Global Cement Newsletter

Issue: GCW685 / 13 November 2024

Headlines


On 6 November 2024, Donald Trump appeared before followers in Florida, US, to declare victory in the 47th US presidential election. A sea of red baseball caps reflected the promise of the former president, now once again president-elect, to Make America Great Again. What Trump’s triumph means for the cement industry is not so straightforward. One lesson of President Trump’s 2017 – 2021 tenure as 45th president is that a Trump presidency comes with winners and losers.

Alongside the international heads of state posting their congratulations to Trump via social media was the Portland Cement Association (PCA), which represents US cement producers. In a post to LinkedIn, it took the chance to set out its priorities for the upcoming presidency, set to commence on 20 January 2025. These include collaborating on ‘market‐based initiatives’ to further reduce US cement’s CO2 emissions, addressing ‘regulatory burdens’ that currently hinder the uptake of alternative fuels (AF) and ensuring favourable policies and funding for the use of alternative cements under federal transport programmes, which are up for renewal in 2026, as well as collaborating on carbon capture, utilisation and storage.

The post was suitably diplomatic for an organisation that will have to work with the incoming administration for the next four years. Reading the policy priorities against some of Trump’s campaign promises, however, they may be more pointed. As part of his plan to stimulate economic growth, Trump has proposed an unspecified reduction of the ‘regulatory burden’ of environmental standards. He also purports to want to replace renewables with increased use of fossil fuels – in direct opposition to the PCA’s goal to slash the US cement industry’s coal and petcoke reliance from 60% to 10% by 2050. The PCA’s stance is not merely ideological: its roadmap is founded on the legally-binding Paris Agreement on climate change mitigation. Trump, who considers the Paris Agreement a ‘disaster,’ has the stated aim of withdrawing the US from the treaty – for a second time!

The PCA included a positive note that “We can all agree that the ultimate goal of our industry and the government is to best serve the American people.” In case there were any doubt as to what it feels best serves those people, it concluded that it will work with all federal officials to help communities in the US to build ‘a more resilient, sustainable’ country.

Producers themselves, in the US and many other markets, had been finalising first-half or nine-month financial results when the Trump news broke. Now came half-anticipated strategy discussions – and a surprise: in market after market, trading in cement stocks opened on the up. Ireland-based CRH’s share price spiked by 15%, before settling on a rise of 6% day-on-day. Mexico-based Cemex’s rose by 7% and Switzerland-based Holcim’s by 5%. Investors, clearly, glimpsed opportunity in uncertainty for these US-involved operators.

Trump’s campaign successfully positioned him as the disruptive outsider, despite being the known (or, at least, known-to-be-unpredictable) quantity of the two candidates. His promise to Americans was increased affordability; to corporations, deregulation. Either way, he stands to overhaul the past four years’ policy on the economy. All of this may keep Wall Street high-ballers placing their bets on Cemex or CRH, or on Holcim North America after it eventually joins them on the New York Stock Exchange. The prospect of more money in homebuyers’ pockets is attractive, especially to allied sectors like property development, where Trump himself worked for over 40 years. The cement industry, meanwhile, will be taking a hard look at what the Trump proposition might mean for its market.

US Geological Survey (USGS) data tracks a favourable market trend under the present Biden Administration – to date – for a US cement industry that has also grown in production terms. Consumption was 120Mt in 2023, up by 14% over the three-year-period from 2020, while production was 91Mt, up by 4% over the same period. President Biden has signed into law two major pieces of legislation – the Inflation Reduction Act and Infrastructure Investment and Jobs Act – with a combined value of US$1.94tn in additional public spending, to President Trump’s none. However, the Republican president previously proposed investing an additional US$200bn in 2018.

Trump voters may have perused the USGS’ most recent monthly cement figures, for July 2024, before casting their votes. The figures recorded a 5.2% year-on-year decline in total cement shipments in the year-to-date, to 58.6Mt. Both Eagle Materials and Italy-based Buzzi noted a recent lack of growth in US sales volumes in their latest financial results. Another possibly alarming trend for the industry – and anyone with a protectionist mindset - is the growth of imports, which rose from 14.8Mt in 2019 to 26Mt in 2023.

A defining feature of Trump’s original presidency, alongside Covid-19 lockdown, was his still-ongoing trade wars. We can expect Trump to resume his roll-out of new tariffs as soon as he can. This might include cement plant equipment produced in other jurisdictions, such as the EU. Compared to the roster of goods he previously denied entry to the US, however, 26Mt/yr of cement will be less easy to wrangle with in a country with a domestic shortfall of 29Mt/yr.

Whatever happens in politics, the US cement sector remains very strong, with historied local ownership and some of the most innovative plants in the industry globally. Global players continue to seek to maximise their US-facing presence, as evidenced by Brazil-based Votorantim Cimentos’ contemplation of an initial public offering (IPO) for Votorantim Cimentos North America, announced on 7 November 2024. For the industry, the day-to-day grind – and pyroprocess – goes on.

After all, Trump did not enact many of his more disruptive proposals, such as building a Mexican border wall, after his win in 2016. See Global Cement’s analysis of that proposal here. But even this record is an unreliable guide for what to expect in 2025 – 2029. Not only did Trump himself win the popular mandate this time around, but his allies also gained majorities in the House of Representatives and Senate, comprising the US legislature. This betokens a different pace and scale of possible changes.

In 10 weeks’ time, the US cement sector will be lobbying an entirely new regime. Now is the time for it to prepare whatever arguments will appeal to incoming lawmakers to allow it make the best of such opportunities as may be available.


Pakistan: Fecto Cement has reappointed Aamir Ghani and Mohammed Yasin Fecto as its chair and CEO respectively. The move followed a formal revaluation of the company leadership, according to Pakistan Press International. It said that the change aims to streamline operations and reinforce the strategic direction of the cement producer. The company operates an integrated plant at Sangjani near to Islamabad.


Japan: Taiheiyo Cement has reported net sales of US$2.86bn for the six months that ended on 30 September 2024, a 5.5% increase compared to US$2.71bn a year earlier. However, the company’s operating profit for the six-month period was US$115m, a decrease of more than 50% compared to US$325m in the first six months of the prior financial year.


Japan: Sumitomo Osaka Cement has reported net sales of US708m for the six months to 30 September 2024, a decline of 0.3% compared to US$710m a year earlier. The company’s net profit slumped to US$6.1m in the six-month period from US$37.5m in the first six months of the 2023 financial year, a fall of 87.4% year-on-year.


India: Shree Cement’s profit plunged by more than 80% year-on-year to US$11.0m in the three months to 30 September 2024, weighed down by weakness in both demand and low prices. While the September quarter is seasonally weak for cement makers in India, the country's third largest producer's sales volume slipped as compared to the previous year too, falling by 7% to 7.6Mt.

Neeraj Akhoury, managing director of Shree Cement, said "Despite strong headwinds on account of an extended monsoon season and softer pricing environment across the industry, Shree Cement has delivered a steady performance on the back of accelerated operational efficiency measures, focused cost optimisation drive and product ‘premium-isation’ initiatives.” He added that the company expects an increase in demand in the remainder of the 2025 fiscal year due to the release of government budgetary allocations for national infrastructure projects.


Brazil: Votorantim Cimentos has reported that its net profit surged by 24% in the third quarter of 2024 compared to the same period of 2024, to reach US$179m. Its net revenue increased by 6% year-on-year to reach US$1.33bn.

However, when excluding currency fluctuations, revenue decreased by 1%. This highlights the significant impact of foreign exchange rates on Votorantim's global operations. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 20% to US386m. Cement sales volume increased by 3% to 10Mt during the quarter.

The company said that these figures indicate resilient demand across Votorantim's markets, despite challenging economic conditions in some regions. The company's diversified geographical presence has helped balance market fluctuations.

In the sustainability arena, Votorantim Cimentos also says that it has made significant progress. The company reduced its specific embodied CO2 emissions by 4% to 556kg/t of cement in 2023. It has also increased its alternative fuel thermal substitution rate (TSR) from 26.5% in 2022 to 30.9% in 2023.


Türkiye: Çimsa will invest US$31.8m in an expansion to its calcium aluminate cement production facilities at its Mersin Cement subsidiary. The upgrade will reportedly be completed by the end of the first half of 2026.


Tunisia: Société les Ciments de Bizerte’s local sales fell by 77.43% in the third quarter of 2024 compared with the same period in 2023, to US$1.7m in 2024. This decrease is due to the total cessation of clinker production during this period. Similarly, the total turnover of Société Les Ciments de Bizerte fell in the third quarter of 2024 due to the domestic sales situation and a total absence of exports. As a result of the company’s ongoing financial crisis, it has not been able to meet its commitments to suppliers or its bank debts.

The company made just 16,796t of cement during the third quarter of 2024, 75,020t less than in the same period of 2023 when it produced 91,816t.


Germany: Heidelberg Materials has started the Front-End Engineering Design (FEED) Study phase on the GeZero project at its Milke plant in Geseke. The technical planning phase is being conducted by Fluor Corporation. It will focus on the design and integration of the various systems into the overall technical concept, which also includes a CO2 transport solution. The technical planning is expected to be completed in mid-2025 with construction scheduled to start in 2026.

Christian Knell, CEO of Heidelberg Materials Germany, said “With GeZero, Heidelberg Materials will rely on CO2 capture using state-of-the-art oxyfuel technology in combination with a CO2 cleaning and liquefaction plant. To pave the way for domestic CCS plants, a CO2 transport solution by rail is part of the planning until the necessary pipeline infrastructure is available. In addition, a local CO2 storage hub is to be created as interim storage. The electrical energy requirement for the operation of the plant is to be covered exclusively by renewable energies. A new photovoltaic system in the vicinity of the factory premises will help to meet the needs.”

The GeZero project is preparing to build a carbon capture and sequestration (CCS) value chain for the Geseke cement plant, North Rhine-Westphalia, in inland Germany. It aims to capture 0.7Mt/yr of CO2 starting from 2029. The project is supported by the European Union Innovation Fund.


Kenya: East African Portland Cement (EAPC) has contracted a technical audit from Denmark-based FLSmidth Cement with a value of just under US$70m. EAPC’s acting managing director Mohamed Osman said the findings would guide a pending plant upgrade, to be funded by some of the proceeds from the land sale, according to the Star newspaper. It hopes to double capacity at the unit by the late 2020s without incurring debt. The cement producer is also considering its options to use alternative fuels such as macadamia husks and other agricultural biomass. The 10-week audit process is expected to end in early December 2024.

Osman said “We have tapped FLSmidth to undertake a comprehensive technical audit of the plant, which will assess how to maximise the capacity and inform the design and cost of a new one,'' Osman said. “The audit by FLSmidth will also look at the reserves of raw materials that it has and inform whether it needs to acquire more land that has adequate reserves.”


Australia: Hanson Australia has changed its name to Heidelberg Materials Australia as part of parent company Heidelberg Materials’ global rebranding strategy.

The company started in 1949 when Pioneer was established as a ready-mix concrete producer. It was later acquired by Hanson in 2000 and rebranded as Hanson Australia in 2004. Hanson was subsequently acquired by Heidelberg Materials in 2007. Heidelberg Materials began its global rebranding from Heidelberg Cement in September 2022. Hanson’s subsidiaries Hymix, Pioneer North Queensland, Placecrete, Traino, Alex Fraser and Suncoast Asphalt will continue to operate under their existing brands.


Switzerland: ABB has launched a white paper outlining the challenges the global cement industry must tackle to decarbonise operations in line with global emissions reduction targets and the role technology will play in this.

The white paper is supported by industry associations and, in it, ABB details a technology roadmap for potential solutions to achieve net-zero targets. It combines insights from a range of key industry players - including customers, technology partners, industry media and associations - along with ABB’s commercial specialisation. It details the benefits of advanced electrification used in tandem with technologies adopted through industry collaborations. The white paper also includes discussions around how sustainable cement could be defined, as well as practical advice as to what steps producers can immediately take in their decarbonisation journey. Electrification is identified as a major component in the decarbonisation of the cement industry, with the ability to replace fossil fuel burners with electrified, or zero-carbon, solutions. These are predicted to help significantly reduce emissions in line with industry ambitions.

ABB sells products in the electrification and automation sectors. Its Process Automation business automates, electrifies and digitalises industrial operations that address a wide range of essential needs. Its products are marketed to help customers in process, hybrid and maritime industries improve performance and safety of operations.

The full white paper can be accessed online here: https://new.abb.com/cement/campaigns/cementing-a-sustainable-future


Austria: RHI Magnesita has launched 4PRO, a new refractory solutions contract model. It says that the new business model is designed to “lead high-temperature industries like steel, cement, glass, non-ferrous metals etc. towards a sustainable and technologically-advanced future through a more holistic and contemporary approach.” The 4PRO contract model is guided by four key pillars: Performance; Partnership; People; and Planet.

The company supplies refractory products, systems and solutions for high-temperature processes exceeding 1200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. RHI Magnesita has over 20,000 employees in 67 main production sites (including raw material sites), 12 recycling facilities and more than 70 sales offices.


Italy: Buzzi’s net sales decreased by 4% year-on-year to €3.18bn in the first nine months of 2024 from €3.30bn in the same period in 2023. Its cement and ready-mixed concrete sales volumes fell by 6% to 18.8Mt and by 8% to 7.74Mm3 respectively. The group attributed the declines to a “…challenging market environment in Central Europe and the lack of recovery in Italy and the US during the summer.” However, sales were up in Poland and the Czech Republic.


Italy: Cementir Holding has blamed a fall in earnings in the first nine months of 2024 on “lower results achieved in all geographical areas except Egypt.” It added that sales had fallen due to a decrease in volumes in some places and negative currency effects in Türkiye and Egypt. The group’s revenue fell by 5% year-on-year to €1.24bn in the first nine months of 2024, from €1.30bn in the same period in 2023. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 9% to €296m from €326m. Sales volumes of cement and clinker remained stable at 7.98Mt. It noted that volumes increases were reported in Türkiye and, to a lesser extent, in Malaysia and the US. However, volumes of ready-mixed concrete rose by 5% to 3.33Mm3 from 3.18Mm3.

Francesco Caltagirone Jr, chair and CEO, said “The results for the first nine months of 2024 are in line with our expectations and, after several quarters of contraction, signs of a market turnaround in some geographies are emerging in the third quarter of 2024. We are strengthening our competitive position through initiatives such as: the investment on Kiln 4 in Belgium, the restart of the second line in Egypt, the acquisition in concrete in Nordic & Baltic, a new limestone quarry in Malaysia, and the repurchase of a large part of the minority interest in our Egyptian subsidiary, to prepare ourselves for any upcoming market opportunities”.


India: The India Cements’ revenue fell by 24% year-on-year to US$244m in the six months to 30 September 2024 from US$320m in the same period in 2023. Its reported loss grew to US$33.3m from US$19.8m. Sales volumes declined by 15% to 4.26Mt from 5.04Mt. The company’s performance was negatively affected by weak cement demand and a significant decline in prices, according to the Hindu newspaper. It also said that is was unable to benefit from lower fuel costs, particularly petcoke, as lower sales volumes reduced its margins. The cement producer was purchased by UltraTech Cement in July 2024.


Spain: FCC spin-off company Inmocemento plans to start trading shares on the Spanish Stock Exchanges from 12 November 2024. The cement and real estate business is expected to have a market value of €1.93bn, according to Reuters. FCC said in October 2024 that it had transferred related assets to Inmocemento. This included most of the assets from subsidiaries FCYC and Cementos Portland Valderrivas, in addition to FCC's cement plants and the share it owns in real estate developers Realia and Metrovacesa. All FCC shareholders received a number of shares in Inmocemento proportional to their holdings in FCC. Plans for the spin-off were first reported in May 2024.


Paraguay: Gerardo Guerrero, the president of Industria Nacional del Cemento (INC), says that the state-owned company is close to reaching its target of producing 11 million bags of cement in 2024. In October 2024 it manufactured 1.07m bags of cement and sold 1.27m, according to the Agencia de Información Paraguaya. Guerrero attributed the achievement to the company switching its supply chain to land-based transport due to poor conditions on the Paraguay River. INC reportedly has a 37% market share. It operates an integrated cement plant at Vallemí and a grinding unit at Villeta.


Philippines: CRH is considering selling its cement business in the Philippines. The company has engaged UBS Group to assess investors' interest in acquiring assets, with negotiations ongoing. In 2019, CRH attempted to sell its Philippines cement business for US$2 - 3bn as part of an asset portfolio optimisation, but the divestment is reportedly now worth ‘significantly’ less due to a ‘more complex’ business environment, according to AK&M Information Agency.

CRH first entered the Philippine market in 2015 by acquiring Republic Cement, the second largest cement producer in the Philippines.


Greece: Titan Cement has announced its financial results for the first nine months of 2024. The group’s sales increased by 5% year-on-year to €1.99bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the period reached €455m, marking a 15% year-on-year increase. Net profit after tax also rose by 20% during the period to €238m.

In terms of regional performance, the US business saw an increase of 4.2% year-on-year to €1.15bn and EBITDA growth of 20%. Greece and Western Europe experienced an 8.4% increase in sales to €324m, though EBITDA declined by 4.5% year-on-year. Southeast Europe saw an increase in sales of 4% to €327m with EBITDA rising by 19% during the period. Meanwhile, in the Eastern Mediterranean region, sales improved by 5% to €183m, despite a 21% reduction in EBITDA. Titan Cement said that it maintains a positive outlook for the remainder of 2024, driven by solid pricing and overall healthy volumes.


Türkiye: The Ministry of Environment, Urbanisation and Climate Change has initiated a new process for the ‘Integrated Cement Factory and Raw Material Quarries Project’ in Muğla, which had previously been halted due to local opposition and judicial rulings. A meeting of the Investigation and Evaluation Commission (IAC) is scheduled for 28 November 2024, according to the Ministry's announcement on 6 November 2024.

According to Railly News, the project ran into difficulties when construction by local company Muğla Cement Industry and Trade began in 2021. Following environmental concerns, the Muğla 2nd Administrative Court cancelled the construction permit and the environmental impact assessment (EIA) 'positive' decision, citing non-compliance with the law. A request to appeal was denied.

In response to these developments, local environmental groups and residents have continued their legal efforts, most recently challenging the designation of the plant area as an 'Industrial Area' in the regional development plan. The case remains pending.


Nigeria: Lafarge Africa has launched a new alternative fuel and raw material (AFR) platform at its Mfamosing cement plant in Cross River State, with the aim to reduce its CO₂ emissions. The facility will replace traditional fossil fuels with alternative energy sources derived from non-recyclable materials, according to the Nigerian Tribune.


Germany: In the first nine months of 2024, Heidelberg Materials' sales fell by 2.1% to €15.75bn from €16.8bn in the same period of 2023. The result from current operations before depreciation and amortisation rose by €101m or 3% to €3.28bn, while the result from current operations increased by €58m or 2.6% to €2.33bn.

The company’s businesses in Europe reported a revenue of €7.1bn in the nine-month period, a 2.7% decrease from €7.3bn in 2023. In North America, Heidelberg Materials reported a revenue of €3.98bn, marking a 0.5% increase from January - September 2023. In the Asia-Pacific region, revenue decreased by 5.2% to €2.6bn, and the Africa-Mediterranean-Western Asia region also saw a decline of 6.2% year-on-year to €1.65bn.


Ireland: CRH reported a rise in revenue to €9.56bn in the third quarter of 2024, up by 4% year-on-year. Net income grew by 5% in the third quarter to €1.27bn. Adjusted earnings by interest, taxation, depreciation and amortisation (EBITDA) rose by 12% to €2.28bn.

For the first nine months of 2024, total revenues increased by 2% to €24.3bn. Year-to-date net income grew by 13% to €2.55bn, with adjusted EBITDA also up by 12% to €4.73bn. Despite adverse weather, CRH anticipates positive market dynamics to continue into 2025, projecting net income between €3.44bn and €3.5bn and adjusted EBITDA between €6.25bn and €6.34bn. ​


Europe: Titan Group and Ecocem will partner for the development of Ecocem's low-carbon cement technology, ACT, in Europe. This partnership will produce a new low-carbon cement by substituting a ‘substantial portion’ of clinker with supplementary cementitious materials, reportedly reducing cement's carbon footprint by up to 70%.


US: Votorantim is in the early stages of preparing for a potential initial public offering (IPO) of its North American cement business. The offering could occur as early as 2025, contingent on market conditions, according to InvestNews. The company is reportedly still in talks and has not made a final decision regarding the launch of the IPO.