Global Cement News
Search Cement News
Can the Egyptian cement industry secure its fuel supplies?
Written by Global Cement staff
19 February 2014
Suez Cement and Italcementi's first waste treatment plant in Egypt was inaugurated this week. The project uses 45,000t of household waste to produce 35,000t of alternative fuel annually. Given Egypt's on-going fuel concerns the project will be watched closely.
Italcementi has much riding on the success of the project. It has five integrated cement plants in the country. As reported in early February 2014, the cement producer suffered reduced production capacity in Egypt despite 'potential' domestic demand due to limited energy availability. Cement sales volumes in Egypt for Italcementi have continually fallen since 2011, accelerating from a 5.4% year-on-year reduction in 2011 to a 17.6% year-on-year reduction in 2013. Yet, despite this, rebounding domestic demand was reported in 2012 and 2013.
It must be extremely frustrating for Italcementi. It has the production capacity, it has demand but it doesn't have the fuel to power its lines. Any additional fuel will be welcome. At a rough and conservative rate of 200kg of fuel per tonne of cement produced, Italcementi and Suez Cement's new alternative fuel stream could help to produce 175,000t of cement or about 1.5% of the cement producer's clinker production capacity of 12Mt/yr.
Lafarge, with its mega 10.6Mt/yr cement plant outside of Cairo, hadn't suffered (publicly) as much as Italcementi from fuel shortages until the publication of its financial results for 2013. Although sales had decreased year-on-year since 2009, this has been blamed on competition. Now it has been announced that cement volumes decreased by 30% in the first half of 2013 due to shortages of gas. This was mitigated through fuel substitution to a 19% drop in the third quarter and a 7% drop in the fourth quarter.
However, Lafarge's strategy for fuel security may be threatened as the Ministry of State for Environmental Affairs ordered the producer to stop preparations to build storage units for petcoke in February 2014 citing environmental and economic reasons. What happening here is unclear given that the Egyptian government has been encouraging cement producers to move away from using natural gas.
The examples above show the reactions two multinational cement producers, Italcementi and Lafarge, have made to secure their fuel supplies. The outcomes remain uncertain.
In other news, Shijiazhuang in Hebei province in China has started the demolition of 17 (!) more cement plants. This follows 18 plants that were demolished in December 2013. In total, 18.5Mt/yr of cement production capacity has been torn down.
This is more than the cement production output of most European countries or any single US state! Where was this cement going previously? What were the effects on the price of cement in China? Who is taking the loss for the destruction of this industrial production capacity? BBC News Business Editor Robert Peston has some ideas.
Albert Scheuer appointed chairman at HeidelbergCement Bangladesh
Written by Global Cement staff
19 February 2014
Bangladesh: HeidelbergCement Bangladesh has appointed Albert Scheuer as its chairman. Scheuer is a member of the managing board of HeidelbergCement Group with responsibility for Asia-Oceania and worldwide co-ordination of the Heidelberg Technology Centre. Before this, he was chief operating officer of HeidelbergCement's operation in China and served as managing director of HeidelbergCement Technology Centre in European Cement Plants of the group from 1998 to 2005.
Improved fourth quarter revives flagging annual finances for Lafarge 19 February 2014
France: Lafarge's financial results for 2013 have been rescued by an improved fourth quarter year-on-year. It reported a 2% decrease in sales year-on-year to Euro3.71bn for the fourth quarter of 2013 fromEuro3.81bn in 2012. Overall sales for 2013 fell by 4% to Euro15.2bn from Euro15.8bn. The French-based multinational building producer reported increasing sales on a like-for-like basis for both the final quarter and the full year. It attributed the improvement to growing sales volumes, ongoing growth in most emerging markets, the recovery in the United States and stabilisation in Europe.
"In the fourth quarter we saw much more positive operational trends, accelerating compared to the third quarter, while exchange rates continued to be adverse," said Chairman and Chief Executive Officer of Lafarge, Bruno Lafont.
Sales volumes of cement for the 2013 financial year fell by 3% year-on-year to 137Mt from 141Mt. Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 9% to Euro3.10bn from Euro3.42bn.
By region, sales volumes of cement fell in North America by 12% in 2013 to 11.3Mt from 12.8Mt but the residential sector in the US recovered. In Western Europe they fell by 14% to 14Mt from 16.4Mt but the French construction market was described as 'resilient' and sales rose in the UK. In Central and Eastern Europe they fell by 6% to 12.5Mt from 13.2Mt, with particular problems in Poland and Romania. In Middle East and Africa they fell by 2% to 44.4Mt from 45.2Mt with problems noted in Egypt, Morocco and Kenya. In Latin America they fell by 4% to 8.8Mt from 9.2Mt affected by 'subdued' growth in Brazil. Although on like-for-like basis they rose by 1%. In Asia cement sales rose by 3% to 45.8Mt from 44.3Mt led by a strong market in the Philippines despite Typhoon Haiyan.
For its outlook Lafarge expects to sees cement growth in its markets of between 2 to 5% in 2014 versus 2013 with markets benefiting from recovery in the US, stabilisation in Europe and on-going growth in emerging markets.
Buzzi Unicem sells cement plant to Wietersdorfer unit for Euro22m 19 February 2014
Italy: Buzzi Unicem has agreed to sell its 0.3Mt/yr cement plant in Cadola, Italy, to a subsidiary of Wietersdorfer for Euro22m. Under the terms of the agreement, Austria's Wietersdorfer will be also entitled to buy, within five years and without additional payment, Buzzi Unicem's Travesio 0.4Mt/yr cement plant.
Italian cement producer Buzzi Unicem has also agreed to buy 25% in two Wietersdorfer facilities. In particular, the company will acquire shares in W&P Cementi and Salonit Anhovo Gradbeni Materiali for Euro22m. W&P Cementi currently has a grinding plant in Pordenone, Italy with a production capacity of 0.3Mt/yr. Salonit owns an integrated cement plantin Slovenia with a production capacity of 1.3Mt/yr.
With these transactions, Buzzi Unicem expects to strengthen its production and sales structure by improving its procurement logistics, it said adding that the deals will result in technological integration between the two companies aiming to develop new products. The transactions are expected to close on 30 June 2014.
Dangote to commission cement plant in July 2014 19 February 2014
Zambia: Dangote Cement plans to commission a US$400m cement plant in the city of Ndola in July 2014 with a production capacity of 3000t/day.
The company expects to produce 1.0 - 1.2Mt/yr of cement when it is commissioned, which will increase Zambia's total cement production to 2.5 - 2.7Mt/yr. Zambia currently has a cement production capacity of 1.5Mt/yr from Lafarge's plants in Lusaka and Ndola and Zambezi Portland's plant in Ndola.
Senior general manager for Dangote Projects, Anand Kameshwar said that installation of major equipment at the plant by China's Sinoma Engineering was nearly complete. "Most of the major equipment has been installed and the project is on course and should be complete by July 2014," Kameshwar said, adding that Dangote would contribute significantly in mitigating cement shortages that have resulted from high cement demand due to construction activities. Once operational, the cement factory will create 700 new jobs.
Dangote is also constructing a 30MW power sub-station that is expected to commission in May 2014. "This facility will provide electricity to the cement plant, which is expected to consume 25MW of power per day," Kameshwar said. The cement factory will also open up other avenues for Dangote to increase its investments in Zambia.