GLOBAL CEMENT INDUSTRY. KNOWLEDGE.
August/September 2014
CW RESEARCH
GCVFR 2H2014
Global Cement Markets revised up for 2014
feature
Expansions in plan for Colombian cement market Cemex and Argos bet on high cement demand growth in Colombia
feature
VERTICAL INTEGRATION A RISK WORTH TAKING?
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CONTENTS FEATURES
5
5 HIGHLIGHTS FROM THE GCVFR 2H2014 Global Cement Markets revised up for 2014 11 Expansions in plan for Colombian cement market Cemex and Argos bet on high cement demand growth in Colombia 17 VERTICAL INTEGRATION - A RISK WORTH TAKING?
11
FEA
17
DEPARTMENTS LETTER FROM THE PUBLISHER 39 From our industry partner 1 Colombia bets on cement growth Construction and building materials update numbers in brief 3 Mexico’s cement production 42 equipment posts slight growth Equipment and notable projects research 23 Cement Volumes 26 Cement Energy Markets
43 cw group meeting agenda Group’s upcoming events
people 31 People on the move
44 BUZZ Top 15 CemWeek and BM Week stories
32 35 36 38
regional reports Europe, Middle East & Africa Central & South-East Asia Asia Pacific Americas
EDITOR’S NOTE Letter from the publisher and editor
Colombia bets on cement growth
I
n In this month’s issue of CemWeek Magazine we tried to capture the current positive trend the cement market is experiencing. After a series of years during which the market floundered, often disappointing industry players, encouraging signs point towards increased demand and a general resurrection of the sector at a global level, albeit there are a few exceptions. One of the main features of the current issue is CW Group’s 2014 Volume Forecast Report. According to our data, global growth will accelerate to 4.3 percent and consumption will reach 4.21 billion tons in 2014, up from 3.9 percent forecasted in February this year. More so, we anticipate that, on the long term, renewed confidence in construction market conditions will positively affect the general global outlook, annual consumption reaching 4.8 billion tons by 2018. The countries which will come to experience the biggest capacity increases at the end of the year will be Indonesia, Russia, Tunisia and Vietnam, each of them seeing their production of cement grow with over 10 percent. Though we prefer to be cautiously optimistic in forecasting a too bright of a future for the cement global industry, it is worthwhile to mention that countries and regions which have previously underperformed, most notably the United States and the European Union, are now showing signs of recovery. We find that at the basis of this recovery sit a renewed confidence in the construction sector, the revival of the real estate market and the stabilization of otherwise troubled markets. The biggest surprise this year and during the years to come will be the Chinese cement market. Production of cement has already contracted in China, and we predict that the accelerated growth in capacity China sustained in the past will cease. On the South American continent we find that traditionally strong markets, like Brazil and Mexico, will see consumption increase at a slower rate than in the past, while emerging markets, like the Colombian one, will grow both consumption and capacity wise. Mega infrastructure projects and housing developments in Colombia is thought to lead to a considerable increase in demand, prompting cement manufacturers like Argos Cement and Cemex to increase their capacities in the region and to seize the hike in demand. Argos, the main player on the Colombian market, will have a capacity of 11.8 million tons per year following the expansions underway, an increase of 24 percent over its current capacity. Though such a figure would allow the company to control the largest share on the market, Cemex’s intentions of extension in Colombia points to the fact that Argos will have to deal with an eager and strong competitor. Finally, the last of the features to be found in this issue of CemWeek deals with vertical integration and its sustainability as a successful tactic in the cement industry. The article reveals that vertical integration makes for a great solution only when and if the timing is right and after quasi-integration strategies failed. Do not miss CW Group’s analysis of energy and cement prices and volumes, as well as the latest news on regional cement markets.
Robert Madeira
PUBLISHER AND HEAD OF RES EARCH
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numbers
Mexico’s cement production posts slight growth
According to data released by Mexico’s National Institute of Statistics and Geography, gray and white cement production have experienced a slight growth during the first eight months of 2014 when compared to the industry’s performance in the same period, last year.
Reported Cement Volume (million tons)
Reported cement volume 2013 (tons)
Reported cement volume 2014 (tons)
3.30 3.20 3.10 3.00 2.90 2.80 2.70 2.60 2.50
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Source: Mexico’s National Institute of Statistics and Geography CW Research
Gray cement production 2014 v. 2013
Both Mexico’s gray and white cement production up until August 2014 reveal a better performance of the sector when compared to 2013’s figures. Though the growth experienced cannot be described as being outstanding, it comes as an encouraging affirmation for the Mexican cement industry. The most notable increase in gray cement production in a year over year basis came in March, when the production grew by almost 200,000 tons, a similar growth coming about in August this year. On the other hand, there when production either stagnated or dropped when compared to 2013. Such was the case in April, June and July 2014.
Reported Cement volume (million tons)
Reported cement volume 2013 (tons)
Reported cement volume 2014 (tons)
0.12 0.10 0.08 0.06 0.04
0.02 0.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Source: Mexico’s National Institute of Statistics and Geography CW Research
White cement production 2014 v. 2013
White cement production in Mexico reached 110,000 tons in May, increasing by 30,000 tons in a year over year comparison. Significant growth was also experienced in august, when production expanded by the same rate it did in May 2014. 3
SUMMER 2014
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CW Research
research report:
GLOBAL WHITE CEMENT MARKET & TRADE REPORT worldwide white cement industry, current and future state of the market segments, industry trends, global movement of product as well as major suppliers and consumer nations hite cement continues to enjoy its niche as a specialized, value add segment within the global cement sector. Though the sector has climbed up from its depths in the global recession, the industry may be pausing to ďŹ nd breadth. Even so, new production capacity is expected to come on-line in the next few years, following the recent commission of some of the world's largest white cement production units. Is there room for more?
DESCRIPTION 5-year projection of global white cement consumption, production and net trade through 2019 Worldwide white cement plant production facilities Extensive quantitative information on consumption, production, local prices, regional benchmark trade prices, trading facilities and trade-flows You can contact the CW team at sales@cwgrp.com or +1-702-430-1748 with any questions you may have or to place your order.
E: inquiries@cwgrp.com • T: +1.702.430.1748 132 Larchmont Ave, Suite 12, Larchmont, NY 10538, USA
WHO IS THIS REPORT FOR? Business development professionals Industry and trading analysts Financial investment institutions Other executives and decision-makers involved
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CW Group
FEATURE
Highlights from:
GCVFR 2H2014 Global Cement Volume Forecast Report
Global Cement Markets revised up for 2014
5
August/September 2014
www.cemweek.com
W Group forecasts 2014 global growth to accelerate to 4.3 percent and consumption to reach 4.21 billion tons, up from 3.9 percent forecasted in February this year. We anticipate that renewed confidence in construction market conditions will positively affect the general global outlook, annual consumption reaching 4.8 billion tons by 2018.
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August/September 2014
6
FEATURE
lobally, cement consumption picked up by 7.5 percent per year on average between 2009 and 2013, but our research shows a deceleration in some markets that will translate into a 3.6 percent hike per year on average for the 20132018 period. We expect ex-China cement consumption to grow at a slower pace through 2018 than it had in previous years. Per capita cement consumption growth for 2013-2018 will also contract in comparison to previous year. However, usage will rise from 592 kilograms per person in 2014 to around 646 kilograms per person by 2018. Worldwide annual cement production capacity will reach 5.4 billion tons by 2018. Total addition to the 3.9 billion tons base capacity is estimated to reach 1.5 billion tons by 2018. In 2014, the largest increase in capacity will come from Egypt. The year will end with capacity increases of over 10 percent for Indonesia, Iraq, Russia, Tunisia and Vietnam. “There are several markets which we anticipate will surprise in terms of consumption growth and production output. The revival of several real estate markets, the economic stabilization of markets which
had been severely affected by the financial crisis, as well as renewed confidence in the construction sector give us reason to be cautiously optimistic in what the future growth of cement markets is concerned,” Robert Madeira, Managing Director and Head of Research commented for ICCM. Global perspective The Chinese cement market will slow down in the coming years. After consumption expanded by 10 percent in 2013, demand in 2014 will contract and end with a much lower percent growth amid a slowdown in the construction sector. The accelerated development in cement capacity China fostered in the past comes to a halt in the coming years, with capacity
GLOBAL CONsumption AND PER CAPITA FORECAST (‘14-‘18) Per capita (kg)
Global Consumption (million tons) 6000
700
5000
600 500
4000
400 3000 300 2000
200
1000 0
7
100
2009
2010
2011
2012
August/September 2014
2013
2014
2015
2016
www.cemweek.com
2017
2018
0
expected to rise slightly from 2013 to 2018. Chinese cement consumption will recover at lower single digit percent on average per year by 2018, well below the average growth reached between 2009 and 2013. When taking a look at the wider regional level, we continue to predict divergent performance for different regions of the world. As opposed to previous years, developed regions will come to see slight recoveries in cement demand. In our previous forecast, we expected demand in the United States to remain subdued, but we now revised our forecast and consumption growth is expected to be in the medium single-digit percent on average per year by 2018. United States continues to show signs of improvement, though growth is shown to be still unsteady. Residential market, which stared to pick up in 2013 will continue to growth, especially in cities severely affected by the recession. We also revised the contraction expected on the Western European market, now forecasting a yearly recovery to be in the low single-digit range. For 2013-2018, we expect developed regions to escape downward trends and developing regions to underperform when compared to previous years. Our research has revealed that notable recoveries in cement volumes in 2014 were felt in the United States and in Africa. As opposed to previous years, when the
United States cement consumption was unstable on account of lack of confidence in the sustainability of big construction projects, the effects of the global economic crisis and general reluctance in making real estate investments, this year’s year on year figures surpass our expectations. We expect a medium to high single-digit percent surge in demand in the United States for 2015 and similar encouraging figures for the upcoming years. Residential projects recovery, coupled with higher investment in infrastructure and non-residential buildings will sustain the progress of cement consumptions in the United States. Another market that showed a big recovery in cement consumption is Africa. Consumption levels will climb by 5.8 percent on average per year by 2018. Nigeria continues its traditional growth and we expect consumption to expansion to persist. Egypt is another notable market in the continent. The country will continue to handle the largest share of the continent’s capacity and will be responsible for one fifth of the total cement consumption in Africa, overcoming the difficult political situation that has affected the country
GLOBAL CONSUMPTION BY REGION (2009-2018 VOLUME) mill tons
6000 China 5000
Asia ex-China
4000
Africa Middle East
3000
E Europe & CIS 2000
Western Europe
1000
0
Latin America North America 2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
We expect ex-China cement consumption to grow at a slower pace through 2018 than it had in previous years
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August/September 2014
8
INTERVIEW
recently. African cement consumption levels will continue to be fueled by continued foreign investments in infrastructure and constructions. The reduced cement consumption the Western European market experienced between 2009 and 2013 will finally turn around in the upcoming years. Government austerity and apprehension about over-building patterns still prevent major evolution from happening, yet Europe’s residential market is on the path to recovery, backing up our encouraging prospects for cement demand. Nonetheless, progress will remain sluggish for this regional market, with Italy and Spain continuing to underperform. Consumption rates for both markets are not probable to climb enough to meet domestic capacity, meaning production capacity will either stagnate or increase slightly. Germany and the United Kingdom will resume their traditional roles as engines of development, both of the countries being anticipated to experience average per year growth in consumption higher than in the last few years. The total consumption per year the two countries will reach in 2018 will amount for a third of Western Europe’s total consumption for the year.
We also expect growth rates on the Russian cement market. Production will hike by a medium single-digit percent per year on average while consumption is anticipated to increase by similar rates on average per year. New infrastructure construction for the 2018 World Cup, joined by the government’s initiative of kick starting a large-scale affordable housing program, will continue to sustain Russia’s cement market. Downward prospects are expected for regions that were traditionally strong cement markets. Consumption levels will subdue considerably in Latin America, Middle East and in China. In Latin America, after 2013 cement consumption figures bettered 2012’s performance, demand will rise by at a much lower pace in 2014. Colombia, Bolivia and Peru will experience the highest growth rates in consumption in the continent, while Argentina, Brazil and Mexico will see consumption increase at a slower rate than in the past. Argentina’s case is worth mentioning since consumption will contract by 2018, starkly contrasting with the middle single-digit percent growth it experienced between 2009 and 2013. Brazil will continue to grow on account of infrastructure and social housing programs. The large-scale
FORECAST SEGMENTATION (2018) Size of ball:2018 market
85%
North America
China
80%
2018Utilization (%)
75%
Latin America
70% 65%
Africa
Western Europe Middle East
60%
Asia ex-China
E. Europe &CIS
55% 50% 45%
2%
3%
4%
5%
2013-2018 CAGR (%)
9
August/September 2014
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6%
7%
GCC countries being expected to ride the new construction boom
invest-ments made in anticipation of the 2014 World Cup and the 2016 Olympic Games, including continued, stadi-ums, transport infrastructure, accommodation, hotels, retail building and healthcare facilities, will ease down and have little impact in the short term. Consumption remained at levels similar to 2013 in the Middle East, but growth for the upcoming years is expected to accelerate. The feverish with which consumption grew in the Middle East was sustained by the large numbers of mega-construction projects in Saudi Arabia, UAE, Abu Dhabi and Qatar, but we expect progress in consumption to stall for the last half of 2014, picking up at a constant speed in the years
About the GCVFR
GLOBAL CONSUMPTION FORECAST (‘14-‘18) & COMPARISON TO LAST FORECAST 1H2014 fcst
2H2014 fcst
SLOVAKIA
Fcst revision % variance
1.22% 3400
2013
4,781
4,651
4,620
4,501 4,301
4,362
4,208
3800
4,145
3,988
4200
4,036
4600
4,468
5000
4,809
mill tons
10%
8%
6%
4%
1.52%
2014E
2%
1.43%
2015
to come. Large-scale projects will continue to dominate the construction sector, GCC countries being expected to ride the new construction boom .
0.74%
0.66%
0.58%
2016
2017
2018
0%
We expect utilization and consumption to temper on the Asian cement market as well. Economic growth in Asia has been seen slowing down as a result of lower consumer spending and doubts regarding credit availability. The future success of many Asian economies is now highly dependent on their ability to restructure themselves as consumer driven economies. Nonetheless, Asia is expected to remain the leader of global growth.
Final observations “We are seeing the global cement market making sure steps towards a more balanced future, but that is not to say that the sector is safe from meeting the volatilities it has experienced in the past. Political instability and geopolitical tensions may once again take their toll on the cement market, preventing it from performing to the rates we have anticipated in this forecast. Nonetheless, the global economic growth to be felt in the coming years, coupled with the positive outlook on GDP levels, can be expected to secure a smoother progress for the cement sector,” stated CW Group’s Robert Madeira.
In India, After witnessing an economic slowdown in 2012-2013 mainly because of the slump in infrastructure and corporate investment, the Indian economy is on a path of recovery since the Narendra Modi led new government took over in May 2014. Despite the slowdown in the construction activity, the momentum is expected to continue as the new government in its Union budget 2014-15, announced a series of infrastructure projects that are likely to boost cement consumption in the country.
This year’s forecast gives a positive outlook on the future of cement volumes. Though growth will not reach the figures experienced between 2009 and 2013, the better performance of markets which were troubled in the past (e.g. United States, Europe) gives a positive nod to the future. The biggest disappointment will come from China- though the market will still hold the biggest share of the cement global market, its previous hike will significantly slowdown in the years to come.
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The CW Group’s Global Cement Volume Forecast Report (GCVFR) is a twice-yearly update on projections for cement volumes at the national, regional and global basis. The report brings together the CW Group’s principal research team to provide the latest insights on the evolution of cement volume trends for 58 important cement markets worldwide, as well as regional and global totals. The mid-year update (also included in the subscription price) is an extended report, additionally including executive briefs of country macro- as well as supply-demand dynamics for the GCVFR coverage universe. COLOMBIA
The report contains the CW Group’s 5-year outlook for: - National cement consumption (tonnages) - National cement production (tonnages) - National net-trade estimates (tonnages) - Industry-wide utilization rate (%) - Cement production capacity (integrated & grinding tonnages) Methodology: The GCVFR forecast is a data-oriented forecast report, providing extensive details on the outlook for key cement markets around the world. Our methodology goes beyond the obvious and average forecast, to incorporate as many inputs and as much information as needed. The GCVFR not only builds on the CW Group’s industry-leading and proprietary databases and the industry’s most extensive market intelligence platform, but also combines our analysts’ views with inputs from multiple other external analysts, industry associations, market observations, monthly tracking information, discussions with executives and management at cement manufacturing groups, plus a CW Group quantitative overlay model (econometric and statistical quant models). More information: For questions, inquiries and orders please contact your CW Group Client Service Coordinator, or sales@cwgrp.com
CW Research
August/September 2014
10
FEATURE
Expansions in plan for Colombian cement market Cemex and Argos bet on high cement demand growth in Colombia
11 August/September 2014
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Colombia’s economy is expanding at an energetic pace, having all the chances of registering a GDP growth of 5.0 percent at the end of the year. Such a figure would place Colombia among the leader countries in economic expansion in Latin America. During the first six months of the year, the country’s GDP grew 5.4 percent year over year driven mainly by the building and infrastructure sector.
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August/September 2014
12
FEATURE he sector expanded by 10.2 percent in the first half of the year from the same period of last year. “At this moment, the construction sector is bearing this growth. In the first quarter of the current year, this sector grew over 17 percent; in the same period the Colombian economy grew 6 percent, the second highest rate after China,” President Santos mentioned. The sector is thought to continue to follow a positive trend since the government has set the wheels in motion for a multi-billion dollar plan to repair and expand old highways and to build new ones. Infrastructure and housing projects The strategy for building the infrastructure of the country is called “Fourth Generation Road Concessions (4G)” and will require an investment of over US$26 billion. The 4G program includes 40 projects that would aid in overcoming the lag in infrastructure the country is suffering from. Such works are crucial for road travel between Colombian cities that now lack an efficient highway network. More so, according to the head of the Colombia, 2,000 rural households and a million urban ones will be set up in the course of
The country is experiencing a strong momentum in what constructions are concerned, and it is only fitting that the cement sector would benefit from higher demand on the short and long run.
12,000 10,000 8,000 6,000 4,000 2,000 0
2009
2010
2011
2012
2013
2014
2015
2016
2017
The International Monetary fund forecasted as of 2009 that Colombia will come to experience solid growth in real GDP
13 August/September 2014
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2018
2019
Source: International Monetary Fund, World Economic Outlook Database, October 2014, CW Research
Gross domestic product per capita, current prices
the following four years. Overall, Colombia will most likely invest about US$138 billion in infrastructure and housing projects until 2020. The country is experiencing a strong momentum in what constructions are concerned, and it is only fitting that the cement sector would benefit from higher demand on the short and long run. Benefits on the cement industry According to the national statistical office DANE, in the 12 months to September 2014, production of grey cement reached 12.2 million tons, whereas national dispatches reached 11.25 million tons. Consumption is expected to rise to 12.4 million tons by the end of 2014. Per capita consumption is now 233 kilograms per person, yet analysts estimate
Argos and Cemex plan for expansions Confident on the sustained growth of the economy and increase in cement demand, Cementos Argos and Cemex have announced plans to expand its operations in Colombia. Argos controls 50 percent of the Colombian cement market, being closely followed by Cemex, the Mexican cement manufacturer which holds 35 percent of the market share. Cemex to build first plant from scratch outside of Mexico The first company of the two to announce its expansions plans in Colombia was Cemex, which at the beginning of August released its intentions of setting up a plant in Maceo, province of Antiquiam, in the north-west part of the country. This plant will be the first one the company builds from scratch outside of Mexico. Its location was chosen due to its proximity to commercial roads and to limestone and coal mines. The project has two phases: an initial one during which a grinding mill will be built.
Year-on-Year growth of cement production 2014 v. 2013 16.21%
15.87%
15.27% 11.53%
10.21%
1.96%
January
Febrary
March
April
May
The mill will begin production in the second quarter of 2015. In the second phase the rest of the plant will be set up and put in operation no later than the second half of 2016. The 4G plan that the Colombian government has been making moves to implement did not go unnoticed by the Mexican com-
6.23%
Febrary
March
April
May
June
10.65%
8.06%
July
August
September
Source: DANE- Colombia’s national statistical office, CW Research
January
17.33%
14.73%
1.60%
June
July
August
September
Argos controls 50 percent of the Colombian cement market, being closely followed by Cemex, the Mexican cement manufacturer which holds 35 percent of the market share .
29.46%
4.13%
12.32%
6.91%
Year-on-Year growth of cement demand 2014 v. 2013
12.17%
11.44%
Source: DANE- Colombia’s national statistical office, CW Research
that the end of the year will bring about a hike in demand that will put Colombia’s per capita consumption above the Latin American average of 260 kilos per person. As far as year on year growth is concerned, consumption is thought to increase by 6.4 percent by 2018. Nonetheless, granted that the speed of construction and infrastructure works remains steady, demand is expected to rise by 10 million tons till 2020.
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pany, executives of Cemex realizing that there is a great opportunity to be seized in the country. “This plant will strengthen our position in Colombia, allowing us to take advantage of the growth in the level of the construction activity. We will be closer to our customers by adapting our portfolio of innovative building solutions, to meet their changing needs. A construction of this kind is to stay for long, 80 or 100 years producing cement for the development of Colombia. So we are very happy investing in Antioquia” said Carlos Jacks, President of CEMEX Colombia. The plant’s capacity is expected to be of one million tons per annum, rising Cemex Colombia’s current capacity of 4.5 million tons per year to 5.5 million tons per year. The total investment is estimated to reach US$340 million and the plat is designed to
August/September 2014
14
FEATURE
For The 4G plan the Colombian government has been making moves to implement did not go unnoticed by the Mexican company, executives of Cemex realizing that there is a great opportunity to be seized in the country
Cemex’s operations in Colombia
be able to use 50 percent of alternative fuels, such as biomass and tire residue, though it will rely on fossil materials in its initial phase. Argos to solidify its position in the market Cementos Argos announced its own plans for expanding the capacity of one of its cement plants in the center of the country. According to the company’s press release, around US$450 million will be invested in the company’s Sogamoso cement plant over the next years to add 2.3 million tons of capacity. Sogamoso supplies the markets in the center zone of the country, an area responsible for 70 percent of the country’s total cement consumption and has been recording annual growth of 7 percent.
Argos’ installation costs per ton will reach US$195 15 August/September 2014
Moreover, Argos’ installation costs per ton will reach US$195 per ton. Just like Cemex, the company is looking to be prepared to respond to the demand the country’s infrastructure and housing projects will bring. Argos’ plans rely on nearby significant limestone reserve, estimated to last for 50 years, easy access to fly ash and slag, and the natural gas supply coming from Red Cusiana, the area with the largest level of reserves in the country and only 25 kilometers away from the plant. Argos has also announced that environmental conscious features will not be overlooked. According to company’s officials, 40 percent of fossil fuels needed to reach the capacity announced will be replaced will alternative fuels, and that emissions
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This investment reflects our confidence and commitment to the development of Colombia. Factors such as institutional and regulatory strengthening for infrastructure development; the important 4G projects for more than US$25Bn and greater resources for housing development, will drive the growth in cement consumption in the next few years. As a Colombian company, we are committed to assisting the country in its development Jorge Mario Velásquez, Argos’ CEO
of particulate matter will stand below the national limit by 67 percent.
Argos Cementos’ operations in Colombia
As far as the financing of the project goes, managers of Cementos Argos are confident that internal funds generated over the next half of a decade, coupled will continued positive performance of the Colombian market and more export opportunities in Central America and in the Caribbean, will sustain the development strategy. At the end of the second quarter of 2014, Argos reported that its net profit increased by 87 percent, consolidated revenues improved by 18 percent and sales volumes grew by 9.3 percent. The company has been particularly profitable in the United States, after the company’s recent acquisitions in the area were successfully integrated. The company operates in a total of 18 countries and managed to meet solid demand in most of the regions of the world where it operates. Argos’ overall performance this year, as well as the fact that domestic demand grew and will continue to do so, made the company’s senior managers confident the expansion of its Sogamoso plant makes for a highly sustainable venture.
“This investment reflects our confidence and commitment to the development of Colombia. Factors such as institutional and regulatory strengthening for infrastructure development; the important 4G projects for more than US$25Bn and greater resources for housing development, will drive the growth in cement consumption in the next few years. As a Colombian company, we are committed
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to assisting the country in its development,” said Jorge Mario Velásquez, Argos’ CEO. The expansion plan will boost the company’s capacity in Colombia to 11.8 million tons per annum, increasing it by 24 percent over Argos’ current capacity of 9.5 million tons per year, allowing the company to continue to control the largest market share in the country.
August/September 2014
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FEATURE
VERTICAL INTEGRATION A RISK WORTH TAKING?
Robert Madeira CW Group Managing Director & Head of Research Miguel Senior CW Group Senior Advisory Associate
17 August/September 2014
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Vertical integration, a market strategy meant to capture value, in which companies control the upstream or downstream channels, is nowadays being pursued by more and more cement companies. In a nutshell, vertical integration is a manner of coordinating different stages of an industry chain when bilateral trading is not beneficial.
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August/September 2014
18
INTERVIEW
ore often than not, there are some reason which weigh heavily when companies choose vertical integration as a strategy. First of all, when companies in adjacent stages of the industry are performing better and control a larger part of the market share than companies in a more developed stage, vertical integration makes sense in trying to recover power over the market and limiting the control of adjacent companies. Secondly, the newfound market power that comes with vertical integration is useful in raising barrier to entry or allowing price discrimination across customer segments. Lastly, a key driver for vertical integration is the age of the market: if the market is young, a company can integrate in order to help develop the market, if the market is declining and other players are pulling out from adjacent stages, a company can take advantage of the situation and gain control over the market. Failure of vertical market is not to be overlooked. A vertical market could fail when transactions within it are too risky and the contracts designed to overcome these risks are too costly. Failure can be caused by a limited number of buyers and sellers, opportunism, uncertainty of the market, difficulty in drafting contracts covering all future possibilities and frequent transactions.
When applied correctly, when its risks and all its implications are understood, vertical implication can be greatly beneficial. But by far the most important things when it comes to vertical integration is getting the timing just right
Timing is key When implemented correctly, when its risks and all its implications are understood, vertical integration ca be greatly beneficial. But by far the most important factors when it comes to vertical integration is getting the timing just right. The main issues to consider here are chances of profitability, whether the integration can be achieved at a cost smaller than the value of benefits which will be the outcome of the integration, the nature of the skills required for entering a particular stage of production or distribution and the possibility other firms may have in entering the same stage.
Knowing when not to integrate is just as important. Since vertical integration is expensive, risky and often difficult to reverse, the process should not be initiated unless it is completely necessary. Overintegration is a trap in which too many companies fall because they are guided by the wrong reasons, failing to understand that there are alternatives to full integration that are more beneficial under certain circumstances. Quasi-integration strategies When vertical integration is not the best fitted option, quasi integration strategies
Cement companies have successfully applied vertical integration strategies in the United States, and it is expected that vertical integration will continue to be a trend in the country, especially so in areas liable to imports
19 August/September 2014
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SETUP
• Capital (e.g. equipment, acquisitions) • Systems development • Training
TRANSACTION
• Information collection and processing • Legal • Sales and purchasing
TRANSACTION
• Possibility of unreasonable price changes • Supply or outlet foreclosure • Insulation from market (e.g. from technical changes, new products)
COSTS
RISK
• Run lenghts, inventory levels, quality
COORDINATION EFFECTIVENESS • Capacity utilization • Service (delivery performance)
Source: CW Research
Factors that explain why firms vertically integrate
that involve lower capital costs and an increased flexibility make for a reasonable choice. Among such strategies we mention long-term contracts, joint ventures, asset ownership, strategic alliances, technology licenses and franchising. Vertical integration- a common strategy for cement companies Why cement companies commonly pursue vertical integration strategies? The first major benefit from this strategy is better control of the supply chain (local products versus imports) that translates into positive cement prices. In developed countries ready-mixed concrete accounts for 60-80 percent of cement consumption, so if cement producers also own manufacturers of ready-mixed concrete, companies have the power to better manage the supply chain. Also, pricing trends show less volatility on integrated markets. An example of this is the Florida state market in the US. Back in 2006 when imports peaked, cement companies had successfully gone through vertical integration strategies. Pricing trends in the period shown that cement prices were considerably less volatile in Florida than in other importer states.
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August/September 2014
20
INTERVIEW
Key issues to address before embarking in an integration of readymixed concrete businesses There are several opinions surrounding the read-mixed (RMX) concrete industry. Some deem it as unattractive and deplore the fact that there are no real barriers to entry, while others believe that it is just a channel for cement and that it should be run at cost, or that it is a business of its own and should be run separable from the cement one. As a matter of fact, RMX is a fairly large industry, producing revenues of US$30 billion annually in the United States, working as both a business and a channel. Different global cement manufacturers have different perspectives on ready-mixed business. For Cemex and Heidelberg, for
The peak of imports in the United States was reached in 2006. The shown terminals imported 500,000 tons or more, and the exports shown totaled 300,000 tons or more to that terminal in 2006.
Source: US Census Bureau
Vertical integration also expands the size of the potential market for the cement companies and securing supply is another major benefit that comes with integrating readymixed concrete businesses. Vertical integration ensures more steady levels of sales to the cement unit, not to mention that ownership of such a business, which is closer to the end user, aids in identifying changes in cement demand in a time effective manner.
instance, RMX is a solid vertical integration strategy, while for Holcim vertical integration may be a viable game-plan, depending on the region under consideration. CRH has a similar approach to that of Holcim, following RMX vertical integration in its Europe operations and keeping it as a channel for aggregates in the United States, as part of its road contractor business. For Italcementi and Buzzi, RMX is a
Consolidation is primarily a possibility depending on the existence and strengths of obstacles to entry.
21 August/September 2014
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channel for cement in Italy and France. Few focused ready mix producers in the US Ready-mixed concrete consolidation also offers cement companies strategic benefits valuable on the market. On the one hand, where ready-mix can be and remain a consolidated industry, it may exert market power over its cement suppliers, as such,
Consolidation can also be driven from organic growth, such as increasing capacities of existing facilities or opening new ones, from external growth, like acquisitions and mergers, through services and technical collaborations, through franchising or ready-mix know how, or thorough market coordination. Consolidation attractiveness depends on the existence and strengths of obstacles to entry. The three basic scenarios observed are: if there are no barriers to entry in the first place, rising them after the completion of vertical integration will be challenging. Secondly, when structural barriers are nonexistent, but there is a possibility to use a well though-out strategy, pushing for higher regulatory standards or leveraging existing strong market presence, would raise them. Lastly, when structural blocks already exist because of strict environmental laws or lack of physical space. In this last scenario, integration of ready-mix business integration will come with all the benefits. There are different areas where vertical integration has proven to be more efficient than
Beyond former RMC and perhaps US Concrete, there are no focused RMX producers
AGGREGATES PLAYERS
CRH
BUILDING MATERIALS PLAYERS
Agg. Industries
Aggregate volume as % of RM needs (2001)
CEMENT PLAYERS
Hanson
LAF
CSR RMC READY-MIX PLAYER
ITA BUZZI DYCK
in others. In Orlando, Florida, vertical integration proved to be profitable, having led to a highly consolidated market: there were five integrated players which controlled 90 percent of the market, making it nearly impossible for a new entrant penetrating the market. In San Diego, California, the market was fully vertically integrated and very profitable, with three players controlling aggregates and about 95 percent of the ready-mix market, and no independent ready-mix producer on the market. Full vertical integration proved to be so profitable in Caracas, Venezuela, in the past that on site-mixing was estimated at half of all potential markets. There were only a handful of independent ready-mixers and the
HEI
HOL CX
Source: CW Research
it’s attractive from the cement point of view to hold a significant position within these markets. Therefore, identifying markets that have the potential of becoming (more) consolidated is key.
concrete market was being dominated by big multinational cement players. The situation was completely divergent in Houston, Texas, where the market was fragmented and regularly unprofitable. There were more than 30 independent players on the market, while integrated ones controlled only about 30 percent of the market. More so, because of easiness in setting up new plants and lax environmental laws, entering the market was fairly facile. Vertical integration, a challenging task The ready-mixed concrete industry is very local, and the dynamics can be very different from market to market for multiple reasons. Local markets should be evaluated and mapped in terms of barriers to entry and strategic value (to cement or aggregates players) and certain conditions and key drivers at each market level can be identified to determine profitability, sustainability, and value to cement and aggregates companies. Vertical integration opportunities and strategies have to be evaluated carefully and not followed according to one’s business intuition. Before advancing with such a strategy, cement companies need to make sure that they would not be able to get similar results and benefits by quasi-integration means, which require less capital and come at a reduced risk.
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August/September 2014
22
CEMENT MARKETS
CW Research
CEMENT VOLUMES Cement consumption in Spain in the first 8 months of 2014 reached 7.1 million tons, a drop of 1 percent versus the same period of 2013. In August consumption totaled 0.9 million tons, 16 percent down from July and almost flat compared with the same month of last year. Spain cement demand remains at historical minimum, following an intense deceleration in public spending in infrastructure and housing development.
In the United States, the construction sector continues to recover from the crisis
According to Oficemen, cement manufacturing companies in Spain are exporting around 53 percent of production, which account for approximately 9 million annual tons of cement. Spain has become the largest exporter of cement in the European Union since the local demand plummeted during the financial crisis hit in 2007-2008. Consumption will decline between 7 and 8 percent this year, accumulating seven years of decline in a row. In the United States, the construction sector continues to recover from the crisis. Housing starts surged 22.9% in July, to reach their highest pace since November 2007. The National Association of Home Builders released data showing builder confidence at its highest level since November 2005, which shows encouraging expectations for the remaining of the year. New construction starts in July climbed 6% with nonresidential building supported by a strong month in manufacturing plant projects as well as improvement for commercial building. Russia’s cement production grew 3 percent to 7.6 million tons in July 2014. The construction sector in Russia continues to show signs of accelerated recovery. Infrastructure development currently accounts for the largest portion of the construction market as the government invests in projects ahead of the 2018 FIFA World Cup. The country is also investing in improving its road network. The recovery in France has lost ground in the last months. Cement consumption rose 2 percent in July compared to June, but the demand is 11 percent down from the same month of last year. The year-to-date drop has now reached 4 percent. The French Prime Minister has responded to the overall
May 2014/May 2013 Cement Production Growth Rate (%) 20%
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Japan
Thailand
Argentina
Vietnam
Russia
China
India
Colombia
-10%
Saudi Arabia
0%
Source: CW Research
10%
CW Research CEMENT MARKETS
weakening conditions by implementing measures to revive the construction sector. The government would offer tax rebates for the sale of land destined for development, and rolled back plans for complex regulation of rentals. Domestic cement production in Argentina surged 4 percent in Jul as compared to the previous month. However, year-on-year cement production fell 4 percent. Recession has hit the country and in particular the construction sector. Demand for most construction materials dropped in July from the same month of last year. Cement declined 5.4 percent, asphalt dropped 4.4 percent and clay bricks contracted 3.1 percent. Colombia increasing investment in infrastructure and social housing programs have been driving up cement consumption in Colombia. July production increased 10 percent from June and is up 11 percent from the same month of last year. In Peru, economy has started to recover, but at a slower pace than expected. The economy grew only 1.6 percent in July, below the analysts’ consensus. Cement demand grew 5 percent during the month but year-on-year figures are still at the same level of 2013. China’s cement production suffered a setback and closed at 223 million in July following a decline in consumption over the recent months. Overall, industrial production in China has experienced the weakest growth since December 2008 and the Chinese government has taken several measures to bolster confidence in the real estate sector and boost sales. Housing sales in China in the first seven months of the year fell 10.5% amid efforts from local governments to make easier for homebuyers to purchase second homes.
The recovery in France has lost ground in the last months
After an unexpected recovery in demand in May, mostly driven by legislative elections, cement sales in Indonesia plummeted 26 percent in July on slower deliveries due to the Lebaran holiday and delays of some projects caused by political uncertainties in the market on the results of the 2014 presidential election. Expectations are that the industry will face a challenging year in 2014. May 2014/May 2013 Cement Demand Growth Rate (%)
40% 20%
Source: CW Research
France
Germany
US
Spain
Peru
Pakistan
Saudi Arabia
-20%
Indonesia
0%
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August/September 2014
24
MARKET DATA SNAPSJOT
CW Research
Volume variation analysis for selected countries that are major consumers, producer, importers and exporters of cement. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.cemweek.com to the market data section. Cement Production (million tons)
Cement Consumption (million tons)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Cement Production MoM (%)
Cement Consumption MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Cement Exports (million tons)
Cement Imports (million tons)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Cement Exports MoM (%)
Cement Imports MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year
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CEMENT ENERGY MARKETS
CW Research
CEMENT ENERGY MARKETS Coal Market Update Volumes registered a high drop in Indonesia August global coal trading volumes waned 12.5 percent from previous month, with significantly lower volumes out of Indonesian ports. Colombian coal deliveries slightly declined almost 3 percent in August after substantially surging 30 percent in July. However, comparing with the same month of the previous year, the volumes were 16 percent higher, reaching to 8.6 million tons. The monthly average for January-August period improved from 5.8 million tons in 2013 to 7.1 million tons this year. The output target for 2014 has been recently raised to 95 million tons, but industry sources have suggested it can easily be reached if no disruptions will hamper production.
Significantly lower volumes out of Indonesian ports
South African coal deliveries in August stood at 6.1 million tons, 3.3 percent lower than July and down 0.7 percent from August 2013. The coal exports out of the Richards Bay terminal to India fell 25 percent to 2.3 million tons, as well as deliveries to Pakistan (down 32 percent versus July). Just recently, Ukraine announced it will buy one million tons of coal from South Africa because the military conflict in its Donbass region has disrupted domestic coal production. China just announced that from 2015 it would restrict the production, consumption and import of coal with high impurity levels. The measure, which will not apply to power plants, traders and utility sources, has raised concerns among major exporters. Indonesia’s coal exports severely dropped 39 percent in August to 17.7 million. The government has completed the measures to reduce exports in order to drive prices up. The implementation of the new regulation forcing Indonesian thermal and metallurgical coal exporters to secure an export license before they export, effective from October 1, is expected to affect the overseas shipments with a 30 million tons drop in total exports by the end of 2014. The fall in October is predicted to be between 15 and 20 percent from September. Indonesia will also likely be hit by the Chinese ban on low value coal. Coal Global Trading (million tons) 120
Indonesia
Australia
Russia
South Africa
Colombia
US
Rest
100 80 60 20 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14
0
Source: Customs data
40
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August/September 2014
26
CEMENT ENERGY MARKETS
CW Research
Energy Prices Update Coal September average coal prices continued to drop to US$ 70.8 per ton due to weak demand on the international market. Chinese ban on coal strongly affects the big exporters that already lowered their export volumes.
September average coal prices continued to drop to US$ 70.8 per ton due to weak demand on the international market
Australian coal price lost 4 percent versus August and 15 percent from one year ago, staying at US$70.6 per ton. Oversupply and lower import demand from China caused a steady decrease over the first eight months of this year, and the prices will remain subdued for the rest of 2014. But despite the Chinese ban on coal, Australia has abundant supplies of cleaner coal that they have been selling to Japan and could export to China too. The latest negotiated prices for the long-term contracts were fixed at about US$73 per ton (on April), 3 percent lower than the current price. Industry experts expect coal prices to weaken by 6 percent in 2015. On the long term, as import demand continues to improve and weak prices during 2014–2015 reduce investment in new capacity and force less competitive operations to close, the coal contract prices are projected to rise to US$86 per ton by 2019. In Indonesia, a recovery in prices is expected once exports are regulated starting from October 1. Is likely that available supply for export to be reduced as illegal mining operations will be halted. The HBA average export price slightly decreased 1 percent in September compared to August, staying at the lowest level since June 2009. The cut is more significant when comparing to the previous year’s level of 76.9US$/ton. In Colombia, the prices declined 5 percent versus August to US$70.6 per ton. US Energy
Steam Coal FOB Average Prices (US$/ton) Colombia exported
Australia Newcastle
Indonesian HBA
South Africa Richards Bay
27 August/September 2014
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Sep-14
Jul-14
May-14
Mar-14
Jan-14
Nov-13
Sep-13
Jul-13
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
To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748.
Sources: EIA, Colombia Ministry of Mines and Energy, IMF, Indonesia Ministry of Energy and Mineral Resouces
US exported
150 140 130 120 110 100 90 80 70 60 50
CEMENT ENERGY MARKETS
CW Research
Information Administration suggested that the country has the potential to double its output between 2010 and 2020. Moreover, Colombian Natural Resources (CNR), owned by investment bank Goldman Sachs, plans to re-start coal exports and re-establish mining operations after suspended exports from its port at the end of last year because not meeting the new environmental standards effective from 2014. At the beginning of September, South Africa has signed an agreement to provide 1 million tons of coal to Ukraine, helping the country to maintain the power output. Even though the expected effect was to drive up the demand and prices, the average price waned 5 percent from August to US$67.9 per ton, the lowest level since November 2009. US Petcoke Export Price (US$/ton) rolling 12-month average 120 100
60
40 20
Petcoke Price of U.S. uncalcined petcoke for export markets slightly improved 0.02 percent in June from last month and reached US$75.42 per ton. Despite the small recovery from May, the price remains at low levels but fairly stable in the US$75 – US$80 range since the end of 2012. After reaching record volumes in March in the context of falling domestic demand, US petcoke exports dropped significantly in the next two months. Chinese domestic petroleum coke market continued its weakness at the beginning of June, while downstream companies actively control their inventory due to contraction of demand. With the pressure of General Office of the State Council of PRC on high-polluted downstream companies to meet eco-friendly regulations, production costs increase and determine lots of companies to close their kilns. Low sulfur petcoke’s prices dropped to CNY500 per ton (US$ 81.05 per ton). Decreasing demand of steel market, over capacity, and lower price of petroleum coke, are expected to slow down the domestic petroleum coke market in the middle to long term.
S-14
A-14
J-14
J-14
M-14
A-14
M-14
F-14
J-14
D-13
N-13
O-13
S-13
A-13
J-13
J-13
M-13
A-13
M-13
F-13
J-13
D-12
N-12
O-12
S-12
0
Source: Customs data
80
Despite the low prices, oil companies continue to invest in new coker capacity
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August/September 2014
28
CEMENT ENERGY MARKETS
CW Research
Natural Gas The Henry Hub spot price traded at US$3.9 per MMBtu in September, remaining unchanged compared to August. Prices started to decline at the beginning of the month, but recovered by the end of the month to US$3.89 per MMBtu.
Prices started to decline at the beginning of the month, but recovered by the end of the month
Prices in Europe continued to be weak in September (US$9.1per MMBTU) because of high inventories in the region. However, the average price slightly improved 1 percent versus previous month due to colder weather and an escalation in the Ukraine/Russia conflict. Central and Eastern European countries prepare for possible energy shortages this winter as gas shipments from Russia dropped 15 percent in mid-September from previous orders.
Natural Gas Prices (US$/MMBtu) US
18
Europe
16 14 12 10
8 4
2
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Sep-14
Jan-14
May-13
Sep-12
Jan-12
May-11
Sep-10
Jan-10
May-09
Sep-08
Jan-08
May-07
Sep-06
Jan-06
May-05
Sep-04
Jan-04
May-03
Sep-02
Jan-02
May-01
Sep-00
Jan-00
May-99
Sep-98
0
Source: EIA, World Bank
6
MARKET DATA SNAPSHOT
CW Research
Volume variation analysis for selected countries that are major importers and exporters of coal and petcoke. This is a selection of notable markets. Additional detail is available from CW Research as well as on-line at http://www.coalweek.com/ to the market data section.
Petcoke - US Exports (million tons - Aug)
Coal - Exports (million tons)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.
WWW.CEMWEEK.COM/SUBSCRIBE
WWW.CEMWEEK.COM/SUBSCRIBE
Coal Exports MoM (%) US petcoke exports prices MoM (%)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
Coal - Imports (million tons)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
Petcoke - US export prices (USD/ton - Aug)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
Coal - Global export prices (USD/ton)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE Coal export prices MoM (%)
Natural Gas Prices (US$/mmBtu)
TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE
Natural Gas prices MoM (%)
Source: CW Group analysis estimates LM: latest month Aug except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year
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30
people
Grupo Cementos de Chihuahua appoints new CEO The Board of Directors of the Mexican cement company announced that Enrique Escalante will become chief executive officer effective January 1, 2015 after current CEO, Manuel Milan retires. Escalante has served as president of the GCC of American division since 2000, having joined the company in 1999 as the president of its Mexican division. Following his promotion, he will be replaced by Ron Henley as the president of the company’s United States division. Grupo Cementos de Chihuahua distributes and markets cement, ready-mixed concrete and aggregates in Mexico and the United States.
Jean-Carlos Angulo Executive Vice President, Lafarge Group
31 August/September 2014
Lafarge India appoints non-executive chairman Jean-Carlos Angulo, executive Vice President of Lafarge Group, has been announced as the replacement of Uday Khanna as the company’s non-executive chairman of Lafarge India. The decision was taken during Lafarge India’s quarterly board meeting. Uday Khanna will remain in the company by occupying an advisory role. New CEO for Lafarge Canada Bruno Roux has been appointed as the new President and CEO for the Eastern Canada business unit of Lafarge Canada, and he will also join the Board of Directors of Lafarge Canada. Roux will serve as the company’s senior leader for all market areas and product lines in the Atlantic Provinces, Quebec and Ontario. General manger of Eastern Province Cement resigned According to an announcement of the Board of directors of Saudi Arabia’s Eastern Province Cement Company, Abdulhrahman Al-Zamel has resigned for his position as general manager of the company. Abdulrahman Al-Zamel has been in the service of the company for 15 years and his resignation will come into effect at the start of the next year. www.cemweek.com
Senior management changes at Holcim
T
he company’s Board of Directors has decided to make several changes at the senior management level. Urs Belisch, member of Senior Maangement and Corporate Functional Manager, has been nominated as member of the Holcim Executive Committee, while Alain Bourguingnon, currently acting as Area Manager for Canada, United Kingdom and the United States, as well as being part of the company’s Senior Management, will head the joint Divestment Committee in the context of the Holcim and Lafarge merger. From Lafarge’s side, Marc Soulé, currently Lafarge’s Senior Vice President Performance Management, will cohead the Committee. In their new roles, the two managers will be responsible for promoting and selling Holcim and Lafarge assets proposed for divestment.
REGIONAL REPORT:
europe Lafarge and Holcim assets spark interest The merger between Lafarge and Holcim is expected to be finalized by the end of the year, the second stage of assets sales having begun mid-September. Rumors surround HeidelbergCement, several private equity funds and other cement companies about potentially buying a significant number of assets. HeidelbergCement is thought to be interested about two plants in the Philippines, as well as about cement production units located in Germany, France and Austria. Among other firms eyeing Lafarge and Holcim assets is CHR, an Irish cement manufacturer. According to press, the company intends to bid for all the assets the two companies must sell on account of their merger. The Irish company is in the process of expanding its capacity, the move of buying Lafarge and Holcim assets being part of its plans.
Sabanci, an Istanbul based conglomerate, plans on bidding for some of the assets resulting from the merger of Lafarge and Holcim. Press reports that the conglomerate has business related to, cement, owning cement companies Akcansa and Cimsa, and that it plans to spend US$448- 672 millions on expansion investments. The company is supposedly currently preparing to make a bid in December, but representatives of the conglomerate have yet to comment on their interest in Lafarge-Holcim. Though in the middle of a merger, Holcim has closed a deal with Mexico’s Cemex by which Holcim will take over some of Cemex’s operations in Germany and Cemex will take over Holcim’s Sapnish operations. The deal has already been approved by the European Commission. Traditional competitors, Holcim and Lafarge announced their intentions to merge in April, yet their plans can only be completed once competition regulators in 15 countries agree with the terms of the deal.
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Weak performance for Spanish cement sector The Spanish cement market continues to underperform, having reached its historic low in consumption rates. In the first with months of the year, cement demand reached 7.1 million tons, falling by 2 percent from the year ago period. In August, consumption reached 819,249 tons, dropping 3 percent from August 2013 consumption rates. The Spanish region which is experiencing the lowest demand rates in the country is Cataluña, with cement consumption being 84 percent lower than pre-crisis high. Ciment Català, the region’s cement association, announced that demand was down 17 percent in August when compared to last year same month rates. During the same period, cement consumption in Andalucía fell 7.3 percent. At the moment, Spain exports more than half of its production, trying to balance low domestic demand through increased exported volumes and becoming as such the leading cement exporter of the European Union.
August/September 2014
32
Russia AND CIS Plans for production modernization in Russia Several cement companies are planning to make investments on the Russian cement market. Chinese investors are intending to build a cement plant worth US$ 400 million in the Oryol region, the location having been chosen due to its proximity to raw materials. The new plant is expected to be launched by 2015. Holcim has invested in a new 4,500 tons per day production line in Volski as part of the company’s plan to modernize and upgrade Volkscement in 2012. The reconstruction will begin this year and will be completed by 2016. News of investments and modernization also come from Russia’s Eurocement Group. The company has expressed its intentions to invest $2 billion in production modernization. According to Mikhail Skorokhod, President and chairman of the company, the plan for the company is to fully translate its plants to the dry process. The group operates 16 factories in Russia, Ukraine and Uzbekistan, its total capacity being of 40 million tons of cement per year.
33 August/September 2014
Lafarge, the company which is currently in the midst of a merger with Holcim, has plans of selling one of its Russian plants. The cement plant is located in the Urals region and will be sold to BuzziUnicem SpA for EUR 204 million. After the deal goes through, Lafarge will only be present in Russia with the plant it opened nearby Moscow. Middle East Iran’s exports to Iraq grow Iran is to expand its exports to Iraq after a decision allowing a rise in Iraq imports of cement was taken by the Ministry of trade. Iraq had already been one of Iran’s traditional export markets, the latter exporting nearly half of its total cement production to Iraq. Since Iran has seen its trade relations with Tajikistan worsen, news of being able to expand its trade with Iraq is encouraging for the country’s cement sector. Greenlight for cement shipments to Gaza The worn torn region is in need of extensive reconstruction works after homes and institutions were either destroyed or severely damaged. On account of the reconstruction
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works needed, Gaza’s cement demand will rise by half, reaching 1.5 million tons per year. Up unit this month, cement shipments to Gaza were not permitted after Israel’s insistence that cement entering the region will be used by Hamas rebels for tunnel building. The United Nations agreed that Gaza’s reconstruction is a stake too big to be ignored, lifting the ban of cement imports to the region. New production line in Saudi Arabia Southern Province Cement, a cement company from Saudi Arabia, has announced that work on a third production line at its Tihma cement plant is 70 percent complete. The investment for the project is expected to reach US$188 million and completion of the new production line is anticipated to occur in March 2015. The new production line comes as a consequence of increased demand in the Kingdom. On the other hand, though demand is recovering and the Kingdom is expected to ride a new infrastructure and real estate boom, labor shortage will continue to negatively impact the construction sector and the cement industry in the country.
UAE cement plant ordered to halt operations Environmental violations have led to the closing down of operations in a cement factory in Fujairah for a month. The Ministry of Environment and Water ordered the plant to halt production for one month after it inspected the plant as part of the ministry’s regular inspections. The ministry has intensified its efforts to implement environmental laws and regulations, this plant being the first to be closed this year. According to press, the ministry issued a ministerial decree meant to more strictly regulate the installation, management and operation of quarries and crushers in the country. Companies in the UAE which operate crushers, quarries and other related industries have been given six months to comply with the provisions of the new decree. Lafarge evacuates plant in Syria The French company evacuates its Syrian plant near Aleppo for security reasons. Isamic jihadists have seized and set fire to part of the cement plant. The province of Rakkais currently a hot spot of the Syrian tensions after having fallen in the hands of jihadists. Aleppo, the nearest largest city to the Lafarge plant, is a central front in the war between the rebels and the forces of the Syrian President Bashar al-Assad. The conflict has been going on for three and a half years, jihadists further fueling the violent conflict. Lafarge acquired the plant from Orascom in 2008, after buying the majority share in the company. The plant was built
by Orascom in partnership with MAS Economic Group in 2007, its output being of 2.6 million tons per annum. The plant helped the Syria lose part of its dependency on foreign imports by meeting a third of the country’s cement demand. Africa Dangote Cement attracts investment from Dubai Investment Corporation of Dubai (ICD) acquired a minority stake in Nigeria’s Dangote Cement for US$300 million. This marks the first major investment of the Gulf Emirate in the African economy. Mohammed Ibrahim Al Shaibani, CEO of the investment corporation of dubai, mentioned that Nigeria provides for terrific long-term investment opportunities and that the investment in Dangote will allow ICS to access the continent’s entire cement market and opportunities. Dangote is the market’s leader in Nigeria, planning to almost double its production capacity by 2018 and build new plants in South Africa, Senegal, Zambia, Sierra Leone and Cameroon. Egyptian cement market faces trouble The energy crisis Egypt is currently dealing with is causing significant trouble for the cement sector of the country. On account of the ongoing crisis, the government has announced that it has no intentions of awarding new or temporary licenses for new cement plants in the following months. Cement factories now operating in Egypt
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are currently producing one-third of the quota allocated to them. In May, several cement plants in Egypt had no other option than to halt production because of lack of energy in the country. Inconveniences have also come from the construction sector, workers having stalled work for 15 days. The situation led to demand falling and supply rising, resulting in a dull recession of the market. Imports of cement from Turkey were the ones mostly affected by the situation, having dropped to 13,000 tons in September. Cameroon cement demand increases Demand continues to grow in Cameroon, being forecasted to reach 8 million tons in 2020. Cameroon’s total domestic capacity is estimated to be between 2.5 and 3 million tons, demand having already risen to 2.8 million tons this year. High demand is the reason why the country has resorted to increased imports, yet the situation will not last for too long as the new cement plants will add to the country’s capacity. Cimencam has joined the market a few months ago, adding an annual production of 1.6 million tons to the country’s production and Cimaf ’s plant added half a million tons to the total production. Among the companies which have invested in the country’s cement sector we mention Dangote, which will commission a plant able to produce 1 million tons per year in October. Other companies include Medcem Cameroon and Eren Holding, two manufacturers which are expected to start production in February 2015.
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REGIONAL REPORT:
India Demand and capacity grow in India India’s cement sector shows promising signs of growth, demand and capacity both being on the rise. Indian cement firms’ volumes increased 11 percent between March and August, surpassing the 3 percent capacity growth the markets experienced in the same period last year. According to press, the volume evolution experience on the market is to be considered a significant one when taking in account the fact that commodity prices grew, the Indian rupee depreciated and transportation prices grew. As major infrastructure and construction projects are expected to take off, demand for cement is thought to grow to 7-8 percent in the months to come. For the next four years, demand is estimated to
rise by 11 percent. Nonetheless, the large scale projects on which Indian cement companies base their high demand hopes have yet to be put into motions. JSW Cement and Chettinad Cement expand capacity Expectations of an increase in consumption have made JSW Cement and Chettinad Cement to consider expanding their capacities. JSW Cement is planning on setting up a new cement plant in Gulbarga, Karnataka. The company’s current capacity reaches 6.4 million tons, and the new plant will add 4.3 million tons to the company’s annual capacity. The production unit will be located in a region rich in limestone, hence the cement producer has solid reasons for expecting high capacity. The cement manufactured at the Gulbarga pant could be marketed in Maharashtra and Gujarat and will be able to meet the
spike in demand expected in the Southern region of the country. Chettinad Cement Group has more bold plans in what capacity expansion is concerned. The company continues its projects in Andhra Pradesh, Maharashtra and Karnataka even though it has been producing at half of its capacity on account of weak market demand. The capacity expansions the company is currently working on will add almost 6 million tons to the company’s current capacity. Eco-friendly cement developed A group of researchers from Switzerland, India and Cuba developed a new type of cement meant to help reduce carbon dioxide emission by almost 30 percent. The product is a limestone calcined clay cement called LC3 which substitutes up to half of the carbon intensive materials that are traditionally used in making cement. The project was supported by the Swiss government and the new type of cement was created and tested in India, both on the field and in laboratory. Researchers are confident that this type of cement will have economic and environmental significance. PAKISTAN Pakistan cement exports to India grow Pakistani cement dispatches to India grew by 40 percent in trade year 2013-2024. The peak of exports to India was reached in July and August, when exports grew by 70 percent when compared to same period last year rates. India- Pakistan ties continue to be insecure, yet the floods in Jammu and Kashmir were enough reason for several cement retailers in the region to seek imports from their Pakistani neighbors.
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REGIONAL REPORT: Xinjiang Qingsong Building Materials Drainage with 200,000 tons, and Nangang Beitun Qingsong Building Materials with 320,000 tons.
Holcim-Lafarge merger approved in Singapore The merger between Lafarge and Holcim’s Singapore subsidiaries got greenlighted by the Competition Commission of Singapore. The merger was allowed after it was proven that the two companies would not have substantial market power after the merger. In Singapore, Holcim and Lafarge both supply grey cement, ready mix-concrete and mortar. Demand grows in Vietnam and Indonesia Domestic demand in the two countries has been showing encouraging signs of improvement, signalizing an upward trend in cement consumption. In Vietnam, domestic cement consumption rose in August by 115 percent over the same period in 2013. For the first eight months of the year, consumption grew by 5 percent over the same period last year. Nonetheless, the onset of the rainy season is thought to cause a slight decrease in domestic cement consumption. Exports have increased as well, reaching 10.5 million tons during the first eight months of 2014.
In Indonesia, though the first months of the year did not come with significant growth in demand, better consumption is expected for the rest of the year. Two Indonesian cement producers, Indocement Tunggal Prakarsa and Holcim Indonesia have forecasted better performance for the second half of the year on account of more constructions projects being carried out in the period. Holcim Indonesia expects sales to increase in the months to come due to growing demand for cement and to the price hike. More so, the company has begun operations at a new plant in East Java in order to be able to meet the expected rise in demand. CHINA Companies eliminate backwards production Five cement companies in Xinjiang have eliminated a backward production capacity of 950,000 tons. According to China’s Ministry of Industry, the five companies are Xinjiang Qingsong Cement with 220,000 tons, Xinjiang Qingsong Building Materials Chemical with 160,000 tons,
The Ministry announced at the beginning of the year that the backward production capacity in the region, amounting to 1.79 million tons, represented 2.1 percent of the country’s total production capacity to be eliminated. Taiheiyo dissolves JV in China Backward production capacity is one of the reasons why the Japanese joint venture in China has failed. Taiheiyo Cement Corporation, a Japanese cement manufacturer, has removed the cement joint venture agreement it had signed with local cement companies in the Xinjiang Uygur Autonomous Region. The joint venture included plans of expanding the capacity of Xinjiang Tianye, a local cement manufacturer, by 1.2 million tons. The deal did not go through after it failed to be approved by the Chinese government. AUSTRALIA AND NEW ZEALAND The cement industry in the two countries is shrinking, meaning that both cement workers and local clinker productions will suffer from job cuts and closures of clinker plants. In New Zealand, Holcim has announced that 120 people will be laid off after the closing of its Westport plant in 2016. In Australia, Boral announced the cutting of 28 jobs from its Maldon Cement plant in Australia at the end of this year. The unit closures in the antipodes will shrink the total capacity in the two countries by 1.5 million tons per year, leading to a 7.5 million tons per year capacity. The cement industry in the region came to be severely affected in the last couple of years. Among the reasons accounting for the underperformance of the sector are poor recovery of the local building market, high energy costs, competition concerns and the imports of cheaper clinker for East Asia.
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REGIONAL REPORT:
Expansions in South and Central America Several companies have made the advancements necessary or have forwarded plans for expanding capacity. Cementos Argos may have the most ambitious plan on the continent, looking to expand to both Brazil and Mexico. The company is planning capacity expansions in the two countries and does not exclude the option of buying assets from the Lafarge- Holcim merger in order to have the strategic upper leg in the region. Cementos Argos also has expansion plans in Colombia. The company has announced its intensions to enlarge its already installed capacity. The unit for which growth plans are made is located in Sogamoso, in the center-east of Boyaca. About 2.3 million tons will be added to the capacity of the plant, meaning that the company’s total installed capacity in Columbia will reach 11.8 million tons annually. The capacity extension is expected for 2018. Expansions are also in foresight in Bolivia. The government of the country has begun the construction of a new cement plant whose purpose will be of breaking monopoly on the cement market. The new unit will be called Empresa Publica Productiva Cementos de Bolivia (Ecebol) and will begin operation in three years. The plant’s capacity will reach 1.33 million tons per year. The Chinese are becoming further interested in investments in Latin America. Tianjin Cement industry Design & Research Institute (TCDRI) has signed a contract with Brazil’s Votorantim Group and Bolivia’s Itacamba Cemento for a new pro-
37 August/September 2014
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duction line with an output of 2000 tons of cement. The production line’s location will be on the southeastern border of Bolivia and Brazil. Lafarge sells assets in Mexico In Mexico, Elementia, an industrial conglomerate, plans to purchase the 47 pct stake held by Lafarge in Cemento Fortaleza. Lafarge and Cementos Fortaleza began a joint venture at the beginning of 2013, and the Elementia purchase would mean that the company would have complete control over the joint venture.
8.4 percent in 2015 and by 10.7 percent in 2016. According to Portland Cement Association (PCA), the hike in demand will be driven by healthy gains in the economy which will lead to the revival of the building sector. Cement consumption has been sluggish in the United States ever since the economic
depression started in 2008, yet gains in the labor market, low consumer debt and increased consumer wealth will weigh heavily in turning the situation around. If the estimations of the PCA come to be true, cement use in the United States will reach 86.1 million tons this year and 103.2 million tons in two year time.
Cemex intends to buy back debt Cemex plans to buy back more than US$950 million worth of its debt through a tender offer. The new CEO of the company, which is one of the largest in the world, plans to buy back the debt as part of a larger plan meant to lower the company’s debt-to-equity ratio and reduce interest payments. The company has been dealing with heavy debt and cost cutting since the global economic crisis’ onset. Cement industry to grow in the United States Cement demand is expected to increase in the United Stated by 7.9 percent in 2014, by
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sector coverage : Construction & BUILDING MATERIALS by BmWeek.com
Aggregates Mining company puts forward Windsor quarry proposal Yahara Materials, a company from Waunakee, Wisconsin which has proposed a Windsor Quarry 15 years ago but was denied approval, now has a new plan of operating a mineral extractions site in the same location. According to representatives of the company, the site contains a reserve of high quality aggregate materials which could be repurposed as construction material.
and concrete blocks. According to the company’s sustainability report, Hanson has also reduced waste to landfill by over 4,000 tons, or by 35.5 percent. The company’s environmental targets for 2020 are to more efficiently manage energy use and to reduce CO2 emissions. Construction Gaza reconstruction to begin After a deal was reached on Gaza’s reconstruction scheme, the amount of building
The company now has to get the approval of the town board for operating a limestone quarry, yet the manager of the company is confident that their recent proposal stands a decent chance at begin successful. The mining plan put advanced for review includes three phases of development that span on over 25 years. Hanson recycles aggregates in precast concrete and concrete blocks Hanson, a British-based international building company with headquarters in Maidenhead, announced that it is using 62 percent recycled aggregates in precast
39 August/September 2014
Hanson
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materials entering the territory is expected to quadruple. Under the deal agreed to by Israel, Palestine and the United Nations, up to 800 truckloads of construction materials will enter Gaza every day. At the moment, about 200 trucks are entering the war-battered territory. The damage Gaza has to address is estimated at about 18,000 destroyed of affected homes and institutions. The total cost of rebuilding Gaza may reach US$6 billion.
Water shortage in Sao Paolo affects construction sector Construction activity in the city of Itu, Sao Paolo, Brazil, has been affected by a severe water crisis for over three months. Lack of water makes it impossible for builders to make cement, lay bricks and to plaster. Several works which should have already been completed have been delayed because of the draught, yet the mayor of the city will not decree situation of a state of emergency. Construction boom in Algeria Strong domestic growth in domestic consumption of cement and steel stand as evidence of the pick-up in the pace of the Algerian construction sector, and so does the increase in real estate loans. At the end of 2013, real estate loans reached 425 billion dinars, while in 2014 the figure is expected to rise to 750 billion dinars.
Source: U.S. Census Bureau, New Residential Construction Statistics
The decent evolution of the building sector led the country to increase its imports of building materials to US$2.25 billion. Nonetheless, according to Algeria’s Ministry of Industry and Mines, the country should stop importing cement in three to four years since efforts are being made to increase local cement capacity.
materials so that residents could start rebuilding their damaged homes. Cement manufacturing companies in Kashmir have already been requested to cut down cement prices in order to enable the rebuilding of chattered dwellings.
Indian government asked to wave off construction materials taxes in Kashmir After people were left homeless after the floods that hit the Kashmir region, India’s Bharatiya Janta Party (BJP) asked the government to remove taxes on building
New Orleans project relies on Lafarge concrete The massive Hurricane and Storm Damage Risk Reduction System in New Orleans relies partly on Lafarge Agilia concrete. The New Orleans region is one of the most vulnerable areas in the United States as far as
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Concrete
August/September 2014
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sector coverage : Construction & BUILDING MATERIALS by BmWeek.com
France’s plan for building sector revival France’s Prime Minister and Housing Minister announced the future implementation of measures for the revival of the building sector. Mobilization of public and private real estate, tax preferences, extending the duration of building permits and the production of social housing are just a few of the measures proposed by the government. The French government plans to build 30,000 social housing units over the next five years.
sector coverage : Construction & BUILDING MATERIALS by BmWeek.com
devastating storms go, the risk reducing project being meant to act as the largest surge barrier of its kind in the entire world. The total cost of the projects is expected to reach US$700 million and mostly relies on enormous concrete structures. The design of the barrier features 1.271 concrete piles, each of them weighing 96 tons and being able to offer 100-year-level storm protection. In order to deliver the materials need for the huge structure, Lafarge has to supply more than 70,000 cubic yards of Agilia self-consolidating concrete. Self-leveling concrete will be used because it significantly reduces construction time and costs due to its fluid and stable properties. Permission for concrete batching plant in UK denied Aggregates Industries UK subsidiary London Concrete has proposed the construction of a large concrete batching plant and of large storage facilities in East London, on the river Thames, yet the proposal was rejected by the United Kingdom’s Secretary of State for communities and local government. According to planning inspector David Nicholson, the project would have “a significant and harmful impact on the appearance and setting of the East India Dock Basin.” The inspector further mentioned that there is no reason the company should not put forward a better designed project that would not bring about environmental dangers and issues.
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equipment
Customer Day at Loesche ThermoProzess Marking two years since Loesche ThermoProzess became a subsidiary of Loesch, the company invites guests to a customers’ day on October 30 in Gelsenkirchen. The subsidiary offers thermo process technology with all associated products such as industrial burners and hot gas generators. According to the company’s schedule for the announced customers’ day, guests will be able to take part in discussions, presentations and workshops on the latest technologies and trends on the market. Among the presentations to be held during the day we mention the ones of the LTP-burners at the test-bed in the production facility, online-simulation of thermic processes and flow analysis, control cabinet concepts for hot gas generators and burner controls and on further equipment suppliers for ventilators, valves and measuring equipment. The day’s timetable also includes a tour of the LTP facilities which is led by management staff and experienced engineers. LTP’s open day comes as a great networking opportunity for customers since it was though out as to allow significant interaction between customers and LTP’s staff. Loesche ThermoProzess launches compact burner series Loesche ThermoProzess has launched Monoblock, a compact burner series fit for industrial applications. The burner series come with an integrated combustion air fan and burner control system, enabling LTP to supplement its existing burner product range for the process, as well as the heavy industry sector with a practical Source: Eurostat and tested component.
A collaboration with Italian burner manufacturer CIB Unigas made the development of the product series possible. According to the press release of LTP, the scope of the collaboration was to come up with products needed in thermal plants such as hot gas generators, boilers and process plants of any kind within the Loesche group and customers worldwide. In order to assure a high standard of quality and availability for global customers, the burner series also include burners for liquid fuels and dual-fuels burners.
with the new National Emission Standards for Hazardous Air Pollutants environmental legislation. The grinding mill to be supplied by Gebr. Pfeiffer includes a rotary air lock with drive, a MPS 3750 B mill, a high efficiency classifier and Gebr. Pfeiffer’s “Lift and Swing” technology.
The burner product range, despite only having been released, is already being used in clinker plants in Indonesia and Vietnam. Pyroscan HDR image of the combustion inside a kiln
LTP Monoblock
Holcim Unites States plant to use Gebr. Pfeiffer grinding mill Holcim’s Hagerstown cement plant is the most recent cement plant in the United States to order a Gebr. Pfeiffer grinding mill. KHD Humboldt Wedag, the engineering and equipment supplier for the Hagertown plant modernization, has placed the order for the grinding mill and expects the commissioning to be completed by mid-2016. The modernization of Holcim’s plant has the purpose of increasing the plant’s production capacity to about 2,400 tons per day and of aiding the plant in complying www.cemweek.com
New Pyroscan from HGH Infrared Systems HGH Infrared Systems has announced the launch of the new Pyroscan, the highest resolution pyrometric camera on the market at the moment. The camera creates 1.2 Mpixel high dynamic range, thus being able to provide with precise measurements of temperatures, ranging between 700 °C1800 °C at any point in the image. What sets the camera apart are the specific configuration of its detector and the proprietary software features for signal processing. These two features provide the ability to see in a single view details of the flame and the brightest areas in the kiln and clinker. This represents a great help when it comes to seeing the impacts of burner adjustments, variations in raw metal composition or mix of alternative fuel and overall combustion process monitoring. August/September 2014
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FLASHBACK NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker red shows higher news volume)
CW Group Meeting Agenda The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit http://research.cwgrp.com/meetings
CW Research Webinars:
Conferences where the CW Group will be presenting
CW Middle-East & Africa Summit 2014 Recap
DEC 30, 2014 at 2:00 PM GMT
Global Energy Outlook - Petcoke, Coal
JAN 12, 2014 at 2:00 PM GMT
43 August/September 2014
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Cement Business & Industry (CBI) Brazil & LatAm 2015
FEB 4-5, 2015
Sao Paulo, Brazil InterContinental Hotel
BrasCon 2015 Industry Conference
MAR 4-5, 2014
Sao Paulo, Brazil Hotel Radisson Vila Olímpia
AshTrade Europe 2015 Fly Ash Industry Conference
APR 22-23, 2015
Frankfurt, Germany
World Paper and Pulp (WPP) Brazil & LatAm 2015
APR 15-16, 2015
Sao Paulo, Brazil Hotel Radisson Vila Olímpia
buzz TOP CEMWEEK STORIES 1
Holcim’s Siggenthal cement plant restarts production
2
Cementos Molins acquires Bolivian cement manufacturer
3
Colombian cement company considers acquiring assets of Lafarge and Holcim in AL
4
HeidelbergCement interested in Lafarge and Holcim assets
5
Peru’s Yura invests in machinery and equipment
6
Romanian companies to invest in Egypt’s cement sector
7
Lafarge and Holcim sell Brazilian assets
8
Sale of Holcim Romania assets attracts interest
9
Russian Pikalevsky Cement boosts production
10
Dangote Group to establish coal fired power plants in Nigeria
11
Italian Buzzi Unicem executes agreement with Wietersdorfer
12
Russia approved Holcim’s acquisition
13
Brazil cement company to invest £1 billion
14
Cement prices stabilize in Egypt
15
Russian company supplies equipment to cement plant in Uzbekistan
CEMWEEK.COM acting africa aims alexandria annual arabia’s argos assets bank
board building
cemex chairman chief china
Synbra acquires German-owned Knauf Insulation
2
Illegal quarries in Peru investigated
3
Knauf opens new plant in Russia
4
Price Index of Construction Materials of Lima, Peru increases
5
U.S. Concrete posts Q2 results
6
Cementir to supply concrete for Italian project
7
Egypt imports steel and cement from Turkey
8
Landfill expansion in US for coal fly ash storage approved
9
Egyptian steel companies file anti-dumping claim
10
International exhibition of cement to be held in Egypt
11
Researchers develop new method of building materials
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Turkish researchers develop building material from waste ash
13
Construction activity in Germany drops
14
Waste generated Dubai’s construction sector increased
15
New brick factory launched in Russia
cements
coal consumption
continue costs countries debt
decline directive direc-
energy
tor directors domestic eastern egypt egyptian equipment eurocement executive expansion exports facility
factory furthermore gaza grow investment karnataka limited
growth holcim
india india’s indonesia infrastructure
imports improvement increased
lafarge
lawsuit limestone
manager manufacturer materials merger minister
ministry natural nigeria operations owned plans
plants portland power pradesh
previous
BMWEEK.COM
TOP BMWEEK STORIES 1
cargo
acquisi-
gregate
tion
activity ag-
aggregates agreement aims
approved awarded bank brick built coal commercial commission
continue
canal chief
concrete
contract contractors costs cubic decline devel-
op development director dropped dubai economic energy engineering environmental estate european executive expand expansion
government growth housing india industrial industries infrastructure insulation international investment lafarge management markets meters mining minister national output plans plants posted power price private product products facilities facility furthermore
project
public qatar quality quarry rate ready real road roads russia
recovery region residential results rise
sector
signed spending sales sand saudi states steel technology transport united units value waste work zawya 2014
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