Global Cement Newsletter

Issue: GCW688 / 04 December 2024

Headlines


Huaxin Cement revealed this week that it is buying Holcim’s majority stake in Lafarge Africa for US$1bn. The moment marks a big step in the China-based cement producer’s international ambitions. It has been linked in the financial media to many divestments around the world in recent years. Yet this appears to be its largest acquisition so far and it adds to what is becoming a serious sized multinational business in Sub-Saharan Africa.

The details of the deal are that Holcim has agreed to sell its 83% share of Lafarge Africa to Huaxin Cement. Lafarge Africa operates four integrated cement plants in Nigeria at Sagamu and Ewekoro in Ogun State, at Mfamosing in Cross River State and the Ashaka Cement plant in Gombe State. It has a combined production capacity of 10.5Mt/yr. The transaction is expected to close in 2025 subject to regulatory approvals.

Holcim holds a relationship with Huaxin Cement that dates back to the late 1990s when it first bought a stake in the company. Following the formation of LafargeHolcim in the mid-2010s, Lafarge’s subsidiary Lafarge China Cement was sold to Huaxin Cement. At the end of 2023 Holcim reported that it owned just under a 42% share in the company. Huaxin Cement has also bought assets from Holcim as the latter company has divested subsidiaries over the last decade. In 2021 it bought Lafarge Zambia and Pan African Cement in Malawi from Holcim. This adds to other acquisitions in the region. In 2020 it purchased African Tanzanian Maweni Limestone from ARM Cement. Later in 2023 it picked up InterCement’s subsidiaries in Mozambique and South Africa. In addition, in October 2024 local media in Zimbabwe reported that the company was planning to build a grinding plant. Now, throw in the plants in Nigeria and Huaxin Cement is the second biggest cement producer in Sub-Saharan Africa after Dangote Cement.

Huaxin Cement said it had an overseas cement grinding capacity of just under 21Mt/yr at the end of 2023. However, this figure included plants in Cambodia, Kyrgyzstan, Nepal, Oman, Tajikistan and Uzbekistan. Data from the Global Cement Directory 2024 suggests that the company now has 10 integrated cement plants in Sub-Saharan Africa with a cement capacity of around 18Mt/yr. It also operates a number of grinding plants in these countries.

The Lafarge Africa deal is significant because a mainland China-based cement producer has finally hit the US$1bn window in merger and acquisition (M&A) activity overseas. Many potential acquisitions in the sector are linked by the press to Chinese companies these days. However, most of the activity to date has been of a plant-by-plant or piecemeal nature. Alternatively, these companies have been building their own plants around the world as part of the Belt and Road Initiative. Taiwan Cement Corporation (TCC) has spent more buying itself into Türkiye-based OYAK Cement since 2018 but it is headquartered in Taipei.

The question from here is how much further does Huaxin Cement plan to expand both in Africa and beyond? The obvious answer is that it will keep going given the state of the cement sector back home in China, the retreat of the western multinationals and the demographic trends in the region. World population growth is predicted to be fastest in Africa in the coming decades and demand for cement should follow. Outside of Africa, the ‘big’ one recently has been InterCement in Brazil. Unfortunately for Huaxin Cement though, InterCement extended its exclusivity deal with Companhia Siderúrgica Nacional (CSN) in November 2024. If the Lafarge Africa transaction completes then it will be the biggest deal yet and it will welcome a China-based cement company to the big league of international M&A. It may just be the start.


Philippines: The Consunji Group has appointed Herbert M Consunji as the president and CEO of Cemex Holdings Philippines (CHP). The group completed its acquisitions of CHP from Cemex in early December 2024, according to the Manila Bulletin newspaper. It plans to change the name of the company to Concreat Holdings Philippines subject to the approval of shareholders at a meeting to be held in February 2025.

Consunji is the Executive Vice President, Chief Finance Officer, Chief Compliance Officer and Chief Risk Officer of DMCI Holdings, part of Consunji Group. He concurrently sits on the board of various DMCI Holdings subsidiary companies. He is a certified public accountant and he graduated from De La Salle University in Manila with a degree in commerce majoring in Accounting.


Germany: Heidelberg Materials has appointed Gün Burak Günbey as Senior Project Manager at its Competence Center Cement global research and development hub.

Günbey has worked for the cement sector since the late 2000s. He has held engineering, project management and investment roles at OYAK Bolu Çimento, Limak Cement and Vicat. He became the Group Investment Manager for Vicat Group Türkiye in 2021 and subsequently worked as Project Expert for VICAT Senegal Sococim from 2023.


Germany: thyssenkrupp Polysius has appointed Philip Glörfeld as Head of Business Development & Sales. He will succeed Lukas Schoeneck in the role from the start of January 2025. Schoeneck became the head of Operating Unit Green Solutions in October 2024.

Glörfeld has worked for thyssenkrupp since 2015 in business development roles. In 2020 he became the Director Business Development & Sales Europe, Africa & CIS for the Polysius business unit that later became thyssenkrupp Polysius. Prior to his time at thyssenkrupp he worked at Siemens. He is a graduate from the Steinbeis Hochschule Berlin and holds a master of business administration from the University of Plymouth.


US: Sublime Systems has completed negotiations with the US Department of Energy for a US$87m grant to build a ‘clean’ cement manufacturing plant in Holyoke, Massachusetts. The company will now commence site engineering, design and permitting. The Holyoke plant will demonstrate full-scale operations of its cement manufacturing process when production begins in 2026. Sublime Systems expects to create 70 - 90 jobs once its new plant is operational.


Australia: Suvo Strategic Minerals has been offered an opportunity to field test its lower carbon cement made from kaolin in the Victorian government's level crossing removal project (LXRP). This trial aims to evaluate Suvo’s cement formulation, which the company hopes can reduce up to 70% of Portland cement typically used in construction.

The company utilises ‘hydrous’ kaolin from its Pittong operation, located 40km west of Ballarat, Victoria, in producing this cement. The LXRP trial will allow Suvo to demonstrate the feasibility of using their product in real-world infrastructure projects, with help from the government to navigate the commercial and technical approval processes to introduce its cement product to the market.


Thailand: At COP29 in Azerbaijan, the Thai Cement Manufacturers Association, in collaboration with the Department of Climate Change and Environment, the Global Cement and Concrete Association and United Nations Industrial Development, showcased the achievements of the ‘Saraburi Sandbox’ project. Notable successes include more than 80% of construction projects in Saraburi now using hydraulic cement, the cement industry increasing its use of alternative fuels and renewable energy to 26%, and a pilot project for growing crops like Napier grass for use as alternative fuels in cement production. These developments are key to implementing the Thailand 2050 Net Zero Cement and Concrete roadmap.


Pakistan: In November 2024, there was a 6% increase in total cement despatches, reaching 4.15Mt compared to 3.93Mt in November of the previous fiscal year, according to the All Pakistan Cement Manufacturers Association (APCMA).

Local cement despatches during November 2024 were 3.34Mt, reflecting a 2% year-on-year increase from 3.27Mt in November 2023. Exports rose by 21% year-on-year, from 662,374t in November 2023 to 803,258 tonnes in November 2024. However, the first five months of the current fiscal year saw a 5% decline in total cement despatches, amounting to 18.8Mt, down from 19.8Mt during the same period last fiscal year. Domestic despatches fell by 12% to 14.8Mt, while exports experienced a 29% year-on-year increase, reaching 4.02Mt.

An APCMA spokesperson noted that domestic cement sales could improve if the government reduced duties and taxes, which would lower consumer costs and boost demand, helping to utilise the sector's idle capacity.


Portugal: Cimpor recently celebrated the 50th anniversary of its Souselas plant, which has been operational since November 1974. The plant was initially launched with a production capacity of 500,000t/yr of clinker, but has since adapted to meet market demand.

Throughout its five decades of operation, the Souselas plant has produced over 69Mt of clinker and processed approximately 667,000t of alternative fuels. Current projects include the rehabilitation of Line 2 for producing calcined clays, installing photovoltaic plants and focusing on co-processing and heat recovery initiatives, with the aim to achieve carbon neutrality by 2050. The anniversary event showcased recent projects, such as the installation of a 1MW photovoltaic plant and the planned introduction of a 10MW plant by 2025. Additionally, a 7.4MW waste heat recovery system will commence operation in February 2025 and a 10MW hydrogen plant is scheduled for 2026.


Norway: SLB Capturi has reached mechanical completion of the carbon capture unit at Heidelberg Materials' cement plant in Brevik. The unit includes the carbon capture system, compression system, heat integration system, intermediate storage, and loadout facilities. The plant is now ready for testing and commissioning. The carbon capture plant is designed to capture up to 0.4Mt/yr of CO2 from one production line at the cement plant. When operational, this world-first commercial-scale carbon capture plant at a cement plant will enable production of an amount of net-zero cement, without compromising on the product strength or quality. SLB Capturi is a joint venture between SLB and Aker Carbon Capture.

"Reaching this milestone is a testament to the power of working together and the collective determination to make a positive climate impact," said Egil Fagerland, CEO of SLB Capturi. "We look forward to continuing these collaborative efforts as we move toward the commissioning and operational phases of the project. The Brevik CCS plant sets a precedent for future carbon capture initiatives, where learnings and insights from this groundbreaking project enable others to follow."

"The mechanical completion of the Brevik CCS project is a landmark achievement in the decarbonisation journey of the cement industry,” said Giv Brantenberg, general manager Northern Europe, Heidelberg Materials. “This project exemplifies our commitment to innovation, collaboration, and the pursuit of solutions that address the pressing issue of climate change. We are immensely proud of the dedication and hard work of our teams and partners who have made this possible."


Egypt: Assiut Cement, part of Cemex, is set to manage and operate a non-hazardous post-consumer material recycling plant in Tunal-Gabal, Mallawi, Minya, around 230km south of Cairo. According to Yago Castro Izaguirre, Cemex President in Egypt and UAE, the material treated by the plant will produce alternative fuels for the company’s cement plant in Assiut.

The plant will receive 320t/day of material from Mallawi and Deir Muwwas. As well as alternative fuels, the plant will also make organic fertilisers. Rejects will be disposed of in a new sanitary landfill that is currently under construction.


Chile: The offer made by Peru’s Yura Group to acquire a further 20% of Chile’s Cementos Bío Bío (CBB) – in addition to the 20% it already owns – has been rejected by directors, according to CE Noticias Financieras. This is despite it valuing the company at US$390m, 110% of its current market value. CBB’s board maintained that the price is still insufficient for shareholders who see their investment as being worth more in the longer term.

"It is a low value considering operations of similar characteristics and amounts, as it does not consider the potential growth once the low demand cycle associated with the construction industry ends, or new mining projects that demand lime," emphasised the director of CBB, Alfonso Rozas.


Azerbaijan: The State Customs Committee (SCC) reports that cement production in Azerbaijan reached 3.42Mt in the first 10 months of 2024, an increase of 11.2% compared to the same period in 2023.

The SCC also reported that Azerbaijan exported 695,656t of cement and clinker in the first 10 months of 2024, a 2.4% decline compared to the same period of 2023. However, the value of exports rose by 5.8% to reach US$43.1m, reflecting stronger pricing dynamics in international markets.

Azerbaijan’s cement capacity is approximately 5.2Mt/yr, which provides a solid foundation to meet both domestic and export demand.


North Korea: South Korea-based news outlet Daily NK has reported that an explosion took place in the kiln at North Korea’s Mt Purae cement plant in the early hours of 14 November 2024. It reports that the plant was ‘straining’ to meet ‘aggressive production targets’ after being pushed above its rated capacity.

Speaking anonymously, a source with knowledge of the event said “The explosion was caused by overloading the kiln, as factory management sought to raise production targets under pressure from the provincial party committee, which was responding to the central government’s appeal to demonstrate a spirit of self-sufficiency.”

Plant technicians who analysed the explosion said that management had been too focused on boosting productivity and output cement to properly maintain the kiln. Its managers acknowledged that the accident would not have occurred if they had stuck to the plant’s design capacity.

The factory has since announced that it will adjust its production schedule and resume normal operations after swiftly repairing the damage. No workers were injured.


Nigeria: Holcim plans to sell Lafarge Africa to China-based Huaxin Cement for an equity value of US$1bn. The Switzerland-based building materials producer owns an 83% share of the subsidiary. The transaction is expected to close in 2025 subject to regulatory approvals.

Lafarge Africa operates four integrated cement plants in Nigeria at Sagamu and Ewekoro in Ogun State, at Mfamosing in Cross River State and the Ashaka Cement plant in Gombe State. It has a combined production capacity of 10.5Mt/yr. The company also holds a ready-mixed concrete production capacity of 0.4Mm3/yr. Its local recycling subsidiary, Geocycle, reported an alternative fuels thermal substitution rate of 37% in 2022.


India: Ambuja Cements has started a strategic partnership with Finland-based Coolbrook to use its RotoDynamic Heater (RDH). The technology uses renewably powered electrical heat to replace or reduce the amount of fossil fuels used for reaching high temperatures in cement kiln pre-calciners. No indication of the price or which cement plants will be upgraded with the equipment has been disclosed. The deal is intended to help Ambuja Cements meet its targets of reaching an alternative fuels thermal substitution rate of 28% and a renewable energy rate of 60% by 2028.

Ajay Kapur, CEO - Cement Business, Adani Group, said, “We continuously seek out innovations which drive efficiency and decarbonisation across our cement manufacturing value chain. Leveraging our Adani Group’s green power generation capabilities, we will be able to reduce fossil fuel dependence, costs, and emissions, ultimately delivering the best value for our stakeholders.”


Vietnam: Thailand-based Siam Cement Group (SCG) says it is expanding the production of its SCG Low Carbon cement product in southern Vietnam. It plans to export up to 8000t/day of the product to the US, Canada, and Australia, as well as supplying local green-procurement projects, according to the Vietnam Business Forum. The company says its low-carbon cement reduces CO2 emissions by up to 20%, compared to regular products, through the use of alternative fuels, renewable energy sources and installing waste heat recovery (WHR) units at its plants. SCG formally launched SCG Low Carbon Super Cement in the country in July 2024.


Zimbabwe: PPC Zimbabwe claims that the country could lose an estimated US$50m/yr in foreign currency if imports of cement continue to enter the market at the current rate. Albert Sigei, the managing director of PPC Zimbabwe, made the comments at a press conference, according to the Herald Zimbabwe newspaper. He said that up to 45,000t/month of cement is being imported at present. Sigei added that the local cement manufacturers have sufficient production capacity to meet local demand. The installed cement grinding capacity is around 3Mt/yr compared to an estimated demand of 1.8Mt/yr.

In October 2023 the government issued temporary permits for cement imports during a shortage. The import permits were then discontinued in March 2024 when local production increased. However, smuggled cement reportedly continues to enter the market.


Oman: Raysut Cement says that production overcapacity in neighbouring countries has led to excess supply in the local market. This in turn has placed “pressure” on cement prices. The company added that exports to the Maldives, Yemen and east Africa had also slowed due to regional political instability, negative currency exchange effects and higher competition. The cement producer’s revenue fell slightly year-on-year from US$128m in the first nine months of 2023 to US$127m in the same period in 2024. However, its net loss grew from US$8.71m to US$14.6m.


Chile: Cementos Bío Bío (CBB) concludes negotiations with Mississippi Lime Company (MLC), according to Diario Financiero. Earlier in November 2024, MLC presented a non-binding offer of US$1.89 per share for 100% of CBB, valuing the company at almost US$500m.

Following this, Yura has now increased its offer to US$1.48 per share, valuing CBB at US$390m, after its original proposal ‘lost attractiveness’ to MLC’s offer. Yura aims to increase its stake to 40% in the company.

MLC said "After months of due diligence and review of the company's operational and financial performance, MLC and CBB's principal shareholders shared a non-binding letter of intent in May 2024 subject to conditions. That indicative offer, and its conditions, expired during this year. The revised indicative offer [from Yura], which is subject to all of the terms and conditions set out in the non-binding letter of intent, attributes an equity valuation of US$400m to CBB.”


US: Zanini Renk has received a repeat order from St. Marys Cement for four additional gearboxes at its Charlevoix, Michigan plant. In 2016, St. Marys Cement's Charlevoix plant began a US$130m upgrade to expand the plant's infrastructure. The project scope included adding a new finish mill, an additional kiln and a new coal grinding system. The 2016 upgrade at St. Marys Cement expanded the Charlevoix plant’s cement capacity from 1.4Mt/yr to 2Mt/yr.

The initial order for a Zanini Renk gearbox was for installation in its vertical roller mill. Zanini Renk completed the gearbox installation in 2022. The first new gearbox has been in operation since January 2023 and the other two new gearboxes will be delivered at the end of November 2024. Installation is expected to be completed by March 2025 and by April 2025.


Philippines: Cemex Holdings Philippines (CHP) sold its entire stake in Swiss-based Cemex Asia Research (CAR) to Cemex Innovation Holding for US$900,459 to streamline its business, according to BusinessWorld. CHP signed a share purchase agreement with Cemex Innovation on 26 November 2024 involving the sale of 118,849 shares. The company is the licensee under certain licence agreements with Cemex and its subsidiaries for certain trademarks and intangible assets, which it sublicensed to CHP and its domestic subsidiaries. Cemex Innovation is an affiliate of Mexican operating and holding company Cemex.


Armenia: The Armenian government has extended restrictions on the import of cement and clinker from Iran and ‘other countries’ for another six months on 28 November 2024.

The restrictions were first adopted on 13 January 2022 and have been repeatedly extended since then. The latest decision takes effect on 20 January 2025 and is valid until 20 July 2025.

As a result, domestic cement production increased to 1.14Mt in 2023, a rise of 13% year-on-year, while clinker imports rose by 125,200t (19%) and cement imports increased to approximately 270,000t. During the first eight months of 2024, cement imports rose to 305,100t, a 260% increase compared to the same period in 2023, due to lower Iranian cement prices. Concurrently, local cement production declined by 31% to 485,900t in the first half of 2024.


US: Heidelberg Materials North America has entered into a definitive purchase agreement to acquire Giant Cement Holding, a cement producer on the US East Coast focused on using refuse-derived fuels, for US$600m. The acquisition will reportedly strengthen Heidelberg Materials’ cementitious footprint in the Southeastern US and New England markets and help to contribute to its circular offerings and decarbonisation efforts.

The transaction’s assets in the Southeastern US include an integrated cement plant with a capacity of 800,000t/yr in Harleyville, South Carolina, a network of four cement terminals in Georgia and South Carolina, and a joint venture deep-water import terminal in Savannah, Georgia. Assets in the New England area comprise a cement and slag terminal in Newington, New Hampshire, and a deep-water import terminal in Boston, Massachusetts. The transaction also includes Giant Resource Recovery, an alternative fuel recycling business with four facilities in the Eastern US. The transaction is expected to be completed in the first quarter of 2025 and to contribute around US$60m in earnings by interest, taxation, depreciation and amortisation in the first year of operation.


US: Eagle Materials has awarded thyssenkrupp Polysius a contract for the modernisation and expansion of its Laramie, Wyoming cement plant. The modernisation project will result in an expansion of the plant's manufacturing capacity to approximately 1.1Mt/yr of cement. The project also includes the installation of an alternative fuel substitution system. The modernisation of the cement plant is expected to deliver benefits such as cost reductions, achieved with lower-cost alternative fuels and natural gas, simplified maintenance and improved operational efficiencies. The production expansion from the new finish mill will supplement the grinding capacity of the existing plant, which already operates with an integrated polysius booster mill. The polytrack ECO cooler will facilitate heat recovery and clinker cooling while improving process reliability. The project, which has received primary regulatory approvals, is slated to commence immediately [in November 2024], with construction scheduled for completion by the second half of 2026.


India: FLSmidth has won an order for the delivery of its core grinding technology. The order includes two high pressure grinding rolls (HPGR) (3m diameter × 2m width), installation, commissioning, start-up support and a service agreement. The equipment is expected to be installed and commissioned during 2026. With this new order in India, FLSmidth has won a total of 15 HPGR orders or commitments in 2024. The value of the order has not been disclosed.


Türkiye: Cement exports from Türkiye to Uzbekistan decreased by 21% year-on-year in the period from January to October 2024 compared to the same period in 2023, and amounted to US$11.4m, according to Trend. Türkiye's global cement exports from January to October 2024 decreased by 7% and amounted to US$3.6bn.

In October 2024, Türkiye exported cement products worth US$765,000 to Uzbekistan, marking a year-on-year decline of 69%. Overall, it exported US$365m worth of cement, up by 1% year-on-year. To note, Türkiye exported cement worth US$4.3bn from October 2023 to October 2024.