CemWeek Magazine, Issue 1

CemWeek CemWee MAGAZINE

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

JANUARY / FEBRUARY 2011

Rebuilding

Benchmarking

CemWee CemWee ABMWeek Titan Iraq

Spreads Its Wings

Organization-Wide Measurable Benefits

Cement Industry Answers the Call

Greener pastures

Goo that can change the world

View

of Environmental Stewardship:

Advocacy, Collaboration, Innovation, Common Sense

News

|

Analysis

|

Market Coverage

|

Interviews

|

People Moves

EDITOR’S NOTE Letter from the publisher and editor

The CemWeek Magazine is published by the CW Group (CemWeek LLC) 848 N. Rainbow Blvd., Box #1658 Las Vegas, NV 89107, USA T: +1-702-430-1748 F: +1-928-832-4762 www.cwgrp.com www.cemweek.com

“Turbulence is life force.

It is opportunity.

Let’s love turbulence and use it for change.”

Former U.S. Attorney General Ramsay Clark could have been speaking about the cement industry with those words, and he was certainly speaking to us in noting the pervasiveness of turbulence and the benefits of embracing it. As chroniclers of the turbulence that is constantly reshaping our industry, CemWeek embraces the need for adaptive change.

staffbox

It is in that spirit that we launch the new CemWeek Magazine. Drawing on our roots in research and analysis as well as practical business experiences, we decided this bimonthly online publication would fill an analytical and information void in the global cement industry.

Robert Madeira

The cement industry is going through a period of unprecedented change, requiring forward and data-oriented thinking, in addition to operational optimization. As changes accelerate, the need to understand strategic and operational implications in a fact-based and research-oriented format also increase.

editor

The CemWeek Magazine picks up on this need by offering reflections from industry leaders, interviews, regional and corporate coverage and market trend reviews applicable to a global cement industry. Additionally, the CemWeek Magazine will leverage CW Group’s research and highlight analyses that the group prepares.

This extensive coverage adds depth and perspective to the current news updates found every business day on our portal, www.CemWeek.com. Readers of both will be well prepared to deal constructively with developments as they occur on the front lines of the industry.

In this first issue we have focused on sustainable development and included reflections from industry thought leaders such as Mr. Don Ingerson, Vice President at a subsidiary of Titan Cement’s US division (page 4). We have also included highlights from CemWeek’s Sustainability Survey collaboration with the World Business Council for Sustainable Development’s Cement Sustainability Initiative (page 25) and showcased some interesting preliminary findings (the full survey will be published later this Spring).

Each issue will include activity summaries and projections from CWGroup researchers in all regions of the world plus in-depth articles from areas of particular interest (see India page 26 and Iraq page 28 in this issue).

The CW Group is excited about launching this new format that complements the wellreceived CemWeek.com platform. We hope you will find the change welcome and helpful in forming your business decisions.

As always, we welcome your feedback editor@cemweek.com. Tell us what you like, of course, but also let us know if you see anything missing. And it you have ideas that would benefit the industry, talk to us about contributing an article or being the subject of an interview.

CemWeek Magazine

cemweek publisher head of cw group research

Arthur Norwalk Jennifer Ridgeway project editor

Paolo Dela Rosa art director

Anthony Fitzgerald advertising

Diana Heeb Bivona Katy Bowman John Thompson pat ryan Claudia Pelcz

CemWeek & CemWeek CemWeek BMWeek BMWeek BMWeek

contributing writers researchers

To subscribe or advertise, please contact us at T: +1-702-430-1748 F: +1-928-832-4762 E: sales@cwgrp.com

©2011 CemWeek LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

CW Group CW Group

Any submissions or contributions from readers shall be subject to and governed by CemWeek's Terms and Conditions, which are available upon request.

Robert Madeira

Arthur Norwalk

publisher and head of research

editor

CW Group

JANUARY / FEBRUARY 2011 www.cemweek.com

CONTENTS FEATURES 4 Environmental Stewardship

Titan America’s Don Ingerson sees benefits when industry and government work as partners

8 A WIDER SCOPE FOR COMPETITIVE BENCHMARKING

Applying this proven tool in non-traditional areas can stimulate growth in revenue and profit

30 Greener Pastures

Canadian prototype shows the promise of algae in reducing CO2 emissions

36 Africa

4

Interview: Don Ingerson, Titan America

8

Competitive benchmarking

28

Country snapshot: Iraq

30

2

numbers in brief

Greener Pastures

DEPARTMENTS Numbers in Brief

Leaders Comment

2 Major differences in prospects between 20 Marc Soule, GM at Lafarge Honduras, developed and developing markets projects renewed growth 24 KHD’s Ralf Slomski examines prospects for Mideast and BRIC Regional Reports 36 HeidelbergCement’s Rob Huydts on 12 Americas managing in Africa 14 Europe, Middle East & Africa 16 South Asia

Country Snapshots

From Our Industry Partner 18 Building materials update

Projects & People 27 People on the move 34 Notable projects

Data Share Performance

38 Overview of stock performance for cement companies

Divided fortunes: Look-back on

26 India rushes to add capacity 2010 28 Cement industry has key role in Iraq 40 Overview of stock performance for rebuilding cement companies

CW Group Research provides high-quality and data-centric custom and published market research. Our research and report services help cement companies conduct and leverage research to provide clear direction for business decision-making.

■■ Market and country research

■■ Opportunity assessments

■■ Forecast services

■■ Customized surveys

■■ Due diligence research

■■ Business intelligence

■■ Competitive benchmarking

■■ Analysis support

Contact us at inquiries@cwgrp.com to discuss further how we can support your market intelligence needs. www.cwgrp.com/research We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com or on +1-702-430-17 48 848 N. Rainbow Blvd., Box #1658, Las Vegas NV, 89107, USA

NUMBERS

IN BRIEF

2010 - a tale of two worlds... or three “Old News; China Is Still King�

2010 Global Cement Demand Share

hina continued to dominate the

global

market,

cement

5% India

representing

2% USA

57% of total demand volume. Other emerging markets, including India and Brazil also

57% China

2% Brazil 2% Turkey

figured prominently and have captured year-on-year share.

The US remained one of the

24% Rest of the World

largest cement markets globally, despite tough trading conditions in 2010 and still down sharply from peak demand a few years ago.

Source: CW Group research

Global Cement Demand Bn Tons 4

Global Demand Going Strong Despite All Things

2

0

2000 Source: CW Group research

2

www.cemweek.com JANUARY / FEBRUARY 2011

2010

espite notable demand weakness in much of the developed world, global cement demand nonetheless increased in 2010.

The different growth scenarios across continents have increasingly led to a bifurcation of growth patterns with many emerging and frontier markets seeing double-digit growth in demand, whereas North America and Europe have stagnated with many sub-regions contracting. Overall, global demand reached 3.3 billion tons for the year, representing a 7.1% average annual growth rate over the past five years.

SILO CLEANING Safer, faster and more efficient than other traditional silo cleaning methods Highly qualified crews, using our unique, non-human entry silo-clean system Fully certified rope access teams equipped to work at height Iso 9001, 14001 and atex certified silo cleaning operations

 (+34) 917.231.502  (+34) 917.952.529

worldwide service cwgrp.com

Calle La Resina 37 Nave 11 28021 Madrid, Spain

| CemWeek 2010 Middle East & Africa Cement Sector Survey

1 www.blancon.net

Interview: Don Ingerson, Titan America In an era when concern about climate change has focused on the reduction of carbon emissions worldwide, cement producers are being called on to do their share. CemWeek spoke to Mr. Don Ingerson at Titan America about industry responses to this critical issue, and new thinking about environmental stewardship.

4

www.cemweek.com JANUARY / FEBRUARY 2011

ement is arguably one of the most commonly and widely used materials in construction worldwide.

While the production of cement accounts for between 5 and 7 percent of the world’s carbon dioxide emissions, cement-based products can help reduce the total amount of CO2. In an era when concern about climate change has focused on the reduction of carbon emissions worldwide, cement producers are being called on to contribute to these reductions.

STAR partnership, where Titan America is a partner and the Roanoke Cement plant is an ENERGY STAR certified plant.

Mr. Don Ingerson, Vice President at Roanoke Cement Company, a subsidiary of Greek-based Titan Cement’s U.S. group, Titan America, recently talked with CemWeek about the need to work cooperatively, both within the industry and with organizations outside the industry, to address environmental concerns and advance the cause of environmental stewardship across the industry.

However, as Mr. Ingerson points out, sharing progress and innovation is just as important as discovery for the industry. As an example, Titan America has taken the concepts and ideas it has developed with the U.S. EPA across the extended cement and concrete supply chain. In particular, the company has “gone to customers with our engineers and spent time at their facility and audited their energy use.”

Working Together

For Mr. Ingerson, the program is about educating more companies and individuals on the advantages of environmental stewardship, and on “doing more with less”, while helping Titan America “build stronger relationships with its customers and helping everyone involved improve their bottom line.”

According to Mr. Ingerson, the industry is doing more, both to address environmental issues directly as well as to publicize its cause with the public and with the governments crafting new policies and regulations.

In 2007, Titan America joined the ENERGY STAR program as a way to work with the U.S. government to reduce the energy it uses in the course of producing an average of over 1.3 million tons of cement annually.

“Through our work with the EPA, we have been able to translate energy-reduction principles into tools, ideas, and best practices.”

“The more that the participants in our industry do to benefit the environment, the more likely it is that our views will be heard in the halls of government.” But he cautions that the equation is complex and requires work; because “there are no easy answers when you’re trying to satisfy the interests of the world’s environment, global companies, local producers, national governments and the public.”

Sharing knowledge within the cement industry is not without its challenges, however. Antitrust regulations often limit how companies within the industry are able to work together. “We can’t collaborate freely as an industry on some of these key issues,” Mr. Ingerson says. While trade associations such as the Portland Cement Association provide a forum for industry dialog, it may not always allow for the unfettered flow of “We see the government as a partner,” says ideas or the sharing of lessons learned.

Mr. Ingerson. Cement industry leaders need to be working with government Global implications are also to be regulators to develop policies and solutions considered. If manufacturing is reduced in that address the environmental issues and the U.S. and worldwide demand remains make it economical for cement producers unchanged, low-cost imports from other to operate in environmentally friendly ways. nations will rise to meet the demand. Many of the lower-cost producers do not have There are many ways that this collaboration equally robust environmental requirements can happen. The U.S. Environmental compared to the U.S. and the European Protection Agency (EPA) provides linkages Union, and the regulations that are in place to the cement industry through a variety of tend to not be as rigidly or consistently tools and support including the ENERGY enforced. Without a U.S. import policy in place, reducing U.S. manufacturing capacity JANUARY / FEBRUARY 2011 www.cemweek.com

5

FEATURE ultimately shifts the emissions to locations where higher emissions are allowed. This is not a US-specific issue, rather a global one: this is why organizations such as the World Business Council for Sustainable Development and its Cement Sustainability Initiative (WBCSD CSI) are working diligently on framing.

Mr. Ingerson explains that the discussions surrounding the environmental concerns of making cement are not always looking at the whole picture. The issue of carbon being released into the atmosphere during the manufacture of cement is talked about in isolation, without considering that other aspects of cement manufacturing and use may help to negate this release. “Carbon needs to be treated like an investment with tradeoffs,” Mr. Ingerson says. “Consider the fact that concrete roads and structures become carbon neutral during the use phase,” he adds, referring to research from MIT.

Economic and environmental symbiosis

and to serve as a leader in environmental stewardship within the industry as a whole.

As part of this, the company has strived to Environmental stewardship does not only create a culture of pride and responsibility have to be big picture. It can start with company-wide. smaller things that cement operations around the world can do without major “People, profit, and planet are three things investments. Mr. Ingerson recommends that that are relevant no matter the business organizations “think about basic business cycle,” says Mr. Ingerson. “Our philosophy practices and ask why do we do it this way.” is to retain people by pride, to let our For example, he suggests having drivers turn employees at every level of the organization off their trucks when they get out of them, know that they have the power to live our rather than leaving them to idle. It may values and create the corporate culture seem simple, but in the aggregate it can have themselves.” a meaningful effect not only on emissions, but also on the company’s overall energy The company has moved towards a costs. “In the U.S., a truck can burn two and comprehensive and sustainable approach a half gallons of diesel in idling per hour. to leadership, valuing the “soft skills” of its Reducing the idle time means wasting less managers and leaders as well as their ability money, energy, and producing less carbon.” to manage the day-to-day operations of the For Mr. Ingerson, it’s all about challenging organization. “These issues are relevant in any place where people have brains and conventional thinking. hearts and hands. You can’t think only about the hands. You have to believe in your employees and have a passion for what you The more that the are doing. It changes how you approach participants in our your work.”

In an effort to address both the need for new, more environmentally friendly technologies and the need for information sharing industry do to benefit the within the industry, the Portland Cement Association and the Ready Mixed Concrete environment, the more Research and Education Foundation have likely it is that our views teamed with the Massachusetts Institute of Technology (MIT) to form the Concrete will be heard in the halls of Sustainability Hub (CSH) to work on this government very topic. The goal of the CSH is to “foster a close alliance between academia, industry and government to facilitate the transfer The global business cycle, particularly as it of knowledge by aligning world-leading affects the developed markets today, dictates research with end-user needs.” some trade-offs as companies focus on their cost structures. Big investment programs One study currently underway at the are delayed until better prospects take hold.

CSH is attempting to broaden the Instead, the cement industry in developed conventional life-cycle assessment model markets is in the near term more likely to used for determining carbon emissions see incremental approaches to improving in concrete construction to make it more economics and the environment, for comprehensive. This new work is focusing instance, taking equipment off-line when it’s on the use-phase of the material, something not in use. The Roanoke Cement Company that had not previously been explicitly took this approach a step further in April considered in the cement carbon emissions of 2010 when it shut down the lights on its dialog. The preliminary results of the study pre-heater tower and announced plans to have already illuminated what had been leave them off indefinitely. This significantly major gaps in the general knowledge of reduced the energy required to light the how concrete structures contributed to tower and improved the view of the starlit reductions of carbon emissions. The study night sky. has found a variety of trade-offs, both in building and road construction, which Titan America has made a commitment could allow engineers and architects to across its subsidiaries to reduce its design structures that emit far less carbon environmental footprint as a company than current designs.

6

www.cemweek.com JANUARY / FEBRUARY 2011

Ongoing Challenges: Thinking Long Term Both within the industry and its partners in government, one of the major tasks is to think long-term about environmental issues. This requires ongoing conversations between the industry, government and other stakeholders.

Many cement companies are global and they frequently rotate skill and talent globally.

The mindshare that results is a tangible benefit and makes for a more dynamic corporate culture. But in the context of the ongoing, long-term industrial and policy dialog there is a trade-off as some of the continuity is lost. “Real challenges – really important issues – need consistent dialogue,” Mr. Ingerson explains.

In the end, in order to have a truly sustainable mindset, Mr. Ingerson says all stakeholders need to be thinking long-term.

Titan America’s policy of managing “for the next quarter century, not the next quarter,” is an example of the company’s commitment to advancing sustainability throughout its organization “because we truly believe that you can be both pro-environment and probusiness at the same time.” BMWeek CemWeek BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group CW Group

BMWeek BMWeek BMWeek

BMWeek BMWeek

CW Group CemWeek CW Group CemWeek RESEARCH

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

UP

CW GRO

CW Group

RES

EARCH

CW Group 30-1748 T: +1-702-4 762 F: +1-928-832-4

search York, USA New .cwgrp.com/re www

k LLC Blvd.

CemWee Rainbow 848 N. 8 Box #165 s Las Vega USA 7, NV 8910

roup M

CW G

CemWeek BMWeek 2010 BMWeek BMWeek CemWeek CemWeek CemWeek

DECEMBER 2010

CW Group CW Group CW Group

Middle east & africa ceMent sector survey

Foreword by Eng. Al Rousan Secretary General Arab Union for Cement and Building Materials | CemWeek 2010 Middle East & Africa Cement Sector Survey

CW Group CW Group CW Group

H

CW GROUP RESEARC

rt: t Repo

arke

ment rica ce East Af t marke date) up (2010

January,

CW Group T: +1-702-430-1748

+1-928-832-4762 F: USA New York, .com/research www.cwgrp

CemWeek LLC 848 N. Rainbow Blvd.

Box #1658 Las Vegas NV 89107, USA

CW GROUP

RESEARCH

January, 2011

CW Group T: +1-702-430-1748 F: +1-928-832-4762 New York, USA www.cwgrp.com/ research

CemWeek LLC 848 N. Rainbow Blvd.

Box #1658 Las Vegas NV 89107, USA

et Report:

CW Group Mark

Bangladesh ceme market (2010 update)

2011

CW Group Mar

nt

ket Report:

CW GR

OUP

RESE

ARCH

Cameroon cement market (2010 update) January, 2011

CW G

roup

Marke

t Rep

ort:

Peru ce (2010 ment m arke upda t te) January

, 201

1

CW T: +1-Group F: +1- 702-430 New 928-832 -1748 www York, USA-4762 .cwgrp.

com/res

earch

CemWeek LLC 848 N. Rai Box #16 nbow Blvd .

Las Veg 58 NV 891 as 07, USA

Lates

t cem repor ent mark e ts inc lude t

Syria • B Peru • razil B Iraq • enin Kenya

We know the cement industry well.

Let us guide you. For more information please contact us at inquiries@cwgrp.com or on +1-702-430-1748 www.cwgrp.com T: +1-702-430-1748 F: +1-928-832-4762 848 N. Rainbow Blvd. Box #1658 Las Vegas, NV 89107, USA

FEATURE

Analysis and Tools:

Using Competitive Benchmarking to Identify Best Practices and Drive results ompetitive benchmarking, a tool long used by engineers and accountants to quantify past results, is also an often overlooked tool for the business and management side of operations. Used creatively, it can be a lever for top managers to shape and implement innovative profitbuilding strategies in many areas of their organizations.

“The fixed-asset nature and high degree of rivalry in the cement industry underscores the need to maintain a company’s competitive advantage. There is a high degree of actionable leverage to be gained from competitive benchmarking,” says Mr. Robert Madeira, Managing Director and Head of Research at the CW Group.

The CW Group recently completed some benchmarking research and the findings 8

www.cemweek.com JANUARY / FEBRUARY 2011

The application of benchmarking to business functions outside of operations was particularly transformational

were encouraging: “For the functional areas that we focused on for the study, we uncovered notable performance gaps that could be closed to yield significant cost and performance improvements. While the results were encouraging, the application of benchmarking to business functions outside of operations was particularly transformational.”

In a nutshell, competitive benchmarking is simply a method of comparison.

Comparing the answers to a set of questions asked of a number of different companies allows managers to determine which of those companies is performing the best on a given task, thereby identifying an industry best practice. This best practice can then be used to set improvement objectives for use in other companies and to develop broader improvement and strategic programs.

FEATURE Competitive Benchmarking Framework

Defining analytical envelope & metrics selection

Action planning and strategy management

Results and impact modeling

Internal baselining

Data interpretation and management

Strategic and competitive benchmarking

Constraint analysis Best practices assessment and gap analysis

But just because it looks easy, does not mean it is easy to do; what makes the competitive benchmarking process stand out is the use of a rigorous approach to competitive data collection and analysis and a reliance on evidence for determining best practices and actions. The results of a benchmarking study do not point to opinions, they point to facts.

Finding Best Practices Benchmarking, in general, is the process of comparing performance between companies and units. It is a data-driven methodology for determining which organization performs best according to a set of indicators measured in an objective and rigorously systematic manner. This process has the potential to not only prompt managers to re-think their current business practices, but also to adapt new processes that may improve performance.

The goal is to create a robust study that addresses all the necessary factors without allowing it to become bloated and making it exponentially more complex to gather and interpret the data

Historically, benchmarking has been more familiar in operations and engineering functions. But competitive – or strategic – benchmarking is focused mainly on management processes across the broader organization. “Traditionally the industry has viewed benchmarking as a tool for engineering,” says Mr. Madeira. “However, there is a parallel track in the benchmarking work focused on the management agenda, spanning across all functions of the enterprise. Done right, competitive benchmarking is a tool for business development and strategy groups to uncover and emulate competitive advantages as well as drive transformational change.”

Competitive benchmarking can be approached in several different ways, but the roots of the initiative need to be firmly grounded in analytical discipline, market research and modeling. The CW Group competitive benchmarking framework (see figure) begins with determining the objective for the study and moves through data collection and analysis to the final development of an action plan for implementing an improvement plan.

Toward the beginning of the process, three key points are essential to ensuring a successful benchmarking project: ■■ Understanding the enterprise strategy and management process ■■ Determining and clearly articulating the objective for the benchmarking strategy ■■ Selecting the indicators (metrics) that will be assessed Before beginning the benchmarking process, it is imperative that everyone involved understand the enterprise strategy and management process. This understanding will ultimately guide the kinds of questions that can be asked during the process and the way that any improvements to the way the organization functions will be made.

The objective that is chosen for the study will guide the entire initiative, from deciding on the scope of the research to selecting indicators to interpreting the results. It is of the utmost importance that this objective be clear and the link to the strategic management function be firmly established. “If this part of the process is not done with the greatest care and wide buy-in, » JANUARY / FEBRUARY 2011 www.cemweek.com

9

FEATURE chances are great that the completed report will gather dust on a back-office bookshelf rather than becoming a valued tool in the company’s advancement,” says Mr. Madeira.

The next step is to determine what measurable dimensions, or specific questions, can be identified to realize the objective of the study.

When selecting indicators, or metrics, there are several important questions that both the researchers and the company leaders commissioning the study need to ask: ■■ Does this indicator directly address the objective of the study?

■■ Is this indicator measurable (does the data exist)?

■■ Is this indicator meaningful – will it give me actionable data?

Driving Innovation With a set of metrics identified, the challenge is to uncover comparable – and observable – situations at other organizations and build a database of these findings. This is a challenging phase in the process that draws on a range of information sources, primary and secondary research, as well as data sources. Besides gathering the data in a highly structured and systematic manner, objectively processing and interpreting the quantitative data is crucial to avoid introducing biases in the analytical process.

“Quite often, this is a challenge in many organizations that can limit the effectiveness of the entire initiative and can limit the ultimate benefits,” says Mr. Madeira.

internally, externally, and over time.

Global, yet local, the cement industry is well-suited to benefit from competitive benchmarking. “The neat thing about conducting benchmarking studies in the cement industry is that it is global,” says Mr. Madeira. “The process is beneficial for both developed and emerging markets, as there is the opportunity for learning not only within markets, but also between them.”

number of training days per year per employee (this is just an example metric).

The latter is a measurement the business can act on – time spent training employees can be adjusted and validated.

The first difficulty can be in selecting the study question up front. It is important to resist the urge to gloss over this area and move on to the indicator selection process. Taking the time to make sure that the questions being asked are clear and meaningful will help to ensure a smoother and ultimately more useful process.

Finally, managers need to be careful about how they apply any new best practices to their own operations. Realistically, the global nature of the cement industry can add constraints to this process. A practice that is deemed a best practice in one market may not translate well to another market where different natural, financial, or regulatory conditions are in place. “The key is not just to figure out what the best practices are, but to interpret and adapt those practices to the reality of your company’s situation,” says Mr. Madeira.

Collecting the data is, more often than not, a challenge as well. A lot of the more specific – and actionable – data will not be readily available, and so a survey may need to be conducted to gather the necessary information. Often companies need external Every Step is Essential help in this part of the process as they may While competitive benchmarking can be a not be equipped or have the bandwidth to powerful tool, there are many reasons why collect large amounts of data from a variety the results may not produce the desired of sources, ensuring rich and robust data for a number of different indicators. effects.

As for indicators, keep in mind that more is not necessarily better. Having too much data can slow down the process of conducting the study and leave the results muted and difficult to interpret. The goal is to create a robust study that addresses all the necessary factors without allowing it to become bloated and making it exponentially more complex to gather and interpret the data.

“Be realistic,” Mr. Madeira advises, “remind yourself at every turn how the choices will Even though the development of an action help inform your actions.” plan is listed as the final step, it is useful to think of the benchmarking process To the greatest extent possible, indicators as a circle. Comparisons across time are should line up with specific actions so incredibly useful. “It is not enough to go the results can provide clear guidelines through the benchmarking process and for action. For example, an indicator that philosophize on the results,” says Mr. measures the volume of cement sold by a Madeira. “In addition, organizations will particular division for a given month may be be best served if they plan for a long-term interesting, but it is vague and tells managers process to drive transformation and strategic little about how this particular number is improvements.” Companies embarking on achieved. A more tangible indicator, if the a benchmarking program should plan to hypothesis was that employee skill was the measure and re-measure, comparing results driver of better sales, could be the average

Launching Your Business Into the Future When done right, benchmarking can produce a leaner, more efficient and agile business operation in functions across the organization such as sales & marketing, finance, IT, human resources. The entire goal of the benchmarking process is to create a competitive advantage – to move your business ahead of the rest. Using a benchmarking process can help business leaders learn to anticipate new and better business practices, and establish a baseline to rigorously measure progress against. As Lord Kelvin, the 19th century mathematical physicist and engineer said: “If you cannot measure it, you cannot improve it.” BMWeek

Plan to measure and re-measure, comparing results internally, externally and over time 10

www.cemweek.com JANUARY / FEBRUARY 2011

BMWeek BMWeek

CemWeek CemWeek CemWeek

FABRICATION &

INSTALLATION Medium and light metal construction to specification erection of industrial facilities General industrial maintenance and corrosion control Manufacture and assembly of industrial tubing and pipelines

 (+34) 917.231.502  (+34) 917.952.529

worldwide service cwgrp.com

Calle La Resina 37 Nave 11 28021 Madrid, Spain

| CemWeek 2010 Middle East & Africa Cement Sector Survey 11

www.blancon.net

REGIONAL REPORT: PCA CHALLENGES U.S. EPA EMISSION STANDARDS In August 2010, the EPA announced amendments to the National Emission Standards for Hazardous Air Pollutants (NESHAP) which will take effect in 2013.

The new rule is set to lower limits for total hydrocarbons, hydrochloric acid and particulate matter.

Following the announcement, the Portland Cement Association (PCA) immediately filed two petitions in federal court to reconsider the standards. The PCA agreed with Kings College Professor Lofstedt, who said the new rules could reduce the U.S.’s long term cement production by 8 to 15% and cause imports to increase from 20 million tons to 48 million tons per year. According to the PCA, the regulations may force 5 to 10 plants to shut down.

But the federal government has recently showed signs of a more constructive approach; on January 19, 2011, President Obama issued an executive order aimed at “improving regulation and regulatory review of federal agencies, including the EPA.” The order would subject regulations to a cost-benefit test that would yield rules that protect public health and the environment while promoting economic growth and job creation. The president further commits to identify and review regulations that are unworkable. The executive order was well NORTH AMERICA RECOVERY PROJECTIONS IN U.S. received by the PCA, which mentioned that recovering, albeit modestly at first. Growth current regulations in the cement industry The 2010 U.S. cement shipments reached is expected to turn positive in the next two could already cause loss of 3,000 to 4,000 only 72.5 million tons, a far cry from 2005 years and reach 1 to 2 percent. jobs. levels of 128 million tons. Lowered demand also decreased imports, falling by 6.32% Attesting to the market’s longer-term Manufacturers are taking actions to compared to 2009, amounting to 5.7 million recovery hopes is Titan America, which is meet EPA requirements and achieve tons. Manufacturers had no choice but to continuing efforts to building a new plant energy efficiency. Cemex already reduced cut production levels, shut down plants and in North Carolina in spite of the current mercury emissions and assured that it is at lay off workers. market conditions. The plant, however, has manageable levels. CalPortland received the continued to face push-back from the U.S. 2010 EPA Energy Star Sustained Excellence For example, in November 2010, Holcim Environmental Protection Agency (EPA) Award for its comprehensive energy temporarily had 70 people laid off at its and environmental groups over emission management organization. Holcim’s five Catskills plant in New York. At the same levels and permits. In January 2011, plants located in Utah, Alabama, Missouri, time, Buzzi Unicem wrote down the value of the injunction freezing Titan America’s Montana and South Carolina also received its Oglesby, Illinois, plant, and announced application for an air permit was finally a Gold award from the EPA in recognition that it will remain inactive for several years. lifted. The firm declined the US$4.5 million of its environmental programs and energy local and state incentive and will comply efficiency performance.

However, the outlook is not as dire. The with the National Environmental Policy U.S. cement market is expected to start Act. 12

www.cemweek.com JANUARY / FEBRUARY 2011

BRAZIL IS HOT

Cement sales in Brazil continue to surge as the country gears up to host the 2014 World Cup and the 2016 Olympics. These two international events, together with the new US$440 million government infrastructure program, have contributed to a 15.5% (60.2 million tons) year-on-year increase in 2010.

If all announced projects are completed, consumption is expected to reach 80 million tons by 2016. Nonetheless, shortages persist, since the country’s 70 cement units– with a capacity of 62.6 million tons – are insufficient to meet demand that is set to grow 30% in 2011. Parts of the country have been experiencing delay in deliveries and slowdown of construction projects.

In response, manufacturers’ plant buildout continues. Votorantim is set to build eight plants by 2013 – a total investment of

SHORTAGES PLAGUE SOUTH AMERICA Other parts of South America are also experiencing shortages.

Venezuela’s local production is only operating at 50% – industry groups and analysts point to inefficiencies brought about by the nationalization of cement assets. In 2008, President Chávez announced the nationalization of the subsidiaries of cement makers Cemex, Holcim, and Lafarge. Since then, critics such as the Civil Association for the Defense of Ex Cement Workers (Asocemento) say that nationalization has been harmful to production due to lack of investment, cash flow problems, and scarcity of raw materials. The Venezuelan government is scrambling to meet demand through imports and seeking to raise installed production capacity from 7.3 million tons to 8.3 million tons in 2011.

US$5 billion. Cimpor has invested US$326 million, aiming to increase its market share by more than 10%, while CSN is looking to increase production by two million tons by 2011 and six million tons by 2014.

Cimentos Camargo Correa (CCC), with the goal of capturing 15% of the market, has invested US$3.6 billion and expanded production by 75%. Projects have also been announced by Apodi, BRC Cement and Supremo Cimento.

EXPanSIONS IN PERU

Peru’s cement industry is currently being boosted by a number of expansion plans amounting US$1.4 billion in the next three years. In April 2010, Cemex invested US$100 million to construct a new plant in the country. Cementos Lima also invested US$180 million to expand its Atocongo plant. Cementos Selva plans to expand capacity at its La Rioja province unit that currently has the capacity to produce Brazilian manufacturers are also seeking 223,000 tons of cement per year. expansion through acquisitions abroad.

In December 2010, CSN bought cement In Colombia, Argos announced that is assets from Spain’s Grupo Alfonso Gallardo dismantling its Barranquilla plant and amounting to US$465 million. CSN in moving 120 workers to its other facilities. the same year lost a bid against CCC and Argos cited logistical problems as the main Votorantim to acquire stakes in Cimpor. reason for the move.

CCC and Votorantim now own 31.1% and 21.2% of Cimpor, respectively. In the meantime, imports from Vietnam and Portugal are meeting the demand.

In Paraguay, domestic demand for 50kg cement bags reached 35,000 daily, although the country only produces 15,000 bags.

Total imports in 2010 reached 12.2 million bags or 74% of the demand. In November 2010, President Fernando Lugo decreed to simplify cement import procedure for 360 days to facilitate more cement being brought into the country. Cement prices in Paraguay reached US$14 from the normal price of US$7.6. The government has started probing cement dispatches and even individual cement traders for speculation. As the cement crisis continues, the Association of Distributors of Alto Paraná (ADAP) and the House Building Materials Dealers (Cavemaco) called for the resignation of National Cement Industry (INC) President Optaciano Gómez. The groups said that President Gómez is incompetent in handling such an important role and his production plans for the INC

New Plants and Expansions: Americas Company

Location

Capacity

Ancap

Uruguay

1.0 million tons/yr

Cementos de Venezuela

Venezuela

1.0 million tons/yr

Cementos Selva

La Rioja, Peru

223,000 tons/yr

Cimentos Liz

Belo Horizonte, Brazil (Expansion)

1.6 million tons /yr

INC

Vallemi, Paraguay

3,500 tons/day

Loma Negra

L'Amal, Argentina

1.0 million tons/yr

Unnamed Chinese company

Cochabamba, Bolivia

"Est 1 million tons / yr (US$180 million investment)"

REGIONAL REPORT: AMERICAS

SOUTH AMERICA

Soboce, Bolivia

have been a total failure. Meanwhile, INC has announced an investment of US$300 million for expansion projects.

Bolivia has reached 2.41 million tons in production and expects to import an additional 241,000 tons to cope with the demand. Market speculation is increasing BMWeek BMWeek the prices of cement bags to US$11.14 from BMWeek US$7.44. Bolivia’s Coboce says, however, that it will continue to maintain its US$7.44 price in spite of the demand. Cement shortages have paralyzed construction projects in the country, resulting in the loss of an estimated US$15 million. Expansion plans are underway to meet the demand.

The governor of Cochabamba has been in talks with China to invest US$180 million to build a plant in the region. Cement maker Fancesa, on the other hand, has increased output from 350 tons to 600 tons a day. BMWeek BMWeek BMWeek

Source: CemWeek and CW Group Research

JANUARY / FEBRUARY 2011 www.cemweek.com

13

Western Europe

REGIONAL REPORT:

Trading conditions have been challenging in Europe during the last few months with Western Europe, like its American counterparts, experiencing macroeconomic uncertainty resulting from tighter government spending and slowdown in construction. Spain is leading the downtrend, witnessing a severe depression in cement demand; 2010 demand collapsed to 1994 levels.

Regulation and Investigations Add Uncertainty

eastern Europe regulatory concerns in Eastern Europe

Ukraine court expands public access to pollution data The operating environment is made more challenging by a tough regulatory Cement operators in Eastern Europe are In the Ukraine, environmental disputes are environment. The European Union is also facing tough trading conditions after also ongoing. Environment-People-Law pushing forward with an investigation a particularly severe winter. Faced with (EPL) has been trying to gain access to of alleged anti-competitive practices by new CO2 emissions restrictions, Poland, environmental impact documents from JSC manufacturers in the region, including Bulgaria, Czech Republic, Slovakia, and Mykolaivcement (Lafarge Group) for three possible import/export restrictions, market Romania have joined together in an appeal years. Ukraine’s High Economic Court finally sharing and price coordination. The probe to the European Union to reconsider their ordered Lafarge to release environmental follows other investigations by the European CO2 emission limits to help operators data of its plant reconstruction project in Union and individual countries and the at least while market conditions are not January 2011. The decision of the High latest includes Lafarge, Holcim, Cemex, supportive. The group is asking the EU to Economic Court of Ukraine is the first of HeidelbergCement, Buzzi Unicem and its take into account the fuel characteristics of its kind, declaring the right of the public to German Dyckerhoff unit. The EU further each country, especially those that use coal obtain direct environmental information confirms that the probe included firms as their main fuel which emits more CO2. from polluters. in Austria, Belgium, the Czech Republic, The benchmark used by the EU was gas France, Germany, Italy, Luxembourg, the A more positive trajectory has been seen Netherlands, Spain and Britain. power. in Russia in the last few months with Polish manufacturers are possibly facing manufacturers anticipating a pick-up in Cemex, which has been cooperating with fines of up to US$137.1 million a year due to cement demand. Investment funds for new the EU in the investigation, also received new emission rules. An average Polish plant plants have been largely concentrated in a formal complaint in January, 2011 from emits 0.823 tons of CO2, way beyond the the country as it prepares to host the 2014 Spain’s National Antitrust Commission. The proposed EU limits of 0.688 tons. The Polish Olympics and the 2018 FIFA World Cup. Commission alleged that Cemex Spain has market expects growth of 7 to 8% in 2011 The Union of Cement Producers of Russia been taking part in a cartel in the Navarre and the impending EU regulation coupled (Soyuztsement) further stated that it expects region. Cemex denies the allegation but can with government budget cuts are making cement production to increase to 85 million be fined by as much 10% of Cemex Spain’s manufacturers hesitant to invest further tons in 2012. New plant construction and yearly sales if found guilty. in the country. Cemex Poland confirmed expansion projects are being cautiously rethat they have delayed investment projects launched.

Turkish Competition Authorities have also despite having funds for investment ready. launched a probe of ten cement makers. The list includes Askale Cement, International Cement, Limak Cement, Elazig Cement, Cimko Cement and Concrete, Cimsa, Adana Eastern Europe: New Plant Construction & Expansion Announcements Cement, KCS Kahramanmaras Cement, and Company Location Capacity Start date Mardin Cement. The Authorities believe CTIE Amur, Russia 20,000 tons/day 2013 that the firms were engaged in price fixing Eurocement Podgorensky, Russia 2 million tons/yr Est 2013/14 and volume determination in the region.

HeidelbergCement

Cesla, Russia

1.2 million tons/yr (expansion)

Est 2013

Inteco

Omsk, Russia

9,300 tons/day

2013/14

Mechel

Chelyabinsk, Russia

1.6 million ton/yr

2012

Vicat

Vinnitsa, Ukraine

1.3 million tons/yr

2014

Source: CemWeek and CW Group Research

14

www.cemweek.com JANUARY / FEBRUARY 2011

Some European cement manufacturers had carbon credits stolen in a larger hacking operation. In mid-January, Holcim Romania reported it had permits stolen and Italcementi later announced that it had 300,000 permits stolen from its Greek

The pressures are starting to drive consolidation in the sector. Notably in Spain, where only 22 million tons of consumption is expected for 2011, major cement players are absorbing small grinding firms that have been struggling with low capitalization.

Further restructuring efforts are observed in Spain. In an effort to save US$82 million, Cimpor has consolidated its Spain and Portugal operations under one unit.

Acquisitions in Spain Acquisition

Date Announced

CSN

Cementos Balboa

Dec 2010

Corporación Noroeste (Cimpor)

Cementos El Monte

Oct 2010

Holcim

49% stake in Los Avatares de Cementval

Mar 2010

Cemex

Cementos Castilla La Mancha

2009

The Middle Eastern cement market is strongly supported by government infrastructure projects such as those seen in Iran, Iraq, and Saudi Arabia. In Iraq alone, the Housing Minister announced in November 2010 that the Ministry will build more than 2.5 million homes by 2015 as the country rebuilds. Manufacturers are planning to further respond to the growing market in the region with investments.

Regulations Negatively Affect Company Prospects Government import and export regulations (be they restrictive or free), however, are restricting industry growth in countries like Saudi Arabia where exports are limited, and Jordan where rampant change to significant imports is affecting local manufacturers. Saudi Arabia’s continued ban on exports is putting manufacturers in a precarious situation given the lower domestic demand and mounting excess capacities. Several companies are working at reduced production levels, resulting in idle capacities estimated at 26 million tons.

2011. Algeria has opened a tender for the delivery of about 450,000 tons of cement as the country continues to deal with low production from its domestic cement makers.

Jordan is suffering from virtually the opposite problem for cement manufacturers as it has an open trade policy that encourages imports. With weak demand and flow of imports, Lafarge Jordan temporarily halted two cement production lines in January 2011 as a result of the pressures as well as higher input cost. The local cement industry later approached the Ministry of Industry and Commerce to halt issuing automatic import licenses for clinker.

Manufacturers are swaying the government to lift the ban in the wake of renewed Cemex Castellonense 2008 infrastructure development in neighboring Oriónidas Qatar, which is hosting the 2022 World Lafarge Cementos Esfera 2008 Cup. On December 13, 2010, the Supreme Source: CemWeek and CW Group Research Economic Council of Saudi Arabia started the review of the export ban. Manufacturers Middle East and in UAE announced in February 2011 that prices will increase by as much as 15% in an The political unrest that broke out in North Africa effort to counter higher input costs and an January 2011 against Egyptian President Hosni Mubarak has affected the outlook Manufacturers in the Middle East are attempt to raise profitability. of global manufacturers in the country as pushing for changes in import/export regulations as demand increases are seen in Other parts of the MENA region are also production units were shut down during the certain countries like Qatar and Algeria. In calling for more cement. For example, the turmoil. Production capacity largely came Africa, competition stiffens and price wars Algerian government called for cement back online mid-February, but to a changed are cropping up on lower trading volumes. export bids into the country in January operating environment including strikes and calls to nationalize the cement industry.

Tudela Veguin

Cementos Galegos 2009

Sub-Saharan Africa

Middle East & North Africa: New Plant Built and Expansion Company

Location

Capacity

ASEC

General expansion in different facilities

12.6 million tons/yr

Suez Cement

Egypt

2.0 million ton /yr

Consultative Group of Companies

Djibouti, Egypt

N/A (US$300 million )

Iran’s Khoy cement

Western Azerbaijan

1.2 million tons/yr (est); US $300mm

Turkish firm

Sinjar Cement plant

1.8 million tons /yr

Lafarge

Western region of Saudi Arabia

1.4 million tons/yr

MEES Group

Tunisia

1.0 million tons/yr

Unannounced

Al Jufrah, Libya

1.0 million tons/yr

Source: CemWeek and CW Group Research

Competition stiffens in Sub-Saharan Africa as several countries face slowing cement demand and resulting price competition.

South Africa in particular has struggled, suffering decreased sales for three straight years; 2010 sales amounted to only 10.9 million tons. Pretoria Portland Cement has initiated a fresh brand campaign to strengthen and grow sales in the region amidst lowered demand that is expected to continue in 2011.

Continued on page 29

JANUARY / FEBRUARY 2011 www.cemweek.com

15

REGIONAL REPORT: EUROPE, MIDDLE EAST AND AFRICA

unit. The string of thefts has involved 3.1 million permits so far million, including the 1 million from Holcim Romania registry.

In total, the value of the stolen permits amounts to an estimated €45 million.

REGIONAL REPORT:

Import and export struggles between Pakistan and India In December 2010, Pakistani cement exports to India halted as the Bureau of Indian Standards delayed renewing certifications including on-site inspections, causing a 15,000 ton drop in exports in just six months. Pakistani traders believe this is a deliberate move to impose nontariff barriers and discourage exports from Pakistan. Further developments in January 2011 revealed that India may ban cement imports from Pakistan in an effort to counter Pakistan’s ban on onion exports to India. India has been suffering from rising food inflation and sees Pakistani imports as a way to curb prices.

In India demand has been sluggish and input prices have been increasing. In January 2011, freight prices were up by 4%, similarly fuel and power cost have increased.

Despite the trends, Andhra Pradesh cement industry is planning capacity boosts of 17 million tons by the end of 2011. Among these manufacturers are Jaypee Cements planning an addition of 2.50 million tons followed by Zuari Cements with 2 million tons, Penna Cements 1.50 million tons, NCL 1.40 million tons, and Andhra Cement and KCP Cement having 1 million tons hike each. Heidelberg Cement is also pushing through with a capacity expansion project, which will increase installed capacity to 3 million tons by the first quarter of 2012.

Heidelberg Cement is confident that downward trends in demand are temporary and will soon pick up.

Despite sluggish demand, plant expansions continue across India. A few plant proposals, however, were rejected by authorities. Harish Cement’s environmental clearance to build a cement plant near the Bandil Life Sanctuary in the Mandi District was revoked by the India State High Court on the grounds that the state department that awarded the clearance illegally waived the public hearing required for such a construction. Nirma Cement’s proposed cement plant on the Saurashtra coastline is also under scrutiny. The Lafarge Surma plant in Bangladesh is still suffering from India having stopped shipment of limestone from its quarries across the border on environmental grounds. The case is still making its way through the Indian judicial system after several appeals were rejected.

Company

Location

Capacity

Start date

Reliance Industries

Gujarat, India

5.0 mm tons

Jan 2011

Binani Cement

Gujarat, India

2.5 mm tons

Jan 2011

Bharathi Cement

Kadapa , India

2.5 mm tons

Jan 2011

Anjani Portland Cement

Karnataka, India

1.0 mm tons

Dec 2010

Jaypee Cement

Dighi Port, India

3.0 mm tons

Dec 2010

Ultra Tech

Dighi Port, India

2.0 mm tons (est)

Dec 2010

Dalmia Bharat

Karnataka and Meghalaya, India

5.0 mm tons

Dec 2010

Source: CemWeek and CW Group Research

16

www.cemweek.com JANUARY / FEBRUARY 2011

Cement exports from Pakistan were further hit when Afghanistan increased transit fees by 100% in January 2011. Fees were raised from Rs9,000 to Rs18,000. The various stakeholders including cement makers and truck owners are still in discussion regarding the issue. High transit fees coupled with the impending India import ban have already decreased Pakistani export revenues by US$ 20 million in the first quarter of 2011. Prior to these developments, Pakistan had been eyeing growth opportunities in cement exports to neighboring countries. It still sees an opportunity to take advantage of a coming hike in cement demand in Qatar.

However, some analysts maintain that Qatar may favor cement imports from other Middle Eastern countries like Saudi Arabia and UAE where they have stronger ties.

In Bangladesh, efforts are underway towards self sufficiency in anticipation of a continued construction boom in the country. In the last quarter of 2010, companies have been installing new clinker grinding plants worth an estimated BDT 20 million that would double capacity to over 30 million tons.

By January 2011, the Bangladesh Cement Manufacturers Association (BCMA) announced that the country is now self sufficient. The BCMA further asserts that Bangladesh is also capable of exporting to neighboring countries like India.

REGIONAL REPORT: SOUTH ASIA

EAST ASIA China cement volumes are predicted to continue rising, reaching 2.1 billion tons in 2011, partly helped by the government’s plan to build another 10 million housing units. At the same time, prices are expected to remain high as manufacturers continue to pass on high input costs. Because of increasing coal prices, power cuts, and the peak season, cement prices began to rise in July 2010, especially in East China.

Profitability of cement companies has however been relatively strong.

Modernization and Growth in China China continues to move toward increased production and efficiency as targeted in its 11th 5-year plan. The year 2010 marked the elimination of obsolete production lines representing 92 million tons of capacity.

This was countered by 203 new clinker production lines which boosted capacity to 243 million tons. Profitability was also unaffected as gross profit continued to rise in the fourth quarter of 2010 with higher prices widening profit margins. Capacity development continues in the country as the world’s largest single production line for white cement, owned by Aalborg White Cement in Anqing Province, was awarded a provisional acceptance certificate in December 2010.

Locally, in Taiwan, cement demand has declined while China’s share of Taiwan’s total cement imports also continued to rise.

The Ministry of Foreign Affairs responded by announcing in January 2011 that it may impose an anti-dumping levy on cement from China, if it proves that cement imports are hurting Taiwanese manufacturers.

In South Korea, domestic demand remains at 50 million tons as construction activities continued at a slow pace. Coupled with the increase in coal prices, Korean cement companies announced a poor sales performance in 2010. Hanil Cement and Asia Cement, which together control 90% of the market in South Korea, reported sales dropping by 87% and 13% respectively.

Technological Advances in Japan The first step to developing Japan’s technique for reducing heat during coal burning, the PKS technique, was made at the Ube Industry’s pulverized thermal captive power

plant. The technique’s first official test aims to significantly improve efficiency by cutting costs and improving the biomass in power plants. The Isa Cement Factory will also be used as a demo of the PKS technique.

In other measures to conserve energy in China, Lafarge Shui On Cement started its program to lower waste heat utilization.

In cooperation with China Energy Conservation Environmental Protection Group, Lafarge agreed to lower waste heat utilization in its seven production lines in China.

SOUTH EAST ASIA The cement industry in Indonesia is set to grow 6% in 2011; with the property sector unaffected by the financial downturn, consumption is expected to reach 40 million tons. Local cement maker Gresik sets a higher growth rate for itself at 9%.

The company has several expansion plans including two new plants in Tuban and Tanosa and is seeking funding for another 2 plants in Sumatra and Java. Holcim Indonesia is likewise setting its growth projection at 6 to 8% and has started construction of a new plant in Java.

capacities. In terms of marketing, CEMAP is pushing for the increased use of blended cement. The manufacturers say blended cement can be an answer to the strong consumption since 2009. CEMAP further argued that blended cement is appropriate for many applications, and with less clinker, manufacturing it results in lower CO2 emissions.

In February 2011, Lafarge Cement’s Philippine based unit announced that it will look to increase market share in the country in the next few years noting that the country is one of their top five markets in Asia, where it has captured a 30% market share.

Vietnamese companies seek export opportunities

In Vietnam, competition is increasing with mumerous facilities situated in the northern region of the country, a surplus of 2 million tons, and an additional 12 lines of cement kilns that started production in 2010. Businesses are actively seeking export markets to channel in the surplus, including Bangladesh. Other cement expansion projects are underway, but the Ministry of Construction is planning to The Philippine cement market has similar propose revoking the licenses of those growth projections to Indonesia at 7 to who implement backward and inefficient 8%. In January 2011, the government technology. announced a possible elimination of cement tariffs to ease spiking prices. The Myanmar announced that it embarking on Cement Manufacturers Association of the a drive towards cement self-sufficiency. In Philippines (CEMAP) opposed the plans, January 2011, the government permitted 20 saying that it would put pressure on the cement facilities to be built by private firms. local market by exposing it to a high influx The drive is part of the plan to substitute of imports from countries with excess imports with domestically produced cement. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

Coal Week Coal Week

JANUARY / FEBRUARY 2011 www.cemweek.com

17

FROM OUR INDUSTRY PARTNER: BMWEEK

News from the world of

Building Materials (From BmWeek.com)

Rapid changes have been occurring across the globe in the building materials sector over the past few months. The year has started off with corporate activity, expectation of improving demand and notable innovations.

In India, Lafarge operates about eighty concrete facilities and is looking to increase its market share. Lafarge India acquired L & T’s RMC business in 2008 and is now focused on increasing their market share by 50 percent. Overall, activity in India remains robust and is actively attracting new investments. For example, the ACCSimplex joint venture are starting work on the largest building in the country, the World One Tower in Mumbai, which will reach a height of 442 meters. Infrastructure investments also accelerated in late 2010, and the country will invest US$500 billion in infrastructure, mainly in power, telecoms, roads, railways and oil pipelines, in five years to the end of March 2012 to lift growth near double digit levels.

In contrast with its underinvestment in infrastructure and delays which have dragged down recent economic growth, India aims to double spending on infrastructure to US$1 trillion in its next 18

five-year plan, which runs from April 2012. Construction prices have risen approximately thirty percent in the last year due to inflation and a shortage of qualified labor.

In Asia, Laos is beginning a historic project to build a US$1.5 billion dollar hydroelectric dam in Khammouane province. Able to provide up to 920 megawatts, the dam will sell electricity to Thailand and is projected to generate US$80 million per year in revenue for Laos. Nearby, the economic feasibility of China’s massive High Speed Rail (HSR) plan is under scrutiny due to the limited amount of fly ash for construction.

Construction Outlook. Based on macrotrends, McGraw Hill projects that single family housing may rise 27%, multifamily by 24%, commercial by 16%, and manufacturing by 9%.

Europe has seen changes over the last few months as well. In France, with the TGAP or General Tax on Polluting Activities the government will now earmark a part of tax collections for environmental issues and road maintenance, which will allow local communities to retrieve part of the tax initially collected. This tax earmark applies only to communities that have quarries and are involved in quarry operations.

Professional organizations Unicem and UNPG support this change and it will be Growth Projections: US Up; effective in January, 2012. In general, the Europe Down Eurozone countries are faced with a dismal outlook. Ireland, Spain and Portugal lead In the United States, the housing market is the drop with a 3.3% decline in construction projected to rise by up to 8% during 2011, sector growth for 2010 and 0.1% decline according to a report from McGraw Hill expected in 2011. Massive spending cuts

www.cemweek.com JANUARY / FEBRUARY 2011

Construction activity is picking up in the Middle East. Notably Saudi Arabia, though it has suffered from the global malaise, is proceeding with a series of massive infrastructure projects. The Kingdom has allocated more than US$695 billion to 687 projects before the end of 2015, with robust growth in the real estate sector expected.

The Arkan Group is positioned to respond to aggressive demand for lime in the UAE and Middle East with the plans for their new lime plant. With the capacity to offer up to a thousand tons of quick lime and hydrated lime, Arkan will offer its environmentallyfriendly product to the steel, environmental effluents, agro-food, paper and construction industries.

On the other hand, Finland, Germany, Poland, Britain, Sweden and Switzerland are still facing challenges as they struggle to adjust to changes in the economy.

Companies are taking the opportunity to grow in this climate. French Cemex recently acquired an asset in Dolus Oleron, that has a production capacity of 50,000 tons of aggregates each year, purchased from Sablier Charentais. The purchase will increase Cemex’s production ability and give them the opportunity to consolidate their footprint. For approximately €120 million, Lafarge sold several aggregate and concrete sites in France, Portugal and Switzerland to Holcim and Portugal’s Secil as part of an assets disposal program.

Worldwide Acquisition Activity In New Zealand, Fletcher Building, parent of the Golden Bay Cement company, launched a US$989 million bid to acquire the Crane Group. With the offer including cash and stock options, the completed transaction is expected to strengthen both businesses. With Fletcher’s support, Crane will be able to expand work in New Zealand, while decreasing overall operating costs.

In Australia, Boral is in a solid financial position to pursue acquisitions. With just

over $1 billion allocated for acquisitions, completed an experiment on the strength of Boral doesn’t see the need to raise additional the material in the rubble and it meets or exceeds the minimum strength standards capital at this time. of the United States. By using the recycled Ireland’s CRH has also been active in rubble, Haiti will have a sustainable strategy acquisitions, spending €536 million during to incorporate the tons of waste as a result 2010 to increase business in Germany, of the earthquake. The resulting concrete Switzerland and the United States. CRH will help to make buildings stronger and purchased aggregates and readymixed increase overall safety. concrete businesses and completed the buyout of the German Bauking Another study focused on environmental Distribution business in December. In the concerns, completed by MIT, discusses the US, CRH subsidiary Oldcastle Materials has carbon emissions of concrete. The goal of continued its bolt-on acquisition strategy, the study was to create a new level of liferecently adding two operators in Texas to its cycle assessment of the costs of building portfolio. and paving materials from the initiation to the completion of a project. The results indicated that by using more efficient Big housing and concrete wall systems, carbon emissions can be dramatically decreased. Insulated infrastructure growth concrete forms instead of traditional projected in the BRICs wood-framed construction may yield a savings of a minimum of 20 percent. MIT and the Middle East plans to follow this study with a more comprehensive analysis of the total costs of The Lafarge Research Center has just building materials. celebrated its twentieth anniversary and is working to improve cement formulations Another US-based innovation is a new and to create innovation for the two billion asphalt formulation used by Pioneer Paving tons that is consumed globally each year. and Grading in the completion of a hospital With the goal to create cement in line parking lot near Santa Fe, New Mexico. with Europe’s green standards, Lafarge is Lafarge’s Warm Mix Asphalt technology was currently researching new formulations used. With temperatures ranging from 50°F that will reduce carbon emissions by 10%- to 100°F, the new technique requires foaming 20%. One way that Lafarge encourages of the asphalt cement through the utilization innovation is through their sponsorship of of additives or water, which decreases the contests. In a recent contest held by Lafarge, asphalt’s viscosity and allows the aggregate Serbia’s prefab concrete operator Quatro to be coated at lower temperatures. This Construction won first prize for the best new asphalt has been available since March innovation based on their system panel and is prized for its workability, reduction construction that uses continuing internal in energy consumption, and cold weather insulation. The new concrete technique applications. allows construction projects to complete more quickly, increase their energy European companies are continuing to work on new technologies as well. efficiency and decrease cost.

Innovations include Italy’s Itacementi’s new transparent concrete product that works Innovation Supports with thermoplastic polymer resin, recently Rebuilding In Haiti displayed at a trade show. Semi-transparent New technology and environmental concrete panels are also possible with the efficiency have been the trend over the new formulation While the company did last few months. While one year ago, the not reveal the exact formulation, they did country of Haiti suffered a catastrophic say that the transparent concrete was a earthquake, they are now in the process of combination of cement and admix. Finally, rebuilding. A major initiative announced in Denmark, engineers from Aalborg by the Journal of Commerce reveals that University have developed a new concrete rubble from Haiti’s earthquake can be mold method to provide shelters for the recycled into new construction material. Mols Mountain National Park. With better The Georgia Institute of Technology has workability, the new mold method decreases costs and increases innovative applications.

JANUARY / FEBRUARY 2011 www.cemweek.com

19

FROM OUR INDUSTRY PARTNER: BMWEEK

as a result of the global recession, as well as government cuts are blamed for the decline.

In South Africa, the Competition Commission has launched a probe into the construction sector. Bid rigging, barriers to competition and cartels are the commission’s highest concerns. Builders are denying the allegations, and the investigation follows a similar probe into the country’s cement sector last year.

BMW BMW BMW

LEADERS

COMMENT Piedras Azules Cement Plant in Comayagua, Honduras

BUILDING A COUNTRY:

LAFARGE HONDURAS Cemweek recently interviewed Lafarge Honduras General Manager Marc Soule to learn his perspective on the current market conditions and future outlook for the company and the future of the overall cement industry in Central America.

CemWeek: Thank you for talking to CemWeek about Lafarge Honduras and your work in the country. Can you describe the Honduran building material market?

Mr. Marc Soule: In 2009 the Honduras GDP growth was affected, just as other Central American countries, with a negative growth of 2.1%. After many years of growth, the construction market decreased by 10% in 2009. Most impacted sectors were industrial and non-residential. On the other hand, residential, especially self-construction, helped to mitigate the total impact on 20

cement consumption which only decreased projects in several locations of the country, 6% vs. 2008. with an estimated total installed capacity of 70 Mwh. In road infrastructure, we are For 2010, the construction market was the supplier of two of three sections of the still on a downward trend, and cement CA5 road project between Tegucigalpa consumption further decreased roughly and Comayagua, which is so far the main by the same magnitude we experienced infrastructure project of Honduras for 2011. in 2009. It is expected that the cement consumption rate will recover in 2011 due The current annual cement consumption to infrastructure projects, hydro electrical is close to 1.5 million tons. Two local projects and road construction in particular, companies are producing and supplying and a rising housing demand. cement in Honduras; as one of them, Lafarge Cementos has a strong 52%-market share.

Lafarge will be the cement supplier for at least 5 small to medium sized hydro

www.cemweek.com JANUARY / FEBRUARY 2011

LEADERS COMMENT

Lafarge donates school bags and material to the Piedras Azules Community School.

CW: What is the scope of Lafarge’s operations in Honduras?

Mr. Soule: We have one production plant in Comayagua with a grinding capacity of 1.25 million tons/year and one grinding station in the south of the country in San Lorenzo with a grinding capacity of 0.3 million tons/ year.

Inauguration of a classroom built by Lafarge at the "9 de marzo" community school. The children of the school/community with Marc Soule, General Manager of Lafarge Honduras.

Being part of a large group at Lafarge gives us the opportunity to send people in their technical fields to the best performing plants worldwide

The technology used in the plant includes a dry process, four-stage pre-heater and company but also because safety and 1,200 tpd kiln with planetary cooler with performance are closely related. one cement mill and another small mill for The experience of Lafarge as a group puzzolan drying and grinding.

(80,000), with a worldwide presence, is In 2000, Lafarge invested in a new cement obviously very valuable for us in this matter. mill supplied by TCDRI from China. In The Lafarge Group is providing us with 2003 the planetary cooler was replaced with standards, best practices and key learning a cross bar cooler from FLS and the kiln tools from the past experiences of the group. output was increased from 1500 tpd to 1800 This sharing is even more intensive with other Lafarge Latin America business units tpd. including: Mexico, Ecuador and Brazil.

Today the plant is still being optimized.

Small projects are ongoing in order to reach CW: What are your current main a production level of 2000 tpd of clinker and operational initiatives?

1.3 metric tons of cement.

Mr. Soule: Our current key challenge at CW: What are the particular challenges in the plant level is to adjust our fixed costs managing an individual unit of a major structure to the current market conditions and, at the same time, to prepare for the global cement company in Honduras? future rebound of activity that will require Mr. Soule: Our experience is that a safe good reliability and a full plant team plant is also a well performing plant. As a mobilization. business unit manager, my main challenge is the promotion of a true safety culture We are trying to improve our performance within the company. We are convinced that by adjusting the organization to the new having safety as a core value is a must for challenges. To do this, we have a young us, not only because this is a basic ethical team that has been developed in technical requirement for a socially responsible and managerial skills.

CW: Describe your sustainable development strategy, alternative fuel use, and how it fits with Lafarge’s global objectives.

Mr. Soule: We want to put sustainable development at the heart of our strategy.

We don’t consider it as philanthropy but as a way to generate new business opportunities while helping the national community to solve its problems.

Our sustainable development strategy is organized through four priorities: environment, education, affordable housing, and health. Many years ago we created the Lafarge Cementos Foundation which is one of the vehicles we use to implement this strategy.

In compliance with the Lafarge Group’s objectives for reducing CO2 emissions by 20% by 2012, we continue to work in Honduras on the use of alternative fuels, the optimization of our production process and the development of new products.

Currently, we are using waste oil and waste carbon as alternative fuels. The Group’s »

JANUARY / FEBRUARY 2011 www.cemweek.com

21

LEADERS COMMENT

Safety Month (June) activity at the Piedras Azules Cement Plant with our employees and contractors.

objective, as well as our own, is to increase the use of alternative fuels and thus further decrease CO2 emissions. Alternative fuels account for approximately 9% of our overall consumption.

The Honduran waste market is not mature enough. It does not have a clear legal framework promoting the recycling since the beginning of the process. For example, the country has been importing used tires that have shorter life than new ones and this has increased the number of waste tires in the country. There is no legal guideline that regulates the responsibility of the tire importer.

22

CW: On the human capital side, what sources. The main source of training is the are your priorities and challenges in strong bond with our Technical Centers Honduras? which have many experts in different areas of the cement manufacturing process. These Mr. Soule: Our main challenge is to develop experts visit us on a regular basis to assist a true safety culture with visible leadership us in solving technical difficulties as well as in the field. A lot of progress has been made train our people. in the past years but the promotion of safety as a core value and the number 1 priority is Being part of a large group at Lafarge gives a never-ending process that requires strong us the opportunity to send people in their management involvement. technical fields to the best performing plants worldwide. In the past years we The challenge is to give to our people more have sent people to USA, Canada, Spain, empowerment so that they can further Mexico, Brazil, and Ecuador among others. develop themselves to prepare the future The subjects of these exchanges range from evolution of their jobs. We provide our quarry operations to dispatch as well as people with technical training from diverse start-up of new lines. BMWeek CemWeek CW Group

www.cemweek.com JANUARY / FEBRUARY 2011

BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

Coal Coal Coal

E-Magazine is nice, but print copy nicer?

Subscribe to the CemWeek Magazine’s print edition and have it mailed directly to you. Contact CemWeek at sales@cemweek.com to make arrangements.

Global cement industry coverage in a new, fresh format focusing on market moving trends, analysis and business. We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com, or on +1-702-430-1748 T: +1-702-430-1748 F: +1-928-832-4762 www.cemweek.com

848 N. Rainbow Blvd. Box #1658 Las Vegas, NV 89107, USA

LEADERS

COMMENT

Discussion:

KHD reorganization and growth strategy Mr. Ralf Slomski, KHD Managing Director, Humboldt Wedag GMBH and Head EMEA operations, and Mr. Anthony Fitzgerald, CemWeek Commercial Director, at the AUCBM conference in Ras Al Khaima in December 2010.

During the Arab-International Cement Conference in the United Arab Emirates in mid December 2010, CemWeek’s Anthony Fitzgerald caught up with Ralf Slomski, Managing Director of KHD’s Humboldt Wedag GmbH and EMEA in order to get his perspective on business opportunities in the Mideast and other markets, KHD’s reorganization and the firm’s overall strategy for future growth. other high-growth areas – most particularly, Reorganizing For Global Reach the BRIC countries (Brazil, Russia, India and China) which represented over 62% of Mr. Slomski also discussed the benefits the global cement consumption in 2008. of KHD’s reorganization which created two distinct entities: a Canadian mineral “If you look at the statistics, the BRIC royalty company (Terra Nova Royalty countries are huge growth areas but there Corporation) and the German industrial are pockets of growth like here in the Middle plant technology, equipment and servicing East, as well,” the Managing Director noted. company (KHD Humboldt Wedag). The “This is why we are very excited about being “new” KHD organization has established a here at the AUCBM and seeing many of single, global team structure with joint ISO our business partners in exactly this region. certification for all locations; a centralized These companies have been faithful to KHD client servicing structure and standardized for many years.” offerings that he believes make KHD even Expanding In BRIC Countries more competitive.

CemWeek data indicates that the Mideast Following shifts in global demand, KHD demand has averaged 8.2% growth per year He also noted that KHD “is now in the third step of the global SAP implementation is also looking to expand its operations in over the last five years.

Mr. Slomski concurred with the many conference attendees who saw the Mideast providing an opportunity for strong growth in the next few years, particularly compared to the US and Europe. Noting that KHD is “quite optimistic about the future,” he said the company has dedicated a service center, based in Cologne, to the region. In addition, as they expand their sales and service teams in the Mideast, KHD has a couple of local service centers in the region and has put plans in place to extend the local presence significantly during 2011-13.

24

www.cemweek.com JANUARY / FEBRUARY 2011

WBCSD – CSI CemWeek Survey finds “Genuine Engagement With Sustainability Across The Industry” Early analysis of results from a new industry survey indicates that tackling climate change and continuing to improve safety are the main priorities for cement producers. The 400 survey respondents, on average, indicated they had a clear understanding of what sustainable development meant to the industry, and broadly believed that industry leaders were making sustainable development a top agenda item.

L-R Ralf Slomski, Gaurav Sood,Volker Helberg, Dr Stefan Seemann and Hans-Dieter Kozlowski. process, in which processes and systems will Additionally, it will combine CATIC’s be harmonized globally.” representation in more than 30 countries and 56 overseas subsidiaries with the traditional strength of KHD in India, EMEA, Focus On The Future the Americas and countries of the former Discussing what he sees as some of the Soviet Union. He expects this will allow industry’s biggest challenges over the the two to penetrate or further strengthen next few years, Mr. Slomski pointed out their position in fast-growing emerging that KHD will continue to play a lead economies, including India, Brazil, Turkey role through its ability to maintain a high and the petroleum-producing countries. degree of flexibility on all its projects, its Lastly, Mr. Slomski sees the collaboration ability to cooperate with different service more effectively meeting the need of providers around the world and its strong customers to manufacture cement locally, closer to its intended uses. BMWeek CemWeek competitiveness.

BMWeek BMWeek

CemWeek CemWeek

Mr. Slomski added that the company will retain its focus on emissions, efficiency, and, finally, initial investment cost control without compromising long-term sustainability.

The majority of respondents to the surveyCoal Week were cement producers, CW Group CW Group Coal Week followed by equipment vendors, and CW Group Coal Week consultants, analysts and researchers.

Geographically, respondents from all regions participated, with the largest number based in Europe.

Respondents were also asked to rank other aspects of sustainability, including non-CO2 emissions, occupational health and biodiversity in order of importance; both to the industry as a whole and – where appropriate- to their own company. In addition, they were asked to reflect on their company’s ability to meet each challenge. Companies appeared to be continuing to work toward integrating sustainable development into their operations, confirming an ongoing commitment to fostering social and environmental responsibility within the industry.

“KHD strives to deliver what the customer wants and to do this within his financial requirements.”

KHD is seeking to “develop a position as a leading supplier of environmentally friendly technologies.” The statement offers a strong focus to the company’s current efforts to expand its position as one of the leading global cement production suppliers.

Following the AUCBM event, KHD entered into a strategic partnership with CATIC, China. Mr Slomski believes the exclusive partnership will leverage CATIC resources within China to win projects and leverage the proven technological expertise of KHD.

The “CemWeek – WBCSD Cement Sustainability Initiative Survey” is the first in a series of surveys undertaken by the CW Group and the World Business Council for Sustainable Development’s (WBCSD) Cement Sustainability Initiative (CSI) to build a trending profile of sustainability in the cement industry based on feedback from the industry. Preliminary results show some interesting and challenging priorities for the sector.

Delegates at the AUCBM conference in Ras Al Khaima, Dec 8-10, 2010.

Continued on page 29

JANUARY / FEBRUARY 2011 www.cemweek.com

25

INDIA

COUNTRY SNAPSHOT

Global competition for India’s orders As the world’s second-largest producer, India’s cement industry heads into 2011 riding a surge of growth. With current production levels projected to climb to 236 million tons in 2011, and to 263 million tons in 2012, the push for greater capacity to handle demand is likely to continue for the near future. New plant builds and expansion efforts in India continued at a brisk pace throughout 2010, with an estimated 50 million tons (mt) of capacity added.

This push has made India a key market for global providers in the business of building and expanding cement plants. Global providers such as FLSmidth, Polysius, KHD Humboldt, and Sinoma celebrated major Indian contracts awarded in 2010 through January 2011.

In 2010, FLSmidth reported securing about 50 percent of all cement plant orders in India. Several of its larger contracts were worth millions of Euros such as a 5,000 tpd pyro-processing line at Heidelberg Cement’s existing plant in Narsingarh, and a 4,500 tpd pyro-processing system for JK Lakshmi Cement’s upcoming plant in Durg, Chhattisgarh. Given its success, the company’s continued grip on around 50% of the installed cement capacity market share in India seems realistic.

line from Wonder Cement. KHD Humboldt was awarded a contract to supply two pyroprocessing lines with a nominal capacity of 10,000 tpd each for UltraTech Cement, and Sinoma was contracted by Lafarge India to construct a 5,000 tpd cement production line.

Concerns over overcapacity outpacing growth, coupled with a crowded field of plant and equipment vendors means that competition may intensify going forward.

But with production levels climbing sharply, Other global providers also landed interest in adding capacity is still strong. BMWeek BMWeek significant orders. Polysius received a BMWeek contract for two 7,000-tpd cement clinker production lines from Gujarat Ambuja Cement and a 6,500-tpd cement production

POLYSIUS Date

Company

Description

Capacity

Nov 2010

Wonder Cement

6,500 tpd cement production line for plan in Nimbahera, Rajasthan

6,500 tpd

Sep 2010

Vicat Sagar Cement

Grinding system for new factor in Chatrasala

6,500 tpd

Sep 2010

Penna Cement Industry

Cement grinding plant

320 tph

Jun 2010

Madras Cement

Cement grinding rolls and high efficiency separators for RR Nagar & Salem Factory

230 tph

Jan 2010

Gujarat Ambuja Cement

Two 7,000 tpd cement clinker production lines for Plant Bhatapara and Plant Rauri

14,000 tpd

Date

Company

Description

Jan 2011

JK Lakshmi Cement

4,500 tpd Pyro-Processing system for its upcoming cement plant in Durg, Chhattisgarh in Central India

Dec 2010

Vicat Sagar Cement

Project at Chatrasala in the South Indian State of Karnataka

6,000 tpd

Nov 2010

Vasavadatta Cements

HOTDISC along with an alternative fuel feeding system is placed by Vasavadatta Cements for their Unit III at Sedam. This system will enable Vasavadatta Cements to feed 3.5 tph of tires and replace approximately 30% of the coal fired in the calciner with alternative fuels

Feb 2010

Heidelberg Cement India

48 million euro order for 5,000 tpd pyroprocess line at the existing plant in Narsingarh, M.P., a new clinker grinding system at their existing grinding unit in Imlai, M.P. and a material handling system at their grinding unit in Jhansi, U.P

5,000 tpd (at Narsingarh)

FLSMIDTH

KHD Humboldt Date

Company

Description

Sep 2010

UltraTech Cement Limited

Two projects for 85 million euros for pyro-processing lines with a nominal capacity of 10,000 tpd each

20,000 tpd

Sinoma International Engineering Date

Company

Description

Jun 2010

Lafarge India

5,000 tpd cement production line in Rajasthan for 72 million euros

Please your send project wins to editor@cemweek.com so we can ensure that they will be included in future updates.

26

www.cemweek.com JANUARY / FEBRUARY 2011

5,000

Cem Cem Cem

Southern Province appoints chairman

Continued from page 15:

Regional Report

Oversupply in Kenya; Shortages in Nigeria New entrants in Kenya are putting more pressure on prices, contributing to a drop of 10% in 2010. Mombasa Cement and National Cement are taking market share from established manufacturers like East African Portland Cement Company and Lafarge Bamburi in the price wars.

Established players are, however, confident that the new entrants’ pricing strategies are not sustainable in the long run.

Prices in Nigeria increased, reportedly from higher input costs. Builders and developers are claiming that cement manufacturers Continued from page 27:

Wbcsd Sustainability Survey However, the short term priority of profitability also figures high on the agenda, reflecting recent financial impacts from the industry downturn.

Saudi Arabia’s Southern Province Cement has appointed Prince Abdullah bin Bin are creating artificial shortages to justify Abdul Rahman Al Saud as new chairman of high prices. For example, the Block the board in.

Industry Association of Nigeria has urged manufacturers to boost production in order He replaces Prince Khaled bin Turki Al to bring prices down.

Turk, who stepped aside because of health concerns, becoming chairman emeritus of Other parts of the region are also seeing the company. expansion. In Namibia, Ohorongo Cement is expecting completion of its plant in 2011 and in Congo a new plant with a 500,000 ton capacity was announced to be built in Loma Negra appoints new CEO 2011 by Spain’s Cementos La Union.

Argentinian company Loma Negra has appointed Osvaldo J. Schütz as its new CEO, replacing Ricardo Lima, who has taken the job of Vice President of Cement Operations for Brazil’s Camargo Correa Group. and the initial feedback from the survey indicates that companies are aware of the Mr. Schütz is a CPA and has a Bachelor tasks that lie ahead of them, particularly of Business Administration degree concerning safety and emissions. It also from the University of Buenos Aires, highlights the fact that profitability is a with postgraduate studies at Penn State fundamental aspect of sustainability: an University, Harvard Business School and organisation that is not profitable cannot the IAE. invest in the training, skills and equipment required to encourage and improve sustainability.

“It is encouraging to see that there is genuine engagement in sustainability across the industry,” said Dr Howard Klee, JK Lakshmi Cement appoints new Program Director for the WBCSD’s Cement “We welcomed the opportunity to Sustainability Initiative. director collaborate with CemWeek on this project

“These are challenging times for the sector and look forward to publication of the full Indian cement maker JK Lakshmi Cement results.” appoints the IDBI Bank’s Executive Director Raj Kumar Bansal as Director of the company’s Board. Mr. Bansal succeeds Pradip Roy who left the Board in November, FICEM elects Gabriel Restrepo as Holcim Romania has new general 2010.

PEOPLE MOVES new President

manager

Gabriel Restrepo, head of Colombian cement maker Argos, has been elected president of the American Federation of Cement (FICEM-Apac).

The Romanian unit of Swiss Holcim Sinoma installs Li Xinhua as new has named Daniel Bach as new General Manager. Bach replaces Markus Wirth, who President will end his six-year mandate at the helm of the company. Wirth will stay president of Sinoma has announced the appointment of Li Xinhua as its new President, replacing In his speech after the appointment, Mr. the company’s Board.

Zhou Yuxian. Li Xinhua also serves as Restrepo said the industry would continue its eco-friendly programs through “good Daniel Bach has previously been vice vice president of China Building Materials practices related to technologies friendly president in charge of production with Federation, China Society of composite to the environment.” The appointment Holcim in the Philippines. He has 16 materials, vice president, China Composites occurred at the federation’s first meeting in years experience in the cement industry Industry Association, the National Building 2011 and the Board thanked the outgoing in the Asian and African markets, holding Materials Technology in Education president José Manuel Torrebiarte. operational and management positions Committee, vice chairman and other duties. there. He joined the Holcim group in 1994 as a project engineer.

JANUARY / FEBRUARY 2011 www.cemweek.com

27

IRAQ

COUNTRY SNAPSHOT

IRAQ: Massive Infrastructure Rebuilding Expected to Drive Years of Increasing Demand When sovereignty was restored to the Iraqi people in June 2004, a functioning government and establishing security were of utmost concern. However, much of Iraq’s industrial capability, including cement production, was destroyed or neglected during the U.S.-led war against Saddam Hussein’s regime. Although Iraq had been a net exporter to the region from the 1970s to 1990s, years of looting, sporadic and insufficient energy supplies and a lack of spare parts led to industry decline.

After years of neglect, the cement industry in Iraq and its 21 cement plants recently boasted only a 30 percent utilization rate, while electricity shortages, security concerns and unstable distribution routes plus pollution at outdated facilities are contributing to high production costs.

28

www.cemweek.com JANUARY / FEBRUARY 2011

15

15

0

20

In response to rising domestic demand, cement manufacturers and equipment vendors are working across the industry

30

10

Lafarge Iraq, through the Orascom acquisition, has captured the largest market share—nearly 60 percent through its two cement plants —of Iraq’s recovering cement industry, while three state-owned companies—Southern State Cement Company, Iraq Cement Company and the Northern Cement Company—control the balance of sales. The still emerging cement market largely operates through the retail channel and the vast majority of the product is still in bag form.

The construction sector is predicted to rise 17 percent annually over the next five years to over 2.5 bn Iraqi Dinars in real terms

Total change in demand over 2005 (mm tons)

20

For the last six years, however, foreign companies have been investing in Iraq’s recovery, funding construction of power and water facilities, roads, schools and hospitals. Fuelled by infrastructure investments and improved production, apparent cement consumption in Iraq rose 18 percent annually from 2005 to 2010 to over, according to CW Group research, an estimated 18 million tons.

Source: CW Group research

COUNTRY SNAPSHOT: IRAQ

PRINCIPAL IRAQ CEMENT UNITS

ement State Co

ement State Co

ement State Co

1

2 3 4

7

5

t Co

8

t Co

t Co

9 10

t Co

11

t Co

6

tate Cement Co

12 13

tate Cement Co

15

tate Cement Co

14

16

tate Cement Co

17

tate Cement Co

tate Cement Co

1

Northern Cement State Co

5

Lafarge

9

Iraq Cement Co

13

Southern State Cement Co

2

Northern Cement State Co

6

Lafarge

10

Iraq Cement Co

14

Southern State Cement Co

3

Northern Cement State Co

7

Iraq Cement Co

11

Iraq Cement Co

15

Southern State Cement Co

4

Lafarge

8

Iraq Cement Co

12

Southern State Cement Co

16

Southern State Cement Co

17

Southern State Cement Co

to restore and build new plants. In total, seven million tons of capacity will be added, including new production lines from KHD Wedag and Sinoma, in the next few years, with an additional potential four million tons announced. However, to date Iraq continues to import more than 11 million tons of cement, largely from Turkey, although new capacity sees the country turning towards exports in the future.

As the nation rebuilds, Iraq’s economy is forecast to improve as well, albeit with uncertainty around the government’s ability to execute on its plans and funding concerns.

Last year, the Iraqi government released a five-year National Development Plan that outlines nearly 3,000 recovery projects meant to restore and rebuild crumbling infrastructure and cities and move Iraq into the future.

Consequently, the construction sector is predicted to rise 17 percent annually over the next five years to over 2.5 billion Iraqi Dinars in real terms. As such, cement demand outlook is fuelled by strong fundamentals, including low per capita consumption, a supply constrained market and intense public construction spending.

Demand growth is therefore projected to nearly double by 2015. Iraq promises to be one of the most dynamic cement markets globally in the next few years, though not without its challenges. BMWeek CemWeek CW Group BMWeek BMWeek

CemWeek CemWeek

The article highlights the recently published CW Group report “Iraq cement industry (2010 update),” which provides a comprehensive analysis of the cement industry in Iraq today and going forward. Let us know at inquiries@cwgrp.com if you want to know more.

JANUARY / FEBRUARY 2011 www.cemweek.com

CW Group CW Group

29

FEATURE

by: Andrea Macko St. Marys Journal Argus

for cement plants

It may or may not taste better than cement, but one thing is for sure: St. Mary’s Cement’s newest product is safe enough to eat.

Inside the building the bioreactors glow brightly as algae grows within.

30

www.cemweek.com JANUARY / FEBRUARY 2011

FEATURE Last fall, the Ontario, Canada, plant began testing a world’s-first process that converts polluting carbon dioxide from its emissions stack into algae, the green, goopy plant that naturally coats river rocks and neglected swimming pools.

to report on the groundbreaking algae test in June 2009, and Vroegh says that thanks to the Internet, he’s received calls of interest from around the world based on the story, as well as a story that appeared in the Toronto Star.

The fact that the concentrated algae resembles cake batter is of little consequence - in the small shed at the south end of the Water Street plant, this goo could go on to change the world. Instead of using fossil fuels such as coal and petroleum coke, many industries could look to using - and making - algae as a green, renewable source of fuel, without the dangerous greenhouse emissions.

Pond Biofuels recently secured intellectual property rights on the process. This means an industrial steering committee will be created to attract researchers from the private and education sectors to perfect the process so that all of the plant’s emissions can be used, instead of the one per cent of the emissions currently being tested.

A World’s First The test has been running for about half of the time since the equipment was installed in October 2009, says Martin Vroegh, St. Mary’s Cement’s (SMC) environmental manager.

“We’re very excited,” says Vroegh. “As can be expected with a world’s first, we’re learning, but the results are very promising so far… we’re very close to having the ability to go full-scale.”

SMC and its parent company, Brazilianbased Votorantim Cimentos, have been working with Pond Biofuels, of Scarborough, on the algae test for the past three years. The process basically mimics what happened on the Earth millions of years ago: volcanoes spewed gases from the Earth’s core (mainly carbon dioxide, but a few trace elements as well, such as sulphur dioxide) which algae then converted, using photosynthesis, into more algae, as well as oxygen and nitrogen, which are naturally present in the Earth’s atmosphere.

This goo could go on to change the world

pond does, it is essential that the process mimic a healthy pond, instead of creating something completely different than nature.

“It’s a question of how to manage an existing system instead of creating our own ecosystem, so that the algae species interact naturally,” notes Vroegh.

The test already has two aspects working in its favor. First, the process of using carbon dioxide gas as algae food is working in the real world, outside of the sterile confines of a laboratory. Second, SMC and Pond Biofuels are using strains of algae already found in this area, from the Thames River, a mere few hundred metres away.

(Some research firms in the United States are exploring a genetically engineered algae to create biofuels in different settings, raising concerns that a so-called “super algae” could become an invasive species if it escapes a controlled setting, according to a New York Times article.)

Where The Magic Happens But replicating nature isn’t as easy as one might think. From a point about 70 feet up the SMC’s main exhaust stack, 1,000 feet of stainless steel piping runs into the unassuming, insulated shed where the magic happens.

In the shed are three large tanks, as well as a myriad of computer equipment monitoring the test. On the day of the Journal Argus’ visit, two tanks are running different “We’re using SMC engineers now, but (with versions of algae production. the creation of the steering committee) we’ll be able to get university researchers who In the first tank, water and stack gas are eat, live and breathe algae production,” says being conditioned prior to algae being Vroegh. added. The pH levels are being calibrated,

the nutrient content determined and enough time is passing to ensure the carbon dioxide is properly dissolved within the water. As for other trace compounds found in the From The Laboratory To The Real exhaust, including sulphur and nitrous World oxide, they are involved in the process as a Considering that a full-scale algae system “fertilizer” for the algae, says Vroegh.

The resulting algae, with its naturally high would cost millions of dollars, Vroegh says, carbon content, has been successfully “we have to make sure risk is minimized Once the water is ready, algae is implanted used as biodiesel fuel in laboratory. when we go to a full-scale facility.” into the tank, and artificial light is used to Vroegh says a timeline for using the SMCmimic the sun, so that photosynthesis can produced algae is hinged to when the Aside from perfecting the process to take place in the algae and it can absorb process moves from test to reality, as not allow for a full-scale rollout, Vroegh says carbon dioxide while releasing oxygen. » enough algae is currently being made researchers will be especially interested in to fuel the plant or its fleet of trucks. the micro ecology of the process. Since the The Journal Argus was the first in the world process essentially replicates what a natural He adds that there’s been extensive interest from universities in the region to participate in the test and rollout of the full-scale system.

JANUARY / FEBRUARY 2011 www.cemweek.com

31

FEATURE View of the Pond Biofuels Algae Demonstration site adjacent to the St. Marys Cement Plant.

Special Light Allows 24-Hour Testing It’s not a run-of-the-mill bulb powering the photosynthesis, but rather a highly efficient light that is proprietary to Pond Biofuels.

The system allows the test to run 24-hours a day, without having to worry about weather conditions. Vroegh points out that they have also been testing a system that uses a parabolic reflector to harness light from the sun to be used in the tank, similar to how a solar panel captures the sun’s energy.

32

Over in the second tank, a murky, mucky mix of water and algae is bubbling away as oxygen and nitrogen from the atmosphere and the stack gas comes to the surface.

This tank had been running for about twoand-a-half weeks, and was “harvested” two days prior. Ideally, says Vroegh, harvesting would take place at the exact rate of the algae’s growth - and the team was able to make it this happen for one straight week.

“A lot of the hiccups are from the plant shutting down,” whether it is from a power outage or a work stoppage, such as holiday shutdowns, says Vroegh.

www.cemweek.com JANUARY / FEBRUARY 2011

Replicating nature isn’t as easy as one might think

FEATURE

An 8 inch (20cm) hole was cut into side of the smokestack.

Fans were provided by Canadian Buffalo and they draw the stack gasses down 1000 feet (300m) of pipe to the bioreactors.

At harvest time, the water and algae eventually reaches a level that surpasses a drainage point (like a bathtub’s emergency drain near the tub’s top) and it runs off into a harvest tank that draws the algae-water mix into a centrifuge.

“It’s cheaper than using filters that have to be regularly cleaned and replaced,” says Vroegh.

“We looked to apple juice manufacturers and sewage treatment plants to see how they separated solids from liquids.”

best replicate what would happen in nature.

The entire test is computer-monitored, and once the system becomes full-scale, Vroegh says it will be likely be linked to the plant’s main operating computer.

The steering team will also be looking at balancing the end products with the system itself; for example, if coal-fired power plants can use algae as a fuel, different strains or photosynthesis techniques will be used to maximize this potential so that there is a financial bonus to production.

as a source of carbon dioxide; instead of letting it out of the stack, they’ll use it to make biofuels,” says Vroegh.

Theoretically, the next stage would be to increase the scale of the test to onethird of the stack gases, instead of the current one per cent. The study would continue, and then when it proves itself, move up to a full-stage system.

“This is the future of energy,” he says of the prehistoric algae. “And now we can put research into it, finding out what makes it It only takes a half-gram of algae per litre of water to seed the tanks. Vroegh says they are “In the future, it’s very possible that the tick.” BMWeek CemWeek CW Group Coal Week CemWeek CW Group Coal Week BMWeek a trying out a variety of local algae strains to cement industry will be mining limestone CemWeek BMWeek CW Group Coal Week JANUARY / FEBRUARY 2011 www.cemweek.com

33

NOTABLE

PROJECTS

Eco Hopper from B&W Mechanical Handling

Colombia: San Marcos orders Pfeiffer separator upgrade Gebr. Pfeiffer to supply the SLS 800 BK High Efficiency Separator to Cementos San Marcos in Cali, Colombia. The High Efficiency Separator will upgrade the refurbished Raymond coal mill, providing better product fineness, increased mill capacity and improved efficiency of the milling circuit. This order follows another recent contract for a new Pfeiffer MPS “Swing Mill” which will be installed at the same plant in 2011.

Cargotec delivers handling system to Malaysia’s CMS Cement Cargotec received an order for MacGregor cement self-loading/unloading systems to be installed on two 7,000 dwt barges being built in Miri, Malaysia. The barges will trade on Malaysian routes between Kuching and Sibu, and between Kuching and Miri, for CMS Cement. The pneumatic systems will have rated capacities of 300 tph for loading and 250 tph for unloading.

Nuh Cimento orders WHR system from Sinoma The Turkish company based in Istanbul, has ordered a ‘Waste Heat Power Generation 34

Plant’ to generate electric energy and save costs by using waste heat from the cement manufacturing process at its unit. The equipment will be sourced in China and installed by Sinoma. The WRH unit will provide an approximately 25 percent energy saving for the company. Sinoma earlier won a contract with Akcansa cement, part of the HeidelbergCement group, for a 15 MW WHR unit.

with an output of 8,600 kW. The new plant is an innovative energy efficiency project and the largest Kalina Cycle power plant in the world that aims at capturing global cement business opportunities. The Kalina Cycle plant will utilize the waste heat stream of the Khairpur Cement plant to generate renewable and eco-friendly power. The cement plant is currently operated by D.G Khan Cement Company.

Oman Cement begins implementing SAP-ERP system

Brazil: Pecem port installs dust reducing mobile hoppers

Oman Cement has begun its implementation of a new SAP-ERP system, which will help it improve efficiency. It has launched the project to implement an electronic system to manage the business effectively, as it contributes to support the future growth of the company. A second phase of this project, including production and quality control, maintenance, quarrying, and reports of the administration is expected to begin implementation in the second quarter of 2011.

The port of Pecem in Brazil has installed a new design of dust reducing mobile hoppers, to reduce dust emissions from bulk products such as coal and cement. The Eco Hopper is ready to receive an initial 71,000 tons of imported material, consisting of 50,000 tons of slag and 21,000 tons of clinker purchased from China bound for Cimento Apodi’s cement facility in the port.

The Eco Hopper is manufactured by B&W Mechanical Handling, and is loaded from vessels via 20 cubic meter capacity crane grabs. The system integrates purpose built dust filter units into the structural element Pakistan’s Khairpur Cement to get of the hopper, complemented by the B&W new power plant Wasabi Energy Limited secured a contract Flex Flaps system. with FLSmidth to construct a new power plant at Khairpur, Pakistan which implements the Kalina Cycle technology

www.cemweek.com JANUARY / FEBRUARY 2011

NOTABLE PROJECTS

Photo courtesy Cargotec

Turbosonic awarded South American project

Brazil: Cementos Liz inks deal with Votorantim and TCDRI sign contract GE for control system

The $1.2 mm contract from a South American cement plant is for the supply of its proprietary Turbotak ammonia injection technology for the latter’s four cement plants, a statement from the company said.

The equipment will be used for selective non-catalytic reduction (SNCR) of nitrogen oxides (NOx), a combustion by-product that is harmful to the environment. The delivery is scheduled during the current fiscal year ending June 30, 2011. TurboSonic’s NOx control technology relies on patented Turbotak spray atomization technology for generation of ultra-fine droplets.

The $4.5 million contract for GE Intelligent Platforms’s Proficy Process Systems will help control operations at the cement plant, from extraction to packaging. GE said the program will give Cementos Liz lower costs with increased productivity.

Turkey’s Polimeks inks automation deal with Siemens Siemens has secured a contract to supply electrical and automation equipment for Turkey’s Polimeks Insaat Taahhüt ve San. The equipment will be used in Polimeks’ new cement line in Koytendag, Turkmenistan.

The order is handled as a turn-key project

by Siemens, utilizing its local resources for engineering, manufacturing, and supervision and commissioning services.

Siemens is supplying the complete electrical equipment and automation systems including the Cemat process control system based on Simatic PCS7.

ABB teams with Holcim on waste heat system

A US$10,650,000 contract for the supply of four sets of petroleum coke mills has been signed between Brazil’s Votorantim Cimentos and China’s Tianjin Cement Industry Design and Research Institute. The contract with Brazil’s largest industry group marks TCFRI’s entry into the burgeoning South American market.

Financiera y Minera to install CEFICARG

ABB will install its newly developed heat recovery and electrical power production system at the Holcim cement plant in Untervaz, Switzerland. The ABB solution is based on the ORC (Organic Rankine Cycle) technology that allows exhaust gas heat to be turned into clean electricity. Thanks to the re-use of wasted heat as operating power, no fossil energy is required to run the power plant. The system is expected to be in operation at the end of 2011. A future replacement of the existing planetary cooler will increase the power production up to 50%.

Spain’s Cefisa has been awarded a contract for the implementation of its logistic product CEFICARG at the Financiera y Minera (FYM) plant in Arrigorriaga, Bilbao, Spain. Cefisa will provide a raw materials, fuels, cement expedition and transport management system to improve and automate the processes, supervise the fulfilment of quality, security and transportation standards and is integrated with the company’s ERP. Spain’s Financiera y Minera (FyM) is part of the Italcementi Group BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

Coal Week Coal Week

Votorantim awards silo project to CP Brasil The order from Brazil’s Votorantim Cimentos (VC) follows previous MC silos supplied to VC over the last four years. The new silos which will handle raw meal are capable of storing, mixing and dosing a total of almost 40,000 tons of raw material.

Nuh Cimento,Turkey JANUARY / FEBRUARY 2011 www.cemweek.com

35

LEADERS

COMMENT

Africa

Management and the Environment

CemWeek and Prescon had the opportunity to ask Mr. Huydts’ view on three important questions on Africa and management. He shared his thoughts on management challenges, improvement opportunities and priorities for the African cement operation.

How does the "management" of an African Differences in attitude among managers in cement plant differ from other units in different cultures will be evident in these areas, as will differences in legislation and developing markets? market situations. In the high-demand Beside the cultural differences, which always emerging and developing markets, play a role, the management of an African pressure will be on people to focus on the cement plant is not different from that in primary goal of production, while other developed, developing, or other emerging processes may thus receive less attention. markets. That is to say that “managing” still The challenge to management is to make involves the organization of all the processes sure that for example filters are operating properly, that people are using all necessary involved.

PPE, spending sufficient time on preventive While this may seem obvious, in practice maintenance and paying attention to the most (or all) emphasis is typically placed on concerns of neighbors. For these reason, technical solutions that directly influence management of all processes is often short-term profitability: mainly production more difficult in emerging and developing and cost performance. Less attention is given markets. to processes that have less direct, or longer term influence on profitability, or even on What are the biggest opportunities for the viability of the site. Management of improvement within the management environmental issues is one of these issues realm of the African cement operation? and other examples are safety, preventive What are some of the variations you see across the region? maintenance and community relations.

36

www.cemweek.com JANUARY / FEBRUARY 2011

Although old production installations with a lot of impact are still operational in Africa, significant investments are being made in improvements, building new production facilities or replacing old production installations. Cement companies with a policy based on sustainable responsibility will build state of the art installations.

HeidelbergCement group will invest US$890 – 900 Million in the period 2008 -2013 in Africa in improvements, new production facilities and replacing old production installations.

The technical update of cement production in Africa will result in significant improvement of environmental performance. However this ¨technical improvement¨ is only part of the necessary improvement since, when not properly managed, it can turn out to be only a temporary improvement. Furthermore, not all sources of environmental impact can be technically tackled, and installed abatement equipment needs (preventive)

LEADERS COMMENT

Rob Huydts

senior Environmental Manager team

Europe (North / West) Mediterranean - Africa HeidelbergCement Belgium

Mr. Huydts has served in his current role since 2007, prior to which he was the QSE Manager at the HeidelbergCement cement plant in Maastricht, Holland. His expertise includes general management of environmental issues, and he has represented the Dutch cement industry in Twiga Cement plant in Tanzania, Africa (Photo courtesy HeidelbergCement) environmental issues on European level and worked on action plans for improving maintenance in order to assure ongoing some African countries have well developed environmental performance. proper operation. environmental legislation with standards, others are in the process of establishing Since the technical improvement is more environmental legislation and have no being elements of this system) is a critical starting point for the successful manager’s or less a given that is influenced at a standards yet. checklist. Showing model day-to-day broader level, the opportunities for local management for improvement are notably In practice, the requirements from behavior in environmental compliance, related to managing the environmental existing national legislation will all be housekeeping and preventive maintenance issues. Establishing, implementing and complied with (even exceeded) by the will form a solid foundation for successful CemWeek BMWeek maintaining an Environmental Management cement companies with a policy based on and profitable operations. BMWeek CemWeek CemWeek BMWeek System and in the day-to-day practice focus sustainable responsibility when investing on housekeeping, preventive maintenance in improvements, a new production facility and model behavior of management. or replacing an old one. Well-developed Mr. Rob Huydts will give a full presentation national legislation in all countries would on the issues raised in his interview during Besides managing the environmental issues create a level playing field for all cement the 2nd Environmental Cement Africa it is also very important for the cement producers. However, in practice the level Conference 2011, which will take place in industry to improve and manage safety of enforcement will have a major impact Nairobi, Kenya, on the 11th and 12th of performance. The approach for managing in determining how level the playing field May. The conference, which also features an exhibition, a Gala Dinner and a cement environmental issues and safety issues is actually is. plant visit, is a prestigious gathering of quite similar.

What needs to be at the top of the Plant various stakeholders in Africa’s cement To some extent the status of legal Managers' list as a priority for the next industry. For information on participation, the programme and exhibition bookings, requirements will influence the outside year? please visit the website at pressure on performance and the need for improvement in order to comply. There are Establishing, implementing and maintaining www.prescon-int.com differences in status of legal requirements an Environmental Management System in different countries/regions in Africa: (housekeeping and preventive maintenance

JANUARY / FEBRUARY 2011 www.cemweek.com

37

CW G CW G CW G

DATA

SHARE PERFORMANCE

Company (Exch)

Last trade date

52 hi

52 lo

% from 52Hi

% from 52Lo

BORAL LTD FPO (ASX)

3/1/2011

5.98

4.15

-8.03%

32.53%

TITAN CEMENT (Athens)

2/28/2011

21.04

13.16

-22.77%

23.48%

DHAR CEMENT (Bombay)

3/1/2011

1.00

1.00

0.00%

0.00%

INDIA CEMENT (Bombay)

3/1/2011

143.15

81.00

-38.98%

7.84%

JK CEMENT (Bombay)

3/1/2011

214.30

114.00

-37.00%

18.42%

PRISM CEMENT LTD. (Bombay)

3/1/2011

65.90

44.85

-21.85%

14.83%

SAGAR CEMENT(BSE (Bombay)

3/1/2011

214.00

113.00

-37.38%

18.58%

SHIVA CEMENT (Bombay)

3/1/2011

11.49

5.50

-43.26%

18.55%

SHANSHUI CEMENT (HKSE)

3/1/2011

6.60

3.15

-10.76%

86.98%

ANHUI CONCH (HKSE)

3/1/2011

56.50

21.50

-30.00%

83.95%

INDOCEMENT TUNGGA (Jakarta)

3/1/2011

19,400.00

12,750.00

-26.03%

12.55%

HOLCIM INDONESIA (Jakarta)

3/1/2011

2,575.00

1,760.00

-28.16%

5.11%

SEMEN GRESIK (PER (Jakarta)

3/1/2011

10,350.00

7,250.00

-16.91%

18.62%

TONGYANG CEMENT & (KOSDAQ)

2/28/2011

4,475.00

1,675.00

-58.66%

10.45%

ASIA CEMENT (KSE)

2/28/2011

55,100.00

41,350.00

-19.42%

7.38%

LAFARGE MALAYAN C (Kuala Lumpur)

3/1/2011

8.11

6.06

-9.49%

21.12%

YTL CEMENT BHD (Kuala Lumpur)

3/1/2011

4.85

3.80

-1.86%

25.26%

CIMPOR R (Lisbon)

2/28/2011

5.75

3.91

-12.71%

28.26%

STEPPE CEMENT (London)

2/28/2011

73.75

39.00

-33.56%

25.64%

CEMENTOS PORTLAND (MCE)

2/28/2011

20.70

11.06

-25.12%

40.14%

GRUPO CEMENTOS (Mexico)

2/28/2011

56.50

38.00

-15.04%

26.32%

BUZZI UNICEM (Milan)

2/28/2011

11.79

7.00

-13.06%

46.43%

CEMENTIR HOLDING (Milan)

2/28/2011

3.19

1.78

-27.59%

29.59%

ITALCEMENTI RSP (Milan)

2/28/2011

5.23

2.96

-29.67%

24.26%

ASSOCIATED CEMENT (NSE)

3/1/2011

903.60

415.05

8.64%

136.53%

ANDHRA CEMENTS LI (NSE)

3/1/2011

23.70

18.50

-51.05%

-37.30%

BINANI CEMENT LIM (NSE)

3/1/2011

96.60

58.00

-9.94%

50.00%

BURNPUR CEMENT LI (NSE)

3/1/2011

15.75

10.20

-47.30%

-18.63%

DECCAN CEMENTS LI (NSE)

3/1/2011

248.00

156.10

-47.18%

-16.08%

ITD CEMENTATION I (NSE)

3/1/2011

292.40

174.20

-31.29%

15.33%

MADRAS CEMENTS LT (NSE)

3/1/2011

139.60

95.50

-32.66%

-1.57%

MANGALAM CEMENT L (NSE)

3/1/2011

128.00

46.25

-12.97%

140.86%

CRH PLC AMERICAN (NYSE)

2/28/2011

29.44

14.76

-21.64%

56.30%

CEMEX, S.A.B. DE (NYSE)

2/28/2011

12.60

7.46

-28.65%

20.51%

EAGLE MATERIALS I (NYSE)

2/28/2011

34.99

15.91

-7.63%

103.14%

TEXAS INDUSTRIES, (NYSE)

2/28/2011

47.42

27.28

-14.00%

49.49%

CIMENTS FRANCAIS- (Paris)

2/28/2011

81.50

57.85

-15.46%

19.10%

LAFARGE (Paris)

2/28/2011

58.93

35.57

-25.43%

23.55%

ANHUI CONCH CEMEN (Shanghai)

3/1/2011

45.59

14.50

-22.29%

144.34%

FUJIAN CEMENT CO. (Shanghai)

3/1/2011

9.91

6.35

2.32%

59.69%

HUAXIN CEMENT CO (Shanghai)

3/1/2011

3.59

1.93

-7.52%

72.02%

TAIWAN CEMENT TWD (Taiwan)

3/1/2011

35.20

24.60

-15.91%

20.33%

ASIA CEMENT CORP (Taiwan)

3/1/2011

33.90

25.65

-9.14%

20.08%

CHIA HSIN CEMENT (Taiwan)

3/1/2011

17.90

12.45

-10.06%

29.32%

LUCKY CEMENT TWD1 (Taiwan)

3/1/2011

8.59

6.81

-15.60%

6.46%

HOLCIM N (VTX)

2/28/2011

85.00

59.65

-19.76%

14.33%

HEIDELBERGCEMENT (XETRA)

2/28/2011

54.00

30.86

-6.06%

64.39%

38

www.cemweek.com JANUARY / FEBRUARY 2011

DATA 50d Mov Avg

200d Mov Avg

% from 50d MA

% from 200d MA

5.10

4.70

7.87%

16.93%

-

-

N/A

N/A

1.00

1.00

0.00%

0.00%

95.29

107.57

-8.33%

-18.80%

P/E (ttm)

P/Sales 0.21

Company (Exch) BORAL LTD FPO (ASX) TITAN CEMENT (Athens) DHAR CEMENT (Bombay)

7.83

0.68

INDIA CEMENT (Bombay)

133.01

155.64

1.49%

-13.26%

4.22

0.51

JK CEMENT (Bombay)

49.70

55.09

3.63%

-6.52%

9.47

0.86

PRISM CEMENT LTD. (Bombay)

130.48

136.31

2.70%

-1.69%

0.46

SAGAR CEMENT(BSE (Bombay)

7.15

8.69

-8.86%

-24.95%

41.06

5.87

5.50

0.42%

7.10%

20.47 33.04

36.32

33.52

8.89%

17.97%

14,608.80

16,787.10

-1.77%

-14.52%

1.98

SHIVA CEMENT (Bombay) SHANSHUI CEMENT (HKSE) ANHUI CONCH (HKSE) INDOCEMENT TUNGGA (Jakarta)

1,972.06

2,256.44

-6.19%

-18.01%

HOLCIM INDONESIA (Jakarta)

8,427.94

9,186.36

2.04%

-6.38%

SEMEN GRESIK (PER (Jakarta)

1,925.15

2,157.59

-3.90%

-14.26%

TONGYANG CEMENT & (KOSDAQ)

44,471.20

44,536.50

-0.16%

-0.31%

ASIA CEMENT (KSE)

7.75

7.52

-5.30%

-2.44%

LAFARGE MALAYAN C (Kuala Lumpur)

4.76

4.40

-0.02%

8.07%

YTL CEMENT BHD (Kuala Lumpur)

4.94

4.93

1.55%

1.75%

CIMPOR R (Lisbon)

53.58

47.84

-8.55%

2.42%

13.21

13.45

17.36%

15.27%

45.78

43.08

4.84%

11.42%

STEPPE CEMENT (London) CEMENTOS PORTLAND (MCE) 1,739.29

1.89

GRUPO CEMENTOS (Mexico)

9.49

8.34

7.96%

22.86%

30.15

1.61

BUZZI UNICEM (Milan)

2.22

2.23

4.18%

3.53%

17.75

0.45

CEMENTIR HOLDING (Milan)

14.37

0.21

3.57

3.48

3.12%

5.81%

786.51

618.19

24.82%

58.80%

ASSOCIATED CEMENT (NSE)

ITALCEMENTI RSP (Milan) ANDHRA CEMENTS LI (NSE)

19.24

19.24

-39.70%

-39.70%

88.28

83.83

-1.45%

3.78%

11.22

11.46

-26.01%

-27.55%

BURNPUR CEMENT LI (NSE)

BINANI CEMENT LIM (NSE)

163.07

164.23

-19.67%

-20.23%

DECCAN CEMENTS LI (NSE)

236.56

239.69

-15.07%

-16.18%

ITD CEMENTATION I (NSE)

114.85

107.92

-18.15%

-12.90%

MADRAS CEMENTS LT (NSE)

112.25

73.90

-0.76%

50.74%

MANGALAM CEMENT L (NSE)

21.68

19.11

6.43%

20.71%

9.83

9.23

-8.52%

-2.57%

29.28

25.96

10.39%

24.49%

21.82

0.69

CRH PLC AMERICAN (NYSE)

0.62

CEMEX, S.A.B. DE (NYSE)

50.56

3.03

EAGLE MATERIALS I (NYSE)

40.46

37.33

0.79%

9.24%

1.82

TEXAS INDUSTRIES, (NYSE)

68.02

66.38

1.29%

3.80%

15.67

0.87

CIMENTS FRANCAIS- (Paris)

44.20

2.26

45.66

43.41

-3.75%

1.24%

30.18

26.12

17.40%

35.65%

LAFARGE (Paris) ANHUI CONCH CEMEN (Shanghai)

7.87

7.65

28.85%

32.58%

FUJIAN CEMENT CO. (Shanghai)

3.19

2.55

4.10%

30.37%

HUAXIN CEMENT CO (Shanghai)

31.02

32.03

-4.57%

-7.57%

TAIWAN CEMENT TWD (Taiwan)

31.23

31.36

-1.39%

-1.79%

ASIA CEMENT CORP (Taiwan)

16.55

16.09

-2.72%

0.05%

CHIA HSIN CEMENT (Taiwan)

7.71

7.71

-5.94%

-5.96%

68.40

66.05

-0.30%

3.26%

48.70

41.56

4.17%

22.07%

LUCKY CEMENT TWD1 (Taiwan) HOLCIM N (VTX) 0.59

HEIDELBERGCEMENT (XETRA)

JANUARY / FEBRUARY 2011 www.cemweek.com

39

MARKET

UPDATE

Divided Fortunes:

Look-Back On

2010

Cement: 2009 - 2010 Tonnage Change (mm tons) 6 4.8 4 1.7

2 1.1 0.5 -

Buzzi Unicem

Cemex

0.9 CRH -0.2

Cimpor

-2

Heidelberg Cement -0.9

Holcim

Italcementi

Lafarge

Vicat

-1.3

-4 -5.5

-6

-8

he global cement makers showed mixed results in 2010, as demand for cement, aggregates and ready mixed concrete started to recover. Taken as a group, the nine global heavy building material companies increased their sales in 2010 to a combined US$554.9 billion. The sales volume showed nascent signs of recovery as it rose, albeit modestly at 0.2 percent, from US$553.8 billion in 2009. Naturally, within the sales total there were significant discrepancies between manufacturers, markets and to some extent product segments. In particular, divergent fortunes between developed and emerging markets shaped the sales profiles of the different groups. In a notable change, Holcim passed Lafarge in terms of cement delivery volumes to become the biggest cement company in the group based on volume.

40

Vicat and Buzzi Unicem achieved increased building material sales for the year; however Italcementi and HeidelbergCement, like Lafarge, saw volumes stagnate or decline.

French firm Vicat showed double digit growth in both cement (11.5 percent) and aggregate (11.2 percent) sales volumes.

For the year, it dispatched a reported 16.2 million tons of cement, and 20.8 million tons of aggregates. Concrete sales also increased 8.5 percent to 7.7 million tons. Despite this, its turnover dipped slightly to US$2.5 billion, compared to US$2.7 billion in 2009.

Lafarge’s cement and aggregates sales fell 3.9 percent and 1.4 percent, respectively, and turnover for the period also fell to US$19.7 billion. Lafarge delivered 135.7 million tons of cement for the year, positioning it as the second largest cement company in our comparison universe based on volumes.

www.cemweek.com JANUARY / FEBRUARY 2011

Italcementi cement dispatches fell 2.3 percent to 54.4 million tons, while aggregate sales dipped 5.7 percent to 36.7 million tons. Its total turnover was also lower, at US$5.8 billion, despite 1.4 percent gain in concrete sales volumes to 11.4 million tons.

HeidelbergCement also turned in somewhat softer figures for the year; its cement sales fell 1.1 percent, while both its concrete and aggregate sales were flat, but turnover in US dollar terms decreased to US$14.4 million, though up 5.8 percent in Euro-terms.

Meanwhile, Cimpor and CRH turned in more mixed results, with some product categories gaining and other declining.

Cimpor benefitted from a relatively high emerging market exposure and booming Brazilian business. Volume sales for its cement business increased 3.3 percent to 28.3 million tons, but its aggregates and

JANUARY / FEBRUARY 2011 www.cemweek.com

41

FLASHBACK

Cement news map News density map for the last two months

India, China and the US saw an eventful last two months with high news flow on CemWeek.com. Events in other important emerging markers including Egypt, Saudi Arabia, Russia and Brazil made these markets feature prominently on CemWeek.com

IN THE NEXT ISSUE Interview: Trond Waerp and Finn Arnoldsen on West Africa

Discussions: Bursik at the Baumit Group

Feature: Improve and impact

Improving through data analysis, Review of one of the world’s most dynamic Interview with the Austrian company's employing practical benchmarks. regions with experts from Norway’s Africa managing director Mr. Georg Bursik Consulting Services

Silo cleaning done right

Spain-based Blancon explains how they help the CEO by cleaning silos

Country snapshot: Brazil & Syria

Highlights from two dynamic markets

Coupling, decoupling and re-coupling

Feature: Mother Russia

Emerging and frontier market linkages in the global cement market.

Discussions: Bursik at the Baumit Group

Interview with the Austrian company’s managing director Mr. Georg Bursik

Feature: Mother Russia

Will she keep her place as one of the four top growth markets?

42

www.cemweek.com JANUARY / FEBRUARY 2011

Subject to change

PREFERRED PARTNER PROFESSIONAL RESULTS  (+34) 917.231.502  (+34) 917.952.529

worldwide service cwgrp.com

Calle La Resina 37 Nave 11 28021 Madrid, Spain

| CemWeek 2010 Middle East & Africa Cement Sector Survey 19

www.blancon.net

Cool Cool technology

technology

™ New New FLSmidth FLSmidth Cross-Bar Cross-Bar™ Cooler Cooler The new FLSmidth Cross-Bar Cooler is the latest development in The new FLSmidth Cross-Bar Cooler is the latest development in ™ Newtechnology.

FLSmidth Cooler cross-bar It delivers Cross-Bar consistently high thermal efficiency,

cross-bar technology. It delivers consistently high thermal efficiency, The new FLSmidth Cross-Bar Cooler is the latest development in minimises minimises maintenance maintenance and and maximises maximises availability. availability. Its Its modular modular cross-bar technology. It delivers consistently high thermal efficiency, design design ensures ensures rapid rapid installation installation and and great great flexibility flexibility for for complete complete or or minimises maintenance and maximises availability.gathered Its modular partial upgrades.

All made possible by experience from partial upgrades. All made possible by experience gathered from design ensures rapid installation and great flexibility for complete or more more than than 230 230 cross-bar cross-bar cooler cooler references references and and extensive extensive R&D. R&D. And And partial upgrades.

All made possible by experience gathered from all for a very economical investment.

How cool is that? all for a very economical investment. How cool is that? more than 230 cross-bar cooler references and extensive R&D. And all for a very economical investment.

How cool is that?

For For more more information information please please visit visit us us at at www.flsmidth.com/cool www.flsmidth.com/cool For more information please visit us at www.flsmidth.com/cool