Global Cement News

Nigeria: Lafarge Africa has installed a new bag filter at its 3.9Mt/yr Ewekoro cement plant in Ogun State. The filter cost US$8.51m. Lafarge Africa says that the equipment has successfully reduced the plant’s dust emissions to below 50mg/Nm³. The company said that it has made ‘significant adjustments’ to its production activities, besides introducing air quality measurement systems across a 10km radius of the plant.

Lafarge Africa’s head of health, safety and environment Rachael Ezembakwe said “Care for the environment and for our host communities is built into all aspects of our operations within the country. Our social impact is focused on the areas of the most need: education, empowerment, health and safety, and shelter/infrastructure.”

Spain: Cemex España has bought two new quarries near Madrid. The producer said that the quarries will strengthen its limestone reserves. It added that they include ‘all necessary elements’ for it to increase its services to the Madrid market.

Cemex’s Europe, Middle East, Africa and Asia regional president Sergio Menéndez said “These acquisitions strengthen our existing network and enable us to better serve a growing market with high-quality, sustainable and circular products. We are excited to be part of Madrid’s growth, which contributes to improving the quality of life of its residents and setting an example for more sustainable and circular cities.”

Indonesia: The UK-based World Cement Association (WCA) has announced the inclusion of the Indonesian Cement and Concrete Institute (ISBI) as an affiliate member. The ISBI has over 20 years’ experience in providing engineering training and consulting services to the cement sector and related industries in Indonesia.

WCA chief executive officer Ian Riley said "The WCA is further expanding its involvement with industry players operating in emerging economies, particularly in Indonesia which is one of the world’s largest cement markets.”

The first half of 2023 has continued to be a tough period for the major China-based cement producers, with revenue and profits down for many. As CNBM put it, the sector is facing production overcapacity, weak demand, high inventory, low prices and declining profits. However, not every company has followed this trend, with a few such as Anhui Conch, Huaxin Cement and Tapai Group managing to hold operating income up and the latter somehow even managing to increase its net profit. The China Cement Association (CCA) in its financial coverage has memorably described these companies that have bucked the national picture as ‘dark horses.’

Graph 1: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: For CNBM, cement revenue shown only.

Graph 1 above summarises the situation for a selected group of cement producers. Anhui Conch avoided the fate of CNBM by managing to grow its non-cement revenue, specifically from aggregates and concrete. Yet it too was unble to avoid its net profit falling by 32% year-on-year to US$928m in the first half of 2023 from US$1.37bn in the same period in 2022. Huaxin Cement pulled off the same trick by raising its concrete and aggregates revenue domestically and by growing its overseas revenue. As well as its subsidiaries in Africa, the company also added Oman Cement to its portfolio, completing the acquisition of a majority stake in April 2023. The CCA has a wider roundup of how well the local cement companies have done.

Graph 2: Cement output in China, 2019 to first half of 2023. Source: National Bureau of Statistics of China.

Data from the National Bureau of Statistics of China suggests that the cement sector is stagnating rather than actively declining. This is an improvement of sorts from the decline in the first half of 2022, at least. Cement output in the first half of 2023 rose ever so slightly to 980Mt from 979Mt in the same period in 2022. On a rolling annual basis cement output has been gently falling below 1% each month since November 2022, although it rose by nearly 1% in March 2023.

The underlying problem for the Chinese cement sector remains the local real estate market. Developer Country Garden has been the latest company to warn of potential losses – of up to US$7.6bn – in the first half of 2023. It is also currently attempting to ask for more time to repay a bond. This follows the financial problems that Evergrande has faced since 2021. Financial analysts have been monitoring the situation for several years and warning of what a larger collapse in the sector could mean for the wider economy, such as the implications for the banks that hold the debts of the developers. Commentary by Goldman Sachs in August 2023, for example, suggested that the real estate sector needs to manage its inventory on a large scale, with over US$2Tn in liquidations, in order to restructure debts in the property sector. It estimated that the whole situation could reduce the country’s entire gross domestic product (GDP) by 1.5% in 2023, although this would be the trough of the downturn in its view.

Cement producers in China continue to be held hostage by the conditions in the real estate market and the effect this has in turn on demand for building materials. Yet all is not lost, as the examples of the CCA’s ‘dark horses’ show, buoyed by business diversification, overseas expansion or even regional differences. How much longer the rest of the other cement companies can cope in this environment remains to be seen. A less regulated market would certainly expect to see mergers and acquisitions taking place as the financial pressure mounts. China, for now at least, remains steadfastly different. With luck the real estate market may reach its lowest point in 2023 and a recovery could follow.

India: Dalmia Cement (Bharat) has appointed Puneet Dalmia as its managing director (MD) and chief executive officer (CEO). He will succeed Mahendra Singhi in the role in December 2023. Singhi will remain working for the company as Director and Strategic Advisor to the MD and CEO to aid the transition process.

Puneet Dalmia has been the MD of Dalmia Cement (Bharat)’s parent company Dalmia Bharat since 2004. Prior to this co-founded JobsAhead.com in 1999, which was sold to Monster.com in 2004. Dalmia is also the chair of the Development Council for Cement Industry (DCCI), set up by the Government of India in June 2021. He holds a master of business administration (MBA) postgraduate degree from IIM-Bangalore and holds a bachelor of technology degree from IIT-Delhi.