GLOBAL CEMENT INDUSTRY. KNOWLEDGE.
AUGUST / SEPTEMBER 2015
FEATURE
LAFARGEHOLCIM MERGER CREATES NEW SECOND LARGEST CEMENT PLAYER IN INDIA FEATURE
MONGOLIAN INDUSTRY
New eco-cement plant boosts imports-dependent FEATURE
FOCUS ON
MATERIAL HANDLING TOP STORIES IN MIDDLE EAST News
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Analysis
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Market Coverage
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GLOBAL WHITE CEMENT MARKET & TRADE REPORT WORLDWIDE WHITE CEMENT INDUSTRY, CURRENT AND FUTURE STATE OF THE MARKET SEGMENTS, INDUSTRY TRENDS, GLOBAL MOVEMENT OF PRODUCT AS WELL AS MAJOR SUPPLIERS AND CONSUMER NATIONS
White cement continues to enjoy its niche as a specialized, value add segment within the global cement sector. Though the sector has climbed up from its depths in the global recession, the industry may be pausing to find breadth. Even so, new production capacity is expected to come on-line in the next few years, following the recent commission of some of the world's largest white cement production units Is there room for more?
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CONTENTS FEATURES 5 MONGOLIA IS MOVING CLOSER TO CEMENT SELF-SUFFICIENCY Opening of Moncement plant in the Gobi desert boosts imports-dependent Mongolian industry 9 LAFARGEHOLCIM LafargeHolcim merger creates the second largest cement player in India
5
15 MATERIAL HANDLING: TOP STORIES IN THE MIDDLE EAST Bedeschi Group increases activities in the Middle East with new contracts
15 11 DEPARTMENTS LETTER FROM THE PUBLISHER 2 Global cement trading remains dynamic despite expected price declines
CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM 39 Construction and building materials update
NUMBERS IN BRIEF 3 Global trade and domestic cement prices overview
EQUIPMENT 41 Equipment and notable projects
RESEARCH 21 Cement Volumes Cement Energy Markets PEOPLE 29 People on the move 30 33 35 37
REGIONAL REPORTS Europe, Middle East & Africa South-East Asia Asia Pacific Americas
CW GROUP MEETING AGENDA 43 Group’s upcoming events BUZZ 44 Top 15 CemWeek and BM Week stories
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EDITOR’S NOTE Letter from the publisher and editor
HIGH TECH OR BUST
S
tate of the art technology and innovation are the new hype as the global cement industry is becoming more competitive. Additional pressure comes from environmental awareness shaping new legislation to an ever higher extent. New plants and capacity additions are centered around high-tech solution that are becoming the norm. The new issue of CemWeek magazine covers the challenges posed by major companies and producers in delivering new cement production units that meet the higher global standards as well as local requirements. This issue also looks into the impact of the LafargeHolcim merger both, on the Indian market and the merging companies themselves. Just like in the action and reaction theory, the process had a significant influence on both the business environment and on the company. One of the main stories in the current issue of CemWeek magazine focuses on the new production capacity opened by Mongolian producer Monpolymet Group in the Gobi desert. A technological feat in itself, the new plant is built to withstand the harshness of the Mongolian desert, while playing a key role in the industry, as the country’s cement demand is increasing rapidly. As the feature story details, the new plant takes Mongolia closer to cement self-sufficiency, at a time when much of the southeastern part of the country depends on imports from China. Read the story to find out all the details about the remarkable technical specs, the financing structure and the business impact of the new plant. Going deeper into the topic of cement technology, CemWeek brings a detailed foray into the activities of equipment producer Bedeschi, which is currently increasing its activities in the Middle East and North Africa, where economies have witnessed impressive expansion and currently boast one of the fastest growing construction sectors in the world. Don’t miss out on the story that details some of Bedeschi’s most important projects, spanning from Turkey to Tunisia and Morocco.
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STAFFBOX ROBERT MADEIRA CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH
MARINA FERNANDES
JR. EDITOR & COMMUNICATIONS ASSISTANT
RALUCA CERCEL STEFANA ABICULESEI SILVIU STEFANESCU SUSHMITA RAI
CONTRIBUTING WRITERS & RESEARCHERS
CATALIN CIOBANU SANTOSH SHETTYE DESIGNERS
We also take a closer look at the double impact generated in India by the global merger of Lafarge and Holcim. Both the structure of the local market and the merged companies suffered changes as a result: while the new group becomes a very strong number two in India’s cement business, Lafarge also had to give up some of the most profitable production units in the country, in order to comply with the demands of the competition regulators. Another effect of the merger is that is likely to strengthen LafargeHolcim’s financial standing in India and its position on certain segments against their competitor, UltraTech Cement. The feature gives a detailed analysis of the merger aftershocks on the Indian cement sector. And as usual, CemWeek Magazine provides all the relevant news about the main indicators of the industry, including the latest facts and figures about cement volumes, energy prices, relevant people in the business, regional developments, equipment and construction projects. Don’t miss out the numbers and the trends laid out in the special sections.
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NUMBERS
GLOBAL TRADE AND DOMESTIC CEMENT PRICES OVERVIEW
The cement trading world has developed in line with trends exhibited this time last year, while average sales prices have been heavily impacted by geopolitical developments GLOBAL GRAY CEMENT PRICE INDEX
(USD/ton)
Source: CW Research
240
Apr-15
Feb-15
Dec-14
Oct-14
Aug-14
Jun-14
Apr-14
Feb-14
Dec-13
Oct-13
Aug-13
Jun-13
Apr-13
Feb-13
Dec-12
Oct-12
Aug-12
Jun-12
0
Gray cement export have seen some recovery following the winter months, given that demand in the markets highly impacted by seasonal changes has increased. Nevertheless, year-on-year, volumes have contracted. In what prices are concerned, the general trend for FOB pricing has been a month-on-month decline, yet prices exhibited strengthening on a year-on-year basis. The main cement exporters in the first half of the year were Thailand, China, Vietnam and Turkey. An interesting development this years was that China lost its position as the primary cement exporter in the world. (USD/ton)
250
2Q 2014
2Q 2015
Ukraine
China
Poland
Thailand
India: North
Saudi Arabia
Oman
Italy
Russia
Germany
Portugal
India: Pan
India: South
Indonesia
Czech Republic
Egypt
Luxembourg
Brazil
USA
South Africa
Mozambique
Peru
Argentina
Paraguay
Jamaica
Nigeria
Chile
Cape Verde
0
Source: CW Research
2Q2015: AVERAGE SALE PRICES FOR SELECT MARKETS
At the domestic level, average sale prices of cement saw some expected developments. In the second quarter of the year, the depreciation of the Ruble against the US dollar impacted the prices of cement, leading to the steepest decline in the world. Ex-works prices fell by 33 percent year-on-year. At the other end of the spectrum is Jamaica and the United Stated. In the United States, the market is expected to see a general strengthening, in line with economic recovery and increased activity in construction activity, and a greater focus on real estate development. 3
AUGUST / SEPTEMBER 2015
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FEATURE
NEW ECO-CEMENT PLANT BOOSTS IMPORTS-DEPENDENT
MONGOLIAN INDUSTRY
5
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A new production capacity in Mongolia’s cement industry is set to meet the country’s rising demand, as Monpolymet Group opens Moncement plant in the Gobi desert.
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FEATURE
the economy during the same year. The shortfall in production has traditionally been met by imports, mostly from China, though demands from that country’s domestic market have at times put constraints on sales to its neighbor, limiting construction sector growth in Mongolia.
The new 250 million USD Moncement cement plant
ongolia is moving closer to cement self-sufficiency, at a time when increasing demand threaten to increase dependence upon imports from China. The new plant adds to a recently refurbished facility in the north and will be followed by another two projects that will consolidate local production. The new 250 million USD cement plant was built with joint financing provided by the European Bank of Reconstruction and Development, the Development Bank of Mongolia and Monpolymet, a group of companies founded in 1992 and specialized
integrated cement plant and consists of two production lines with a total production capacity of 3,000 tons of clinker per day and 1 million tons of OPC 42.5, РС 42.5 and PC 52.5 Portland cement per year. A BREAK FROM IMPORTS Mongolian demand for cement, along with other building materials, is set to rise sharply in the coming years as both the public and private sectors roll out extensive construction projects in the country. With a boom in the mining sector in particular, the demand for cement to build infrastructure, both at mines
Output from the plant is estimated to amount to around 50% of the country’s annual cement consumption. in mining and mineral explorations, rehabilitation, construction and production of building materials. The EBRD loan for the Mongocement project was part of an extended financial package agreed in May 2013, which included a 20 million USD equity investment in Senj Sant, whose parent company is the Monpolymet Group. The project is a complete development of an 7
AUGUST / SEPTEMBER 2015
and for transport links will increase. At the same time state-backed projects in infrastructure, housing and utilities will also draw heavily on domestic production and imports. In 2013, Mongolia’s cement production was around 240,000 tons per year, well short of the 2 million tons demanded by www.cemweek.com
In May 2014, Mongolia began production at the country’s largest cement plant, a one million ton capacity facility in the Khutul district of Selenge province. The plant was refurbished over a one-and-a-half year period, replacing outdated technology from an inactive Soviet-era cement factory with a modern dry process system. Located 250 km to the north of Ulaanbaatar, output from the plant is estimated to amount to around 50% of the country’s annual cement consumption. By using the dry process, which does not have water added to the ground up materials during production - unlike in most older plants – the plant requires less power to fire its kilns and cause less pollution. This year’s opening of the Moncement plant brings the Mongolian cement business even closer to self-sufficiency, as the CEO of Monpolymet Group and Moncement project leader N. Munkhnasan outlined during the inauguration: “We have been importing almost 90 percent of our cement consumption in the past. Today, we have created our advantage while meeting Mongolian and European standards, utilizing modern technologies that reduce the consumption of energy and impact on its environment.” The added capacity of the new plant is likely to reduce the occasional bottlenecks in the supply pipeline, which have been pushing up prices whenever the flow of materials could not be maintained at a level equal to the construction sector’s requirements. THE HIGH-TECH, MID-DESERT GREENFIELD PROJECT Moncement is the first cement plant of the 25 year-old Monpolymet Group, and much of the output of the new facility is
to be directed towards supplying cement and raw materials to major mining projects in the region. The plant was built the middle of the Gobi desert, 520 km from the Ulaanbaatar and 55 km from Saynshand, the capital of the southeastern Dornogovi province bordering China’s autonomous region of Inner Mongolia. Various technical challenges were faced to conserve water and to design the production units to the extreme weather conditions, as frequent sand and snow storms amplify the harsh Mongolian climate with temperatures ranging from -40°C to +40°C and ground temperatures as high as 60°C. Moncement is the first plant in Mongolia to include a Waste Heat Recovery (WHR) system, which incorporates a gas powered generator that allows the facility to produce energy using residual heat coming from the production line. The plant also has a complete water treatment and recycling plant. Logistics of incoming materials and cement is assured by the direct connection to the country’s main railway system. Moncement is developing the SenjitKhudag limestone deposit located in OrgunSoum, which is
estimated to have sufficient reserves for over 170 years of production. The local impact of the new plant will be significant, as Moncement is creating more than 500 jobs and is contributing to the local budget. It will also have a major
authorities estimate that up to 1,000 family apartments, with supermarkets and sports facilities will be built as a result, leading to a threefold expansion of the local community. Apart from the Senj Sant project, there are at least two other cement plants in
The new plant directly supports and nurtures the development of the private sector in a relatively underdeveloped industry in Mongolia. Phil Bennett, first vice-president of the ERBD impact in developing auxiliary facilities and small and medium enterprises in the area and increasing the income of the locals. According to Phil Bennett, first vice-president of the ERBD, the project represented another step towards the diversification of Mongolia’s economy: “The new plant directly supports and nurtures the development of the private sector in a relatively underdeveloped industry in Mongolia.” Local and regional
the works with the Mongolyn Alt (MAK) Group and Germes Gakhiur building new production facilities, both expected to be completed and begin production in 2015. With the additional production these plants offer, Mongolia is expected to come close to cement self-sufficiency. This could still be tested by rising demand from both the public and private sector, with some estimates putting requirements at up to 3 million tons a year this year.
Mongolian officials at the opening ceremony of the plant
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FEATURE
merger creates new second largest cement player in India
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New company compelled to sell profitable assets, but becomes a strong competitor in ready mix cement
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afargeHolcim repositions itself as the second largest cement maker in India after selling two highly profitable plants to Birla Corporation in an increasingly consolidated market. The sale of the Jojobera plant in Jharkhand and the Sonadih plant in Chhattisgarh, that awaits approval by the Indian regulators, was a condition for the recent global merger between giants Lafarge and Holcim. The asset divestment will push LafargeHolcim a tad behind UltraTech, the country’s top cement producer promoted by AV Birla Group. On the other hand, the merger is likely to strengthen LafargeHolcim’s financial standing in India and its position on certain segments against their competitor, UltraTech Cement. COSTLY DIVESTMENT In order to receive the approval for the merger, LafargeHolcim was asked to give up on two important plants. The two units being sold by Lafarge to Birla Corporation for Rs. 5,000 crore are among the most profitable cement plants in India, generating about Rs.700 crore in pre-tax profits a year, even in the current depressed market. The two plants are established under
the Concreto and PSC brands and have a total annual capacity of about 5.15 million tons, partly because of the availability of raw materials in close proximity. The Concreto and PSC brands were crucial for the
The merger is likely to strengthen LafargeHolcim’s financial standing in India and its position on certain segments against their competitor, UltraTech Cement. closure of the transaction, which would take Birla Corp.’s total annual capacity to manufacture the building material from 10 mt to 15 mt. “The acquisition, together with the two brands, perfectly fit into our
Rolf Soiron, Holcim chairman, left, and Bruno Lafont, Lafarge chief
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strategic vision and ambition of enhancing competitiveness in our chosen markets,” said Harsh Lodha, chairman of Birla Corp. Concreto is one of the strongest cement brands in India, and in some markets commands a premium of up to Rs.55 for a 50kg bag. PSC, too, is considered a premium brand. The Birla-Lafarge deal brings Birla Corp among the top 10 players in the country with a capacity of 15 million tonnes. The Indian company will fund the deal with some cash and incremental debt. However, besides regulatory clearances, the deal is conditional upon Birla Corp. securing the limestone mining rights of the two units. The mining rights may not be automatically transferred to Birla Corp., but without access to the deposits estimated at 145 mt, the plants will have to be mothballed. While, LafargeHolcim is giving up profitable assets in India in order to complete the merger, the group will benefit from combined capacities and will actually create a serious competitor for UltraTech Cement, especially in the ready mix concrete sector (RMC). UltraTech, the largest cement maker in India sold 4.8 million cubic meters of RMC in 2013-14, while according to the 2014 annual reports of Lafarge and Holcim, Lafarge sold 2.6 million cubic meters of RMC in India and Holcim’s subsidiary ACC Ltd sold 2.12 million cubic meters. Once the new entity is formed, combined RMC sales of 4.7 million cubic meters will make a serious competitor to UltraTech. RMC is a kind of concrete made according to preset requirements and delivered at work sites on truck-mounted mixers. Its advantages include better quality mixture and less on-site work. With the expectation that construction and infrastructure will pick up, this is the sector, that will benefit the most and will see a major cash generation, once that demand comes in. The industry average contribution of the RMC business to a cement company’s total turnover is around 5-7%. According to Cement Vision 2025, a Confederation of Indian
Industry-AT Kearney report released in April 2014, RMC accounts for 8% of overall cement demand in India. This share is expected to increase up to 25% by 2025, the report said. STRONGER PLAYER ON A CONSOLIDATED MARKET Although driven by the antitrust regulator, the Competition Commission of India, the deal with Birla also reflects the perennially consolidating nature of the cement industry in India, which has witnessed 20 mt of production capacity, changing its hands in seven deals with a combined value of Rs.16,000 crore in the past two years. The wave of consolidation in recent years was triggered by the entry of global giants, difficulties in setting up new plants and industrywide overcapacity. With some more cement assets on the block, industry experts expect more consolidation. Prior
to the LarfargeHolcim merger, Aditya Birla Group company, UltraTech Cement, India’s largest cement maker with an annual capacity of more than 60 million tons, said in December it would buy two plants in central India from Jaiprakash Associates as it aims to take its output to beyond 70 million tons annually. This consolidation is happening at a time when new players like Anil Ambani-led Reliance Group and Sajjan
new plants being planned in Maharashtra and Madhya Pradesh. JSW Group is setting up 10 grinding units in the country to triple its cement and clinker capacities to 20 mtpa in the next three years. India, the world’s second-largest cement industry after China, remains a key market for the Lafarge-Holcim Group, with a balanced portfolio in cement, aggregates,
In order to receive the approval for the merger, LafargeHolcim was asked to give up on two important plants. Jindal-led JSW Group have big plans in the cement sector. Reliance Cement is aiming for a three-fold increase in capacity upto 15 million tonnes in the next three years, with
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and ready-mix concrete. After the merger the group will have a combined cement capacity of around 68 million tons in the country. The combined group will account
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FEATURE
Lafarge Cement Plant , Bhawaliya ,Chittaurgarh, India
for nearly 20% of the total industrywide capacity that stands at 366 million tons. The proceeds from the sale of the two plants to Birla will be used to further reduce debt and thus strengthen the group’s financial situation in the country. In India, Holcim operates through subsidiaries ACC and Ambuja Cements, while Lafarge’s units include Lafarge India and Lafarge Aggregates & Concrete. Lafarge had forayed into the Indian cement market in 1999 with the acquisition of Tata Steel’s cement activity. Later it acquired the Raymond Industries’ plant in Chhattisgarh and snapped L&T’s concrete business. The company has plants in Chhattisgarh, Jharkhand, Bihar, West Bengal and Rajasthan and also have recently commissioned an integrated cement plant in Rajasthan with a split blending unit in Haryana with a combined installed capacity of 2.6 metric tonnes per annum (MTPA). As
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on September 2014, Lafarge India had a capacity of 11 MTPA. The Lafarge units in the states of Jharkhand and Chhattisgarh, have a total capacity of 5.15 million tons a year and will take the Kolkata-based company’s total capacity to 15 million tons. LafargeHolcim Ltd. was formed in July and is now the world’s biggest cement maker with a market value of $38.7 billion. With a well-balanced presence in 90 countries and a focus on Cement, Aggregates and Concrete, LafargeHolcim is the world leader in the building materials industry. The Group has 115,000 employees around the world and combined net sales of EUR 27 billion in 2014. The new company aims to save 1.4 billion euros ($1.55 billion) within three years as a result of the merger. The outlook for India’s cement industry will improve once the nation’s economic
growth starts picking up, driven by a slew of reforms initiated by Prime Minister Narendra Modi. The government has announced plans to boost infrastructure development, including the so-called Smart
also expects activity to pick-up in the roads and highways construction space during the same period. “About 8,314 km of roads are expected to be built during 2015-16. During the subsequent year, infrastructure
After the merger the group will have a combined cement capacity of around 68 million tons in the country. City and Housing For All projects, and also to expand the nation’s highways. AllIndia cement production grew 5.6 per cent in 2014-15 against three per cent in 201314, according to rating agency ICRA. According to Centre for Monitoring Indian Economy analysis, the real estate sector alone is likely to see project completions worth Rs. 20-lakh crore during 2015-17. It
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companies are expected to construct 8,624 kms of road. This is much more than 3,4004,500 km of road network added in each of the preceding five years,” the report stated. India is expected to post the fastest growth in cement demand of any major national market, advancing eight per cent per year through 2019, according to World Cement report issued by the Freedonia Group, a US-based industry research firm.
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FEATURE
FOCUS ON MATERIAL HANDLING TOP STORIES IN MIDDLE EAST Mr. Pietro De Michieli, Chief Operating Officer, Bedeschi SPA
15 AUGUST / SEPTEMBER 2015
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FEATURE
Circular Storage
he Middle East and North Africa economies have witnessed impressive expansion over the past few years. Those countries boast one of the fastest growing construction sectors in the world, which in turn has led to growth in their cement industry. New requirements are also coming due to coal handling in Middle East. Bedeschi is currently increasing its activities in those marketplaces with a number of new contracts in the raw material handling area of expertise, as described in the following case study. CASE STUDY: EREN HOLDING - MEDCEM CEMENT PLANT Bedeschi and CTP are taking part in the construction of a new greenfield cement plant in Turkey for a production capacity of 10 000 tpd clinker (approximately 17 AUGUST / SEPTEMBER 2015
CASE STUDY MEDCEM Material
Limestone/Premix
Bulk Density (t/m3)
1.4
Grain size (mm)
95%<80 â&#x20AC;&#x201C; 100%<100
Moisture (%)
5-10 max
Resting angle (°)
38
Diameters of rails (m)
90
Total storage volume (t)
50 000
Stacking max. capacity (tph)
2000 each
Reclaiming max. capacity (tph)
700 each
3.3 million tpa of clinker). Bedeschi will supply all the machinery for raw materials handling, as outlined below. www.cemweek.com
PREMIX STORAGE This comprises two circular limestone prehomogenization plant with luffing slewing stacker and bridge reclaimer, each with a total storage capacity of 50,000b ton and 2,000 t/h stacking capacity and 700 t/h reclaiming capacity. ADDITIVE STORAGE (RAW MILL) An additive storage facility comprising 4x10 000 areas will store materials for both the raw mill and cement mill (iron ore, clay or sand at one side and gypsum and additives at the other). Stacking will be carried out via a first belt stacking system with a capacity of 2000 tph. Iron ore and clay (or sand) will be reclaimed by a 250 tph side semi-portal reclaimer. From the additives storage plant, 300 tph belt conveyors will transport the iron ore,
clay or sand to the raw mill’s feed hoppers. Dust filters will be installed. ADDITIVE STORAGE (CEMENT MILL) Gypsum and additives are stored in tone multi-box longitudinal sheed. A 250 tph side semi-portal reclaimer will be used to transport gypsum and additives to the cement mills’ feed hoppers. Again, dust filters will be installed for dedusting. COAL PREBLENDING STORAGE A longitudinal storage has a 25,000 t capacity coal preblending. A 500 tph tripper car is installed to stack the coal and two 100 tph side semi-portal reclaimers reclaim coal.
CASE STUDY MEDCEM Material
Clay
Iron Ore
Bulk Density (t/m3)
1.4
1.8
Grain size (mm)
0-100
0-100
Moisture (%)
10
3
Resting angle (°) Total stored volume (t)
38-40 10 000
10 000
Stacking max. capacity (tph)
2000 max
Reclaiming max. capacity (tph)
250
Side Semi-Portal Reclaimer
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CASE STUDY MEDCEM
CASE STUDY EREN HOLDING
Material
Coal and Petcoke
Material
Cement
Clinker
Bulk Density (t/m3)
0.8
Bulk density
1,05 t/m3
1.35
Grain size (mm)
0-50
Temperature
Ambient
110 ° C max
Moisture (%)
15
Moisture (by weight)
dry
5% max
Resting angle (°)
35-38
Size
0-1
0 – 30
Total stored volume at 38°(t)
12 500 + 12 500
Capacity
Stacking max. capacity (tph)
500
Reclaiming max. capacity each (tph)
100
CASE STUDY: EREN HOLDING – ESILOVACIK PORT Finally, there are two shiploaders installed at the Yesilovacik Port designed for loading at a rate up to 1,400 t/h vessels with a capacity up to 40,000 DWT. The shiploaders are slewing and travelling type (figure 5). CASE STUDY: LES CIMENTS DE BIZERTE TUNISIA Les Ciments de Bizerte, Tunisia, has commissioned to Bedeschi the modernization of the existing shiploader for cement, clinker, coke and coal, installed near the productive plant.
CASE STUDY MEDCEM Material
Additives
Gypsum
Bulk Density (t/m3)
1.4
1.4
Grain size (mm)
0-100
0-100
Moisture (%)
5
5
Resting angle (°) Total stored volume (t)
38 10 000
10 000
Stacking max. capacity (tph)
2000
Reclaiming max. capacity (tph)
250
Ait Baha Cement Plant
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40,000 DWT
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The supply consists of: - Shiploader SHL 21/1200 to load cement and clinker for export - Belt conveyors - Tripper TRP 8/1000 - Grab crane to unload coal and petcoke for import The shiploader has a nominal loading capacity up to 500tph of cement and clinker and a total installed power of maximum 300 kW. The shiploading operation will be possible with wind speed under 20 m/sec. The machines are in the process of delivering. CASE STUDY: CEMENT PLANT AIT BAHA – MOROCCO Bedeschi recently commissioned the equipment for the complete raw material handling system at Italcementi’s greenfield Ait Baha plant, close to the port city of Agadir in the southwestern Morocco. The facility includes four longitudinal storage halls for raw material feeding, including coal storage. The company’s scope of supply included the complete set of equipment for the 1.5 km transport system from the limestone quarry up to the plant as well as all the material receiving departments with apron feeders, screens, bucket elevators, chain conveyors and belt conveyors, totaling more than 5000 m in length. CONCLUSION Bedeschi Group (including ONT & CTP) will be for our customers a guarantee of more efficient and reliable solutions in the handling sector. Thanks also to the know-how of CTP a leading provider of filtration, gas treatment, equipment and services in the cement, steel and metals, power plant and glass sectors, Bedeschi Group is able to meets the client’s needs offering projects environmental friendly and with a low energy impact.
CASE STUDY LES CEMENT DE BIZERTE Material
Cement
Clinker
Size
0 to 1 mm
0 to 50 mm
Design Capacity
500
500
CASE STUDY CEMENT PLANT AITH BAHA Equipment
Material
Capacity
QUARRY LIMESTON HANDLING DPT Belt Conveyor NG 1450/1400
Limestone
2000
LIMESTONE HANDLING DPT WITH LONGITUDINAL STORAGE Stacker STK 25/1600
Limestone
2000
Blade Bridge Reclaimer PAL T 220/34
Limestone
800
CLAY-SILT HANDLING DPT WITH LONGITUDINAL STORAGE Stacker STK 21/1000
Clay-Silt
500
Blade Bridge Reclaimer PAL T 130/25
Clay
300
Blade Bridge Reclaimer PAL T 130/25
Silt
300
Reversible Apron Feeder RNSR 8/2000
Clay-Silt
500
ADDITIVES HANDLING EQUIPMENT WITH LONGITUDINAL STORAGE Stacker STK 20/1200
Additives
500
Blade Bridge Reclaimer PAL F 130/25
Additives
200
Feeder CNT 14/2500
Cement Additives
150
Feeder CNT 14/2500
Raw Meal Additives
150
COAL HANDLING DPT WITH LONGITUDINAL STORAGE Stacker STK 28/1200
Coal
500
Blade Bridge Reclaimer PAL T 130/34
Coal
150
Reversible Apron Feeder RNSR 8/2000
Coal
500
PLANT TRANSPORT SYSTEM Belt conveyors (total 3800 m)
Various
200-2000
Dedusting filters (CTP) in all transfer points and receiving sections
Various
5000-40000 m3/h
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AUGUST / SEPTEMBER 2015
20
CEMENT VOLUMES Though Argentina has seen a steep year-on-year (YoY) increase in cement demand in July 2015, the cement market has been reported to have experienced severe cement shortages in various provinces. These shortages have contributed to a sharp boost in cement prices, but the situation is expected to stabilize in the following weeks. On a YoY basis, cement output in Argentina rose 11.5 percent in July 2015.
In Saudi Arabia, cement demand has been aided by strong construction activity in the country, seeing steep YoY growth. Furthermore...
Though cement demand in Chile increased at a double-digit YoY rate in July 2015, demand growth this year is expected to remain moderate. However, several new infrastructure projects are expected to kick off and therefore contribute to an increase in sales of the building material. Meanwhile, Colombiaâ&#x20AC;&#x2122;s Argos has been reported to look at Chile as a potential new investment market, where it would enter both the cement and ready-mix market. In Saudi Arabia, cement demand has been aided by strong construction activity in the country, seeing steep YoY growth. Furthermore, moves to solve the housing crisis in the country are projected to boost further demand for cement in the medium term. However, volumes of cement sales, as well as cement production, have declined dramatically on a month-on-month basis. On the other hand, many cement producers in the country are seeing their clinker and cement stocks rise due to low export volumes. Companies are negotiating with the Ministry of Commerce to allow the reexport of their products to achieve better sales. Though the Colombian government has cut its 2015 budget on the back of declining oil prices, thus negatively affecting infrastructure growth, construction activity is projected to strengthen this year, albeit at a slower rate. Multiple signed free trade agreements are creating significant demand for new capacity and better quality infrastructure. Improved access to ports and adequate highways will be essential if the country is to meet the expected increase in exports. In India, the construction sector is expected to grow over the next decade after the election of the new Modi government. The removal of barriers to foreign investment is projected to spur demand for construction in the following year. FY16 is expected to bring about improved utilization rates, while the 6.5-8 percent increase in cement demand is expected to balance out supply additions in
JULY 2015 YEAR-ON-YEAR CEMENT DEMAND GROWTH (%) 15% 10%
-15%
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Ecuador
France
Japan
Thailand
Germany
Poland
Morocco
Cyprus
Colombia
-10%
Saudi Arabia
-5%
Chile
0%
Source: CW Research
5%
Argentina
CEMENT MARKETS
CW Research
CW Research CEMENT MARKETS
the country. Several international cement manufacturers, including CRH, LafargeHolcim and Heidelberg, are looking for opportunities to expand their operations in India. While Poland’s demand for cement remains strong, growth in cement production has eased in the more recent months. Some cement manufacturers in the country have been forced to reduce production volumes due to the new electricity usage polices imposed by the government, but the situation is expected to stabilize in the short term. Meanwhile, construction activity in the country is poised to see continued growth in 2015. Civil engineering will be the main driver for the construction sector’s growth, driven by increased construction activity in EU-funded projects reaching completion, in particular in the railway and water and sewage construction segments. Thailand’s cement production dropped 1.2 percent in July 2015 as compared to the same month in 2014, while production of the building material saw a 1.6 percent YoY fall. However, demand is expected to recover in 2015 due to Thailand government’s economic stimulus measures. Furthermore, Thailand expects to boost its export volumes for cement due to incoming orders for shipments in the fourth quarter of the year. Demand for cement in Japan has been falling. On top of declining domestic demand, Japan’s exports have also been on a downward curve. Japan’s construction and infrastructure growth has seen ongoing decline as the economic stimulus measures implemented by the government in 2013 started to wear off. Demand for cement in Russia has been falling, the decline being reflected in the 6.6 percent YoY fall in cement production in July 2015. Though 2015 saw a decline in non-residential construction activity, as well as many postponed new developments that delayed the expansion of Russia’s still struggling construction industry, the construction industry in Russia is projected to resume growth in 2016. Political tensions between Russia and developed countries are expected to ease gradually from 2016 onwards, with Russia being more interested in improving deteriorating relationships, as oil prices will not rebound to triple-figure values in the near future.
Thailand’s cement production dropped 1.2 percent in July 2015 as compared to the same month in 2014, while production of the building material saw a 1.6 percent YoY fall.
JULY 2015 YEAR-ON-YEAR CEMENT PRODUCTION GROWTH (%) 30% 20%
Source: CW Research
Russia
Belarus
China
Japan
Thailand
Poland
Ukraine
Colombia
India
Saudi Arabia
Argentina
-10%
Vietnam
0%
Cyprus
10%
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22
MARKET DATA SNAPSJOT
CW Research
Volume variation analysis for selected countries that are major consumers, producer, importers and exporters of cement. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.cemweek.com to the market data section. Cement Production (million tons) Country
LM
Cement Consumption (million tons) MoM (%)
YoY (%)
YTD
YTD (%)
LM
MoM (%)
YoY (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Cement Production MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
LM
YTD (%)
Cement Consumption MoM (%)
Cement Exports (million tons) Country
Country
Cement Imports (million tons) MoM (%)
YoY (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
YTD (%)
Country
LM
MoM (%)
YoY (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
YTD (%)
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE Cement Exports MoM (%)
Cement Imports MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Source: CW Group analysis estimates
MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year
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CEMENT ENERGY MARKETS
CW Research
CEMENT ENERGY MARKETS Coal Market Update Global trading volumes decreased to 82.76 million tons in July 2015, declining 1.8 percent in comparison with 84.26 million tons recorded in June 2015. A decline in coal trading volumes was observed in Australia, Russia, Indonesia and Colombia, whereas the US and South Africa showed some increase in coal trading volumes. China’s concern on increasing pollution has initiated a shift from thermal power production. Reduced growth prospects are contributing to less demand for thermal coal. China has started moving coal from inland mines to coastal users. Therefore, it is expected that China will no longer have to import coal. Rather, it will have the capability to export the same to other countries. With demand slowing and traded thermal coal markets well supplied, thermal coal imports are expected to remain subdued.
China has started moving coal from inland mines to coastal users. Therefore, it is expected that China will no longer have to import coal. Rather, it will have the capability to export the same to other countries.
Australia coal deliveries deceased 5.7 percent MoM in July 2015 to reach approximately 16.9 million tons, down 6.9 percent when compared to July 2014 index. The Australian coal sector is already struggling under low commodity prices and weak demand. The recent reporting season confirmed that many Australian coal mines are loss-making, including the local coal divisions of Glencore, Yancoal, South32 and WLC. Additionally, the National Bank of Australia has ruled out funding Adani’s AUD 16.5 billion ($11.2 billion) Carmichael thermal coal export project in the Australian state of Queensland’s Galilee coal field. Russia exported 12.3 million tons of coal in July 2015, declining 0.1 percent in comparison to June 2015 and increasing 0.2 percent from June 2014’s coal export volumes. The coal market conditions remain difficult due to slower demand growth and abundant supply. Major coal producer Adaro Energy has lowered its production target from 56-58 million tons previously to 54-56 million tons to mitigate oversupply that led to plunging commodity prices. Although the short-term outlook for coal remains challenging due to slower demand growth and macroeconomic uncertainty, it is expected that the demand for coal will play a key role in the future. COAL GLOBAL TRADING (million tons) Indonesia
120
Australia
Russia
South Africa
Colombia
US
Rest
100
40
Jul ’15
Jun ’15
Apr ’15
May ’15
Feb ’15
Mar ’15
Jan ’15
Dec ’14
Oct ’14
Nov ’14
Sep ’14
Jul ’14
Aug ’14
Jun ’14
Apr ’14
May ’14
Feb ’14
Mar ’14
Dec ’13
Jan ’14
Oct ’13
Nov ’13
Sep ’13
Jul ’13
Aug ’13
Jun ’13
Apr ’13
May ’13
Feb ’13
Mar ’13
Dec ’12
Jan ’13
Oct ’12
Nov ’12
Sep ’12
Jul ’12
0
Aug ’12
20
Source: customs data
80 60
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AUGUST / SEPTEMBER 2015
24
CEMENT ENERGY MARKETS
CW Research
Energy Prices Update COAL: The average coal price for August 2015 closed at $60.13 per ton, decreasing 2 percent as compared to July’s price of $61.43 per ton and down 19 percent as compared to August 2014’s price of $74.11 per ton. Coal futures have fallen to 12-year lows, hit by increasing production and a slowdown in global buying, including from India and China, which have been the pillars of strong demand.
Demand from China has also slowed as its economy grows at its slowest pace in decades and the Chinese government’s fight against pollution,
The steady and sharp fall in coal prices has brought down shares of big mining companies like BHP Billiton, Glencore and Rio Tinto, and it has seen many financers exit the sector. The price fall follows a rise in output from exporters like Australia, and at the same time a sharp slowdown in overseas orders from major importers like the US, China and India. Demand from China has also slowed as its economy grows at its slowest pace in decades and the Chinese government’s fight against pollution, to which coal contributes significantly. In the US, increase in natural gas from shale formations has made gas much cheaper, eating into coal’s US power generation share. The government also plans to move away from coal for environmental reasons. Demand in Europe has been flat as energy efficiency improves, renewables take increasing shares of the power mix and many of its economies struggle to grow. However, it is expected that low coal prices could start to stimulate demand as it has made the fuel super-competitive against its main competitor, natural gas. Emerging markets, which have yet to provide electricity to all households and need cheap energy to develop their industries still mostly, rely on coal as their main fuel as they prioritize low costs over environmental concerns. All physical coal markets have weakened in 2015, with Australian coal down 1.7 percent since January, South African cargoes 15.5 percent down and European coal down 16.5
STEAM COAL FOB AVERAGE PRICES (US$/TON) US exported
Colombia exported
Australia Newcastle
Indonesian HBA
South Africa Richards Bay
130 120 110 100 90 80 70
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Jun ’15
Jun ’15
Apr ’15
Feb ’15
Dec ’14
Oct ’14
Aug ’14
Jun ’14
Apr ’14
Feb ’14
Dec ’13
Oct ’13
Aug ’13
Jun ’13
Apr ’13
Feb ’13
Dec ’12
Oct ’12
Aug ’12
Jun ’12
Apr ’12
Feb ’12
Dec ’11
Oct ’11
50
Aug ’11
60
Sources: EIA, Colombia Ministry of Mines and Energy, IMF, Indonesia Ministry of Energy and Mineral Resouces
140
CEMENT ENERGY MARKETS
CW Research percent. Coal prices have also been moved by changes in regional supply and demand. Thermal coal markets have been very volatile recently, pulled up and down by global markets as well as regional demand and supply swings. However, the overall outlook for coal remains weak as high output clashes with falling consumption. PETCOKE: US petcoke exports decreased 8.1 percent to 2.4 million tons in June 2015 as compared to the previous month, and down 9.6 percent as compared to June 2014. The US export price for petcoke for June 2015 closed at $64.3 per ton, decreasing 0.3 percent as compared to May’s price of $ 64.49 per ton and down 14 percent as compared to June 2014’s price of $75.16 per ton.
The Chicago Coalition to Ban Petcoke has created a tool to help Chicago residents make decisions about protecting themselves when the weather conditions present a hazard.
High sulfur Saudi petcoke is giving stiff competition to USGC petcoke due to its cheaper prices and improved availability in the Indian market. However, due to large inventories of petcoke with most buyers, the demand for the product is quite low at the moment, but is expected to pick up in September when monsoon season ends. Fuel product consumption or sales in India increased 6 percent YoY to 58.73 million tons in April-July 2015. Consumption of petcoke advanced 7.1 percent YoY to 1.23 million tons in July 2015. Sales of petcoke increased 19.2 percent YoY in April-July 2015. The Chicago Coalition to Ban Petcoke has created a tool to help Chicago residents make decisions about protecting themselves when the weather conditions present a hazard. Petcokealerts.org is a new website, which allows residents of Chicago’s Tenth Ward to receive text message updates when windy conditions increase their exposure to petcoke. According to data from the Turkish Statistical Institute, the country’s imports of uncalcined petcoke increased 3 percent YoY to 1.99 million tons in the first half of 2015. Total sales of uncalcined petcoke fell 15 percent YoY to $164.88 million, with the average imported price at $82.87/ton. US PETCOKE EXPORT PRICE (US$/ton) Monthly price
Source: customs data
J ‘15
M ‘15
A ‘15
M ‘15
F ‘15
J ‘15
D ‘14
N ‘14
O ‘14
S ‘14
A ‘14
J ‘14
J ‘14
M ‘14
A ‘14
M ‘14
F ‘14
J ‘14
D ‘13
N ‘13
O ‘13
S ‘13
A ‘13
J ‘13
Rolling 12-month average
J ‘13
90 80 70 60 50 40 30 20 10 0
Exxon Mobil Corp is undergoing planned maintenance at its 560,500-barrel-per-day (bpd) Baytown, Texas, refinery. The company plans to shut a 135,000-bpd crude distillation unit to begin a planned 40-day overhaul. It also plans to shut a 51,500-bpd delayed coking unit associated with the CDU at the refinery as a part of the overhaul. AdditionTo learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-866-9474 www.cemweek.com
AUGUST / SEPTEMBER 2015
26
CEMENT ENERGY MARKETS
CW Research ally, Motiva Enterprises restarted its 28,500 barrels per day coker last week at its 238,000 barrels per day Norco, Louisiana, refinery. NATURAL GAS: The US Henry Hub spot price traded at $2.82 per MMBTU in August 2015, decreasing 0.6 percent MoM. The US is producing more natural gas than ever in 2015, despite low prices that make it increasingly difficult for companies to spend money on drilling. In fact, the government’s Energy Information Administration forecasts a 5.4 percent increase in output this year compared to 2014.
In its August “Drilling Productivity Report,” EIA forecasts that gas production will decline in all seven of the US’ major shale regions in September, the first across-theboard slump in shale gas production ever recorded by the agency.
In its August “Drilling Productivity Report,” EIA forecasts that gas production will decline in all seven of the US’ major shale regions in September, the first across-the-board slump in shale gas production ever recorded by the agency. In May, production reached an all-time high of 45.6 billion cubic feet a day in the shale regions, including the Marcellus in Pennsylvania, the biggest gas field in the US. According to EIA’s projections, the daily output is expected to fall to 44.9 billion cubic feet by September. Temperatures are expected to be warmer in the South and East over the next several days, while temperatures in the West are likely to cool off, lowering demand for air conditioning in California. Temperatures in the Midwest and west of the Mississippi River have been a few degrees warmer, which likely raised demand for natural gas. While demand is not expected to skyrocket, it should still be high. Price in Europe increased 0.3 percent MoM, reaching $7.0 per MMBTU in August 2015. Dutch and German spot prices held their premium to the respective front-month contracts. Russia’s energy giant Gazprom is estimating an average price for gas deliveries to Europe in 2015 between $235 and $242 per 1,000 cubic meters. The head of Gazprom warned European customers that if their countries angled for a single price for natural gas, it would most likely be at the higher end of the range they now pay. China and Russia have announced plans for vast new natural gas deliveries from Siberia to China. Currently, about a quarter of European Union gas comes from Russia, and at least half of that supply flows through Ukraine.
NATURAL GAS PRICES (US$/MMBtu) 20
US
18
Europe
Japan LNG
16 14 12 10
4
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Aug ’15
Dec ’14
Apr ’14
Aug ’13
Dec ’12
Apr ’12
Aug ’11
Dec ’10
Apr ’10
Aug ’09
Dec ’08
Apr ’08
Aug ’07
Dec ’06
Apr ’06
Aug ’05
Dec ’04
Apr ’04
Aug ’03
Dec ’02
Apr ’02
Aug ’01
Dec ’00
Apr ’00
0
Aug ’99
2
Source: EIA, World Bank
8 6
Volume variation analysis for selected countries that are major importers and exporters of coal and petcoke. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.coalweek.com/ to the market data section. Coal - Exports (million tons) - Jul 2015
Country
LM
MoM (%)
Petcoke - Exports (million tons) - Jun 2015
YoY (%)
YTD
YTD %
Country
LM
MoM (%)
YoY (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
YTD %
Coal Exports MoM (%) US petcoke exports prices MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Coal - Imports (million tons) - Jul 2015
Country
LM
MoM (%)
YoY (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
YTD % Petcoke - Global export prices (USD/ton) - Jun 2015
Country
LM
MoM (%)
YoY (%)
YTD
YTD %
WWW.CEMWEEK.COM/SUBSCRIBE
Coal - Global export prices (USD/ton) - Aug 2015
LM
YoY (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
Country
MoM (%)
YTD
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
YTD %
TABLE AVAILABLE INYoY THE CEMWEEK LM MoM (%) (%) YTD MAGAZINE PRINT EDITION.
Natural Gas Prices (US$/mmBtu) - Aug 2015
Country
YTD %
WWW.CEMWEEK.COM/SUBSCRIBE Coal export prices MoM (%)
Natural Gas prices MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Source: CW Group analysis estimates
LM: latest month Jan 2015 except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year
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AUGUST / SEPTEMBER 2015
28
MARKET DATA SNAPSHOT
CW Research
PEOPLE
EAST AFRICAN PORTLAND CEMENT WELCOMES ITS NEW CHIEF OPERATING OFFICER The board of directors of East African Portland Cement have appointed Albert Sigei as new Chief Operating Officer. He will be responsible for operation excellence and business growth of East African Portland Cement. Sigei will also be responsible for production operations, production engineering and supply chain management, sales and marketing. He has an 18-year record of management and leadership in the cement industry. Until his appointment, Sigei was Vice-President of Business Support & Ready Mix operations with Lafarge, Nigeria. He has also worked with PricewaterhouseCoopers in the past. LAFARGE FRANCE APPOINTS NEW PROJECT MANAGER Bénédicte de Bonnechose is the new project manager of Lafarge France. Bonnechose has handled many managerial functions in her recent past. She is the first women to be appointed as Project Manager in the history of Lafarge. Bénédicte worked as CEO of the aggregates business in France. She started her career in finance and banking in 1993. She has a clear vision and the ability to lead others. Bénédicte new job requires her to manage 4,500 employees at 400 sites. NEW MANAGER FOR LAFARGE UNIT IN CANADA After 34 years under the same management, the LafargeHolcim cement plant in
29 AUGUST / SEPTEMBER 2015
Exshaw has a new manager. Jim Bachmann was appointed as plant manager. The new manager is keen on connecting with people from the plant and people from the community in Exshaw, Canada. “We want to be a partner in the Bow Valley. That’s our objective,” said the new plant manager. His new position is an extension from his previous role as the plant extension manager. Bachmann joined Lafarge in 2004 after working in the gold mine industry. He worked in Alpena, Mich. and Tulsa, Okla. INDIA: 33 PERCENT SALARY HIKE FOR CEMENT WORKERS The representative body for cement makers in India has announced a salary hike for cement workers, which will be implemented over next two years in the country. As per the settlement, additional Rs 6,000 would be given to cement workers in two instalments of Rs 3,000 each in April 2014 and September 2016, which translates into a 33% hike in salary. It also provides for
GUILLERMO BRUSCO CEO, LafargeHolcim (Russia)
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enhanced Dearness Allowance. The arrears for 16 months will be paid in two instalments. CMA represents 20 cement companies in India; it covers around 66 percent of total annual cement production capacity in the country. The Vice Chairman and MD of India Cements said “The current settlement is unique in today’s scenario since it is perhaps the only nation-wide settlement reached for workers of a major organised industry in the private sector.” LAFARGEHOLCIM APPOINTS CEO FOR ITS UNIT IN RUSSIA LafargeHolcim has appointed Guillermo Brusco as the new CEO of its unit in Russia. The competence of Guillermo Brusco includes leadership and strategic development of company in the Russian market. Guillmero Brusco has over 15 years of experience in the cement industry. Guillermo Brusco graduated from the National University of Cordoba in Argentina, with a master’s degree in civil engineering. He is a graduate of Harvard Business School. He has an MBA from the University of Bournemouth, UK. “LafargeHoclim brought together two companies with a rich history, culture and experience and great leadership potential. To be the head of its Russian business –is a great honour for me. Our challenge is to integrate all areas of the new company, as well as its commercial transformation. I am confident that the professionalism of our team will help solve these problems successfully and effectively, “said Guillermo Brusco, commenting on the appointment. LafargeHolcim is present in 90 countries.
REGIONAL REPORT:
Dangote cement plant in Cameroon
ALGERIA RECORDS DECLINE IN BUILDING MATERIALS IMPORTS Algeria recorded increased imports, which totalled USD 1.49 billion from January to July 2015. Imports of building materials in Algeria declined by 30 percent to USD 1.49 billion from January to July, compared with USD 2.12 billion in the same period last year. Cement imports fell 13 percent over the first seven months of 2014 to USD 306.94 million. In 2014, the Algerian imports building material totalled USD 3.65 billion, an increase of 6.4 percent over 2013. CAMEROON: CEMENT MARKET SEES INCREASE IN CAPACITY The new Dangote cement plant in Cameroon has not influenced cement pricing in the country. Authorities have witnessed a tacit agreement between companies in the cement sector. They were expecting declines in cement prices, as cement is an indispensible product in public works and construction. Dealers of cement in Cameroon continue selling imported brands of cement, despite increase in production capacity by local cement producers. This might be one of the reasons for the high prices of cement in Cameroon. Local cement companies have increased their production capacity: Cimencam boosted capacity to 1.6 million tons, Lafarge and Ciments de l’Afrique added 500,000 tons. Dangote Cement’s plant in Cameroon
has an estimated production capacity of 950,000 tons. CEMENT INDUSTRY REVIVES TANZANIA’S ECONOMY Up to five years ago, Tanzania had three cement plants with a combined installed capacity of 4.65 million tonnes a year, but to date there are seven cement producers in Tanzania. Dangote Cement unit in Nigeria is scheduled to start production before the end of 2015. The two giant cement manufacturers of the country- Tanzania Portland Cement and Tanga Cement also plan to expand its operations. Tanzania Portland Cement recorded reduced net profit for the first half of this year to 18 percent due to raising operations pushed by deprecation of Tanzanian shilling against the US
dollars. Tanzania had seven cement companies namely, Tanzania Portland Cement, Tanga Cement, Simba Cement, ARM Cement, Camel Cement, Nyati Cement, and Lee Building Materials. These seven companies have a combined installed capacity of 4.650 million tons per year. The Tanzanian cement industry has to deal with certain problems like high cost of production propelled by energy cost, cheap import of cement and overcapacity in the market. Tanzanian cement producers have urged the government to control the situation. MOROCCO: CEMENT MARKET RECORDS INCREASE IN SALES Cement prices and sales in the Moroccan cement market recovered after a long decline. The municipal elections, which will be held in the first week of September, boosted sales of cement. The sale of cement recorded a 1.3 percent decline in the first half of this year, after a decline of 3.4 percent in the same period of last year. The recovery in cement sales is due to planned projects put forward during the election. Cement consumption increased during the first quarter of 2015. CEMENT CONSUMPTION IN ITALY DECLINES Italy’s consumption volumes of cement were reduced by nine percent year on year
EUROPE COMPANY/LOCATION
OVERVIEW
Governmental/Tajikistan
the Tajik government and the Chinese Huaksin will set up a cement plant in Tajikistan with a production caapcity of 1.5 million tons of cement per year. Production at the plant is estimated to begin by early 2016.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. OrelStroyTeh/Russia Itlacementi/Bulgaria
Italcementi's plant in Bulgaria has begun production. The plant was set up in 2012 through an investment of Lev 325 million The company has signed an agreement for the settign up of a cement plants in the Verkhozsky district. The plant will have an yearly cement capacity of 1.6 million tons per year and will come on line in 2016. Nineteen million rubles is the estimated cost for the investment.
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Eurocement/Russia
Eurocement plans to upgrade all of its Russian productio operations to the modern dry process. Moreover, the company plans to increases its current cumulated production capacity of 10 million tons to 60 million tons by 2020
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AFRICA COMPANY/LOCATION
OVERVIEW
PPC/Zimbabwe
PPC has earmarked USD 200 million in expanding its production facilities in Zimbabwe. The South African manufacturer will add new milling facilits at the Harare plant, as well as milling and clinker assets in Bulawayo and Gwanda. The upgrades will bring the company's total capacity in the country to 1.2 million tons f cement per year
Dangote/Cameroon
Dangote plans to build a new cement plant in Cameroon, with a capacity of 1.5 million tons of cement per year. The investment required for the integrated plant is of USD 150 million and construction works will be completed in 20 months
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. Qalaa Holdings/Sudan Kwanza Sul Cement/ Angola
the company will increase production at its only plant in the short and medium term in order to reach a daily cement production capacity of 4,500 tons per day The Egyptian company plans on boosting the production capacity of its Sudaneze cement plant to 0.8 million ton per year by 2016. At the moment, the plant has a 0.4 million tons per year cement capacity
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Cimpor/Mozambique
Cimpor is to invest USD 250 million in a new cement production unit in Mozambique. The company's existing plants in the country currently have a 3.1 million tons capacity
Limak/Mozambique
The Turkish cement manufacturer plans to invest USD 150 million in a cement plant with a 2 million tons per year capacity. The plant will be set up in the Maputo port
Medcem/Cameroon
Medcem has invested more tha EUR 24.39 million in the setting up of a plant with an annual production capacity of 0.6 million tons in Douala. The plant initianted production in June
SAUDI ARABIAN CEMENT COMPANIES TO ESTABLISH ACADEMY Ahmed Bin Abdu Ezkil, general manager of Saudi Arabian cement manufacturer Yanbu Cement initiated a move, together with other cement companies, to establish an academy for the cement industry. According to the executive, the academy will officially open in 2016. The academy will focus on training Saudi technicians since most of the technical labor in Saudi is provided by foreign cement companies.
Source: adaksanigeria.com
in July 2015. The volume of cement sales in Central Italy were flat year on-year, while other areas have seen high single digit decline rates. Price increases made by leading industry players have probably had to some effect of pre-purchases, but July data is disappointing. Italian cement giants Buzzi Unicem, the number two cement maker in the Italian market, and Colacem, number three, are likely to renew their focus on the restructuring in the domestic market.
Cement and concrete to be used for road construction in Nigeria
31 AUGUST / SEPTEMBER 2015
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CEMENT AND CONCRETE TO BE USED FOR ROAD CONSTRUCTION IN NIGERIA Nigeria’s former Minister of Works, Mike Onolememen, said earlier this year that the federal government was set to begin trying the construction of roads using cement and concrete. The use of cement is expected to make roads last longer in Nigeria. The minister said two roads would be the first beneficiaries after the approval of this year’s budget. Unfortunately, the Peoples Democratic Party lost the presidential election and he lost his position as minister of works. One of those roads is the Kachia-Baro road to connect the Federal Capital Territory to Baro Port in Niger. The second one is the IkoroduSagamu road in Lagos state. According to Onolememen, they will come on stream as soon as the budget is approved. The government is taking measures to regulate the movement of heavy duty trucks to eliminate the high incidence of potholes, caused mostly by such vehicles. As a result, cement companies in Nigeria are expanding capacity. Dangote can produce 29.25 million tons of cement every year from three integrated plants in Obajana, Gboko and Ibese. Annual cement consumption in Nigeria is still below 20 million tons per year. With almost 80 percent of the roads in the country in need of paving, road construction definitely is that new use to which cement must be applied. VALUE OF CEMENT PRODUCTION IN NIGERIA DECLINES The Nigerian cement industry pushed N351.87 billion worth of products into the Nigerian and West African markets within 2014. However, the figure was lower than the N359.66 billion posted in 2013. The cement industry is driven by a housing deficit of about 18 million units, infrastructure gap and rising rural-urban migration. The decline in the production value in the industry may be attributed to the cement grades war which affected most players, as well as insecurity in the north-east which intermittently shut down Ashaka Cement’s plant in Gombe State. According to Peter Hoddinott, Lafarge Africa’s area manager for Nigeria and West Africa, the Nigerian market shows tremendous opportunity for investment despite challenges.
NEW LICENCES FOR CEMENT FACTORIES IN UPPER EGYPT New licenses for cement factories in Upper Egypt will be introduced in September of this year. The cement industry in Egypt has a strong influence on other industries, like oil and coal, which help in increasing the production of cement in the local market. The ministry of industry and trade pointed out that after special micro studies, the new licenses will be introduced in the cement industry by the end of September. It will help to fulfil the needs of the local cement market until 2020. SWEDISH CEMENTA TO TAKE STEPS TO REDUCE NOISE AT THE PLANT IN SLITE Swedish cement company Cementa and Goatland County Administrative Board are divided on how much noise the new cement plant will make. The matter has reached Land and Environment Court. Cementa will be able to control the noise by May 2016. The provincial government has fined half a million crowns in fines. Cementa has appealed to the Land and Environment Court to allow them to take the noise measurements. However, the provincial government doubts the expertise to make noise measurements on their own. RAZDAN CEMENT IN ARMENIA ON VERGE OF BANKRUPTCY Razdan Cement in Armenia is struggling to survive as the construction sector continues to face crises. The cement sold ce-
Source: carleekman.se
LAFARGEHOLCIM ZAMBIA REPORTS INCREASE IN PROFITS IN Q1 2015 LafargeHolcim in Zambia recorded a 4 percent increase in profit in the first half of 2015. The company sold 263 million tons of cement and 288 million tons of aggregates in 2014 with an installed cement production capacity of 386.6 million tons per annum. The strategic rationale of the merger is believed to be positive as the merged group will have an even more geographically balanced presence than former Holcim and Lafarge on a stand-alone basis. This business profile should provide a better resilience to cyclical swings in demand for cement, aggregates and ready-mix concrete in individual countries.
Swedish Cementa to take steps to reduce noise at the plant in Slite
ment at prices two times lower than the market prices. The plant has two production lines with a cement capacity of 1.2 million tons and clinker production of 1 million tons each. Razdan Cement has high debt and is unable to recover due to ongoing economic crises in the country. The company has incurred debt of around AMD 509. RUSSIAâ&#x20AC;&#x2122;S SOYUZCEMENT AND GERMAN VDZ DISCUSS COOPERATION Russiaâ&#x20AC;&#x2122;s Soyuzcement and Verein Deutscher Zementwerke, the German Cement Works Association, met to discuss areas of cooperation. During the meeting, the German organization shared its experience regarding the mandatory certification of cement, energy efficiency, the use of alternative fuels and raw materials. Furthermore,
the development of education programs for professionals in the cement industry was discussed. The parties will cooperate in the field of training, measuring the environmental performance of cement plants, exchange of experience in the creation of certification centers and inter-laboratory testing of products. RAFAH LAND PORT RECEIVES CEMENT FOR THE GAZA STRIP Rafah land port at Gaza received 575,000 tons of cement and 90 cubic meters of gravel from the Palestinian side of the Gaza Strip, reports Elfagr. This shipment of cement and construction material will help fulfil the needs of reconstruction projects. Earlier, the port was used to receive shipments of cement and gravel from Egypt, so that the reconstruction projects of Gaza can be completed.
MIDDLE EAST
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
COMPANY/LOCATION
OVERVIEW
Darvar/Iran
Darvar is investing USD 350 million in a cement pant with a 3,300 tons per day cement capacity. the plant will be located in Damghan and will benefit from the proximity of a limestone and marl deposit
South Valley Cement/ Egypt
The company is installing a new production line at its cement plant through an agreement with a Chinese company. The investment will double the cement plant's capacity to 3 million tons of cement per year.
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REGIONAL REPORT:
ULTRATECH CEMENT PLANS TO INCREASE ITS PRODUCTION CAPACITY BY FY2016 UltraTech Cement will increase its production capacity to 70 million tons by the end of this fiscal year April-March 2016, reports Live Mint. UltraTech has acquired two cement units of JP group with production capacity of 65 million tons of cement on completion of the project. It also plans to acquire a third unit of JP Cement in Bhillai with a capacity of 2.2 million tons. UltraTech and JP group have approached SAIL to approve its 26 percent stake in the plant. PAKISTANI CEMENT FIRM SUES SOUTH AFRICAN CEMENT FIRMS Lucky Cement, a Pakistani cement company, has sued South Africa’s four of the larg-
PAKISTAN: LUCKY CEMENT SIGN CONTRACT WITH SAP ENTERPRISE SYSTEM Pakistan’s cement maker Lucky Cement signed a contract with Siemens Pakistan to implement SAP Enterprise System. Lucky Cement will be the first cement company
Source: www.ibtimes.co.in
PAKISTAN: CEMENT EXPORTS TO INDIA DROP Pakistan’s cement exports to India in July 2015 fell by 32 percent to 43,000 tons, while exports to Afghanistan dropped to 178,000 tons compared to 184,000 tons of corresponding period of 2014. The export sector continues to disappoint the industry. Exports from North zone were 274,000 tons, ile exports from South zone were 192,000 tons. Major decline was observed in exports to India mainly because of non-tariff barriers erected by the Indian authorities and influx of Iranian cement in Afghanistan. The government policy on exports needs revamping to boost exports. Smuggling of cement through porous Pakistan-Iran border poses a continuous threat for the cement industry.
est cement companies with anti-dumping charges. The International Trade Administration Commission, which sets tariffs on imported products, is facing legal action by Pakistani cement firm. Lucky Cement, in Pakistan has sued four South African cement firms, AfriSam, Lafarge, Natal Portland Cement-Cimpor and Portland Pozzoleno Cement with anti-dumping charges. Lucky Cement had suspected a cement cartel between these four companies. The Competition Commission imposed a fine of ZAR 124 million on AfriSam and ZAR 149 million on Lafarge in 2011 and 2012 respectively after finding the existence of a cement cartel.
33 AUGUST / SEPTEMBER 2015
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in Pakistan to start implementation of SAP on HANA database. “We have always focused on innovation and excellence as the building pillars of our continuous growth,” said Executive Director, Noman Hasan. “Through SAP, we aim to drive progress through greater integration of our various locations, agility and enhanced efficiency of our operations and further efficiencies in our processes,” he added. The move seeks to pave the way forto technological advancements in the organization’s business framework and operations. INDIA: LEGAL MINEFIELD OVER LEASE TRANSFERS IN WAKE OF INCREASED M&A ACTIVITY The government has sought legal opinion on the interpretation of a clause in the new Mining Act that has put spoke in corporate M&A’s in the mining and resources sectors as it bars the transfer of mines that were not allotted via auctions. The legal minefield is likely to have impact on big transactions like Lafarge-Birla Corp or Ultratech –Jaypee. The mines ministry has asked the law ministry, whether mines allotted prior to the new laws enactment could be transferred to other players and their opinion is expected soon. The industry has taken a pause following this new law, which is indeed very ambiguous in its current form,” says Qais Jamal, Practice Head of Mining and Infrastructure at law firm AZB & Partners. “Not only acquisitions but also mergers of subsidiaries within groups are affected due to this. Many banks have also disbursed loans by keeping mining leases as collateral. With this new Act they too are also seeking clarifications from the
government.” Some experts feel that companies that are keen to transfer the mining leases can request the state government to conduct the auction and the acquirer should have the right of refusal to match the highest bid. DEMAND FOR CEMENT IN SOUTH INDIA FALLING Cement demand of Andhra Pradesh, India has fallen to 15 million tons annually, while the manufacturing capacity has gone to 90 million tons per annum from 25 million tons. Construction activity slowed in Andhra Pradesh, as well as the rest of south India, leading to a huge mismatch between demand and supply. The region is going through its worst cyclical dip in 35 years. South India has 170 million tons of the country’s total installed capacity of 350 million tons, but less than 60 per
cent of the capacity is being utilized at the moment. The increase in input costs and railway freight, along with the drop in demand, has compounded the problem for cement companies in the region. Amid the slowdown, reducing the cost of production has been the only option for the companies to keep pressure off margins. Ramco Cements, for instance, has drastically reduced its power cost by setting up captive plants in all its five units, and selling the excess to the grid. India Cements is focusing on integrating its non-core businesses such as coal, power and shipping for better synergy. India Cements is also planning to partially or even fully exit some of its noncore businesses. Despite slowing demand, cement prices increased by Rs 600 to Rs 3,930 a ton in the quarter ended June 30 following announcement of some big projects by Andhra Pradesh and Tamil Nadu.
SOUTH EAST ASIA COMPANY/LOCATION
OVERVIEW
Zuri Cement/India
Zuari Cement is adding another million ton of cement to its current 6 million tons per year capacity in India. The additional capacity will be added by the end of 2015
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
Xuan Thanh Group/ Vietnam
The company has signed with FLSmidth for the supply of a new production line for the Xuan Thanh Ha Nam cement plant able to produce 12,500 tons of clinker per day. The investment in th expansion is estimated at VND 10.8 billion
Sanghi Industries/ India
The company has intalled a new cement grinding mill at Kutch, bringing the plant's capacity to 1.2 million tons per year. Sanghi Industries also plans to install a 15 MW Heat Recovert System at the plant
JSW Cement/India
JSW Cement is set to invest Rs 2,200 crore to bring its capacity in India to 20 million tons of cement per year over the next three years. The targeted Indian areas are East and West India, West Bengal, Odisha and Maharashtra.
Dalmia Cement/India
Dalmia Cement Bharat commenced operations at its greenfield plant in Belgaum district. The plant has a 2.5 million tons cement capacity and required an investment of over Rs 1,300 crore.
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REGIONAL REPORT:
CHINESE CEMENT COMPANIES LOSING MONEY Several cement companies in China are losing money while producing cement. However, stopping production is not an option. It will be difficult for Lucheng Zhuoyue Cement Plant in Changzhi, China to recover from its ever-mounting debts because customers and investments are drying up and the company is borrowing even more money to stay afloat. China is dealing with over production and no demand for cement in 35 AUGUST / SEPTEMBER 2015
market. “Global investors have now come to realize that China’s travails are beginning to affect everyone,” said Frederic Neumann, co-head of Asian economic research at HSBC in Hong Kong. Gross domestic product expanded 7 percent in the second quarter of 2015, the slowest pace for china in a quarter century. Many cement plant owners in China refuseing to liquidate their plants, waiting for the economy to revive and they can produce cement once again. INDONESIAN CEMENT MARKET OVERSUPPLY WILL HAVE DIRECT IMPACT OF EUROPEAN CEMENT MARKET The supply-demand imbalance in the Indonesian cement market will weigh on European cement companies, which are likely to face aggressive pricing and lower profit
HOLCIM INDONESIA, DKJ JAKARTA SIGN A DEAL TO IMPROVE ROAD QUALITY Holcim Indonesia and DKJ Jakarta have signed a deal to repair roads in the capital city of Indonesia using the SpeedCrete material. The contract is valued at USD 5.5 million. The Jakarta provincial government plans to repair 200 kilometers of the city’s Transjakarta bus lanes using on high-tech and fast-drying concrete around provincial greater areas. The road repair would be completed in next five years. In the first half
Source: www.cnnindonesia.com/
INDONESIA: CEMENT MAKERS HIT BY MASSIVE OVERCAPACITY Cement companies in Indonesia including Indocement Tunggal Prakasa and Semen Indonesia are affected by massive overcapacity. Furthermore, the situation is expected to remain the same in the following period. Cement companies have invested in capacity expansions in anticipation of higher demand from infrastructure projects and a property boom. Thailand’s Siam Cement has opened its own cement plant in Indonesia, as well as acquiring a local ready-mix concrete maker, to access the market. China’s Anhui Conch Cement has built a cement plant in Kalimantan and is setting up another in Papua. Meanwhile, domestic sales growth outlook this year could be the worst in a decade. Cement production capacity in Indonesia is expected to rise to 75.5 million tons per year by 2016, up by about 67 percent as compared to 2011. Indonesia is expected to rise to 75.5 million tonnes a year by 2016, up about 67 percent from 2011. Yet demand is far from catching up, with infrastructure spending on roads, bridges and ports delayed by bureaucratic red tape and the economy growing at its slowest pace in six years.
margins via Indonesian subsidiaries. The Indonesian government imposed a price cut on cement sold by state-owned companies in January, which resulted in a 6 percent fall in the average selling price. Further price cuts could happen if planned infrastructure projects continue to underperform against government expectations. As a result, international cement companies’ profit margins are likely to be squeezed further in a weak pricing environment.
Holcim Indonesia factory
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Source: mirrorcitizen.dailymirror.lk MV Mohar, Tokyo Cement’s fifth vessel
of 2015, Holcim as a group reported that its sales fell 3.1 percent to CHF8.65 billion, as better performance in North America could not compensate for lower sales in other regions. Net income increased by 4.9 percent to CHF690 million, mainly as a result of the divestment of Holcim’s minority shareholding in Siam City Cement. TOKYO CEMENT ADDS FIFTH VESSEL TO TRANSPORTATION FLEET Tokyo Cement announced the addition of fifth vessel, ‘MV Mohar’ to its fleet of cement transport ships. Arjuna Ranatunga, Minister of Ports, Shipping and Aviation and Upul Jayasuriya, Chairman, Board of Investments, Sri Lanka inaugurated the 22,000 metric tons, pneumatic bulk cement carrier. The new vessel will help the company in shipping its cement to the Colombo port, in order to distribute more efficiently to the masses. “The cement industry is often times described as a barometer of a country’s march to economic development and prosperity. What we are currently seeing is a surge in demand for products and services which is a good indicator of market confidence. Over the last three decades, Tokyo Cement has built itself up to become one of Sri Lanka’s most valuable brands with an installed capacity of over two million tonnes of cement, over 600 employees and 20 billion rupees in assets. Our success
reflects the continuing growth of Sri Lanka and its economy,” said the managing director of Tokyo Cement, S. R Gnanam. VIETNAM CEMENT PRICES REMAIN STABLE While Vietnam’s exports fell both in volume and value in the months to July 2015, domestic consumption increased due to increased activity in the real estate market. Furthermore, infrastructure projects and rural development projects are being implemented, helping boost demand for cement. In July 2015, Vietnam cement
sales were estimated at 6.5 million tons, up 25 percent from the same period last year. Local consumption stood at 5.15 million tons, 22 percent more than in the year ago period. Cement exports totaled 1.35 million tons. Despite the increase in raw material prices, as well as fuel inputs for cement production, prices of the building material have remained stable over time. Production of clinker and cement exports declined more than the previous year as some export markets are facing difficulties, especially Bangladesh.
ASIA ASIA PACIFIC PACIFIC COMPANY/LOCATION
OVERVIEW
Eagle Cement/ Philippines
The Filipino Eagle Cement plans to invest USD 1.2 billion in new cement manufacturing facilities in Cebu and Davao in 2015. The two new facilities would have a combined capacity of 4 million tons of cement per year. Apart from these new plants, Eagle Cement is adding a new production line at its existing cement plant in Bulacan
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
PT Sinar Arthalestari/ Indonesia
The company has decided to set up a second production line at its Ajibarang plant in Central Java. The expansion will bring the plant's capaity to 2 million tons of cement per year, and will require an investment of Rp 2.3 trillion
PT Semen/ Indonesia
By the end of 2016, Pt Semen will open a cement factory in Rembang, Central Java. The investment required is of Rp 4.5 trillion, and the capacity of the plant will be of 3 million tons of cement per year
PT Eternit Gresik/ Indonesia
The company has earmarked Rp 1.1 trillion for the setting up of a second cement plant in Karawang. The company is preparing for the growing domestic demand following the Indonesian government's plan to build one million affordable housing units
Ceemx/Philippines
Cemex is undertaking the construction of a 1.5 million tons per year integrated production line at its existing plant in Luzon. The additional capacity will double the company's existing one
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REGIONAL REPORT:
VOTORANTIM CIMENTOS PLANS EXPANSION IN TURKEY Brazilian cement manufacturer Votorantim Cimentos plans to expand in Turkey. Walter Dissinger, the CEO of Votorantim Cimentos in Turkey, said that the company eyes the Middle East in terms of infrastructure and trade development. The company plans to invest EUR 140 million as a first phase of a long-term development plan in Turkey. The company plans to establish a new cement plant in the country. According to the company’s CEO, Votorantim Cimentos sees investments in Turkey as a center opened to the Middle East. Tüzün is one of the areas where Votorantim Cimentos is considering to have potential for growth for the Mediterranean region.
PARAGUAY: CEMENT IMPORTERS HIT BY CURRENCY DEPRECIATION Cement importers in Paraguay have taken hits from the rising dollar in recent days. Furthermore, the current situation has also affected concrete workers, who can no longer import high-strength cement. According to Castorino Rojas, director of FCK Concrete, the appreciation of the dollar is accompanied by an increase in freight rates. Importers in Paraguay currently get high-strength cement from Argentina, Uruguay and Brazil. CHACO, ARGENTINA RECORDS INCREASE IN CEMENT CONSUMPTION Due to the large number of public and housing works, consumption of cement
CEMENT INNOVATION CENTER TO BE ESTABLISHED IN MEDELLÍN, COLOMBIA An innovation center will be inaugurated at the University Eafit, Medellín in Colombia that is expected to become the main input of innovation processes that take place within the cement industry. The COP 30,000 million investment is developed through cooperation with a United States-based partner, according to José Alberto Vélez, the president of Colombian cement manufacturer Argos. The center will develop cement materials containing fly ash with an aim to develop a green concrete capable of revolutionizing the cement industry. FOUR CEMENT MAKERS IN ARGENTINA UNABLE TO DELIVER CEMENT Construction companies in Argentina have been dealing with severe cement shortages as cement plants are not delivering cement in a timely manner over the past weeks. Due to the lack of availability of the building material in the market, cement prices increased between 5 and 10 percent in August. Four brands of cement, namely Loma Negra, Avellaneda, Holcim and Minetti, are having troubles with cement deliveries. According to traders, the backlog of orders began about a month ago. Cement manu-
Votorantim Cimentos cement plant in Cuiabá, Brazil
37 AUGUST / SEPTEMBER 2015
in Chaco in Argentina has increased. The government will make an articulate plan to control the supply of cement. Cement consumption recorded a progressive growth during the first half of 2015: in January, cement consumption was 19,362 tons, in February 20,291 tons, in March 22,870 tons, in April 23,286 tons, in May 22,838 tons, in June was 24,104 tons and in July reached 25,497 tons. Consumption of cement has increased by 12 percent in July 2015 as compared to July 2014. The government will make a plan to ensure additional regular supply of cement in the month of September through district distributors.
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Source: wordpress.com Votorantim cement plant
facturers are arguing that they are facing infrastructure problems that are obstructing them from delivering the building material. Furthermore, some claim to have encountered issues with equipment, citing problems such as broken mills. As supply of cement is limited, demand for cement is on the rise. Currently, cement is being sold for about $90 per ton, while two years ago, prices were around $60 per ton.
will from now on operate as a distribution center. The company expects to see no change in trade relations as demand in the region will be supplemented by other cement plants. However, Votorantim claims the suspension of operations is temporary as soon as the market conditions allow it. Votorantim has 34 other plants, cement plants in Brazil, besides being present in 13 other countries.
CIMPOR SHUTS DOWN PLANT IN BRAZIL Cimpor will close its factories in Brazil due to heavy losses and failing Brazilian economy. The company recorded a decline in its sales volume of 13.5 percent, whereas the cash flow decreased by 43.3 percent, during the first half of this year. Camargo Correa, the group that has been controlling Cimpor since 2012, is closely studying the sales of assets, and closure of plants in the Brazilian market. Cimpor is forced to close its operations in Brazil as adjustment measures and optimizing the production costs. The company’s units in Portugal are performing quite well, as sales rose by 1.4 percent in volume and 6.9 percent in value during the first half of this year.
CONSTRUCTION COMPANIES IN ARGENTINA ASK TRANSPARENCY IN CEMENT PRODUCTION The leader of the Center for Construction Companies in Chaco, Argentina, Mateo
VOTORANTIM SHUTS CEMENT PLANT IN SÃO PAULO, BRAZIL Brazilian cement manufacturer Votorantim announced the suspension of production operations at its cement plant in the municipality of Ribeirao Grande, São Paulo, Brazil. The three kilns at the plant have been shut. According to the company, the current macroeconomic context in Brazil is to blame for the shut of operations. The plant
Alemán, asked the national government to review the conduct of Holcim and Loma Negra. Due to the lack of cement in the market, there has been room for huge price speculations, as some traders have boosted prices of cement by as much as 100 percent. The government should, in the view of Mateo Alemán, see that there are no infringements in cement production that could interfere with the law of supply. According to Mateo Alemán, it is unclear whether cement the cement producers have indeed reached the limit of production capacity. The cement supply issues are generating higher costs for construction companies in the province.
AMERICAS COMPANY/LOCATION
OVERVIEW
Pacasmayo / Peru
Pacasmayo invested more than PEN 380 million in a news cement plant in Piura. Construction began in October 2013, and the plant will come on-line in 2015 with a 1.6 million tons cement production capacity per year
Megatech / Veenzuela
In partnership with the Venezuelan state, India's Megatech is setting up a minicement plant to start production in 2016 in Yaracuy. The plant will produce about 4.5 million bags of cement per year. Reportedly, the partnership will extend to setting up another five mini plants in Portuguesa, Cojedes, Aragua, Merida and Yaracuy
Polimix / Brazil
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
Polimix plans to invest R$220 million in a cement plant in the Pecem Industrial Complex (northeastern Brazil). The project is still pending approval, hence construction is expected to begin in the following 10 to 12 months. The projected capacity is of 0.9 million tons per year
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Medcem / Colombia
The Turkish Medcem plans to set up a 3 million tons per year cement plant in northern Colombia. The investment required amounts to USD 50 million. Medcem is currenly awaiting environmental permits from the Colombian government
Elementia / Mexico
Following the IPO Elementia is planning in Mexico, the company plans to invest USD 20 million to expand its capacity at the Tula Plant to 3.5 million tons per year. The plant currently has a capacity of 2 million tons of cement per year
Cementos Yura/ Ecuador
Cementos Yura plans to invest USD 230 million in a new clinker production plant in Ecuador. Ecuador currently imports a lage part of the clinker needed for cement manaufacturing
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SECTOR COVERAGE : CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM
GENERAL SHALE BAGS AWARD In the US, General Shale has been named a Best in Class winner in the nationally acclaimed Brick in Architecture Awards for 2015 by the Brick Industry Association (BIA). General Shale is the North American subsidiary of Wienerberger AG and a leading manufacturer of brick, one of the world’s oldest green building materials. According to the report, BIA’s premier awards honors outstanding, innovative and sustainable architecture that incorpo-
rates clay brick products as the predominant exterior building or paving material. Forty-six winning projects from 21 states, including nine Best in Class recipients, were selected from more than 115 entries. Independent industry professionals from around the country reviewed and scored each of the entries. SERBIA TO USE FLY ASH FOR BRICKS In Serbia, the regulation on the use of fly ash in road construction and infrastruc-
Serbian highway under construction
39 AUGUST / SEPTEMBER 2015
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ture development will enter into force on July 3. The use will be first tested on a 200m section of Corridor 11 near the town of Obrenovac. The construction of a single kilometer of Corridor 11 highway costs EUR 7 million on average, and using fly will bring about savings of EUR 1.4 to 1.8 million per kilometer. According to the report, Serbia’s landfills currently contain about 200 million tons of fly ash, whose market value is around EUR 1 billion, and its use in road construction can bring
SECTOR COVERAGE : CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM
about savings of 30 to 80 percent compared to using standard construction materials. CEMEX TO APPEAL OHIO DECISION ON MINING In the US, Cemex is to appeal a decision by the planning board of the City of Fairborn to reject rezoning land from agricultural use to mining, PR News reported.“If we cannot access the limestone that is on our property, this plant has a very limited future. But if we can harvest that rock, this plant will be a vibrant part of this community for the next 40 years …,” said local Cemex plant manager John Miller. COAL ASH BEING LOOKED AT FOR NC WATER ISSUE In Charlotte, the source of the city’s drinking water is being tested for coal ash. A water-quality team took water samples to test for coal ash in Mountain Island Lake. The team spent nine hours taking dozens of samples, including several near the Riverbend Station, in Mount Holly, where tons of coal ash remain. “We’ve ramped up efforts with the excavation of the coal ash basin,” said Rusty Rozzelle, with Mecklenburg County Water Quality. AUSTRALIA: HANSON INSTALLS NEW SOFTWARE TECHNOLOGY In Australia, Hanson is utilizing Spectra QEST’s technologies in both its concrete and quarry testing facilities. The implementation of Spectra QEST’s one integrated Laboratory Information Management System, QESTLab, has replaced the two separate systems that Hanson had previously been using in its daily operations. According to the report, QESTLab has been specifically designed for use in the construction materials testing and geotechnical testing industries. The system takes care of all of Hanson’s concrete, aggregate, soil and asphalt testing software requirements. It is used to manage the laboratory operations as well as database and analyze test results and concrete production data. ETEX BUYS LAFARGE’S SOUTH AFRICA GYPSUM BUSINESS Etex has bought Lafarge’s South African gypsum business. Etex aims to strengthen
Lafarge South Africa quarry, Tongaat, Durban
its position in Africa, with the Southern African region and Nigeria as its main drivers of growth. The demand for housing has been on the rise in the country, driven by growing population and an emerging middle class. In addition, the market is becoming increasingly regulated. Consequently, alternative building methods, such as dry construction, are gradually replacing traditional construction. Growing demand for alternative construction methods marks a major opportunity for both local Etex company Marley Building Systems and Lafarge Gypsum South Africa. “Combining these two product offerings enables us to provide the full scope of Etex’s portfolio”, explains Paul Van Oyen, CEO of Etex. LIMESTONE SHIPMENTS IN GREAT LAKES POST INCREASE In the US Great Lakes area, shipments of limestone totaled 4,042,766 tons in June, an increase of 6 percent compared to May, and 9-plus percent compared to a year ago. This is according to figures reported by the Lake Carriers’ Association (LCA). The June stone float is also the highest monthly total since July of 2014. U.S. quarries shipped 3.3 million tons in June, an increase of 6.8 percent compared to a www.cemweek.com
year ago. Shipments from Canadian quarries totaled 765,000 tons, an increase of 21 percent. According to the report, year-todate the Lakes limestone trade stands at 9.9 million tons, an increase of 24.4 percent compared to a year ago. Market conditions alone do not explain the increase. BITUMEN SHORTAGE HALTS SEVERAL ROAD PROJECTS IN SOUTH AFRICA The Johannesburg Roads Agency (JRA) has announced delays to several of its roadworks programs across Johannesburg owing to a shortage of bitumen countrywide. The agency said on Friday that the resurfacing of roads and the patching of potholes in the city would be temporarily halted as a result of a shortage of the oil-based, semi liquid substance, which was used in the production of the asphalt mix for road surface construction. This was the direct result of the shutdown of local refineries for maintenance, JRA acting MD Mpho Kau said in a statement. “Petrochemicals groups Total and Engen are the only refineries that have confirmed that operations will resume in early August. The JRA asphalt plant has, therefore, stopped production and operations are expected to resume from August 10. We apologise for the inconvenience caused,” he noted. AUGUST / SEPTEMBER 2015
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EQUIPMENT
PIKALEVSKY CEMENT LAUNCHED A NEW HYDRAULIC EXCAVATOR Pikalevsky Cement has installed new hydraulic crawler excavator in its limestone quarry in Russia. The new excavator blends high performance and comfortable environment for the operators. The new machine is durable and comfortable cabin meets all safety standards and is equipped with new multi-functional control system. The new hydraulic excavator can keep operated using a joystick. The new model excavator has reduced 5 percent fuel consumption compared to previous models of excavator. LAFARGEHOLCIM WILL USE MINE CONTROL SYSTEM IN CANTAGALO Sodep has implemented the Minetrack solution in Cantagalo (RJ) for LafargeHolcim. The expected improvements by real-time management of the mine operation and reliable production data will lead to higher productivity through resources optimization and reduction in operational costs, such as speed control, tracking ore, monitoring the queues at loading or crusher, ore quality control, productive hours framework. Marcos Andrade, Sodep´s Manager, said: “It’s an innovation in limestone quarry, which can balance the game among the cement plant and mine operation, using similar production information level, through assertive actions based on indicators of performance watched in real time online (TV’s) or production reports sent straight to their managers”. Yhiago Ferro, LafargeHolcim´s mining manager, believes that “the gains opportunities will happen naturally with improved operational standard, security enhancement and optimized use of resources, after all, is cultural change for those who are in41 AUGUST / SEPTEMBER 2015
volved.” Minetrack is accessible to all mining companies in the “turnkey” concept and has a friendly interface technology which facilitates its use such as using a smartphone. FLSMIDTH POSTS LOSS IN Q2 FLSmidth incurred losses during the second quarter of 2015 and will be lowering its investments budget. The company is likely to continue to record losses due to major problems with customers who postpone payments for projects nearing or have no means to give the complete payment. FLSmidth is forced to lower its investment budget as it is short of cash. The company has changed its strategies to cope with heavy losses and keep a close eye on market developments. FLSMIDTH SIGNS CONTRACT WITH RUSSIAN CEMENT PRODUCER In another move, FLSmidth signed a contract with the Russian cement and minerals producer Pikalevo Soda for the supply of equipment for a dry sintering alumina line with a capacity of 3,700 tons per day. The contract was signed in the presence of Prime Minister of Russia Mr. Medvedev and FLSmidth’s Group CEO Thomas Schulz. The two parties have reached an agreement on further cooperation in April 2011, the agreement resulting in the recently announced supply contract. EUROCEMENT SIGNS DEAL WITH KAMAZ Eurocement, the largest cement maker in Russia, plans to purchase about 700 tractors and trucks from the leading domestic manufacturers of trucks Kamaz. The cost of the equipment is estimated at 2.8 billion rubles. Eurocement and the general direcwww.cemweek.com
tor of Kamaz signed a memorandum for the deal last week. The tractors and trucks use natural gas as fuel. PFEIFFER TO SUPPLY COAL MILLS AT AMREYAH CEMENT, EGYPT Christian Pfeiffer Maschinenfabrik signed a contract for the delivery and construction of two complete coal mills for Amreyah Cement, part of InterCement, in Alexandria, Egypt. The contract will be implemented as a turnkey project, which means that Christian Pfeiffer Beckum is responsible for the engineering, delivering all equipment and organizing the construction work in Egypt. Amreyah Cement currently powers its three clinker lines with oil, and wants to switch to coal and petcoke, which are easier and less costly to source. The scope of delivery includes 2 identical horizontal ball mills with a diameter of 3.4 m and an effective grinding length of 6.75 m, and an integrated drying chamber 3 m in length, each equipped with a high-efficiency DSL-K 65-type separator. Construction is scheduled to start in summer 2015, and the plant is to be completed and accepted just one year later. FLSMIDTH TO SUPPLY NEW CEMENT PLANT IN PAKISTAN FLSmidth will supply a new cement plant in Pakistan as it signed a EUR 57 million contract with D.G. Khan Cement Company. D.G. Khan Cement is part of the Nishat Group, one of the largest conglomerates in the country. FLSmidth will supply engineering and equipment for a 8,500 tons per day green field cement plant in Pakistan. The plant will be located in Hub in the province of Baluchistan approximately 30 km northwest of Karachi, Pakistan. “Pakistan is a very important market for FLS-
midth and we are extremely pleased that D.G. Khan Cement Company Ltd. again has chosen FLSmidth as their supplier. This underlines our valuable long-term ties with D.G. Khan Cement Company Ltd. as well as our strong foothold in Pakistan where we expect to see more activity following new government development programs,” said President of the Cement Division Per Mejnert Kristensen. MAGNEZIT SATKA COMMISSIONES MULTIPLE HEARTH POLYSIUS KLIN The new product has many advantages over traditional firing technology of raw materials in a rotary klin. It can save considerable money and manage the process to obtain the product with predetermined properties. The hearth is designed to bear up to 1050b degree Celsius of heat without consuming much electricity. This is expected to boost the cement production of Magnezit Satka. LAFARGE PLACES ORDER WITH AVANTHA GROUP COMPANY CG Lafarge placed an order with Avantha Group company CG for the supply of elec-
trical motors. “CG has signed a global supply agreement with cement major Lafarge for electrical motors,” the company said in a statement. “CG’s ability to provide flexible designs, high quality and cost effective solutions were key factors that Lafarge considered while making this decision,” Lafarge Cement Senior Vice PresidentInternational Sourcing Michel Edmont said. Commenting on the deal, CG’s Chief Executive and Managing Director Laurent Demortier said, “Our strategic investments, such as the global design centre in Bhopal, exhibits our commitment towards developing energy-efficient and technologically advanced products for the everevolving market needs of the industrial sector”. KHD TO SUPPLY SLAG GRINDING MILLS TO JSW CEMENT Humboldt Wedag India and Humbold Wedag, two subsidiaries of KHD Humboldt Wedag, have won contracts valued between EUR 55-65 million for the supply and maintenance of eight slag grinding mills. JSW Cement, an Indian cement manufacturer, placed the order for the
KHD equipment. Each of the eight mills has two significant components, namely two KHD roller presses with a total capacity of 180 tons per hour. The projects will be booked as order intake as soon as the pre-conditions for project executions are fulfilled. KHD is represented in multiple growing markets, like India, Russia and the Asia-Pacific region. The German equipment manufacturer has been providing high quality equipment and services to cement producers for more than 150 year. KHD is a leader in environmentally friendly and energy-efficient product for grinding and pyro processing section of cement plants. ROMERO GROUP ORDERS CEMENT CARRIER Italian shipowners Giovanni and Vicenzo Romeo have ordered a 6,700 dwt cement carrier to be delivered in 2017. The deal has been signed with Ningbo Xinle shipyard, and the carrier has a value estimated at USD 15 million. Romeo’s Nova Marine fleet has 40 bulk carriers, including 5 cement carriers and 3 unloaders.
Eurocement plant, Russia
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FLASHBACK NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker red shows higher news volume)
CW Group Meeting Agenda The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit http://research.cwgrp.com/meetings
CW RESEARCH WEBINARS:
CONFERENCES WHERE THE CW GROUP WILL BE PRESENTING
Global Cement Volume Forecast Report: 2H2015 update and outlook
September 28, 2015 at 2:00 PM GMT
Global Slag Market – a glance at next year’s trends
October 15, 2015
CW Research
Sept 30 – Oct 1, 2015
Rio de Janerio, Brazil
CBI Brazil & LatAm 2016
February 24 – 25, 2016
Sao Paolo, Brazil
CW Summit Middle East 2016
April 4 – 5, 2016
Dubai, UAE
Solid Fuel Summit Middle East 2016
April 5 – 6, 2016
Dubai, UAE
at 2:00 PM GMT
WEBINAR
Price Assessment – Cement and Clinker Price Markers
Wednesday, September 16, 2015 2:00 PM GMT
ssment –
nd Clinker43price AUGUST / SEPTEMBER 2015
Slag & AshTrade Americas
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BUZZ TOP CEMWEEK STORIES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Nigeria:Lafarge-Holcim merger to produce 14mtpa of cement FLSmidth signs agreement with Mamba Cement Heidelberg Cement buys stake in Italcementi BUA Group to start production at new Nigerian plant CRH combines construction brands Tarmac and Blue Circle Kurdistan Cement inaugurates new unit Vietnam’s Lam Thach cement plant halts production HeidelbergCement considers buying stake of Kyzylkumcement Acquisition of Lafarge North America’s Davenport cement plant concluded Dangote to set up plant in Lusaka, Zambia CRH appoints non-executive Director Zambia sees cement price reductions Dangote Cement declares its half-yearly profit Vietnam: Cement prices stabilize after increased consumption Lafarge China launches tender offer Aggregate Industries – UK’s newest cement producer Lafarge-Holcim merger – all eyes on Malaysia Dangote Cement has been circling Italcementi Cement plant in Amur, Russia set to start production this month Palestine to get its first cement plant Indocement to close three cement plants Eurocement begins operations at new Russian plant Pakistan: Waste heat recovery plant opened Chinese company to set up new cement plant in Russia Cement consumption drops in Saudi Arabia UAE – Fuel price liberalization impacts cement industry India’s Ultratech Cements boosted cement sales India’s Dalmia Cement launches production at new unit Supply of cement stabilizes in in Egypt Nuclear deal with Iran could see cement demand rise
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Saudi construction sector continues rise Martin Marietta unit gets green light in Colorado Limestone shipments in Great Lakes post increase Serbia to use fly ash for bricks Saint Gobain posts strong H1 numbers Headwaters banks on fly ash growth Altech Chemicals working on alumina project Higher construction materials sales noted in Thailand Ecuador: Lack of aggregates hurting construction Green construction materials hope for the future Algeria building materials imports declined through May Poland awards fresh road contracts Bitumen shortage halts several road projects in South Africa Spain: Municipalities rationalize aggregates extraction Cemex inaugurates new unit EU construction numbers up in May Sika posts stronger H1 numbers Polaris Materials has new aggregates facility Martin Marietta runs into opposition for proposed plant Cemex to appeal Ohio decision on mining Saint Go completes purchase of US gypsum firm Surging building materials costs hurting Kenya builders San Diego plans new stadium Botswana wants solar panels for mines Kuwait building activity picks up
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