Global Cement Newsletter

Issue: GCW678 / 25 September 2024

Headlines


CRH, formerly Cement Roadstone Holdings, announced this week that CEO Albert Manifold is retiring at the end of 2024. He will be replaced by current chief financial officer Jim Mintern in the role. Manifold will continue to work as an advisor to CRH in 2025. Manifold’s time at the head of CRH marks a decade of considerable change at the group. Crudely, CRH had a market capitalisation of US$19bn at the start of 2014 when Manifold became CEO. At the end of 2023 the group’s market capitalisation was US$50bn.

From a cement sector perspective the big events during Manifold’s tenure include CRH’s acquisition of assets around the world from the Lafarge-Holcim merger in 2015, the purchase of Ash Grove Cement in the US in 2018, the divestment of various businesses in emerging markets and the move of the company’s primary listing to the New York Stock Exchange in 2023. However, at the same time, CRH has been constantly sharpening its portfolio. So, for example, the group bought Germany-based lime and aggregates company Fels in 2017 only to later sell off its European lime business in 2023 and 2024. In the late 2010s the group sold off its US and Europe-based distribution businesses. Then, in 2022, it divested its Building Envelope business. Manifold was also the inaugural president of the Global Cement and Concrete Association (GCCA) when it formed in 2018.

Fairly or unfairly, CRH has given the sense over the last decade of often being ahead of the curve in following the cement markets. After it increased its portfolio when Lafarge and Holcim merged, it sold up relatively quickly in India and Brazil. Famously during an earnings call for CRH’s second quarter results in 2019, Manifold said that the group was prioritising its businesses in the developed world. CRH’s focus on the US in the late 2010s through the acquisition of Ash Grove Cement set it up well for the current strength of the cement market in North America, long before others joined the party. Another striking Manifold statement came at the company’s annual general meeting in 2023 when, in the run-up to the US listing move, he described his company as a ‘de facto’ American company.

Things that may have gone less well for Manifold on the cement side, that we know about, include CRH’s quiet attempt to divest its business in the Philippines in the late 2010s. The company wasn’t alone in trying through. Holcim publicly said that it had signed a deal to sell its local business in 2019 only to declare that it wasn’t happening the following year. Cemex is currently in the process of selling its subsidiary in the country, DMCI Holdings, but it hasn’t concluded yet. More recent acquisitions such as assets from Martin Marietta Materials in Texas in early 2024 and a majority stake in Adbri in Australia are clearly strategic and fit the definition of ‘bolt-on’ but they seem to lack the grand ambition of the earlier big deals.

Questions have also been asked about Manifold’s pay over the years. From 2016 onwards the Institutional Shareholder Services (ISS), for example, has repeatedly raised concerns about executive pay rises at CRH and recommended on occasion that shareholders reject them. Manifold became the highest paid head of an Irish public company and was reportedly the third highest paid CEO on the Financial Times Stock Exchange 100 Index (FTSE 100) in 2022. His response from one interview with the Irish Times newspaper in 2018 was simply: “I’m employed and paid very well to deliver shareholder returns.”

Looking back over the last decade, CRH was well placed to take advantage of the Lafarge-Holcim merger before Manifold started in 2014 but once he was in place it went for it and he led the charge. Yet, the Ash Grove Cement acquisition may prove to be the more momentous move given the current divergence of the European and North American markets. As readers may remember from the time, Summit Materials made a public counter offer but it was rebuffed. Albert Manifold was in charge of CRH and so he takes the credit. These are big shoes to fill. As Richie Boucher, the chair of CRH said in Manifold’s outgoing statement, “Under Albert’s leadership CRH has delivered superior growth and performance with consistently improving profitability, cash generation and returns.”


Ireland: CRH has appointed Jim Mintern as its next CEO. He will start in 2025 following the retirement of the current CEO, Albert Manifold, who plans to retire at the end of 2024. Manifold will continue as an advisor to CRH until the end of 2025.

Mintern is currently CRH’s Chief Financial Officer and has been a director of its board since mid-2021. He holds over 30 years of experience in the building materials industry and has worked for CRH for 22 years in various management positions. Mintern joined CRH in 2002 as the Finance Director for Roadstone and other postings since then have included Country Manager for Ireland, Managing Director of each of the Western and Eastern regions of the group’s Europe Materials Division and Chief of Staff to the CEO. He also led the transition of CRH’s primary listing to the New York Stock Exchange. Mintern is a graduate from University College Dublin with degrees in accounting and commerce.

Richie Boucher, the chair of CRH said “CRH has made enormous progress thanks to Albert’s clear vision and his leadership of a talented, hard-working team.” He continued, “Under Albert’s leadership CRH has delivered superior growth and performance with consistently improving profitability, cash generation and returns.”


Canada: Geocycle and Lafarge Canada, together with the Department of Natural Resources Canada, have opened a new low-carbon fuel plant at the Lafarge Canada Brookfield cement plant in Nova Scotia. The facility, which cost over US$7.5m and received US$2.6m in federal funding, will convert 14,000t/yr of discarded materials headed for landfill into low-carbon fuels, reducing the plant's reliance on fossil fuels and its carbon emissions by over 12,000t/yr. The materials to be repurposed include plastic and construction and demolition materials. The cement created at the facility will be used to make concrete for construction projects in the local area and is expected to create jobs for the local community.

President and CEO of Lafarge Canada (East) David Redfern said "Cement is a vital component of infrastructure projects that contribute to economic growth. By implementing sustainable and innovative solutions to reduce our environmental impact, we're serving the needs of our customers and the communities in which we operate both now and in the future. Our continued collaboration with Geocycle Canada reinforces our commitment to invest and advance circular construction in Canada."

Head of Geocycle North America Sophie Wu said "At Geocycle, our solutions are circular by design. We are happy to take another significant step in our ongoing partnership with Lafarge Canada. This is a great example of our work toward the decarbonisation of the construction industry in Canada."


Spain: Votorantim Cimentos and gas company Enagás have signed an agreement to jointly develop projects for the sustainable management of CO₂. Votorantim Cimentos will focus on CO₂ capture technology at its cement plants, while Enagás will explore solutions for the transport, liquefaction, storage and loading of CO₂ at its regasification terminals. The partnership also includes potential joint applications for European funding to further these initiatives.

Enagás CEO Arturo Gonzalo said "Enagás and Votorantim Cimentos have clear synergies to jointly advance their commitments to reduce their carbon footprint and, based on the knowledge of their areas of activity, they have the opportunity to take the initiative to develop more effective sustainable CO₂ management technologies, which will be key to achieving the decarbonisation objectives of Spain and Europe.”


Spain: Holcim Spain has absorbed its subsidiary, Cementos Esfera, which distributes cement from a facility in the port of Tarragona. The site includes 32,467m² of covered space on a 54,113m² plot, with a production capacity of 500,000t/yr and silos for storing 20,000t of product. Since 2013, the industry has functioned primarily as a cement distribution centre and concrete producer, sourcing supplies from Holcim's integrated plants in Sagunto and Montcada y Reixach.


Jamaica: Caribbean Cement Company has returned to full production following the completion of its annual maintenance programme, reports Radio Jamaica News. The company was experiencing challenges meeting the demand for cement in the country due to the scheduled annual maintenance of its kiln. However, Caribbean Cement says that since production restarted, it has produced over 4000t/day through its 24-hour operation.


Czech Republic: According to its annual report, Cement Hranice recorded a 29% year-on-year increase in net profit to US$38.5m in 2023, up from US$29.8m in 2022. Sales rose by 5.5% to US$104.1m, despite a reduction in cement sales volumes. The company managed to increase revenues through higher product prices, necessitated by rising energy costs, according to chair of the board Roman Michalčík.


Mexico: A violent attempt by 300 people to take over the Cruz Azul cement plant in Tula, Hidalgo, led to around 20 people injured, eight seriously. The attackers were reportedly armed with machetes and firearms, with confrontations at the plant resulting in two people shot, Noticias Financieras News has reported. 120 people have been detained for prosecution. The dispute dates back to 2018 and stems from two groups disputing the company’s assets, with organised crime reportedly used at other plants. Cooperativa Cruz Azul affirmed that it had no relation to the attacks and urged the authorities to reestablish legal order.

In a statement, it said "Cooperativa La Cruz Azul reiterates its commitment to collaborate with the authorities for the benefit of the development of the Hidalgo community, as has been done to date in other states and municipalities of the Mexican Republic.”


Qatar: The Ministry of Environment and Climate Change has organised a symposium to launch a new ‘green’ cement made from sewage waste, with aims to support environmental sustainability and the circular economy in line with the Qatar National Vision 2030. The symposium highlighted the role of scientific research in transforming sewage into green cement. The cement is produced by treating sludge, resulting from solid sewage waste by burning, grinding and mixing it with catalysts, then is practically applied in the manufacture of building blocks and foam concrete. The amount of accumulated sewage waste is estimated at about 40,000t/yr, which can be used to produce 40 million bricks or 150,000m3/yr of foam concrete.


Poland: The Polish cement industry is under threat from increasing Ukrainian cement imports, which have risen by 106% year-on-year in the first half of 2024, according to Warsaw Business Journal. These imports, making up 91% of all cement imports into Poland, could exceed 500,000t by the end of 2024. Despite a projected 3.6% rise in domestic production to 17.2Mt, the competition from lower-cost Ukrainian cement, not subject to EU climate regulations, threatens Poland's economy and job market.


India: Cement producers in North, Central and East India have reduced production by 10 - 15% in the second quarter of 2024 due to low demand and project delays after an extended monsoon, according to The Hindu Business Line. Clinker utilisation stands at 70-75% for the quarter, down from around 80% during April – June 2024. South India remains comparatively unaffected.


South Korea: Due to high prices of cement, the government has announced plans to import Chinese cement, which is reportedly about 15% cheaper than domestically produced cement. The preparations to import it, including certification and the construction of storage warehouses, will take about two years.


World: The 19th Biennial Unified International Technical Conference on Refractories (UNITECR) has announced its call for papers for its event taking on 27 - 30 October 2025 in Cancun, Mexico. The deadline for abstracts is 20 December 2024. The meeting is being hosted by the Latin American Association of Refractories Manufacturers (ALAFAR).

Mauro Cueva, the president of UNITECR 2025, said “I invite speakers from around the world to grab the wonderful chance we offer to be at the heart of this prestigious forum for the international refractories community. Please become part of our roster for 2025 and take this fantastic opportunity to boost the knowledge base from within your own particular discipline. There will be a dynamic, receptive audience in Cancun, eager to listen, to learn, and to network. We would really love you to be part of this story.”

UNITECR held its first event in 1987 in Tokyo, Japan. The most recent outing took place in in Frankfurt, Germany, in 2023. The event, hosted by the German Refractory Association, featured over 200 speakers and more than 1100 participants in total.

For more information visit: www.unitecr2025.com/call-for-papers


Lithuania: Ignitis has signed a 4-year power purchase agreement with Lithuanian cement producer Akmenės Cementas to supply electricity from the Mažeikiai wind farm, starting in 2026. The wind farm features 14 wind turbines with a capacity of 63MW and began operations in 2023.

CEO of Akmenės Cementas Artūras Zaremba said "We are excited about this partnership as it allows us to use green energy in the cement industry. This cooperation is an important step towards our commitment to achieve long-term sustainability and reduce our carbon footprint. By integrating renewable energy sources into our activities and planned projects that will contribute to the EU’s Green Deal objectives, we are strengthening our environmental efforts and creating sustainable and innovative solutions.


India: Ramco Cements has increased its cement grinding capacity by nearly 1Mt/yr. The company carried out debottlenecking at its Kalavatala plant in Andhra Pradesh, enhancing capacity from 1.5Mt/yr to 2Mt/yr. Similarly, at the Valapady grinding unit in Salem District, Tamil Nadu, capacity has been increased from 1.6Mt.yr to 2Mt/yr.


Taiwan: Taiwan Cement Corporation, one of the island's largest coal importers, will completely halt its cooperation with Russia, according to The Moscow Times. This decision exacerbates the challenges faced by Russian coal exporters, who have already seen a nearly 12% decline in exports from January to July 2024. Since spring 2023, Taiwan has purchased more than 10Mt of Russian coal, accounting for nearly 20% of the island's total coal imports.


Kazakhstan: Steppe Cement has reported a loss of US$4.4m in the first half of 2024 compared to a profit of US$61,000 in 2023. The company, which operates two cement production facilities in Kazakhstan, saw its revenue fall by 7% to US$34.4m, down from US$36.9m, reportedly due to a 4% reduction in sales volume and higher electricity and maintenance costs.


Saudi Arabia: Southern Province Cement Company has ordered a crossbelt analyser for stockpile optimisation and an airslide analyser for raw mill control from SpectraFlow for its new Line 3 project at the Jazan cement plant. The new line will have a capacity of 5000t/day of clinker.


US: Holcim has invested in Sublime Systems to expand its range of solutions to decarbonise the construction industry. The partnership will advance Sublime’s first commercial manufacturing facility in Massachusetts, US, giving Holcim a large share of Sublime Cement produced there through a binding offtake reservation. Sublime’s first commercial-scale plant is set to start production in 2026 with a capacity of 30,000t/yr.

Chief sustainability officer at Holcim, Nollaig Forrest, said “The Sublime Systems team has developed a unique technology to decarbonise cement, cutting across the entire production process from the use of clean electricity to carbon-free raw materials. We are excited about this technology’s potential and are delighted to be partnering to bring it to market at scale. This investment advances our strategy to decarbonise construction by scaling up the most innovative technologies across our operations.”

CEO and cofounder of Sublime Systems, Leah Ellis, said “In the cement industry, scale is everything. We are proud to collaborate with Holcim, which supports our mission of swift and massive impact. By pairing Sublime’s technology with Holcim’s advanced global operations from manufacturing and logistics to commercial distribution, we can scale up our impact together.”


Germany: FLSmidth has signed an agreement to acquire Tipco Tudeshki Industrial Process Control (Tipco), an Aachen-based technology firm. Tipco develops sensor technology for measuring particle size distribution of different mass flows, which will be integrated into FLSmidth's hydrocyclones portfolio. The terms of the transaction were not disclosed, and the acquisition does not affect FLSmidth's financial guidance for 2024.

PCV business line president at FLSmidth, Pat Turner, said “This acquisition marks an important addition to our PCV offerings and highlights our strategic focus on digital solutions across the Mining flowsheet. The optimisation of the grinding circuit plays a crucial part in maximising productivity and operational efficiency of the overall processing plant, and the addition of Tipco’s groundbreaking sensor technology will further strengthen our offerings within this area.”


Jamaica: Caribbean Cement Company (CCC) is addressing concerns that have arisen due to a shortage of cement in the market, which has reportedly led to hardware stores rationing supplies, according to the Jamaica Observer. The government has been called on to address the problem, reportedly affecting more than 150,000 people employed in the construction industry.

A spokesperson for CCC said “Caribbean Cement Company has successfully completed the scheduled annual maintenance of its kiln, and we are aware that some customers are experiencing delays in obtaining cement. Prior to the maintenance, the company held sufficient inventories to meet market needs. However, the passage of Hurricane Beryl and the company’s subsequent response to ongoing relief efforts resulted in faster consumption of these initial inventories. We recognise the importance of our operations to the construction industry and are working diligently to replenish inventories as quickly as possible for our valued customers. We anticipate a return to normal inventory levels during the coming days.”


Spain: The first eight months of 2024 have seen a 1.4% decrease in Spain's cement consumption, totalling 9.64Mt, a drop of 141,740t from the same period in 2023, according to data released by Oficemen. Despite this overall decrease, the industry experienced mixed results in the summer months, with a notable 12.5% increase in July 2024 and a 6% decline in August 2024.

Cement demand over the last 12 months, from September 2023 to August 2024, has decreased by 3%, showing an improvement of 1.3% compared to the figures recorded in June 2024. The total volume of cement sold was 14.3Mt, reflecting a decrease of 462,636t from 2023.

Exports dropped by 17.5% in the first eight months of 2024, although this is an improvement from the 20% decline noted at the end of the first half of 2024. Despite a 13.5% growth in exports in July 2024, August 2024 saw a fall of 18%.

General director of Oficemen, Aniceto Zaragoza, said “Despite the decline in August 2024, the evolution of accumulated consumption in 2024, once the figures for the two summer months have been incorporated, has improved by almost two percentage points since the 3% drop recorded in June 2024, which confirms our forecasts of a moderate change in trend towards more positive data for the end of the 2024 financial year."


Tunisia: Carthage Cement has released its interim financial statements for the first half of 2024, revealing a net profit of US$11.7m, up by 48% from US$7.9m in the same period of 2023. The company's half-yearly revenues rose from US$70.8m in June 2023 to US$71.5m in June 2024. Operating profit grew by 17% to reach US$18.7m.