Global Cement Newsletter

Issue: GCW559 / 01 June 2022

Headlines


One big story in India in recent weeks has been the start of action by the central government to tackle rising cement prices. First it reduced tax duties on petrol and diesel in late May 2022. Finance minister Nirmala Sitharaman also said that they were looking at ways of improving the availability of cement in the country, including better logistics, to help lower its cost. A delay to a change in the Goods and Services Tax (GST) rate structure is also being considered to slow inflation generally. Local press then reported a few days later that the government had set up a panel to explore ways of reducing the price of cement by distributing supplies better around the country. Specifically, it was talking to the South India Cement Manufacturers’ Association to work out ways for their members to meet the rising demand in other parts of the country. Reported options included looking at better use of rail and sea connections.

Chart 1: Map of Indian regions showing integrated/clinker production capacity per capita. Note: the chart does not include standalone grinding plant capacity. Source: Global Cement Directory, Indian census data. Map image adapted from Filpro CC BY-SA 4.0

Chart 1: Map of Indian regions showing integrated/clinker production capacity per capita. Note: the chart does not include standalone grinding plant capacity. Source: Global Cement Directory, Indian census data. Map image adapted from Filpro CC BY-SA 4.0.

The map above (Chart 1) summarises the general problem the country faces from a clinker production point of view. More clinker can be produced in the south of the country than elsewhere. This map is partly a reflection where the limestone reserves are. However, it does not show that the East region of India has a higher concentration of cement grinding plants than elsewhere. Additionally, a number of new integrated/clinker plants have been built in the East and more have been proposed. The data in Chart 1 suggests that India has an integrated production capacity of 312kg/capita nationally. This compares to a cement consumption of 200 – 250kg/capita as reported by the ratings agency Crisil.

Data from Crisil indicates that cement prices grew by 9% from the start of 2021 to March 2022. A similar rise of 8.1% month-on-month was reported in April 2022. It is not a direct comparison but retail inflation in India was reported as being 7.8% in April 2022. The cause of this has been blamed on a general tightening in energy supplies in the autumn of 2021 followed by the effects of the war in Ukraine that started in early 2022. Rising international coal and petcoke prices have made manufacturing cement more expensive. Growing petrol and diesel prices have made moving it around costlier still. Looking at the cement market generally, Crisil noted that demand for cement grew sharply in the first half of the 2022 financial year but then slowed in the second half due to poor weather, issues with sand supply and a labour shortage. The ratings agency has forecast stable growth in the 2023 financial year but with the caveat that the mounting costs of construction, including building materials, could dent this.

The fundamentals for the world’s second largest cement market look good as Adani Group’s recent deal to buy Holcim’s Indian assets for US$6.34bn attests. This won’t be much comfort for end-users though who are watching the price of cement rocket upwards. Yet how far the central government will be able to help the southern cement producers move their wares around more easily remain to be seen. If it succeeds, it may slow the rise in prices but it seems unlikely to halt it. The reaction of the more northerly producers is also key, since one option they have is to slacken their own price increases by just enough to fight off the new competition. Already they are facing the dilemma of raising their prices to cover input costs versus the effect this may have on overall demand. All of this looks set to put pressure on the producers’ margins. Indian cement prices look set to go up whatever happens next, making everyone unhappy. Some may be more unhappy than others.


Argentina: Holcim Argentina has appointed Julio Asnal as its Director of Sales and Integral Solutions. He will lead the company’s sales strategy.

Asnal’s prior professional experience includes working as a regional director for Danone and as a commercial director for Coca-Cola FEMSA, where he also held marketing and strategic planning roles. Most recently he has worked in management positions for Promedon over the last decade. He holds a bachelor’s degree in Business Administration from the National University of Córdoba and a master's degree in Business Administration from IAE in Buenos Aires.


Germany: Beumer Group has appointed Rudolf Hausladen as its chief executive officer (CEO). He succeeds Christoph Beumer, who has been in post since 2000. Beumer will remain a member of the management board until the end of 2022 and then move to the advisory board.

Hausladen, aged 52 years, holds a university degree in mechanical engineering as well as a master’s in business administration (MBA). Previously he worked in management positions for logistics companies including Swisslog and Gebhardt Logistic Solutions. His most recent position outside of Beumer was as the group CEO of electronic company ERNI.


Sweden: Cementa has completed its feasibility study for a carbon capture and storage (CCS) system at Slite cement plant in Gotland. The producer says that it will now proceed to the next stage of the project, with the aim of producing climate positive cement from 2030. Sister company Norcem is currently building a 400,000t/yr CCS system at its Brevik cement plant in Norway. Cementa says that its new system will have four times the capacity of that at the Brevik plant, and reduce Sweden's total CO2 emissions by 3%. One or more of 'several storage solutions' currently under development in the North Sea will serve to store the plant's captured CO2 emissions.

General manager Giv Brantenberg said "With the knowledge we have built up through our pioneering project at Norcem in Brevik, we now have a good picture of how to move forward in Sweden. The Nordic countries have what it takes to lead the climate transition in the construction sector."


UK: Hanson plans to install a C-Capture solvent-based carbon capture system at its Ketton cement plant in Rutland. The producer says that the technology reduces energy requirements per tonne of CO2 by 40% compared to other capture systems.

Chief executive officer Simon Wills said “Carbon capture is a critical part of our strategy to decarbonise cement production, and essential if we are to reach net zero carbon by 2050. If successful, the C-Capture process has the potential to be rolled-out across other sites across the HeidelbergCement Group.”


Malaysia: Hume Cement Industries Berhad recorded sales of US$117m in the first nine months of 2022, up by 4.7% year-on-year from US$112m. It recorded a loss for the period of US$415,000, down by 82% from US$2.27m. In the third quarter of 2022, Hume Cement Industries Berhad recorded a profit of US$438,000, compared to a US$2.69m loss in the third quarter of 2021.


Chile: Cbb's first-quarter operating income was US$93.5m in 2022, up by 14% year-on-year from US$81.7m the first quarter of 2021. Nonetheless, the company's net profit fell by 89% to US$573,000 from US$5.04m.


Namibia: The Namibian government has granted Whale Rock Cement permission to resume production of its Cheetah brand cement at its Otjiwarongo grinding plant. Authorities suspended operations at the plant on 10 May 2022.Labour Ministry acting executive director Lydia Indombo cited multiple contraventions of occupational safety regulations, including failure to issue personal protective equipment (PPE), failure to maintain good housekeeping, lack of sanitary conveniences and lack of first aid equipment, as the cause of the suspension.

Indombo said "The ministry conducted verification inspections on 16 and 20 May 2022 to evaluate the compliance on the identified shortfalls and is satisfied with the level of compliance." She added that the ministry had recommended the resumption of production activities.


Zimbabwe: Germany-based Gebr. Pfeiffer says that a new MVR 3070 C-4 mill for cement grinding is due to be commissioned at Holcim Zimbabwe’s integrated plant at Manresa near Harare. The order was handled by the Chinese contractor CBMI.

The roof at the plant collapsed over a cement mill in October 2021 leading to a reduction in production volumes at the plant. The mills were restarted in February 2022 but one of the one of the existing cement ball mills was decommissioned. This mill is being replaced by the new vertical roller mill supplied by Gebr. Pfeiffer. It is expected to double the plant’s cement production capacity after it is commissioned in the second quarter of 2022.


US: Buzzi Unicem USA plans to switch from producing Ordinary Portland Cement (OPC) to Portland Limestone Cement (PLC) at all of its plants by the end of 2022. It said that it intends to transition from traditional ASTM C150 type I and II (OPC) cements in favour of ASTM C595 type IL cement (PLC). So far its Cape Girardeau and Festus plants in Missouri, Greencastle plant in Indiana, Maryneal plant in Texas and Pryor plant in Oklahoma have already completed the move to the PLC. The San Antonio plant in Texas will complete its transition in June 2022, the Chattanooga plant in Tennessee will switch its product line by September 2022 and the Stockertown cement plant in Pennsylvania will complete its conversion later in 2022. The company added that its engineers will continue working to increase the limestone content in cement by up to the permitted 15% and develop High Early Limestone cement, along with other new cement products with reduced clinker content.


Germany: Cemex has inaugurated the Carbon Neutral Alliance at its integrated Rüdersdorf cement plant. The initiative is intended to accelerate the development of the site into the world’s first carbon-neutral cement facility by 2030. Jörg Steinbach, Brandenburg’s Minister of the Economy, Fernando A Gonzalez, the chief executive officer of Cemex, the Mexican ambassador to Germany and representatives from Sasol attended the event.

The Carbon Neutral Alliance comprises a network of over 20 private and public organisations, dedicated to industrial decarbonisation. Among the technologies being introduced at Rüdersdorf include a waste heat recovery project scheduled for the summer of 2022, the development of renewable energy generation and a scheme to produce aviation fuel onsite in coordination with Sasol and Enertrag.

In 2020 Cemex announced its decarbonisation target of reducing its CO2 emissions by 40% by 2030 compared to 1990 levels. This target is expected to be achieved in Europe in 2022. By 2030, Cemex intends to reduce emissions at its European sites by 55%, in line with European Union's new strategy to reduce CO2 emissions. Cemex has also announced its goal to achieve net-zero carbon emissions in concrete by 2050.


Austria/Canada: Canada-based Solex Thermal Science has been selected by Austria-based Cemtec for a mineral cooling project based in Central Europe. As part of the agreement, Solex will deliver a customised plate-based moving bed heat exchanger (MBHE) that will be used to indirectly cool a milled, mineral-based powder that’s similar to cement. The unit is expected to be delivered by the summer of 2022.

Solex says that the use of a welded plate-channel design allows the powder to flow by gravity within a vertically orientated exchanger and between banks of stainless-steel plates. A heat transfer fluid passes within the plates to cool the material by conduction. The use of indirect heat transfer technology, combined with customised plate spacing, provides the necessary residence time to eliminate caking within the unit while also ensuring consistent temperature profiles at the outlet.

“We are excited to bring our decades of thermal engineering experience to this collaboration with Cemtec,” said Gerald Marinitsch, Global Director, Industrials for Solex Thermal Science. “We are confident that our MBHE technology will provide a reliable, real-world solution to this unique and important cooling application.”

Cemtec is a specialist in providing wet and dry grinding technologies for many types of bulk materials and minerals including the cement sector. Solex Thermal Science develops indirect heat exchange technology for the heating, cooling and drying of free-flowing granular materials such as solid granules, pellets, beans, seeds and particles.


India: Jindal Group has signed a memorandum of understanding with the state government of Chhattisgarh for the establishment of its planned Raigarh cement plant. The Times of India newspaper has reported that the plant will have an integrated capacity of 2.5Mt/yr, in addition to a further 2.5Mt/yr in clinker capacity. It will also operate a 12MW waste heat recovery (WHR) plant.


China: Huaxin Cement has signed a capital injection agreement with Huangshi State-owned Assets Company to acquire a 5.2% stake in the latter for US$150m. The producer says that it will strengthen its cooperation with Huangshi State-owned Assets Company in order to accelerate development of its non-cement business. It said that the transaction will also improve its innovation capabilities, helping it to achieve a low-carbon transformation. Huangshi State-owned Assets Company indirectly owns a 16% share of Huaxin Cement.


China: Anhui Conch Cement has engaged Conch IT Engineering for software platform supply and maintenance services for some of its subsidiaries. The supplier will provide design and technical services for the production process control system software, a sales and product dispatch system, production data uploading and a quality management system for clinker production lines, grinding units, aggregate, commodity concrete and technology modification projects. The value of the work is US$36m.


Vietnam: Vietnam National Cement Association (VNCA) members exported 15.5Mt of cement in the first five months of 2022, down by 14% year-on-year from 16.2Mt in the corresponding period of 2021. The value of the cement and clinker was US$693m, up slightly from US$690m.

In May 2022, Vietnam exported 1.5Mt of cement and clinker, with a value US$92m, down by 52% in volume and up by 29% in value year-on-year.


Canada: Workers at St Mary’s Cement’s Port-Daniel-Gascons cement plant have voted in favour of taking strike action in a dispute over matters including wages and pensions. Local press has reported that workers and the company, a subsidiary of Brazil-based Votorantim Cimentos, will sit in negotiations on 13 and 14 June 2022. Employees previously rejected a ‘final and comprehensive’ offer from the company earlier in May 2022.


Saudi Arabia: Southern Province Cement has completed technical studies and commenced construction of a new 5000t/day line at its Jazan cement plant. The company will also build the infrastructure for another 5000t/day line at the site. Reuters new has reported that, together, the lines will replace the plant’s existing production lines.


Egypt: Misr Beni Suef recorded sales of US$23.5m in the first quarter of 2022, up by 70% year-on-year from US$13.8m in the first quarter of 2021. The producer recorded a net profit of US$2.57m, up by 28% year-on-year from US$2.01m.


Zimbabwe: Lafarge Zimbabwe’s cement volumes fell by 55% year-on-year in the first quarter of 2022. The company restarted grinding units at its Manresa grinding plant in February 2022 following a roof collapse in October 2021. In a trading update, Lafarge Zimbabwe said that the disruption impacted its profit in the quarter. The producer took the opportunity to decommission one of its ball mills for replacement with a new vertical roller mill in mid-2022.

Chief executive officer Geoffrey Ndugwa said “The company is confident that volumes will recover and grow as the availability of cement stabilises, especially after the new vertical roller mill start-up in the second quarter of 2022.”


Europe: The European cement industry association Cembureau has published its 2030 Biodiversity Roadmap. The roadmap sets out the association’s strategy for becoming nature positive by 2030. This consists of four focus areas, namely participation in the European Union (EU) Pollinators Initiative, control of invasive species, support for protected species and ecosystem rehabilitation efforts.

Chief executive officer Koen Coppenholle said “The European cement industry is committed to achieving the goals set in the EU Green Deal. In addition to climate change, one of the key priorities of our industry is to protect and preserve the rich ecosystems thriving in and around our quarries and to make a strong contribution to biodiversity across the EU.”


India: The National Bank for Agriculture and Rural Development (NABARD) has entrusted Ambuja Cement Foundation with responsibility for a new watershed development project in Himachal Pradesh’s Mandi District. The work will support local farmers in increasing their production and productivity. It will be the 10th such project that Ambuja Cement Foundation has executed.

Director and CEO Pearl Tiwari said “Ambuja Cement Foundation has a long-standing relationship with NABARD, and we have been working together on watershed development in Himachal Pradesh for the past 14 years. With this new project, we are once again working to empower farmers of another district in the hilly region.”


India: India Cements’ fourth-quarter sales were US$183m in its 2022 financial year, which ended on 31 March 2022, down by 4% year-on-year from US$190m in the corresponding quarter of the 2021 Indian financial year. The producer’s net loss was US$1.37m, as against a first-quarter 2021 financial year net profit of US$6.47m. During the quarter, the company’s cement sales volumes fell by 1.4% to 2.63Mt from 2.67Mt, while its clinker sales volumes fell by 88% to 38,000t from 324,000t. For the full 2022 financial year, India Cements’ sales of cement rose by 2% to 9.07Mt from 8.9Mt. Coal costs ended the financial year at US$300/t, five times the 31 March 2021 price of US$60/t.

India Cements said “The spiralling prices of fuel, along with the shortage in availability of the same, affected the margins of the industry. The woes of the industry worsened further with the outbreak of Russia's war with Ukraine resulting in sanctions being imposed on Russia and its exports, fuelling further shortage of coal and oil in the market.”


US: The US Department of Energy has granted Solidia Technologies US$2.1m in funding for the development and testing of carbonation methods for its Solidia Cement. Solidia will research synthetic supplementary cementitious materials (SCMs) production methods using direct CO2 capture and utilisation.

CEO Russell Hill said “We are proud to partner with the US Department of Energy to continue innovating and ultimately deliver on our mission to provide commercially viable decarbonisation technologies and sustainable solutions for the global construction and building materials industries. The funding will advance our carbon capture, utilisation and storage (CCUS) technologies and synthetic SCMs that can be easily integrated into Portland cement-based concrete formulations, offering manufacturers a solution that is sustainable environmentally and economically.”


Colombia: Cementos Argos exported 297,000 of cement in the first quarter of 2022, up by 32% year-on-year from first-quarter 2021 levels. The producer said that it achieved the increase thanks to the commissioning of its new 3.5Mt/yr Cartagena terminal in February 2022, which tripled its export capacity. The company says that its export network will now have the capacity to export 1.3Mt of cement in 2022.


Germany: HeidelbergCement has replaced its existing revolving credit line with a new syndicated credit line based on the Loan Market Association’s sustainability-linked loan principles (SLLP). HeidelbergCement says that key performance indicators of its progress towards sustainability objectives will determine the credit line’s credit margin, adjusted according to its CO2 emissions per tonne of cementitious material and alternative fuel (AF) substitution rate. HeidelbergCement says that its ‘solid financial base’ enabled it to reduce the syndicated credit line to US$2bn from US$3bn, and to avoid financial covenants.

Chief financial officer René Aldach said “With the conclusion of the new syndicated credit line, we have taken the first step towards sustainable financing. In addition, we were able to improve the terms and conditions compared with the previous credit line.”


India: The Indian government has established a special panel to examine an array of possible measures to lower high cement prices in parts of the country. The Hindu newspaper has reported that the panel will consider plans, including increasing cement shipping from South Indian plants currently operating under capacity to areas affected by shortages. The national government is in talks with the South India Cement Manufacturers' Association (SICMA) about the possibility of increasing members' cement sales in future.


India: Holcim India subsidiary ACC has announced that industrial conglomerate Adani Group's open offer for Holcim's Indian business will open on 6 July 2022 and conclude on 19 July 2022. Live Mint News has reported that the parties expect the deal to subsequently close within 2022.


India: India Cements has signed a strategic collaboration agreement with 3D printing equipment supplier company Tvasta Manufacturing. The agreement establishes mutual strategic support between the partners in their efforts to develop new raw materials for use in 3D printing.

India Cements director Rupa Gurunath said "We are excited that Tvasta Manufacturing's technology delivers a cost-effective construction method that offers quicker turn-arounds as compared to conventional methods. But what we are particularly enthusiastic about is that this methodology is more eco-friendly, with lower consumption of water and sand."


US: Holcim has commissioned 10 Hyliion Hypertruck ERX electric trucks in its Oklahoma and Texas cement and concrete operations. The cement producer says that the trucks reduce CO2 emissions by 89% when using renewable natural gas compared to conventional diesel vehicles.

Holcim US aggregates and construction materials CEO Jay Moreau said “This agreement with Hyliion underscores the direction Holcim is taking around the globe to reach our sustainability and environmental goals. By integrating sustainable technologies like electric vehicles into our operations, such as those of Hyliion, we are able to build on our promise of making greener cities, reducing emissions and driving the circular economy.”


Ireland/UK: An Irish high court has granted Mannok an injunction to prevent former Quinn Industrial Holdings CEO Seán Quinn from trespassing on the site of its Derrylin cement plant and quarry in Cavan and County Fermanagh, Northern Ireland, UK. The Irish Examiner newspaper has reported that the company cited safety concerns over Quinn's presence near industrial equipment and a sheer quarry drop. His media statement in 2021 that he would 'do anything' to remove its directors compounded Mannok's 'sense of unease.'