Global Cement News

South Africa: PPC has started a cost cutting campaign at its head office following poor cement sales so far in 2018. A source quoted by Business Report told the newspaper that staff redundancies had taken place already. The fall in sales has been blamed on poor local economic growth, the impact of a value added tax (VAT) increase on consumer spending and problems in the construction industry, including a fall in large infrastructure projects and private non-residential building.

Colombia: Cementos Argos has lost a trademark dispute over its Luz Verde brand. The Superintendent of Industry and Commerce (SIC) has authorised wholesale travel agent Luz Verde Representaciones to register its Luz Verde brand despite the objections of the cement producer, according to La República newspaper. SIC considered the opposition of Cementos Argos invalid as the companies operate in different business sectors. The company had previously lost another legal conflict with Energy Evolution Colombia for the registration of a motto including the element Luz Verde.

Well, it turns out that the European cement industry wasn’t kidding when it raised the risks of the climate mitigation on the sector. This week three (!) integrated plants have been earmarked for closure.

Cementa in Sweden said that it was considering closing its Degerhamn plant due to increased environmental regulations. Today, local press in Spain is reporting that Cemex España is planning to shut down two of its plants. These are plants in different parts of Europe with different local market dynamics but both are within the European Union (EU). That’s three plants closing out of 219 in the EU, or a loss of around 1% of production capacity.

Last week’s column on the United Nations’ (UN) Intergovernmental Panel on Climate Change (IPCC) report on Global Warming raised the way the cement sector is tackling climate change and the existing and impending legislation. President of the German Cement Works Association (VDZ) Christian Knell’s opening words at the VDZ Congress in September 2018 seem prescient. He said, “To be able to realise our efforts in terms of climate protection and at the same time not to lose competitiveness, we need research policy-related support for our investment in breakthrough technologies and the corresponding demonstration projects.” The add-on was that the industry needed to focus on how the development of carbon abatement technologies can meet the 2050 climate goals and, specifically, that suitable boundary conditions would have to be created. The press releases accompanying his speech emphasised that, “on-going trends in European emissions trading and the ‘rapidly increasing’ price of CO₂ were already today leading to considerable costs for cement manufacturers.”

These words are similar to the comments Albert Scheuer, a board member of HeidelbergCement, made at the Innovation in Industrial Carbon Capture Conference early in 2018 about dividing the mounting environmental costs of cement and concrete between producers and society in general. Considering how much cementitious building materials most people use throughout their lives compared to the relative low price of cement, this argument carries some weight. In addition, the sustainability credentials of concrete buildings through longer lifespan and durability through extreme weather events is another argument that industry advocates such as the Portland Cement Association (PCA) in the US have been hawking in recent years.

Cementa, a subsidiary of HeidelbergCement, blamed anticipated tightening of environmental regulations for its decision. Although it said that the plant had made improvements over the years, the expected difficulty (read: cost) to make further improvements was becoming too hard. Shifting production to the company’s other two plants in the region, Slite on Gotland and Brevik in Norway, will reduce CO₂ emissions by 260,000t/yr.

In Spain, the news from Cemex follows a half-year report from Oficemen, the local cement association, that predicted growth for the year but not as fast as previously expected. The problem was that continued declines in the export market, the 13th decline month-by-month in a row, offset the domestic growth. Oficement president Jesús Ortiz also took time to blame rising electricity costs, expected to rise by 20% year-on-year by the end of 2018.

Market issues in Spain aren’t in doubt, but the real question for both Sweden and Spain is whether EU CO₂ legislation right now is causing cement producers to shut plants. The CO₂ emissions allowance price hit a high of Euro22/t in September 2018, the highest price in a decade. Allowances have stayed below Euro10/t since 2011 and the price has more than doubled in 2018. Throw in the mood music of the IPCC and the trend seems irresistible. How many more plants in Europe are at risk to shut next? No doubt the European cement producers have charts marking the viability of their plants against the CO₂ price. This would be a very interesting graph to get our hands on.

The 2nd FutureCem Conference on CO₂ reduction strategies for the cement industry will take place in May 2019 in London, UK

Germany: Pietro de Michieli has been appointed as the managing director of Aumund. He assumed the role at the start of September 2018 and will focus on equipment sales, spare parts and after sales service.

Previously, de Michieli was the managing director of OMG MGM Cranes, part of Bedeschi Group. Prior to that he was chief operating officer of Bedeschi and a member of the board of directors responsible for the business unit bulk handling, marine logistics and mining and minerals, with a particular focus on sales, marketing, design, manufacturing, purchasing and project management.
Earlier in his career he was projects director with Endeco Engineering Design Construction and project manager at Danieli. He holds a doctorate in electro-mechanical engineering from the University of Padua, Italy.

Since January 2018 de Michieli has been a member of the board of directors of PEMA (Port Equipment Manufacturers Association), a forum and public voice for the global port equipment and technology sectors. He will support a bid for membership of PEMA by the Aumund group of companies.

Spain: Miguel Ángel López has been appointed as the chief executive officer (CEO) of Siemens Spain following the resignation of Rosa García García. García has decided to leave the company and will handover the role on 1 December 2018 and then continue in an advisory role until the end of the year. López, aged 53 years, has been working most recently as the chief financial officer (CFO) of Siemens Gamesa Renewable Energy (SGRE). The CFO role will be filled by David Mesonero, currently SGRE's Head of Corporate Development, Strategy and Integration.