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The Great Wall of Donald Trump
Written by David Perilli, Global Cement
20 July 2016
Back in the May 2016 issue of Global Cement Magazine we asked key people at the Portland Cement Association how they thought the US presidential election might affect the local cement industry. Wisely, for an advocacy organisation with offices in Washington DC, no one would be drawn, citing a lack of information. At that point it was still unclear who was going to be on the final ticket. However, we all missed a trick because one candidate, Donald Trump, had been talking about building ‘a border fence like you have never seen before’ since at least mid-2014. And that fence could potentially require a lot of cement.
Researchers at market analysts Bernstein’s sent a note to clients last week ahead of the Republican National Convention looking at the implications of if Donald Trump became president of the US and actually set out to build his 40ft high concrete wall between the US and Mexico. The result would be a 2.4Mt boost in demand for cement from cement producers near to the border. In terms of market demand Bernstein concluded that this would add over 1% to cement demand in both 2018 and 2019, a healthy ‘shot in the arm’ to the already pepped-up US cement industry, which is currently growing at around 5%/yr.
Map 1: Map of cement and ready-mix concrete plants near to the US - Mexico border. Source: Bernstein Materials Blast. Note – Bernstein does not show the Capitol Cement plant in San Antonio.
Needless to say, Bernstein’s calculations pile-drive assumptions into assumptions, atop of Trump’s political rhetoric. It bases its calculations on a border wall similar to the Israeli West Bank barrier built out of precast concrete panels. It also tries to model how much concrete and cement would be required depending on the differing height’s Trump has trumpeted at his rallies.
The kicker to this tongue-in-cheek analysis is that the construction company that stands to benefit the most from this infrastructure project is Mexican!
Cemex has significantly more cement plants and ready-mix concrete plants than any other company within a 200-mile zone either side of the border. Looking at integrated cement plants alone, it has six plants in the regions near to the proposed wall from the east and west coasts. Its nearest competitors, CalPortland with four plants and Grupo Cementos de Chihuahua with three plants, are more regionally based in the western US and Chihuahua state in Mexico. Clearly Cemex didn’t rate the chances of Donald Trump’s wall actually happening when it agreed to sell its Odessa cement plant to Grupo Cementos de Chihuahua in May 2016.
All of this goes to show that, wherever you stand on the Donald Trump presidency bid, if you manufacture cement near the US-Mexican border you might be working overtime if he (a) actually becomes president, (b) actually manages to start building his wall and (c) actually decides to make it using cement. Yet before anybody starts popping champagne corks consider this: there might also be unintended consequences for the cement sector. Restricting current legal and illegal migration trends from Mexico to the US might have a greater negative effect on the US cement industry, and the overall economy, than ordering one large infrastructure project. Working that one out is harder than a guesstimate of how much cement a border wall might consume. Probably best not to ask at this stage who might actually pay for the Great Wall of Donald Trump.
UK: Hope Cement will use polyethylene (PE) packaging with the Roto-Packer Adams 10 from Haver & Boecker at its Dagenham terminal near London. The site started starting using the Adams system and a palletiser made by Newtec in June 2016, with an operation speed of 1200 bags/hr.
“We want the best benefits and services for our customers. PE packaging here plays an important role. Retailers and wholesalers can increase their stock levels and construction companies can leave their bags outside in the open without worry, no matter what the weather is,” said Gary Brennand, commercial director at Hope Cement. Brennand also cited safety and bag cleanliness as benefits of the new packaging.
Sandvik to sell Mining Systems operations 20 July 2016
Sweden: Sandvik has signed an agreement to divest its Mining Systems operations to the private equity company CoBe Capital. Sandvik will maintain ownership of on-going projects that are close to completion. The deal is expected to complete during the fourth quarter of 2016. No purchase price has been disclosed.
“Divesting the Mining Systems is an important step in consolidating Sandvik to its core operations, which for Sandvik Mining and Rock Technology is high technology mining equipment and aftermarket offerings,” said Bjorn Rosengren, president and CEO of Sandvik.
Mining Systems is a supplier of design and engineering of material handling systems for the mining industry. In 2015 the Mining Systems operations, with 1100 employees, had annual sales of Euro527m representing 6% of Sandvik Group revenues.
Taiwan: Taiwan Cement plans to expand its microalgae unit to boost astaxanthin production from waste CO2. The cement producer intends to invest US$6.25m towards enlarging its existing microalgae unit into a 20-hectare outdoor microalgae farm with an estimated annual production value of about US$12m, according to the Tapei Times.
The upgraded farm will start operation in 2017 producing astaxanthin, an input for skincare and health food products. The company hopes to make astaxanthin products that meet universal standards, such as the Good Manufacturing Practice standard, eventually becoming the country’s main supplier of the chemical.
To support the upgrade Taiwan Cement has signed a business development contract with the Industrial Technology Research Institute (ITRI). The two organisations have collaborated since 2011 on developing CO2 capture technology. As part of the new deal Taiwan Cement is expected to decrease its CO2 emissions by 4800t/yr.
Nigeria: Sinoma International, a subsidiary of Sinoma, has signed two engineering, procurement and construction deals with Dangote Cement worth a total of US$370m. The first, project worth US$281m, is to build a 6000t/day clinker production line for Okpella Cement, a subsidiary of Dangote based in Edo state. The scope of the contract covers limestone crushing to packaging cement for shipping. The project is expected to take 27 months to produce cement and 30 months to complete.
The second project, worth US$89m, is to build a slag grinding plant at Port Harcourt. The scope of the contract covers unloading slag and gypsum to packaging cement for shipping. The project is expected to take 20 months to complete.