Global Cement News

A couple of news stories have emerged from West Africa this week reminding Global Cement of the growth potential the region holds. First Ghacem announced that it had opened a new truck terminal at Sefwi Dwenase in Ghana. Then LafargeHolcim Ivory Coast inaugurated a new mill at its grinding plant in Abidjan. Then Cimburkina, a subsidiary of Germany’s HeidelbergCement, said that it was starting work on enlarging its grinding plant at Kossodo in Burkina Faso.

The other theme that received some coverage this week was another attempt by an African government to regulate its hastily growing cement sectors. Jean-Claude Brou, the Minister of Industry and Mines in Ivory Coast also found time to announce the creation of a commission to monitor the quality control of cement when he inaugurated the new mill in Abidjan. As building collapses due to substandard cement in Nigeria have shown, this kind of government monitoring is essential to protect the public in booming markets. Unfortunately, rightly or wrongly, these kind of bodies often seem to end up embroiled in rows about imports of cement competing with local producers.

Away from the cut and thrust of the market, the new mill at Abidjan is particularly interesting because it was imported and reinstalled piece-by-piece from its original home at a former Holcim plant in Spain. The move cost Euro23m and LafargeHolcim say that it is now the largest horizontal ball mill in French-speaking west Africa. The 1Mt/yr year mill was originally manufactured by Polysius (ThyssenKrupp) in 2006 and uses a 4500kW motor.

Data from the National Institute for Statistics in Ivory Coast reported a 39% rise year-on-year in cement production to 1.64Mt in the first half of 2017. This follows reports of cement shortages in early 2017. The government then took the action of importing 0.15Mt of cement to meet the shortfall until local production capacity caught up.

This is starting to happen now with the LafargeHolcim opening. Other projects that were in the pipeline include Cim Ivoire’s 2.6Mt/yr grinding plant, also in Abidjan, that was due to be completed by the end of 2017. This project is interesting because Cim Ivoire is a subsidiary of Burkina Faso’s Cim Metal Group. It also operates a grinding plant, Cimfaso, near the capital Ouagadougou. Similar to LafargeHolcim it is preparing its supply lines to the African interior. Finally, Nigeria’s Dangote Cement was also building a 3Mt/yr grinding plant near Abidjan. This unit was due to be finished by the end of 2017 but there has been little news about it in recent months.

Ghana’s cement industry has been consolidating itself and is facing an oversupply situation. The government placed production capacity at 8.5Mt/yr in 2016 versus demand of 6Mt. It has since made the headlines with spats between local producers and foreign companies like Dangote Cement. Unlike Ivory Coast, Ghana has two integrated plants that, no doubt, want to preserve their markets from imports. Despite this, Ciments de l'Afrique (CIMAF) and Diamond Cement both opened plants in late 2016. More recently two grinding plant projects have been announced near Tema.

Although the timing is fortuitous , we admit that these stories are fairly loosely connected at best. However, they do illustrate an inward development trend in the region. Bigger and more efficient grinding plants to process locally made or imported clinker, more terminal infrastructure to distribute the cement and then more grinding plants further inside the region geographically as the logistics situation permits. The Cimburkina plant, for example, is situated in landlocked Burkina Faso. Clinker for its mills will initially be supplied by HeidelbergCement’s integrated Scantogo plant at Tabligbo. The drive to develop these countries moves ever forwards and they demand cement.

India: Shri Sajjan Bhajanka has been appointed as the new Managing Director of Star Cement. He is a Commerce Graduate from Dibrugarh University, Assam. He has business and industrial experience of more than 25 years in the fields of plywood, ferro silicon and granite. He is the Managing Director of Century Plyboards (I) Limited, the largest producer of plywood, laminates and block-boards in India. Mr. Bhajanka is also the Chairman of Shyam Century Ferrous Ltd., one of the leading manufacturers of Ferro Silicon in India. He is also the President of the Federation of Indian Plywood and Panel Industry and All India Veneer Manufacturers Association.

Austria: Christoph Stotter has been appointed as the head of Development & Quality Assurance at w+p Zement. He succeeds Walter Steinwender, who had been working at the Wietersdorf plant since 2008. Stotter studied at the Montanuniversität in Leoben and has since gained experience in process engineering, research and development and product management.

Honduras: Colombian cement manufacturer Cementos Argos has reported a positive performance in Honduras. The company, which entered the domestic market in 2013, sold over 1.1Mt of cement in the local market in 2017, a record figure that was 15% more than the 0.95Mt that it sold in 2016.

India: Binani Cement is back on the market after its liabilities were revised upwards, according to sources close to the deal. JSW Cement had previously emerged as the winner of a very competitive bidding process earlier in 2018 with an offer of US$919m. The creditors have now sought fresh bids from interested parties, which previously included LafargeHolcim, HeidelbergCement, Ramco Cement, UltraTech Cement, Dalmia Bharat and the Bain Piramal Resurgence Fund. The resolution professional, Deloitte Touche Tohmatsu India LLP partner Vijaykumar Iyer, has set a new deadline of 12 February 2018, extended from 5 February 2018.

The additional liability of around US$250m has emerged due to Binani Cement’s corporate guarantee for the acquisition of a fibreglass asset in Europe known as 3B in 2012 by group company Binani Industries. As one of the contacts close to the deal is reported to have said, ‘this is not a small amount.’