CemWeek Magazine, Issue 4

CemWeek CemWee MAGAZINE

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

SEEING IT THROUGH

AUGUST / SEPTEMBER 2011

CARIBBEAN CEMENT

CemWee CemWee BMWeek the numbers of a recovery

CEO Jose Magrina on Egypt's Arabian Cement Co

EXPAT PROGRAMS

tools to quantify shareholder value

CENTENARIANS lessons from four Old World cement plan ts

News

|

Analysis

|

Market Coverage

|

Interviews

|

People Moves

Letter from the publisher and editor

CemWeek EDITOR’S NOTE CemWeek CemWeek CemWeek BMWeek BMWeek BMWeek MAGAZINE

Drawing Longitudinal Lines The past few months have in many parts of the world continued to see heightened stock market volatility and perhaps nascent inflection points in economic and construction material trend lines. Sometimes it takes a look-back to anchor views about the future and remember cyclical patterns.

Sometimes it takes a really long look back to look forward.

In this spirit, CemWeek Magazine takes a moment to take a lighter look at the last century of the cement sector. We do so as some cement plants celebrate their 100th years of operation in 2011, looking closer at four operations in the “Old World” that have not only stood the test of time but helped create new national industries: they have broken new engineering ground and reemerged from the brink (see the feature “1911 – 2011 a MiniRetrospective: European Centenarians” on page 4).

Continuing CemWeek’s perspective that the cement industry is by nature both “local business” and “big world,” Arabian Cement Company CEO Jose Magrina discusses the decisions that led Spain’s La Union to join forces with an Egyptian cement company and the challenges the company has faced in carving out a space in the market (page 12).

Staying on the executive agenda, we look at a topic that is highly relevant for the mobile cement sector professional: the role of the expatriate. Leveraging CemWeek’s parent organization, the CW Group, we pick up the expat topic from a new angle to share a potential framework for thinking about the shareholder return on expatriate programs to help promote critical thinking around a traditionally soft issue (page 18).

www.cemweek.com

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

staffbox

CW Group CW Group

Robert Madeira

cemweek publisher head of cw group research

JENNIFER RIDGEWAY

CW Group

project editor

Paolo Dela Rosa art director

Anthony Fitzgerald advertising

Diana Heeb Bivona pat ryan Claudia Stefanoiu John Thompson

contributing writers researchers

&

The CW Group has recently released some new market research, which we highlight in this issue; CemWeek Magazine takes a high-level, end-of-summer look at the Caribbean cement market, distilling a sampling of key points from this rigorously bottoms-up research.

The world outlook is getting murkier by the day it seems in many markets across the globe.

As we enter a period of less visibility, it is evermore important to examine the world and business clinically and methodically. We hope this issue helps frame some of the topics confronting the industry, providing a few examples and the initial steps for a comparative baseline.

We welcome your feedback on this issue and are always interested in suggestions for future content. Contact us at editor@cemweek.com.

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.

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

The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers.

Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader's particular circumstances.

Robert Madeira

Jennifer Ridgeway

publisher and head of research

project editor

The ownership of trademarks is acknowledged. No part of this publication or any part of its contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

CW Group To subscribe please visit www.cemweek.com/subscribe

Front cover: Cemex Castillejo cement plant.

Photo courtesy of Cemex.

CONTENTS FEATURES 4 European Centenarians The 100-year histories of four cement plants 12 Leaders Comment Arabian Cement Co. CEO Jose Magrina on blending a Spanish company with an Egyptian cement enterprise 22 Caribbean Cement An unsettled recovery in the islands’ cement markets causes lingering concerns

12

jose magrina

22

4

caribbean cement

centenarians

DEPARTMENTS Numbers in Brief 2 The current state of equipment orders and backlogs

Technology 36 New research from MIT on the life of concrete

Cement companies in 1H2011 20 Looking at the performance for the first half of the year

Regional Reports 26 America 28 Europe, Middle East & Africa 32 Asia Pacific 33 South Asia

Country Snapshot 40 Russia - Comprehensive cement facilities research

From our Industry Partner 34 Building materials update

Management Tactics 18 Quantifying the value of expat programs Projects & People 42 Decision making and the problem of 19 People on the move over-thinking 37 Update – Lafarge mining resumes in Meghalaya, India

38 Notable projects and suppliers Data Share Performance 44 Overview of stock performances for cement companies

The resource for global cement prices The CW Group's Global Cement Trade Price Report includes current pricing for cement delivered through the retail channel as well as import and export pricing for major markets around the world.

Worldwide monthly cement prices

■■ Major market retail prices ■■ Regional retail price indices ■■ Covers grey and white products

Regional monthly cement price indices: ■■ ■■ ■■ ■■

Mediterranean basin North America & Caribbean East & Southeast Asia And other regions

Global import and export cement prices: ■■ Major market trade flows ■■ FOB export prices ■■ CIF import prices

Global market cement prices.

Import & export trade prices.

All in a single must-have resource.

Annual subscriptions include four quarterly 50+ page reports:

■■ Single user: USD2,300 ■■ Multi-user (max 3-users): USD3,800 ■■ Corporate use: Upon request

Contact us at sales@cwgrp.com to discuss this unique offering further.

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

CW Group Cement Plant Equipment Tracking Indices:

Shedding light on the state of equipment orders and backlog

Cement Equipment Order Intake index ollowing a slow start in the first quarter of 2011, the CW Group Cement Equipment Order Intake (CEOI) index plummeted to 68.0 for that quarter, its lowest value since the inception in Q4 2009. The second quarter of 2011 saw orders grow and the CEOI index rose to 91.6. Broadly, the equipment sector expects to expand further in the second half of 2011, as major orders have already been booked by the cement companies. FLSmidth estimates that in 2011 the new contracted cement kiln capacity global market (exclusive of China) is estimated to reach 65 million tons, with India perceived as the biggest growth driver as 20 million tons are expected to be added by the Indian cement industry.

Cement Equipment Order Intake (CEOI) index

CEOI index (4Q2009=100)

160

80

0

4Q2009

1Q2010

2Q2010

3Q2010

4Q2010

1Q2011

2Q2011

Source: CW Group

Cement Equipment Order Backlog index n the other end, the CW Group Cement Equipment Order Backlog (CEOB) index remained virtually unchanged through the first half of 2011. The CEOB index softened somewhat in the second quarter of 2011, falling to 104.7 from 106.9 in the first quarter. Compared to Q2 2010, the index is 6.1 points lower, but the decline in the backlog index is in large part driven by weak order intake in earlier quarters. With the order intake improving in Q2 2011, the backlog indicator is expected to improve, barring cancellations.

Cement Equipment Order Backlog (CEOB) index

CEOBindex (4Q2009=100)

130

110

90 4Q2009

2

www.cemweek.com

1Q2010

2Q2010

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

3Q2010

4Q2010

1Q2011

2Q2011

Source: CW Group

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

Calle La Resina 37 Nave 11 28021 Madrid, Spain

www.blancon.net

FEATURE

Aerial view of Cemex Castillejo, Spain.

1911-2011 a mini-retrospective:

European centenarians 4

www.cemweek.com

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

FEATURE

A number of cement plants celebrate their hundred-year anniversaries in 2011, and with this milestone it seems appropriate to acknowledge the contribution of some of these ‘centenarians’ of the cement industry. CemWeek looks at four of Europe’s longest-operating cement plants for a historical perspective on the cement industry and to trace some key developments through the last century. he 1824 invention of Portland cement as an amalgam of raw materials released cement manufacture from its reliance on natural deposits. Although the two types of product—naturally occuring and Portland cements—at first co-existed, as

the 19th century came to a close, building materials technology had advanced such that Portland cement was both advantageous to manufacture and in high demand. The Castillejo plant in Spain, the Odra plant in Poland, Beckum-Kollenbach in Germany and the Wopfinger plant

in Austria are among several European plants that trace their operations back to 1911. A century later, each plant is still in operation, an accomplishment that attests to the commitment of plant management, workers, and the surrounding communities.

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

5

FEATURE

Cemex Castillejo in Toledo, Spain

was 4.36 meters in diameter. As a result, the Castillejo plant was able to reach an annual (Toledo, Spain) capacity of 800,000 tons. To power the expanded plant, the hydroelectric capacity In the early 1900s, Spain was a largely was increased from an output of 1,500 to agricultural nation, and the decision to 3,000 kilowatts per hour after the drop on build a new cement plant in Toledo, in the river was re-engineered. Improvements the region south of Madrid, created a new were also made to the storage and shipment model of industrial development for Spain. of cement as two silos of 7,500 tons were Construction of the Castillejo facility commenced in 1905 by FLSmidth with the Production stopped in 1936 during installed, and two twelve spout, rotating aim to produce Portland cement at an initial the Spanish Civil War, but operations bagging units were added for a capacity of production rate of 30,000 tons of cement resumed in mid-1939 and output steadily 4,000 bags per hour. per annum. A waterfall on the Tagus River increased from 30,000 to 60,000 tons per provided hydroelectric power for the plant year. In the early 1950’s, a major upgrade In the 1970s, Castillejo embarked on a series and remained the main power source into boosted capacity to 330,000 tons following of major expansions. In 1972, a new cement installation of a new mill unit. mill with an output of 95 tons per hour was the 1950s. introduced, and a new silo with a capacity By 1966, the plant had converted to a dry of 8,000 tons was built. By 1974, the clinker Even in its early stages, the Castillejo plant production process using two equipment production line had been expanded to 1,800 innovated in terms of production and other supplied by FLSmidth, including a new tons a day and was redesigned to include a activities. The original plant was the first new preheater that reduced the length of the cement mill and a 155 meters long kiln that in Spain to use a wet BMWeek process CemWeek production CW Group Coal Week

Cemex Castillejo

6

www.cemweek.com

line and in the 1920s was producing 30,000 tons annually. Initially, raw material was transported from the quarries using animals, but these were later replaced by motorized carriages. Additionally, the plant found that it could use clinker to warm the carriages of the company trains in the winter months.

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

FEATURE

kiln, increasing annual production to 1.4 million tons. In 1980, the factory pioneered again by moving away from coal to fuel the calcination process. Again working with FLSmidth, the production line was reorganized in the early 1980s to automate the loading of cement, and one of the kilns had its cooler configuration changed, increasing production to 1,700 tons a day.

In 1992, the plant was acquired by Cemex from the original family owners of what had become Portland Iberia. Castillejo now forms one of eight plants in and around Spain owned by Cemex. The change in ownership saw another major round of investment and innovation, in particular to reduce energy consumption. The plant experimented with a variety of alternative fuels, including tires and bone meal from the nearby abattoirs.

In addition, steps were taken to reduce

Worker at an early generation kiln

dust emissions. Such changes have been ongoing, and in 2006 electrostatic filters were replaced with a Defis system to reduce dust emissions below 50mg. Meanwhile, the surrounding countryside, part of the former quarry, was planted with Merlot, Syrah and Cabernet Sauvignon.

The Castillejo plant has seen business cycles wax and wane since its inception,

but the plant has inarguably become an important element not only to Toledo, but also to Cemex Spain. The economic climate prevailing in Spain is one of the toughest in decades. The Castillejo plant’s investments in efficiency will serve it well in navigating through the turbulent times the country’s cement makers are facing.

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

7

FEATURE

Cementownia Odra outside Opole, Poland

Although three of the old rotary kilns were decommissioned as a result, production was able to be maintained at 1,200 tons of clinker a day. The new plant has reduced heat usage, energy consumption and decreased emissions of gases and dust. As Odra heads into its second centenary, the plant is actively developing its usage of alternative fuel, including using combustible domestic waste from the nearby town of Opole.

during World War II, Odra re-opened in 1951. The reconstruction, using equipment from Czechoslovakia, was the largest in the Polish cement sector at the time, as it initially built two new production lines with two more following in 1952. Work to modernize the unit continued, and large improvements were made between 1954 and 1956. The company expanded in the 1960s and 1970s as well. As a result, the company saw steady investment into the mid-1970s as it came to produce 895,000 tons annually.

Cementownia Odra (Opole, Poland)

The Cementownia Odra unit near Opole in Poland is in reality closer to 110 years old, since the original plant opened in 1899 using shaft kilns. However, these were completely replaced in 1911 when the Opole-Port plant was in effect largely re-built as three new wet-process rotating kiln production lines were installed. At this time, daily capacity was raised to 250 tons. By the late 1930s, after several improvements, annual production at Odra had reached 200,000 In 1993, Odra was privatized and bought by Miebach Projektgesellschaft of Dortmund, tons.

Germany. The new company launched a full Cementownia Odra stands today as an plant modernization initiative. The clinker example of how a single plant can embrace production lines were converted into more multiple technological developments as it energy efficient dry process lines in 1999, evolves and expands. Although destroyed allowing a far more economical production.

UK: Eddystone Lighthouse built with cement that hardened under water

1756

1822

UK: Invention of 'Portland cement'

1824

UK: Patent for "a new cement or artificial stone"

8

www.cemweek.com

UK: Burned the cement raw material at high temperature until the mass was nearly vitrified producing the modern Portland cement.

1828

1838

UK: First plant founded at Wakefield, Yorkshire, to manufacture Portland cement

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

1866

In 2011, the company embarked on a celebration of its centennial and organized its first major open day event at the plant.

More than 2,000 people attended, prompting the cement maker to announce that the event will be an annual occurrence from here on. Brought back from being virtually destroyed, the Odra plant has secured a key role in the Polish cement sector.

USA: First import of Portland cement

1868

USA: Coplay Cement Company near Allentown, PA.

USA: First Portland cement plant set up at Coplay, Pa.

1870 RUSSIA: First cement plant

1871

1872 USA: First Portland cement in North America

FEATURE cement sector is nearing its completion.

Additionally, the company notes that 80 percent of its products are used within a radius of 300 kilometers, thus improving environmental performance by reducing transport emissions.

As with other plants across the globe, Wopfinger is now actively developing alternative fuels in order to reduce carbon emissions. In 1995, Wopfinger added a five-stage preheater tower to its cement production line and expanded alternative fuel usage. In 1992, the plant won awards for a paper sludge recycling project.

Wopfinger Cement Plant

baumit Wopfinger (Wopfing, Austria)

In June 2011, the Wopfinger plant outside the town of Wopfing in Austria held its centennial celebrations. Wopfinger differs from the other plants covered in this story, as the cement plant in fact originated as a lime company with 17 employees in Piesting, Austria. In 1940, the lime company added two Alois Schmidt lime shaft kilns, later followed by two more modern units in 1957. However, the company has since grown into an important regional building materials group with 4,700 employees. In 1980, Baumit Wopfinger opened its cement production line at the unit, with a 1,000 ton

INDIA: Cement Manufacture in Calcutta

1889

per day, 50 meter by 3.5 meter rotary kiln.

Today, 512 plant employees work in the town of Wopfing.

Wopfinger, owned by Schmid Industrieholding, ascribes its longevity to an ongoing commitment to quality and technological innovation. In the 1960s, Wopfinger was involved with the development of the Maerz kiln, with its particularly low heat consumption, and specialist forms of cement such as “Spezikalk” and “Baumit.”

“We have set ourselves the goal of making Wopfinger the cleanest building materials plant in the world,” said Robert Schmid, CEO of Baumit. In that spirit, the world’s first regenerative thermal oxidizer in the

1895

SOUTH AFRICA: First cement plant in Afrcia

The evolution of the Wopfinger plant, the 100-year-old lime unit that expanded to also manufacture cement, has not only spanned decades and products. In the face of everstricter European regulations, the plant has also sought new ways to improve its environmental footprint while maintaining production levels, investments that will serve the unit well going into the future.

SPAIN: Camex Plant at Castillejo in Toledo GERMANY: Cemex Plant at Kollenbach POLAND: Odra Cement AUSTRIA: Lafarge Cement

USA: Atlas Cement Company improved the technology of the rotary kiln and fuel economy by replacing fuel oil with powdered coal dust

CUBA: First cement plant in Latin America

1892

A decade later, the plant in 2002 introduced a new production process that reduced CO2 emissions such that the end product could be used as a variant to traditional concrete.

The Slagstar product, a granulated blast furnace slag cement, results in a 90 percent reduction in CO2 emissions. The lack of burning is in contrast to conventional cement production and means that no CO2 or NOx emissions are produced apart from those associated with the generation of the requisite electrical power and with drying the granulated blast furnace slag.

1897

1899

BRAZIL: First cement plant in mainland Latin America

1902

1911

USA: First long kilns developed at Edison Portland Cement Works

AUGUST/SEPTEMBER 2011

USA: Louisville Cement patents the first masonry cement in North America

1914

1917

AUSTRALIA: First cement plant INDIA: First cement plant at Madras

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

9

FEATURE

Early 1950s pioneering technology

Modern day Cemex Beckum-Kollenback plant

Cemex Beckum-Kollenbach (Beckum-Kollenbach, Germany)

One hundred years ago, Arnold Bleckmann, Franz and Josef Bomke came together to open the “Beckumer Portland-Zementwerk Bomke & Bleckmann,” the forerunner of Cemex West Zemen’s Beckum-Kollenbach works. The plant was officially founded in 1911, with its first shipment of cement released on March 15, 1913. Today, the Cemex plant at Beckum-Kollenbach in Germany is investing heavily in alternative fuels.

or preheaters. Research at equipment manufacturer KHD Humboldt at the time was exploring ways to make plants more efficient with work focusing on suspensiontype heat exchangers. A test pilot of the new technology was set up at Kloekner’s Oslebshausen plant near Bremen, Germany.

On May 12, 1953, the new technology was rolled out on a commercial basis as the Beckum-Kollenbach plant broke new ground in cement production with the first rotary kiln with a four-stage cyclone preheater in the world. For the first time, the preheater tower allowed the heat generated After World War II, Germany had a huge in the rotary kiln to be captured and reused need for cement to rebuild the country. in the production process. This allowed the All cement kilns of the day were of wet plant to heat the cold raw meal to around or semi-wet type with no successful 800 Celsius, making a substantial savings of up to 50 percent of heat, reducing overall implementations of waste heat recovery CW Group Coal Week CemWeek BMWeek 10

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

costs and increasing production capacity of the kiln up to 70 percent.

The plant long worked with KHD in its search for improved processes. Although effective at reducing costs, the mixing of gases and solids produced an increased amount of dust. In response, the BeckumKollenbach plant developed the first KHD electrostatic precipitator, and the heat exchanger technology was licensed across the globe.

Beckum-Kollenbach was acquired by Cemex in 2005 from the RMC Group and has played a major role in the overall drive by the cement industry in Germany to adapt to the use of alternate fuels to reduce carbon emissions.

FEATURE

OPOLE

BECKUM-KOLLENBACH

WOPFING

Polysius factory

The Role of the Builders

TOLEDO

The Next 100 Years While the success of these centenarian plants—Castillejo, Odra, BeckumKollenbach and Wopfinger—has been assured through cycles of investment, modernization and expansion, each plant’s ability to thrive, it seems, most singularly rests on an ability to innovate, creating new

The process of technological innovation in the cement industry has been one of partnership between the cement manufacturers and the equipment firms that serve the industry. Many of these companies are well into their centennial years and have been central to enabling the cement companies to evolve into the modern production works that they are today.

directions for themselves and the cement industry as a whole. Though tough trading conditions prevail in much of the developed markets, business cycles come and go. The longevity of these cement units serves as an example of survival and renaissance in following challenging times to come out Firms that date from the late nineteenth century CW Group Coal Week CemWeek stronger and more competitive than ever. BMWeek CemWeek CW Group Coal Week BMWeek include the German CemWeek BMWeek CW Group Coal Week firm KHD Humboldt Wedag, founded in 1856 to manufacture mining machinery, and FLSmidth's first FLSmidth of Denmark, headquarters founded in 1883 to build machinery for Denmark’s brick and tile industry. By the late 1880s, FLSmidth had started working with the cement industry, building its first cement plant at Limhamm, Sweden in 1887. By 1898, the firm had combined the concepts of the tube mill and the rotary kiln to fundamentally alter the cement manufacturing process. This type of innovation is indicative of global progress in the cement industry that occurred worldwide in this time period.

In Europe from 1870 to 1890, Polysius developed machines for the crushing and grinding of raw materials as well as the construction of cement works.

In 1898, Polysius built Europe's first rotary kiln and in 1907 began building the first plant in North Africa in Egypt. The firm continued to innovate, developing the Lepol process in the 1920s that reduced fuel consumption by a third through improved burning in the rotary kiln.

Tractor moving a kiln to the Clot del Moro plant in Spain under construction in 1911

CENTENARIAN CEMENT PLANTS TODAY Company

Plant

LOCATION

cAPACITY

CEMENTOWNIA ODRA

Odra

Opole, Poland

0.5 mtpy

CEMEX SPAIN

Castillejo

Toledo, Spain

1.8 mtpy

CEMEX WESTZEMENT

Beckum-Kollenbach

Beckum-Kollenbach, Germany

0.8 mtpy

WOPFINGER

Wopfinger

Wopfing, Austria

0.3mtpy

These innovations, leading up to 1911 and beyond, fueled the cement industry’s expansion. Engineering, foundry and equipment supply firms enabled the construction of today’s centenarian plants and are leaders in new technologies that will carry these plants into another century.

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

11

LEADERS

COMMENT

Arabian Cement Company:

SEEING IT THROUGH Founded in 1997, Egypt-based Arabian Cement Company became a member of Spain’s Cementos La Union group in 2004. In the past decade, ACC has faced a crumbing economy, licensing conflicts and political unrest. ACC’s CEO Jose Magrina spoke with CemWeek about the management decisions that have secured the company’s position within the Egyptian cement sector going into the future.

The past six turbulent in market and happened as Egypt?

months have clearly been business environment that will attract Egypt. What long-term further investment on higher rates than the structural changes have ones witnessed in 2008 and 2009. a result of the events in In the long term, how does a cement company with a single plant compete in a In the short term, structured projects and market with multi-plant companies? further foreign and local investments have completely stopped, decreasing demand by We can divide the market in Egypt into an estimated five to ten percent compared to three groups: on one side we have the the previous year. Also, this has happened in large multinationals that acquired cement an environment where supply has increased companies from the Egyptian government by more than ten million tons per year in during the end of the 1990s or beginning of less than six months. the 2000s. They are well managed, but they have old, non-efficient assets that require But in the long run, ACC remains high maintenance and operational costs. committed to the country and believes that the political changes will bring a stable Then we have local companies that built CW Group Coal Week CemWeek BMWeek 12

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

their organizations during the last decade.

They have efficient assets, but they lack the multinational experience and network.

These companies have been able to repay their debt throughout the last five years and are lowly leveraged.

In the last group are new comers.

Most of them are not affiliated with any multinational. They have efficient equipment but are highly leveraged and are under stress to start to service their debt.

ACC’s competitive advantage, then, is that it has the best of all three groups: lean operations, with one of the highest equipment efficiencies of the market, but without the same level of leverage of the

LEADERS COMMENT

Jose Maria Magrina, CEO and board member of the Arabian Cement Company in Egypt AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

13

LEADERS COMMENT

ACC cement plant, Ein El Sokhna, Suez Governorate, Egypt.

newcomers and also with the support of an international network.

ACC has faced an ongoing licensing dispute as well. Can you tell us its history and what the likely solution is?

The political changes will bring a stable business environment that will attract further investment

In late 2006, ACC finished its first clinker production line. In 2007, the government of Egypt decided to restrict the entrance of newcomers by limiting the number of cement operating licenses to fourteen, which were to be awarded by public auction during September of 2007.

to a point where it will be difficult for them to invest until a very later future in capacity additions or to lower cement prices.

What was really surprising was that this system was applied retroactively and ACC, which at that time was ready for commissioning, was forced to pay a license price. Since it could not participate actively in the auction (ACC could not withdraw, for its factory was already built), the amount to be paid was to be the same as the company that won the license in the Suez governorate. As absurd as it may look, thanks to this cumbersome system, ACC ended up having to pay two licenses, of EGP 280 million each.

increase electricity prices for all consumers or at least make all (new and old) cement factories pay the bill, creating further barriers to entry in the market was chosen as the best way forward. ACC was forced to pay almost US$50 million as a toll to receive electricity.

Apart from the original license being withheld retroactively, the true bias in this situation has been that all other cement producers do not even have to pay these fees; only new companies have been obligated to pay. This created a non-competitive market where prices could not decrease because new companies have bigger debts and old companies have a cost advantage.

How has ACC responded to these setbacks?

The above led ACC to file a legal suit in the local courts as well as an international arbitration suit. The local court advisor (Comissaires d’Etat) has already issued its opinion in favor of the company, but the case continues. Due to the company’s legal issues, ACC’s hope of fully operating its second production line has yet to materialize because the Ministry of Industry refuses to provide ACC with the gas necessary to operate.

Easing, but not limiting, the entrance of additional players in the cement market would seem the most logical and common sense answer to the increase in construction materials demand that was happening in the On top of this, a new actor entered country. Such a move would have increased the playing field, further reducing the installed capacity, fostered competition, prospect of profitability on new projects. brought down cement prices and increased The Electrical Ministry, realizing that it the energetic efficiency. However, the was short on capacity, decided that new Egyptian government decided to go ahead cement factories had to pay the bill for new with those license selection processes, electricity generation. Although common Fixing this issue would create more jobs and which will most likely BMWeek burden CemWeek newcomers sense dictates that the logical step is to more cement would be produced, adding to CW Group Coal Week 14

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

LEADERS COMMENT

IMAGINATIVE SOLUTIONS:

the joining of Arabian Cement Company and Cementos La Union Jose Magrina explains the genesis of ACC and the investment rationale and strategy behind Cementos La Union’s integration into ACC’s Egyptian operations.

supply and reducing costs for all Egyptians.

ACC’s ongoing dispute with the Ministry of Industry benefits no one and in contrast harms the development of the cement industry specifically and foreign investment in Egypt at large, but the government has not taken steps to resolve the issue.

ACC is prepared to offer the Ministry of Industry incremental payments until the local courts decree a final verdict, at which time ACC will fully respect and abide by the court’s decision.

What is ACC's strategy in Egypt going forward and what initiatives are in place to grow market share?

Since structured projects have taken the biggest toll in response to the political changes of Egypt, the ready-mix market is currently at its lowest tide and will take a while to recover. Although ACC recognized the need to integrate its operations to cover the ready-mix production as well, it will continue to monitor the market and only invest when the variables are right.

Our first and foremost objectives this year are the introduction of new products and more sophisticated cements, along with the education of our customers. Also, we have extended our services to deliver in the markets where the cement is consumed, instead of selling on ex-factory basis.

“Back in 1997, a group of Egyptian businessmen began the long, tortuous path of setting up a cement production plant in Ein El Sokhna, Suez Governorate, in Egypt. The abundance of limestone and the important deposits of clay nearby made it an ideal location for such an investment.

However, the downturn of the economy during those days made it difficult to raise the huge amounts of funds required for the endeavor, and the project was parked aside, even though engineering and even civil works had been started.

which, thanks to its proximity to the port of Sokhna, could export its production to the group’s other plants.

However, the original macroeconomic variables have changed greatly since then. Cement demand was spurred by the sustained yearly increase of Egypt’s economy during the 2005-2010 period.

Meanwhile, the country was also the target of massive FDI coming from the Middle East states, which thanks to the elevated price of petrol had additional liquidity. The Middle East states were eager to invest in friendly countries with good prospects. All these investments helped foster the cement demand to a point where Egypt changed its traditional role of an exporting country to a country that imported cement. ACC adapted to the changing circumstances and changed the original clinker production project to a full-fledged, two lines and four mills factory to serve local demand.

Meanwhile the rising costs of energy, raw materials and manpower were forcing companies in Europe to find imaginative solutions in order to reduce their overall expenses. Sourcing the elements required for cement production in countries where such resources were less costly was one obvious strategy. The group Cementos La Union, an independent Spanish cement producer, had already realized the risks of depending on external sources of clinker for its operations and identified Egypt as Now, seven years later, ACC has invested the proper place to build its first integrated roughly US$566 million to build a five production facility. million tons of cement per annum factory that is among the top five producers of Then in 2004, Cementos La Union acquired cement for the country. It employs directly a majority stake in Arabian Cement and indirectly around 1700 persons and Company and put its hands to work. The generates 0.16 percent of the Egyptian original project was modified to host a GDP.” 5,000 ton per day greenfield clinker plant Jose Maria Magrina

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

15

LEADERS COMMENT The environment is on everyone’s mind.

How have stricter emissions regulations in Europe effected the Egyptian market?

Unfortunately, high production costs and cut-throat competition with other Asian producers renders clinker export to Europe very difficult if not impossible.

We have found it difficult to recruit employees who are able to operate independently

As for “green cements,” the Egyptian markets have not yet reached the level of maturity to value initiatives on the environmental level. ACC, as a producer, is always striving to educate customers with the newest industry trends and products but can only introduce such products once they are accepted by the market.

That said, alternative fuels currently have the most potential for improvement in the industry. ACC is already investing in order to start using alternative fuels to substitute other sources and contribute to the environment. This has proven very challenging, as no formal channels for alternative fuel collection are in place.

Rather, they have to be developed by each consumer.

The approach to work in Spain and in Egypt differs in many ways, but I have found that the biggest difference is in the sense of commitment and ownership towards the company and in day-to-day tasks and projects. Perhaps the reason for this is the legacy of a state-run economy, which created an environment where most of the workers ask themselves what the company can do for them instead of what they can do for the company. Also, we have found it difficult to recruit employees who are able to operate independently, without supervision. Such skills were key for us in being able to achieve our vision as a company.

Fortunately, through a tough and structured recruitment process we were able to identify ideal candidates. Now I’m proud to lead what we believe is the best, youngest, most entrepreneurial team in the cement industry in Egypt. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

16

www.cemweek.com

In managing ACC and building the organization, what have been some of the principal cultural differences and challenges, coming from Spain to Egypt?

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

CemWeek CemWeek

CW Group CW Group

Coal Week Coal Week

JOSE MAGRINA Jose Maria Magrina is Chief Executive Officer and board member of Arabian Cement Company. He joined the company in March 2005. Magrina obtained his engineering degree from the Escuela Tecnica Superior de Ingenieros Industriales in 1995 and received his international MBA from Instituto de Empresa in 2004.

Prior to joining Arabian Cement Company, Magrina was a management consultant with Deloitte Consulting and PwC, where he advised on strategy and operations for the construction materials and other industries in several developed and in-development countries, including Australia, China, England, Germany, Spain and Portugal.

SOKHNA

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

TOOLS

& ANALYSIS

Expat programs:

they feel good, but can you justify them to shareholders? t is intuitive to note that there must be both costs and benefits to using executive expatriates, but what is the true shareholder return on an expat program?

Just because it is a ‘soft’ topic doesn’t mean it cannot and should not be evaluated in a structured manner. This viewpoint suggests a model that can be used as a potential framework to critically assess the

national units, be it for financial and accounting purposes to “control the purse” or to otherwise ingrain common processes, branding, and philosophies.

The second benefit, Sharing Best Practices (SBP), is about leveraging the global talent pool to improve the organizations in a way that only human interaction can bring.

the program and the human capital, support and training environment needed to ensure success. There are of course relocation expenses: travel, personal arrangements around family, often costly schooling for children, etc. To this should be added the unforeseen costs if, for one reason or another, a particular placement fails and how to integrate the career paths of those who

Figure 1: One way to think about shareholder return

Expat program ROI = (SWYG+SBP+ER) – (T$+DOPR+PM$) + e

shareholder return of an expatriate program.

The idea is to ground the assessment in an analytical review of the key constituents of the program (we are not explaining the actual values, coefficients or practical details in this article), for instance, the equation presented in fig 1.

Expatriates bring experience of other undertake such placements with the rest of placements with them and extend the the firm. These expenses are often fairly easy corporate knowledge base so results can be to tally up, but they are not the only costs. emulated elsewhere in the company.

A more hidden impact is Turnover Costs Finally, the prospect to work in different (T$). Not everyone enjoys moving around, countries and cultures can be a major or an expatriate may at some point have attractor to some professionals. Thus a a change of mind about the excitement of Those familiar with statistics will recognize benefit of an expat program is in its ability relocating. This can lead to valued employees ‘e’ as representing the unexplained part of to support Employee Recruitment (ER). looking for more permanent locations the return equation. This recognizes, in As business becomes more and more and leaving the firm. Though making essence, that an equation will always leave international, the career gains from working expat participation optional can mitigate a residual element not fully mathematically as an expatriate become increasingly this, having dual tracks where expats are explained by the equation. attractive. rewarded through promotions or other advancements may also cause resentment Benefits Costs within the organization and lead to nonTurning to the potential program variables, In the same way that an expatriate program expat turnover. This variable is something we start by articulating the benefits. The first brings advantages, there are also costs, both that can be tested for and quantified. one, Supervise with Your Guys (SWYG), is direct and intangible. Starting with the an obviously important element in trying obvious, the Program Management Costs Last, but not least, is the Disruption to to integrate a national subsidiary and the (PM$) of a well-run expatriate program the Organization and Processes (DOPR). multinational. The benefit here is in project- can be substantial. These costs include the This intangible cost comes as a potential ing control from the headquarter to various direct HR personnel involved in managing consequence of new staff learning to work CW Group Coal Week CemWeek BMWeek 18

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

PEOPLE MOVES together internally. In the best case, there is a ramp-up period with lost efficiency as a part of the integration. On the other side—excluding personality conflicts and other internal integration problems—are the external linkages. In many cases, the connectivity with regulators, community, investors and other external organizations is achieved through multi-year processes.

For example, constructing a new cement plant (at least in most of North America and Europe) is a very lengthy process that needs constant dialogue between the local cement company leaders and fairly permanent counterparts in environmental departments and community groups. Thus a potential loss (or cost for the expat program) is the challenge of maintaining discussions between individuals and organizations across longer time series. Certainly, transitions can be managed, but often times these processes build on individual rapport which is hard to transition, even with advance warning.

Where does this leave us?

Overall, at least some of the costs of an expatriate program are easy to quantify, but some of the benefits and costs are less tangible and therefore less quantifiable. The result is that oftentimes expat programs are not being fully evaluated (in whole or in part), even though the financial impact can be material. Much like marketing used to be justified because “you had to market” but later became subject to more rigorous marketing ROI reviews, expat programs may require the same scrutiny. Many models can be used to achieve this, and rather than say that the CW Group’s Business Analysis team has herein demonstrated the model, we do propose it as a starting point for critical thinking that should begin at the CEO-level and certainly involve the head of Human Resources, CFO, Knowledge Management Officer, among other senior staffers. BMWeek BMWeek BMWeek

The CW Group’s Advisory team can help organizations quantify the benefits and costs of expatriate programs and evaluate their effectiveness, among other management-oriented questions. We invite you to contact us to discuss this topic further: inquiries@cwgrp.com

New Lafarge Industrial Director Raul Suarez Perez is the new industrial director of Lafarge, Spain. Perez, who began his career with Lafarge in 1988, had been director of Lafarge Cement’s manufacturing optimization program and takes over the position from Juan Aniz. Perez’s training includes a degree in Geological Sciences from the Universidad Complutense de Madrid and training in human resources, communication, coaching and team management.

Votorantim Executive de Moraes Dies Votorantim announced the death of its executive Carlos Ermirio de Moraes of complications arising from cancer. He was 55 years old. Moraes held the post of Chairman of the Board of Directors of Votorantim Group since 2001 and was responsible for a major strengthening of the Group, contributing decisively to its expanded importance in Brazil.

Directors for Lafarge India, looking after the company’s cement business in India.

New President for Cemento Andino Engineer Crisanto Silva has been appointed president of Venezuela’ Cemento Andino.

The appointment was made through the government’s Ministry of Popular Power for Science, Technology and Intermediate Industries. Silva replaces Engineer Carlos Pacheco, who has accepted a position within the management structure of Petróleos de Venezuela (PDVSA).

Silva’s appointment was welcomed at the Cemento Andino plant because the new president is expected to work on signing a collective bargaining agreement with the workers, where company management and plant workers have struggled for years to sign such an agreement.

Volyn-Cement lets go of CFO Ukrainian cement company Volyn-Cement has let go of its Chief Financial Officer, Stanislav Lukin. The Supervisory Board of Governors for Volyn-Cement reached the decision on July 15. Lukin had served as CFO of the company since September 2003 and also served on the board of directors.

Volyn-Cement is a member company of Dyckerhoff of Germany.

Deepak Parekh joins Lafarge IAB Chairman of the Housing Development Finance Corporation (HDFC) Deepak Parekh has joined the International Advisory Board of Lafarge. "Our India business unit has already benefited greatly from his guidance and he will continue to provide us with invaluable advice in this new position on a global basis," said Isidoro Mirando, Executive Vice-President Holcim Spain Chooses New Chairman Coal Week CemWeek of LafargeCW Group and Co-President of Cement Claudio Boada Palleros has been selected CemWeek CW Group Coal Week Business. by the Board of Directors to replace CemWeek CW Group Coal Week Fernando Varela Parache as Chairman of Parekh, who recently stepped down as Holcim Spain. Palleros studied Industrial Non-Executive Chairman of Lafarge India, Engineering at the Polytechnic University of was replaced by Uday Khanna, who has Madrid and received his Masters in Business since retired from his position as MD and Administration from the University of CEO of Lafarge India. Danilo Buscaglia, California. Prior to his appointment, the incumbent Chief Operating Officer – Palleros served as the senior advisor at East Zone and Ujjwal Batria, Chief Projects HSBC Spain and Portugal. BMWeek CemWeek CemWeek BMWeek Officer, will now serve as joint Managing CemWeek BMWeek AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

19

CW CW CW

MARKET

UPDATE

First half of 2011:

tough trading, but sales show resilience It was a mixed bag for the building materials sector in the first half of 2011, but the emerging markets appear to have sustained industry growth. Cement sales proved problematic for some companies, and increased revenues rest on concrete and aggregates.

BUILDING MATERIALS: 1H 2011 VOLUMES Buzzi Unicem

1H 2011 Concrete Volume

Cemex Cimpor

1H 2011 Aggregate Volume

Heidelberg Cement Holcim

Cement 1H 2011

Italcementi Lafarge Titan Vicat 0

60

he first half of 2011 (1H2011) brought with it signs of a global recovery as the sales volumes of a set of leading global building material companies increased by 5.1 percent compared to the same period last year (looking at Lafarge, Holcim, HeidelbergCement, Cemex, Italcementi, Buzzi Unicem, Cimpor, Vicat, and Titan).

The companies’ total turnover reached a combined EUR 33.9 billion between January and June 2011 versus EUR 32.3 billion in 2010. All the companies experienced important growth rates in the base currency, with one exception: Titan Group showed reduced sales by 18.2 percent in 1H2011

17.8 million tons to 403.7 million tons in 1H 2011, a growth rate of 4.6 percent. Concrete sales increased 8.7 percent from 100.1 million cubic meters in the first half of 2010 to 108.9 million cubic meters for 1H2011.

With the U.S. dollar in decline against the euro, revenues appear to have increased 11.1 percent when expressed in US$ compared to 5.1 percent when shown in EUR.

HOLCIM, LAFARGE NECK IN NECK FOR No. 1 Holcim passed Lafarge last year as the largest cement producer in the group due to increased delivery volumes, a lead that Holcim maintained in the first half of 2011, although the gap between the two companies shrank from one million tons The revenue growth is supported by in 2010 to 0.3 million tons in the first half increased volumes in cement, aggregates of 2011. Holcim enjoyed solid demand in and concrete in the first half of 2011, with its emerging markets and volume growth sales from the leading companies reaching in Europe, while seeing mixed demand in 285.8 million tons in 1H2011, up 13.1 North America. As a consequence, Holcim million tons (4.8 percent) compared to the shipped 70.9 million tons of cement in the half of 2011, plus 81.3 million tons of same period last year. BMWeek Aggregates rose CW byGroupfirstCoal Week CemWeek 20

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

120

aggregates and 23.1 million cubic meters of concrete, for increased sales of 4.6 percent, 11.1 percent and 5.5 percent, respectively.

Meanwhile, Lafarge continues de-leveraging its business, but the company sold nearly eight percent more cement in 1H2011 (70.6 million tons) versus 1H2010 (65.4 million tons). However, Lafarge’s concrete segment experienced only moderate growth to 16.8 million cubic meters (1.8%), and the aggregates segment saw a decline of one percent from 86.9 to 86.1 million tons. Driven mainly by increasing cement volumes, the group’s 1H2011 turnover increased 3.4 percent year-on-year to reach nearly EUR 8 billion.

HeidelbergCement, the third cement producer of the group with 41 million tons dispatched in 1H2011, saw China, India and the African countries as growth engines, with the industrialized countries of Europe and North America coming in weak. With sales

MARKET UPDATE CEMENT: 1H 2010 - 1H 2011 TONNAGE CHANGE

CEMENT: 1H 2011 SHARE OF MAJORS

Change

20%

0%

-15%

Buzzi Unicem

Cemex

Cimpor

Heidelberg Cement

Holcim

Italcementi

Lafarge

Titan

Vicat

Vicat Titan

TURNOVER: 1H 2010 - 1H 2011 CHANGE (EUR)

Lafarge Italcementi

20

Holcim

Change

Heidelberg Cement Cimpor

0

Cemex Buzzi Unicem

-20

Buzzi Unicem

Cemex

Cimpor

Heidelberg Cement

reaching up to EUR 500 million higher than in the first half of 2010, HeidelbergCement registered double digit increases in its cement and concrete segments at 10.5 and 13.4 percent, respectively, while aggregates grew by 6.4 percent.

With 33 million tons of cement and 77.8 million tons of aggregates sold in the first half of 2011, Cemex experienced one of the lowest growth rates for cement (2%) and aggregates (2.9%), while the company’s concrete segment expanded by 8.9 percent to 26.4 million cubic meters. The growth pattern for all segments was driven by North Europe, South/Central America and the Caribbean. The United States and Asia declined on all three segments.

Holcim

Italcementi

Lafarge

Titan

Vicat

all counts in 1H 2011 with an 18.2 percent decrease in revenues resulting from declines in cement volumes (12.6%), aggregates (22.9%) and concrete (7.6%). The company was not able to offset steep declines in the Greek market and the closure of some of its Cimpor follows the trend set by Italcementi traditional export markets, such as Libya. with lower cement volumes but growth in concrete and aggregates. Cimpor sold Following a difficult first half—during 13.8 million tons of cement in H1 2011, a which North America struggled under 0.7 percent decline, while concrete rose severe weather, and Europe was unable to 5.8 percent and aggregates 21.4 percent, meet expectations of a recovery—the global closing the half-year with EUR 1.15 billion building material companies looked once in revenues. again toward emerging markets to build their growth strategies. In the second half Vicat and Buzzi Unicem saw growth in of 2011, market conditions are expected to all indicators. Vicat sold 9.1 million tons follow the same scenario, with the emerging of cement in the first half of 2011 and markets sustaining industry growth. The saw revenues increase 16.5 percent. Buzzi more mature markets anticipate a slow Unicem sold 13.4 million tons of cement, recovery, including the possibility of new weakness for the end of 2011. BMWeek CemWeek with revenues increasing 9.1 percent.

Greece. However, increases in both concrete (29.8%) and aggregates (3.7%) enabled Italcementi to close the first half of 2011 at EUR 2.45 billion in revenues, a 2.1 percent yearon-year growth rate.

LOW CEMENT VOLUMES Italcementi reported a four percent decrease in cement sales during the analyzed period to 26.4 million tons, dictated by difficult The most affected company of the nine, market conditions in Egypt, Bulgaria and Titan Group, experienced severe declines at

AUGUST/SEPTEMBER 2011

BMWeek BMWeek

CemWeek CemWeek

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

21

FEATURE

CW Group Research highlight

Caribbean cement industry:

Steps towards

recovery

22

www.cemweek.com

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

FEATURE

Economic recovery in the Caribbean is rocky as a region reliant on tourism struggles to overcome natural disasters, public debt and a lingering recession, although 2011 brings small signs of fairer winds ahead.

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

23

FEATURE CEMENT CONSUMPTION

(mm tons)

12

6

0

2006

2010

2015

Jamaica

Other Caribbean markets

Haiti

Trinidad and Tobago

Dominican Republic

Puerto Rico Source: CW Group Research

Domicem plant in the Dominican Republic, built by Sinoma

lthough a diverse region by nature with over 7,000 islands, islets, and reefs located within the region, economic activity in the Caribbean is concentrated in the hands of four powers: Cuba, the Dominican Republic, Puerto Rico, and Trinidad and Tobago. Tourism is considered the main driver of the Caribbean GDP, which together with other challenging factors such as economic recession, high public debt, and natural disasters, resulted in a four

Jamaica is feeling pressure from imports

24

www.cemweek.com

percent GDP decrease in 2009, followed by a 0.5 percent decline in 2010. The outlook, however, is more favorable with an average annual growth of 4.8 percent projected between 2011 and 2015. Nonetheless, a fragile recovery may not need much for the growth rate to decelerate materially.

Faced with similarly challenging conditions, the construction sector across the region was hit in 2009 and 2010 by declining volumes as construction projects were delayed or outright canceled. The weaker demand levels were mainly supported by public spending. On the other hand, similar to the overall Caribbean economy, the construction segment started showing nascent signs of recovery in early 2011 when several major construction projects were re-activated.

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

In total, 2010 Caribbean cement consumption fell close to three percent from 2009 and almost a fifth from the 2006 peak of more than ten million tons. Overall, between 2005 and 2010 demand contracted by 1.4 percent per year on average. The Dominican Republic is the largest market with a demand of just above three million tons in 2010 (down from 3.5 million tons in 2007). The second largest market is Cuba, followed by Jamaica and Puerto Rico.

Between 2005 and 2010, mostly the smaller markets saw compelling average growth, but with higher levels of volatility. The past five years are a story of initial ascent and subsequent decline.

The volume-weighted Caribbean cement consumption per capita reached somewhat above 300 kilos in 2010, down by more than a third compared to 2006. Given their small market sizes and smaller populations with high reliance on tourism-related construction, many of the smaller islands have high apparent per capita consumptions (e.g., BVI at 1.5 tons per person, Bermuda at 1.3 tons per person, etc.), which is not as

FEATURE 2010 REGIONAL SHARE OF CONSUMPTION

following the nationalization of Holcim Venezuela, which had been central to the company’s Caribbean strategy.

Other Caribbean Markets

In 2010, a total of 8.6 million tons of cement was produced in eight Caribbean markets.

As a result, cement capacity utilization is low at an estimated industry-wide 44.1 percent.

The biggest producer is the Dominican Republic with over four million tons of output in 2010, followed by Cuba and then Trinidad and Tobago.

Trinidad and Tobago Puerto Rico Guadeloupe and Martinique Jamaica Haiti Cuba Dominican Republic Source: CW Group Research PRODUCTION CAPACITY SHARE

Others TCL Group Lafarge Italcementi Colacem Cemex Argos

Source: CW Group Research

indicative of the state of these markets as it is for the larger ones. For the larger markets, Trinidad and Tobago stands out on the higher end of the spectrum at more than 400 kilos per capita. On the other side, Haiti only supports less than 60 kilos per person, with Cuba at 120 kilos (even though Cuba is the second largest in absolute market demand).

The largest and most influential cement companies in the region include Cemex, Argos and the TCL Group. These companies not only dominate the 22 cement manufacturing plants (with a combined annual capacity of close to 20 million tons), but also operate terminal infrastructures and strong distribution networks. Notable is Holcim’s exit from the market after it sold its Caribbean facilities to Argos in 2009

Intra-regional trade represents a meaningful portion of overall trade in the Caribbean; 0.4 million tons was imported from outside the Caribbean (mostly from Colombia and the United States), while almost double that volume was exported beyond the region.

About 60 percent of all the Caribbean markets’ exports remained within the region in 2010. Major external export markets include Peru, Brazil, Guyana and Suriname.

In total, gross imports represented 19.1 percent of total demand in 2010. This latter metric is somewhat surprising as import totals have remained fairly constant between 2005 and 2010, which with a contracting market has raised this share from 15.5 percent in 2005.

The region is set for a moderate recovery in demand with consumption projected to rise. A bit of a bounce from 2010 lows is anticipated in 2011, but growth is expected to be slow and fragile as long as economic headwinds and uncertainty prevail. Among the larger markets, Puerto Rico is expected to see relatively healthy growth through 2015, but that is off a severe contraction in volumes that occurred in the past few years.

Haiti, on the other hand, has potential but limited funds to implement new projects that could support high growth rates.

Barring a meaningful upside surprise on economic growth, the Caribbean market will need careful navigation through the troubled waters ahead. BMWeek CemWeek CW Grou BMWeek BMWeek

CemWeek CemWeek

CW Grou CW Grou

This update briefly highlights findings from the recently published, 73-page CW Group research report "Caribbean cement market (2011 update)". To find out more visit www.cwgrp.com/ research, or contact the CW Group at inquiries@cwgrp.com.

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

25

REGIONAL REPORT:

North America

Protection Agency (EPA) to revisit three recent environmental rules related to the Portland cement industry, citing an intent to allow the cement industry “to continue its dialogue with the EPA with the goal of crafting rational and feasible emission standards.” The Cement Sector Regulatory Relief Act of 2011 (H.R. 2681) addresses the National Emission Standards for Hazardous Air Pollutants (NESHAP), specifically the commercial and industrial solid waste incinerator rule—including a change in the definition of “solid waste”—and the new source performance standards rule.

Environmental legislation was the focal point in Canada and the United States as cement manufacturers struggled with new legislation likely to affect their operations.

The Cement Association of Canada (CAC) has expressed “cautious optimism” over the government of Quebec’s planned twophase implementation of its cap-and-trade program, with phase one scheduled for 2012 and full compliance required in 2013.

Concerned about the possible disadvantage to Quebec’s cement manufactures, the CAC has urged Ontario and neighboring American states to adopt a similar approach to climate change legislation.

NEW RULES THREATEN PLANT CLOSURES A recent study found that the NESHAP The United States Congress introduced regulation alone would force the closure of roughly 18 of the 100 cement a bill requiring the Environmental CW Group Coal Week CemWeek BMWeek 26

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

manufacturing plants currently operating in the U.S., costing the industry US$3.4 billion in a three-year period in addition to employment and manufacturing capacity losses. By comparison, the industry’s total revenues are slightly more than US$6.5 billion annually.

Lehigh Southwest Cement may lose its California license to sell cement pursuant to allegations of non-compliance with environmental directives. Lehigh insists that the company’s operations are in full compliance and is working with the state of California to resolve the complaint.

Meanwhile, Lafarge’s plant in Ravena, New York received initial approval for its modernization program, which is estimated to cost US$300 million.

Mexican cement manufacturers Cemex, Cementos Moctezuma, and Chihuahua reported an 18 percent combined average sales growth during the first six months of 2011, driven by increases in volume (average of 3.7%) and prices. In building materials, the primary sales drivers were the infrastructure, industrial and trade sectors.

Cemex forecasts a three percent rebound of sales in its home market, which comprises roughly 75 percent of the company’s total sales.

The suit rests on the claim that Adocem shares are distributed proportionally to the domestic market, and that the group sets prices and determines the quantities that each of its members can sell in every DR territory.

Central America & Caribbean

Bolivia resorted to importing clinker in an attempt to stabilize cement prices after five of the country’s six cement firms raised their prices by seven percent.

The Dominican Republic’s (DR) cement manufacturers are bracing for potential changes in the second half of the year, following a 3.3 percent decline in cement consumption to 1.49 million tons in the first six months of 2011. Manufacturers are operating at 55 percent capacity in relation to the local market and are betting on the export market to help flagging sales.

The Honduran government is investigating allegations against cement manufacturers for the possible overpricing of grey cement.

South America

There are reports that Sinoma is considering plans to build a cement facility in Bolivia.

El Grupo Cementos de Chihuahua is taking the Bolivian government to court following the alleged expropriation without proper compensation of the Mexican company’s shares in Sociedad Boliviana de Cemento (Soboce). The disagreement, combined with an uncertain economic and political The DR’s cement manufacturers’ environment, has led Chihuahua to sever all association, Adocem, has continued its operations in Bolivia. complaints against cement imported from the Caribbean market, claiming that a new In Paraguay, INC is investing US$86 million shipment of Docema cement from Jamaica on modernization programs to increase its was being sold without passing quality cement capacity from 720,000 to 920,000 checks. tons annually. Proposed projects include furnace fuel switching, installation of a new Concurrently, three local members of cooler and the expansion of its limestone Adocem have filed a court complaint against operations. Meanwhile, Cementos Molins the association, claiming that Adocem has and Vortorantim announced joint venture conspired to block new market entrants plans to build a 750,000-ton plant in the and implemented market share agreements. Treinta y Tres area of Uruguay. The US$160

CAMARGO CORREA TO EXPAND OPERATIONS Brazil’s Camargo Correa is entertaining the idea of increasing its stake in Portugal’s Cimpor. The report follows an announcement that Camargo Correa was considering making a public tender. Brazil’s Market Commission is seeking clarification from Camargo regarding its intent, as any public offering would first require market regulation. Camargo also announced plans for a US$400 million expansion of its Argentinian unit, Loma Negra, between 2012 and 2014. Roughly US$250 million of that investment will go to building a new plant in western Argentina. Through its Loma Negra subsidiary, Camargo has established nine plants since its arrival in Argentina in 2005.

REGIONAL REPORT: AMERICAS

million plant will be operational by 2014 and is being set up solely to meet demand in Southern Brazil.

Chile’s Cementos Bio Bio (CBB) sold its ceramic units in the United States, Ecuador, Peru and Chile to an Ecuadorian company.

CBB retained its shares in its Venezuelan subsidiary, Vencerámica. The sale of these interests was valued at US$67 million.

However, the sale resulted in a US$58 million loss before tax on the company’s financial statements. CBB is now in talks to restructure its current debt load. BMWeek CemWe BMWeek BMWeek

Projects in the Works: Americas Company (Location)

Plant

Loma Negra (Argentina)

■■New Portland cement plant in San Juan ■■Cost: US$240 million

Lafarge (U.S.) Ravena, NY

■■Plans to modify two wet kilns as well as undertake a replacement dry kiln ■■Construction to start in Fall 2011 ■■Cost: US$300 million

CemWe CemWe

Table available in the CemWeek Magazine Print Edition.

■■Modernization effort will include furnace fuel switching, increased production of clinker, new chiller, installation of a bagger and the expansion of limestone operations www.cemweek.com/subscribe ■■Cost: US$86 million

INC (Paraguay)

Cementos Molins & Vortorantim (Uruguay)

■■JV to build a 750,000 ton plant in the Treinta y Tres area ■■Operational by 2014 ■■Cost: US$160 million

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

27

REGIONAL REPORT: ruling allowed Portugal’s Sempa to exercise its option to acquire CRH’s entire 49 percent shareholding in Secil. CRH is reportedly considering the future acquisition of the Belgian VVM Group.

Meanwhile, Quinn Group has turned down a EUR 200 million offer for some of the company’s units from a consortium headed

by Liam McCaffrey.

In Italy, two of Cementir Holding’s smaller units, Intercem and Cementir Delta, will be absorbed in a move to simplify the group’s holdings and gain management efficiency. Lafarge and Austrian-based Strabag finalized a joint venture agreement to merge the operations of five European units. Lafarge Cement CE Holding was formed last year and includes Lafarge’s Mannersdorf and Retznei cement works in Austria, Cikovice in the Czech Republic, Trbovlje in Slovenia, and Strabag’s plant in Hungary.

DECLINING GREEK PROFITS A declining export market and a decrease in domestic construction have contributed to declining profits for Greece’s cement manufacturers, and imports from Turkey and neighboring countries have increased competition. Manufacturers are moving to further reduce operating costs while also looking for new investments to promote sustainability and synergy within the local community.

A large-scale cement plant modernization effort is underway in Belarus, where the government plans to double the country’s cement production. Chinese contractor CITC was selected to perform the work, which includes the construction of three dry production lines with a capacity of 1.8 Europe additional estimated EUR 625 million will million tons each. However, the government go to cement firms during the next round of Belarus is already accusing CITC of CRH, Quinn Cement and Lagan Cement of allocations. failing to adhere to the agreed timetable. are reported to be earning windfall profits from Ireland’s carbon credits scheme. The CRH has spent EUR 200 million over the Government officials have launched a probe companies have already pocketed EUR last six months on investment initiatives, into whether cement prices in the United 226 million over the last five years from participating in 21 acquisitions in an attempt Kingdom have been “distorted” after the government’s over-allocation of carbon to strengthen its existing market position concerns were raised regarding market credits. The Irish government allocates a and add valuable aggregate reserves, though competition. Five of the sector’s largest certain number of free emission permits to not all acquisitions have gone smoothly. c o m p a n i e s — A n g l o - A m e r i c a n , companies, and the initial over-allocation The European Court of Arbitration recently HeidelbergCement, Holcim, Lafarge and arose partly because of the construction found that CRH failed to comply with Cemex—currently account for 90 percent of bust, which led to lower than estimated obligations under a shareholder agreement all cement sales in Britain. cement production. Under the plan, CW anGroupwithCoalregard to its acquisition of Secil. The Week CemWeek BMWeek 28

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

plant expansion efforts are expected to increase the country’s current output to 23 million tons and increase capacity by 30 percent to 30 million tons by 2015. The first production line at Alttsem’s 1.8 million ton plant will be operational by the end of 2013.

Middle East

A booming construction sector (largely attributed to infrastructure growth) has Saudi Arabian cement manufacturers gearing up, as analysts anticipate a jump in cement prices and a further increase in demand. To ensure a steady supply of cement to meet domestic building needs, the Saudi government cancelled all previously awarded export licenses, and Saudi Aramco announced it would sell fuel to cement companies below current market pricing.

Holcim Russia inaugurated a new dryprocess line at the modernized Shurovo cement works near Moscow. The expansion will raise capacity at the unit to 2.1 million tons per year and is the culmination of a three-year, EUR 500 million project.

The President of the Russian Federation Dmitry Medvedev and the President of Swiss Confederation Micheline Calmy-Rey participated in the opening event on July 13. Tabuk Cement is in expansion mode and has recently signed a contract for a new RATM is following up on its previous sale cement mill. The EUR 42 million expansion of the 1.2 million ton capacity Angarsk will increase plant capacity by 4,000 tons cement plant for US$62 million with an per day, nearly doubling current production announcement of the sale of the Iskitim at the plant. Saudi Cement is also expanding cement plant for US$100 to 150 million with a new 7,000 tpd production line at its to Russia’s fifth largest cement producer, Radigh unit, estimated to come online Sibtsement. Inteko is also selling its plants by late 2014. Yanubu Cement finished its to Novoroscement’s owner, Leo Kvetnoy, most recent expansion effort with Sinoma, for US$200 million. The acquisition completing construction of the plant’s new should be completed by 2012, following 10,000 tpd clinker production line. reconstruction of the company’s two plants.

Nesher Israel is accused of using its Meanwhile, officials in the Sverdlovsk dominant market position to spike cement region are shopping for a partner to meet prices in Israel. The report suggests the the region’s projected one to two million ton company used political and economic cement shortage, expected by 2015. There connections to gain an 85 percent market are currently only two plants operating share. Nesher fought aggressively against in the region, producing a total of three opening the Israeli market to imports, including attempts to prevent construction million tons annually. of import handling facilities. The Haaretz report also indicates that the company EXPANSIONS CANCELED After a slowdown in growth, Altai Cement threatened customers who elected to use has shelved plans to expand its capacity imported cement. to one million tons and instead intends to more effectively utilize its existing capacity. PIPELINE DISRUPTIONS IN EGYPT Transbaikalia Cement also shelved plans Declining sales and prices in Egypt’s for its 12.2 billion ruble plant, citing land market has South Valley Cement exploring opportunities to export to African markets allocation and equipment woes. located near the Red Sea, such as the A NR2 report indicates that although the Sudan. For Sinai Cement, Egypt’s ongoing Ukraine’s 17 cement plants held a potential political turmoil has translated to higher capacity of up to 22 million tons in 2010, costs, resulting in an announcement that outdated equipment was contributing the company will continue its use of fuel oil to decreased operations at only 30 to 40 due to disruptions in natural gas supplies. A percent of capacity. Modernization and series of explosions at Egypt’s main pipelines

Projects in the Works: Europe & Russia Company (Location)

overview

Altessem Cement (Ukraine)

■■Building its first production line with a capacity of up to 1.8 million tons of clinker ■■Commissioned before end of 2013

Table available in the CemWeek Magazine Print Edition.

Ural Mining (Russia)

■■New cement factory with 1.5 million tons annual capacity in Alagir (North Ossetia).

■■To be constructed within 3 years ■■Cost: US $270 million

■■A new 2.2 MTPA cement plant on the border of the Leningrad and Novgorod regions ■■Commissioning of the plant www.cemweek.com/subscribe will begin in the first quarter of 2014

Babinov Cement (Russia)

Eurocement (Russia)

■■New dry cement production plant at the ‘Zhigulevskie Building Materials' site

Holcim/ Volskcement (Russia)

■■Planned upgrade of a unit in the Volsk region

REGIONAL REPORT: EUROPE, MIDDLE EAST AND AFRICA

Russia & the Ukraine HeidelbergCement’s EUR 300 million Tula Cement plant in Novogurovsky has come online with two million tons of capacity. Ural Mining is set to invest nine billion rubles in a new plant in North Ossetia near Alagir, where mineral-rich deposits of marl are located. Volkscement is considering several plans to expand production, including a full plant reconstruction and the introduction of resource-saving technologies.

has translated into a 25 percent increase in energy costs.

Egypt’s licensing authority has refused to rescind its decision to cancel the production licenses of North Sinai Cement and New Valley Cement after the companies failed to obtain the commitments necessary for implementation of previous project agreements.

The Iranian cement industry has spent US$3 billion to renovate roughly one-third of the country’s 90 production lines (spread across 63 cement plants), but an additional US$1.4 billion is needed to renovate the remaining lines, although an additional third of the country’s lines already operated with modern technology. Despite dealing with a 30 percent depreciation of equipment lines in the last five years, Iran’s cement manufacturers have increased production 120 percent from 32 to 77 million tons annually.

Africa

South African cement manufacturers are optimistic that the rate of contraction in the cement market is slowing. Although the building and construction sectors continue to perform poorly, placing strain on the cement industry, Pretoria Portland Cement CW Group CemWeek BMWeek

AUGUST/SEPTEMBER 2011

CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

29

REGIONAL REPORT: EUROPE, MIDDLE EAST AND AFRICA

Projects in the Works: Middle East & Africa Company (Location)

overview

Sanghai Cement (Kenya)

■■Building its first production line with a capacity of up to 1.8 million tons of clinker ■■Cost: Sh 14 billion

C&C International (Nigeria)

■■New cement factory with 1.5 million tons annual capacity in Alagir (North Ossetia).

Dangote Cement (Nigeria)

■■A new 2.2 MTPA cement plant on the border of the Leningrad and Novgorod regions ■■Cost: N 329 billion

Lucky Cement (Congo)

■■New dry cement production plant at the ‘Zhigulevskie Building Materials' site ■■Cost: US$175 million

Sudan

■■Planned upgrade of a unit in the

Saman Cement (Iran)

■■New plant in Kerman-Shah; to produce 10,000 tons/day ■■Cost: 400 billion toman

Ciments of Bizerte (Tunisia)

■■Expansion and upgrade planned which includes construction of a 500,000 ton new manufacturing plant ■■Construction underway and expected to last 24 months ■■Cost: 140 million dinars

Table available in the CemWeek Magazine Print Edition.

www.cemweek.com/subscribe Volsk region

(PPC) is forecasting a growth in sales for the combined capacity that makes ARM the second half of 2011. single largest integrated cement producer in the region. The 750,000-ton Dar es Salaam Messebo Cement Factory and National plant will come online in February, and the Cement, the only cement production 1.5 million ton Tanga plant is scheduled for facilities in Ethiopia currently using coal September 2012. for electricity generation, have joined forces to import 41,000 tons of coal from South Kenya’s cement market anticipates strong Africa. growth in the coming years, due in part to large limestone deposits and increasing Botswana is struggling with cement cement demand in East Africa. The future is shortages, a problem PPC has blamed not as assured in Namibia, however, where on a shortage of fly ash imports resulting concerns persist over the cement industry’s from worker strikes in South Africa. PPC competitiveness and ability to meet future expected the constraints on fly ash deliveries demand. Currently, Namibia has numerous to ease and for production levels to rebound importers and only one significant domestic shortly. producer supplying cement, although support has grown for initiatives to increase Ghana’s cement manufacturer Ghacem competition in the sector. continues to experience around 60 hours of power outages per week. Combined with an NIGERIA REACHES SELF-SUFFICIENCY erratic supply of raw materials, the power In Nigeria, the government announced outages have led to big shortages in cement the country was close to achieving cement supply. self-sufficiency. The country anticipates an additional 8.5 million tons of grinding In Tanzania, Tanga Cement’s planned capacity from two new plants: Dangote’s US$200 million expansion to improve Cement Ibese will contribute six million clinker production and importation is in tons and Lafarge’s Lakatabu, also in the jeopardy after production costs increased Ogun state, will add another 2.5 million in recent months to three times the normal tons. Dangote already operates a seven levels. Higher road transportation costs due million ton capacity plant at Obajana. to an unreliable railway system are cited as a Also, U.S.-based C&C International has major production expense. signed a memorandum of understanding with the Gwana District to build a plant in Kenya’s Athi River Mining (ARM) plant is the Bauchi state. The new company, called set to start production at two new cement Bauchi-Gwana Cement Co. (BGCC), will units in Tazania in the next year withCWaGrouphaveCoal a Week 1.5 million ton capacity.

CemWeek BMWeek 30

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

Unrest among Tunisia’s neighbors and strikes at several domestic facilities, including a worker strike at Enfidha Cement, have resulted in shortages and price increases at home. In response, the Tunisian government will import 200,000 tons of cement to meet demand. The government has also asked manufacturers to increase production and has frozen all cement export operations in order to funnel an additional 80,000 tons into the local market. Tunisia’s seven cement units produce 7.7 million tons of cement per annum while domestic demand rests at 6.7 million tons, with over one million tons set for export to Libya and Algeria.

Lucky Cement, in collaboration with a local partner, will build a US$175 million plant in Congo. The one million ton greenfield project will be 46 percent funded through equity at a US$40 million investment from each partner, with the remaining 54 percent in debt. Meanwhile, the Abbasid state of South Kordofan has approved the establishment of a cement plant in western Sudan, the first of its kind for the region. BMWeek BMWeek BMWeek

Ce Ce Ce

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

REGIONAL REPORT:

nine plants in the region with an installed capacity of 52 million tons annually and a 72 percent utilization rate. Finally, industry representatives met with government officials regarding plans to expand abroad in order to support local production. Officials indicated they were receptive to the idea.

Other Asia-Pac

China

Leon, indicated that government taxes were putting increased pressure on The Chinese government continues to manufacturing businesses in Australia and eliminate backward production capacity that the carbon tax would likely further in order to streamline its economy with aggravate the situation in the future. several industries, including cement, being targeted. China intends to eliminate 153.27 New Zealand’s construction sector appears million tons of cement capacity involving to be bracing for contracted demand levels.

782 cement manufacturers in 45 provinces. Holcim meanwhile is weighing its plans to proceed with a US$500 million cement Eleven plants will close in September. plant at Oamaru.

Meanwhile, predictions show multiple M&As occurring over the next five years in China, partially as a result of the industry’s Indonesia overcapacity problem. China Building Materials projects strong demand due to Indonesia’s cement capacity will increase deep industrial restructuring and upgrades, from 54.5 million to 59 million tons by which will in turn promote M&A activity. 2012 as Semen Gresik and Semen Tomasa The group forecasts that China’s top ten each bring a new 2.5 million ton capacity cement companies will hold 35 percent of plant online. Holcim India’s scheduled total capacity in 2015. completion of a 1.8 million ton facility in 2013 will also add to the country’s growing capacity.

Australia

Australia, which currently boasts the world’s second lowest greenhouse gas emissions after Japan, faces potential job losses as a result of the government’s carbon tax and proposed new shipping rules. A report suggests that as many as 1,800 jobs could be lost if companies elect to increase imports and lower domestic cement production as a result of the carbon tax.

Indocement, Indonesia’s second largest producer, plans to invest US$17 billion through 2017 to boost capacity from its current 27.1 million tons. China-based Anhui Conch is undertaking an aggressive expansion effort in Indonesia with a US$2.4 billion investment plan. The company intends to build four new units on the islands of Kalimantan and Papua, three with 10,000 tpd clinker capacities and the fourth at 6,400 tpd.

Cement Australia recently sold its Parkhurst facility to Queensland Magnesia Lafarge will proceed with its 1.5 million ton and shuttered its plant in Kandos, New plant in North Sumatra for an investment of Rs 3Coal toWeek 5 trillion. Lafarge currently operates South Wales. The company’s CEO, Chris CW Group CemWeek BMWeek 32

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

Japanese manufacturer Sumitomo Osaka Cement cited shrinking public works as the primary reason for a reduction in cement demand that has caused the company to reevaluate its production and distribution systems. Taiheiyo Cement reported a slight increase in demand in its Eastern operation as reconstruction efforts picked up, albeit slowly.

Thailand’s Siam Cement is set to spend US$150 million to acquire units in Indonesia, the Philippines and Vietnam.

At the same time, the company warned that a government plan to increase the minimum wage would harm the industry’s competiveness, resulting in higher production costs and construction materials prices.

Vietnamese cement manufacturers are looking for export opportunities and are particularly interested in Bangladesh, Africa, Hong Kong, Singapore and Myanmar. Meanwhile, the Vietnamese government has asked the cement industry to turn its attention to energy conservation measures and alternative fuel adoption. By 2015, the industry is projected to produce 100 million tons of cement, which would put energy requirements at nine billion KWh, increasing to 11.7 billion KWh by 2020. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

Coal Week Coal Week

Projects in the Works: asia pacific Company (Location)

overview

Jurong Port (Singapore)

■■New terminal is being built to

Wuhu Conch (China)

■■Installation of a 12,000 tpd

ramp up the handling capacity Table available of company’s existing cement facility by another 50% in the CemWeek ■■Cost: US$100 million Nangguo Cement ■■Clearance received to build a Magazine Print (China) 2000 tpd clinker production unit in Anhui province Edition. production line www.cemweek.com/subscribe

Projects in the Works: south asia Company (Location)

overview

Semen Gresik Group (Indonesia)

■■Building a new cement factory in Tuban in East Java and another in Padang in West Sumatra. Semen is also looking at expanding its plant in Rembang, Central Java ■■Cost: GBP 100 million

Anhui Conch (Indonesia)

■■Four new cement plants planned in target areas of South Kalimantan, East Kalimantan, West Kalimantan and West Papua ■■Cost: US$2.35 billion

Table available in the CemWeek Magazine Print Edition.

India Sluggish demand has motivated several Indian cement dealers to offer discounts on bulk purchases. Expectations had been high for increased demand in August following the decline in sales that accompanied the monsoon season in June and July; however, such a recovery has yet to occur.

a promotional strategy that does not rely on government purchases.

LAFARGE INDIA EXPANDS Lafarge is looking to expand its presence in the Indian market via a series of strategic mergers and acquisitions. Reports suggest Lafarge has initiated talks with Star Cement to obtain a majority stake in its operations and is also in discussion with Madras ACC and Amuja Cements experienced Cement for a grinding unit in West Bengal. a large boost in July sales, but rising bank The Madras unit has also attracted the lending rates have affected home buyers and attention of Holcim. real estate companies, and increasing raw material costs have many manufacturers In the meantime, the Indian units for scaling back instead of ramping up global cement leaders Lafarge and Holcim production. have been accused of breaking anti-trust rules, with allegations of price fixing and The slowdown has taken its toll on smaller importation limits resulting in a government cement manufacturing units throughout probe.

India.

Approximately 80 small units have closed in the last six months, and Orient Paper and Industries announced some larger manufacturers like Kesoram plans to spin off its cement business which Industries have shelved expansion plans. contributed 53 percent of the company’s However, Jammu & Kashmir Cements and total sales in FY 2010/11. Additionally, the My Home Industries each plan to double company is building a three million ton capacity, and Madras Cement intends to greenfield project in southern Karnataka for invest Rs 150 crore in three cement plants in 17.5 billion rupees. Production at the facility Tamil Nadu. Prism Cement is undertaking is expected to commence in mid-2014. a 4.8 million ton greenfield project and a 3.6 million ton brownfield unit.

JK Cement recently purchased Nihon Nirman’s production facilities for Rs 42 crore at auction, perhaps in response to government urging that JK Cement improve its production processes to compete with private cement brands. The government has pledged full support for the development of

Other South Asia

FY 2010/11 proved disappointing for Pakistani cement manufacturers as cement consumption fell 8.24 percent. Over 80 percent of cement firms reported losses because of stagnant local consumption and the government’s failure to honor its

Chettinad Cement (India)

■■New 2 million ton grinding unit at Maharastra

Jammu and Kashmir Cement (India)

■■Setting up a 300 tpd clinker grinding and packing unit at the Industrial Growth Centre (IGC) at Samba, in Jammu ■■Cost: Rs 27 crore

REGIONAL REPORT: SOUTH ASIA

REGIONAL REPORT:

Madras Cement ■■Proposed expansion across three (India)www.cemweek.com/subscribe cement plants in Tamil Nadu will include installing a roll press at RR Nagar and a second unit, with 2 MTPA capacity at the Ariyalur plant ■■RR Nagar roll press to be commissioned in March 2012.

The new unit at Ariyalur plan will be commissioned in August 2011 ■■Cost: Rs 150 crore Tamil Nadu Newsprint and Papers Ltd. (TNPL) (India)

■■600-tpd cement plant in the Karur District ■■Commissioned by December 2011 ■■Cost: Rs 69 crore

commitment to inland freight subsidies that were originally touted as helping boost the industry’s export market.

Sri Lanka, facing a construction boom, has turned to imports to meet demand.

The government imported 100,000 bags of cement from Pakistan, but the Sri Lanka Standards Institute (SLSI) criticized the Trade Ministry for allowing the shipment to enter the country without passing an inspection and prior to issuance of an SLSI clearance certificate. India’s Bharathi Cement will also import to Sri Lanka, announcing plans to sell 10,000 to 15,000 tons per month.

Holcim will expand its presence in Sri Lanka and is spending Rs 3.6 billion to increase grinding capacity at its integrated plant at Puttalam as well as at its Trincomalee and Galle facilities. Holcim has expressed interest in building an additional plant in CW Group Coal Week Sri Lanka. BMWeek CemWeek CW Group CemWeek BMWeek BMWeek BMWeek

AUGUST/SEPTEMBER 2011

CemWeek CW Group Coal Week CemWeek CW Group BMWeek CemWeek CW Group Coal Week www.cemweek.com CemWeek BMWeek CW Group

33

Sector coverage: Construction & materials

SECTOR COVERAGE:

Since public-private partnership became operational in India, over 240 projects valued at US$14.5 billion have been delivered, with a majority US$9.4 billion having been spent between 2005 and 2010.

Currently, 292 projects are in the pipeline.

On the other hand, China has been awarded the construction of around 10,000 houses and a railway line in Mozambique. The deal is expected to provide interest-free loans, training and other forms of aid to businesses in the African country.

In Europe, construction activity is expected to recover slowly this year in Germany, France and smaller core economies, while the Euro zone sector as a whole will likely remain sluggish due to persistent weakness in Italy and the ongoing slump in Spain and most peripheral countries.

On a longer-term perspective, the construction market in the U.S. will gradually strengthen. A yearly average 5.9 percent increase is expected in the next ten years. Construction spending will actually outpace the growth of the country’s GDP, with around US$14.5 trillion to be spent in the sector in the coming years.

The outlook in Europe for the next decade is also positive. Even though the continent’s construction declined last year for the fourth consecutive year, it will start growing toward 2020. Growth leaders this year are Construction in emerging markets continues to grow rapidly, while developed Poland, followed by the Nordic nations, nations in Europe are set for a slow recovery. The United States, China and Germany and France.

India will account for over half of the forecast US$4.8 trillion growth in global construction over the next decade. Research in green building techniques looks Major project line-ups to alter building materials technology with cost-effective energy reducers.

A US$3 billion highway will be built in Russia by NCH Consortium, a joint venture Emerging nations to lead growth previous effects of the global financial crisis of Astaldi of Italy and Ictas Insaat of Turkey.

During this year, emerging economies are and is making use of domestic and foreign They will put together the Western Highleading construction demand growth, while investors in order to increase its capacity for Speed Diameter (WHSD) Northern Capital Highway, making for the largest publicdeveloped markets are stagnating. manufacturing building materials. private partnership project in Russia.

In Brazil, tax exemptions for building On a larger scale, a spectacular forecast materials are set to be extended until comes from India, which is expected to In Saudi Arabia, more details concerning December 2012. The fiscal exceptions, need spending of over US$50 trillion on what is expected to become “the world’s which have been in place since March 2009, infrastructure in the next 25 years. The tallest tower” have been revealed. At refer to basic materials such as cement, country will thus become the leading the Kingdom Tower of Jeddah, design paints, mortar, ceramics and others. spender on infrastructure development developments continue to progress drawing during the period. India will, however, face closer to the commencement of the project’s Russia is witnessing an increase in the difficulties like putting together large scale construction. Foundation drawings for the production of building materials—namely public and private partnerships concerning tower have been finished, and its piling has concrete, brick and glass—despite the urban infrastructure, a matter over which been tendered. The Kingdom Tower, which decline in housing construction. The key industry players have expressed will stand at 1,000 meters, is expected to be worth around US$1.2 billion and will country is beginning BMWeek to overcome the concern.

CW Group Coal Week CemWeek 34

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

country

Metric

Evolution (%)

Period *

France

construction equipment

47

S1

Qatar

construction output

28

Q1

USA

housing starts

15

June over May

Argentina

construction materials

10

S1

Poland

aggregates

7

S1

UK

construction output

2.3

Q2

Malta

construction output

-5.3

S1

Meanwhile, in the UK, the Office of Fair Trading has decided after a six-week period of consultations to refer the aggregates, *where unspecified otherwise, evolution is year-over-year cement and ready-mixed concrete markets to EU’s Competition Commission for a deal estimated at around US$598 million. investigation.

The deal will increase Asia’s contribution to Boral’s earnings from 5 to 14 percent. Green and Innovative Building Moreover, plasterboard’s share in Boral’s Builders are now pushing for more ecoearnings will rise from 8 to 17 percent. friendly homes in the U.S. and using “green marketing,” such as underlining the longLafarge is on a selling spree, trying to rid term savings that can be achieved, as a tool itself of some assets in order to decrease to attract buyers. The new type of buildings, its debt, which is currently around EUR 16 like those promoted by Betenbough Homes, billion. Lafarge recently sold its Australian feature low-flow toilets, energy efficient gypsum business to Knauf for a net worth of windows and prefabricated roof trusses.

EUR 120 million and entered negotiations with Etex for the sale of its European and In research, a team from Nottingham South American business units for EUR 850 University based at the Ningbo campus million. in China has come up with a heat-storing material that overcomes the problem of Meanwhile, St. Marys Cement (SMC), a unit quick energy release. The new material of Brazil's Votorantim, has filed a US$275 can be manufactured cheaply and has the million lawsuit against the Canadian potential to deliver considerable energy authorities over a scuttled quarry, saying savings and could lead to more efficient LED its bid was denied for political reasons. lights and solar panels, as well as reducing SMC contends that some local opponents the cost and energy use of air conditioning of the quarry in the town of Flamborough by absorbing heat from a room. were former Liberal political aides who managed to convince ministers of the Meanwhile, Italcementi announced that governing Ontario Liberal government it has developed a new type of sustainable and the premier’s staff members to use concrete. The company says that the product, unprecedented unilateral ministerial Fonisocal, is a sustainable building material powers, targeting only lands owned by SMC created using plastic recycled from landfills. and interfering with SMC’s vested property The company says that the product offers rights. The allegations have yet to be proven a remarkable capacity for both thermal in court. and acoustic insulation, making it useful

Spain

construction output

-17.3

May

Slovenia

construction output

-30

May

be part of the US$20 billion Kingdom City project.

Meanwhile in Japan, disaster is making way for business opportunity as post-earthquake reconstruction is expected to cost around US$152 billion in over five years.

Concrete Mexican group Cemex managed to complete the purchase of Ready Mix USA, worth around US$350 million, strengthening its position in several U.S. states like Arkansas, Mississippi, Tennessee, Alabama, Georgia and Florida. Cemex produces, distributes and sells cement, ready-mix concrete, aggregates and related building materials in more than 50 countries throughout the Americas, Europe, Africa, the Middle East and Asia.

In other news, Arabian Cement has given up the Global City Ready Mix Concrete joint-venture with Italcementi. Arabian Cement is withdrawing as a result of losses accumulated by Global City Ready Mix Concrete.

Across the Pacific Ocean, a concrete testing firm in New York has been charged with faking results for the concrete quality of several projects, including the La Guardia Airport control tower, the new Yankee Stadium and the Lincoln Tunnel. Five of the company’s officials, including the president Alan Fortich, pled not guilty. Prosecutors, however, continue to allege that the company’s illegal activities have been going on for about 12 years.

Aggregates In Poland, the production of aggregates has increased to 110 million tons in the first half of the year, a seven percent rise over the same period last year. The result is said to be due to road construction. Estimates state that the country’s aggregates production will reach about 215 to 220 million tons.

Gypsum and Lime Australian group Boral will buy out its plasterboard joint venture with Lafarge in In Spain, a new project seeks to find the

Sector coverage: Construction & materials

best possible recycled aggregates for construction use. The project, which will last five months, is being conducted by the Research and Development division of the University of Valladolid and the Department of Architectural Engineering.

Currently, experts involved in the project are conducting a study which determines the materials’ properties. The study is also trying to reveal their economic output.

Construction Market Evolution by Country

European Construction Ups and Downs in 2011 Countries leading growth

Countries to decline

Poland

Spain

Nordic nations

Ireland

Germany

Portugal

France

areas in Eastern Europe

AUGUST/SEPTEMBER 2011

Source: Euroconstruct CW Group CemWeek forecast BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

35

Sector coverage: Construction & materials

in condominiums where it can help muffle sounds from other unit owners. Italcementi produces cement, ready-mix concrete and construction aggregates. It is the fifth largest cement producer in the world and the biggest in the Mediterranean area.

Back in the U.S., a new road construction innovation has sought to prove its effectiveness in the construction of heavyhaul coal roads. An innovation patented

by Reinforced Aggregates makes use of recycled tires placed as cylinders side-byside on the ground in order to cover the footprint of a road’s foundation using a web-like pattern. Stone aggregates are then poured into the cylinders in order to hold them tightly. The method is said to decrease costs by reducing the amount of stone used.

This also eliminates the need for curing or compaction. According to Reinforced Aggregates, projects that made use of the technology reportedly reduced costs by 30 to 50 percent.

Finally, Axion International has been given a US$170,000 order to supply Recycled Structural Composite material for the construction of a plastic bridge in Scotland.

The bridge, with the capacity to carry around 45 tons of load, is expected to be the first European bridge to be constructed using Axion’s 100 percent recycled plastic materials. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

European construction in May (over April) Hungary

6.5

Poland

3.7

Romania

2.9

Portugal

1.5

Czech Republic

1.2

Germany

1.1

UK

0.5

Table available in the CemWeek Magazine Print Edition.

Sweden

0.1

Bulgaria

-0.1

Coal Week Coal Week

The Surprising Life-Cycle Impact of Concrete A study from MIT provides builders and consumers with a more complete picture of concrete’s impact as a building material.

Concrete has some positive properties which are easily overlooked by builders and beneficiaries, who usually do not look at the entire life-cycle. This conclusion belongs to the researchers at MIT’s Concrete Sustainability Hub who have recently released a study on the lifecycle of concrete.

In its environmental assessment, MIT researchers found that while concrete pavements are already sustainable in many ways, their carbon footprint can be further reduced. Two of the best methods for carbon footprint reduction are the increased use of fly ash and reduced overdesign. These were found to lower CO2 emissions by approximately 10 percent and 17 percent respectively, Paying attention to how concrete is while also saving upfront costs. used can make a great difference in the efficiency of construction. For example, Furthermore, the research conducted the study reveals that using concrete to by MIT has quantified relative CO2 pave roads and motorways can be much contributions from buildings across all more fuel efficient than asphalt for cars phases of a building's life-cycle, giving the construction industry access to new and trucks. data that could improve the accuracy and Pavements with greater stiffness, MIT transparency of existing and future lifefound, mean better fuel economy for cycle assessments. BMWeek CemWeek CW Group MIT used a life-cycle approach for the first time to evaluate the real cost of pavement throughout a 50-year lifetime, beyond initial construction costs.

The study included equation factors which occur during the operational life of concrete—such as traffic, energy consumption and maintenance efforts— with some surprising results.

France

-1

Slovakia

-1.3

Netherlands

-2.3

Slovenia

-9.8

EU27

-0.9

36

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

www.cemweek.com/subscribe

www.cemweek.com

the vehicles that travel on them. As an example of the initial results, MIT looked at typical material properties for concrete and asphalt pavements and found that for the same stiffness and fuel consumption, an asphalt pavement had to be up to 60 percent thicker than the concrete pavement.

BMWeek BMWeek

CemWeek CemWeek

CW Group CW Group

Coal Week Coal Week Coal Week

UPDATE

ban, the Indian Ministry of Environment and Forests (MoEF) granted Lafarge revised environmental clearance that took into account stricter environmental standards.

The revised clearance occurred under direction from the Supreme Court, which with its most recent ruling has upheld the revised environmental clearances given to Lafarge by the MoEF. Next Steps for Lafarge In response to the Supreme Court’s ruling, a Lafarge spokesperson stated that the decision would not only have a positive business impact but would help to secure the livelihoods of thousands of people on both sides of the India–Bangladesh border. Limestone from Meghalaya will be transported via a 17 km conveyor belt to Lafarge Umiam Mining in Bangladesh.

Lafarge currently operates four cement plants in India—two in Chhattisgarh and one each in Jharkhand and West Bengal— for a total capacity of three million tons of clinker and 6.55 million tons of cement.

Lafarge entered the cement market in India by acquiring the cement business of Tata Steel, followed by the purchase of the Raymond Cement facility in 2001. Lafarge also has a local presence in businesses like aggregates, concrete and gypsum plasterboard.

Now that the ban on its limestone mining operations in Meghalaya has been lifted, Lafarge is considering stepping up its presence in India through organic and inorganic opportunities. The company is Bangladesh, and the Indian Prime Minister said to be in talks with the promoters of Star will visit Dhaka in September of this year Cement, a Meghalaya-based operation, for a majority stake in that company.

The Long Delay The ruling follows several years of protests The Northeast: An Emerging Hub against Lafarge’s mining projects in Northeastern India is quickly becoming a Meghalaya. India’s Apex Court initially strategic hub for the cement industry, and blocked Lafarge from limestone mining the decision to allow Lafarge to continue in Nongtrai, Meghalaya on February 5, its limestone explorations is significant for 2010 after the local population protested the industry as a whole. Estimates place the that the company’s mining activities were eastern region as holding 40 million tons of damaging the region’s fragile ecosystem. A a total 300 million tons in the Indian cement petition filed against the mining operation market (as of FY 2011). The northeast of alleged that Lafarge had misrepresented the India experiences steep drops in demand environmental impact of continued mining during a long monsoon season. However, activities in the region when the company cement units in this region enjoy various applied for the requisite clearances. In April subsidies and tax breaks that are meant as 2010, following the Apex Court’s mining incentives toward industrial growth. BMWeek

lafarge mining resumes in india Despite protests, India's Supreme Court has granted approval in light of revised environmental clearance.

After a seventeen month wait, Lafarge has been given clearance to resume limestone mining operations in Meghalaya in the East Khasi hill forests. India’s Supreme Court gave its ruling on July 6, 2011, allowing Lafarge to once again supply its US$255 million cement plant in Bangladesh with limestone from the East Khasi quarry. The Chhatak plant in Bangladesh, operating as Surma Cement, is a joint venture between Lafarge and Spanish Cementos Molins and is wholly dependent on limestone extracted from the Meghalaya quarry. The ruling comes as India seeks to improve its ties with

BMWeek BMWeek

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

37

Ce Ce Ce

PROJECTS

& SUPPLIERS

EQUIPMENT AND NOTABLE PROJECTS Jaiprakash Orders Loesche Mills for Brownfield Unit Jaiprakash has placed an order with Loesche for its brownfield integrated unit under construction at Shahabad, Karnataka. The order includes one LM 60.6 mill for raw grinding with a 450 tph capacity, one LM 46.2+2 mill for PPC grinding with a 186 tph design capacity, and one LM 56.3+3 mill for PPC grinding with a 300 tph capacity.

Loesche will supply complete mechanical equipment for the raw grinding and cement grinding sections and will supervise erection and commissioning of the equipment on site. Jaiprakash is responsible for all civil and structural work at the unit.

KHD Wins Cimentos Liz Order Cimentos Liz has ordered a new 5,000 tpd line from KHD as part of a US$120 million project. KHD will supply auxiliary equipment, electrical power system components and instrumentation, and portions of the fabrication will be locally supplied in Brazil. Utilizing KHD alternative fuel technologies, the plant will be able to burn up to 25 percent waste fuels in the combustion chamber and up to ten percent old tires in the kiln. The plant will also incorporate KHD's technology for reduction of gas and dust emissions. Once complete, the Cimentos Liz cement plant in Lagoa Santa-Vespasiano will be the largest single cement plant in Brazil and one of the largest in South America.

LOESCHE Mill Type LM 60.6 for “Martinsburg”, US, as for Shahabad

The Rewa plant is the flagship cement plant of Jaypee Group. Last month, Jaiprakash Associates ordered the cement solution previously implemented at the Rewa Plant to be installed also at the company’s Baga Cement Plant in Himachal Pradesh.

FLSmidth Waste Heat Recovery License FLSmidth signed an exclusive licensing agreement with Wasabi Energy for its Kalina Cycle technology, which is able to recover waste heat from industrial process gas streams and convert the waste heat to usable electrical energy. The Kalina Cycle ammonia water process provides efficiencies 10 to 50 percent greater than other conventional technologies, reducing CO2 emissions and water consumption at an attractive investment level.

Cachapuz Bilanciai Wins Jaypee Order Cachapuz Bilanciai Group/String Automation received a new order from Jaiprakash Associates, the cement division of Jaypee Group, to implement its SLV Cement Bag Counting module to control the bags loading processes in twelve truck loading lines at Rewa Cement Plant in In January 2011, FLSmidth signed its first Madhya Pradesh, India. contract with Wasabi Energy to build the world's largest Kalina Cycle power plant at The new module will complement the SLV the D. G. Khan Cement Company, Khairpur Cement Solution implemented in January Plant in Pakistan. The new licensing 2011 and enables automatic bag counting agreement gives FLSmidth exclusive rights directly on the truck loading machines and to offer the technology to the cement and conveyor belt, notifying loading operators lime manufacturing industry globally, with that the total bags registered in the order has a few exceptions where existing licenses been achieved. are present.

38

www.cemweek.com

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

Mal’tsovsky Portland Installs Electrostatic Precipitator Eurocement’s Mal’tsovsky Portland unit in the Bryansk region has started operating its new, high-efficiency electrostatic precipitator, the result of a 250 million ruble investment by the company. Construction and commissioning of the air pollution control facilities were provided by the French firm Alstom Power Stavan.

The project was carried out as part of a comprehensive modernization of all Eurocement holdings. The filter meets European emissions standards and allows a 40 percent reduction of dust content in flue gases from the kiln.

Tecpro Secures Deal with Ultratech Tecpro has won Rs 79.3 crore worth of orders for coal handling and cement conveying systems from India's Ultratech. Tecpro Systems will undertake the supply of a 225 tph Coal Handling System and Cement Plant Conveying System at Rawan Cement Works II in Chhattisgarh. A second order has been placed for supply and erection of a 175 tph handling and conveyance system at the Rajashree Cement Works in Karnataka.

PROJECTS & SUPPLIERS

The headquarters of BEUMER Group UK in Leicestershire. Address: Wilson House, 207 Leicester Road, Ibstock, Leicestershire, LE67HP.

CORPORATE NEWS

Hanil Completes Waste Heat Project Korea’s Hanil Cement has finished construction of a new waste heat treatment facility. The 55 billion won project is estimated to save the company 30 percent on energy bills. The treatment process involves using hot exhaust from high temperature and high pressure steam to turn turbines which will produce electricity during the cement production process.

Izmir Cimentas Installs Air Cannons Turkish cement producer Izmir Cimentas will use high-performance air cannons to remove accumulated material from the preheaters. The build-up of material on the plant’s preheaters was jeopardizing output capacity and required at least two hours of daily maintenance to manually remove the residue. The new air cannon solution was planned and executed by Martin Engineering, who performed a survey of the preheater tower at the start of 2010.

Izmir Cimentas is the first foreign-owned Turkish cement producer and has a total annual production capacity of 5.4 million tons at four plants.

FLSmidth 2Q Falls on unrest Earnings before interest and tax (EBIT) fell 15 percent to 404 million Danish crowns (US$78 million) in April-June, short of forecasts which ranged from 446 to 542 million. Revenues in FLSmidth Cement fell 20 percent in the first half of 2011 from the same period last year, while the company’s Minerals division grew revenues by 17 percent.

FLSmidth to Acquire Phillips Kiln Services CEO Jorgen Huno Rasmussen has confirmed that FLSmidth will take full control of US-based Phillips Kiln Services, noting that “with a significant geographical footprint, Phillips Kiln Services offers a unique network of local specialists, who can serve FLSmidth’s global customers locally.” Phillips Kiln Services is located in South Sioux City, Nebraska in the United States and employees around 190 staff and workers. The company was founded in 1969.

Unrest in North Africa—in particular in Libya—lowered investment in the region, Beumer and Crisplant form Beumer affecting the Cement division’s first half.

Group UK As part of the integration of Crisplant into KHD 1H: Profit Improves, the Beumer Group, the company is now Revenues Down operating under the name Beumer Group KHD Humboldt Wedag International UK. Group reported that revenues fell to EUR 106.6 million from EUR 135.4 million in Since early 2010, intralogistics specialist the same period last year. After winning Crisplant has been represented in the UK several new projects, KHD booked an order by its subsidiary Beumer UK with two intake of EUR 51.4 million after a slow start product ranges: conveying and loading, and in 1Q with EUR 36 million. As the revenue palletizing and packing. Customers in the cycle for large industrial projects is 12 to 36 field of sorting and distribution equipment months, the revenue line in 1H 2011 felt the were previously served locally by Crisplant. dip from orders during the 2009 economic As a result of the merger, Beumer customers crisis, accounting for the 1H 2010 to 1H in all three business segments will have a 2011 drop. Nonetheless, KHD continues to common point of contact. show a strong order backlog of EUR 284.4 million as of June 30, 2011.

The Beumer Group is an international manufacturer of intralogistics for conveying, Looking to the second half of 2011, KHD loading, palletizing, packaging, sortation management expects a significant increase and distribution technology. Together with in order intake. Management also expects Crisplant, the Beumer Group employs group revenue for the full year 2011 of about about 2,300 people with an annual turnover EUR 270 million with an anticipated EBIT of about EUR 375 million. Beumer Group margin between six and seven percent.

UK is headquartered in Leicestershire. BMWeek AUGUST/SEPTEMBER 2011

BMWeek BMWeek CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

39

RUSSIA

COUNTRY SNAPSHOT

Cement Facilities T of T

RUSSIA RUSSIA

ESTONIA LATVIA LITHUANIA

BELARUS UKRAINE

KAZAKHSTAN UZBEKISTAN GEORGIA AZERBAIJAN TURKMENISTAN

KYRGYZSTAN

TAJIKISTAN

Courtsey of Eurocement

A more detailed poster that can be ordered from the CW Group shows unit type and index with details for all units

The Russia, CIS and the Baltic Cement Facilities Review, part of a series of cement facilities reports by the CW Group, consists of a detailed supply-side review of cement production units, capacities, ownerships, locations, types and group memberships and poster-sized strategic maps of the production units. The analysis provides a unique competitive perspective, key findings of which we highlight below.

of all production lines. However, many cement plants within Russia are older units, dating back to before the 1950s. Although several have undergone modernization efforts, including conversions to more energy-efficient dry process production lines, other units still struggle with outdated equipment and limited effective production capacity. Newer factories and production line expansions by companies such as Uglegorsk Cement, Ulyanovskshifer, Kavkazcement, Proletari, Novorossiysk, and Shchurovsky Cement will improve the country’s overall production capabilities EXPAND AND UPDATE Russia, the Ukraine, and Kazakhstan and utilization rates going forward, and contribute a combined 80 percent of the companies will accelerate modernization ex-Soviet cumulative cement production plans with a resurgence in demand. capacity. As the largest country in the region, Russia logically dominates with regard to The Ukraine is the second largest country in total production capacity, facilities and terms of production capacity, while Podilsky production lines, accounting for over half of Cement is the largest production unit. Other all plants in the region and almost 60 percent largeCoalUkrainian facilities with a capacity of CW Group Week CemWeek BMWeek As of the end of 2010, the combined nameplate cement production capacity for ex-Soviet cement manufacturing facilities exceeded 150 million tons of cement per year across 100 units. Close to 60 percent of the cumulative regional cement production capacity is concentrated in Russia (Eurasia), followed by Eastern Europe and Central Asia. The larger countries in the area, such as Russia, the Ukraine, and Kazakhstan, accounted for over 79 percent of the region’s total production capacity.

40

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

two million tons or more include Balcem Cement, Volyn Cement, and DonCement.

Central Asia holds the number two slot in the ex-Soviet region with Kazakhstan having the largest capacity in the area. Roughly 16 percent of capacity in this region is concentrated in the hands of global cement manufacturers HeidelbergCement, Vicat, and Italcementi. Twenty-three cement facilities are located in Central Asia, nine of which are in Kazakhstan, and Karcement Cement has the largest capacity.

GROUP HOLDINGS The ex-Soviet supply-side is relatively fragmented, setting the stage for continued consolidation over time. Independents and other manufacturers maintain a relatively significant presence in the region, accounting for over 34 percent of total production capacity. The major cement groups control the balance of production

RUSSIA: COUNTRY SNAPSHOT CAPACITY BY COUNTRY (% of total capacity)

CAPACITY BY REGION (mm tons)

100

200

Eastern Europe Baltic Central Asia Transcaucasus Eurasia

Estonia

Tajikistan

Latvia

Lithuania

Azerbaijan

Turkmenistan

Moldova

Armenia

Georgia

Kyrgyzstan

Belarus

Uzbekistan

Ukraine

Kazakhstan

Russia

0 0

CAPACITY BY COMPANY (share of capacity)

Independent & other

HeidelbergCement

Vicat

Eurocement

United Cement

Cimpor

Siberian Cement

Cemex

Mordovcement

Buzzi Unicem

Lafarge

Basel Cement

Italcementi Holcim

capacity, with five producers—EuroCement, HeidelbergCement, Siberian Cement, Holcim and Buzzi Unicem—accounting for almost half. The largest overall producer, with 24 percent of total regional capacity, is the EuroCement Group. The company’s 17 manufacturing facilities and 73 production lines are largely located in Russia, but the company also maintains cement plants in the Ukraine, Uzbekistan and Georgia.

In a more distant second position is HeidelbergCement (8%), followed by Siberian Cement (5%), Holcim (5%), and Buzzi Unicem (5%). Combined, these five companies are responsible for 66 percent of production capacity, maintaining just over 71 million tons of annual production capacity.

some slag grinding is done elsewhere). Of all the production facilities, slightly more than 50 percent have the capacity to produce one million tons or more per year, for a total of over 120 million tons of capacity.

This research is a first in that for the first time a single source details all the integrated gray, integrated white, grinding stations and slag cement plants for all countries on the continent, providing details on principal cement type produced, plant capacity, number of production lines, ownership structure, and affiliation with global groups. The report and poster are available directly from CW Group, by contacting us at sales@ cwgrp.com or by visiting our website at www.cwgrp.com/research

Recovery and growth are today’s leitmotifs in Russia, CIS and the Baltic region. The Russian cement market in particular showed strong growth in 2010, increasing 14 percent. Plant expansion efforts, including some previously placed on hold, are moving forward, including new units by Uglegorsk Cement, Lafarge, and Ulyanovskshifer.

Furthermore, the 2012 APEC Summit in Vladivostok, the Sochi 2014 Winter Olympics, the hosting of Formula-1 Grand Prix races between 2014 and 2020, and the 2018 World Cup Games are likely to drive The region relies largely on integrated plants strong growth in the region’s cement sector and only limited use of grinding stations can over the next five to eight years. BMWeek CemWeek CemWeek BMWeek be found (primarily in the Far East, though CemWeek BMWeek

CW Group CW Group CW Group

Coal Week Coal Week Coal Week BMWeek CW Group CemWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek CW Group AUGUST/SEPTEMBER 2011 BMWeek

41

TOOLS

& ANALYSIS

Are We Thinking Too Little, or Too Much?

by Carmen Nobel Harvard Business School Working Knowledge

The most captivating item in Michael Norton's office is a Star Wars The Force Trainer, a toy that allows would-be Jedi warriors to levitate a Ping-Pong ball within a tube using only the power of focused thinking. Norton, a marketing professor at Harvard Business School, plans to study whether inducing people into believing they can expertly control the ball will affect the way they perceive themselves as business influencers. n fact, Norton spends most of his time thinking about thinking. So it's somewhat ironic that his latest line of research explores the idea of thinking too much.

want to do this, then you should do this and not that,' making lists of the pros and cons and making a decision based on which list is longer, and so on."

"We all know that when we make lists, we often end up crumpling them and throwing them away because they're not really helping us make decisions," Norton says.

"Bill Clinton was famous for becoming so involved with the intricacies of each policy that no decisions were made. Having a leader who considers every detail sounds great in theory, but it can be suboptimal for moving forward with a decision.

There's a paralysis that can come with thinking too much."

However, there has been little research that "Academics traditionally have taken two considers the notion that overthinking a different approaches to decision-making," decision might actually lead to the wrong says Norton, who teaches in the Marketing outcome. Nor have researchers come up Unit. "One view is that people often make decisions too hastily; they use shortcuts and heuristics, and therefore Norton explores this idea they're susceptible to in From Thinking Too biases and mistakes. The Little to Thinking Too implication is that if maybe Much: A Continuum they thought more, they'd of Decision Making, an do better. with a model that explores how to determine article he co-wrote with Duke University's "And then there's this whole stream of when we're overthinking a decision—even Dan Ariely for Wiley Interdisciplinary research about ways in which you should though logic tells us that there certainly is Reviews: Cognitive Science. think more carefully in more logical ways— such a thing. creating decision trees BMWeek that mapCemWeek out 'if you CW Group Coal Week

If you've done something the same way for 10 years, it might be time to reconsider

42

www.cemweek.com

CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

TOOLS & ANALYSIS "We set out not to tell people whether they're thinking the right way, but just to get them thinking, 'I'm supposed to be making a decision right now—am I thinking too little about this, or am I thinking too much?'"

Norton says. "Both of those could lead to mistakes."

For example, in choosing laptop computers for a sales team, an IT executive might get caught up in comparing the graphics capabilities and audio quality of various options, when in fact the only factors of importance to users are the size, weight, and security features.

Worse yet, even if they narrow down the list of attributes under consideration, executives can still be stymied if they try to consider every single laptop on the market.

(In the article, Norton and Ariely cite a study by social psychologists Sheena Iyengar and Mark Lepper, who showed that grocery store shoppers who were offered free samples of 24 jam flavors were less likely to buy any jam at all than those shoppers who sampled only six flavors; considering too many options made it too hard to choose one.)

The underthinker The problem is that time-crunched managers often swing too far to the other end of the decision-making thinking spectrum—that is, they don't think at all.

"Very often managers find that there's not enough time to think through every single scenario or customer segment, which can take months," Norton says. "But too often the correction to 'We don't have time to do that' is an over-correction to one hundred percent 'We should go with our gut.' " While all good managers should be able to make snap decisions in high-pressure situations, they may miss out on good opportunities—and fall into ruts—when

they make quick decisions strictly out of Stale popcorn habit. Too often, "We always do it that way" More detrimentally, people may make is the main reason for a decision. downright bad decisions based on force of habit. In the article, Norton and Ariely deFor instance, a manager might hire or scribe a study in which several participants disqualify job candidates based on whether watched a movie while eating popcorn. they make good eye contact during an Some received fresh popcorn, while others interview, just because past candidates were given week-old, stale popcorn. The rewho made good eye contact ended up searchers found that those participants who performing well at the company. always ate popcorn at the movies were just as likely to gobble down the stale popcorn as they were the fresh popcorn, strictly out of habit.

Lately, Norton has been studying the brain chemistry of decision makers, using functional magnetic resonance imaging (FMRI) in order to determine the neural signatures of decisions based on habits and those based on thoughtful analysis. He gives the example of choosing a favorite hangout because of the quality of the coffee and the ambience at a particular coffeehouse, as opposed to stumbling into a café on a very cold day when any hot drink would seem delicious—yet coming to believe in both cases that the establishment truly offers the best coffee in the whole world. "Ask yourself: Do I like this coffee because I really like "So they just decide to use that criterion this coffee, or do I like it because it was cold forever because it's worked out in the past," out?" Norton says.

Norton explains. "But they don't think about what if they had hired people who Still, there's a long way to go before science don't make eye contact. Maybe they would offers a clear-cut method for thinking have been better than the people who through decisions perfectly. do. And so that's the idea we want people to consider. Sometimes when you make "We are hopeful that people will continue habitual decisions, things work out fine. But to conduct research in this area," Norton that doesn't mean they're the best decisions. says. "What we know now is that people And if you've done something the same way sometimes think too much, and sometimes for 10 years, it might be time to reconsider— they think too little. But we still don't know the right amount to think for any given to think a little more." decision, which is a fascinating decision yet to be solved." BMWeek CemWeek CW Group Coal Wee

CemWeek CW Group Coal Wee BMWeek CemWeekCemWeek BMWeek BMWeek CW GroupCW Group Coal Wee CemWeek CW Group BMWeek www.cemweek.com CemWeek CW Group AUGUST/SEPTEMBER 2011 BMWeek

43

DATA

SHARE PERFORMANCE

As of August 31, 2011. All share prices in local currency Company (Exch)

52 WEEK HIGH

52 WEEK loW

% from 52Hi

% from 52Lo

50d Mov Avg

200d Mov Avg

% from 50d Mov Avg

% from 2000d Mov Avg

ADEL BRTN FPO (ASX)

3.72

2.22

-23.92%

27.48%

2.68

3.05

5.62%

-7.14%

BORAL LTD FPO (ASX)

5.73

3.32

-35.60%

11.14%

3.91

4.61

-5.54%

-19.97%

TITAN CEMENT (Athens)

18.36

12.60

-27.72%

5.32%

-

-

N/A

N/A

DHAR CEMENT (Bombay)

1.00

1.00

0.00%

0.00%

1.00

1.00

0.00%

0.00%

INDIA CEMENT (Bombay)

127.80

62.10

-47.54%

7.97%

69.38

83.57

-3.36%

-19.77%

JK CEMENT (Bombay)

199.90

96.05

-46.10%

12.18%

106.51

118.64

1.16%

-9.18%

PRISM CEMENT LTD (Bombay)

65.90

39.10

-39.45%

2.05%

44.02

49.31

-9.37%

-19.09%

SAGAR CEMENT BSE (Bombay)

170.00

113.00

-23.00%

15.84%

137.22

140.11

-4.61%

-6.57%

SHIVA CEMENT (Bombay)

11.49

4.92

-43.26%

32.52%

5.79

6.27

12.60%

4.06%

FLSMIDTH & CO (Copenhagen)

549.00

255.20

-42.00%

24.76%

356.05

419.48

-10.58%

-24.10%

WEST CHINA CEMENT (Frankfurt)

0.34

0.14

-49.85%

22.86%

0.19

0.25

-10.79%

-29.99%

SHANSHUI CEMENT (HKSE)

10.20

4.21

-21.76%

89.55%

8.83

7.87

-9.66%

1.40%

ASIA CEMENT CH (HKSE)

7.34

3.30

-24.11%

68.79%

6.44

5.61

-13.46%

-0.75%

ANHUI CONCH (HKSE)

56.90

27.25

-41.48%

22.20%

35.75

38.28

-6.85%

-13.02%

INDOCEMENT TUNGGA (Jakarta)

19,400.00

12,750.00

-21.65%

19.22%

15,424.20

16,039.60

-1.45%

-5.23%

HOLCIM INDONESIA (Jakarta)

2,575.00

1,770.00

-24.66%

9.60%

2,045.45

2,070.04

-5.16%

-6.28%

SEMEN GRESIK PER (Jakarta)

10,350.00

7,250.00

-12.08%

25.52%

9,380.30

9,307.46

-2.99%

-2.23%

TONGYANG CEMENT (KOSDAQ)

2,850.00

990.00

-54.04%

32.32%

1,338.00

1,658.50

-2.09%

-21.01%

ASIA CEMENT (KSE)

49,600.00

35,550.00

-21.17%

9.99%

42,908.60

45,065.30

-8.88%

-13.24%

LAFARGE MALAYAN C (Kuala Lumpur)

8.11

6.06

-18.74%

8.75%

7.75

7.52

-14.97%

-12.41%

YTL CEMENT BHD (Kuala Lumpur)

4.85

3.80

-3.30%

23.42%

4.76

4.40

-1.49%

6.48%

CIMPOR R (Lisbon)

5.55

4.27

-3.44%

25.47%

5.14

5.08

4.20%

5.41%

STEPPE CEMENT (London)

59.86

31.65

-46.37%

1.42%

36.65

41.71

-12.41%

-23.05%

CEMENTOS PORTLAND (MCE)

17.19

9.26

-41.01%

9.50%

10.76

13.41

-5.79%

-24.37%

GRUPO CEMENTOS (Mexico)

56.50

38.00

-20.35%

18.42%

41.39

41.73

8.72%

7.82%

BUZZI UNICEM (Milan)

11.01

6.18

-36.60%

13.04%

7.42

9.22

-5.94%

-24.28%

CEMENTIR HOLDING (Milan)

2.65

1.62

-27.36%

19.20%

1.80

2.02

6.73%

-4.50%

ITALCEMENTI RSP (Milan)

3.97

2.09

-36.52%

20.69%

2.47

3.27

2.03%

-22.85%

44

www.cemweek.com

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

DATA SHARE PERFORMANCE As of August 31, 2011. All share prices in local currency Company (Exch)

52 WEEK HIGH

52 WEEK loW

% from 52Hi

% from 52Lo

50d Mov Avg

200d Mov Avg

% from 50d Mov Avg

% from 2000d Mov Avg

ASSOCIATED CEMENT (NSE)

903.60

415.05

10.98%

141.61%

786.51

618.19

27.50%

62.22%

ANDHRA CEMENTS LI (NSE)

23.70

18.50

-62.03%

-51.35%

19.24

19.24

-53.22%

-53.22%

BINANI CEMENT LIM (NSE)

109.00

76.55

-16.97%

18.22%

-

87.95

N/A

2.90%

BURNPUR CEMENT LI (NSE)

15.75

10.20

-61.59%

-40.69%

11.22

11.46

-46.06%

-47.19%

DALMIA CEMENT (BH (NSE)

284.80

54.00

-76.70%

22.87%

209.09

223.14

-68.27%

-70.26%

DECCAN CEMENTS LI (NSE)

248.00

156.10

-41.53%

-7.11%

163.07

164.23

-11.08%

-11.71%

ITD CEMENTATION I (NSE)

282.00

148.10

-48.40%

-1.76%

156.80

178.00

-7.20%

-18.26%

MADRAS CEMENTS LT (NSE)

134.00

80.00

-34.63%

9.50%

85.74

91.76

2.17%

-4.53%

MANGALAM CEMENT L (NSE)

128.00

46.25

-20.35%

120.43%

112.25

73.90

-9.18%

37.96%

SHREE CEMENTS LTD (NSE)

2,454.10

1,700.00

-32.42%

-2.44%

2,118.58

2,002.35

-21.71%

-17.17%

CRH PLC AMERICAN (NYSE)

25.16

15.89

-28.46%

13.28%

18.41

21.32

-2.25%

-15.57%

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

11.15

4.86

-51.84%

10.49%

6.24

7.94

-13.92%

-32.34%

EAGLE MATERIALS I (NYSE)

33.22

16.89

-40.64%

16.76%

21.41

27.01

-7.88%

-26.99%

TEXAS INDUSTRIES (NYSE)

47.42

30.11

-24.91%

18.27%

36.21

39.64

-1.66%

-10.16%

CIMENTS FRANCAIS- (Paris)

77.49

55.10

-16.54%

17.37%

65.57

69.23

-1.38%

-6.58%

LAFARGE (Paris)

48.76

25.87

-40.43%

12.29%

33.16

41.71

-12.40%

-30.37%

ANHUI CONCH CEMEN (Shanghai)

43.05

21.38

-48.08%

4.54%

25.30

32.64

-11.64%

-31.53%

FUJIAN CEMENT CO (Shanghai)

14.70

6.75

-22.31%

69.19%

12.89

11.19

-11.40%

2.04%

CHINA SINOMA INTL (Shanghai)

50.50

24.20

-45.49%

13.76%

29.16

35.49

-5.59%

-22.42%

HUAXIN CEMENT CO (Shanghai)

5.48

1.83

-63.35%

9.78%

2.47

3.30

-18.76%

-39.20%

SIAM CEMENT -F- (Stuttgart)

10.54

7.59

-17.81%

14.08%

9.30

8.92

-6.86%

-2.86%

TAIWAN CEMENT TWD (Taiwan)

49.45

29.30

-18.91%

36.86%

43.58

39.03

-7.99%

2.74%

ASIA CEMENT CORP (Taiwan)

48.30

28.85

-18.53%

36.40%

42.10

37.61

-6.54%

4.62%

CHIA HSIN CEMENT (Taiwan)

20.30

15.00

-11.33%

20.00%

17.95

17.44

0.29%

3.23%

LUCKY CEMENT TWD1 (Taiwan)

9.20

5.85

-27.50%

14.02%

7.00

7.32

-4.68%

-8.84%

HOLCIM N (VTX)

76.90

42.39

-33.75%

20.19%

50.78

63.56

0.34%

-19.84%

HEIDELBERGCEMENT (XETRA)

54.00

26.97

-44.77%

10.61%

35.13

44.89

-15.09%

-33.56%

KHD HUMBOLDT WEDA (XETRA)

8.24

4.05

-35.67%

30.97%

5.70

6.62

-7.03%

-19.96%

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

45

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

BUZZ

TOP 15 STORIES

CEMWEEK.COM

Falling prices in India, mixed news on plant expansions. The most popular stories this season on CemWeek.com:

decision

1. 2011 India Cement Sector Survey 2. Reliance Cement issues LOI for Satna factory plan 3. India: Lafarge, Holcim units in anti-trust probe 4. Holcim sets sights on Madras Cements plant 5. Small cement firms in India shuttering plants 6. Cemex allots $470 million for capital expenditures in 2011 7. India: Cement makers in Rajasthan ordered to pay interest 8. Cement demand in Brazil still growing 9. Birla Group suspends cement expansion plan 10. Prism Cement opening new cement, coal plants 11. Ghana: Ghacem looking for fresh limestone deposits 12. Cement majors get mixed ratings 13. Camargo considering controlling stake in Cimpor 14. Cement prices in India falling 15. Anhui Conch to build four cement plants in Indonesia

products fuel rising

global

manufacturers

retail

united

land

raise

improved

materials

revenue

southern environmental debt mercury

power

days

analyst

chairman economic gloria revenues bolivia times mexican improve

increased rise

units cent continue investment yuan development lanka work

holcim plants

project earnings soboce levels executive india africa government region concrete chihuahua profits china building lafarge target sold

capital

good

energy

waste outlook markets control

costs average growth selling

mexico domestic

output russia rubles

egypt

performance cementos level sector operations director industrial purchase agreement stake post shares major national ambuja

brazil

TOP 15 STORIES

international general

facility

expansion board

area

BMWEEK.COM

Top corporate news with global economic, political and industrial developments. Here’s what you’re reading on BmWeek.com: 1. Eternit shareholders to spend 20 years in jail 2. Etex draws closer to acquiring Lafarge gypsum 3. US Committee votes to bar regulation of coal ash as hazardous waste 4. TMK enters joint venture with Lhoist 5. Lafarge nears divestment goals for 2011 6. Euroconstruct predicts growth for European construction 7. Lafarge operations continue to reel from global recession 8. JS Group to acquire Permasteelisa 9. New road construction method gains popularity in the US 10. Tax exemption for building materials extended in Brazil 11. Lafarge to sell gypsum business to Etex 12. Cemex US, TXI in rmx, agg asset swap 13. Cemex to launch projects in Dominican Republic, Haiti 14. Cartel allegations rise in Ireland 15. Blue World Crete launches new product

port thousand

financial

firm

european

houses

price

water

economic produce

global manufacturing

given

completed

deal

countries infrastructure recovery france activity output homes europe builders provide markets facilities limestone known sustainable using

operation

industries

include

regarding operations meters expansion equipment

declined country’s continues quarry continue costs environmental engineering

project facility

products growth public world steel sales sector recently lafarge rate cubic previous focus aggregates order housing decline reportedly work

concrete

coal product

government worth rise

areas

safety believes program power road cemex plans china energy quality jobs developed india gypsum russia spending experts ready purchase improve results concerning development

says

sand

australia

believe

AUGUST/SEPTEMBER 2011

CW Group CemWeek BMWeek CemWeek CW Group BMWeek www.cemweek.com CemWeek BMWeek CW Group

47

FLASHBACK News flow on CemWeek.com last two months (darker red shows higher news volume)

Market news continues to trend around the major markets, with increasing attention on Russia, Mexico and Brazil. Industry developments have also kept Egypt, Saudi Arabia, Nigeria and Indonesia in the headlines at CemWeek.com.

IN THE NEXT ISSUE Straight talk: CemWeek industry leader series Italy cement market: Glimmers of hope or wishful thinking?

Regional Focus: North America and Caribbean cement facilities CemWeek survey: Highlights from the 2011 Brazil-Americas survey Strategic ideas: 7 questions for better execution

CemWeek industry leader series

North America & Caribbean cement facilities

48

www.cemweek.com

CW Group Coal Week CemWeek BMWeek CemWeek CW Group Coal Week BMWeek CemWeek BMWeek CW Group2011 Coal Week AUGUST/SEPTEMBER

North America and Caribbean cement facilities Italy Cement Market

PLANT

MAINTENANCE Rope and remote access services throughout the cement plant High-capacity industrial vacuuming services, wet and dry Cleaning and painting of small and large structures Clean outs of cement bulk ship transport carriers High-altitude measurements and verification of plant infrastructure

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

worldwide service

Calle La Resina 37 Nave 11 28021 Madrid, Spain

www.blancon.net

A better way to cool clinker New FLSmidth Cross-Bar™ Cooler Ready to move towards maximum availability, minimal maintenance and consistently high thermal efficiency – all for a very economical investment? The new FLSmidth Cross-Bar Cooler is the latest development in cross-bar technology. Featuring a modular design, it ensures rapid installation and great flexibility for complete or partial upgrades. How did we make our bestselling cross-bar cooler even better? With experience gathered from more than 230 cross-bar cooler references, and with extensive R&D. See for yourself just how cool it is.

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