Global Cement Newsletter

Issue: GCW665 / 26 June 2024

Headlines


UAE: India-based UltraTech Cement has revised its former offer to acquire a 32% stake in RAK White Cement.The group told investors on 25 June 2024 that it is now seeking to acquire a 25% stake. The acceptance period for its previous offer elapsed on 24 June 2024.


The Hillhead Quarrying, Construction and Recycling Show is in full flow this week, taking place near Buxton in Derbyshire. As one delegate marvelled on the panoramic minibus journey down to the quarry, “It’s like a music festival without the music and… other stuff.” Indeed. Of course what one doesn’t find at Glastonbury and the like is a near comprehensive range of suppliers, over 600 of them, to the industry all in one place… in a quarry! Where else can one get up close and see the new hydrogen-powered generators and excavating vehicles that are being piloted? The official attendance figures don’t get released until after the event but on the ground it looks as busy as ever. It’s truly the place to be this week.

The show gives us a reason to take a look at the UK cement sector. Like many other countries around the world it is an election year in the UK, with a General Election scheduled for 4 July 2024. The result of this should determine the next Prime Minister and the ruling party. So, naturally, the MPA, the trade association for the aggregates, asphalt, cement, concrete, dimension stone, lime, mortar and industrial sand industries, is taking the opportunity to remind the political parties what its priorities are. The quick version is: support for decarbonisation; a streamlined planning system; and better delivery of projects. This sounds familiar to priorities in other countries but one British spin on this includes the UK’s carbon border adjustment mechanism (CBAM).

Graph 1: Domestic cement sales and imports in the UK, 2017 – 2022. Source: MPA. 

Graph 1: Domestic cement sales and imports in the UK, 2017 – 2022. Source: MPA.

Edwin Trout’s feature on the UK cement sector in the June 2024 issue of Global Cement Magazine presents a good overview of the last 12 months. The general UK economy has faced shocks in recent years such as Brexit, Covid-19 and the war in Ukraine. However, this has been further compounded by a downturn and high interest rates since late 2022 when the then Prime Minister Liz Truss caused market turbulence in the wake of a badly received government financial statement. As Trout relates, sales of heavy building materials have been in relative decline since mid-2022 with more of the same expected in 2024. Production of cement in 2023 is currently uncertain given the reporting time lag from the MPA but up until 2022 domestic cement sales fell somewhat but imports grew. This has created a situation where overall cement sales in 2022 were 12Mt, not far behind the annual level in the early 2000s. However, the share of imports has nearly doubled since then. More recent MPA data on mortar and ready-mixed concrete sales throughout the first nine months of 2023 suggest that market activity has decreased and poor weather at the start of 2024 looks set to have made this worse.

Despite the apparent slowdown in building materials sales the cement companies have been conducting smaller-scale maintenance and upgrade projects at their facilities and supply chain schemes such as the cement storage unit for deep sea shipping lines that Aggregate Industries said in February 2024 it was going to build at the Port of Southampton. The news the cement companies want to show off has been a steady stream of information about ongoing decarbonisation projects in the cement sector. C-Capture started a carbon capture trial at Heidelberg Materials’ Ketton cement works in Rutland in May 2024, Capsol Technologies said in March 2024 that it had been selected to conduct a study on its carbon capture technology at Aggregate Industries Cauldon cement plant in Staffordshire, Heidelberg Materials' Ribblesdale cement plant in Lancashire announced in March 2024 that it was taking part in a study to assess the use of ammonia as a hydrogen source for fuelling cement kilns and Heidelberg Materials awarded Japan-based Mitsubishi Heavy Industries (MHI) a front end engineering design contract for a carbon capture installation at its Padeswood cement plant in Flintshire in February 2024. Finally, on the divestment front, CRH completed the sale of its UK-based lime business to SigmaRoc for €155m in March 2024. The business operates from sites in Tunstead and Hindlow with five permitted lime kilns.

That’s it for this short recap on the UK for now. For a longer look at the UK cement sector read Edwin Trout’s feature in June 2024 issue of Global Cement Magazine.

Hillhead 2024 runs until 27 June 2024


UK: MQP (Midland Quarry Products) has appointed Andrew Boileau as its managing director. He succeeds Rick Green, who has retired after a 40-year career in the industry, taking responsibility for MQP’s three quarries and 10 asphalt plants located across the Midlands. MQP is a subsidiary of Heidelberg Materials.

Boileau previously worked as the Programme Director for STARK Building Materials. He has also held various senior roles at Saint-Gobain, including Managing Director of Gibbs and Dandy.


Türkiye: Çimsa has secured a US$26.7m loan from the European Bank for Reconstruction and Development (EBRD). The bank says that the loans will finance decarbonisation projects, including the establishment of waste heat recovery (WHR) and solar power units.

Çimsa CEO Umut Zenar said, "We are determined to advance our sustainability goals and take important steps in our energy efficiency and decarbonisation efforts. This collaboration with the EBRD represents a significant milestone in our journey towards a greener future. We are proud to be the first cement company in Türkiye to receive this type of financing from the EBRD, reflecting our commitment to leading the industry in sustainability initiatives.”

The EBRD expects Türkiye to require US$10bn worth of investments up to 2030 to be on track for its target of net zero CO2 emissions by 2053.


US: A team at the University of Princeton has developed a new alternative cement using oyster shells. The team says that the oyster shells provide calcium carbonate in the form of aragonite, along with biopolymers. Together, these raise the resulting cement’s crack resistance by 19% and its ductility by 17% compared with ordinary Portland cement (OPC).

Team leader Reza Moini said “Our bio-inspired approach is not to simply mimic nature’s microstructure, but to learn from the underlying principles and use that to inform the engineering of human-made materials. One of the key mechanisms that makes a nacreous shell tough is the sliding of the tablet at the nanometer level. Here, we focus on the mechanism of tablet sliding by engineering the built-in tabulated structure of cement paste in balance with the properties of the polymer and the interface between them. In other words, we intentionally engineer defects in the brittle materials as a way to make them stronger by design.“


India: JK Cement has inaugurated its 2Mt/yr Prayagraj grinding plant in Uttar Pradesh. The Economic Times newspaper has reported that the plant raises JK Cement’s cement production capacity by 9% to 24Mt/yr.


India: Ambuja Cements and Ravi Sanghi plan to launch an offer for sale of a stake in Sanghi Industries. The Times of India newspaper has reported that Ambuja Cements will offer 2.4% of shares and Ravi Sanghi will offer 1.2%, giving a total offer of 3.6%. Following the completion of the intended sale, the companies’ combined stake in Sanghi Industries will drop to 75%, in line with shareholding rules for promoters.


US: Heidelberg Materials has successfully converted its cement plant in Speed, Indiana, into a slag grinding facility. The facility ceased Portland cement production in 2023 following the opening of a new plant in Mitchell, Indiana, and now produces slag cement using domestically sourced slag granules. The Speed site has a grinding capacity of over 400,000t/yr and also functions as a distribution hub for the Mitchell plant's cement and other products.


Italy/UK: UK-based carbon capture technology provider Nuada has launched carbon capture trials with Buzzi at its cement facility in Monselice, aiming to accelerate the decarbonisation of the cement industry. The MOF-based VPSA carbon capture plant is now fully operational, capturing 1t/day of CO₂ directly from the facility's stack.

Nuada posted on LinkedIn “Nuada's carbon capture solution is the most energy-efficient developed to date, redefining the decarbonisation landscape for hard-to-abate sectors like cement. Together with Buzzi, we are showcasing the future of carbon capture in the cement industry.”


Switzerland: Neustark has raised US$69m in a growth equity round to scale up its carbon dioxide removal technology. The funding, led by Decarbonisation Partners—a collaboration between BlackRock and Temasek—will support Neustark's aim to permanently remove 1Mt of CO₂ by 2030. Climate tech growth investor Blume Equity also joined the round, alongside existing backers Holcim, Siemens Financial Services, Verve Ventures and ACE Ventures.

Neustark has developed a technology that captures biogenic CO₂ at its source and utilises it in building materials through an accelerated mineralisation process. This method is currently applied at 19 carbon capture and storage plants in Switzerland, Austria, Liechtenstein and Germany, with 40 more under construction across Europe.

Johannes Tiefenthaler, co-CEO and founder at Neustark, said “We turn the world’s largest waste stream, demolition concrete, into a carbon sink. In the past year, we have already deployed our unique solution at 19 sites. This growth investment will take us into the next exciting phase of our mission, helping us to further scale our impact across Europe, enter new markets in North America and Asia Pacific, and develop new solutions to store even more CO2 in mineral waste streams.”


Uganda: Richard Todwong, leader of the National Resistance Movement party, launched his Karamoja mobilisation tour at the clinker cement plant in Moroto District on 24 June 2024. The plant is owned by West International Holding, a subsidiary of China West Cement, and is currently under construction. Once operational in 2025, it will produce about 6000t/day of clinker and cement, according to New Vision. The project is valued at US$300m, spanning 81 hectares and employing over 1000 people in the Karamoja sub-region. Uganda imports over 50% of its clinker supply and this project will reportedly support the government’s import substitution initiative by allowing for local manufacture of clinker.


Egypt: South Valley Cement has reported a net loss of US$959,000 for the first quarter of 2024, decreasing from a loss of US$768,000 in the same period in 2023. The company generated revenues amounting to US$6.8m in the January-March 2024 period, compared to US$7m in 2023. The company's financial results from 1 January to 31 March 2024 reveal ongoing challenges, with increased operational costs and reduced demand impacting the sector significantly.


Madagascar: Atlantic Group has begun construction of a new cement plant in Tamatava, which will have a capacity of 500,000t/yr and create over 1000 jobs. The plant will span nine hectares, employing primarily local residents, and use ‘advanced’ technology to minimise CO₂ emissions, according to Fraternité Matin newspaper. Supported by the Malagasy authorities and president, the Madagascan Cement Company will commence operations in the second quarter of 2025.


Global: Vattenfall and Cemvision have agreed to develop and supply low carbon cement, aiming to cut CO₂ emissions by 95% from traditional levels, according to Vattenfall. This agreement is underpinned by a letter of intent. The partnership utilises Cemvision’s technology, producing cement from recycled industrial materials and powered by renewable energy.

Cemvision CEO Oscar Hållén said "We are delighted to deepen our partnership with Vattenfall and to welcome them to our growing customer base. Already today in our demo production, we are reducing carbon emissions by 80%, and as we optimise processes and supply chain, we will reduce by up to 95% by 2030. Near-zero emission cement is the most efficient way to achieve significant climate benefits without increasing the overall cost of a construction project.”


Ukraine: PrJSC Kryvy Rih Cement, under the initiative of Concorde Capital founder Ihor Mazepa, will build a 24MW power generation facility to ensure continuous plant operations, according to Interfax Ukraine. The project will reportedly cost around US$15m, with a payback period of three to four years.

Ihor Mazepa posted on Facebook "This is a necessary measure to keep business from stopping. In general, I see the prospect of investing in energy projects. Therefore, in a short period we will build 40MW of storage capacity, which will balance the energy market. We see a good return on investment in the amount which can reach up to 30% depending on the market development scenario."


Saudi Arabia: Southern Province Cement and Yanbu Cement have signed a non-binding memorandum of understanding to evaluate a potential merger. The due diligence process will assess various aspects including operational, technical, financial, legal and actuarial factors, according to Mubasher.

The memorandum was signed on 23 June 2024 and is set to expire in 12 months unless a merger agreement is reached beforehand. The feasibility of the merger will depend on agreement on final terms, regulatory approvals and endorsements from both companies' general assemblies.


Bolivia: Cement exports from Bolivia have dropped significantly, falling from US$10.5m in 2017 to just US$0.2m in 2023, as reported by the National Institute of Statistics and the Bolivian Institute of Foreign Trade (IBCE). Bolivia’s main export market is Paraguay, with over 95% of cement exports heading there. The decline reportedly began when the Paraguayan government started to protect its local industry by limiting imports, according to CE NoticiasFinancieras.


Global: Heidelberg Materials has launched the sixth edition of the Quarry Life Award, encouraging global participation to develop sustainable quarry management solutions. Open to researchers, students, communities, non-government organisations (NGO) and nature enthusiasts, the competition offers a prize fund of around €300,000 and aligns with the company's commitment to the Global Goal for Nature. Partnering with organisations like BirdLife International, the initiative aims to enhance biodiversity at extraction sites. Since its inception in 2011, the Quarry Life Award has spurred over 450 projects aimed at biodiversity protection. The 2025 edition will see Heidelberg Materials open its quarries for selected projects, with Türkiye, Egypt, Kazakhstan and Indonesia joining as new participants.

Chief sustainability officer Nicola Kimm said "The Quarry Life Award is a key element of our biodiversity strategy, which relies on strong partnerships with stakeholders to engage across science, industry, and local communities. To truly move from biodiversity loss to gain, a concerted effort is needed by everyone, working together in the recovery of nature at a landscape scale."


Germany: Berlin-based AI startup Alcemy, in partnership with German cement producer Spenner, has produced a commercially viable low-carbon cement alternative named ‘CEM X’. This product reportedly reduces carbon emissions by 65% and has less than 30% clinker content, according to the company. The composition incorporates a blend of 33% granulated blast furnace slag and 37% limestone.

Alcemy CEO Leopold Spenner said "With 'CEM X,' we have reached a significant milestone on our journey to decarbonising the cement industry.”

 


Spain: Domestic cement consumption in Catalonia fell by 8.5% year-on-year in the year to May 2024, reaching 2.1Mt, while production decreased by 6.6% to 3.14Mt. Exports also declined by 18% to 1.6Mt during this period.

According to Ciment Català, the statistics confirm the ‘sluggishness’ of the domestic market and the difficulties Catalan companies face in competing in other regions and countries. It warned that the situation could become worse due to the general economic situation in the region. Salvador Fernández Capo, president of Ciment Català, said that investment in infrastructure was likely to be further delayed.


Pakistan: Cement dispatches in May 2024 reached a nine-month high at 4.3Mt, marking an 8% rise year-on-year and a 45% month-on-month increase from April 2024, driven largely by a surge in exports. Over the first 11 months of the 2024 financial year, total dispatches amounted to 41.7Mt, up 3% from 2023 with exports growing by 66%, according to Pakistan Press International. However, domestic dispatches fell by 4%.


Germany: Heidelberg Materials, in partnership with Linde, is constructing a large-scale carbon capture and utilisation (CCU) facility at its Lengfurt cement plant, set to start operating in 2025. According to the company, it will be the first of its kind. The project is named Capture-to-Use (CAP2U) and will capture 70,000t/yr of CO₂.

Christian Knell, general manager of Heidelberg Materials Germany, said "With the amine scrubbing technology applied here in Lengfurt, we are demonstrating the capture and utilisation of CO₂ on an industrial scale for the first time in the cement industry in Germany.”


Global: The Global Cement and Concrete Association (GCCA) and the United Nations Industrial Development Organization (UNIDO) have entered a partnership to accelerate the decarbonisation of the cement and concrete industry, focusing on the global south. This collaboration, formalised through a memorandum of understanding, commits both organisations to advancing sustainability and decarbonisation. Their joint efforts will include developing low-emission technologies, organising international events and promoting industry solutions globally.

GCCA CEO Thomas Guillot said "Through our net zero roadmap and the accelerator programme we have put in place, we are already working with policymakers, governments and industry to overcome procurement and resourcing challenges across the global south. Having this ground-breaking agreement with UNIDO is a natural progression which we hope will fast-track progress in a meaningful way."


France/Europe: Eurazeo, via its Smart City fund, alongside the EIC Fund and existing investors, is supporting Materrup with a €26m fundraising effort to expand its low-carbon cement technology across France and Europe. This investment will accelerate the deployment of Materrup's circular low-carbon cement plants using its non-calcined clay technology. Already operational with its first scale plant in Landes, Materrup plans to establish an additional 10 plants, in collaboration with European industrial partners.


Peru: The Gloria Group is set to expand its operations with a new lime plant in Lima's industrial zone, according to CE NoticiasFinancieras. This development is promoted by the group’s cement, concrete and lime subsidiary Cemento Yura. The proposed plant, will have a production capacity of over 350,000t/yr and will serve both domestic and export markets. Currently, the group operates Cal y Cementos Sur (Calcesur), which produces quicklime and hydrated lime in Juliaca with a capacity of 1Mt/yr. With lime demand rising, particularly from the mining and construction sectors, Gloria Group is also considering further plant projects.

The company is reportedly confident that the procedures for obtaining operating permits for new projects in the mining sector will be expedited in order to stimulate the demand for lime. It also did not rule out the implementation of new plants.


Vietnam: The Vietnamese cement industry persists in facing difficulties, with several plants operating at only 70 - 75% capacity and accumulating stockpiles of around 5Mt, according to the Vietnam Investment Review. The total production capacity is over 120Mt/yr, yet four new production lines with a combined 11Mt capacity remain inactive. At a recent conference, strategies were proposed to alleviate industry pressures, including fiscal policy adjustments and abolishing the current clinker export tariff, which currently sits at 10%. It was revealed that many cement producers are struggling due to borrowing, soaring production costs and slow consumption.

Chair of the Vietnam Cement Association Nguyen Quang Cung said "Never before has the cement industry been at such a critical stage. If the current predicament drags on, the possibility of domestic ownership transferring to foreign investors might occur, posing the threat of the cement sector falling into the hands of foreign businesses, thereby reducing the country's ability to deal with pricing and market moderation in the long term."