CemWeek Magazine, Issue 14

Page 1

CemWeek CemWee MAGAZINE

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

APRIL / MAY 2013

CemWee CemWee BMWeek Highlighting cement & Africa M&A Activity:

Brewing changes

China Energy Outlook:

Swing importer building momentum Country Focus:

Kenya Booming

New! CW Research & Analytics section:

energy market insights News

|

Analysis

|

Market Coverage

|

Interviews

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People Moves


cbi conference

cement business & industry india & south asia October 9-10, 2013 • Hilton Mumbai International Airport Hotel • Mumbai, India CBI India & South Asia 2013 Conference will focus on the various aspects of India’s cement industry from a business growth & investment perspective. Notably, the programme will take a dual-track business and technical approach to the issues around:

GMI

Market perspective, forecast and competitive outlook

Alternative fuels, new business models

Environmental performance management

Finance and capital markets

Coal as mainstay fuel option and outlook

Efficiency, innovation, new developments

Technology, operations and best practices

GLOBAL

Organized by GMI Global and again with the great support from the India Cement & Construction Materials (ICCM) journal the event is expected to bring together more than 200 cement and lime professionals. GMI is excited to build on the success of CBI India 2012 to expand the scope to include participants from the entire South Asia region this time around.

Register on-line at www.gmiforum.com or email sales@gmiforum.com. You may also call us in the US at +1-203-516-7424 supported by

india CemWeek

CEMENT & CONSTRUCTION MATERIALS


CemWeek EDITOR'S NOTE CemWeek CemWeek CemWeek BMWeek BMWeek BMWeek MAGAZINE

Letter from the publisher and editor

PROVIDING MORE INSIGHT The CW Group is excited to announce that it has evolved the format of its magazine to better align with the CW Group’s core as an industry consultant and research house. To further separate our research thought leadership from that of basic journalism, we decided to add a new section in the magazine entitled “CW Research & Analytics.” Besides the fact that we want to keep our readers permanently informed, we also aim to provide a more indepth analysis of the industry developments in energy, trading, projects and other related topics. Over the last few years energy has probably been one of the most analyzed topics in the cement industry. Securing a reliable and cost-effective energy supply in one of the key challenges faced today by the cement industry and China is a clear example of this issue. The country was a net coal exporter until 2009, when the rapid economic growth resulted in a dramatic increase in coal imports. Many coal-exporter countries found their way into China, among them the United States, which last year shipped more than 9 million tons of coal to the Chinese market. According to China’s government coal imports are expected to continue their upward trend, driven by the new coal-based power plants coming online and the high transportation costs between the inland mining areas and the high-demanding coastal areas. In our “Surging Economic Growth Draws M&A Activity to Africa” we take a look at the recent evolution of M&A activity in Africa, with focus on the economic overview, the factors that lead to the economic growth and what the future has in store for the cement industry in the region. We were present at the EEE-IAS / PCA Cement Industry Technical Conference that took place on April 15-April 18 in in Orlando, Florida. In this magazine issue we share with you some highlights of the conference as well as some images of the different exhibitors and industry groups that attended the meeting. In closing, we welcome your input. If you are interested in contributing to the magazine with an article, or simply want to share your feedback, contact us at editor@cemweek.com.

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CONTENTS FEATURES 6 Surging Economic Growth Draws M&A Activity to Africa Focus on M&A Activity in Africa in the last years

06

12 REGIONAL FOCUS Kenya: Barreling ahead in East Africa 16 China Energy Outlook China’s coal imports to continue upward trend

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DEPARTMENTS EDITOR’S LETTER 1 Providing more insight Numbers in Brief 4 Focus on Latin America and Africa plant construction costs Research 26 Cement Markets 28 Cement Energy Markets EVENT 20 IEEE Conference Highlights 24 CBI Africa 2013 Conference

regional Reports 32 Europe, Middle East & Africa 36 Asia Pacific 37 South Asia 38 Americas From our Industry Partner 40 Building materials update Projects & People 44 Equipment & notable projects 46 People on the move


Fast, simple alternative fuels upgrade The Titan America – Pennsuco Plant in Florida wanted an alternative fuels upgrade – but first they wanted clear proof of benefits. FLSmidth proposed a simple and cost-effective solution. A temporary portable volumetric unit proved out the supply chain of locally available materials and demonstrated excellent results. This allowed Pennsuco to confidently justify a permanent installation. A close relationship with FLSmidth helped Pennsuco test, approve and install an alternative fuels upgrade - all within a very tight timeframe. For more information about how FLSmidth can help make your plant more competitive, visit www.flsmidth.com/upgrades


NUMBERS

IN BRIEF

Focus:

LatAm and Africa greenfield plant construction costs Latin America and Africa are expected to see impressive growth in cement production capacity in the upcoming years. Brazil accounts for the largest share of the new Latin America cement capacity coming online, with Bolivia, Peru, Ecuador, and Colombia also expected to see a host of new projects. Africa’s boom, driven by positive demographics coupled with rapid urbanization and capital-intensive infrastructure projects, is concentrated largely in Sub-Saharan Africa. RATIO OF US$/TON CAPACITY FOR NEW GRENFIELDS (EAST AFRICA BASE=1) 2

1

0 East Africa

Southern Africa

West Africa

Latin America

Source: CW Group Research

But capital intensive as the cement industry is, keeping an eye on the investment costs is ever-important. Naturally, many factors influence the construction costs, including of course the plant configuration. But on a non-normalized and unadjusted basis, greenfield cement plant construction costs in LatAm and Africa range from as low as US$90 per ton in East Africa to as much as $300 per ton in LatAm and West and Southern Africa. Compared to Africa, Latin America shows the widest range in cost per ton with civil construction costs and labor costs representing the swing factors. AVERAGE COST OF NEW GREENFIELD US$/TON Middle 80%

East Africa

Southern Africa

West Africa

Latin America Source: CW Group Research

Average construction cost per ton in Southern Africa and West Africa are approximately 1.5x and 1.6x higher than those seen in East Africa, respectively. The cost per ton of building a plant in Latin America is 1.6x than that in East Africa. Excluding Ecuador, reviewed projects in Latin America had an average cost per ton of above US$200. In the region, Colombia, Paraguay and Argentina showed the highest costs with the average cost above US$275 per ton. 4

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

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

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

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

Global market cement prices. Import & export trade prices. All in a single must-have resource.

Annual subscriptions include four quarterly 50+ page reports:

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We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com or on +1-702-430-17 48 848 N. Rainbow Blvd., Box #1658, Las Vegas NV, 89107, USA


FEATURE

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Surging Economic Growth Draws M&A Activity to Africa Governments in Africa urged to stimulate infrastructure investment in order to attract more cement companies to the region.

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FEATURE Economic Overview For the past ten years, Africa was recognized as one of the fastest growing regions worldwide with GDP growth averaging about 5 percent per year. It is evident that the downturn in the global economy, particularly among the G7 regions such as the U.S., Europe and Japan, has turned the tide for the poorest continent in the world. According to both the IMF and the World Bank, economic growth in sub-Saharan Africa is predicted to range between 5.0 and 6.1 percent next year, surpassing the 4 percent global average. The major drivers of growth are increased investment, high commodity prices and the region’s rising middle class. The sluggish growth in major economies has led multinational companies to diversify their capital towards geographical regions with faster growth. Investors that have already taken advantage of the boom in Asia are now setting their sights on Africa. Africa’s declining inflation and increased purchasing power translate to a potential 1 billion consumer market for these multinational companies. Moreover, the region’s abundant natural resources make it a new haven for energy and mining corporations.

REAL GDP GROWTH 2008-2014 Central & Eastern Europe

Latin America & Caribbean

0% 4%

2008

2009

2010

2011

2012

2013

2014

Source: IMF, World Economic Outlook | Note: Excludes South Sudan

INFLATION 2008-2014 Central & Eastern Europe

Latin America & Caribbean

Developing Asia

Sub-Saharan Africa

15%

0%

2008

2009

2010

2011

2012

2013

2014

Source: IMF, World Economic Outlook | Note: Excludes South Sudan

improvement will further increase consumer spending. Based on a report by the African Development Bank (AfDB), about 34.32 percent of the African population was classified as middle class in 2010 versus 26.19 percent in 1980. The increase is equivalent to over 200 million people with the middle class population at about 313 million in 2010 compared to 111 million in 1980. Middle class is defined as those that spend between US$2 and US$20 per day.

Emerging Middle Class Conducive to Mergers & Acquisitions Africa’s growing middle class is one of the primary contributors to the favorable investment climate in the region. Steady economic growth for the last two decades helped to reduce poverty, and continuous

With Africa’s purchasing power on the rise and a market that is virtually untapped, multinational companies are finding ways to enter the continent and grab a foothold into its emerging economy. Reports from the IMF indicate that foreign direct investment inflows to sub-

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Sub-Saharan Africa

10%

In terms of GDP growth, Mozambique and the Ivory Coast are expected to lead the pack with 8 percent forecasted in 2014. Mozambique is the site of the world’s biggest gas discovery in the past decade while the Ivory Coast is regarded as the world’s largest cocoa producer. Following closely with a 7 percent projected growth in 2014 is Nigeria as the continent’s top oil producer. On the other hand, the continent’s largest economy, South Africa, is expected to recover at 3.3 percent after the crippling mining strikes it encountered in 2012.

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Developing Asia

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Saharan Africa reached US$37.7 billion in 2012 and are expected to reach US$54 billion by 2015. Among the major investments in the consumer sector for the past years are the Indian Bharti Airtel’s US$10.7 billion acquisition of Zain, Walmart’s US$2.4 billion stake in South Africa’s Massmart and the purchase of Ethiopia’s state-owned breweries by Heineken, Diageo and Duet Group for a combined value of US$500 million. Energy, Mining & Utilities Sector with Highest Level of M&A Activity While there has been significant investment activity in sub-Saharan Africa’s consumer sector, the energy, mining & utilities sector still registered the highest level


of activity in terms of value and number of deals. Even with its rising middle class, Africa’s lure to foreign investors has always been its natural resources. In 2012, total deal value in the energy, mining & utilities sector reached US$14.9 billion followed by the financial services sector at US$7.5 billion. Although the energy, mining & utilities sector dominates in M&A activity in terms of value, it is interesting to note that the disparity between the different sectors in number of deals for 2012 is not so wide. For the number of M&A deals in 2012, the energy, mining & utilities sector accounted for 18.6 percent. It is evident that Africa’s investment profile is expanding and may continue to diversify in the coming years. Further proof of diversification is seen from the M&A deals announced in 2012.

AFRICAN POPULATION BY CLASS Poor Class (<$2)

Middle Class ($2-$20)

Rich Class (>$20)

100%

0%

1980

1990

2000

2010 Source: African Development Bank, April 2011

Prospects for the Cement Industry Looking forward, the challenge for subSaharan Africa is to augment a favorable investment profile with infrastructure improvement. The World Bank opined that Africa’s deficiency in infrastructure is a major barrier to sustaining growth and estimates US$93 billion per year in capital investment over the next ten years to overcome this deficit. In Ethiopia, the government is seeking investors to assist in the development of a 2,000-km railway network in the country. On the other hand, South Africa is planning a 15-year infrastructure program with an estimated cost of $462 billion to boost economic growth. However, funding such endeavors presents a major obstacle in accomplishing these goals. To remedy the financial gap, the AfDB is proposing the issuance of a US$40 billion bond to support infrastructure development in Africa. The implementation of such infrastructure programs bodes well for the construction and cement industry in the continent. In anticipation of this construction boom, several cement companies are expanding plant capacity, while

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FEATURE others are investing in new cement plants in strategic parts of the region. In June 2012, Dangote Cement unveiled the largest cement plant in sub-Saharan Africa in Obajana, Nigeria, with a capacity of 10.25 million tons per year. With the new cement plant, Dangote Cement now operates various plants in the continent with a current capacity of 28 million tons per year. Dangote Cement is the largest company traded on the Nigerian Stock Exchange since October 2010, following a merger with Benue Cement. In November 2012, Sephaku Holdings likewise announced the acquisition of Metier Mixed Concrete in South Africa valued at US$41 million. More recently, HeidelbergCement AG disclosed plans to invest US$31 million in Tanzania to build its fifth plant in the area to increase capacity to 2 million tons per year. Although these companies announced more concrete plans to expand cement production, other cement companies such as Afrisam have expressed intentions to expand. But in the case of Afrisam, expansion will have to wait until a debt reduction of US$1.5 billion is completed through euro-denominated rate notes settled through equity infusion from PIC and the Pembani Group.

SECTOR DISTRIBUTION BY DEAL VALUE - 2012 (%)

0.4%

Pharma, Medical & Biotech

2.2%

Agriculture, Transportation & Business Services

2.3%

Construction & Real Estate

3.4%

Industrials & Chemicals

9.0%

Consumer & Leisure

13.9%

Technology, Media, Telecoms

22.9%

Financial Services

45.6%

Energy, Mining & Utilities

SECTOR DISTRIBUTION BY DEAL COUNT - 2012 (%)

Despite apprehensions about sub-Saharan Africa’s ability to sustain economic growth, there is no question that its huge consumer market and natural resources are the major catalysts that will propel the region from being the poorest in the world to becoming one of the most progressive.

2.7%

Pharma, Medical & Biotech

18.1%

Agriculture, Transportation & Business Services

8.2%

Construction & Real Estate

10.9%

Industrials & Chemicals

18.0%

Consumer & Leisure

8.7%

Technology, Media, Telecoms

14.8%

Financial Services

18.6%

Energy, Mining & Utilities

top deals in 2012 Date

Target Company

Deal Value (US$ Bn)

Apr-12

France Telecom SA

Egyptian Company for Mobile Services (63.64% stake)

3.28

Nov-12

Sephaku Holdings

Metier Mixed Concrete

0.41

Nov-12

China Petrochemical Corporation

Total Nigeria Plc (offshore OML 138 block) - 20% stake

2.5

Dec-12

Qatar National Bank

National Societe Generale Bank SA

2.56

Dec-12

Absa Group Ltd

Barclays Africa Limited

2.07

Dec-12

Oando Energy Resources Inc.

ConocoPhillips (Nigerian business)

1.79

10

Bidder Company

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E-Magazine is nice, but print copy nicer? Subscribe to the CemWeek Magazine’s print edition and have it mailed directly to you. Contact CemWeek at sales@ cemweek.com to make arrangements. Global cement industry coverage in a new, fresh format focusing on market moving trends, analysis and business. We know the cement industry well. Let us guide you. For more information please contact us at inquiries@cwgrp.com, or on +1-702-430-1748 T: +1-702-430-1748 F: +1-928-832-4762

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FEATURE

Kenya

Barreling ahead in East Africa Optimism returns to the Kenyan cement market. The “wait and see” sentiment that recently overwhelmed the industry turns into a scramble to get ahead.

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COUNTRY SNAPSHOT

APPARENT CEMENT DEMAND & PRODUCTION (2005–2012) tons

Kenya took a turn for the better in March 2013. The turning factor was materially driven by a non-violent outcome of the presidential election process held on March 4, 2013. Given the peaceful conclusion of the election, stalled investments are expected to ramp up and reach their full implementation during the second half of the year and onwards. The government has set aside consistent funds for infrastructure, energy and social programs, while residential consumption is also expected to lift the low cement consumption per capita of the country.

5,000,000

150,000

Along with the entrance of the seventh cement company in the Kenyan cement market at the end of 2014, three other cement companies are expanding their cement capacities: EAPCC, National Cement and Mombasa Cement. Their combined efforts are estimated to place the national nameplate cement capacity over 11.1 million tons by the end of 2017. Capacity expansions across the East Africa

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Cement production

2,575,000

In 2005, the cement demand in Kenya was at a mere 1.6 million tons. Since then, the market registered impressive growth, closing 2012 at almost 4 million tons in cement consumption. But the industry is not without concerns: Kenya is still dependent on large clinker imports, with over 1.2 million tons imported in 2012 mostly from China. The dependency on clinker imports is expected to continue as efforts targeted toward capacity expansion are mostly focused on cement grinding.

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Apparent consumption

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2005

2006

2007

2008

2009

2010

2011

2012

Source: CW Group research

Kenyan cement companies hit the brakes in 2012 when the industry reached the lowest growth rate in the last ten years. However, going forward the fortunes are expected to turn as cement demand is projected to expand 10 percent per year on average and exceed 6.3 million tons annually by 2017. Kenya’s cement consumption per capita is also forecasted to reach an important milestone in 2014 when it will surpass for the first time in its history 100 kilos per inhabitant.


NAMEPLATE CEMENT PRODUCTION CAPACITY (2007–2017E) tons

12,000,000

New Capacity

Baseline Capacity

0

2007

2008

2009

2010

region add additional competitive pressure as do perennial fuel sourcing issues for clinker producers in the country. The availability of quality limestone reserves in Kenya provides its cement companies an important competitive advantage, as most of the regional markets are lacking sufficient raw materials. However, environmental concerns and the resistance of local residents continue slowing down the process. Access to clinker will remain a key differentiator for the com-

2011

2012

2013E

2014E

ing five-year period when it comes to product pricing and margins. The expected inception of coal mining in Kenya can also bring some relief for cement companies against inflating fuel costs. But fundamentally, Kenya benefits from a favorable combination of economic strengths and opportunities, which assists the country in meeting the ambitious objectives detailed in the Kenya Vision 2030 program. Moreover, Kenyan cement companies provide a stable envi-

2015E

2016E

2017E

Source: CW Group research

6,000,000

ronment for domestic consumers as the market continues to be self-sufficient. The reduced cement consumption per capita and the strong economic and construction-related prospects lead to the expectation that the market will flourish in the next five years. The Western region of the country is projected to become a major driver of the market from 2015 and onwards given the increased accessibility to cement and the expected decline in retail prices.

APPARENT DEMAND FORECAST (2005–2017E) tons Apparent consumption 8,000,000

1,000,000 2005

2006

2007

2008

2009

2010

2011

2012

2013E

2014E

2015E

2016E

2017E

Source: CW Group research

4,500,000

The article is a summary of the 42-page in-depth market research from CW Analytics. To learn more, contact CW Analytics at sales@cwgrp.com.

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FEATURE

China Energy Outlook

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China’s economy may be decelerating but coal consumption is on the rise. New coal-based power plants will drive up coal demand and imports are expected to continue their upward trend. Elevated transportation costs between the inland mining areas and the highdemand coastal regions, as well as relatively low coal trading prices in the Asia-Pacific markets will continue to play a relevant role.

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FEATURE

Last year China represented the thirdlargest market for U.S. coal exports, after volume shipped to the country went up to 9.1 million tons or approximately an 80 percent increase versus 2011. As a whole, the U.S. coal industry exported around 114 million tons in 2012, and the U.S. continues to see the export market as a big opportunity to increase its coal output, especially with Asian economies on the rise. Expectations for 2015 China’s Energy Outlook Report shows that the economic growth rate is expected to decelerate as a result of the global economic downturn, and energy demand will advance more slowly in the upcoming years. GDP will grow at an annual average rate of 7 percent, 0.5 percentage points lower than the previous outlook estimate. As for energy demand, it is anticipated to increase 4.7 percent per year from 2011 to 2015, down from a 6.7 percent average observed in last year’s

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NEW COAL-BASED POWER PLANTS CAPACITY DISTRIBUTION (%) BY PLANT STATUS

83.6%

0.2%

Planning

Financed

11.0%

3.7%

Permitting

Feasibility Study

0.3%

0.5%

Permitted, Preparing Construction

Designing

0.6%

Announced

Source: CW Group research

China’s coal imports to continue upward trend China’s demand for coal has grown steadily over the last 10 years, reaching more than 3.5 billion tons in 2012, which represented more than half of total global consumption. Traditionally, imports have accounted for a small share of the coal utilized in the country. However, in 2009, unable to keep up with local demand, China was forced to tap into the global coal market to a greater extent, causing imports to surge drastically. More recently, this trend has accelerated even further because of a sustained drop in coal prices in the Asia-Pacific trade markets as well as high transportation costs between the inland mining areas and the very populated, high-demand coastal areas. In 2012, China imported more than 288 million tons of coal, and according to the last Energy Outlook Report released by the Chinese government, coal imports will continue to rise in the future.

outlook. Yet, coal imports are expected to reach 430 million tons by 2015, which will represent around 11.3 percent of the total coal consumption in the country. The southeast coastal region would have to import 300 million tons of coal in order to meet demand and help maintain China’s leading position in the global coal market.

of 16 giant coal-power bases, mainly in the northern and northwestern provinces of Inner Mongolia, Xinjiang, Shanxi and Shaanxi. However, public opposition to new coal-based power plants due to environmental concerns has been on the rise, and the likelihood that China will follow through with all these projects is still being debated.

A major factor driving the increase in coal consumption is the new coal-based power generation capacity coming online. China has plans to add 363 coal-fired plants with a combined capacity of more than 557,938 MW and its 12th Five-Year Plan already approved the construction

China recently established a target to cap the annual coal consumption at 3.9 billion tons by 2015 as a measure to control pollution and coal consumption. However, some analysts already have predicted that China’s coal demand will reach 4.8 billion tons by 2016. BMWeek CemWeek

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

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


FEATURE

3L&T (Linas Mazeika, owner)

Luis Sucre and Ed Papa (Vezers Industrila constructors)

Various views of exhibits hall

IEEE Conference Highlights

John Kline (Mercury balances in modern cement plants, John Kline Consulting)

John Knnotts

Various views of exhibits hall

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Lunch break with Argos

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Second day of general sessions

Jonathan Forinton (Recycling kiln bypass dust into valuable materials, ATEC America) Imran Akran (IA Cement LTD), US and Global Perspectives

Techweigh (weighing and metering products)

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FEATURE

Afternoon’s technical sessions

Cementos Progreso’s team, FLSmith and IAC teams

Continental Construction Company booth

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Argos Team

Process solutions Canada Ltd (Luis Ramirez, David Rogers with potential customers)


The 55th cement industry technical conference took place between Sunday 15th and Thursday 18th of April at the Dolphin hotel & Resort in Orlando FL. The conference included a menu of technical sessions, papers, presentations and exhibitions from a long list of vendors which took place for 4 straight days, along with spouse activities and entertainment features. Approximately 700 delegates were present at this event, representing 332 companies: equipment manufacturers, engineering firms, cement producers and other cement related services from across the world. Several topics that included all the aspects of the cement industry were discussed on Tuesday and Wednesday, during the morning and afternoon sessions. Mark Mueller and Jeff Nagel addressed the crowd and provided opening remarks, followed by economists David Zwickie (PCA) and Imran Akram, who made a presentation on the state of the US and global industry and provided their latest forecasts on cement demand.

Afternoon’s technical sessions

Experts in mechanical, process, electrical, environmental, industry economics as well as Human resources presented their papers and research topics, providing a breakthrough of knowledge in areas such as: clinker grinding, recycling, emissions control, new regulations and latest developments, impacting the cement industry, electrical and power study cases, energy conservation, lifecycle cases, new construction techniques and personnel training strategies. They also provided a diversified and robust portfolio of topics that covered the latest developments in the cement industry in the US and in other parts of the world. About a third from the total of 35 topics presented and discussed in the two days were related to environmental and regulatory matters such as emissions reduction, mercury emissions control, the impact of NESHAP, alternative fuels, regulatory landscape and energy preservation.

Alfran – Refractory services (Jose Ma Dominguez, Carlos Dominguez)

Vendors provided a large and impressive display of their latest products and services in the exhibition showroom under a friendly and comfortable social environment for strengthening old relationships as well as forming new ones. BMWeek

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EVENT

Cement Business & Industry (CBI) Africa 2013 Conference GMI Global brought their custom-tailored CBI Africa 2013 Conference to Johannesburg, South Africa on March 27-28, 2013 – the first of its kind in this region. There were over 100 delegates registered, an exceptional selection of speakers who are leaders in their fields, and top corporate sponsors from the most influential cement business and manufacturing companies.

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“CBI Africa 2013 brought together a lot of exciting groups. We are really excited – this conference highlighted that Africa is a continent of incredible opportunity, despite the challenges that exist here. We are looking forward to expanding CBI Africa next year and welcoming an even larger and more diverse group.” The first CBI Africa 2013 Conference was opened by Mr. Robert Madeira from the CW Group who provided an introduction on “The Big Picture – Shifting Economic Strength and Macro Challenges” in Africa. Below are some of the other highlights from CBI Africa 2013. GMI Global LLC sales@gmiforum.com +1-203-516-7424

Technical & Engineering Highlights: •

Eduardo Reis from the Global Technical Assistance Area, Cement & Lime at Magnesita discussed “Technological Globalization.”

Dr. York Reichardt, General Manager of Products and Sales at Gebr Pfeiffer presented on “Vertical Roller Mills for the African Cement Industry.”

Gideon Potgieter an Independent Business Advisor shared his thoughts on“Reducing Carbon Footprint by Using Energy Generated From Waste.”

Jan Reynhardt, Co- Founder & Chief Operating Officer of GRNQ Environmental Solution (Pty) Ltd reviewed “Energy and the Environment: The World in Flux.”

Andreas Renetzeder, Senior Sales Manager at Scheuch presented on “Innovative Filter Technology- EMC, SCR, DeCONOx.”

Jens Garbe, Territory Sales Manager at Claudius Peters shared “Innovative Packing Plant Technology for African Building Material Market.”

Vishal Agrawal from Loesche discussed “Clinker Grinding without Hot gas & with Zero/Minimum water sprinkling in Loesche VRMs at Holcimplants in India.”

Business & Finance Highlights: •

Michel Folliet, Principal Industry Specialist at the International Finance Corporation (IFC) discussed the “Context of the African Cement Industry – What Lies Beyond the Horizon?”

Maciek Szymanski, Senior Manager at Ernst & Young presented on “Sub-Sahara – The Last Exciting Frontier In Global Cement.”

Jeannot Boussougouth, Senior Manager at Standard Bank reviewed “Financing Cement Projects in Africa”.

Benjamin Tymann, Shareholder of Greenberg Traurig LLP and CoChair of the Global Construction Materials Industry Practice Group shared his thoughts on “Today’s Rising International Legal Risks and Designing a Compliance Program to Prevent Them”.

Tshepiso Dumasi, Commercial Director at Lafarge Zambia discussed the “Opportunities and Challenges Central Sub-Saharan Africa.”

Dr. Daniel Camarasa, Strategic & Business Development Manager at Dangote Cement presented on “Growing Africa’s Cement Industry – Challenges & Opportunities.”

CBI Africa 2013 was sponsored by: Magnesita, Gebr. Pfeiffer, Claudius Peters, Loesche, Promac Engineering Industries Limited, Scantech, Scheuch, and Starlinger. CemWeek also provided key support to CBI Africa 2013. GMI Global is looking ahead and is excited to begin planning for the next CBI Africa Conference. Stay tuned for news on what will surely be the most exciting annual cement business and industry events in Africa.

ARPIL / MAY 2013

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After increasing 9.8 percent in 2012 over 2011, Russian cement production closed the first quarter of 2013 at 11.2 million tons (13.1 percent over Q1 2012).

CEMENT VOLUMES Another disappointing quarter for hard-hit countries The first quarter of 2013 fared positively for most of the reporting countries, but dipped to new lows for already affected markets. Nine out of 12 countries tracked by their cement production notched increases when compared to the corresponding quarter of 2012, while at the level of cement demand only seven out of the 13 cement markets could brag about their outcome. Cyprus registered the highest cement production growth rate after producing around 0.24 million tons of cement in the first three months of 2013. The 30 percent hike was mostly driven by the disappointing volume registered in March of last year, when the cement industry was harmed by a strike at the Vassilikos cement plant. The strike followed the announcement of cost-cutting actions. Even though cement production turned positive in the first quarter, the depressed status of the Cypriot cement market was further emphasized by the 24.4 percent decrease in its cement demand. Russia continues to be one of the most prominent cement demand pockets of the world. After increasing 9.8 percent in 2012 over 2011, Russian cement production closed the first quarter of 2013 at 11.2 million tons (13.1 percent over Q1 2012). Ukraine also managed to outpace last year’s volume by 3 percent (1.3 million tons). On a negative pole, Belarus produced just below 0.90 million tons of cement during January-March 2013, 4.4 percent below the 0.94 million tons registered last year. Q1 2013/Q1 2012 CEMENT PRODUCTION GROWTH RATE (%)

Colombia

Belarus

Argentina

Ukraine

China

Thailand

Saudi Arabia

Vietnam

Spain

-35%

Peru

0%

Russian Federation

35%

Cyprus

CEMENT MARKETS

CW Research & Analytics CW Group CemWeek BMWeek CemWeek CW Group BMWeek CemWeek BMWeek CW Group CEMENT MARKETS

SOURCE: CW Group Research

Group Coal Week CemWeek BMWeek To learn more, please contact the CWCWResearch & Analytics team at sales@cwgrp.com or +1-702-430-1748. CemWeek CW Group Coal Week BMWeek CemWeek BMWeek APRIL / MAY 2013 www.cemweek.com CW Group Coal Week 26

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Latin American countries bagged mixed results with Peru, Ecuador and Argentina leading the charts. Peru produced more than 2.5 million tons of cement in Q1 2013, followed closely by cement consumption (2.42 million tons). However, the paralysis of some construction works and prolonged rains led to declining YTD growth rates from one month to another. As such, the YTD growth rate of cement consumption shrank from 18.7 percent in January 2013 to 15.4 percent in February 2013 and 10.3 percent by the end of the first quarter. With almost 1.5 million tons of cement consumed in the first three months of 2013, Ecuador recorded a comparable YTD growth rate to Peru. Argentina grew at moderate pace in Q1 2013 – 2.9 percent for cement production and 1.4 percent for cement consumption.

CEMENT MARKETS

CW Research & Analytics CemWeek BMWeek BMWeekLatin AmericanCemWeek mixed CemWeek BMWeekcountries bagged results with Peru, Ecuador and Argentina leading the charts.

Chile and Colombia had to settle for negative prospects, notching cement consumption declines rated at 3.6 percent and 7.6 percent, respectively. The biggest contractions in Colombia were noted in Cesar (26.4 percent), Huila (21.5 percent), Bogotá (20.3 percent) and Antioquia (9.5 percent). By contrast, the expanding departments were Córdoba (31.4 percent), Tolima (26.2 percent), Atlántico (13.7 percent) and Cundinamarca (9.3 percent). The consistent growth of countries such as Thailand, Saudi Arabia, Indonesia and Pakistan was opposed by the steep decline of France, Morocco and Spain. France plummeted 11 percent in Q1 2013, but the market is expected to recover in the next quarters as the year-end cement consumption decline is projected at 7 to 9 percent. The French cement sector is expected to turn the trend from 2014 and onwards. Spain was once again the owner of the largest contraction with a 40 percent decline registered in March 2013 versus the corresponding month of last year. The grim evolution led the quarterly slide to 30.9 percent. The Spanish construction sector is practically paralyzed, with public works bidding falling by 45 percent in 2012. Preliminary results for countries outside the universe detailed above reveal mostly optimistic evolutions. Countries including Brazil, Bolivia, Germany, United States and Japan are expected to post hikes for the quarter, while Mexico will most likely face a decline.

The biggest contractions in Colombia were noted in Cesar (26.4 percent), Huila (21.5 percent), Bogotá (20.3 percent) and Antioquia (9.5 percent).

Q1 2013/Q1 2012 CEMENT PRODUCTION GROWTH RATE (%)

15%

Spain

Cyprus

France

Chile

Argentina

Pakistan

Indonesia

Peru

Ecuador

Colombia

Morocco

-35%

Saudi Arabia

Thailand

0%

SOURCE: CW Group Research

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CEMENERGY MARKETS

CW Research & Analytics CW Group CemWeek BMWeek CemWeek CW Group BMWeek CemWeek BMWeek CW Group CEMENT ENERGY MARKETS Chinese coal imports might be stalled but trading markets still have high expectations for 2013

COAL MARKET UPDATE After two consecutive months of decline, coal trading volumes slightly recover during March, mainly boosted by an increase of more than 13% in Chinese coal imports. Coal demand on the rise? Despite continued interruptions in supply in two major coal-exporting countries, trading volumes in the first quarter of 2013 remained in good shape compared to the same period of the previous year. Australian shipments were disrupted after strong rains battered parts of Queensland and forced the closure of mines and ports, while Colombia saw its production severely affected by a 32-day strike at Cerrejón, Colombia’s biggest coal mine. It’s estimated the strike cost the country about 3 million tons in lost output. Principal destinations for Colombian coal are countries in Europe and South America. Output from South Africa’s Richards Bay Coal Terminal (RBCT) climbed to 7.49 million tons in March, up 37% from the previous month. The increase follows a rise in China’s coal imports, the second largest market for South African coal exports after India. Indonesia, on the other hand, has seen its coal supply shortened by heavy flooding and a police crackdown on illegal mining conducted in Kalimantan (Indonesia’s biggest coal-producing region) last February. Estimates from the U.S. Energy Information Administration indicate that coal exports declined 3% in the first quarter of 2013 when compared to the same quarter of 2012 due to a drop in volumes exported to most European countries and China. Outlook for the year: market continues optimistic

COAL GLOBAL TRADING (million tons) 120

Rest

US

Colombia

South Africa

Russia

Australia

Indonesia

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

0

Jan-10

60

SOURCE: CW Group Research Group Coal Week CemWeek BMWeek To learn more, please contact the CWCWResearch & Analytics team at sales@cwgrp.com or +1-702-430-1748. CemWeek CW Group Coal Week BMWeek CemWeek BMWeek APRIL / MAY 2013 www.cemweek.com CW Group Coal Week 28

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CEMENERGY MARKETS

CW Research & Analytics CemWeek BMWeek CemWeek BMWeek CemWeek BMWeek

High expectations for the 2013-2014 coal market continue to rise. In Europe, coal-fired power generation is growing in countries such as Germany and Spain as gas reserves dry up and prices move up.

China’s coal imports have started to stall and could fall in 2013 but Japan, the thirdlargest coal importer worldwide, is expected to recover in the second half of the year as new coal-fueled generation is expected to come on line.

In Indonesia, the Coal Mining Association recently announced that coal exports are expected to rise to 330 million tons in 2013, up 6.5 percent from a year ago. A surge in export volumes will partly offset the shortfall in domestic coal supplies in India, Indonesia’s main market. The country estimates it may need to import nearly 15 million tons in 2013-14, following a government decision that opens a window for coal producers to fill the gap between domestic supplies and power stations’ demand by imports.

ENERGY PRICES UPDATE Coal Global coal prices have remained mainly unchanged as the market waits for the Japanese utilities to close annual deals with suppliers. However, some delivered prices have recently hit bottom on weak demand concerns.

Coal prices mainly unchanged, but trends are mixed

STEAM COAL FOB AVERAGE PRICES (US$/TON) South Africa Richards Bay

Indonesian HBA

Australia Newcastle

Colombia exported

150

US exported

105

60

Mar-09

Sep-09

Mar-10

Sep-10

Mar-11

Sep-11

Mar-12

Sep-12

Mar-13

SOURCE: CW Group Research CW Group CemWeek To learn more, please contact the CW Research & Analytics team at sales@cwgrp.com orBMWeek +1-702-430-1748.

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Coal W Coal W Coal W


US PETCOKE EXPORT PRICE (US$/TON)

120

Feb-13

Dec-12

Jan-13

Oct-12

Nov-12

Sep-12

Jul-12

Aug-12

Jun-12

Apr-12

May-12

Feb-12

Mar-12

Dec-11

Jan-12

Oct-11

Nov-11

Sep-11

Jul-11

Aug-11

Jun-11

Apr-11

May-11

Feb-11

Mar-11

0

Jan-11

60

Dec-10

CEMENERGY MARKETS

CW Group CW Group CW Group

CW Research & Analytics CemWeek BMWeek CemWeek BMWeek Petcoke prices stable and no signs of rebound yet CemWeek BMWeek

SOURCE: CW Group Research

Australian coal export prices fell as China’s demand for imported coal declined following record inventory levels in its stockpiles and as local coal prices in China remain weak. Local competition has been tough but prices are expected to start recovering within the next month. In Indonesia, coal export prices are seeing a recovery as countries such as India start building stockpiles before the rainy season starts; however, local coal miners in Indonesia reported that after increasing its sales volume in the first quarter of 2013 by 21 percent versus the same period last year, net sale price declined around US$20 per ton. In the U.S., the price of thermal coal exports remains unchanged from the end of 2012 at around US$81 per ton, after reaching a historical high of US$92 per ton in the third quarter of 2011. In Colombia, the strike at the Cerrejón mine temporarily affected coal prices in Europe, a destination for much of the country’s coal exports. Export price for Colombian coal has slipped since February, reaching two-year low levels at slightly over US$80 per ton. Petcoke The 12-month average price of U.S. uncalcined petcoke for export markets remained unchanged versus the previous month while yearly volumes recovered around 16 percent% after dropping more than 25 percent% last December. In China, most loGroup Coal Week CemWeek BMWeek To learn more, please contact the CWCWResearch & Analytics team at sales@cwgrp.com or +1-702-430-1748. CemWeek CW Group Coal Week BMWeek CemWeek BMWeek APRIL / MAY 2013 www.cemweek.com CW Group Coal Week 30

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CEMENERGY MARKETS

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cal petcoke producers raised prices in the first quarter following a decrease in crude oil processing and steady petcoke sales that kept inventories at a low level, especially around the days of the Chinese New Year celebration. In the short term, refineries will likely increase inventories, but weak markets will still limit a rebound in petcoke price. Natural Gas Natural gas prices in North America recovered in March in the midst of cooler weather across much of the region and declining supplies in Canada. Price continued its upward trend during April, when the spot price at Henry Hub reached US$4.28/mmBtu, the highest since July 28, 2011.

In Japan, the number one importer of liquefied natural gas (LNG) worldwide, March price closed at US$15/mmBtu, a 9 percent decline versus the previous month. Japan saw its imports jump after the Fukushima incident and with no internal sources of gas, prices surged reaching US$18/mmBtu in July 2012. European natural gas prices, which are linked to oil prices, have remained stable since the last quarter of 2011 at around US$11/mmBtu to US$12/mmBtu. Prices are still high compared to the US$7/mmBtu realized in mid-2009 but are unlikely to fall in the near future as shortages affect the east part of the region. In the United Kingdom, natural gas prices hit record highs in March after multiple operational problems affected the country’s supply. In Argentina, the government announced a 44 percent% increase in price to encourage local and foreign investment in the sector, after the country saw a decline in its natural gas reserves produced by low investments in exploration and exploitation. In Mexico, natural gas import costs climbed 70 percent% in the first two months of 2013 versus 2012 as total volume imported grew 47 percent% to offset the increasing demand, mainly from the electrical and industrial sectors.

Extended winter drives rally in US natural gas prices

NATURAL GAS PRICES (US$/MMBTU) Europe

Japan LNG

US

20

10

Mar-13

Mar-12

Mar-11

Mar-10

Mar-08

Mar-09

Mar-07

Mar-06

Mar-05

Mar-04

Mar-03

Mar-02

Mar-01

Mar-00

Mar-99

Mar-98

Mar-97

0

SOURCE: CW Group Research

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REGIONAL REPORT: The German Federal Court gave its final ruling on a HeidelbergCement appeal formulated against an administrative fine order dated 2003 related to cartel infringements during 1990 to 2002. The court reduced the fine against the company by €8.5 million to a total of €161.4 million. HeidelbergCement declared that it has implemented a far-reaching compliance program in order to avoid similar situations in the future. EUROPE Italy is severely over-capacitated given the reduced domestic demand that has now fallen to levels last seen in the late 1960s. In a move to rationalize the Italian industrial and distribution organization, Italcementi announced that it will close nine of its 17 Italian cement plants. Italcementi posted losses of €362.4 million in 2012 that further amplified the company’s concerns. However, Italcementi reconfirmed the plan to invest €150 million in Rezzato’s revamping. At national level, the Italian cement producers posted a 10.3 percent lower cement production for the first two months of the year compared to the corresponding period of 2012, falling below 3 million tons in total. Following a similar pattern, Spain registered a fall of 39.8 percent in cement consumption in March versus the same period of 2012, reaching a volume of 0.78 million tons. The spectacular drop led to a quarterly negative growth rate of 29.3 percent translated into 2.53 million tons total domestic consumption. The cement market is expected to decline 20 percent in 2013 due to scarce governmental in-

vestments in infrastructure and the stoppage in building activities. The Polish cement market is also projected to contract further in 2013. With 2013 cement sales estimated at 15 million, the decline is set in the vicinity of 4 percent. Polish cement producers sold 1.6 million tons in the first quarter of 2013, 35 percent less than in Q1 2012. The economic slowdown, the stagnation in investments and the tough winter conditions are blamed for the harsh situation. Cement prices may also increase in the following months due to the constant pressure of higher input costs placed on companies’ margins. Portugal’s Cimentaçor was forced to negociate on an early retire scheme with its workers after registering a 25 percent drop in cement sales in the first quarter of 2013. Other measures adopted by the company were the renegotiation of contracts with suppliers and the increase in local raw materials usage. This plan intends to avoid further staff reductions at Pico da Pedra factory in São Miguel.

select PROJECTS IN THE WORKS: europe, russia and baltic region COMPANY (LOCATION) Turkey

OVERVIEW A boron added portland cement plant will be built in Emet district, Kutahya province. The cement plant is regarded as the first of its kind in the world and will own a nameplate cement capacity of 1.16 million tons per year.

Table available in the CemWeek Magazine Print Edition.

Cimpor/Portugal

Portugal's Cimpor has announced an investment of 500 million euros in the following years for capacity expansion in certain regions.

Italcementi/Italy

Italcementi reconfirmed its revamping plan of Rezzato cement plant. The total investment is www.cemweek.com/subscribe estimated at €150 million. The Group is also currently investing also in India and Bulgaria.

Lafarge/Russia

Lafarge is building a new cement plant in Kaluga that will produce 2 million tons per year and will reduce CO2 emissions by around 31 percent per ton of cement . The total area of the plant is approximately 430,000 sq.m.

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On a more regional level, reports show that approximately 10,000 installations out of 13,000 firms operating under the EU’s Emissions Trading System (ETS) registered carbon dioxide emissions of 1.79 billion tons in 2012, which represented a fall of 1.4 percent. The emissions fall registered for a second consecutive year represents the main tool in the fight against climate change. RUSSIA AND THE BALTIC REGION Russia produced 61.5 million tons of cement in 2012, increasing 10 percent over 2011. Considering the predominance of imports over exports, Russia ended last year with 63.9 million tons in cement consumption. However, the cement market benefited from around 1.2 million tons of cement in stocks at the end of 2012. The Russian cement market is set for incredible growth. Local sources report that the cement consumption might reach 90 – 105 million tons per year by 2020. For this year, the increase of cement consumption is rated at 5 to 7 percent. The cement production capacity registered in Russia at the beginning of 2013 exceeded 93 million tons. An overall capacity increase of 21.3 million tons was registered in the last five years. As of the beginning of 2013, 12 large cement plant construction projects were underway. In a recent development, HeidelbergCement announced that it is now the sole owner of CJSC Construction Materials after having purchased the remaining 49 percent of the company’s shares. The purchase price of the acquisition was


regional report: europe, middle east, africa

kept confidential by the two parties. CJSC Construction Materials holds a total nameplate cement capacity of 1.8 million tons. Ukraine’s cement consumption per capita continues to lag behind when compared to its neighboring countries. Estimates revealed by the Chairman of the Supervisory Board of PJSC Cement, Nicholas Kruts, show that cement consumption per capita in Ukraine amounted to 215.2 kg in the end of 2012, while Russia registered 350 kg and Poland 400 kg. EU countries range their cement consumption per capita between 350 and 1,000 pounds. Cement production in Belarus declined by 4.3 percent in the first quarter of the year, hitting 0.9 million tons. According to the Council of Ministers Decision № 213 of March 25 the Belarusian government will reimburse cement companies with a portion of the interest paid on bank loans. The Lithuanian competition body blocked the purchase intention of UAB Concretus Materials regarding a 51 percent stake in Akmenes Cementas on the grounds of competition disturbances. Lithuania operates currently at subdued levels with an estimated cement consumption of 0.6 million tons and more than half of Akmenes’s cement production destined for exports. MIDDLE EAST One of the major recent developments of the region is the intervention of Saudi Arabia’s King Abdullah into solving the

Kingdom’s cement supply crunch. As a result, King Abdullah ordered the government to pledge SR3 billion (US$800 million) for the construction of at least three to four cement plants over the next three years, while also importing an additional volume of 10 million tons of cement. Cement companies reacted promptly to the request and ten cement plant proposals were already received by the government, summing up to a total cost of SR5 billion. Total cement sales reported for the first three months of 2013 amounted to 15.6 million tons, almost 9 percent above the 14.33 million tons sold last year during the same quarter. Cement production settled at 15.64 million tons – 9.4 percent over Q1 2012. Cement price increases were reported in the last months with speculative activities being intensified in

select PROJECTS IN THE WORKS: middle east COMPANY (LOCATION)

OVERVIEW

Saudi Cement/Saudi Arabia

Saudi Cement decided to rehabilitate and re-operate kilns 4 and 5 from Hofuf cement plant with a total designed capacity of 3,000 tons of clinker per day. Re-operation is expected to commence in Q4 2013.

Iraq

Iran is pledging US$245 million for setting up a cement plant in Iraq with annual production capacity of 2 million tons. The construction process is estimated to last two years.

Table available in the CemWeek Magazine Print Edition.

National Company for Cement/Yemen

www.cemweek.com/subscribe A new cement plant will be established in the Hodeidah Governorate. This new project is expected to help meet the rising demand on the cement market.

Qatar National Cement/ Qatar

The company plans to build a new cement plant with a design capacity of 5,000 or 7,500 tons of clinker per day for which it will launch an international tender.

the expectation of imports. Cement traders from the Eastern region reported a ton of cement was sold for SR300 as speculators raised domestic prices to match the expected importing prices of cement sourced from UAE. Besides UAE cement companies that have the surplus output to export to Saudi Arabia, Kuwait also expressed its interest into dispatching a maximum of 4 million tons of cement. Qatar is found in a similar situation as Saudi Arabia, although at a lowered scale. The cement shortage is estimated at 3 million tons by 2015 and the government has already called on UAE and Omani cement companies to assist in covering the domestic demand. Additionally, Qatar National Cement invited bidders via an international tender for the construction of a new 5,000 to 7,000 tpd clinker line. On a different pole, Jordan’s cement consumption plummeted 25 percent in the first quarter of the year, which led to declines in cement prices as well. A ton of cement was traded in mid April at a range of 75 to 79 dinars, decreasing from a maximum level of 90 dinars. The country’s white cement consumption also registered an overall fall of 20 to 30 percent with the price per ton ranging between 180 and 200 dinars.

ARPIL / MAY 2013

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regional report: europe, middle east, africa

Iran produced over 70 million tons during the past Iranian fiscal year reaching a new historical maximum. Domestic companies expanded their YoY output by 5.7 percent, dispatching around 81 percent of their production to domestic consumers. According to local sources, the cement production capacity reached 115 million tons in December 2012. For the new fiscal, Iranian cement companies target a cement production of 75 million tons. Iran’s cement exports exceeded 13 million tons and were dispatched to a total of 24 countries. More than 60 percent of total cement exports were directed toward Iraq, followed by Azerbaijan and Turkmenistan. Iran announced that it will fund a 2 million tons cement plant to be built in Muthanna, Iraq. The cement plant will require two years of construction time and a total investment of US$ 245 million. The focus will be set on exporting activities to neighboring countries under Iranian brand name. On another note, China National Building Materials completed the first ignition of a new production line in Iraq. The project for SCP included the manufacture, delivery and installation of the plant’s equipment and was the first foray of CNBM into the Iraqi cement industry. AFRICA Egypt cement makers are expecting a decrease in cement production for 2013 due to the shortage of natural gas supplies. Medhat Stefanos, President of the Cement Division at the Federation of Egyptian Industries declared that the first quarter indicators show a significant decline in the government’s obligations to provide fuel for the industrial sector, including cement. He also pointed out that the production capacity of the cement factories that operate in Egypt equals 64 million tons, while in 2012 cement units managed to produce only 58 million tons. The government advised cement companies to turn their attention toward coal for fuel diversification and announced that it may bid out as many as 11 licenses for coal-fueled cement plants. On the

34

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back of inflated production costs, a fresh cement price increase is expected for May deliveries when a ton of cement will be traded locally at 800 pounds, 100 pounds more compared to the previous level.

Even though total construction materials imports declined in the beginning of 2013, Algeria registered an impressive increase of cement imports in the first two months of this year. Cement imports reached 0.47 million tons in volume and

select PROJECTS IN THE WORKS: africa COMPANY (LOCATION)

OVERVIEW

CTCem/Sierra Leone

A new cement plant that will produce 0.25 million tons of cement per year is expected to start operation in the following months.

Addoha/Morocco

Addoha Group is building a 0.5 million tons cement plant in Morocco that can later be expanded to 1 million tons of cement per year. The company also announced the construction of a cement packaging plant in Côte d'Ivoire.

Lafarge/Algeria

Table available in the CemWeek Magazine Print Edition.

Lafarge will build a new cement plant in Biskra. The new plant will have a production capacity of 2.7 mtpa and the investment was set at 30 billion dinars.

Saoura Cement/Algeria

The company plans to build a new cement plant in Bechar. The plant will produce maximum 1.5 million tons of cement per year and is expected to begin production in 2017.

Mamba Cement/South Africa

A new cement factory will be constructed in Limpopo. The factory represents a greenfield www.cemweek.com/subscribe rated at 1 million tons per year.

HeidelbergCement/ Tanzania

HeidelbergCement is looking to invest US$31 million to build a 0.7 million tons production line in Dar es Salaam. The company’s capacity in Tanzania will increase to 2 million tons. HeidelbergCement is also investing in a 0.65 million tons cement grinding plant in Burkina Faso and a 0.8 million tons cement grinding unit in Takoradi, Ghana.

Secil Lobito/Angola

Secil Lobito will invest 18 billion kwanza to build a new cement plant in Lobito with a capacity to produce 1.2 million tons per year. The new cement plant will be located 200 meters away from the existing 0.4 million tons cement plant of the company.

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regional report: europe, middle east, africa

US$39.14 million in value by the end of February, doubling the corresponding indicators of 2012. Low cement supplies inevitably led to price increases, some traders even complaining that cement prices for a 50 kg bag increased from AD450 to AD750 from a fortnight. Nigeria was already on its way to becoming a net exporter from the early months of 2012. However, according to Dangote Cement’s CEO, Devakumar Edwin, the goal was achieved only in the first quarter of 2013. Nigeria’s major cement company reported a full-2012 revenue increase of 24 percent as the additional 11 million tons in cement capacity boosted sales. Net income for the year advanced to 149.6 billion naira from 120.9 billion naira in 2011. HeidelbergCement announced its intention to invest US$31 to build its fifth Tanzanian cement plant. The 0.7 million tons cement plant will be located in Dar es Salaam and is expected to be commissioned by 2014. AfriSam, through its Tanga Cement local company, also reconfirmed its plan to build a second kiln in Tanzania after overhauling debt of more than US$1.6 billion. Tanga Cement targets a 9 percent increase in production for 2013 after crossing the threshold of 1 million tons sold in 2012. Additionally, Tanzania Portland Cement Company complained that the government failed to check on tax evading cement importers, situation that is causing unfair competition for the domestic cement producers. The Addoha Group is building a new 0.5 million tons cement plant in Morocco, which will be commissioned in June this year with the prospect of boosting its cement capacity to 1 million tons by 2014. A new project that includes the construction of a cement packaging plant in Côte d’Ivoire has also been revealed by the company. It is estimated that the new facility will cost US$12 million and will produce 120 million bags. From the total production, 10 million bags will be dedicated to domestic consumption and the rest will be used for export.

ARPIL / MAY 2013

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Ube Industries plans to develop largescale mining of limestone in Yamaguchi Prefecture. This is the first limestone development plan in 35 years in the area, and the estimated digging start date is set for 2017. The total investment amounts to about 8.0 billion yen. Japanese cement demand continues to be strong due to the reconstruction efforts in the aftermath of the Great East Japan Earthquake.

REGIONAL REPORT:

China reported an output growth of over 8 percent in the first three months of this year. According to the National Bureau of Statistics, the national cement production touched 186.98 million tons in March, while the total cement output for the first quarter of 2013 reached 417.04 million tons, registering a year-on-year growth of 8.2 percent. In the January - March period, the national real estate development investments added up to 1.31 trillion yuan, notching a year-on-year increase of 20.2 percent in nominal terms. During the 12th Five Year Plan the Chinese cement industry is required to eliminate 73.45 million tons of obsolete cement capacity. The consolidation of the Chinese cement market is expected to benefit Taiwanese cement producers as well. Robert Chen, deputy spokesman of Taiwan Cement, declared that Chinese downstream clients are not demanding the price reductions they did a year ago. Regional statistics confirm that average cement prices started to increase in Eastern and Southwestern China, while the prices stabilized in the South. Vietnam reported increasing volumes for the first quarter of the year with cement production and cement consumption settled at 8.14 million tons and 7.55 million tons, respectively. While both production and consumption expanded by 15 percent, cement prices maintained a steady pace. Given the estimations that the market would be hampered by severe overcapacity with a projected surplus of 25 million tons by 2015, the government announced adjustments to the cement industry’s expansion plan. Nine projects were canceled, while another seven projects were put on hold until 2015.

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Cement sales in Indonesia rose to 13.6 million tons in the first quarter of 2013, 8.6 percent above the corresponding period of 2012. Indonesian cement producers earmarked up to $6.68 billion in the next four years to build and expand manufacturing plants in order to keep up with the booming demand that is projected to touch 71 million tons by the end of 2015. The announced investments are expected to boost the country’s cement capacity from 60.5 million tons to 108.8 million metric tons by the end of 2017. Some established companies have already announced a total of $4.83 billion in investments that translate into an aggregated total of 35.3 million tons in capacity expansions. These projects include investments from Semen Indonesia, Indocement Tunggal Prakarsa, Holcim Indonesia, Semen Bosowa Maros and Lafarge Cement Indonesia.

Holcim Philippines wants to expand capacity in the country by seeking incentives from the Board of Investments for future projects. The company’s main purpose is to increase its annual production capacity at Bulacan cement plant by 2 million to 2.5 million metric tons by 2017. The investments are estimated to amount up to $500 million, said Holcim president and chief executive Eduardo Sahagun. Thailand’s TPI Polene announced plans to re-initiate an expansion project that was stalled in 1997. The 10 billion baht investment to be deployed by 2016 will target the development of the fourth production line at TPI Polene’s existing plant in Saraburi and the adaptation of the cement plant to use community waste as alternative fuel. Cement capacity will be expanded by 33 percent to 12 million tons per year by 2026, thus making it the largest cement plant in the country. BMWeek BMWeek BMWeek

select PROJECTS IN THE WORKS: ASIA PACIFIC COMPANY (LOCATION)

OVERVIEW

Semen Indonesia/ Myanmar

The company is planning to build a $200 million cement plant in Myanmar at the beginning of 2014.

TPI Polene/ Thailand

TPI Polene is ready to invest 10 billion baht between 2013 and 2016 to develop a new production line for cement and expand into renewable energy. With this new line, the company foresses a rise in capacity to 12 million tons by 2026.

Semen Indonesia/ Indonesia Lafarge/ Malaysia

Table available in the CemWeek Magazine Print Edition.

Semen Indonesia intends to start building a cement plant in Sorong, West Papua by 2015. The company is currently conducting studies related to the ownership of the plant site. The 0.6 million tons cement plant will require a US$120 million investment. Lafarge is considering to expand in order to meet the domestic demand and to ensure the company's www.cemweek.com/subscribe lead in the region. The company's rivals YTL Cement and CIMA have already planned capacity expansions of around 1.5 million tons each.

Siam Cement/ Indonesia and Myanmar

Thailand's Siam Cement is expanding at regional level. The company announced a US$400 million cement plant to be built in Indonesia by the end of 2015 with annual capacity of 1.8 million tonnes. Another US$400 million will be invested in cement and power plants and logistics systems in Myanmar.

Suzhou Tianshan Cement/China

The new grinding station in the Industrial Zone of Qiushe has been completed. The total investment for this project was estimated at $ 220 million.

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India cement makers turned in weaker than expected results in the first quarter of 2013. Although cement companies sold 3 to 5 percent more cement when compared to the last quarter of 2012, the results were stable or even lower versus the corresponding period of 2012. Going forward, cement companies rely on the government to boost infrastructure spending and revive the industrial climate even though they expect only single digit growth for this year. The weakness felt both within the infrastructure and real estate segments led also to a softening of cement prices starting mid-February. Even though prices regained strength in the last weeks, they are still unable to cover the steep increase in production costs, especially at the level of freight and power. Starting April 1st Indian Railways implemented a freight rate increase of 6 percent for coal shipments and 3 to 4 percent for cement and clinker. Pakistan cement dispatches touched 8.6 million tons in Q1 2013, 4.7 percent higher than the total dispatches registered in the first quarter of 2012. Cement exports drove the increase in March with a YoY growth rate of around 23 percent, while domestic sales remained somewhat constant versus last year’s corresponding period. However, when it comes to cement prices the situation is worsening as the market announced a price increase of around Rs 50 per 50 kg bag following

with the prospect of kicking off the project with 0.1 million tons cement capacity that will further be enhanced to 1 million tons of cement by the end of the first decade. Additionally, the government declared that two cement plants are preparing for operations. The Sri Lanka Cement Corporation is expected to commence production at Kankasanthurai cement plant, damaged during the war.

the boost in transportation costs for both coal and cement effective from April 14. A certain consolidation is expected to take place on the Pakistani cement market. Local cement producers turned their attention to innovation in order to shore up their presence given the slow demand cycle. Energy efficiency projects, like Waste Heat Recovery systems and Tyre Derived Fuel Processes, were kicked off recently. Pakistan’s Thatta Cement announced plans to foray into Sri Lanka through the commissioning of a cement grinding and bagging plant in Magam Ruhunupura Mahinda Rajapaksa Port. The total investment is rated at US$ 15.15 million

regional report: SOUTH ASIA

REGIONAL REPORT:

Uzbekistan produced around 1.5 million tons of cement between January and March 2013. The 27 percent increase was mostly driven by cement sales in bulk that account for 94 percent of total domestic sales. Bekobodtsement and China CAMC Engineering have put into operation a new production line of clinker in Uzbekistan. The new line has a maximum nameplate clinker capacity of 0.75 million tons and benefits from a dual-fuel technology, permitting the use of both natural gas and coal. The harsh winter took its toll on Kazakhstan’s cement market with Steppe Cement being forced to keep cement prices at high levels. This situation led to a decline of 3 percent points in market shares for the company in the first three months of the year. On a national level, cement consumption rose 17 percent in the first quarter of 2013 versus the same quarter of last year. BMWeek CemWeek CW Group Coal Week CemWeek CemWeek

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select PROJECTS IN THE WORKS: south asia COMPANY (LOCATION)

OVERVIEW

Huaksin Ghayyur Tsement/Tajikistan

The project is already in progress with US$85 million invested so far. The total estimated investment is expected to reach US$100 million.

Accord/Azerbaijan

A first production line for cement is planned in the Gazakh district. This line is part of a larger expansion plant that will ultimately provide and additional cement capacity of 3 million tons.

Uzstroymateriali/ Uzbekistan

A new cement plant will start operating in Uzbekistan by the end of this year. The new plant will have a design capacity of 0.36 million tons.

Chettinad Cement/ India

The company is looking to expand its Karikkali plant from 4.5 million tons to 7 million tons per year. Thewww.cemweek.com/subscribe company is also investing Rs 1,800 crore in a 5 million tons cement plant in Gulbarga district. Additionally two new cement grinding units will be built in Maharashtra and Andhra Pradesh.

JK Lakshmi/India

JK Lakshmi's Chhattisgarh cement plant project will be delayed by 2-3 months, following violent disruption of project work by local villagers. Damage caused to the plant is estimated at Rs 150 crore. The plant is now expected to be commissioned by the first quarter of next fiscal.

Jaiprakash Associates/India

Jaiprakash has asked for permission to acquire 212 hectares, including 158 hectares of forest land for the construction of a new cement plant in the Bilasbur district.

Table available in the CemWeek Magazine Print Edition.

ARPIL / MAY 2013

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REGIONAL REPORT:

Recovery finally arrived for the U.S. cement market. Total shipments of Portland and blended cement in the United States and Puerto Rico reached around 4.8 million tons in January 2013, 5 percent above the first month of 2012. In the 12 months ended January 2013, national cement consumption totaled 83.9 million tons with Texas, California, Florida, Arizona and Oklahoma representing the leading consumers. Cemex has sold $600 million of bonds due 2019 to yield 5.875. According to reports, Cemex said in a statement to the London Stock Exchange that it plans to buy back as much as 200 million euros ($259 million) of bonds due in 2014 with a 4.75 percent coupon. The last time Cemex raised money abroad was in October with an offering of $1.5 billion of 2022 bonds. The securities have rallied since the sale, sending yields down 2.46 percentage points to 6.91 percent.

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Cemex is also set to collaborate with the Earth Engineering Center (EEC) at Columbia University and the City College of New York in a year-long study related to the use of alternative fuels in cement manufacturing. The agreement has the purpose of building a better understanding of the important role that alternative fuels play in society and of the way they protect the environment. Cemex said that the substitution of fossil fuels with alternatives results in a number of benefits, including lower energy costs and reductions in greenhouse gas emissions and the use of greenfield sites for landfill. Sales of cement in Brazil fell 8.3 percent in March, while accumulated cement sales decreased 1.9 percent in the first quarter versus the corresponding period of 2012. The domestic cement consumption totaled 5.5 million tons in March 2013 with the Q1 total being rated at 16.12 million tons of cement. March’s performance stands in stark contrast to

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last year’s results, when cement sales of the same month increased 18.9 percent backed by quarterly sales that rose 13.3 percent. The growth, however, had been decelerating since the beginning of 2012. Bolivian cement companies expect that cement demand in the domestic market will grow by at least 10 percent this year. The legal trustee of the National Cement Factory SA (Fancesa), Luis Ayllon, explained that the increased demand for cement is generated by the projects planned by the central government, state governments and municipalities. The vice president of the Bolivian Chamber of Construction (Caboco), Christian Eduardo, confirmed that an additional 3,700 tons per day of cement will be put into the market as a result of the investments of the three largest cement producers in the country. He also declared that the measure is expected to prevent profiteering and speculation, particularly in the high season from September to December. The Bolivian Institute of Cement and Concrete (CWI) reported that the cement demand reached 2.9 million tons in 2012 with the prospect of nearing 3.2 million tons in 2013. The Chilean cement companies are equally optimistic about the positive context of the market. However, a growing market does not necessarily translate into satisfactory results for all cement companies. Juan Antonio Guzmán, Polpaico’s


regional report: americas

president, declared that 2012’s financial results are still insufficient in order to provide shareholders with an adequate level of profitability. The over-capacity of the market, the increased level of competition, the high production costs and inflated imports given the strengthening of the Chilean Peso all led to the current state of the market. According to companies’ reports, Polpaico registered a profit of $623 million, managing to reverse the 2011 loss of $2,631 million. The company is currently working on several major infrastructure projects, such as the supply of products and services for the expansion and development of the Chuquicamata mine. Cementos Melon on another hand saw its revenues rose by 15.6 percent over 2011, reaching $216 billion at the end of 2012. By contrast, Cementos Bío Bío (CBB), owning an approximated market share of 29 percent, registered losses of $28.2 million. A new lime production unit is set to be inaugurated in Uruguay. The lime factory is part of a larger project: the construction of a cement plant which aims to supply the product to Brazil. Meanwhile, a biodisel plant was also installed, with an approximate investment of U.S. $ 25 million and claimed to have employed around 300 workers in the assembly stage. Venezuelan traders lobbied the government in the beginning of March 2013 to remedy the shortage of cement that was rated by Gilbert Dao, president of the Venezuelan Construction Chamber (CVC) at 70 percent. Part of the Venezuelan cement plants still faces operational hurdles that render them inefficient. Fábrica Nacional de Cemento ended the third consecutive year with a loss (49 million bolivars in 2012). The cement production was mostly affected by the issues that occurred at Ocumare cement plant (Miranda state) with the fall of the chimney and the reconstruction of the pallets camera and the difficulties in mining limestone at the plant that is located in the state of Tachira. Logistics issues were also present. The company produced around 1 million tons of cement in 2012 and operated at only 66 percent of its installed

capacity. On an opposite pole, Industria Venezolana de Cemento closed 2012 with 2.7 million tons in cement sales and 100 percent utilization rate. With the first production of environmentally friendly cement at the state owned Siguaney cement plant, Cuba claims to have become the first country in the world to achieve such a performance. The project is the result of researchers from

the Central University of Las Villas and the University of Lausanne, Switzerland. The production specialists collaborated to reduce emissions of carbon dioxide (CO2) and reduce energy costs. The process is based on the replacement of up to 60 percent of the clinker, a mixture of the material known as metakaolin and unburned limestone, which avoids polluting emissions. BMWeek CemWeek CW Group BMWeek BMWeek

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select PROJECTS IN THE WORKS: americas COMPANY (LOCATION)

OVERVIEW

Coceca/Bolivia Uruguay

A new cement plant will be constructed in Santa Cruz. The plant will have an annual capacity of 0.85 million tons and is set to become operational by 2014.

Table available in the CemWeek Magazine Print Edition.

A new lime production unit will be inaugurated in Uruguay. The lime factory is part of a larger project that includes the construction of a cement plant, which will supply Brazil.

Cemento Andino/ Venezuela

The new production line will add 2 million tons of extra production for the company in Venezuela. The Minister for Industry, Ricardo Menendez, confirmed that all paperwork needed to begin construction on www.cemweek.com/subscribe the second production line of Cemento Andino is ready.

Bahia Cement/ Brazil

The company will make an investment of R$ 850 million to build an integrated cement plant of 2 million tons cement capacity per year. The plant will serve markets of Bahia, Sergipe, Alagoas, Pernambuco, Paraíba and Rio Grande do Norte.

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SECTOR COVERAGE:

The Irish construction sector still faces a general decline, registering a negative annual compound annual growth rate of 28.25 percent between 2008 and 2012. However, the future looks more positive, as the Irish infrastructure sector is projected to record a CAGR of 1.03 percent between 2013 and 2017 due to a number of government initiatives and transport plans that aim to stimulate the economy. In the Middle East, the gross margin of construction companies dipped to 9.2 percent in the last quarter of 2012, decreasing from 13.4 percent in the previous quarter. The total value of the projects awarded in Q4 2012 amounted to US$2.1 billion, 52.1 percent over the previous quarter. The order backlog of the region improved to US$11 billion in the end of 2012. The UAE continues to hold the largest share of the order backlog. However, the construction sector in this region continues to face several challenges, such as rising construction costs and increased competition.

CONSTRUCTION The construction sector experienced a fall in almost all the regions of the world. U.S. construction spending fell 1.7 percent in March 2013 compared to the previous month, mainly due to a 4.1 percent drop in government construction activity, the highest since March 2002. The private construction segment registered a mixed result with non-residential building declining by 1.5 percent and residential building increasing by 0.4 percent. Even though the industry shrank in MOM comparison, the YOY indicator revealed a 4.8 percent growth in March 2013 (US$856.7 billion in value) versus the corresponding month of last year.

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The UK construction sector decreased in March as well, but expectations have improved and there still seems to be hope. Despite the fact that the latest Purchasing Managers’ Index (PMI) for constructors came in at 47.2 in March 2013, improving from 46.8 in February, the indicator was still below the 50 mark, which does not indicate any major development. A similar situation can be found in Germany, where the construction sector registered the steepest decrease in over a year. One of the main reasons for the contraction was the harsh weather. The Purchasing Managers’ Index (PMI) declined from 43.8 in February 2013 to 41.9 in March.

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Moreover, Qatar’s construction inflation is expected to rise by 18 percent between 2016 and 2019, during the World Cup building boom. Qatar’s construction industry is driven by the preparations of the 2022 FIFA World Cup and the investments deployed to meet the country’s 2030 vision. Government spending on infrastructure is expected to exceed US$200 billion over the next decade, with 70 percent of the funds being scheduled for the next five years. Moving to the Asian continent, China is facing a glut in construction machinery. Despite the fact that the market has the tendency to rise in 2013, production appears to lag behind. Equipment production is forecasted to fall by 30 to 40 percent this year in order to allow equipment dealers to build inventories. However, Chinese manufacturers have the capability to produce more than four times the total amount of excavators sold in 2012. Within the Twelfth Plan, Indian authorities plan to pledge US$1 trillion of infrastructure investments that are expected


New Residential Construction in the U.S. (thousands of units) Jan-13

Feb-13

Authorized Units

904

939

902

Started Units

902

968

1,036

562

579

591

721

721

800

Table available in the CemWeek Magazine Print Edition.

Units under construction

Units completed

CONCRETE At least 11 concrete production units are expected to be commissioned by the end of 2013 in Algeria. Each station will be able to produce a maximum 120 m3 of ready-mix concrete per hour. Another four production units are planned to be completed as soon as they gain land access. Ukrainian concrete production increased by 7.4 percent in the first quarter of 2013. For the month of March, concrete production declined by 17.7 percent. In Uzbekistan, the building materials sector registered good growth in the first quarter of 2013 with production of crushed stone growing by 5.9 times, gravel by 3.6 times, kaolin by 2.4 times, asphalt by 2.3 times, concrete by 9.8 percent, precast concrete structures by 3.7 percent and sand by 3.1 percent.

Mar-13

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Source: U.S. Census Bureau, New Residential Construction Statistics

in the Carinthian Mountains. Despite the challenging temperatures, Cemex said it will provide 120,000 cubic meters of ready-mix concrete and 24-hour shift operations from a specially installed mobile plant that will be located at the worksite. GYPSUM AND LIME Nordkalk plans to reopen extraction at its Savonlinna unit. After the deterioration of the lime market, Nordkalk decided to seize its activity at the Louhi-located unit in 2009. On the other hand, the hydraulic lime plant owned by Cimpor in Cabo Mondego is set to be closed. Despite the fact that the president of Brazilian InterCement assured in June last year that it

would not make any personnel cuts in Portugal, Cimpor has already laid off 20 percent of its workers in less than a year. The Belgian company Lhoist is set to build a limestone mine in Russia’s Sverdlovsk region. The plans and investment for the new limestone mine were discussed during a meeting between Guy Trouveroy, the Ambassador of Belgium, and Denis Pasler, the Chairman of the Sverdlovsk region.

sector coverage: construction materials

to drive the economy in the coming years. Infrastructure represents 54 percent of total construction spending, while industrial expansion accounts for 36 percent. The remaining 5 percent is directed toward residential and commercial construction.

In Canada, a Liberal MP showed concern for the funding that NCL Holdings received from the Atlantic Canada Opportunities Agency, saying that the money would give NCL an unfair advantage over

On another note, the depression registered in the Polish concrete sector can be reversed only from next year. The country produced 19.5 million cubic meters of concrete in 2012, 17.7 percent less than in 2011. The average 2012 price for a cubic meter of concrete settled at around 251 zł. Portugal follows an even deeper downward trend as concrete production volume plummeted 30.3 percent in 2012. The number of production centers was reduced from 310 in 2011 to 290 in 2012. The production of concrete is expected to notch another 10 percent in decline in 2013. The prices of ready-mix concrete rose in Russia by 6.4 percent in February to an average of 256.4 rubles per cubic meter. This rise follows the 3.8 percent hike of January that was preceded by rather unchanged prices in the previous months. Mexico’s Cemex will provide materials for Austria’s new hydroelectric plant, located

ARPIL / MAY 2013

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SECTOR COVERAGE: CONSTRUCTION MATERIALS BY BMWEEK.COM

its competitors. NCL Holdings received around $438,000 to modernize and expand its limestone operations. NCL President Pansy Cross said the company will use the funds to buy two crushers that will replace the existing equipment. AGGREGATES One of the major issues in India is the rising price of sand across Punjab. The prices rose in early April 2013 to RS 3,200-RS 3,500 per 100 cubic feet in comparison to the previous month, when the prices were around RS 2,700 per 100 cubic feet. The prices of aggregate have also witnessed an increase in March 2013 from RS 3,000 to RS 3,500-RS 4,000 per 100 cubic feet. As a precautionary measure, the Punjab Government auctioned off sand quarries in five districts to ease the supply of sand and gravel. Tanzania Portland is preparing to start production of aggregates that will be marketed as Twiga Aggregates. Twiga Cement already owns a quarry site in Lugoba village. Breedon Aggregates is looking to buy six quarries, four asphalt plants, seven readymixed concrete and two concrete block plants from Aggregate Industries under a deal of £34 million. The company is also in advanced talks with Marshalls for acquiring four quarries and associated aggregate businesses in the exchange of £19 million.

locations, at least one third of them have suffered robberies. The damages range between 50,000 and 150,000 euros for each robbery. Sika Romania announced the construction of a new plant in Capusu Mare, Cluj, which will produce the full range of dry mortar products. The plant will start operations in September 2013 and will have a production capacity of approximately 50,000 tons per year. The products will be used in the local market, but will also be exported into countries such as Moldova, Bulgaria, Serbia, Ukraine and Hungary. GREEN AND INNOVATIVE BUILDING Lafarge announced the official launch of its new decontaminating concrete. A prototype has been implemented in the research center of the group, L’Isle d’Abeau, in order to test this new concrete. In addition, a full-scale test is planned in the near future. The Mission Valley Rock plant in California became the first aggregates production site to achieve the U.S. Environmental Protection Agency’s (EPA’s) ENERGY STAR Challenge for Industry. The Mission Valley Rock plant reduced its energy intensity by 12.2 percent within one year. USG introduced a self-leveling underlayment that offers a significant reduction in several environmental impacts. USG’s DUROCK ECOCAP Self-Leveling

Lafarge established, with the European Bank for Reconstruction and Development’s (EBRD’s) financial collaboration, a road metal and sands goods production unit in the village of Ispas, Ukraine, that has a capacity of 0.6 million tons per year. The factory was commissioned in the beginning of 2013 and will have around 50 employees. The total investment of the project amounted to UAH27 million. Spain’s Aggregates Federation and its member associations have alleged damages of up to EUR70 million as a result of thefts in quarries and gravel pits. César Luaces, the CEO of the Federation, explained that from a total of 2,000

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Production in Construction Index Country

Jan-13

Feb-13

Table available in the CemWeek Magazine Print Edition.

Czech Republic

85.6

88.4

Germany

105.6

102.8

France

94.7

95.6

76.6

73.4

Hungary

86.5

88.5

Poland

104.2

100.3

67.68

67.16

Italy

Portugal

www.cemweek.com/subscribe Sweden 116.3 120.2 Underlayment utilizes a new technology based on geo-polymer that was developed at the company’s Innovation Center in Libertyville, Illinois. DUROCK ECOCAP reduces carbon footprint by 50 percent and also reduces embodied energy by 45 percent when compared to Portland cement-based or calcium aluminate cement-based underlayment products. Meanwhile, CEMEX is supplying waterproof ready-mix concrete for the new 430-unit La Serena housing estate in Regensburg, Germany. Until now, CEMEX has delivered around 10,000 cubic meters of ready-mix concrete, 40 percent of which is waterproof. In order to create the ready-mix concrete for the project, CEMEX is using five different types of cement, mixed with Danube gravel aggregates and special concrete additives. BMWeek BMWeek BMWeek

Cem Cem Cem



EQUIPMENT

& NOTABLE PROJECTS

Loesche supplies equipment for largest cement works in Turkey The management of Medcem Madencilik ve Yapi Malzemeleri Sanayi ve Ticaret relies on Loesche grinding technology for Silifke, the largest cement works in Turkey The new Silifke cement works located in the south of Turkey, approximately 100 km west of Mersin, will be equipped with six energy-efficient Loesche vertical roller mills. With a capacity of 10,000 tpd, Silifke will be the largest cement plant in Turkey. All six Loesche vertical roller mills will be operated in this location. Two vertical roller mills type LM 56.6 will be used for the grinding of cement raw material. They will have a product rate of 420 tph each at a product fineness of 12 percent R DIN 0.09 mm. Both mill drives will have a capacity of 4,600 kW each. Coal will be ground on a Loesche mill type LM 41.4 D. The mill is designed for a capacity of 75 tph at a product fineness of 8 percent R DIN 0.09 mm. The mill motor of the LM 41.4 D will operate with 1,250 kW. For the clinker grinding, the cement plant relies on three Loesche vertical roller mills type LM 56.3+3. Each mill will be producing 210 tph of OPC at 3,200 Blaine

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and 250 tph PPC at 5,500 Blaine. All mill motors for the LM 56.3+3 C are planned with a capacity of 5,300 kW. Complete basic engineering will be supplied by Loesche for all three grinding plants including mill pre-bunker, the grinding plant and the product transportation up to the distribution into the silos. The services of mounting and commissioning supervision are also part of the contract, and delivery for Silifke will start at the beginning of 2014. ThyssenKrupp Resource Technologies – achieving more together As part of ThyssenKrupp’s strategic development program, the two engineering subsidiaries ThyssenKrupp Fördertechnik and ThyssenKrupp Polysius are being merged, effective April 2, 2013, to form ThyssenKrupp Resource Technologies. With around 5,500 employees and annual sales of approximately two billion euros, the new company will be one of the world’s leading system suppliers for the mining and cement industries as well as the mineral processing and bulk materials handling sectors. It will offer singlesource expertise ranging from design and consulting to engineering and project management to construction and installation, after-sales service, research and development and plant financing.

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Dr. Hans Christoph Atzpodien, CEO of the Industrial Solutions business area of ThyssenKrupp, said: “As a strong cornerstone of the Industrial Solutions business area, ThyssenKrupp Resource Technologies will have a presence on the world’s growth markets. Our comprehensive engineering covers solutions from single machines to complete plants. With growing environmental awareness and rising raw material and energy prices, this engineering expertise provides our customers with a significant competitive edge. With ‘better’ solutions we will create ‘more’ value, for example by cutting operating costs and reducing CO2 emissions.” The ThyssenKrupp Resource Technologies product range includes bucket-wheel excavators, conveyor systems, crusher plants, grinding and processing plants, stockyard and port handling systems for bulk materials as well as cement plants. Lifecycle support can be provided for all products, as well as 24/7 service for individual machines or plants. A TEC GRECO SUPPLIES EQUIPMENT FOR LAFARGE CEMENT PLANTS IN IRAQ The international grey cement supplier Lafarge decided to equip its plants in Bazian and Tasluja with a new heavy fuel oil system. The existing heavy fuel oil system is only designed for high-quality heavy fuel oil. Due to strong varying HFO qualities, a modification of the existing system was required.


The new heavy fuel oil system is designed to achieve the following performances: • Efficient and reliable operation - independent from the available heavy fuel oil quality; • To store high-quality and low quality heavy fuel oil separately; • To excrete impurities and sediments from the delivered low quality heavy fuel oil; • Full automatic fuel management system (FMS) for the HFO supply; The international purchasing department of Lafarge Iraq searched for a supplier that can design, deliver and install such a high end system and furthermore is able to support with his experience and service a fast and successful project implementation.

peratures can reach more than 40 degrees Celsius in summer. Loesche provides new vertical roller mill for Holcim Holcim decided to purchase an LM 56.4 mill for their cement plant in Guayaquil, Ecuador. The delivery of the Loesche LM 56.4 vertical roller mill for the Guayaquil cement plant of Holcim Ecuador is planned for the end of 2013. The order was placed by Chinese general contractor Sinoma-TJ, which will supply a 4,500 tpd kiln line. The mill will be operated to grind cement raw material and has been designed for a capacity of 386 t/h and a fineness of 12 percent R 0.09 mm. The motor will have

a capacity of 4,000 kW. One of the factors that influenced Holcim in making this acquisition was the realization of a unification concept based on the interchangeability of the mill modules. Moreover, the gearboxes will be identical to the existing Loesche cement mill Type LM 56.3+3. Loesche will also provide spare part pooling for the new mill. Fives FCB licenses FCT ACTech online analyzing technology Fives FCB finalized a license agreement in November 2012 with the company FCT ACTech for the marketing and supply of the COSMA™ system (Continuous On-Stream Mineral Analyzer). With the help of this project, Fives FCB has the continued on page 48

A TEC GRECO specialist in combustion engineering and supply systems won the project and started to investigate the existing systems of both plants. A part of this investigation was to clarify which parts of the existing equipment could still be used and which parts had to be renewed. The result of this study was a tailor made solution for the modification of the existing HFO supply system. The new A TEC GRECO high and low quality heavy fuel oil supply system will be commissioned during the summer kiln stoppage in 2013. VAS Template implemented at Lafarge Emirates Cement FRITZ & MACZIOL has reached another important milestone in the rollout of the logistics system VAS at Lafarge MENA. As a key project, seven cement plants belonging to various companies are now working in Saudi Arabia, the Emirates and Syria with the logistics solution from FRITZ & MACZIOL. For installations in the Arab world, the VAS user interface has been designed in such a way that the terminals for the drivers and dispatch staff, who speak in Arabic, can also be used from right to left. The hardware also had to be modified to suit the climatic conditions in the Arab world, where tem-

ARPIL / MAY 2013

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PEOPLE HOPE CHAIRMAN NAMED YOUNG ENTREPRENEUR OF THE YEAR Amit Bhatia, Chairman of Hope Construction Materials and founder of Swordfish Investments, has been crowned the Young Entrepreneur of the Year for 2013 at the Asia Business Awards which was held in London on the 22nd of March. The London-based businessman fought off stiff competition from a number of high-profile nominees. The awards have been recognizing Asian business achievement for 16 years and were presented by Home Secretary Theresa May. Mr. Bhatia founded Hope Construction Materials at the start of this year. In the short time since the company’s founding, Hope Construction Materials has won several key contracts and is aiming for further growth and success this year. Mr. Bhatia was overwhelmed to win the award: “It is a great, unexpected honor and I am delighted, especially given the wealth of talented Asian entrepreneurs in this country. I guess I am like other entrepreneurs in always looking for an exciting new challenge and I have found that with Hope Construction Materials. The quality of our people and the level of service we are determined to offer makes me confident for the future. Our first few months have been very encouraging.” Kalpesh Solanki, Managing Editor of the Asian Media & Marketing Group that organizes the awards, said: “Amit is an outstanding winner, having achieved great success in both business and his community work. He is a model for aspiring entrepreneurs.” Hope Construction Materials is Britain’s leading independent supplier of cement and concrete. The company also produces aggregates and asphalt. Named after the county’s top cement plant in Hope Valley in Derbyshire, the company has 180 sites across Britain, employing 800 people plus 400 contract drivers. Hope is owned and led by Mr. Bhatia, one of the UK’s most progressive entrepreneurs, who began his career by working in mergers and acquisitions at both Morgan Stanley in New York and Credit Suisse First Boston in London. He then incubated Swordfish Investments, a private equity fund, and Swordfish Capital Management. In 2010, Mr. Bhatia set up the Global Relief Initiative. He attended Cornell University in Ithaca, N.Y.

GEBR. PFEIFFER APPOINTS ADRIANO GRECO AS NEW SALES DIRECTOR Gebr. Pfeiffer has announced the recent appointment of Adriano Greco as Sales Director of the South American market. Mr. Greco has gained extensive, worldwide industry experience through his numerous years in various management positions at GRECO Burners Company, Brazil, Austria, China and Spain. More recently, he served as General Director of ATEC GRECO in Brazil and GRECO COMBUSTION SYSTEMS EURIOPE in

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Austria. He is fluent in Portuguese, Spanish, English, Italian and French. JENS HEDEGAARD JOINS PEG AS NEW CHIEF OPERATING OFFICER Jens Hedegaard has joined PEG as Chief Operating Officer and he will be based in the company’s head office in Geneva. Jens has more than 32 years of international experience in the cement industry, spending most of his life abroad (North Africa, UK, Egypt, Romania, Belgium) and acquiring multi-cultural under-

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standing and appreciation. He formerly worked for FLSmidth and Holcim. YAMAMA ANNOUNCES NEW DIRECTOR Yamama Cement has a new director in the person of Jamal bin Mohammed Ajaji since the beginning of April. The new representative holds a master’s degree in law and more than ten years experience in the field as he was a representative of the General Organization for Social Insurance in a number of boards of directors. New CEO at Cementos Portland The Board of Directors of Cementos Portland Valderrivas agreed to appoint José Luis Saenz de Miera as Chairman and CEO. Saenz de Miera has been responsible for the Mexican cement group CEMEX in southern Europe, Africa, Middle East and Asia, and he was also Vice President and Managing Director of CEMEX Spain. Saenz de Miera replaces Juan Béjar, who was appointed Vice President and CEO of the FCC group a month ago. Strike continues at Qena Cement The workers at the Qena Cement plant in Egypt launched a strike in mid April. The striking workers call for the disbursement of incentives overdue four months, an increase of the monthly salary and social justice among all employees. A delegation from the parent company in Cairo came to meet the protesters and strikers for negotiations, but the bargaining committee refused to negotiate without a lawyer. Italcementi elects new board The shareholders of Italcementi elected the Board of Directors for the next three years during their annual general meeting. The members of the new Board are Pierfranco Barabani, Giorgio Bonomi, Fritz Burkard, Victoire de Margerie Federico Falck, Lorenzo Renato Guerini, Italo Lucchini, Emma Marcegaglia, Sebastiano Mazzoleni, Jean Paul Méric Carlo Pesenti, Giampiero Pesenti, Carlo Secchi, Elena Zambon and Giulio Antonello. BMWeek BMWeek BMWeek

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

GLOBAL SPOTLIGHT Tracking the news flow of the global cement sector.

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possibility to enlarge its range of products and services in the field of process control optimization and to strengthen its offering of solutions. The advanced technology of the COSMA™ system uses X-Ray diffraction and provides automatic and direct measurement of mineral phases of all types of material analyzed, from clinker to cement and minerals. The on-line and real-time data trends enable an automated process monitoring and control (burning lines and grinding units for cement industries, raw material and separation process for mineral industries). The system offers a large number of benefits, whether it is installed on new lines or on existing ones.

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These benefits include: ■■ reduced fuel and energy consumption; ■■ increased output; ■■ reduced polluting emissions; ■■ improved product consistency. This technology, combined with Fives FCB’s process optimization solutions, offers a reliable solution to cement and minerals producers seeking to improve their production efficiency, reduce operating costs and gain a more consistent quality product. Constantine Manias, Managing Director of the FCT group, declared that the COSMA™ system will improve the production

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efficiency and product quality in cement manufacture, while at the same time setting a new standard in the process control area. Olivier Vanlerenberghe, Director of Business Development at Fives FCB, pointed out that the company managed to widen its portfolio of products for process control and plant optimization, while sharing FCT ACTech’s vision that innovative technologies bring the best results for plant operations. Vanlerenberghe also asserted that this development helps the company offer new solutions to its customers. BMWeek CemWeek CW Group Coal Week BMWeek BMWeek

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BUZZ TOP 15 STORIES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Algeria: New cement unit planned in Bechar JK Lakshmi plant set on fire Lafarge to build JV cement plant in Algeria Report: Three firms jockeying for Lafarge India stake Holcim unveils plan to take over Cementos de Hispania New cement plant to rise in Bolivia Sinoma bags fresh contracts in Malaysia India: ACC absorbs Encore Cement Casualties at India cement plant accident China’s Sinoma expanding presence in India India’s ACC launches new products Cement plant incident kills four in China HeidelbergCement unveils invesment plans in Africa India: Residents against proposed plant in Sundernagar Siam Cement plans expansion in Indonesia

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TOP 15 STORIES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Canada: Agro 100 inks deal with Graymont Carillion bags new Mideast projects Qatar construction work affected by Saudi shortage Lafarge showcases innovative new products Spain: Canteras de Arenal weathering economic woes so far Research team comes up with self healing concrete Atkins installs new CEO for North America Martin Marietta pushing for Maple Hill quarry UK group bats for construction as tool for long term growth US Green Building Materials market set for growth Spain aggregates consumption continues to tumble UK starts construction safety inspections Cemex seen benefiting from US construction recovery US construction dips anew in January Caterpillar lines up fresh job cuts in Belgium

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M ct um ob Re e bai gis r 7 , In te -8, dia r To 20 da 13 y!

O

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Organized by gMi glObal witH tHe great SuppOrt FrOM cOalweek tHe event iS expected tO bring a FOcuSed grOup OF cOal and petcOke induStry prOFeSSiOnalS.

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