Global Cement Newsletter

Issue: GCW543 / 09 February 2022

Headlines


The data on cement consumption for 2021 in Spain is out this week and it looks promising. As the national cement association Oficemen explained, last year was the sector’s best for over a decade, nearly reaching 15Mt consumption and exceeding the figure in 2019 before the Covid-19 pandemic started. Oficemen also singled out particular strong performance in December 2021. It now expects this growth trend to continue into 2022 with a forecast of 5% to 15.6Mt predicted based on both domestic and infrastructure segments.

Graph 1: Cement consumption in Spain, 2012 – 2021. Source: Oficemen.

Graph 1: Cement consumption in Spain, 2012 – 2021. Source: Oficemen.

The Spanish cement industry reached a peak consumption of over 50Mt in the late 2000s before hitting a near-50 year low in the 2010s in the wake of the 2008 financial crisis. The market then started to recover in the second half of the 2010s until Covid-19 came along. A report on the Spanish cement market to the start of 2021 that lays out the situation can be found in the February 2021 issue of Global Cement Magazine. The larger news stories since then have been Votorantim Cimentos’ growth in the market through its acquisitions of FYM and Cementos Balboa, and Çimsa Çimento’s final completion of its deal to buy the Buñol white cement plant from Cemex. Each of these stories involve an integrated cement plant changing ownership.

Looking back at Oficemen’s summary describing 2012 depicts a much different dwindling market. However, one commonality it shares with the association’s roundup for 2021 is that it complains about the country’s disadvantage in electricity costs compared to its neighbours. Back in 2012 this was framed as holding back exports. As Oficemen noted at the time it exported 5.9Mt of cement in 2012, less than half the 13Mt it exported in 1983. Jump forward to 2021 and exports are now 6.8Mt. Energy is still a key issue though. Now Oficemen’s president, José Manuel Cascajero Rodríguez, says that the sector’s production costs have increased by 25% since the latest round of electricity price rises began. He then compares the cost of energy intensive industry in Spain unfavourably against France and Germany and calls for a structural change in the Spanish electricity market to make prices more predictable. Cement producers elsewhere in Europe and beyond may share Oficemen’s concerns regard unpredictable energy prices over the last six months but electricity has been a particular issue for Spain for a long time. To take one recent local example, in November 2021 Cementos Cosmos said it was planning to scale down the production of clinker at its Córdoba cement plant as a result of the high cost of electricity.

The other issue that gets raised in Oficemen’s 2021 summary is competition from cement importers outside the European Union (EU) and the necessity of a border carbon adjustment mechanism (CBAM) to take in account carbon taxation for producers within Europe. To jump back a bit, back in May 2021 the EU Emissions trading Scheme (ETS) reached Euro50/t. Then in December 2021 Cembureau, the European cement association, published a calculation predicting that if the EU ETS CO2 cost made it to Euro90/t then this could represent 12 - 15% of the production costs of cement producers. Well, as readers will have guessed, the EU ETS beat Euro90/t on 2 February 2022 and then rose to Euro96.7/t on 7 February 2022. Answers in an email for when readers think the EU ETS price will top Euro100/t.

All of the above feeds neatly into the week’s other big Spanish news story: Cemex and Synhelion have successfully produced clinker from concentrated solar radiation at a pilot unit at the Very High Concentration Solar Tower of IMDEA Energy near Madrid. It’s early days yet as the process needs to be scaled up but, make no mistake, this is a big story. An interview with the team behind Cemex and Synhelion’s solar concentration project can be found in the December 2020 issue of Global Cement Magazine for more information. The SOLPART (Solar-Heated Reactors for Industrials Production of Reactive Particulates) project in France did similar research a few years ago but it didn’t reach the 1500°C target required to reach the sintering phase where clumps of clinker form. US-based Heliogen has been trying to industrialise concentrated solar energy but not much has been heard about its cement-industry ambitions since it said it reached temperatures of about 1000°C in 2019.

The relevance of an eventual full-scale concentrated solar unit for the entire production line or just the preheater and/or calciner at a cement plant in Spain makes considerable sense. At a stroke energy costs are reduced, diverted to a renewable source and any desired CO2 capture becomes, in theory, easier and cheaper. Cemex said in the interview with Global Cement Magazine that the tentative next step would be a pilot unit at a cement plant, although, candidate plants could be in the US or Mexico, as well as Spain. Another side of the drive to cut energy and carbon costs can also be seen in a couple of photovoltaic solar projects supplying cement plants that were announced in 2021 for Spanish plants run by Cemex and Cementos Cosmos.

We leave the Spanish cement sector in a growth phase but with plenty of challenges ahead, not least from electricity costs and the mounting cost of carbon. Yet in common with other countries in Europe the industry faces a high-wire balancing act between staying economically viable and inching towards net zero. It’s conceivable that an industrial scale concentrated solar unit at a cement plant in Spain by 2030 might steady the wobbles along the way.


Russia: Soyuzcement, the national cement manufacturing union, has appointed Vyacheslav Shmatov as its chair. He is currently the general director of Eurocement Group and has worked in the cement industry for over 11 years. He was previously the head of BaselCement.


Germany: BWF Envirotec has appointed Nikolai Beranek as the managing director for its EMEA (Europe, Middle East and Africa) area and South America. He succeeds Thomas Chodora in the role, who will now manage human resources on an interim basis.

Beranek has worked for BWF Group for over six years in various management positions. As Director Human Resources he was responsible for human resources and he also worked in controlling.

Chodora was previously in charge of human resources at BWF Group from 2008 to 2016. He has held management positions as managing director at BWF Profiles, responsible for plastic products and thermoformed parts, and BWF Envirotec.


Italy: Cementir’s revenue grew by 11% year-on-year to Euro1.36bn in 2021 from Euro1.22bn in 2020. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 17.9% to Euro311m from Euro264m. Sales volumes of cement and concrete increased by 4.1% to 11.2Mt and 14.8% to 5.01Mm3 respectively.

“2021 marked for Cementir the year of the historic record of revenues and EBITDA despite the uncertainties related to the pandemic crisis, the substantial increase in energy costs, materials and services and the devaluation of the Turkish lira,” said Francesco Caltagirone Jr, chair and chief executive officer of Cementir.

The group also reviewed and approved the three-year Group Industrial Plan update for the period 2022 - 2024 and the 2022 budget. It has a target of reduce CO2 emissions (scope 1) by 30% in 2030 compared to 1990 levels. It is also planning to invest Euro116m in the 2022 – 2025 to meet this goal and others. Some of this will go towards building a new production line at its integrated Gaurain cement plant in Belgium, where the work is intended to raise the unit’s alternative fuels substitution rate to 80% from 40%. The group noted that this project has been delayed to 2022 due to the coronavirus pandemic. Changes at other cement plants include switching to natural gas and biogas as well as energy efficiency projects. It is also said it was planning to ‘significantly’ increase the production of its FUTURECEM calcined clay cement and related sustainable products.


India: In its results for the third quarter of the 2022 financial year, HeidelbergCement India has recorded a sales decline of 9.5% year-on-year to US$71.7m from US$79.2m. Its net profit for the quarter was US$4.07m, down by 52% from US$8.51m.


India: Anjani Portland Cement recorded sales of US$14.3m in the third quarter of its 2022 financial year, up by 5.6% year-on-year from US$13.9m in the third quarter of the 2021 financial year. Its net profit was US$566,000, down by 80% from US$2.82m.


US: Lehigh Cement’s Mason City cement plant in Iowa has transitioned to Portland limestone cement (PLC) production. The plant will produce the company’s EcoCem brand PLC. It previously launched the cement in Canada in February 2021.


US: Ash Grove Cement has re-opened its Port Manatee terminal in Florida following the installation of a new Kovako type ship unloader supplied by FLSmidth. The machine was custom built for Ash Grove by the Denmark-based company to meet its specific needs. The cement producer says it is the largest mobile pneumatic ship unloader built, has twin 800hp blowers, 37m suction arm and can offload a dry bulk vessel at a high rate while maintaining maximum efficiency and minimising environmental impact by eliminating dust emissions.

A ribbon-cutting ceremony to celebrate the event was held on 7 February 2022 as a shipment of fly ash was processed at the site. This maiden shipment completes the Phase 1 transformation project at Port Manatee, which began in early 2021. The project is intended to improve the subsidiary of CRH’s capacity to import cement, slag and fly ash for customers in Florida and South Georgia. It is also planning to use the terminal’s existing silo capacity to complement the capabilities of Ash Grove’s cement plants in Sumterville and Branford.


Canada: TransAlta Corporation has secured a contract to supply 100Gwh/yr of wind power to Lafarge Canada’s Exshaw, Alberta. The power will cover an estimated 25% of the plant’s electricity needs.

Lafarge Western Canada’s head of sustainability and environment Cailee Ellis said “This agreement, first of its kind for Lafarge in Alberta, is an important step to utilising higher amounts of renewable electricity at our facilities.”


Togo: Cimenterie de la Côte ouest-africaine’s (CimCo) new 2.5Mt/yr grinding plant in Lomé is preparing to produce its first cement in March 2022. Germany-based Intercem Engineering says that construction work has been completed on the project and that the cladding is in place. Currently, the cold commissioning is in progress. The plant will operate as a subsidiary of CimMetal Group.


Kenya: Bamburi Cement has signed a power purchase agreement (PPA) with Momnai Energy to set up two solar plants. One 14.5MW unit will be situated next to its integrated Mombasa plant and the other 5MW unit by its Nairobi grinding plant. This will account for up to approximately 40% of the cement producer’s total power supply. Construction of the solar power plants is scheduled to begin end of 2022, after requisite regulatory approvals with expected completion within a year.

“We are elated to be making this step towards switching to more affordable and clean energy that will not only lead to a significant reduction in power costs but also bring us closer to our goal of achieving net zero carbon emissions,” said Miriam Ngolo, Bamburi Cement’s Strategy and Business Development Director.

Other recent sustainability work by the subsidiary of Switzerland-based Holcim has included substituting heavy fuels with alternative fuels like biomass, including rice husks, and other waste material such as waste tyres and waste oil in its operations.


Colombia: Cement production grew by 16% year-on-year to 13.8Mt in 2021 from 11.8Mt in 2020. Data from DANE, the Colombian statistics authority reports that despatches rose by a similar rate to 13.0Mt from 11.2Mt.


Colombia: Cemex Colombia has recorded accumulated sales of 500,000m3 of its Vertua reduced-CO2 concrete. It aims to achieve net zero CO2 emissions by 2050.

President Alejandro Ramírez said “Our Vertua concrete sales volume is excellent news for the country. It demonstrates that a sustainable vision of construction is being consolidated in Colombia, conscious of its decisive contribution to global climate action.”


Saudi Arabia: Qanbar Ready Mix has run its first trial mix of concrete using Canada-based CarbonCure’s CO2 utilisation technology. The Eastern Province-based ready-mixed concrete producer conducted a full-scale plant trial in late December 2021 in Ras Al Khair Industrial City, according to Gulf Construction. Employees, customers from Saudi Aramco and engineers were present at the event. Concrete supplied from Qanbar Ready Mix’s batching plants will be used to supply projects at the King Salman International Complex for Maritime Industries and Services.


Japan: Taiheiyo Cement recorded consolidated sales of US$4.57bn in the first nine months of the 2022 financial year, down by 24% year-on-year from US$5.65bn in the corresponding period of the 2021 financial year. The group’s net profit in the period was US$256m, down by 20% year-on-year from US$322m. Dow Jones Institutional Newswires has reported that the producer forecast full-year sales in the 2022 financial year of US$6.15bn and a net profit of US$294m.


Honduras: HN Ingenieros has commissioned a new kiln line at a cement plant in Honduras. The supplier says that the line had previously been inactive since 2002, and is now the country’s largest.


China: China National Building Material subsidiary Nanjing Kisen has signed a long-term collaboration agreement with France-based Schneider Electric. The partners plan to develop models for increasing operational efficiency, digitisation and sustainability. Alliance News has reported that they will establish a series of joint pilot projects. They plan subsequently to explore plant engineering, procurement and construction (EPC) opportunities outside of China together.


Vietnam: Vicem sold 29.4Mt of cement and clinker in 2021, in line with its sales volumes in 2020. Viet Nam News has reported that the company produced 24.1Mt of cement during the year, down by 2.1% year-on-year. Its sales were US$1.46bn, in line with 2020 sales.

Vietnamese domestic cement consumption fell by 5.2% year-on-year to 59Mt in 2021.


Australia: In the third quarter of the 2022 financial year, James Hardie’s net sales rose by 22% year-on-year to US$900m. Its Asia Pacific fibre cement business recorded sales of US$140m, up by 20% and adjusted earnings before interest, taxation, depreciation and amortisation (EBIT) of US$38.2m, up by 17%. James Hardie’s North America fibre cement business’ sales also rose, by 24% to US$645m, while its adjusted EBIT rose by 18% to US$183m. Following the results, James Hardie raised its 2022 net income guidance to US$620 – 630m from US$605 – 625m.

Interim chief executive officer Harold Wiens said, "I am pleased to report the James Hardie team has continued to execute well on our stated global strategy.” He attributed the successes to “Firstly, enabling our customers to make more money by selling more James Hardie products and, secondly, marketing directly to the homeowners to create demand of our high value products through our customers."

Wiens also announced the launch of the company’s new Architectural cement boards collection.


Malawi: Lafarge Cement Malawi, which Huaxin Cement acquired from Holcim in December 2021, has renamed itself Portland Cement Malawi.

The Nyasa Times newspaper has reported that company secretary Constance Musopole said "Portland Cement Malawi will remain the home of our trusted brands which include DuraCrete, SupaSet, Kumanga and Khoma. We wish to inform the general public that the reputable legacy and the superior quality of goods and services that have been built over 65 years of existence in Malawi will indeed continue and also improve.” She added "Huaxin is among the 10 largest cement manufacturing companies globally with 115Mt/yr in capacity. We are excited to begin this new chapter in the legacy of the company."


India: JK Cement recorded a third-quarter consolidated net profit of US$18.8m in the third quarter of its 2022 financial year. The figure represents a 35% year-on-year decline from US$29.1m in the third quarter of the 2021 financial year.


US: Total shipments of cement in the US in the first 11 months of 2021 were 99.2Mt, up by 4.1% year-on-year from 95.3Mt in the corresponding period of 2020. The country imported 15.2Mt of cement, up by 17% from 13Mt.

Domestic clinker production for the year totalled 72.2Mt, up by 0.4% from 71.9Mt.


Vietnam: Vicem Bút Son sold 3.2Mt of cement in 2021, 91% of the volume stipulated in its plan for the year. Its clinker sales were 2.8Mt, 96% of planned volumes. Viet Nam News has reported that the company is targeting a 14% increase in cement sales to 3.4Mt in 2022. Its clinker sales target is 600,000t.


Mexico: Holcim Mexico has replaced 11% of its concrete truck fleet with 61 new natural gas and Euro V diesel-fuelled Sinotruk vehicles worth US$6.2m. The company says that some of the trucks run on 100% natural gas, reducing both their CO2 and particulate emissions by 25%. Parent company Holcim hopes eventually to roll out Sinotruk vehicles throughout operations in its Latin American region. Each truck has an 8m3-greater capacity than Holcim Mexico’s previous models, and also generates less noise.


Bangladesh: LafargeHolcim Bangladesh’s full-year sales were US$243m in 2021, up by 27% year-on-year. Its net profit was US$45.8m in 2021, up by 64%, according to the New Nation newspaper.

During the year, LafargeHolcim Bangladesh launched its new Water Protect and Shokti cements and continued to accelerate alternative fuel (AF) co-processing across its cement plant network.


US: Eagle Materials’ consolidated sales rose by 13% year-on-year to US$1.45bn in the third quarter of the 2022 financial year from US$1.28bn in the corresponding quarter of the 2021 financial year. Its sales of cement rose by 12% year-on-year to US$261m, while its earnings from the segment were US$79.8m, up by 13%. Cement volumes totalled 2Mt, up by 7% from third-quarter 2021 financial year levels.

Chief executive officer and president Michael Haack said that the results reflected both continued strength in US construction activity and excellent execution by Eagle Materials as Covid-19-related supply chain challenges continued. He said “We continue to see positive demand trends across our geographic footprint, driven by increased residential construction activity and expanded infrastructure investment. These trends should support growing construction activity and contribute to attractive pricing across our heavy and light materials businesses. We enter the last quarter of our fiscal year in a position of strength, with an excellent balance sheet enabling us to continue to execute on our core strategies.”

Haack added “I’m also proud to share that, during the first nine months of our fiscal year, we achieved the best safety performance in our history, demonstrating our deep commitment to our people and their wellbeing. During the quarter, we also continued to make strides towards our environmental stewardship goals. We are now producing and selling our eco-friendly Portland limestone cement (PLC) from four Eagle cement facilities.”


India: Sahyadri Industries plans to invest US$12.7m in the establishment of a cement board plant in Maharashtra. Reuters News has reported that the company expects to commission the unit by mid-2024.


India: Shree Cement has hired Denmark-based FLSmidth to carry out its digital transformation. The supplier will install its ECS/PlantDataManagement monitoring system at Shree Cement’s cement plants. It says that the technology will increase efficiency.

Shree Cement’s joint managing director Prashant Bangur said "We are always looking at ways to optimise production, and the decision to apply FLSmidth's information management system to all our sites is a natural next step." Whole-time managing director Prakash Narayan Chhangani said "FLSmidth is a trusted partner for us, as we demonstrated by the milling and pyro order we announced last year. And we are confident that this next step in our digital transformation will prove to be profitable."


Spain: Spain’s cement demand grew by 11% year-on-year to 14.9Mt in 2021, up by 1.4% from pre-pandemic levels of 14.7Mt in 2019. The Spanish cement association Oficemen has forecast a 4.7% rise to 15.6Mt in 2022 due to an increase in approved housing units and infrastructure projects.

The El Economista newspaper has reported that Spanish cement production capacity utilisation was 50% in 2021. Production costs were approximately 25% higher the before the Covid-19 outbreak.


Spain: Cemex’s Mósteles clinker pilot batch production unit at IMDEA Energy Institute in Madrid Autonomous Community has produced its first batch of solar-heated clinker. The unit uses Switzerland-based Synhelion solar radiation technology. The technology uses a solar receiver and gaseous heat transfer fluid to heat raw materials.

Cemex chief executive officer Fernando Gonzalez said “The production of the first solar clinker is an exciting milestone for this transformational technology. It is proof of our commitment to deliver tangible outcomes through innovation to achieve our goal of delivering only net-zero CO2 concrete by 2050.” He concluded “Cemex is building a better future, and that future must be sustainable.”


India: JK Lakshmi Cement recorded revenues of US$159m in the third quarter of its 2022 financial year, consistent with third-quarter levels in the 2021 financial year. Despite this, the company’s net profit declined by 42% year-on-year to US$7.91m from US$13.7m. Its operating costs grew by 4.6% to US$140m during the quarter.


India: Dalmia Cement (Bharat) has received clearance from the High Court of Andhra Pradesh to resume operations at its Kadapa cement plant. The producer had filed a writ against an order by the Andhra Pradesh Board Control Board (APPCB) to suspend production at the 2.5Mt/yr plant on 29 January 2021.


India: Dalmia Cement (Bharat) has commissioned a 14.7MW solar power plant at its 1.3Mt/yr Kapilas grinding plant in Odisha. The producer says that the new power plant multiplies its total solar power capacity in Cuttack District by six to 17.1MW from 2.4MW.

The company said "Furthering Dalmia Cement (Bharat)'s sustainability goal of becoming carbon negative by 2040, this initiative will enhance the plant's energy efficiencies."


Switzerland/France: Holcim is collaborating with Engie and and the French National Institute of Applied Sciences (INSA) Lyon to develop a cement-based energy storage technology to serve as an alternative to batteries. The solution will use cement hydration to store heat as energy and release it when needed in an infinitely repeatable cycle. The partners say that it will make energy storage local, safe, affordable and recyclable.

Holcim’s head of global innovation Edelio Bermejo said "The world needs innovative solutions to accelerate our shift towards renewable energy generation, distribution and storage – all areas in which Holcim can play a big part. With this collaboration, we are moving energy storage forward, opening up a new range of solutions based on materials that are local and recyclable."