Global Cement Newsletter

Issue: GCW576 / 28 September 2022

Headlines


Nigerian billionaire Aliko Dangote was spotted attending the inauguration ceremony of Kenyan President William Ruto earlier in September 2022. This is relevant because Dangote’s cement company previously announced plans in 2016 to build two 1.5Mt/yr plants in Kenya, near Nairobi and Mombasa respectively. They were intended to become operational by 2021. Unfortunately, Dangote himself allegedly described Kenya as being more corrupt than Nigeria to Kenyan broadcast journalist Jeff Koinange a few years later and nothing more happened. Back in 2014 Ruto visited Dangote Cement’s Obajana plant in Kogi state in Nigeria when the politician was the Deputy President of Kenya. Dangote’s attendance at the presidential inauguration this month suggests at the very least that his relationship with Ruto remains active. Maybe more news on those planned plants will follow.

Graph 1: Cement in Kenya, 2018 – June 2022. Source: Kenya National Bureau of Statistics (KNBS).

Graph 1: Cement in Kenya, 2018 – June 2022. Source: Kenya National Bureau of Statistics (KNBS).

The reason why the owner of Africa’s largest cement company might be interested in the Kenyan market can be seen in its latest cement production figures. Data from the Kenya National Bureau of Statistics (KNBS) shows that production for the first half of 2022 grew by 20% year-on-year to 4.95Mt in the first half of 2022, from 4.12Mt in the same period in 2021. Cement production was broadly similar in 2018 and 2019 at around 6Mt. It then increased by 25% to 9.25Mt in 2021 from 7.41Mt in 2020. On a rolling annual basis, production picked up at the start of 2020 and has risen consistently since then each month, peaking at over 10Mt in May 2022.

However, the elections in August 2022 probably slowed this growth trend, despite being much more peaceful than those in 2007, although the KNBS is yet to release the data. Bamburi Cement said in its outlook for the second half of 2022 that it expected markets to recover after the ballot. The subsidiary of Holcim reported increasing turnover in the first half of 2022, due to mounting sales volumes and price rises, but its profit fell sharply. It blamed this on fuel and logistics inflation, growing clinker import costs as well as negative currency exchange effects.

That last point about imported clinker is worth noting given that a government report in late 2021 found that the country had a clinker shortage of up to 3.3Mt/yr. Yet, the KNBS data in recent years shows that cement production and consumption are broadly similar, suggesting that the shortfall in clinker is being imported. The report added that 59% of the imported clinker originated from Egypt, tariff free, due to a free trade agreement. Local producers were reported to have been operating at a 65% capacity utilisation rate. Egypt and the UAE accounted for most of the imported clinker followed by Saudi Arabia. An interview in the Standard newspaper at this time with Bamburi Cement’s managing director Seddiq Hassani revealed that, despite locally produced clinker being cheaper than imported clinker, some producers were reluctant to hand control of a key input material over to their local competitors. Other producers, predictably, were trying to persuade the government to raise the duty on imports of clinker from 10% to 25%. Tariff discussions have continued in 2022.

So far in 2022 the other big stories in the sector have included Bamburi Cement’s plans to build two solar power plants and a major repair to the kiln shell at East Africa Portland Cement’s (EAPCC) Athi River cement plant. The solar plants will be built next to Bamburi Cement’s integrated Mombasa plant and its Nairobi grinding plant. Once operational in 2023 they are anticipated to supply up to 40% of the cement producer’s total power supply. Devki Group, the owner of National Cement, also announced plans in August 2022 to set up a wind farm near Mombasa. However, this seems more like an attempt to diversify the group into electricity production rather than to supply its own plant near Nairobi. EAPCC’s upgrade project has completed this week after about a month and half of work. It is intended to increase the plant’s cement production by 50%.

Cement production started in rise in 2020 but the Covid-19 pandemic may have constrained this. Production (and consumption) then jumped up in 2021 and looks set to do similar in 2022 bar a possible blip from the elections in August 2022. This is despite the global market issues arising from the end of Covid-19 and the war in Ukraine. These may be uncertain times but the fundamentals for the Kenyan cement market look positive despite rising end prices. Unsurprisingly, it looks likely that Dangote Cement remains keen to extend its business to Kenya.


India: Sagar Cement has appointed KV Vishnu Raju as its chair. He succeeds K Thanu Pillai in the post.

Vishnu Raju is a graduate in Chemical Engineering from the National Institute of Technology in Tiruchirapalli and he holds a master's degree in Chemical Engineering from the Michigan Technological University in the US. He worked as an executive director and then managing director of Raasi Cements in the 1990s. He was later on the board of Anjani Portland Cement as its chair and managing director from 1999 to 2014.

Sagar Cement operates three integrated plants and two grinding plants in Andhra Pradesh, Madhya Pradesh, Orissa and Pradesh Telangana.


Spain: LafargeHolcim España has appointed Carmen Díaz appointed as its director general. She succeeds Isidoro Miranda in the position and will report to Miljan Gutovic, Region Head EMEA at Holcim Group.

Díaz trained as a chemical engineer from the University of Oviedo and has taken the General Management Program (PDG) from the IESE Business School. She started working for Lafarge in 2002 as the head of its concrete business in Spain. She held the position of VP Commercial Performance in 2014 with responsibility for 30 countries. Later she became the Head of Ready-Mix Commercial and then the General Manager for the ReadySet Mix Digital Venture. Most recently she was worked as the Commercial Director of Spain for LafargeHolcim.


India: Birla Corporation plans to invest a total of US$1bn in realising its planned 50% cement capacity footprint expansion to 30Mt/yr by 2030. The producer is considering establishing 4Mt/yr-worth of new cement plants, possibly in the form of a new 4Mt/yr integrated cement plant in Chhattisgarh. It would also carry out 4Mt/yr-worth of upgrades and 2Mt/yr-worth of debottlenecking work.

The producer expects its newly commissioned Mukutban cement plant to contribute 600,000 - 700,000t of cement production during the remaining five months of the 2023 financial year, rising to 3Mt/yr by 2024.

During the 2022 financial year, Birla Corporation increased its cement sales volumes by 6% to 14Mt. The company said that it achieved 95% capacity utilisation throughout the year. It noted continuing cost pressures and slow demand growth so far in the 2023 financial year.

Chair Harsh Vardhan Lodha said "Things may not look up immediately, but post-Diwali we are hopeful of a robust turnaround."


India: Ratings agency Crisil forecasts that the operating profitability of cement producers will decline by around 15% year-on-year to around US$11/t in the 2023 financial year due to growing fuel costs. However, it added that a 17% growth in cement demand in the quarter from April to June 2022 would mitigate the impact of this. It expects that growth in the cement market in the 2023 year will be driven by non-residential sectors such as infrastructure development and commercial projects. By region, growth is anticipated to increase fastest in eastern regions, followed by central and southern regions but the northern and western regions could be more subdued. It added that any significant delay in the reduction of petcoke and coal prices or any company that was unable to increase its cement prices would add further pressure to the market.


India: Gensol has commissioned a 6.7MW captive solar power plant for Shree Cement’s Panipat plant in Haryana. The project is estimated to save over 9000t/yr of CO2 emissions. The cement producer acquired the 1.5Mt/yr cement grinding plant in 2015.


Pakistan: The Punjab Assembly has constituted a committee to review proposed plans for a new cement plant in Chakwal in the Province's Rawalpindi Division. Protestors have previously complained about plans to the Punjab Environment Protection Agency. The Dawn newspaper has reported that stated concerns include the threat to the local water supply, damage to future tourism promotion and possible harm to endangered species, including autochthonous wild sheep.


Malaysia: Bank CIMB Group Holding Berhad has published sustainable finance targets for its lending to cement sector clients. Islamic Finance News has reported that the institution will reduce the emissions intensity of loans to cement producers by 36% to 720,000t per tonne of cementitious product by 2030 from 460,000 at present.

CIMB Group Holding Berhad recently doubled its sustainable finance target to US$13m by 2024, from US$6.48m.


Australia: Fremantle Ports has broken ground on its construction of a new US$35.1m cement terminal at Kwinana Bulk Terminal in Western Australia. Business News Western Australia has reported that contractor COVA-Haywards will build a 40,000t-capacity clinker storage dome at the site. The terminal will supply BGC and Cockburn Cement's local grinding operations. Commissioning is scheduled for 2024.

State development minister Roger Cook said"It will significantly improve our capability to move clinker faster, more safely and with very significant environmental benefits, and provide the capacity for the port facility to accommodate future trade growth. It's a great example of planning assets to integrate the state-owned port with adjacent private facilities, with benefits for all."


France: HeidelbergCement subsidiary Ciments Calcia plans to lay the first stone of a major upgrade project at its Airvault cement plant on 5 October 2022. The event will mark the start of the construction phase of a new 4000t/day clinker production line, according to La Nouvelle République newspaper. The Euro300m project will be built by Germany-based ThyssenKrupp.


Germany: Heidelberg Materials says it is considering shutting down plants in Germany due to the high cost of gas and electricity. In comments reported by Reuters chief executive officer Dominik von Achten said, "If power prices won't come down sustainably, we would have to take individual plants in Germany completely off the grid. That's what we have prepared for." He added that the company is shifting production to times and days when power prices are lower including at the weekend. However, changing staff shift patterns has required ongoing discussions with labour unions.

The building materials company expects its energy bill to rise by around half year-on-year to over Euro3bn in 2022. It has called on the German government to place a cap on energy prices despite measures the company has already taken to protect itself from soaring costs, such as using alternative fuels.


Spain: Sustainability Observatory's Decarbonisation 2022 report has named FCC, Cemex and Holcim on a list of Spain's top 10 CO2 emitters. Construction conglomerate FCC, parent company of Cementos Portland Valderrivas, was the seventh largest contributor the country's CO2 emissions during the year. Mexico-based Cemex placed joint eighth with energy provider Iberdrola at 2.4Mt-worth of CO2 emissions in 2021, followed by Switzerland-based Holcim with 2Mt.

Spanish CO2 emissions grew by 5.1% year-on-year in 2021, and by 3% across industries subject to emissions credit trading, which include the cement sector. Together, the top 10 emitters accounted for 57% of these industries' emissions, and 19% of total national emissions.


Greece: Titan Cement Group says that its H2CEM green hydrogen projection has received inclusion under the EU Important Project of Common European Interest (IPCEI) Hy2Use. Hy2Use consolidates funding for hydrogen electrolysis, transport and storage development projects across Europe. Titan Cement Group’s H2CEM project consists of Euro60m-worth of new green hydrogen production installations at its Drepano, Efkarpia and Kamari cement plants. The installations will produce hydrogen through electrolysis using renewable energy sources. The producer says that use of the hydrogen as cement fuel will reduce the plants’ CO2 emissions per tonne of cement by 8%, corresponding to 160,000t/yr of emissions. H2CEM is Hy2Use’s only cement plant project.

Titan Cement Group aims to achieve carbon neutrality by 2050.


UK: Innovative Ash Solutions, a joint venture of Levenseat and Organic Innovative Solutions, has launched a new air pollution control residue (APCR)-based supplementary cementitious material (SCM). The supplier produces the material at its Lanarkshire treatment facility using APCR local from municipal solid waste (MSW) and wood biomass incinerators. Innovative Ash Solutions has received planning permission for a 54,000t/yr industrial-scale APCR-based SCM plant, and plans to establish a total of three plants in the UK, one of which will reach a capacity of 500,000t/yr. It has also signed an exclusive licensing agreement with an Australia-based importer for the material.

The SCM is designed to replace pulverised fly ash (PFA), of which the UK imported 325,000t in 2019, more than four times its 2012 import volumes of 76,000t.

Innovative Ash Solutions director Robert Gren said “We are excited to bring this new product to market. Innovative Ash Solutions is the first and, so far, the only company in the UK to have achieved ‘End of Waste’ accreditation for a PFA replacement for this type of use. Our research shows there is potential to produce more than 500,000t/yr of PFA replacement from UK APCRs every year, which would reduce the need for importing materials and support the decarbonisation of cement and concrete products.”


India: A court has ruled that the Builders Association of India (BAI) is an interested party, and thus able to complain to the Competition Commission of India (CCI), over alleged cement sector cartelisation leading to cement price rises. BusinessLine Online News has reported that the BAI believes high Southern Indian prices to be unaccountable except as an outcome of cartelisation.

The CCI launched its on-going cement cartel investigation in 2019.


Costa Rica: The Costa Rica Institute of Technical Standards (INTECO), with confirmation of the National Institute for Women (INAMU), has renewed Holcim Costa Rica’s Management System for Gender Equality in the Workplace certification. This recognises the company’s commitment to promoting the role of women in its operations. Holcim Costa Rica requires the candidate pool for new positions to consist of 50% men and 50% women. This has helped its realise representation of 52% women across its corporate offices, and 35% in all leadership roles. Its CEO Andrea Lara said that the producer assures its employees a work environment characterised by respect, fairness and an absence of harassment or discrimination.

Lara said “Both men and women have the same opportunities. The position is awarded to the most qualified man or woman for the position.”


India: Police raided a Gwalior, Madhya Pradesh, fake cement bagging plant on 26 September 2022. The Free Press Journal newspaper has reported that the officers arrested multiple suspects and recovered 200 bags of fake cement and 5000 bags of raw materials for fake cement mixing.

UltraTech Cement had previously reported to police that counterfeit cement bearing UltraTech Cement branding was circulating in the district.


India: Ramco Cements plans to inaugurate its upcoming Nandyal cement plant in Kalvatala, Andhra Pradesh, on 28 September 2022. The Sakshi Post newspaper has reported that the plant will have a cement capacity of 2Mt/yr. Ramco Cements’ planned total capital expenditure (CAPEX) investments during the 2023 and 2024 financial years (1 April 2022 – 31 March 2024) are expected to reach US$154 – 167m.

Two West Bengali welders fell to their deaths at the site of the upcoming Nandyal cement plant on 25 September. The welders had been working on a conveyor system when it snapped. The Times of India newspaper has reported that both workers died immediately. Police have informed their relatives and are conducting post-mortems.


Saudi Arabia: Qassim Cement has concluded a non-binding memorandum of understanding (MoU) with Hail Cement for acquisition of the latter’s issued shares. After any acquisition takes place, Qassim Cement plans to issue US$377m-worth of share capital in favour of Hail Cement’s existing shareholders.


UK: Clean Energy Ministerial CCUS (CEM CCUS) and the Global Cement and Concrete Association (GCCA) have announced a new partnership aimed at scaling up the deployment of carbon capture technologies in global cement and concrete production over the 10-year period up to 2033. The partners will explore incentives, policy frameworks and finance solutions that can best facilitate industrial-scale CCUS projects. Additionally, they will seek to ensure the long-term development of CCUS via technological developments.

CEM CCUS Norway initiative co-lead Henriette Nesheim said “This is a great opportunity to work together with a vitally important industry. In Norway we are already building our first cement CCS project in Brevik, and we look forward to sharing the experience with others.”


India: The Confederation of Indian Industry has certified Sagar Cements’ Bayyavaram grinding plant as an Excellent Energy Efficient Unit with an award at the Energy Management Excellence Awards 2022. The facility was also among recipients of the confederation’s GreenCo Star Performer Awards 2022.


Spain: Cementos Portland Valderrivas has renewed its European Environmental Management System (EMAS) registration for its Alcalá de Guadaíra cement plant. The Spanish Association for Standardisation (AENOR) and government of Andalusia verified the registration. The company says that it confirms its commitment to the environment and transparency.


Canada: Investment bank BDC Capital has invested US$3.7m in concrete testing technologies supplier Giatec. BDC Capital hopes that the investment will further the development of CO2-reducing technology and AI-based concrete testing.

Giatec CEO Pouria Ghods said "The BDC Capital investment will propel Giatec's expansion into international markets and accelerate our innovation in CO2-reducing technology, moving the concrete industry towards carbon neutrality. BDC has a long history of supporting emerging Canadian cleantech firms in their growth through exports, research and development. We at Giatec are looking forward to working with BDC in our mission to revolutionise the concrete industry and to create yet another success story for the BDC cleantech practice.”


Austria: Starlinger launched its new 22% recycled plastic cement bags at the K Show trade fair in Düsseldorf, Germany. The bag implements Starlinger’s GripTEC technology, which increases the coefficient of friction on bag surfaces so that stacked bags do not easily slip.


Austria: PERI and STRABAG have used a COBOD 3D printer to successfully build Europe’s first 3D printed office building in Hausleiten, Lower Austria.

PERI board member for innovation and marketing Thomas Imbacher said "The building in Hausleiten is a milestone for STRABAG, for PERI, for all involved. We are convinced that 3D printing of buildings will be part of the future of construction, as this technology offers solutions for challenges that are currently occupying our industry: digitalisation, efficiency, shortage of skilled workers and much more."


Pakistan: Lucky Cement has informed investors that it plans to buy back shares up to an equivalent of 3.1% of its registered share capital, which it has valued at US$417,000. The company will commence the purchase from 29 September 2022, and continue until its completion or 27 March 2023.


Belgium: Holcim has completed its acquisition of façade and external insulation systems producer Cantillana. Holcim said that the deal expands its position in building renovation and energy efficiency solutions, aligning with its Strategy 2025 – Accelerating Green Growth plan.


Europe: The European Commission has approved the IPCEI Hy2Use plan for the construction of an international hydrogen electrolysis, transport and storage network. IPCEI Hy2Use consists of multiple projects planned for completion by 2026, with the commissioning of all infrastructure scheduled for 2036. 13 EU member states and Norway will contribute Euro5.2bn in funding, with a view to attracting private investments worth Euro7bn.


Algeria: Lafarge Algeria has launched Chamil cement, a 40% reduced-CO2 cement, which contains locally sourced clay and ferrous materials. The producer developed Chamil cement based on technology from the Rouiba Construction Development Laboratory.

Lafarge Algeria aims to achieve export volumes of 3Mt across its product range in 2022.


Spain: Heidelberg Materials subsidiary Cementos Rezola has made a donation of 1t-worth of food to the Gipuzkoa Food Bank, which delivers food to households across Gipuzkoa Province. Europa Press News has reported that the cement producer despatched the donation from its Añorga cement plant in San Sebastián.

Cementos Rezola thanked the Gipuzkoa Food Bank for its work in support of 'Gipuzkoan families that are going through difficult times in a context marked by the cost of living and the increase in costs of energy.'