Global Cement Newsletter

Issue: GCW686 / 20 November 2024

Headlines


The mood music for this year’s United Nations Climate Change Conference (COP29) in Azerbaijan has been poor. Despite this though the decarbonisation prospects for the cement sector are looking rosier than other industries.

First, the negatives. People are starting to question whether the COPs are fit for purpose. Donald Trump’s election as President-Elect in the US before the event started pretty much set the tone given that he intends to withdraw from the Paris climate agreement. Again. Azerbaijan's President Ilham Aliyev described his country’s natural gas resources as a “gift from God” following reports that, once again, COP national delegates had been caught promoting fossil fuel deals. France and Argentina also withdrew their lead negotiators for differing political reasons. Meanwhile, there has been increasing lobbying against carbon capture from the environmental sector. In short the view is growing that carbon capture is a delaying tactic by fossil fuel companies rather than a viable solution. This poses a threat to the cement sector because its current net zero roadmaps require carbon capture.

The World Cement Association’s CEO Ian Riley asked in a statement whether there might be “...a shift toward negotiations driven by the major emitters - China, the US, India, Russia, and Saudi Arabia.” However he observed that none of these countries yet seem ready to lead on the climate agenda globally.

Now, the positives. Cement CO2 sector emissions may have continued to fall in 2023. The Global Carbon Project published its Global Carbon Budget 2024 in mid-November 2024. It predicts that global fossil CO2 emissions will rise by 0.8% year-on-year in 2024 with emissions from coal, oil and gas still mounting. However, emissions from cement producers are expected to fall by 0.8%. This trend started in 2022. It appears to be due to declines in China, the US and the EU but, notably, not in India. It’s worth commenting here that this decline may be principally down to the parlous state of the real estate market in China, but there is also a lot of decarbonisation work happening. We’ll take a win where we can.

Next, the Global Cement and Concrete Association’s two big announcements at COP29 have been the publication of its Cement Industry Net Zero Progress Report 2024/25 and the launch of international definitions for low carbon cement and concrete. The progress report proffers a nifty update on how well it’s going. Short version: 23% reduction in emissions intensity since 1990; lots going on; plenty more to do.

One of those issues that require attention is low-carbon procurement. Hence those international definitions. This may seem like an abjectly boring topic but never underestimate the power of standards upon building materials. This should help support governments, policy makers and the private sector to set low carbon procurement rules. Since governments are among the biggest buyers of building materials worldwide, both directly and indirectly, this is intended to start speeding up decarbonisation by driving demand for existing lower carbon cement and concrete products. Whether this is the tool that cracks the global adoption of low carbon building materials remains to be seen. Yet the long lead time it took the Portland Cement Association (PCA) in the US, for example, to promote the use of Portland Limestone Cement is both instructive and inspirational. It can be done and it can deliver results.

COP29 has been described as the ‘finance COP’ because the representatives are hoping to set a new global climate finance target. This target, or new collective quantified goal (NCQG), is seen as one of the summit's main outcomes. It is intended to replace the existing US$100bn goal that is due to expire in 2025. However, the question of how much each country pays has predictably caused disagreements between developed, developing and those countries in between. All of this is well above the ‘paygrade’ of the cement sector but is crucial to what happens next, because it’s going to get expensive. Establishing regional carbon capture infrastructure requires serious funding. Time will tell whether COP29 can actually further this aim. The arguing continues.


Germany: The European Cement Research Academy (ECRA) has elected Eric Bourdon as the chair of its Technical Advisory Committee. Hendrik Möller, Schwenk Deutschland and Samir Cairae, Titan Cement have also joined the organisation’s board of directors

Bourdon is the Deputy CEO, the Head of Industry and the Chief Climate Officer of Vicat. He joined the group in 2002 after working for thyssenkrupp Polysius. He is a graduate in engineering from the Ecole Nationale Supérieure d’Arts et Métiers in Paris.

ECRA was founded in 2003. It supports and shares research by the cement sector in Europe. It is steered by its technical committee. Bourdon will work with ECRA managing director Martin Schneider on strengthening its work in strategic areas, including CO₂ capture and related technologies, as well as grinding and kiln technologies.


Zambia: China Zambia De Jin Xin Cement plans to invest US$170m in the Zambian economy to build a cement plant, a power plant, a mine and a high calcium powder plant, according to ZNBC. The construction is expected to begin in November 2025, according to the company's director, Jianbao Zhao. This investment will reportedly create over 1000 jobs during the construction phase and more than 500 permanent positions once operational.


Saudi Arabia: Al Jouf Cement Company has signed a power purchase agreement with ENGIE to develop a 22MW solar photovoltaic plant at Al Jouf Cement’s facility in Turaif, Northern Borders Province. The plant will provide on-site power generation and help to decarbonise Al Jouf Cement's operations over the project’s 25-year lifespan. The solar photovoltaic installation will span over 420,000m2 and is expected to reduce the plant’s carbon footprint. ENGIE will handle the development, design, construction, ownership and operation of the solar plant.


Spain: Cement consumption in Spain has seen a cumulative increase of 1.3% in the first 10 months of 2024, compared to a decline of 0.5% at the end of the third quarter of 2024, according to the latest data from Oficemen. This increase is largely due to 14.5% growth in October 2024 consumption compared to the same month a year earlier, reaching 1.37Mt, the highest since 2019. Despite the domestic gains, cement exports fell by 1% in October 2024 to 0.41Mt, contributing to a 13% decline in the cumulative annual data up to October 2024. Since November 2023, exports have decreased by 16%, totalling 0.47Mt.

Oficemen’s general manager Aniceto Zaragoza said "These positive figures are in line with the forecasts that we made at the beginning of 2024, when we were expecting a moderate recovery in the final stretch of the year."


Pakistan: Kohat Cement Company has installed and commissioned a 5.34MW on-grid solar power plant, according to the Business Recorder. This new facility adds to the existing 10MW solar power plant at the same location.


India: Around 67t of non-recyclable materials collected from the city of Ernakulam have been sent to cement plants as refuse-derived fuel (RDF) for the plant’s processes, according to October 2024 estimates. 36t/day of materials from local bodies and an additional 27t/day from Clean Kerala Company facilities are handed over to cement plants, with private facilities contributing 3.9t. The waste generated in households and commercial establishments was sorted at material collection facilities and resource recovery units managed by local bodies, before being used for energy generation in cement manufacturing. Haritha Karma Sena volunteers manage the collection of non-biodegradable materials from households and shops, directing these materials to nearly 15 cement plants across Tamil Nadu, Andhra Pradesh and Gujarat for co-processing.


Spain: Heidelberg Materials Hispania and Enagás have signed a collaboration agreement for a CO₂ capture, transmission, liquefaction and storage project in Northern Spain. Heidelberg Materials Hispania says that the collaboration will support carbon capture installations at its plants in the region. The partners will now produce a feasibility study and technical designs for CO₂ transmission, liquefaction and storage infrastructure, including the use of Enagás’ existing regasification terminals.

Heidelberg Materials Hispania operates the 1.1Mt/yr Añorga and Arrigorriaga cement plants, both in the Basque Country.


Afghanistan: A joint venture of two local and two China-based companies plans to build a new US$200m, 1Mt/yr-capacity cement plant in Balkh. Afghan state media has reported that the plant will generate 1000 local jobs and reduce the reliance on imports in Northern Afghanistan.


Taiwan: Taiwan Cement Corporation (TCC) and 100 construction firms have together launched the Low Carbon Construction Pioneer Alliance. CNA News has reported that the founding members eliminated 146,000t of CO₂ emissions altogether through their use of reduced-CO2 building materials since November 2024. This includes despatches of 800,000m3 of Portland limestone cement (PLC) concrete by TCC, with 2.5Mm3 in cumulative orders to date. TCC first launched its PLC in October 2023, touting an emissions reduction of 15% compared to ordinary Portland cement (OPC). It since enlarged the net reduction to 24% through production modifications.

Taiwan Cement chair Zhang Anping said "TCC took the initiative to align with the Global Cement and Concrete Association and released the lowest-carbon PLC concrete in Taiwan. The CO2 reduction is far greater than the 53% as defined by the government.”


India: Aditya Birla subsidiary UltraTech Cement is reportedly considering issuing bonds worth US$118m. Informist MoneyWire News has reported that the issuance may take place later in November 2024.


India: Aditya Birla plans to expand its production capacity by 28% from 156Mt/yr to 200Mt/yr before 2035. Group chair Kumar Mangalam Birla told the Hindustan Times Leadership Summit in New Delhi that scale is key to long-term survival, and that he always aims for his group to be a leader in any given industry in which it operates.

Domain-B News has reported that Birla said "It took the group 36 years to build a 100Mt/yr cement capacity, while it added another 50Mt/yr capacity in five years.”


India: UltraTech Cement has entered a new transport service contract to deploy about 100 electric vehicles for the transportation of 75,000t/month of clinker from its cement plant Dhar Cement Works in Madhya Pradesh to its grinding unit Dhule Cement Works in Maharashtra, 200km away. This expansion aims to reduce CO₂ emissions by 17,000t/yr. The initiative follows a successful pilot launched in January 2024, in which the company deployed five electric trucks for the transport of clinker on this route, as well as the deployment of charging infrastructure and training. UltraTech is evaluating additional routes for further electric truck deployment and plans to conduct another pilot with a similar model. The company aims to increase its electric truck fleet to 500 by June 2025 as part of India's eFAST initiative.


Kazakhstan: International Cement Group has opened its fourth plant, Korcem, increasing its capacity by 38% to 5.5Mt/yr. The US$153m investment aims to support the growing construction demands in Central Asia and is expected to meet rising export demand, especially from Kyrgyzstan.


Fiji: Fijian Holdings (FHL) plans to construct a new cement plant within the next two to three years in Lami, replacing the current facility which began operations in 1962. According to CEO Jaoji Koroi, the existing plant, operated by subsidiary Pacific Cement, has faced issues with machine breakdowns, which have affected production and profitability. In 2023, damaged machine parts forced the plant to close down for two months. The proposed new plant reportedly aims to produce more ‘environmentally-friendly’ products. The announcement follows a year where Pacific Cement saw reduced sales due to price controls and outdated equipment.


North Macedonia: Titan Usje will invest €20m over the next three years to modernise its operations, focusing on digitalisation and new technologies. Since 2019, the company has invested over €6m in digitisation and artificial intelligence solutions. The system is being rolled out across all Titan plants and is designed to maximise production efficiency, reduce energy use by over 10% and improve product quality, while cutting CO₂ emissions.


Zimbabwe: Bulawayo deputy mayor Edwin Ndlovu and Finance and Development Committee chairperson Councillor Mpumelelo Moyo have been arrested by the Zimbabwe Anti-Corruption Commission (ZACC) for allegedly demanding a US$20,000 bribe from Labenmon Investments. The officials are accused of soliciting the bribe from the China-based investors in exchange for approving 5.6 hectares of land for a cement plant. The initial application for 10 hectares was denied by the Bulawayo City Council. The two were scheduled to appear in court on 16 November 2024.

A statement from the ZACC said "The circumstances are that sometime in November 2023, Tsitsi Mapfumo from Labenmon Investments made an application, without success, for 10 hectares of land to the Bulawayo City Council for a cement mixing plant. Labenmon Investments resubmitted the application in April 2024 and was offered 5.6 hectares. After Labenmon Investments received an offer letter, the accused persons allegedly approached Mapfumo demanding a reward of US$20,000 cash on behalf of other 20 Bulawayo City Council councillors for facilitating the approval.”


Colombia: Grupo Argos grew its sales by 8% year-on-year to US$739m in the third quarter of 2024. It also grew its earnings before interest, taxation, depreciation and amortisation (EBITDA), by 34%, to US$254m. As a result, net profit rose by 75%, to US$74.1m.


Pakistan: Cherat Cement CEO Azam Farooq and fellow executives met Khyber Pakhtunkhwa Governor Faisal Karim Kundi on 15 November 2024 to discuss the potential establishment of a new cement plant in Dera Ismail Khan. The Balochistan Times newspaper has reported that the Governor ‘assured full support’ for the proposed project.


India: Grasim Industries reported 11% year-on-year growth in sales to US$3.98bn in the second quarter of the 2025 financial year. Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 10% year-on-year to US$479m, partly due to reduced profitability in the cement business. Group net profit dropped by 66% to US$46.2m.


Azerbaijan: The Global Cement and Concrete Association (GCCA) has called on governments at the COP29 climate conference to support the decarbonisation of the cement industry. The association published its Net Zero Progress Report 2024/25 to coincide with the conference. The report details the ‘extensive decarbonisation work’ currently underway in the industry, including accelerating carbon capture, utilisation and storage (CCUS), switching to renewable energy sources, advancing the circular economy and reducing cement’s clinker factor. The sector expects to commission its first net zero cement plant, following a carbon capture upgrade to Heidelberg Materials’ Brevik plant in Norway, later in 2024.

GCCA president Fernando González said “Our industry is engaged in the most significant transformation in its history. To fully unlock our decarbonisation progress in this crucial Decade to Deliver, we urgently need effective policy support."


India: UltraTech Cement announced plans to make a private placement of non-convertible debentures (NCDs) on 12 November 2024. MarketLine News has reported that the value of the proposed placement as US$356m.


Türkiye: OYAK Cement has announced net sales of US$333m and a 17% year-on-year rise in earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$111m for the third quarter of 2024. The company recorded a net profit of US$61.3m for the third quarter and US$155m for the first nine months of 2024.


India: RLJ Infracement plans to more than double the production capacity of its 0.3Mt/yr Mirzapur, Uttar Pradesh, grinding plant to 0.66Mt/yr.

Reuters has reported that the plant's cement supplier, Prism Johnson, now plans to terminate its supply agreement with Rockhill Hi-Tech Cement. Rockhill Hi-Tech Cement operates the 0.22Mt/yr Patna grinding plant in neighbouring Bihar.


Puerto Rico: The Puerto Rico Economic Development Bank (BDE) has reported an increase in cement sales, reaching 1.41 million 43kg bags in October 2024, the highest since March 2023. This marks a 15% rise from October 2023, with recent months averaging 1.28 million bags.

BDE President Luis Alemañy said "We see a recovery in the construction sector, particularly in cement sales, which predicts a good impact on infrastructure development and job creation in Puerto Rico. Although the 2024 fiscal year closed with a 1% decrease in cement sales compared to the previous year, the start of the 2025 fiscal year shows a 6% increase in sales between July and October. This allows us to anticipate a progressive recovery in this key sector for our economy."


China: Shandong Province will curb cement production from 15 November 2024 to 15 March 2025 to reduce air pollution. The measure, similar to last winter's, was announced by the Province's industry and environment ministries. Shandong's reliance on inefficient captive coal-fired power plants means the measure could reduce coal demand significantly.