Global Cement News

Pakistan: Lucky Cement has won the KCCI Export Trophy for its performance in the cement export market during the 2021 financial year. The News International newspaper has reported that the company relied on its 24,000t-capacity Karachi cement terminal to ship cement to markets across South Asia, Southeast Asia, the Middle East and Africa.

Chief executive officer Muhammed Ali Tabba said "This modern facility allows the company to excel in exporting break bulk and containerised shipments." He continued "Our focus is on implementing advanced manufacturing technologies to enhance technical capabilities and operational efficiencies. A diversified business portfolio has helped us strengthen the country's industrial base, enabling us to develop a larger manufacturing footprint and seize opportunities for growth both in local and international markets."

UK: Private equity firm BGF has invested US$4.39m in carbon capture specialist Nuada. Nuada, formerly called MOF Technologies, is currently supplying its technology for a project at Buzzi’s Monselice cement plant in Italy. The system applies metal-organic framework (MOF) filters and vacuum swing absorption. Other partners on the project include Cementir Holding and Heidelberg Materials.

Nuada’s co-chief executive officer Conor Hamill said “There is no net zero without carbon capture. However, incumbent solutions are notoriously costly and energy intensive. Investment from BGF will further catalyse the scale-up and deployment of our technology, ensuring we are primed to efficiently decarbonise heavy industries.”

BGF’s investment is an extension to Nuada’s US$5.81m Series A funding round, which was co-led by the Clean Growth Fund and Barclays’ Sustainable Impact Capital portfolio.

Adani Group and JK Lakshmi Cement were reported to be leading the race to acquire Sanghi Cement this week. The Economic Times newspaper reported sources who said that both companies are about to start due diligence processes ahead of making formal offers in the next few months. The enterprise value of Gujarat-based Sanghi Cement is around US$730m. Shree Cement, Nirma Group and Dalmia Bharat were said to have been interested previously, but no longer at this stage. However, none of the companies involved have commented directly on any bidding process so far.

Coverage in the India-based press earlier in July 2023 suggested that Shree Cement had dropped out of the bidding process for a 40 - 70% stake in Sanghi Cement. Although the exact reasons for Shree Cement withdrawal were not expressed, it was noted that the enterprise value for Sanghi Cement included debts of around US$220m. In late 2022 the Kotak Mahindra Bank made an investment of around US$67m in Sanghi Cement to ‘help the company's liquidity profile and enhance its operations.’ The head of the bank’s Special Situations Fund added that the cement producer’s performance had been under pressure due to high energy costs and that this had been further exacerbated by impending debt repayments stemming from expansion capital expenditure.

Sanghi Cement had the misfortune of commissioning a new line at its integrated plant during the Covid-19 pandemic. The subsidiary of Sanghi Industries operates a 6.6Mt/yr unit at Kutch in Gujarat, with a 130MW captive power plant and a 13MW waste heat recovery (WHR) unit, making it one of the largest plants in the country. It also owns three cement terminals in Gujarat, Maharashtra and Goa. Its annual power and fuel costs rose by 79% year-on-year to US$49.9m in the year to March 2022. Then its finance costs tripled to US$29m in the year to March 2023. Some of the increased fuel costs may have been down to the new production line but its total income in the year to March 2023 was lower than in the year to March 2019.

Adani Group and JK Lakshmi Cement both operate plants in Gujarat. Adani Group runs one integrated and one grinding plant in the state via its Ambuja Cement subsidiary. JK Lakshmi Cement owns a grinding plant. A number of other companies additionally manufacture cement in the state. The biggest of these is the country’s largest cement producer, UltraTech Cement, with three integrated plants and two grinding ones in Gujarat. It would be a surprise if this company tried to buy a share of Sanghi Cement. One prominent India-based cement company that does not have a manufacturing presence in the state is Shree Cement. This made it a compelling candidate for the acquisition before it ruled itself out.

On the national stage, ratings agency ICRA’s June 2023 cement sector report forecast a ‘stable’ outlook for the sector, with cement volumes expected to grow by 7 - 8% in the 2024 financial year. This should be supported by the residential market and infrastructure projects. Crucially, it also noted that power and fuel costs, which peaked in the July - December 2022, eased in early 2023 and are anticipated to further soften in the 2024 financial year. The agency’s view was that this would help company earnings margins, but not to the levels seen in the five years prior to the Russian invasion of Ukraine. This may be cold comfort for Sanghi Cement, but it may have implications for any bidding process.

Lastly, ICRA also warned of the weakening effects that El Niño could have on the monsoon season and, in turn, rural house building during this period. The weather has been a ‘hot’ topic globally this year, as various records have been broken. Yet on a day-to-day basis the weather can also affect the business of making and selling cement. ICRA’s concern was for the latter. An example of the former occurred in June 2023 when Cyclone Biporjoy caused disruption at Sanghi Cement’s Sanghipuram plant. The unit was shut down in mid-June 2023 to protect the staff. Some damage was reported and the plant reopened at the end of the month. Again, as with fuel prices, the weather may also play a part in the calculations of any company considering buying a stake in Sanghi Cement.

China: Yin Zhisong has been elected as the chair of Sinoma International Engineering. He succeeds Liu Yan, who has resigned. Zhisong has held of number of management positions with subsidiaries of China National Building Material (CNBM) and Sinoma. Notably he has worked as the general manager of Suzhou Sinoma Construction, the general manager of Sinoma International Engineering and a vice president at Sinoma International Engineering.

Germany: Schmersal Group has appointed Jörg Kraus as its Sales Manager for Germany. He will be responsible for areas including continued development and implementation of the group’s sales strategy and sales process optimisation. He will lead a sales team and will be responsible for sales representatives and external service providers.

Kraus holds experience in the sale of technical components and capital goods in complex industries, such as mechanical and plant engineering, metals, technical gases and surface technology. He has also established and managed local sales and service organisations in Germany, Switzerland and Poland, as well as the development of new business areas. He has worked for subsidiaries of Alberts Surface since 2019. Prior to this he was employed by Linde Group for over 20 years.