Global Cement News

Europe: Koen Coppenholle took over as the new Chief Executive of Cembureau on 1 July 2012. He follows Dr Jean-Marie Chandelle, who retired at the end of June 2012.

Following a distinguished legal career, Koen Coppenholle has been Head of European Affairs for ArcelorMittal in Brussels since November 2007. Between September 2000 and November 2007, he was Senior Counsel European Affairs with General Electric Europe in Brussels. Coppenholle joined the Cembureau team on 2 April 2012 to help to ensure a smooth transition.

Jean-Marie Chandelle has held the position of Chief Executive of Cembureau since 1996. A qualified lawyer, with a Master of Law and a PhD, Chandelle has held numerous positions in his native Belgium and abroad.

India: The announcement last week that 11 Indian cement producers face a combined US$1.1bn penalty for a price-fixing cartel will cast a long shadow over the country's increasingly vulnerable-looking cement industry.

For years the Indian cement industry has been beset by suspicions of over-capacity despite a constant stream of new capacity. Now the Competition Commission of India (CCI) thinks that it has got to the heart of the paradox by accusing manufacturers of limiting production amid high demand and colluding to artificially raise prices.

The amount that the CCI has fined the companies, 50% of their net profits for the two fiscal years to 31 March 2011, is quite astonishing. If enforced in its entirety the fine effectively negates a large portion of the sector's profits for an entire fiscal year. This is clearly not a slap-on-the-wrist from the CCI.

In the 1990s and early 2000s a similar cartel case involving European (and specifically German) cement producers led to fines in the order of hundreds of thousands of US Dollars. The industry has since cleaned up its act considerably as a result. Indian producers would be foolish not to follow suit. What are the likely effects in the Indian case?

Removing the cartel that the CCI purports to have found would reduce prices, which are inflated by an oft-quoted 25% median in a cartel. This is clearly good news for consumers and potentially the development of the Indian economy in general. The obvious losers in this situation would be the producers, which would see a reduction in profitability. Some of the smaller producers would find such a situation very challenging, with the risk of going bust or being absorbed into larger companies.

Another possibility is that the accusations will spread along the value chain. Shortly after the announcement of the fine, the Builders' Association of India (BAI), announced that it wants the fine increased to accommodate compensation claims from contractors and consumers that it feels are out-of-pocket as a result of the cartel. Many will feel aggrieved now that they 'know' the cement companies were profiteering - sorting out claims from affected parties could be a long and costly exercise.

The effects of the fine could also extend to outside of India. Indian cement producers, very good customers of the Chinese and European cement plant manufacturers in recent years, will have to deal with lower revenues. This will clearly dampen their enthusiasm to contract further capacity and may cause knock-on-effects for Sinoma, KHD, Polysuis and other major suppliers. The cement industries of neighbouring countries, like Pakistan, may also be affected.

Whatever happens in the Indian cement industry as a result of the CCI's fine, the authority, only formed in 2009, has shown that it is serious about taking on corruption in India. In the long run that can only help develop the potential of the country.

"The first thing for any new competition regulator is to go out and find the cement cartel. My experience of this subject is, it is always there, somewhere," wrote Richard Whish, a Professor of Law at King's College London in 2001. "The only countries in which I had been unable to find the cement cartel is where there is a national state-owned monopoly for cement."

Germany: Dipl.-Ing. Otto Jung will retire from Gebr. Pfeiffer SE on 30 June 2012 after nearly 40 years with the company. Dr.-Ing. Robert Schnatz will take over Jung's technical responsibilities on the executive board.

Jung started his career as a development and project engineer. In 1988, he became head of the projects and sales department processing and then in 1996 he was appointed to the Executive Board of Gebr. Pfeiffer SE, a position he held for 16 years. During this time a number of innovateive new projects were launched for the cement industry.

The Global CemPower conference took place last week in London, attracting 103 delegates from 25 countries. The conference looked at waste heat recovery options in the global cement industry. 'Back-of-the-envelope' calculations suggest that the value of the waste heat recovery units that could be installed in the global cement industry in the next ten years might total US$50bn - well worth thinking about.

Robert McCaffrey, the conference convenor, gave a listing at the event of the seven megatrends that will shape the future of the global cement industry, including demographic trends (aging of both developing and developed nations), urbanisation (with 70-75% of humanity due to live in cities by 2050), the growth of new country superpowers, the possibility of further climate change, paradigm shifts in the cement industry business model, ever-increasing energy costs and the influence of Rumsfeldian known-unknowns and unknown-unknowns.

Whatever else happens in the next 50 years, increased energy costs and energy efficiency will be the order of the day. In the global cement industry, waste heat recovery is here to stay.

Presentations, videos and a full review of the Global CemPower conference are available here, www.globalcement.com/conferences/global-cempower/introduction.

UK: ANH Refractories Europe has hired Stefan Frank, a senior engineer with more than 20 years' experience, to drive export sales across Europe.

The senior refractory engineer has joined the Wirral based firm to bolster expertise in the cement sector. He has been charged with kickstarting a new campaign to increase ANH's profile and drive sales in emerging cement markets in countries including Turkey, Ukraine and Italy.

Frank holds more than 20 years' experience in the refractory industry. This has included roles at HeidelbergCement Group's Technology Center in Leimen, Baden-Württemberg, in Germany, and extensive work in the rotary kiln field.

ANH Refractories Europe managing director Peter Rooney said, " The European cement market has been a solid area for sales in the last 12 months and we believe Stefan has the knowledge and skills to build on this."

The American owned firm, which has a US turnover of US$550m, manufactures materials used in linings for furnaces, kilns and incinerators operating at high temperatures. It delivers refractory solutions, services and products to many industries including aluminium, petrochemical, power, incineration, mineral and glass.