% compared to 2.39Bnt in 2020. Note that the 2021 output figure is about average for China’s annual output since it hit a high of nearly 2.5Bnt in 2014. However, the months from September 2021 onwards have seen output drops of above 10% year-on-year. It’s been from a high base but if it were to continue it could signal a more ominous trend. As the China Cement Association (CCA) describes it, cement output started to slow from May to August 2021, in part due to seasonal factors and repeated local outbreaks of Covid-19 around the country. This trend then started to accelerate for the reasons mentioned above.

Looking at energy first, coal future prices in China hit a near-decade high in October 2021 due to a variety of market disruptions. This looked set to worsen at the start of January 2022 when the country’s biggest overseas supplier, Indonesia, banned exports for a month due domestic shortages. However, data has since emerged this week from the National Bureau of Statistics showing that Chinese coal production grew by 4% year-on-year to 4.07Bnt in 2021, with faster monthly growth, as the industry ramped up output to meet demand.

On the real estate market, the CCA views it as having run ‘hot’ and then ‘cold’ in 2021. At the start of the year the government introduced new government regulations (its so-called three red lines of policy) to reduce borrowing in the sector. The real estate market subsequently declined, not withstanding certain hot-spots. In the western press this process has been symbolised by the fortunes of Evergrande and its debts of over US$300bn. It started missing bond payments in September 2021 before formally defaulting in December 2021. As the Financial Times newspaper reported in a summary on the situation, in late December 2021, Evergrande said that work at 92% of its projects, which number in the hundreds across China, had resumed. Separate data though showed that its housing sales had slumped by 99% year-on-year in the same month. The newspaper has compared the Chinese government’s approach to Evergrande to its handling of conglomerate HNA Group, which was eventually declared bankrupt in 2021 after a slow disintegration. In its opinion the government may try to control the collapse of Evergrande through a series of quiet interventions over a long period. However, Evergrande’s debts appear to be double those of HNA Group’s and there may be further risks from other companies in the real estate sector. All of this presents risks to local cement output.

To round up, Chinese cement output in the second quarter of 2022 is the figure to watch to assess how well the industry is coping with its current issues. Production is likely to slow in the first quarter due to seasonal factors such as the New Year holidays, winter shutdowns and the hangover from the problems in the autumn. Once the spring arrives then we may have a glimpse of how cement companies are coping with coal supplies, the real estate market and all the rest.

And finally... Global Cement Weekly invites readers to explore Austria-based W&P’s virtual tours of three of its plants. The presentation is a fancier version of the panorama photo applications one can find on most smartphones but with some added mapping and visualisation settings. It’s a fantastic addition to the set of community outreach tools a cement company can use. Check it out here: https://alpacem.com/360/


Qatar: Essa Muhammed Ali Kaladari has been appointed as the new chief executive officer of Qatar National Cement Company. He succeeds Mohammed Ali Al Sulaiti who has resigned with effect from the end of January 2022.


Austria: Stefan Schriebl has been appointed as Head of Corporate Development for Wietersdorfer Group. He will be responsible in his new role for the sustainability and digitisation management of the company. Prior to joining the Wietersdorfer Group, Schriebl worked at the former BASF subsidiary MBCC Group in Austria as technical manager for concrete admixtures and at the refractory manufacturer RHI Magnesita as senior vice president for research and development in Europe.


Russia: SibCem subsidiary KuzbassTransCement has appointed Eduard Ishimov as its managing director. He succeeds Alexander Chagaev, who will continue to work as an advisor to president of Sibcem on transport and logistics. KuzbassTransCement is responsible for the operation of the railway fleet of SibCem.

Ishimov, aged 53 years, started working in the railway sector in the late 1990s. In 2006 he began working at KuzbassTransCement and has held the positions of Director for Transportation and Operation of Rolling Stock and Director for Transportation and Logistics. A graduate of the Novosibirsk Electrotechnical Institute, he also holds qualifications from t he Siberian State University of Communications and the Moscow International Higher Business School.


China: Sibo (Steven) Yan has been appointed as the general manager of KHD’s Chinese unit KHD Beijing. His new role is intended to help KHD grow its market share in China in conjunction with the company’s main shareholder, AVIC.

Yan started working for KHD in 2016 as Manager of the Tendering Department before becoming Vice President - Tendering & SCM in 2019. Previously he worked as a Technical Manager for AVIC International Beijing. He holds a PhD in Mechanical Engineering from the Beijing University of Technology.


US: Cadence Environmental Energy has appointed Tom Lane as Vice President of Finance. In addition to his financial tasks he will also serve as a strategic advisor to Cadence’s president, recommending financial initiatives, policies, programs and practices that support the company’s key business initiative. Lane joined Cadence’s accounting department in 1991. A trained and accredited CPA, he graduated from Ball State University in 1983 with a bachelor’s degree in accounting.

Cadence Environmental Energy provides technology for waste fuel recycling and emission reduction technology to the cement industry.


France: Lafarge France has commissioned its Martres cement plant’s new kiln line. China-based Sinoma Construction carried out the work on the plant in Occitanie Region. The supplier said that the new kiln will use 85% alternative fuel (AF), which will cut 163,000t/yr (28%) of its CO2 emissions. This will reduce its clinker’s carbon footprint by 240kg/t.


Italy: Buzzi Unicem has signed an agreement with Italgas to collaborate on the development of power to gas plants for implementation in combination with carbon capture systems. Their research will assess the possibility of producing and using synthetic methane obtained from the combination of green hydrogen from power to gas plants with captured CO2.

Buzzi Unicem’s group technical director at Luigi Buzzi said "We are very interested in the opportunity to collaborate with Italgas as an experienced partner to develop a project that is fully integrated into our industrial investment plan aimed at identifying technologies for capturing and reusing the CO2 released by our plants, in line with the roadmaps defined by industry associations.” He added “Our aim is to responsibly contribute to containing climate change by developing CO2 capture technologies and identifying the best solutions for its reuse. We are currently experimenting with calcium looping technology for capturing the carbon dioxide released by the production process at our plant in Vernasca, Piacenza. Thanks to the EU Horizon 2020 Cleanker project, it will be possible to assess the technical and economic sustainability of this technology and estimate the changes to the plant and the investments required to adopt this process in existing cement plants.”


Australia: RMIT University in Melbourne, Victoria, has developed a new method of carbon capture, called the bubble column method. The method uses liquid gallium at 100 – 120°C, through which flue gas is bubbled. This activates the CO2, leading to oxidation of the metal. The captured carbon accumulates on the surface of the pool.

Gallium is a by-product of bauxite and zinc ores mining. The United States Geological Service (USGS) has estimated its global reserves in these ores alone as 1Mt.

Project co-lead Torben Daeneke said “Turning CO2 into a solid avoids potential issues of leakage and locks it away securely and indefinitely. Because our process does not use very high temperatures, it would be feasible to power the reaction with renewable energy.” He added “Ideally the carbon we make could be turned into a value-added product, contributing to the circular economy and enabling the carbon capture and storage (CCS) technology to pay for itself over time.”

The Australian Government plans to invest US$719m in low emissions technologies by 2050 under its Net Zero Plan.


Kazakhstan: International Cement Group has resumed operations at its Almaty cement plant following its suspension of production due to political unrest.

The group said "To safeguard our employees and plant during the nationwide unrest, the company temporarily closed its cement plant located in the Almaty region of Kazakhstan." It added “As far as business is concerned, everything appears back to normal now, but last week we definitely did not know what was going to happen."


Kyrgyzstan: A new 1.8Mt/yr cement plant is to be built at Tunuk-Suu in Batken region. 10 hectares of land have been set aside for the project, according to local government sources quoted by Central Asia News. The initiative is a joint venture between the authorities and investors. Construction of the plant is scheduled to be complete by early 2024. A 60km road supporting the proposed plant is also being repaired.


Croatia: Volunteers from Cemex collaborated with the Agricultural and Veterans’ Cooperative Lintar and local school pupils to harvest 6.5t of olives from the site of its rehabilitated Split quarry in Split-Dalmatia. The company says that the winter crop produced 900l of olive oil.

Cemex’s Europe, Middle East and Africa corporate affairs, sustainability and environmental resources manangement vice president Andrew Spencer said “We recognise that our industry has consequences for the environment, but Cemex is working hard to actively counteract climate change and this drive is present through all aspects of our business. In our cement and aggregate quarrying operations across Europe, we restore and recultivate our sites to provide optimal conditions that are managed well to deliver for biodiversity.” He added “Our vision is of a successful, sustainable Cemex that makes a positive contribution to people and the environment.”


Japan: Sumitomo Osaka Cement says it plans to raise the price of its cement-related products by 20% in April 2022. It has blamed this on rising raw material, energy and logistics costs.


Morocco: Ciments du Maroc plans to commission its 0.7Mt/yr grinding plant at Nador in July 2022. The production unit, belonging to the subsidiary of Germany-based HeidelbergCement, is located around 18 km outside of Nador. The project has a budget of around US$36m and it intended to support development in northern and eastern regions of the country. Construction of the plant started in 2020.


Uganda: Preliminary findings into a fire at Hima Cement’s integrated plant at Kasese that took place on 16 January 2022 have revealed lapses in health and safety rules. Three people were reported killed in the blaze and a further eight others were injured, according to the Daily Monitor newspaper. Following an inspection of the site, Flavia Bwire, the executive secretary of the National Building Review Board (NBRB), said there were inadequate entry and exit points for the staff to evacuate the building. The NBRB will make recommendations to the relevant authorities when it has concluded its investigation. Hima Cement, a subsidiary of Switzerland-based Holcim, said that staff were conducting installation work at a light diesel oil tank when the incident happened. Production at the plant is yet to restart.


UK: British Precast, whose members include manufacturers of concrete masonry, paving slabs, structural sections and drainage systems, has merged with the Mineral Products Association (MPA) which represents all the UK’s cement makers, over 90% of aggregates producers and more than 70% of ready-mixed concrete suppliers. The merger is intended to give the British concrete industry a single voice, with the sector’s advocacy body, UK Concrete, lobbying on behalf of the sector on sustainability issues. It should also unite the industry behind the ‘Roadmap to Beyond Net Zero’ plan by 2050.

Alan Smith, who retires as President of British Precast, said, “British Precast has been affiliated with the MPA for the past decade and the successful relationship we have built has given our members the confidence to fully support this merger. Coming together enables the industry to operate more strategically, rejuvenating our determination to rise to the challenges of climate change and emphasise the importance of our industry in climate adaptation.”

Two new MPA product groups have been formed as a result of the merger: MPA Precast and MPA Masonry. They join existing MPA product groups including The Concrete Centre and the British Ready-mixed Concrete Association (BRMCA).


India: UltraTech Cement plans to invest US$129m in capacity expansion projects in order to increase the production capacity of its Birla White brand white cement by 93% to 12.5Mt/yr from 6.5Mt/yr. The Aditya Birla subsidiary says that it will commission the new capacity in a phased manner. The investment aims to strengthen Birla White cement’s presence in the growing white cement market and to reduce its dependence on high-cost imports.


India: UltraTech Cement recorded consolidated sales of US$1.74bn in the third quarter of the 2022 financial year, up by 5.8% year-on-year. Its net profit in the quarter was US$229bn.

The Business Standard newspaper reported that the producer maintained a strong cement volumes growth trajectory, with 13% year-on-year cement sales growth throughout the first nine months of the 2022 financial year.


Zimbabwe: Lafarge Zimbabwe has concluded its assessment of the collapse of its Manresa grinding plant’s roof, which occured in October 2021. The company warned investors that continued disruptions to cement production and the cost of repairs will have a negative impact on its 2022 first-quarter results. It added that normal operations would resume ‘as soon as possible.’


Belgium: Holcim has completed its acquisition of speciality building products company PTB-Compaktuna. The group said that the acquisition further expands its service-led offering in the repair and refurbishment market.

CEO Jan Jenisch said “I am excited to add PTB-Compaktuna to the Holcim family as another step in the expansion of solutions and products, advancing our Strategy 2025 – Accelerating Green Growth. This addition strengthens our presence in Europe in key markets like repair and refurbishment. Building on the entrepreneurial vision and legacy of the Smessaert family, I look forward to investing in this business’ next era of growth and warmly welcoming their employees into the Holcim family.”


India: Dalmia Cement (Bharat) has commenced cement production at its upgraded 2.9Mt/yr Murli cement plant in Maharashtra. The company invested US$125m to install a new fueling system, waste heat recovery (WHR) plant and solar power plant at the facility. It acquired the plant from Murli Industries for US$55.2m in 2020.

The new commissioning brings Dalmia Cement (Bharat)’s total installed capacity to 35.9Mt/yr.


China: Tangshan Jidong Cement says that it expects its consolidated net profit to drop by up to 3.5% year-on-year to US$441m in 2021 from US$457m in 2021. Its full-year cement and clinker sales were 99.7Mt in 2021, down by 7% year-on-year.


Philippines: The Fiscal Incentives Review Board (FIRB) has approved the grant of tax incentives to San Miguel Equity Investments a for the construction of its 2Mt/yr Mindanao cement plant. The Manila Bulletin newspaper has reported that the producer will pay no tax on its income from the plant during its first two years of operations, and reduced taxes during the subsequent five years.

The FIRB said that it expects the US$195m plant to stimulate downstream businesses, promote the use of energy-efficient equipment and lead to a transfer of knowledge and increased productivity in the underdeveloped area where it will be located.


Australia: Aluminium company Alcoa of Australia has extended its contract for the supply of lime from AdBri subsidiary Cockburn Cement until January 2023. Business News Western Australia has reported the value of the extension as US$18m – 25.3m. Alcoa of Australia switched to using imported lime at its Kwinana, Pinjarra and Wagerup refineries in Western Australia in June 2020. Prior to this, it had bought a total of US$50.5m-worth of lime from Cockburn Cement.

Adbri’s managing director Nick Miller said "The extension reinforces our position as a reliable and high quality supplier of lime through our local manufacturing and distribution network across Western Australia, supporting local manufacturing jobs, the resources sector and the broader Western Australia economy."


Hungary: Kirchdorfer Gruppe subsidiary Kirchdorfer Concrete Solutions has agreed to sell a 49% stake in prestressed concrete sleepers producer MABA Hungaria to railway overhead line construction company Firma Vasútvill. Austria-based Kirchdorfer Concrete Solutions will retain its majority stake in the company.

Kirchdorfer Gruppe CEO Michael Wardian said that the group was delighted to have secured a strong partner for its Hungarian operations.


Germany: HeidelbergCement plans to proceed with its on-going share buyback programme in early 2022 with a second tranche of purchases worth Euro300 – 350m. The group expects to conclude the tranche in mid-2022. It previously finished buying back 2.7% of its shares in December 2021. On 13 January 2021, HeidelbergCement announced that it had retired all shares purchased under this previous tranche.


Brazil: The Brazilian National Cement Industry Association (SNIC) has recorded cement sales of 64.7Mt by Brazilian cement producers in 2021, up by 6.6% year-on-year from 2020 levels. Home construction work, property development and infrastructure building all contributed to the rise. Capacity utilisation rose to 69% from 65% across the country’s 94Mt/yr, 91-plant cement network.


Russia: Asia Cement has extended its contract with Freight One for the transportation of its cement by rail from Chais, Penza region. The producer said that it will aim to dispatch 164,000t of cement under the contract in 2022.


Spain: Cement Science Group (CemSciG) and the University of Málaga (UMA) have received a US$50,000 donation from US-based CSA Research for their research into reduced-CO2 cement production. The funding will continue the partners’ work at UMA’s department of inorganic chemistry, crystallography and minerology into alternative methods of cement production. Titles of their on-going projects include ‘Optimisation and Processing of LC3 Eco-Cements with Spanish Clays,’ ‘Microstructure Analyses of Limestone Calcined Clay Cements by Advanced Synchrotron Techniques’ and ‘Reduction of Cement Industry CO2 Emissions without Loss of Mechanical Properties.’


UAE: Cemex has supplied 400,000m3 of advanced semi-dry heavy-duty concrete to Abu Dhabi Ports Group’s Khalifa Port. Cemex said that the concrete’s composition maximises its lifespan, increasing sustainability.


US: LafargeHolcim US has announced the successful transition of two further plants to Portland limestone cement production. The company’s 4.5Mt/yr Ste. Genevieve, Missouri, cement plant and 2.4Mt/yr Alpena, Michigan, plant have begun exclusively producing its OneCem reduced-CO2 Portland limestone cement (PLC).

LafargeHolcim US’ manufacturing North vice president Michael Nixon said "LafargeHolcim is fully engaged in making carbon reduction an urgent priority and 100% dedicated to leading the market transformation needed for climate stability." He added "To achieve net-zero commitments by midcentury, we must start now in accelerating the adoption of low-carbon building solutions to mitigate the impacts of climate change."

LafargeHolcim US successfully transitioned its Midlothian, Texas, cement plant to PLC production in 2021.


Kazakhstan: Steppe Cement sold US$83.4m-worth of cement in 2021, up by 16% year-on-year from its US$71.7m-worth in 2020. Its sales volumes totalled 1.69Mt for the year, up by 2.4% from 1.65Mt in 2020. It exported 202,000t of cement, down by 57% from 86,500t. The company said that production limitations prevented it from fully meeting demand, and it concentrated on local markets. Regarding its outlook in 2022, Steppe Cement said “We have a healthy cash balance and are continuing our capital expenditure (CAPEX) programme to increase the production capacity of the company by 5% by mid-2022.”

Dow Jones Newswires has reported that Kazakhstan’s 2021 full-year cement consumption was 11.6Mt, up by 23% year-on-year from 9.4Mt in 2020. A rule change to pension withdrawals permitting allocations for home improvement and construction bolstered demand growth. Exports fell by 20% to 1.6Mt from 2Mt, while imports rose by 33% to 800,000t from 600,000t.


Switzerland: A TEC has secured a contract to install a new ReduChlor chlorine bypass system at Holcim Schweiz’s Eclépens cement plant in Vaud. The supplier says that it will also fit a bypass dust handling system and upgrade the alternative fuel (AF) feeding system at the plant.


Costa Rica: Société Générale de Surveillance has awarded Holcim Costa Rica its Positive Packaging certificate for 100% packaging energy recovery in 2021. The company offset the 1500t carbon footprint of its packaging production for the year by sorting and co-processing 14,000t of paper as fuel. It sourced the paper from its customer cement bag return scheme and through municipal recycling services run by fellow Holcim subsidiary Geocycle Costa Rica.

Holcim Costa Rica sustainability coordinator Catalina Mora said “Waste management is a global challenge, so this project has a direct impact on our contribution as a company to the vision of sustainability for the country.”


China: Saudi Aramco and China Building Materials Academy (CBMA) have launched the Nonmetallic Excellence and Innovation Center (NEXCEL) in Beijing. The centre will leverage CBMA's expertise and resources to promote the development and application of nonmetallic technologies offering superior lifecycle cost, efficiency and environmental performance to metal-based alternatives in Chinese construction.

Saudi Aramco’s senior vice president of technical services Ahmad Al-Sa'adi said “We are excited to be part of this important initiative with CBMA, to jointly advance the use of nonmetallics in building and construction in China. At Aramco, we have been developing and deploying nonmetallic solutions within our own operations for more than 20 years as they offer superior lifecycle cost, efficiency and environmental advantages over their metal alternatives.”