Global Cement News

Lafarge UK's release of its 2011 Sustainability Report for its cement business this week presented some bold headline figures. Key statistics for the period covering 2009 - 2011 included a 17% reduction in CO2 emissions through the use of solid recovered fuels (SRF), a 17% reduction in the use of electricity and a 26% cut in emissions to air.

For a European producer this is some positive news in a time of gloom. Looking a little deeper into the report reveals the usual ambiguities that can arise with interpreting statistics. Lafarge UK's fossil fuel consumption actually rose by 9% from 285,000t in 2009 to 311,000t in 2011. CO2 emissions to air rose by 15% from 2.31Mt to 2.65Mt. In terms of emissions per tonne of Portland Cement Equivalent (tPCE), the figures are more encouraging with fossil fuel use decreasing from 87kg/tPCE to 82kg/tPCE (6%) and CO2 emissions remaining stable at 704kg/tPCE. These figures are good considering that Lafarge's production increased from 2009 to 2011 due to construction for the London 2012 Olympics.

As mentioned in Edwin A R Trout's article 'The British cement industry in 2011 and 2012' the move to refuse-derived fuels (RDF) has consistently made the news with projects at several Lafarge plants. RDF use at Lafarge UK plants rose by 48%, from 92,758t in 2009 to 137,143t in 2011. Each of the alternate fuels – tyres, waste-derived liquid fuel, processed sewage pellets (PSP), meat and bone meal, SRF – roughly increased its unit share per tonne of cement produced by 2%.

Lafarge UK is clearly reacting to uncertain input costs and preparing for any further future green taxes. It failed to meet its 2011 target rate for RDF substitution of 31% (it reached 29%) but it has raised the target to 35% for 2012. It is also continuing to secure permits for PSP use at its Dunbar plant and SRF use at its Hope plant, although by the time this is approved Hope may be someone else's facility. However, the key question is, how can Lafarge push alternate fuels? It will be interesting to see how much Lafarge UK's fuel mix can be reduced in cost over the next five years.

India: Sagar Cements has announced its director, Wemer CR Poot, has resigned from the board with effect from 28 September 2012. John Eric Fernand Pascal Cesar Bertrand has been appointed as the new company director from 17 October 2012.

News from Mexico and the US over the past week confirms the contrasting fortunes of the cement industry in the 'Old World' and the 'New World,' of Europe and North America. First, Cemex reported a significantly reduced loss of US$203m in its third quarter, compared with a loss of US$730m in 2011. However, the firm's European units again faired worse than other regions. 

The European problem is not limited to Cemex, but while much of the continent has seen a poor 2012 so far, North America appears to be in the midst of a construction renaissance. HeidelbergCement estimates US cement sales growth of 8-11% in 2012. In Mexico, a strong and growing industry, it has also been announced that the Mexican billionaire Carlos Slim had partly financed a new US$300m plant in Mexico, due to go into production early in 2013.

In light of this apparent upward trend in North America, it is surprising that France's Lafarge has agreed to sell two more of its US cement plants, this time to Eagle Materials. If the Eagle deal is approved, it will represent (along with the May 2011 sale of Lafarge's Roberta and Harleyville plants to Cementos Argos) a continued and substantial reduction in Lafarge's presence in the US. In under 18 months, Lafarge will have offloaded four plants, taking its total from 12 to eight.

Lafarge's decision to sell to Eagle seems like an attempt to meet its own debt-reduction schedule. Yet to do this it may be losing important territory in North America. This can't have been an easy decision.

Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has re-elected Aizaz Mansoor Sheikh unanimously as its at its Annual General Meeting held at APCMA Secretariat, Lahore. Names of the other elected office-bearers for the year 2012-13 were also announced at the meeting.

A statement issued by APCMA said that Sayeed Tariq Saigol of Maple Leaf Cement Factory and Muhammad Ali Tabba of Lucky Cement were also unanimously re-elected as Vice Chairmen of the Association.

Aizaz Mansoor Sheikh of Kohat Cement Company has served as Chairman of the APCMA for eight years since 1992. The current term 2012-13 is his second consecutive term as Chairman APCMA.

M Raza Mansha of DG Khan Cement, Amer Faruque of Cherat Cement, Rehmat Khan of Lafarge Cement Pakista, M Sabir of Fauji Cemen, Asmat Ullah Khan Niazi of Askari Cement, Syed Asif Shah of Bestway Cement, Babar Bashir Nawaz of Attock Cement Pakistan, Mazhar Iqbal of Pioneer Cement, M Tousif Paracha of Gharibwal Cement were elected as Members of the Executive Committee.

Prominent industry issues discussed at the meeting included were the non-availability of railways wagons for export to India, high diesel rates and its consequential effects on the high input costs that the industry is confronted with.

South Africa: Pretoria Portland Cement (PPC), the biggest producer of cement products in South Africa, has appointed Ketso Gordhan as CEO from 1 January 2013. Gordhan will succeed current CEO Paul Stuiver, who will have completed his contract.

Gordhan will join the group's board as CEO-designate from 1 November 2012. His most recent role has been in the South African Presidency, where from 2009 he developed performance metrics and targets for government ministries. Before working for the Presidency, Gordhan was head of private equity at FirstRand Financial Services Group for almost a decade. He was also city manager of Johannesburg between 1999 and 2000.

Previously Gordhan was the campaigns manager for the African National Congress and policy co-ordinator between 1990 and 1994. He was also director-general of the Department of Transport between 1994 and 1999 and was involved in privatising Airports Company SA and setting up the first privately funded toll road to Maputo. The South African National Roads Agency was also created during this period.

"Ketso brings a wealth and blend of experience in business and in government, as well as knowledge of various industries," said PPC group chairman Bheki Sibiya.