Global Cement Newsletter

Issue: GCW675 / 04 September 2024

Headlines


France: Eqiom has awarded Fives FCB a contract to upgrade its cement grinding plant at Héming. The project involves integrating an FCB TSV 4000 TSF Classifier and an FCB TGT Filter with the existing milling circuit at the unit operating by the subsidiary of Ireland-based CRH. The upgrade is intended to reduce the plant’s clinker factor, improve the quality of the cements produced, offer the option of manufacturing cements with higher fineness and reduce energy consumption. The new equipment is expected to be tied-in during the plant’s annual mill shutdown in 2025, with commissioning to follow.


It won’t be a surprise to most readers that the Chinese cement industry continued to struggle in the first half of 2024. The China Cement Association (CCA) summarised the situation as a "continuous decline in demand, low price fluctuations and continuous losses in the industry." Cement output fell year-on-year and four of the six large cement companies featured in this article reported falls in revenue. The CCA estimated that the sector as a whole lost about US$140m in the first half of the year.

 Graph 1: Cement output in China, 2019 to first half of 2024. Source: National Bureau of Statistics of China.

Graph 1: Cement output in China, 2019 to first half of 2024. Source: National Bureau of Statistics of China.

Data from the National Bureau of Statistics of China shows that cement output fell by 13% to 855Mt in the first half of 2024 from 980Mt in the same period in 2023. That’s a fall of more than 100Mt and around the annual cement production capacity of the US! Analysis by the CCA reckons that the first half of 2024 saw the lowest cement production since 2011. It blamed the situation on the failure of the real estate market to stabilise and a slowdown in infrastructure investment. Geographically the areas with the biggest declines were the Northeast, Northwest and Central and South regions. Those provinces with the smallest declines were Tibet, Jiangsu, Yunnan and Hebei. However, the CCA was keen to point out that staggered production, through initiatives such as peak shifting, took place in the second quarter of 2024, the producers’ cement inventory fell and cement prices rallied somewhat in June 2024.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: For CNBM Basic building materials segment revenue shown only. 

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: For CNBM Basic building materials segment revenue shown only.

CNBM says that it is the largest cement producer in the world. However, Anhui Conch appears to have sold more cement and clinker than CNBM did… in the first half of 2024 at least. Anhui Conch sold 126Mt of cement and clinker, a drop of 3% year-on-year, compared to 114Mt by CNBM, a drop of 20%. Anhui Conch’s sales revenue and net profit fell by 30% to US$6.4bn and 48% to US$490m respectively. The sales revenue from CNBM’s Basic Building Materials segment, its division that manufactures cement, deceased by 31% to US$5.73bn. Tangshan Jidong and CRC reported similar situations to their larger peers with declines in revenue and profit.

Huaxin Cement and Taiwan Cement both managed to raise revenue, but this was mostly due to their businesses outside of China. Huaxin Cement increased its operating income by 3% to US$2.3bn, with sales volumes of cement falling at home but growing abroad. Indeed, its domestic operating income fell by 32% to US$716m, a similar rate of decline to the other companies featured here. By comparison, the operating income from its overseas cement business rose by 55% to US$502m. Combined with a boost in aggregate sales volumes, this helped to stabilise the company’s financial performance. Taiwan Cement, meanwhile, completed its acquisition of Cimpor Portugal in March 2024 giving it a majority stake in OYAK’s cement business in Türkiye. Subsequently, its revenue in the second quarter of 2024 shot up year-on-year.

CNBM hit the nail on the head in its half-year report when it said: “The overcapacity has not been fundamentally resolved.” China is a big country with lots of regional variation but when cement plants stopped manufacturing cement in the second quarter of 2024 the price improved. Funny that should happen! The government is slowly making adjustments to the real estate market and other mechanisms, including the China national emissions trading system, are due to be applied to cement plants soon. Yet, until that overcapacity is addressed or unless some market fundamentals change then expect to see more of the same in China in the near future.


Brazil: Votorantim Cimentos has appointed Antonio Miguel Sousa Pelicano as Executive Vice President of Finance and Investor Relations. He has succeeded CEO Osvaldo Ayres Filho in the role. Filho took the position of Chief Financial Officer (CFO) and Investor Relations in May 2024 on a temporary basis when Bianca Nasser Patrocínio resigned.

Sousa Pelicano, a Portuguese national, holds a degree in economics from the University of Coimbra in Portugal and an International MBA in Administration from Rutgers Business School in the US. He has held executive positions at Cimpor and Votorantim Cimentos EAA (VCEAA). He worked at Cimpor from 2003 to 2012 starting his career as an IT Project Manager and eventually becoming the Country CFO. He also gained experience working in various countries, such as Morocco, Tunisia, Türkiye, China and Mozambique. Since 2012, he has been working at VCEAA, where he held the position of CFO in China. In 2019, he was responsible for creating the holding company VCI in Luxembourg, where he worked as CFO. In 2020, he took the position of CFO of VCEAA.


Global: Holcim has made three senior appointments in North America and at the group level.

Jaime Hill, the Country CEO of Mexico, has been appointed Region Head North America with immediate effect. He succeeds Toufic Tabbara, who is leaving the company. Hill joined Holcim in 1996 and has over 30 years of international experience, in finance, sales and marketing in the US and Latin America.

Carmen Diaz, the Country CEO of Spain, has been appointed as Chief People Officer with effect from 1 October 2024. She succeeds Feliciano González Muñoz, who is planning to retire at the end of 2024. Diaz joined Holcim in 2002 and has held commercial and general management roles in Madrid, Paris, Lyon and London.

Lukas Studer, General Counsel Corporate and M&A, has been appointed as Group General Counsel with effect from 1 November 2024. He succeeds Mathias Gaertner, who is leaving the group. Studer joined Holcim in 2008 and has been General Counsel Corporate and M&A since 2017, supporting corporate, finance and M&A.


Kenya: Hasmukh Patel, the founder of Mombasa Cement, has died at the age of 58 years after a short illness. He was also the chair of Uganda-based Tororo Cement, according to the Standard newspaper. Patel set up Mombasa Cement in 2007. Notably, the Corporate Social Responsibility programmes of his companies had a budget of around US$12m/yr for spending on various philanthropic schemes.


Germany: Cemex has acquired a majority stake in the Berlin-based recycling company RC-Baustoffe to enhance its circularity business Regenera. The company processes construction, demolition and excavation materials. The acquisition integrates RC-Baustoffe with Regenera, allowing the facility to process up to 400,000t/yr, which will be turned into repurposed aggregates for concrete production.

CEO of Cemex, Fernando González, said “With acquisitions such as this, Cemex continues to strengthen its commitment to circularity through Regenera as well as promoting the world’s transition to a more circular economy. Construction and demolition materials account for more than 30% of global ‘waste’ streams and reintegrating these materials into the construction value chain can reduce the use of virgin raw materials."


India: Dalmia Bharat announced that its subsidiary, Dalmia Cement (Bharat), has entered into a share subscription and shareholders agreement to acquire a 26% stake in Truere Surya for US$5.3m. Truere Surya will establish a solar power project in Tamil Nadu, aligning with Dalmia Bharat’s goals to become carbon negative by 2040.

The solar project will have a capacity of 128MW. Completion of the transaction is anticipated within 4 - 6 months, pending customary conditions.


Japan: Taiheiyo Cement, ITOCHU, Nippon Steel, Mitsubishi Heavy Industries, INPEX, Taisei, and ITOCHU Oil Exploration have been chosen by the Japan Organisation for Metals and Energy Security (JOGMEC) to lead the engineering design work for key carbon capture and storage (CCS) initiatives. This selection marks a step towards Japan's ambitious goals to achieve carbon neutrality by 2050 and a 46% reduction in greenhouse gas emissions from financial year 2013 (FY13) levels by FY30.

The project encompasses front end engineering design (FEED) and appraisal drilling as critical next steps following a comprehensive feasibility study conducted in FY23. This prior study involved detailed assessments of CO₂ separation, capture, transportation and storage processes. The CCS initiative involves shipping CO₂ captured at Nippon Steel’s Kyushu Works in the Oita area and Daiichi Cement's Kawasaki plant, part of the Taiheiyo Cement Group, to designated storage sites.


US: GCC Pueblo has upgraded its OK™ 36-4 Cement mill with a new separator from FLSmidth, incorporating the addition of ECS/ProcessExpert's vertical mill application. This upgrades the plant's existing ROKS separator to the latest ROKSH technology.


Spain: Following more than two months of industrial action, unions at Cementos Rezola, part of the German conglomerate Heidelberg Materials, have agreed to conclude their strike. This decision comes after extensive negotiations regarding a redundancy plan introduced in June 2024, which initially proposed dismissing 56 out of 102 employees. The agreement includes provisions for no forced dismissals, leading the Basque nationalist union to call off the strike.

Under the terms of the settlement brokered by the other unions, several workers will enter early retirement and nine workers will be relocated to the company's Arrigorriaga plant. This plant transfer is part of a strategic move to concentrate clinker production at a facility that is better equipped to meet stringent environmental standards and deliver greater operational efficiency. The revised redundancy plan also converted four initially forced exits into voluntary or early retirements after further negotiations, with the remaining two being reintegrated into the company.


China: The sales revenue from CNBM’s cement manufacturing division fell by 31% year-on-year to US$5.70bn in the first half of 2024 from US$8.25bn in the same period in 2023. The group blamed the decline on falling sales volumes of cement and aggregates and decreasing prices of heavy building materials. Its Basic Building Materials segment reported an operating loss of US$261m from an operating profit of US$348m previously. The division sold 114Mt of cement and clinker, a fall of 20% from 142Mt.

In its interim report the group said that its Basic Building Materials segment had been “…affected by a combination of factors, such as the in-depth adjustment of the real estate and funding constraints for infrastructure projects.” Subsequently the cement industry had faced low demand and prices. It added that market overcapacity had not been resolved.

Overall the group’s revenue and gross profit fell by 19% to US$11.7bn and by 25% to US$1.86bn respectively. However, income from its Engineering Technology Services segment rose by 2% to US$2.89bn. This division includes cement plant and equipment supplier Sinoma International. The group noted that global engineering and construction demand remained stable in the first half of 2024.


Brazil: Companhia Siderúrgica Nacional (CSN) will invest approximately US$530m to build a cement plant and a limestone plant in Itaperuçu, Curitiba. Noticias Financieras News has reported that the project is set to begin construction in 2025 and will create 3000 jobs. The cement plant will receive about US$500m, covering 150 hectares with an additional 70 hectares for mining.

Currently, the company is obtaining environmental licences from the Water and Land Institute and will be supported by the government when construction starts in 2025. The initiative benefits from tax incentives under the Paraná Competitivo programme, which provides a tax reduction for companies and industries that want to invest in the state, aligning with efforts to boost local employment and economic growth.


Spain: Votorantim Cimentos will construct a solid recovered fuel (SRF) production plant at its subsidiary Cementos Cosmos’ plant in Oural, aiming to produce up to 0.15Mt/yr of alternative fuel, reports Digital Economia newspaper. The facility, spanning 5800m2, will utilise non-recyclable industrial byproducts and various discarded materials from the local community such as plastic, paper and wood, to partially fuel the combustion in its cement kilns. The plant, currently in the public exhibition phase, will start production at 60% capacity, producing 85,000t/yr of alternative fuel. Plans include ramping up to full capacity to produce roughly 0.15Mt/yr. The new plant will create 15 jobs.

Votorantim Cimentos has not detailed the investment in the new facility, although the budget presented to the local council amounts to €12m.


Kenya: Bamburi Cement’s sales increased by 4% year-on-year from US$81.4m in the first half of 2023 to US$84.5m in 2024. The company reported a net loss of US$6.8m in 2024, compared to a net income of US$682,000 in 2023, marking a significant year-on-year downturn.


Zimbabwe: The Zimbabwe National Water Authority (ZINWA) has addressed public concerns about the potential environmental impact of a new US$1bn cement plant being established in Magunje by Labenmon Investments and West International Holdings. Amid fears of pollution to the nearby Kemureza Dam, ZINWA has assured residents that the project will not compromise the water source that serves over 10,000 people.

During an Environmental Impact Assessment (EIA) consultation in Chinhoyi, ZINWA’s head of corporate communications and marketing, Majorie Munyonga, emphasised that the cement plant will rely on boreholes for its water needs, thereby safeguarding the dam. The project is currently undergoing further EIA stakeholder consultations to integrate community and environmental considerations.

The Herald newspaper has reported that the initiative by Labenmon Investments is expected to generate around 5000 jobs. However, the Zimbabwe National Organisation of Associations and Residents Trust (ZNOART), representing the concerns of Magunje and Hurungwe residents, has petitioned for a reassessment of the site to mitigate any adverse impacts on the local ecosystem, health and livelihoods. It has stressed the importance of compliance with the Environmental Management Act and the Zimbabwe National Water Authority Act.


Uganda: Cement manufacturers have lauded the Uganda Revenue Authority's enforcement of digital tax stamps, citing a significant reduction in counterfeit products in the local market. According to the Uganda National Bureau of Standards, counterfeit goods constitute 58% of the market, posing risks to both consumers and the economy.

Edina Agwata, Sales Manager at Simba Cement Uganda said “We have initiated a price reduction in the market, forcing our competitors to also drop their prices. We are focused on making cement affordable to every Ugandan so that they can build their dream home.”


Cambodia: China-based Jiangxi Provincial Building Material Group plans to establish a cement plant in Cambodia. Company president Wensheng Chen led a delegation on 29 August 2024 to assess investment opportunities, meeting with officials from the Council for the Development of Cambodia (CDC).

Chea Vuthy, secretary-general of the CDC’s Cambodia Investment Board (CIB), said "The CIB’s management and officials look forward to providing all possible arrangements for the company to invest in Cambodia."


Philippines: Republic Cement's resource recovery group, Ecoloop, has diverted 21.4 billion plastic sachets in 2023, equating to 110,000t of discarded materials utilised as alternative fuel in cement co-processing. This marks a 30% reduction in CO₂ emissions per ton of cement, according to The Philippine Star newspaper.

Ecoloop director Angela Edralin-Valencia said "This achievement represents a significant amount of materials diverted from landfills and bodies of water, such as oceans and urban waterways and further underscores Republic Cement’s commitment to environmental stewardship and circular economy principles."


Europe: CRH has finalised the sale of its lime operations across Europe for US$1.1bn. The transaction concluded with the divestment of the group’s operations in Poland.


Ireland: New regulations effective from 1 September 2024 require all state-funded building projects in Ireland - including roads, schools, and hospitals - to use low-carbon cement. The directive prohibits the use of CEM I cement, mandating a minimum of 30% replacement of clinker with low-carbon alternatives for public projects.


UK: A new study by the Mineral Products Association (MPA), supported by Innovate UK, has found that incorporating reclaimed clays and finely ground brick powder into cement production can reportedly lower the embodied CO₂ by up to 3%. The materials are used as calcined clay in the cement production process. The project aims to offer a viable alternative to fly ash and ground granulated blast-furnace slag, as resources diminish due to the steel industry's decarbonisation efforts.

MPA director Diana Casey said "Using discarded bricks and reclaimed clays will not only lower carbon and reduce the amount of materials sent to landfill but has the potential to create a whole new market if these clays become widely used in the construction industry, helping to retain economic value in the UK, secure jobs and attract investment."


Afghanistan: The governments of Azerbaijan and Uzbekistan have agreed to build a new 1Mt/yr cement plant in northern Afghanistan. Trend News has reported that representatives of the three countries met to discuss the upcoming plant, as well as other opportunities for regional cooperation, railways and the role of Afghanistan in the Economic Cooperation Organisation.


Kyrgyzstan: A partly state-owned consortium of companies including Terek Tash and Zenit has commissioned a new 1.5Mt/yr clinker plant in Kemin, Kara-Kyrgyz Autonomous Oblast. Central Asia News has reported that the plant is intended to supply clinker for use in cement production at an upcoming grinding plant at Novo-Pokrovka in Chui. The projects have a combined value of US$150m.


US: Dragon Products reportedly plans to lay off six employees at its Thomaston, Maine, cement plant later in 2024, in the plant’s on-going transition from cement production to distribution only. This will reduce the plant’s total employees to 20, down by 76% from 85 at the start of the year. Local press has reported that rising operating costs, including for energy and transport, led to the move.

The Thomaston plant continues to process ‘residual’ raw materials and has begun implementation of its new distribution strategy, taking delivery of 30,000t of bagged cement via the port of Searsport. A second delivery is scheduled for October 2024.


Cuba: A ‘materials spill’ at Cementos Cienfuegos’ Carlos Marx cement plant in Guabairo on 27 August 2024 resulted in the death of one worker and injuries to five others. General manager Ernesto Gálvez said that a filter in the plant’s Kiln 3 collapsed, leading to the spillage of hot material from a hopper. Granma News has reported that Raymundo Narciso Sarría, an employee of contractor Empresa de Construcciones Ingenieras No. 6, died, while one other worker is in a critical condition, two in a serious or very serious condition and two others in a less serious condition.


Colombia: Cemex Colombia has reported that 90% of the water used at its Santa Rosa grinding plant in 2024 to date came from non-fresh water sources, including rainwater harvesting and water recycling systems. Additionally, the plant operates with zero water discharges. UK-based Environmental Resources Management (ERM) supported the development of the current water management protocol for the plant.


Libya: Al-Ahlia Cement Company has signed a memorandum of understanding (MoU) with China National Building Material (CNBM) subsidiary Sinoma CDI to collaborate on the construction of a new 6600t/day production line at its Lebda Cement Factory in Tripolitania. The expansion is expected to more than triple the Lebda cement plant’s capacity to 3.4Mt/yr.


Germany: Switzerland-based ABB has acquired analytics equipment supplier Födisch Gruppe. ABB says that the acquisition will enhance its offering of continuous emission monitoring systems and expand its technology and innovation competitiveness.

Stephan Schumann, CEO of Födisch Group’s parent company Dr. Födisch Umweltmesstechnik, said “This acquisition is a testimony of our strong performance in recent years. Leveraging ABB’s global footprint will allow to scale the impact of our offering internationally.”

ABB’s Measurement and Analytics President Jacques Mulbert said “We are very impressed by what the Födisch Gruppe has achieved and are eager to welcome their team to the ABB family. Integrating the Födisch Gruppe into ABB will unlock significant opportunities for new and existing customers.”


Portugal: Cimpor has published new standard procedures for the prevention of intoxicants use at its sites. Cimpor will conduct toxological screening of employees and third-party contractors to ensure a blood alcohol level of 0.0, as well as testing for narcotics and other psychotropic substances. The new protocol aims to protect the safety of everyone at Cimpor sites and host communities. The company says that it will support the screening regimen by implementing additional education and training.


Nepal: Exports of cement to India via the Kakarvitta road border crossing in Jhapa totalled 50,000t in the 2024 financial year, which ended on 15 July 2024. KhabarHub News has reported that shipments had a combined value of US$3.81m. The Kakarvitta crossing had not previously served to convey major despatches of cement between the two countries. The cement industry in Jhapa is 50% dependent on export markets for its demand. Eight plants operate in the district, of which three currently sit idle due to 40% local oversupply.


India: The family of worker Rajaram Kushwaha has reported that he died after being taken to hospital for injuries sustained while working at a cement plant near Maihar, Maharashtra. The Free Press Journal newspaper has reported that Kushwaha’s family has requested that police lodge a freedom of information request of plant management into the circumstances of the ‘mysterious’ tragedy.


India: Adani Ports and Special Economic Zone has opened a 2Mt/yr grinding plant in Guna, Madhya Pradesh, Mint News has reported. Together with a neighbouring firearms plant, the Adani Group subsidiary invested US$417m in the project.