Global Cement Newsletter

Issue: GCW667 / 10 July 2024

Headlines


Both Limak Çimento and Cemento Yura revealed plans to work with hydrogen this week. Additionally, Lhyfe and Fives signed a deal to sell decarbonised products and services to industries, including cement, covering hydrogen production to combustion.

Türkiye-based Limak Çimento said that it had successfully conducted a hydrogen-enhanced alternative fuel test at its integrated Anka plant near Ankara. As part of the project it blended hydrogen with an alternative carbon-neutral fuel and then operated the plant’s kiln at a 50% substitution rate. The cement company says that the trial achieved a world first by feeding the hydrogen-enhanced fuel directly into the calciner instead of the main burner in the rotary kiln. According to local press, Air Liquide supplied grey hydrogen for the test, although this could be switched to green hydrogen in the future. As a reminder, ‘green’ hydrogen is produced by the electrolysis of water using renewable energy sources. ‘Grey’ hydrogen is made from steam reforming using fossil fuels.

Limak’s wider ambition is to use hydrogen-blended alternative fuels at all of its cement plants by 2030. By doing so it aspires to reduce its CO2 emissions by 700,000t/yr. Its CEO Erkam Kocakerim remarked in mid-2023 that focusing on the carbon risks that energy-intensive industries might face exporting to the European Union (EU) paled in comparison to the potential payback from the green energy transition. At a climate change summit in mid-2023 organised by the United Nations and the Turkish government, he called for the Turkish Emission Trading System to be put into action as soon as possible, the creation of an updated renewable energy roadmap with renewable hydrogen, CCUS and renewable fuels, and the publication of a hydrogen and CO2 country atlas. At the same time, he stated that the local cement sector could meet the EU’s 2030 emissions targets through the increased uptake of alternative fuels and blended cements.

Meanwhile in Peru this week Juan Carlos Burga, the general manager of Grupo Gloria subsidiary Cemento Yura, told the Gestión newspaper that its cement plant near Arequipa is preparing to start a green hydrogen trial in 2025. The catalyst for this is a solar power unit at the site that is currently scheduled for commissioning in early 2025. Once it is ready then the plant’s hydrogen project can use the renewable energy source to manufacture hydrogen and inject small quantities of it to stabilise the burning process and reduce the amount of coal used.

By contrast the memorandum of understanding that Lhyfe and Fives announced this week looks like the pair are marking their territory in the hydrogen supply and equipment chain for heavy industry. As part of the agreement the companies are targeting the metals, glass and cement industries and some other selected industrial heating processes and applications in Europe and North America. France-based Lhyfe develops, builds and runs green hydrogen production plants both for external clients and itself. It operates one plant at Bouin in France and is building other plants in France and Germany. However, the output of these sites is low. In spite of this, it says it is set to become the largest producer of renewable hydrogen in France in 2024. Fives, well known as a cement equipment supplier, says it has been a “technological leader in hydrogen for over 50 years” and that it sells “the widest range of hydrogen-proven burners available on the market to serve all industries.” The Lhyfe-Fives agreement follows a similar deal between Air Products and ThyssenKrupp Uhde Chlorine Engineers in 2020.

Projects in West Asia and South America such as those discussed by Limak Çimento and Cemento Yura are not necessarily where one might expect them to be. Typically all the sustainability news in the cement sector tends to be dominated by companies in Europe and North America. This is reflected in the continents that Lhyfe and Fives have targeted this week. Yet, the focus by Limak and Yura on hydrogen suggests that these companies are hunting for decarbonisation options that are cost effective ahead of potential legislative enforcement. Both appear to be using hydrogen as a fuel enhancer or additive rather than on its own.

We have reported upon a steady stream of hydrogen projects for the cement sector in the last year. These include Heidelberg Materials' study looking at using ammonia as a hydrogen source for fuelling cement kilns at its Ribblesdale cement plant in the UK, Fives work with Holcim at the La Malle plant in France and much work by Cemex such as the increase of its stake in green hydrogen production technology developer HiiROC in late 2023. As with Global Cement Weekly’s previous reporting on hydrogen, the jury is still out on whether it is a ‘goer’ for heavy industry at scale. An executive at Mitsubishi Heavy Industries told a conference in March 2024 that the infrastructure investment to support the use of hydrogen would cost over US$1Tn in the US and Europe alone. The head of Saudi Aramco then pointed out at the same event that oil and gas, for now at least, cost far less than hydrogen. Despite this, the projects keep coming.


Mexico: The National Cement Chamber (CANACEM) has appointed Julio Cedeño as its General Director. He previously worked as the Director of Institutional Relations for the Camara Nacional de la Industria del Hierro y del Acero (CANCERO), an organisation representing the steel sector in Mexico. Cedeño is a graduate of the Universidad Iberoamericana in Political Science and Public Administration.

CANACEM represents the six cement companies in Mexico: Cementos Moctezuma, Cemento Cruz Azul, Cemex México, Grupo Cementos de Chihuahua, Holcim México and Cementos Fortaleza. 35 cement plants operate in the country producing nearly 47Mt/yr of cement and employing over 26,500 people. The organisation was originally founded in 1948.


India: Saurashtra Cement has appointed Pradeep Mehta as its chief financial officer (CFO). He will succeed Virendra Raj Mohnot in the post, who is retiring, with effect from 9 September 2024.

Mehta has worked in corporate finance roles for nearly 30 years most recently as the President-CFO of Garware High-Tech Films. He also worked as the CFO of Arihant Superstructures and has held finance positions with Mabati Rolling Mills, Jindal Steel and Power Global Ventures, Essar Steel, Jindal Power and Grasim industries. He holds an undergraduate degree in mathematics and is a registered chartered accountant.


Bangladesh: Bengal Cement has appointed Khandker Ataur Rahman Rifat as its chief operating officer. He has been working as the Group Chief Marketing Officer for Metrocem Group since 2019, according to the Business Standard newspaper. Prior to this Rifat, held roles with Hyundai Cement, Cemex, Meghna Group, LafargeHolcim Bangladesh and Aman Cement dating back to the mid-1990s. He holds a PhD in social science and business and a master of business administration qualification from the University of Dhaka.


Trinidad & Tobago: Trinidad Cement (TCL) has appointed Gonzalo Rueda Castillo as its General Manager and Roberto Adrian Villarreal Villarreal as its Group Strategic Planning Manager.

Rueda succeeds Guillermo Rojo de Diego as General Manager. As part of the role, Rueda will also oversee the operations of TCL’s business units in Trinidad, Barbados and Guyana. Rueda has over 25 years professional experience, and most recently held the position of Vice President – Commercial at Cemex Colombia.

Villarreal will replace Gustavo Alejandro Ruiz Silva as Group Strategic Planning Manager. Ruiz will take up another position within the Cemex Group. Villarreal has been domiciled in the Caribbean for approximately 10 years, and most recently held the position of General Manager with responsibility for the operations of TCL’s business units in Barbados and Guyana, namely, Arawak Cement Company Limited and TCL Guyana.


Saudi Arabia: Al Qura Cement has appointed Abdullah Abdulaziz Suleiman Alabdulatif as its chair. Saud Mahamed Ali Al Sabhan has been appointed as the Vice Chair. Both positions started in early July 2024 and will last until early July 2027.


US: Hoffmann Green Cement Technologies has signed a licensing agreement with Hoffmann Green USA. The company will receive a first entry fee of €2m and annual royalties based on sales generated by the commercialisation of Hoffmann cements. The contract also gives the option of sub-licensing Hoffmann units in the US. It also includes the option, until 2025, to extend the license nationwide by 2025 for €20m.

Co-founders Julien Blanchard and David Hoffmann said "The signing of this key licensing agreement in the US is the concrete result of the pre-agreement announced at the end of 2023. We are delighted to join forces with two partners who share our vision of the construction sector and have both significant expertise and in-depth knowledge of the local ecosystem."


Croatia: Holcim Croatia's €237m 'KOdeCO' project has been declared a strategic investment by Croatia. This will reportedly make Holcim the first producer of carbon-neutral cement in Croatia and one of the first in Europe, according to a press release by the company.

In January 2024, Holcim Croatia began implementing the carbon capture and storage project at the cement plant in Koromačno, signing a contract with the European Climate, Infrastructure, and Environment Executive Agency and securing a grant from the EU Innovation Fund totalling €117m. The project will reduce annual CO₂ emissions by 367,000t/yr.


Vietnam: The Ministry of Construction has proposed resuming cement sector planning to the prime minister, addressing the critical oversupply affecting the industry. Cement planning ceased six years ago, leading to unregulated project approvals. Vietnam now faces a surplus, with 92 production lines and a total capacity exceeding 120Mt/yr, while domestic consumption lags at under 60Mt/yr and exports are only 30Mt/yr. The construction slowdown exacerbates the issue, with redundant clinker production capacity at approximately 50Mt/yr, leading to risk of cement producers going bust, unless suitable measures are introduced. The latest figures from the Vietnam National Cement Association (VNCA) show that cement plants are running at just 70-75% of their designed capacity.

Deputy CEO of Vicem, Nguyen Thanh Tung, said "Several production lines belonging to our system have to temporarily halt operation, incurred by low consumption and dwindling incomes. Despite all this, we commit to not selling products below the production cost."


Switzerland: Cement deliveries in Switzerland decreased by 8% year-on-year in the second quarter of 2024, reaching 965,200t. Over the first half of 2024, a decline of 8% to 1.8Mt was also reported. Industry organisation Cemsuisse attributes the drop to economic uncertainties, supply chain disruptions and high energy prices. Although civil engineering projects may stabilise the market, a quick recovery in residential construction is not anticipated, according to a press release given by Cemsuisse on 9 July 2024.


Uzbekistan: From January to May 2024, Uzbekistan's cement production rose by 35.6% year-on-year, reaching 6.2Mt. In May 2024, companies produced 1.7Mt of cement, according to the latest data by the local Statistics Agency.


China: China National Building Materials (CNBM) expects to report an unaudited loss of approximately US$275m for the first half of 2024, a significant downturn from a net profit of US$192.5m in the same period in 2023.

CNBM has attributed the anticipated loss to decreased selling prices and reduced sales volumes for key construction materials such as cement.


Belgium: Holcim has completed the acquisition of Mark Desmedt, a Belgium-based company that recycles more than 0.5Mt/yr of construction demolition materials. This acquisition aligns with Holcim's goal to recycle 10Mt/yr of construction demolition materials.

CEO of Holcim, Miljan Gutovic said "With the Mark Desmedt team, we are accelerating our vision to drive circular construction in the key metropolitan areas where we operate to build cities from cities. Strategically located between Brussels and Antwerp, Mark Desmedt will scale up our ECOCycle technology across Belgium, making circularity a driver of profitable growth.”


India: UltraTech is in talks to acquire Orient Cement, restarting discussions amid significant sector consolidation. This development follows UltraTech's recent acquisition of a 23% stake in India Cements. UltraTech has proposed buying Orient Cement for US$4.43-4.49 per share, offering a substantial premium over its current market value, with the deal valuing Orient at about US$874-$934m.


Australia: Woodside Energy and Cemex have invested US$6.7m in Melbourne-based KC8 Capture Technologies to support its efforts in achieving net zero emissions via carbon capture and storage.

KC8 is partnering with Cement Australia to construct a commercial demonstration plant in Gladstone, Queensland, aiming to capture 15t/day of CO₂. A partnership with Cemex aims to capture over 100t/day of CO₂ at one of its major plants. Additionally, KC8 plans a commercial pilot at the US Department of Energy’s National Carbon Capture Centre to capture 10-15t/day of CO₂ from natural gas combustion flue gas. The initiative has also secured US$6m from Low Emission Technology Australia and US$11.26m from the US government.

Executive director Greg Ross said "The funds will be used to expand KC8’s team and expedite deployment of its technology into hard-to-abate industries, such as cement – through a number of key projects."


Tanzania: The Tanzania Revenue Authority (TRA) has introduced a new digital verification application named Hakiki Stempu, aimed at helping consumers verify the quality of cement products and combat the sale of counterfeit and substandard cement.

Ndositwe Haonga, TRA Director for Internal Affairs, explained that Hakiki Stempu allows the public to check whether the product they are about to purchase is genuine or not by scanning the product to check if it has the right tax stamp. The app also serves as a tool for ensuring that products meet necessary standards and offer value for money.


Türkiye: Limak Çimento has received its inaugural delivery of green hydrogen from France-based Air Liquide at its Ankara cement plant. The partners say that the technology will reduce the plant’s CO2 emissions by 180,000t/yr. ESMERK News has reported that the companies plan to commence a strategic collaboration for the development of green hydrogen ecosystems for the cement industry. Limak plans to implement net zero fuels in the kilns of all seven of its plants between 2035.


India: A boiler explosion at UltraTech Cement’s Jaggaiahapet cement plant has reportedly killed two people. Venkatesh Avula and Arjun Paritala were working at the plant on the afternoon of 7 July 2024 when the disaster occurred. The New Indian Express newspaper has reported that 14 others workers sustained serious injuries.

District Collector Srijana Gummalla said that a preliminary inquiry indicated the cause of the blast to be a gas leak due to high pressure. She said “A detailed probe has been launched to ascertain the reasons behind the incident. Officials will carry out a thorough investigation and submit the report. Based on the report, necessary action will be taken against the factory management.”


India: Dalmia Bharat has expanded the capacity of its plant in Kadapa, Andhra Pradesh, by an additional 1Mt/yr. The Kadapa unit's expansion, which cost US$25m, raises the company's total installed capacity to 46.6Mt/yr. The company plans to increase its total installed capacity to 110-130Mt/yr by 2031.


Thailand: Siam Cement Group has awarded JGC Corporation the pre-feasibility study for a carbon capture and utilisation (CCU) facility at a cement plant in Thailand. The study will determine the technology license, assess the required production capacity for CO₂ capture facilities and evaluate the economic feasibility of constructing a CCU facility, which will capture and convert CO₂ from SCG's cement plant emissions into new chemical products.


Germany: Alcemy, manufacturer of low-carbon ‘Cem X’ cement, has raised US$10m to scale up its cement decarbonisation solution. The funding round will support research and development and Alcemy's entry into new markets, including the US, in 2024.

CEO Leopold Spenner said "With this additional nearly US$10m in funding and support from Norrsken VC, in addition to our first-round investors, we're paving the way to a low-carbon construction industry, one project at a time."


Mexico: The Secretariat of the Environment (Sedema) has reported that over 5600 tyres collected from illegal dumps in the districts of Xochimilco and Gustavo Madero have been transported to a treatment plant to be used as an alternative fuel for cement production. This initiative is part of a strategy to manage tyre waste, supported by a collaboration with Geocycle Mexico. The effort aims to address public environmental issues caused by tyre disposal in public spaces and environmentally sensitive areas, potentially leading to wildfires. Sedema also plans to expand tyre collection through the Reciclatrón Program to promote comprehensive waste management and reduce the reliance on fossil fuels and mineral extraction.


Zimbabwe: Bulawayo City Council has turned down Labenmon Investments' application to establish a cement grinding plant in Cowdray Park, citing ‘significant’ environmental risks. The plant had an expected output of 900,000t/yr. The council stated the proposed site's proximity to residential areas posed potential pollution hazards, leading to the suggestion of relocation to Umguza District. Concerns were also raised regarding the choice of a foreign company over local alternatives like PPC Cement.


UK: FLSmidth Cement has entered a cooperation with Carbon Re, a UK-based climate tech company, to integrate FLSmidth Cement’s process control software, PXP, with Carbon Re’s AI-powered cloud platform. This integration will provide cement producers with access to new process optimisation capabilities.


Global: Lhyfe and Fives have signed a memorandum of understanding to provide a decarbonised solution for the cement industry, covering everything from hydrogen production to combustion. This initiative is designed to accelerate the energy transition by enabling the use of hydrogen in process industries without the need to modify existing equipment.

Lhyfe will produce and supply green hydrogen, while Fives will offer optimised and safe solutions for its use in industrial combustion processes, including cement production.


India: Cement volumes in India are projected to rise by 7-8% year-on-year in the 2025 financial year, driven by sustained demand from the infrastructure and housing sectors. This forecast is supported by the government's focus on infrastructure projects, sanction of additional houses and industrial capital expenditure, according to a report by the credit rating agency ICRA.

The Indo-Asian News Service reports that capacity addition in the cement industry is estimated at 63-70Mt between FY25 and FY26, with approximately 33-35Mt expected in FY25 alone. The capacity utilisation is expected to rise to 71% in FY25 from 70% in FY24, backed by higher cement volumes.


Ghana: Minister of Trade and Industry, K Hammond, has presented the Ghana Standards Authority (Pricing of Cement) Regulations 2024 in Parliament. This legislative instrument aims to control cement prices in response to rising costs.

The legislation follows government efforts to persuade manufacturers to reduce prices and address public concerns over escalating costs, according to the Daily Guide Network. Despite opposition from the National Democratic Congress lawmakers and cement producers, the regulation will likely become law after a 21-sitting day period in Parliament. The new law will introduce a price stabilisation fund to ensure consistent cement prices across the country.

Mr Hammond said "For a long time, we haven’t seen cement prices de-escalating. It's always escalating. I think there's something fundamentally wrong with the pricing of cement in the country.”