Global Cement Newsletter

Issue: GCW682 / 23 October 2024

Headlines


Starlinger revealed this week that it had taken on copycats in China and won. The packaging machine manufacturer said that it had sued a number of China-based machine manufacturers and their customers, packaging producers, based on infringement of several of its patents. An out-of-court settlement was eventually reached with the case going before both a civil court and a Chinese court specialised in intellectual property. Naturally, Austria-based Starlinger did not say what the settlement involved other than stating that the proceedings had been “...settled with strict obligations for the machine manufacturers.”

It’s unclear how directly the case affected the cement sector. Starlinger did say that the case involved a replica of a proprietary sack conversion line for producing woven plastic sacks. Packaging producers, often in Asia, use Starlinger’s conversion lines to manufacture proprietary block bottom valve sacks made of polypropylene tape fabric for the cement and construction industries, although they are also used for other dry bulk goods such as rice, flour or chemical granulates.

Starlinger’s reasons for going public are interesting given that most companies steer well clear of discussing legal matters openly. In the accompanying press statement Harald Neumüller, the chief strategy officer of Starlinger, used the disclosure to promote his products by saying “Only the best are copied, as the saying goes.” He then went on to underline the company’s strengths in research and development. Yet he also admitted that this was “...little consolation if it has economic consequences for innovative machine manufacturers like us.”

Firstly it should be noted that battles over patents and ideas happen everywhere from time to time. Discussing international copyright theft has become politicised because it plays into the geopolitical rivalry between the US, Europe and China. One US-government commissioned estimate in 2017 reckoned that the US economy was losing US$225 - 600bn/yr due to counterfeit goods, pirated software and theft of trade secrets. This report has been criticised but it gives one an idea of the scale of the concern. However, there are also plenty of prognosticators in the western media who have spent the last two decades warning of a hard landing in the Chinese economy that hasn’t happened.

Bringing this discussion back to cement, following the collapse of the real estate market since 2021, cement output has fallen. Data from the National Bureau of Statistics of China shows that output decreased by 11% year-on-year to 1.33Bnt in the nine months from January to September 2024. This appears to be following a similar decline in local real estate investment. The market is still correcting itself and the government is making gradual changes but there has been no apparent cataclysm so far. China-based equipment suppliers don’t appear to have suffered to the same degree due to their foreign orders.

The standard western narrative is that when European or American companies sold their equipment in China from the 1990s onwards they contended with a rocketing economy and lax intellectual property (IP) enforcement. Such an environment reputedly made it easy for some local companies to copy machinery and sell it more cheaply. At the same time China’s industries legitimately surpassed their competitors leading to criticism about how they did it. Publicly available evidence of this behaviour in the cement sector is limited. One of the few includes action by Haver & Boecker, another packaging machine manufacturer, in the late 2010s. However, anecdotally, the view that IP was stolen in China is prevalent in the west whether it is true or false. No doubt readers will have their own experiences and opinions. None of which would be publishable. The issue has been superseded though as China’s cement sector has become the largest in the world by a considerable margin. The biggest manufacturers of cement plants in the world are now Chinese companies too. They either use their own equipment or buy in western kit depending on what the customer wants. They also own a number of their overseas competitors and more potential acquisitions look likely.

All of this is what makes Starlinger’s admission unusual. It has taken a stand and it may have paid off. At the very least the equipment supplier is wringing publicity out of the affair regardless of how big - or small - the settlement may have been. Others may follow.


Bangladesh: Heidelberg Materials Bangladesh has appointed Saikat Khan as its secretary with effect from 1 November 2024. Khan also serves as the director of the company's legal division, according to the New Nation newspaper. He succeeds Emdadul Haque in the post, who has resigned.

Other recent personnel changes include the appointment of Terence Ong Kian Hock as managing director. He assumed the role from 1 September 2024 and succeeded Jose Marcelino Ugarte. Emdadul Haque has also been appointed as chief financial officer from 1 January 2025. He will follow Jashim Uddin Chowdhury in the role.


Germany: A consortium comprising Cemex and engineering company Linde has won €157m from the EU Innovation Fund for a carbon capture, utilisation and storage (CCUS) initiative at the Rüdersdorf cement plant. The project will capture 1.3Mt/yr of CO₂ from the plant’s production processes, aiming for complete decarbonisation of the site by 2030, aligning with Cemex's Future in Action climate strategy. The Rüdersdorf facility will use Linde's HISORP(R) technology for CO₂ capture, featuring a cryogenic-adsorptive process that captures CO₂ from exhaust gas at the source, ready for compression, liquification and eventual permanent sequestration at an offshore storage site in the North Sea.

Sergio Menéndez, president of Cemex Europe, Middle East, Africa and Asia, said "Our Future in Action climate action strategy is working hard to drive several revolutionary CCUS projects across our global operations. While we are working hard to decarbonise using existing technology, an important component of our Future in Action strategy is to develop breakthrough decarbonisation solutions for our industry to reach Net Zero. The Rüdersdorf project is Cemex's largest CCUS project to date, with all the hallmarks and credentials to make a significant contribution to the decarbonisation of the cement industry."


UK: Cool Planet Technologies has raised €23.7m in a funding round led by Taranis Carbon Ventures, with participation from CRH Ventures and BlueScopeX. This investment will support the development of Cool Planet's ‘low-energy, low-cost’ membrane-based carbon capture technology. It will also go towards the construction of a new membrane manufacturing facility at Holcim’s Höver cement plant near Hannover, Germany, capturing 10,000t/yr of CO₂.

CEO of Cool Planet Technologies Andrew Corner said “We are delighted to have the support of these three new major industrial investors and we want to thank our existing investors for their continued support. We believe that our technology will significantly reduce the cost of carbon capture and help to accelerate its adoption at scale. This investment will enable us to demonstrate both the potential of our technology at scale and how Cool Planet will become a leading player in providing affordable solutions to help decarbonise multiple industries.”


Germany: Schwenk Zement will utilise Germany-based Orcan Energy's organic Rankine cycle (ORC) technology at its Allmendingen cement plant in Baden-Württemberg. The installation of five ORC modules aims to harness residual heat from the clinker cooling process to generate electricity, saving 8.5GWh/yr. Orcan Energy expects operations to begin in the first quarter of 2025. The company has previously worked with Dyckerhoff and Cemex.


Azerbaijan: Shahbulag Mining subsidiary AzCement has launched a new cement plant project in Askeran village, Khojali district, according to ABC Azerbaijan news.

Economy minister Azerbaijan Mikayil Jabbarov posted on X that "The AzCement cement plant with a production capacity of 60,000t/yr will provide jobs for 70 people. The enterprise will contribute to strengthening the infrastructure and industrial potential of the liberated territories, as well as economic growth of the region."


Vietnam: Major cement producers Vicem Bỉm Sơn, Bút Sơn, The Vissai, Thành Thắng Group and Xuân Thành Cement will increase prices from 20 October 2024 due to rising production costs from electricity, coal and packaging, according to Viet Nam News. A representative from Thành Thắng Group said that the company has recently faced a 4.8% rise in electricity prices, impacting production costs despite measures to improve efficiency and cut costs, like utilising waste heat recovery systems. The decision to increase electricity prices by Vietnam Electricity reportedly came into effect on 11 October 2024, with ongoing global geopolitical conflicts also contributing to rising costs for coal and oil.

The Vietnam National Cement Association said that price increases were ‘inevitable’, as cement has reportedly been sold below cost ‘for years’ and companies would likely not survive if prices were not increased to cover the additional costs. The list of cement producers raising prices is reportedly expected to increase in the coming weeks.


India: Adani Group subsidiary Ambuja Cements has entered talks for the acquisition of Orient Cement (OCL) at a value of US$451m. Ambuja Cements will acquire 47% of OCL's shares from its current promoters and certain public shareholders, fully funded through internal accruals. Orient Cement has two cement plants in the south and one in western India, according to Reuters.

Director of Ambuja Cements, Karan Adani, said "This timed acquisition marks another significant step forward in Ambuja Cements' accelerated growth journey, increasing cement capacity by 30Mt/yr within two years of Ambuja's acquisition. By acquiring OCL, Ambuja is poised to reach 100Mt/yr cement capacity in the financial year 2025. The acquisition will help to expand Adani Cement's presence in core markets and improve its pan-India market share by 2%. OCL's assets are highly efficient, equipped with railway sidings and well supported by captive power plants, renewable energy, waste heat recovery systems, and alternative fuel and raw material facilities. OCL's strategic locations, high-quality limestone reserves and requisite statutory approvals present an opportunity to increase cement capacity in the near term to 16.6Mt/yr."


India: Jindal Panther Cement (JPC), part of the Jindal Group, has commissioned its first cement grinding unit with a capacity of 1.5Mt/yr at Angul, Odisha. The unit will use about 1Mt/yr of blast furnace slag from Jindal subsidiary Jindal Steel & Power’s (JSPL) nearby integrated steel plant, operating with the industry's lowest clinker factor as part of its decarbonisation strategy. The Angul grinding unit will produce low-carbon Portland slag and composite cement for central and eastern India, repurposing waste from JSPL's operations and aligning with the group's decarbonisation goals. In the future, JPC plans to increase production capacity at both of its facilities, Angul and Raigarh, to 7Mt/yr, with an investment of US$257m.

CEO of JPC, Rohit Vohra, said "The commissioning of our Angul grinding unit marks a significant step in our journey towards a sustainable future. Our low-carbon cement and innovative distribution model position us uniquely to support eastern India's infrastructure growth while contributing to a greener planet."


India: UltraTech Cement has published its financial results for the second quarter ending 30 September 2024. For the second quarter, the company reported sales of US$1.86bn, down by 2.1% from US$1.90bn in the same period of 2023. Revenue for the second quarter of 2024 was US$1.89bn, marking a year-on-year decrease of 2% from US$1.92bn in 2023. Net income fell to US$97.5m, down by 36% from US$152m in 2023, with net profit after tax dropping to US$202m, a 52% decrease from US$240m recorded in the preceding June quarter. Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the September 2024 quarter stood at US$239.94m, a decrease of 18% year-on-year.


Iraq: Eggersmann Anlagenbau has expanded its refuse-derived fuel (RDF) production facility in Sulaymaniyah, operated by Ecocem Environmental Solution, part of the Faruk Investment Group. The expansion includes a new Eggersmann TEUTON ZS 55 single shaft shredder and four additional lanes for biological drying using the CONVAERO system. This system is integral to the Eggersmann RDF process, which converts municipal solid ‘waste’ into high calorific value RDF used by the regional cement producers Gasin Cement Company and Bazian Cement Company. The facility, which has a capacity of 1100t/day of RDF, will see an increase with the expansion. The Eggersmann FUEL process utilises biowaste in RDF production, improving both the quantity and quality of the fuel through biological drying in the CONVAERO system, relying on the natural warmth of the composting process. This method reduces methane emissions at landfill sites by integrating biomass into the fuel, according to the company.

Business development manager at Eggersmann, Eugen Becker, said "A particularly high quality substitute fuel is being produced with the Eggersmann FUEL process in Sulaymaniyah, whose net calorific value can be precisely tailored to the customer’s needs over the adjusting of the drying period. This quality makes a noticeable economic difference."


Spain: Spain's cement consumption declined by 0.5%, with 10.9Mt consumed by the end of the third quarter of 2024, 50,760t less than the same period in 2023, according to Oficemen. However, a 7.1% increase in consumption in September 2024 was also observed, with 1.22Mt consumed, 80,515t more than in September 2023.

General manager of Oficemen, Aniceto Zaragoza, said "The latest cement consumption data continues to corroborate our forecasts for the end of 2024, which pointed to a slight improvement from the summer onwards. At the same time, the positive evolution of building permits could indicate that we are witnessing a moderate change in trend, although, as we have indicated on other occasions, we must wait to see if these works are actually carried out in the short term."

Since September 2023, 14.4Mt of cement were consumed, marking a 1.8% decline year-on-year. Despite a 16% increase in cement exports in September 2024, the annual cumulative data for the first nine months still shows a 14.7% decline, equating to a reduction of 617,855t. Since September 2023, exports have fallen by 17%, resulting in a reduction of 955,590t.


India: Dalmia Bharat has reported a 60.5% decline in net profit to US$5.83m for the second quarter ending 30 September 2024, down from US$14.8m in the same period in 2023. Revenue from operations slightly decreased by 2% to US$36.7m, compared to US$37.5m in 2023. Earnings before interest, taxation, depreciation and amortisation (EBITDA) also fell by 27% to US$5.16m. However, the company recorded an 8.4% year-on-year increase in cement volumes to 6.7Mt.

Managing director and CEO Puneet Dalmia said "I believe that as India grows, the cement sector will continue to flourish. We are actively working to announce our Phase II expansions within the next nine months and achieve our interim milestone of 75Mt/yr by the 2028 financial year."


Peru: National cement dispatch fell by 2% year-on-year to 1.06Mt in September 2024, according to a report by ASOCEM, the cement manufacturers’ association of Peru. Cement production rose slightly by 0.2% year-on-year to 997,000t, while clinker production dropped by 19% to 661,000t. Cement exports declined by 1% year-on-year to 11,500t, and clinker exports decreased by 45% to 37,400t. However, cement imports increased by 0.5% compared to September 2023 to 21,000t, and clinker imports rose by 34% to 84,000t.


Kenya: Detectives from the Directorate of Criminal Investigations (DCI) have arrested three suspects in Baruti, Nakuru County, for impersonating employees of a cement company and defrauding unsuspecting customers by offering cement at low prices. During the raid, assorted SIM cards, a desktop computer and six mobile phones were seized, according to The Star newspaper. The DCI confirms that investigations are ongoing and more accomplices may be arrested. The suspects are currently in custody awaiting formal charges.


India: Shree Cement's Ras quality control laboratory in Rajasthan has been recognised by the National Accreditation Board for Testing and Calibration Laboratories (NABL), affirming its compliance with the ISO/IEC 17025:2017 standards. Managing Director Neeraj Akhoury said that the accreditation acknowledges the company's commitment to providing premium, sustainable building materials. The laboratory's role in ensuring standardisation across all product testing is important for maintaining production quality at the plant.


India: The environmental public hearing for Meghatop Cement's proposed integrated cement plant in Wahiajer village, Elaka Narpuh, was conducted on 18 October 2024, according to The Shillong Times. The plant is planned to have a 3.3Mt/yr clinker capacity and 16MW waste heat recovery system, and has faced a mixed reaction from several community members. Franky Laloo from the Meghalaya Pollution Control Board led the hearing, attended by district officials, villagers and company representatives. Supporters emphasised the potential community benefits of the plant, but the Jaintia Women Council expressed some concerns, saying that “We intended to voice our opposition at the hearing, but were prevented by village volunteers and police. A hearing that only accommodates supporters is unacceptable.”


China: Asia Cement (China)’s nine-month profit of US$16.3m in 2023 turned to a loss of US$64.6m in 2024, Dow Jones Institutional News has reported. The group attributed the reversal to a drop in its selling prices.


Switzerland/US: Holcim may list its upcoming market-separated North American business both in the US and Switzerland, Bloomberg has reported. The possibility arose due to Swiss and European restrictions on foreign shareholdings for locally-based funds, which may result in sales of Holcim stocks, with negative price impacts. On the other hand, a dual listing could potentially reduce the liquidity of any future US-listed shares.

SeeNews has reported that Holcim North America will be headquartered in Zug, Switzerland, for tax ‘advantages,’ while operating out of Chicago, US.


Pakistan: DG Khan Cement recorded a 22% year-on-year rise in earnings in the first quarter of the 2025 financial year, to US$2.88m. This came despite a 7% drop in sales, to US$54.9m, and a 12% drop in cement sales volumes, to 1.18Mt.


India: Kaushalya Logistics has commenced operations at its new depot in Amritsar, Punjab, Reuters has reported. The facility will serve JK Cement’s regional distribution operations.


Chile: The combined cement sales of Cbb, Melón and Polpaico continued a three-year decline with a 4% year-on-year drop in the first half of 2024, to 1.83Mt. In terms of market shares, Polpaico retained 40%, Melón 34% and Cbb 26%. Noticias Financieras News has reported that low domestic demand caused the fall in sales. Despite the general downturn, Cbb succeeded in more than doubling its profit to US$18.5m, by increasing its shipments of cement, which offset a decline in concrete sales.

Polpaico said "During the second quarter of 2024, the cement and concrete industry in Chile continued to face significant challenges, reflected in a slowdown in the construction sector." It added that there was ‘constant price competition’ exacerbated by an ‘abnormal volume of rainfall’ in June 2024.

Melón said "There has been a slowdown in projects under development compared to previous periods. On the other hand, production and distribution costs have continued to be under pressure, which in this period are mainly related to the increase in the exchange rate."


Burkina Faso: AVIC International Beijing, in collaboration with Humboldt Wedag GmbH (KHD), has won an engineering, procurement and construction (EPC) contract from Ciments de l'Afrique (CIMAF) to build a 900t/day clay calcination plant. This plant aims to integrate with CIMAF's existing clinker grinding line to produce calcined clay cement, potentially reducing CO₂ emissions by up to 30%, according to the company. KHD will be responsible for designing and equipping the plant with clay calcination technology, while AVIC, as the EPC contractor and KHD's parent company, manages the overall project execution.

KHD's system features a two-stage preheater and flash calciner with a pre-combustor, offering adaptability for the future installation of KHD’s Pyrorotor technology to maximise secondary fuel usage. The technology also includes a colour stabilisation process to maintain consistent supply of grey or black calcined clay. The project is scheduled for completion by mid-2026.

CIMAF Group Vice-President, Malik Sefrioui, said "This project is a major piece of our group decarbonisation roadmap, fully financed by IFC under a green loan form. Two other similar projects are being studied and will be launched very soon. The choice of AVIC/KHD is based on their long track record in cement pyro-processing projects. We are sure that this inaugural partnership will deliver significant added value for both parties."


India: UltraTech Cement has commissioned an additional 1.2Mt/yr of grinding capacity at its Arakkonam unit in Tamil Nadu. This expansion is part of a broader 22.6Mt/yr capacity increase announced back in June 2022. With this latest addition, UltraTech Cement's total cement capacity now stands at 156Mt/yr.


UK: Alternative fuel manufacturer WKE has expanded its product range with new pellet sizes, including 9mm and 6mm shortcut pellets for extended burn times and reduced leftover material in cement kilns, and a 16mm pellet for the biomass sector. This development aims to address specific industry challenges and meet growing demand in both UK and international markets.

CEO Ian Jones said "Our new range of pellet sizes represent a significant step forward in our mission to provide a cleaner, greener and cost-effective alternative to fossil fuels. By tailoring our products to meet the bespoke needs of sectors like cement, we can further support these heavy energy-use industries in reducing their dependence on fossil fuels, all while cutting their energy costs and tackling the enormous amount of material that ends up in landfill."


Kyrgyzstan: Cement production in Kyrgyzstan reached 2.06Mt between January and August 2024, marking a 2% increase from 2.02Mt during the same period of 2023. 375,000t of cement was produced in August 2024, marking an 18.7% increase compared to August 2023.