Global Cement Newsletter

Issue: GCW676 / 11 September 2024

Headlines


One surprise at the end of August 2024 was that Türkiye-based Çimsa has agreed to buy a majority stake in Ireland-based Mannok. The subsidiary of Sabancı Holding signed a deal to acquire just under a 95% stake in Mannok Holdings based on an enterprise value of Euro330m for 100% of the shares. The final purchase price will be determined later in the process, as will a potential completion date subject to the usual regulatory approvals.

Çimsa has described the deal as its “third major global initiative in the past three years” following expansions in the US and Spain. Çimsa started production at its 0.3Mt/yr white cement grinding plant in Houston, Texas in 2019. It is currently planning to set-up a 0.6Mt/yr grey cement grinding plant, also in Houston, with operation expected to start by the end of 2024. Its Spain-based business received a boost in mid-2021 when it purchased the Buñol white cement plant in Valencia from Cemex. Outside of Türkiye the company also operates a few terminals in Germany and Italy. Of interest to this article it established a subsidiary for sales in the UK in mid-2023.

Mannok was previously known as Quinn Group before it was rebranded in 2020. In addition to cement the company sells a range of construction products including PIR (polyisocyanurate) insulation, aircrete thermal blocks, roof tiles and precast concrete. The company is headquartered at Derrylin in Fermanagh, Northern Ireland in the UK but it operates in both Ireland and the UK. It runs a 1.4Mt/yr integrated plant at Ballyconnell, County Cavan in Ireland, just across the border from Derrylin. With the 17th Global CemFuels Conference scheduled to take place next week in Dublin, it is worth noting that this cement plant had a recent upgrade of interest to the alternative fuels sector. In 2023 the company said that it had installed the world’s first FLSmidth Fuelflex Pyrolyzer at a cement plant following an earlier pilot of the system back in 2018. It is used to replace coal with solid recovered fuels (SRF) in the pre-calcination stage of cement production. Later in 2023 Mannok said that the equipment was reducing its CO2 emissions by 58,000t/yr.

As reported in the October 2023 issue of Global Cement Magazine, cement from the Ballyconnell plant is sold in both Ireland and the UK. In 2022, 35% of its sales were in Ireland, 30% in Northern Ireland and the remaining 35% in the rest of the UK. The company uses a storage unit at Warrenport in Northern Ireland to despatch cement to a 8400t cement storage and distribution at Rochester in Southern England.

Çimsa said that the acquisition is intended to help it to increase the share of its revenue in foreign currencies to over 70%. It is not a revelation that Çimsa might want to do this given the parlous state of the economy in Türkiye since 2018. Interest rates are high and the Turkish Lira has lost value. Çimsa raised the issues this has caused in its 2023 annual report. These include higher costs for imported goods and services such as energy, equipment and engineering services. In 2023 the company reported that 57% of its sales consisted of foreign currency-based revenue. The same year exports represented just under 40% of the company’s total revenue. Overall, Çimsa’s revenue fell slightly year-on-year in 2023, in part due to the divestment of a cement plant and other assets, but earnings rose significantly.

Buying Mannok gives Çimsa another route into the European Union (EU), via Ireland, and the UK. Crucially, this gives its first integrated grey cement production site outside of Türkiye. Both of these things are especially useful for an export-focused company facing increasing hurdles to sales in the guise of the EU Emissions Trading Scheme. It also helps the business to further hedge against negative currency exchange effects back home in Türkiye. So ‘Sláinte’ to Çimsa and Mannok, and good luck.

The 17th Global CemFuels Conference & Exhibition takes place in Dublin, Ireland on 18 - 19 September 2024


Argentina/Mexico/Spain: Holcim has appointed Pablo Bittar as the Country CEO of Argentina, Christian Dedeu as the Country CEO of Mexico and Ricardo de Pablos as the Country CEO of Spain. Dedeu succeeds Jaime Hill, who has become Region Head North America. Bittar succeeds Dedeu. De Pablos succeeds Carmen Díaz, who has been appointed as the Chief People Officer in Holcim Group.

Dedeu previously worked as the CEO for Holcim Argentina from 2020. Before this he was the Commercial Director for the company in the country. He originally started working for Holcim in Argentina in 2007 before moving to Holcim Costa Rica in 2016 where he eventually became Commercial Director (Central America). Earlier in his career he worked for ExxonMobil in Argentina from the late 1990s. He is a graduate from the University of El Salvador in Buenos Aires and holds a Master in Business Administration from the IAE Business School.

Bittar worked for Holcim Argentina from late 1990s until 2012, eventually becoming a Procurement Officer. He then worked for Holcim in Ecuador and Colombia becoming the Head of Supply Chain Latin America in 2023. Bittar is an qualified accountant from the National University of Córdoba with a master’s degree in business administration from the same institution.

De Pablos joined Holcim in 2005. He became Regional Director Aggregates in Spain in 2009, Director Mediterranean Area in Spain in 2012, Export Director in 2016 and Director of Business Development and Exports in 2022. Prior to working for Holcim he was a Senior Consultant for PriceWaterhouseCoopers. De Pablos holds a degree in industrial engineering from the Universidad Politécnica de Madrid and an executive degree in business administration from the IE Business School.


US: Ireland-based Ecocem has appointed Mike Donovan as Technical Director for its US business operations. He will be responsible for overseeing key aspects of Ecocem’s business in the US, with a focus on widespread commercial adoption of the company’s low-carbon cement technologies, including ACT, by the US market.

Donovan most recently developed and brought a new natural pozzolan to market with Geofortis. He started his career in concrete in the 1980s working at companies including as Sherman Industries, Blue Circle Cement Tarmac and Central Concrete Supply (US Concrete). He is a graduate in civil engineering from the University of Texas at Austin.


US: Eriez has appointed Todd Loudin as its Vice President of Global Sales.

Loudin holds a bachelor’s degree in marketing and business from Kent State University and an Executive Master in Business Administration from Loyola University Maryland. He worked as a General Manager for Larox in the 1990s and was on the Standards Committee for the International Society of Automation (ISA ANSI) in the 2000s and early 2010s. Later he became the head of Neles’ USA Flowrox business and its Head of Sales for the Americas in 2021.

Eriez is a specialises in separation technologies. It supplies products to the mining, food, recycling, packaging, aggregate sectors, and other processing industries. The company was established in in 1942 and has its headquarters in Erie, Pennsylvania.


Guatemala: Cemex has sold its operations in Guatemala to Holcim Group for US$200m. The deal includes one grinding mill, three ready-mix plants and five distribution centres. The grinding mill has a capacity of 0.6Mt/yr.

CEO of Cemex Fernando González said "In 2024, we have accelerated the execution of our portfolio rebalancing strategy with the announced sale of more than US$2bn in assets located primarily in emerging markets. We are now primed for the next stage by redeploying most of the divestment proceeds in developed markets, primarily the US. We expect these efforts to drive sustainable growth for our business in the short and medium term."


US: The Continental Cement Davenport plant in Buffalo, Iowa, has celebrated the expansion of its facility, which now enables the reuse of post-consumer materials. This initiative will substitute approximately 50,000t/yr of fossil fuels with discarded materials that would otherwise be incinerated or sent to landfill.


Pakistan: Maple Leaf Cement has reported a consolidated profit after tax of US$5.6m for the quarter ending June 2024, with sales revenue increasing by 5% to US$56.4m from US$53.8m year-on-year. The cost of sales dropped by 10%, boosting the gross profit by 44% year-on-year to US$21.7m.


Vietnam: Vietnam exported 2.3Mt of cement and clinker worth US$90m in August 2024, down by 17% and 23% year-on-year, respectively. From January to August 2024, exports totalled 20.5Mt valued at US$789m, marking declines of 4% in volume and 14% in value compared to the same period of 2023. In 2023, the country earned US$1.33bn from 31.4Mt of exports, a fall of 1% in volume and 4% in value year-on-year.


India: Residents near the proposed cement plant site in Garhshankar, Hoshiarpur district, are holding a public hearing on 11 September 2024, disputing the legitimacy of a previous meeting held by the Punjab Pollution Control Board and local authorities on 19 January 2024. The Vatavarn Bachao Sangharash Committee, representing 24 villages, claims the initial hearing was manipulated and poorly attended by local villagers.

Convener Tarsem Singh said "Three villages - Naryala, Sardullapur and Badhoaan - are in the immediate vicinity of the proposed plant. Around 30 villages are in its 5km radius. Representatives from these villages have already been holding meetings for eight months after we came to know about the proposal. We have also been sending representatives to authorities. Now our teams are visiting these villages daily to mobilise wider public participation, so that people can express their views."


Denmark: Denmark's first CO₂ storage facility is now ready to store CO₂ in the North Sea, designed for large-scale CO₂ containment to combat climate change, according to a press release from project leaders INEOS Denmark. The Project Greensand initiative has completed its pilot phase, confirming permanent CO₂ storage in the Nini West reservoir, 1800m below the seabed.

Following the pilot phase's success, the launch of large-scale CO₂ storage is expected by late 2025 or early 2026, with ambitions to store up to 8Mt/yr by 2030. An investigation is also underway to determine the possibility of storing CO₂ underground on land in Denmark, with the company obtaining an exploration licence from the Minister for Climate, Energy and Utilities earlier in 2024 for an area of Jutland in the Gassum reservoir.

Country manager at INEOS Denmark and Commercial Director at INEOS Energy, Mads Gade said “We emphasised that Denmark has moved to the forefront of CCS in the world when we stored the first CO2 in the North Sea. Now we are in the process of investigating how to take the next step, and here we stand on the shoulders of the invaluable experience from Project Greensand's pilot. We are keen to continue this momentum with an ambition that Greensand will be the first CO2 storage facility in operation in the EU, and we are now awaiting the Danish authorities' approval of a permanent storage. This is an important step, because if Denmark takes just 5% of a future CCS market in Europe, it could mean up to 9000 jobs, with an economic potential of US$7.4bn. At the same time, we can support the EU's objectives, because we have all the prerequisites to create a new industry that is part of the solution to the challenges of the climate.”


India: Oriana Power subsidiary TrueRE Surya has won a contract to build a 128MW solar power plant in Tamil Nadu for Dalmia Cement (Bharat), supporting its target to use 100% renewable electricity by 2030 and become carbon negative by 2040.

The project cost approximately US$62m and will be commissioned within the next 12 months, according to Energetica India Magazine. As part of the contract, Dalmia Cement (Bharat) will acquire 26% of TrueRE Surya for US$5.3m, with the transaction finalising within four to six months.

Oriana Power Chief business officer Anirudh Saraswat said “We are also humbled by the trust posed in Oriana Power’s ability to execute mega solar projects by the largest companies and are equally excited to take another big step forward in helping India meet its renewable energy goals through this partnership.”


China: China plans to expand its national carbon trading market to encompass the cement industry by the end of 2024, Bloomberg reports. This initiative, announced by Minister of Ecology and Environment Huang Runqiu, aims to reduce emissions in high-pollution sectors and prepare for the EU’s impending carbon border adjustment mechanism (CBAM) starting in 2026. Currently limited to 2200 power utilities, the expansion will integrate seven more sectors into the market, which China hopes will cover 70% of its emissions by 2030. The Ministry is reportedly seeking public feedback on the proposal until 19 September 2024.


Brazil: Cement sales increased to 6.2Mt in August 2024, marking the highest monthly sales since October 2014, when sales reached 6.7Mt. This 10-year peak reflects a 5% month-on-month and 3% year-on-year increase, spurred by dry weather and a robust real estate sector, according to data released by the National Union of the Cement Industry (SNIC).

All regions in Brazil reported sales growth, with the highest sales in the north and northeast and a recovery in the south after the floods in Rio Grande do Sul. Year-to-date sales reached 43Mt, up by 3% from 2023.

However, concerns about prolonged dry spells potentially affecting electricity prices and logistics are emerging, with SNIC stating in a press release "The announcement of the increase in the red flag energy bill in Brazil due to the lack of rainfall is already causing concern for the cement sector, both in terms of production costs and logistics. Brazil is facing the worst drought in history in 2024 and this could have an impact on cement sales, especially in the north."


Canada: Ash Grove Mississauga cement plant has entered a proposal with the Ministry of Environment Conservation and Parks to burn alternative fuels. This includes materials such as construction and demolition materials, paper fibre, wood, plastic and industrial rubber, according to the Insauga newspaper. Local residents have expressed concerns about potential toxicity and environmental impacts due to emissions from the plant entering the atmosphere. The association reportedly objected to a previous application allowing higher emissions levels at the plant. Ash Grove will address these concerns in a public meeting scheduled for 12 September 2024.


Ukraine: The Antimonopoly Committee of Ukraine (AMCU) has approved CRH Ukraine's acquisition of over 50% of the voting shares in Dyckerhoff Cement Ukraine. This move is part of a broader agreement that includes anti-competitive measures to be implemented within 24 months post-transaction. CRH Ukraine will acquire a 99.9775% stake in Dyckerhoff, with expectations for the European Bank for Reconstruction and Development to potentially join as an investor following a mandate signed in December 2023. 


India: RHI Magnesita India plans to invest approximately €442m to expand and upgrade its production capacity by the end of the financial year 2025, according to The Hindu newspaper. This follows a €331m investment over the past two years, which increased the company's refractory production capacity in India to over 0.5Mt/yr.


India: Star Cement has announced the formation of Ri Pnar Cement in Meghalaya as a wholly-owned subsidiary. The incorporation was approved by the Ministry of Corporate Affairs on 5 September 2024, and involves an authorised capital of US$11,911, divided into 100,000 equity shares valued at US$0.12 each.


Egypt: Egypt's cement consumption is expected to drop to 45Mt in 2024, a decrease of 4% from 47Mt in 2023, reports Arab Finance newspaper. According to Ahmed Shireen, head of the cement division at the Federation of Egyptian Industries, the country is also projected to export 15Mt of cement. Local production capacity stands at 92Mt/yr. Recent reductions in transport availability have reportedly been exacerbated by exports, particularly to Libya, causing a significant cement shortage. This has reportedly impacted local construction projects and contributed to a 20% price increase since 1 August 2024.


Vietnam: Vietnam produced 119Mt of cement between January and August 2024, up by 1.3% year-on-year, according to data released by the General Statistics Office. In August 2024, production was 15.6Mt, up by 6.3% compared to August 2023. In 2023, the country recorded a cement output of 120Mt, a decline of 4.5% year-on-year.


Thailand/Myanmar: Siam Cement Group (SCG) has suspended the operations of two plants in Myanmar and halted any expansion plans over the next two years amid ongoing economic decline and political instability. The economic situation in Myanmar has deteriorated since the outbreak of Covid-19 and was exacerbated by the 2021 military coup and continuing conflicts between the junta government and various ethnic groups, reports The Nation newspaper.

SCG's executive vice president, Thammasak Sethaudom, stated that the company has invested over US$240m in these facilities. He said "There is no hope of resuming operations anytime soon. Myanmar has another cement plant in the north, owned by a Chinese company and guarded by the Chinese military. SCG could not do that and we would not risk our employees’ lives."


US: Titan Cement International has announced via press release its intention to proceed with the initial public offering (IPO) of its US business, Titan America. The listing will involve an IPO of a minority stake and is designed not to create any additional tax burden. The transaction is anticipated to be completed in early 2025.


Pakistan: Recent tax increases on cement have been blamed for a significant decline in demand, with cement despatches falling by 25% in August 2024 compared to August 2023. According to the All Pakistan Cement Manufacturers Association (APCMA), total cement dispatches during August 2024 were 3.37Mt, down by 34% year-on-year from 4.53Mt.

For the first two months of the 2024 financial year, total cement despatches were 6.38Mt, a decline of 18% year-on-year from 7.76Mt in 2023. In August 2024, domestic dispatches decreased by 21% year-on-year to 5.21Mt, and exports dropped slightly by 2% to 1.16Mt.

A spokesperson for the APCMA said "In the current budget, excise duty on cement doubled, alongside significant increases in federal and provincial taxes," adding that no other industry has been taxed as heavily. "The government must reassess its taxation policies to support the struggling construction sector, which is critical for employment and economic stability."


Ghana: Minister of Trade and Industry, Kobina Hammond, has assured Ghanaians that cement prices will remain fair and stable following a new regulatory law, according to the Pulse Ghana newspaper. The legislation is designed to oversee the industry and ensure a balanced market without imposing price caps. Hammond stated that the new law will protect consumers from unjustified price rises while also allowing cement producers to operate profitably.

He said "I am clear beyond argument that there is a certain amount of unfairness in the pricing of cement in the country and I am prepared to make sure that there is some sort of sanity. The document [Legislative Instrument] as we speak is in force.”


India: Indian cement manufacturers plan to invest approximately US$14.3bn over the next four years to increase capacity by 25%, adding 160-170Mt/yr of cement production, reports the Times of Oman newspaper. This expansion is reportedly driven by rising domestic demand and a significant infrastructure push by the government, with plans to invest US$1.7tn in infrastructure projects by 2030. The industry aims to fund this growth primarily through internal accruals, reducing reliance on debt. The top three producers —Ultratech, Ambuja, and Shree Cement — will reportedly contribute over 70% of the total capacity increase.


Algeria: Germany-based motor manufacturer Menzel Elektromotoren supplied a fan motor for an Algerian cement plant. According to the company, the replacement was for a failed slip ring motor, and was manufactured and delivered within 13 weeks. The motor was a MEBSSL-type 6-pole slip ring motor in frame size 630, with a rated output of 1950kW, an operating voltage of 11,000V and a rated torque of 18,754Nm.


Vietnam: Vietnam's cement sector anticipates minimal impact from the EU's carbon border adjustment mechanism (CBAM) as exports to the EU account for less than 2% of total sales, according to the Vietnam News Brief Service. However, Luong Duc Long, vice president and general secretary of the Vietnam Cement Association, remains alert to potential changes in emission thresholds that could incur additional taxes. Currently, the country’s cement sector emits 700 - 750kg/t of CO₂, with goals to reduce this to 650kg/t by 2030 and to 550kg/t by 2050 through technological advancements like rotary kilns and AI, as well as the use of alternative fuels and waste management solutions.