Global Cement Newsletter

Issue: GCW609 / 24 May 2023

Headlines


Sinoma International Engineering was revealed this week as the winner of a contract to build a new production line at Southern Province Cement’s Jizan plant. The China-based engineering firm said that the US$330m contract was to build a full line, from limestone crushing to bagging, with an output of 5000t/day. The construction period is expected to take just over two years, suggesting a commissioning date in mid-2025 if work starts now. The project has been in the pipeline for a while with an announcement in mid-2021. It was previously reported that the new line is intended to replace the two existing production lines at the site once completed.

Other recent projects in the country include Yamama Cement’s plans to move its cement plant near Riyadh to a new location. Sinoma International Engineering was also selected as the main contractor in November 2022 for the US$220m project. The relocated line – using both old and new equipment – will have a production capacity of 10,000t/yr. Project duration was estimated at around two-and-a half years following financial contractual commitments. So the earliest this one might be completed is also mid-2025. Eastern Province Cement also started making moves to build a new major upgrade in March 2023 when it started the tendering process for a planned 10,000t/day production line at its Al Khursaniyah Plant. The intention is to replace some of the obsolete lines at the unit. The project dates back to 2015, when it was first announced.

Graph 1: Domestic cement sales and clinker exports in Saudi Arabia, 2013 – 2022. Source: Yamama Cement

Graph 1: Domestic cement sales and clinker exports in Saudi Arabia, 2013 – 2022. Source: Yamama Cement

The timing of these new projects is compelling given that sales by the local industry peaked in 2015. They declined in 2018 to a low of around 40Mt before stabilising at around 50Mt for the last three years. However, one trend to note is how clinker exports reached 7.1Mt in 2022, the highest figure in a decade, since export rules were relaxed in 2017. They have grown year-on-year since 2018 with the exception of 2020. Cement exports have been lower since 2013 hitting a high of 1.9Mt in 2019, although 2022 was nearly as good at 1.8Mt.

The other big news story from the local sector in 2023 was the US$37m fine that the General Authority for Competition (GAC) levied for price fixing in April 2023. 14 of the 17 main cement companies in the country were found to have broken local competition law following an investigation. Detail on specifically what happened is light, but the GAC said that it took exception to companies “controlling prices of commodities and services meant for sale by increasing, decreasing, fixing their prices or in any other manner detrimental to lawful competition.”

As ever with the Saudi construction market, government spending is expected to keep things buoyant. Although input and logistic costs have risen like everywhere else, energy costs have also risen. This, no doubt, is useful to a government planning on building a bunch of so-called ‘Giga’ projects. Local sales of cement may have dipped slightly in 2022 but building all these big new projects will require plenty of cement. A report by the SICO Bank in January 2023 forecast that local cement demand was expected to remain ‘flat’ in 2023 but that it would grow by 5% year-on-year in 2024. Interestingly, it added that demand from the tourism and exhibition sector would also fuel demand in the run-up to 2030 as various schemes connected to the ‘Giga’ projects reached fruition.

Each of the three projects detailed above are intended to replace existing capacity. This suggests that none of these companies expect the market to grow significantly anytime soon. These cement producers are likely to be focusing on improving efficiencies from their existing market share. Alongside this, exports of cement and clinker have grown, giving combined local and export sales that are similar to the market peak in 2015. Efficiency savings and adapting to a mature market appear to be the way forward for Saudi cement producers in the near-term.


India: Star Cement has appointed Vinit Kumar Tiwari as its chief executive officer. He succeeds Sajjan Bhajanka in the post. Bhajanka will continue to work for the cement producer as its managing director and chair.

Tiwari, aged 54, holds over 25 years of professional experience in the building materials sector. His most recent position was as the head of sales and market development for Nuvoco Vistas. Prior to working for Nuvoco Vistas, he was the country head for Greenply, a supplier of plywood and veneer products. Earlier in his career he worked for UltraTech Cement and Grasim Industries. He holds a bachelor of science degree and a master’s degree in business administration (MBA) in marketing.


India: UltraTech Cement has announced a plans to install a RotoDynamic Heater (RDH) supplied by Finland-based Coolbrook at one of its cement plants. The RDH uses renewably powered electrical heat, eliminating the need for cement fuels. UltraTech Cement will initially test the equipment in the drying of alternative fuel (AF) in its existing AF line.

UltraTech Cement managing director Kailash Jhanwar said “As a founding member of the Global Cement and Concrete Association (GCCA), we are committed to the sectoral aspiration of delivering net zero concrete by 2050. Towards this end, we are continuously striving to innovate at every stage of the whole life of concrete. Coolbrook’s RDH technology represents an exciting technological pathway that we believe has the potential to exponentially accelerate our progress towards full decarbonisation. Every megawatt of clean energy we add to our mix makes a big difference.”

Read more about Coolbrook’s RDH in the September 2022 issue of Global Cement Magazine

 


Hungary: The Hungarian National Professional Association of Construction Contractors (ÉVOSZ) has claimed that the government of Hungary has initiated negotiations to acquire Duna Dráva Cement and Holcim Magyarország. 24.hu News has reported that the construction industry is facing on-going cement supply issues due to a purported decline in domestic production. ÉVOSZ said that its members’ reliance on imports of cement has risen to 60% from 40%.

Duna Dráva Cement clarified that its joint owners, Germany-based Heidelberg Materials and Schwenk Zement, are ‘committed to their investment in Hungary and are not negotiating its sale.’

Meanwhile, Switzerland-based Holcim said "We are not in a position to comment on the news that the Hungarian state is negotiating with domestic cement producers and/or their foreign owners for the purpose of acquiring shares."


Türkiye: Italy-based CTP Team says it is currently installing a new waste heat recovery (WHR) system at Medcem Çimento’s Mersin plant. Its contribution to the construction of a new production line at the site includes installing an organic rankine cycle-based (ORC) 10.5Mwe WHR system and three new process fabric filters for the kiln and raw mill, coal mill and cement mills. The new line is expected to be commissioned in 2024.


US: Continental Cement has ordered a Fuelflex Pyrolyzer alternative fuels combustion system from Denmark-based FLSmidth for installation at its Davenport plant in Buffalo, Iowa. The supplier says that its product offers a lower capital expenditure compared to competing systems, can control NOx emissions without the need for ammonia water and can be installed without a long shutdown period. This is the first commercial installation of the Fuelflex Pyrolyzer system following a pre-commercial installation at the Mannok cement plant in Northern Ireland, UK, in 2022.

David Loomes, the president of Continental Cement, said “We’re very excited about what the Fuelflex Pyrolyzer will do for our process.” He added, “We’re planning to achieve 55% fossil fuel replacement across the plant, utilising non-hazardous waste that would otherwise go to landfill or incinerators. The economic and environmental benefits of this technology are very significant and a key element of executing our carbon reduction commitment.” Continental Cement, a subsidiary of Summit Materials, has been incorporating waste materials as fuels for more than 30 years.

Jens Jonas Skov Larsen, Head of Capital Sales at FLSmidth, said “Mannok has called the Fuelflex Pyrolyzer a game-changer for the cement industry.” He continued, “This system effectively rearranges the order of the combustion process to make use of hot preheater meal, which is the heat source for the waste fuel pyrolysis. It’s a more efficient way of burning alternative fuels and it comes with a host of benefits, including reduced emissions and a more stable process.”

The installation at Davenport cement plant is expected to start operation in 2024. The full commercial launch for the system is scheduled by 2025. No value for the order has been disclosed.


Greece/Belgium: Titan Cement International has bought back a further Euro313,000-worth (0.4%) of its shares. The latest buyback increases its ownership stake to 4.4%. The cement producer bought the shares via the Athens Stock Exchange and Euronext Brussels exchange.


Bolivia: Itacamba Cemento declared a general assembly of bondholders on 22 May 2023 void after bondholders failed to attend in sufficient numbers for the meeting to proceed. The company said that there was insufficient quorum in accordance with the provisions of its bond issuance programme, and that the way forward would be to call a new assembly.

This story was amended on 26 May 2023, after a previous version erroneously stated that the bond issuance had been declared void - whereas it was the inquorate meetings that were declared void. Global Cement apologises for this error.


Spain: Cemex España and ecology company Cinclus have extended their quarry rehabilitation partnership to a national level. Under the extended collaboration, the partners will implement restoration plans for all of Cemex España’s quarries, in line with the cement producer’s Biodiversity Action Plans.


India: Shree Cement's consolidated sales were US$2.16bn in the 2023 financial year, up by 19% year-on-year from US$1.81bn during the preceding financial year. The company's total expenses rose by 33% to US$2.03bn from US$1.53bn. This led to a drop in profit of 46%, to US$153m from US$282m.


Germany: Chemicals company BASF has won a contract to supply its OASE Blue CO2 separation technology for use in the upcoming 70,000t/yr carbon capture installation at Heidelberg Material's Lengfurt cement plant in Bavaria. The Capture to Use (Cap2U) project, in partnership with fellow chemicals company Linde, aims to capture CO2 from the plant for use in the chemicals, food and beverages industries.

BASF head of gas treatment Andreas Northemann said “Our portfolio of OASE technologies makes a significant contribution to sustainability and is perfectly suited to help our customers achieve their sustainability targets. This carbon capture and use unit facility has the potential to become a show-case project in a hard-to-abate sector."


India: JK Lakshmi Cement increased its full-year sales during the 2023 financial year to US$786m, up by 19% year-on-year from US$662m during the 2022 financial year. Over the same period, the producer's net profit dropped by 23% year-on-year to US$44.6m from US$57.7m. This was primarily due to a 24% rise in its total costs to US$722m from US$584m.

MoneyControl News has reported that JK Lakshmi Cement's vice chair and managing director Vinita Singhania said "Despite an unabated increase in the price of fuel, the company has been able to record satisfactory performance by increasing its efficiency parameters, optimising its product mix and geographies and focusing on several green initiatives."


Canada: A study led by Douglas Geoffrey in Calgary, Alberta, has patented a method of producing cement from calcium carbonate precipitated in the carbonation of brine. The method mixes the mineral with magnesium oxide and cures it to form cement.

Geoffrey noted that the brine may derive from multiple industrial processes, including fossil fuel and potash production, geothermal power generation and desalination.


Uzbekistan: United Cement Group (UCG) has planted 3200 saplings in Navoi Region under the government's Green Land initiative. Uzbekistan Daily News has reported that the Green Land initiative seeks to plant 1bn new trees and shrubs across the country between 2022 and 2026.

UCG subsidiary Qizilqumsement's general director Sergey Melnikov said “UCG has been actively involved in the Green Land project in cooperation with local authorities, environmental organisations and residents of the region. Concern for the ecology of the territory where the production is located is a trend of the modern cement industry, which is fully consistent with our internal policy and high environmental and social responsibility." He added "All plants of the holding are being modernised with regard to green technologies.”


Saudi Arabia: China-based Sinoma International Engineering has won an engineering, procurement and construction (EPC) contract to build Southern Province Cement's upcoming Jizan cement plant, in the province of the same name. YiCai Global News has reported that the plant will have a capacity of 1.83Mt/yr. Commissioning is scheduled to follow 27 months after the start of construction. Sinoma International Engineering's contract covers installation of the entire line, from limestone crushing to cement bagging. The value of the work is US$300m.

Fellow CNBM subsidiary Sinoma Overseas Development previously won a US$220m contract with Yamama Cement for transferal of its Riyadh cement plant's new Line 7 from its old plant to its new location.


India: Indian industrial companies plan to increase their capital expenditure (CAPEX) investments by 14% year-on-year in the current, 2024, financial year, the Financial Express newspaper has reported. UltraTech Cement says that it will more than double its CAPEX investments to US$1.55bn during the year (1 April 2023 - 31 March 2024). Adani Green Energy, the renewable electricity subsidiary of Ambuja Cements' parent company Adani Group, has the highest planned investments of any Indian industrial company. It also plans to more than double its CAPEX spending, to US$1.69bn in the 2024 financial year.


Europe: Holcim plans to deploy 1000 new electric trucks in its operations across Europe before 2030. The cement producer ordered the vehicles from Sweden-based Volvo. Both companies are founding members of the First Movers Coalition low-CO2 technology alliance. Holcim expects the initiative to reduce its annual CO2 emissions from road transport by 50%. It will take delivery of the first new trucks by the end of 2023.

Chair and CEO Jan Jenisch said “The net zero transition requires deep collaboration across value chains. We are excited to be partnering with Volvo to decarbonise our European operations’ logistics with electric fleets, advancing our goal to reach 30% of zero-emission heavy-duty trucks by 2030.”


India: The government of Uttar Pradesh has awarded JK Cement US$4.15m as a concession for its construction of the 1.5Mt/yr Aligarh grinding plant. The Times of India newspaper has reported that the concession covers some of the producers' investments over a period between 1 April 2019 and 31 March 2022.

JK Cement has invested a total sum of US$145m in projects in Uttar Pradesh, including US$60.6m of it in the on-going construction of its 2.5Mt/yr Prayagraj grinding plant.


India: The government of Andhra Pradesh broke ground on the construction of the 35.1Mt/yr-capacity Machilipatnam Port in Krishna District on 22 May 2023. The New Indian Express newspaper has reported that the project is scheduled for completion in mid-2025. When operational, the Port will handle despatches of cement and clinker by local producers.


US: Eagle Materials reported sales of US$2.1bn in 2022, up by 15% year-on-year from 2021 levels. The producer's earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 19% to US$782m. Its cement sales rose by 7% to US$1.1bn due to increased prices, despite a drop in volumes. Throughout the year, the company increased its production of Portland limestone cement (PLC).

President and CEO Michael Haack said "Looking ahead, we anticipate continued attractive fundamentals in our markets, despite headwinds relating to higher interest rates and affordability constraints in single-family residential construction. Among the favourable demand factors we expect will affect our results in future periods are projected funding increases for infrastructure projects and healthy demand for heavy industrial projects and multi-family residential construction. We remain well-positioned to capitalise on these conditions, given our geographical footprint across the (Central) US Heartland and fast-growing Sun Belt (Southern US) and our financial strength and flexibility."


India: Ramco Cements' sales were US$987m during the 2023 financial year, up by 36% year-on-year from US$726m during the 2022 financial year. The producer sold 15Mt of cement and dry mortar products, up by 36%. The Times of India newspaper has reported that the producer's profit after tax declined by 62% to US$41.5m from US$108m.

The producer expects that anticipated infrastructure investments and a 'normal' monsoon will maintain strong cement demand in India in the full-year 2023 financial year. It forecast growth in its profit margins from the second quarter of the 2024 financial year (July - September 2023) onward.


World: The Global Cement and Concrete Association (GCCA) has received over 70 submissions to its Innovandi Open Challenge 2023, and is now preparing the shortlist of startups to present their pitches on 30 June 2023. The Innovandi Open Challenge seeks new disruptive technologies to help to achieve net zero cement and concrete production by 2050. Startups selected under the challenge will have the opportunity to partner with the GCCA and its members to further develop their products.

GCCA cement director and innovation lead Claude Loréa said “To receive more than 70 quality applications from start-ups for this year’s Innovandi Open Challenge is hugely encouraging, and shows what level of interest and work is being done to help drive climate action, with applications received from every region of the world." She concluded "Our vital industry needs products which are affordable, scalable and easily adopted. We look forward to sifting through the applications with our member companies and working with those who are selected.”


Peru: Unacem recorded consolidated sales of US$380m during the first quarter of 2023, corresponding to year-on-year growth of 2.6%. Despite this, the producer's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 7.4% to US$105m. Unacem attributed its sales growth to 'strong' cement sales volumes in the US, as well as increased prices across its markets. The domestic Peruvian market contributed US$247m (65%) of Unacem's sales, up by 0.5% year-on-year. Peruvian cement volumes fell by 8%, while high fuel costs there contributed to a local decline in earnings.

Looking ahead to the full 2023 financial year, Unacem CEO Pedro Lerner expects the group's consolidated sales to rise year-on-year. He forecast a 10% drop in Peruvian cement volumes to 6Mt. Lerner said that the company is 'monitoring events' in neighbouring Ecuador, but considers it inevitable that on-going political disturbances will 'affect economic conditions' in the market.


India: Century Textiles & Industries plans to raise US$48.3m by issue of non-convertible debentures (NCDs) on a private placement basis. Accord Fintech News has reported that the NCDs will be listed, rated, unsecured and redeemable.


UK: Breedon Group has acquired concrete block producer Broome Bros., construction firm Minster Surfacing and concrete block and aggregates producer Robinson Quarry Masters. Breedon Group said that the businesses will strengthen its presence around Doncaster in South Yorkshire, in Antrim, Northern Ireland, and 'from the Midlands to London.'

CEO Rob Wood said “Many of our transactions come to us through our local knowledge and personal engagement with the owners. As a result, our active mergers and acquisitions pipeline has continued to yield high quality, earnings-enhancing opportunities that will enable us to progress our sustainable growth strategy." He added "Each of these independent family-run businesses is aligned with our vertically-integrated operating model, providing further opportunity to pull through upstream building materials while extending our downstream footprint to deliver profitable growth.”

Business Live News has reported that the group has also completed its transition to the London Stock Exchange from the AIM exchange. Breedon Group said that this will enhance its corporate profile by helping to attract greater international investment.


Iraq: Najmat Al Samawa Company for Cement Manufacturing (NASCCM) plans to build a new 1.82Mt/yr clinker line at its Samawa cement plant. When commissioned, the new line will more than double the plant's clinker capacity to 3Mt/yr. Pakistan Company News has reported that the expanded plant will secure a supply of clinker for the producer's Basra grinding plant.

NASCCM is a joint venture of Al Shumookh Group and Pakistan-based Lucky Cement.


UK: Aggregate Industries, Breedon, Lhoist and Tarmac have announced the launch of the Peak Cluster, a carbon capture and storage cluster of cement and lime plants. The partners aim to eliminate 3Mt/yr of emissions from operations across their plants in Cheshire, Derbyshire and Staffordshire by capturing 100% of their CO2 emissions. Progressive Energy will oversee the capture and transportation of CO2 from the plants for storage below the Irish Sea. Possible storage partners for the cluster are Liverpool Bay CCS or the upcoming Morecambe Net Zero storage project. When operational, the Peak Cluster will eliminate 40% of emissions from UK cement and lime production. Participating cement plants are Aggregate Industries' 1Mt/yr Cauldon cement plant in Staffordshire, Breedon's 1.5Mt/yr Hope plant in Derbyshire and Tarmac's 0.8Mt/yr Tunstead plant in Derbyshire.

Mineral Products Association (MPA) energy and climate change director Diana Casey said “The launch of the Peak Cluster is an exciting and vital step forward in the journey of the cement and lime sectors towards net zero. The region is a historic heartland for cement and lime production providing highly skilled jobs for local communities, and a secure supply of essential materials to the UK economy." She concluded "The UK Concrete and Cement Industry Roadmap to Beyond Net Zero highlighted the importance of carbon capture for the decarbonisation of the cement and concrete supply chain, and the Peak Cluster is an essential part of that transition. This launch demonstrates the commitment of cement and lime producers to transition to net zero to secure the future of these important industries, and the vital products they produce, in a net zero world.”


US: Heidelberg Materials North America has secured funding for a feasibility study for a 2Mt/yr carbon capture installation at its Mitchell cement plant in Indiana. The study will also investigate possible storage and utilisation solutions for a future installation. The producer says that the US government's Department of Energy has pledged US$5m in funding towards the US$10m study.

Heidelberg Materials North America president and CEO Chris Ward said “We are pleased for this additional federal funding to help move our Mitchell carbon capture project forward. Heidelberg Materials recognises the significant role that carbon capture will play in achieving its goal of net zero carbon, and we are very excited to take the next steps in exploring this technology at our new cement plant in Mitchell.”


Trinidad & Tobago: Trinidad Cements' sales were US$309.6m in 2022, up by 9% year-on-year. Group earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 19% to US$77.0m. The Trinidad and Tobago Guardian newspaper has reported that the producer recorded a US$16.1m loss during the fourth quarter of the year. The producer attributed this to a weather-related drop in cement demand across its markets, as well as restructuring costs for its Barbados-based subsidiary Arawak Cement.

Trinidad Cement chair David Inglefield and managing director Francisco Aguilera Mendoza said "We will ensure that our operations remain resilient by continuing effective cost management initiatives to maximise value in this challenging economic environment. Additionally, we expect improved productivity and efficiency of our equipment on completion of major planned maintenance in 2023."


UK: John King Group has acquired valve manufacturer DAB Valves for an undisclosed amount. DAB Valves sells a variety of valves and associated equipment within their range from slide and butterfly valves to gravity flap diverter valves and drop out boxes. The 40-year old company is based near Parwich in Derbyshire.

David Wadworth the managing director of John King Group, said “In acquiring DAB Valves we have added a complementary range of products to the existing John King Group portfolio. We are delighted to announce that DAB Valves
will continue to be manufactured in our Yorkshire based factory where we have a full complement of machinery to be effective in this objective. We are delighted to harness our production capabilities with the on-going support of Bob Wright and the DAB Valves design team who have over 40 years of industrial and applicational expertise.”

Bob Wright, the managing director and owner of DAB Valves, added, “Selling the business to John King Group is an exciting one. Yes, it frees up some of my time and enables me to focus on what I love the most, which is the design and engineering of the Valves. Having John King Group ambitious team behind DAB Valves, I know will take the brand to the next level. You only have to visit their Leeds manufacturing site to feel the energy and hunger for success, along with their continued reinvestment in equipment and people.”

John King Group says that its purchase of the DAB Valves brand will further strengthen its global support network and in-house design, engineering and manufacturing capabilities.


Vietnam: Nghi Son Cement Corporation has despatched its first batch of cement to customers in the US. The shipment consisted of 31,500t of cement produced at the company's Thanh Hoa cement plant. Việt Nam News has reported that the producer moved into the US market due to declining cement demand domestically.

Nghi Son Cement Corporation is a joint venture of Vietnam Cement Corporation (Vicem), Japan-based Taiheiyo Cement and Japan-based Mitsubishi Materials.