CemWeek Magazine, Issue 24-25 (Double Issue) by CemWeek

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

ISS

DECEMBER / MARCH 2015

24-25

feature

A huge success for CBI Brazil & LatAm 2015 The 8th Cement Business & Industry conference and exhibition proved to be a fitted and needed platform

CW RESEARCH Worldwide white cement consumption expected to accelerate 2014-2020

feature CLAUDIUS PETERS: a leader in innovation in clinker cooler manufacturing

Colombia: Long darling market is becoming more complex

feature

CRH acquires Lafarge-Holcim assets The company walks towards becoming third largest cement manufacturer

News

•

Analysis

•

Market Coverage

•

Interviews

•

People Moves

CONTENTS FEATURES

5 A huge success for CBI Brazil & LatAm 2015 The 8th Cement Business & Industry conference and exhibition proved to be a fitted and needed platform 11 Worldwide white cement consumption expected to accelerate 2014-2020 17 CRH acquires Lafarge-Holcim assets and walks towards becoming third largest cement manufacturer Creating a powerful company that will control 20 percent of the global market outside China

FEA

23 Colombia: Long darling market is becoming more complex 25 CLAUDIUS PETERS: a leader in innovation in clinker cooler manufacturing

DEPARTMENTS LETTER FROM THE PUBLISHER 1 Bright(er) outlook for the global cement market

From our industry partner 51 Construction and building materials update

numbers in brief 3 Moderate growth in sight for the global cement industry

equipment 54 Equipment and notable projects

research 31 Cement Volumes 35 Cement Energy Markets people 41 People on the move 42 45 46 49

regional reports Europe, Middle East & Africa Central & South-East Asia Asia Pacific Americas

cw group meeting agenda 55 Groupâ&#x20AC;&#x2122;s upcoming events BUZZ 56 Top 15 CemWeek and BM Week stories

EDITOR’S NOTE Letter from the publisher and editor

Bright(er) outlook for the global cement market

The CemWeek Magazine is published by the CW Group LLC PO Box 5263 Greenwich, CT 06831, USA T: +1-702-866-9474 www.cwgrp.com www.cemweek.com

Besides the topics mentioned above, as you are accustomed, CemWeek Magazine provides an outlook for the global cement market through its regional news updates. These sections provide a general outlook over the global cement industry movement, such as the drop in production in China as a consequence of following a more moderate model of economic growth. In comparison to the Chinese market that is seeing a decrease in output, the African market is experiencing a period of growth, with Nigeria controlling the largest amounts of the share. When taking a look at the European continent, all signs point to a mild recovery in production and demand for countries which have previously been affected by the economic depression of 2008.

STAFFBOX

n this double issue of CemWeek Magazine we cover multiple grounds in the cement business environment. CRH winning the auction for the majority of the Lafarge-Holcim assets expected to be divested, the Cement Business & Industry Brazil 2015 event held in Sao Paolo, the 2015 update on the Global White Cement Market and the Colombia market snapshot are among the topics covered in this special edition of the magazine.

As CemWeek Magazine was a supporter of the Cement Business & Industry conference in Brazil, held in Sao Paolo on February 4 – 5, 2015, it presents the most important topics covered in the two days meeting. Held at the InterContinental Hotel in Sao Paulo, Brazil the CBI Brazil & LatAm 2015 - Brazilian and Latin American Cement and Lime Conference, hosted an audience of over 200 regional and international executives, as well as cement industry professionals. The meeting revolved around themes such as the future of cement production, the innovations occurring in the cement industry, as well as their technical and business implications, the environmental performance of the industry, and trading, shipping and logistic challenges. In this extended article we share highlights from the conference and also present the Dr. Clemente Greco Award Winners of the 2015 edition. This edition continues with a special six page feature on the big news on the cement market, with CRH entering into exclusive negotiations for the Lafarge-Holcim assets. With the completion of this acquisition, CRH added 36 million tons per year to its worldwide annual capacity, and it seems that the French and Swiss companies are on track to create a powerful company that will operate 20 percent of the global market outside China. The highly anticipated move from CRH’s part in buying assets resulting from the merger unburdened Holcim and Lafarge of assets worth US$7.3 billion, allowing the companies to put their tie-up on track to complete during the first half of 2015. As CW Research recently released the 2015 update of the Global White Cement Market & Trade Report, this edition dedicates a six page feature on the current global white cement market. While the global economy has yet to recover from the financial crisis, the prospects for white cement have improved due to the rise of emerging consuming countries like India, the resurgence of demand in the US and the consolidation of the Middle East as a major consumption hub. Another feature of the magazine sees Colombia close to becoming the fourth largest economy on the South American continent, as well as the 31st largest in the world. When addressing the cement sector, supplying for the need for demand are six principal cement producers operating in Colombia: Cementos Argos, Cemex LatAm, Holcim, Cementos Taquendama, Cementos San Marcos and Ultracem, between them having twenty production units. More information about the Colombia cement market is revealed in this special two page feature.

ROBERT MADEIRA CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

CRISTIAN DUMITRU SANTOSH SHETTYE DESIGNERS

LIVIU DINU ADVERTISING

LAURA GOLDNER RALUCA CERCEL STEFANA ABICULESEI silviu stefanescu Sushmita Rai

CONTRIBUTING WRITERS & RESEARCHERS

To subscribe or advertise, please contact us at T: +1-702-866-9474 E: sales@cwgrp.com

©2015 CemWeek LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher. Any submissions or contributions from readers shall be subject to and governed by CemWeek’s Terms and Conditions, which are available upon request. The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of its contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

CW Group

Robert Madeira

PUBLISHER AND HEAD OF RES EARCH

TO SUBSCRIBE please visit www.cemweek.com/subscribe

CW Group CW Analytics

SINCE 1908… TAKING THE BEST FROM THE PAST TO BUILD THE FUTURE www.bedeschi.com

numbers

Moderate growth in sight for the global cement industry

In our global consumption forecast for the first half of 2015 we expect a steady growth rate, with a conservative stance in our approach towards the global cement sector. Global Consumption Forecast 1H2015 Consumption (million tons)

YoY % change

4,000 8.00%

3,000 2,000

4.00%

1,000 0

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

0.00%

2019

Source: Mexico’s National Institute of Statistics and Geography, CW Research

12.00%

5,000

Our forecast for global consumption indicates a 2.9 percent increase in demand in 2015, after last year’s 2.6 percent rise. For the upcoming years, we forecast that the demand growth will not exceed the 3 percent benchmark. Worldwide, excluding China, we revise our previous forecast for 2015, downgrading it by 3.3 percent, and by 3.5 percent for 2016. For 2017 and 2018 we expect demand levels to decline by 4.1 and 4.4 percent respectively, as compared to our previous analysis.

Revision Global Ex-China Consumption Forecast & Comparison To Previous Forecast 2H2014 fc

forecast revision

ent volume 2014 (tons)

2000

-1.60%

-0.02

1000

-3.30%

-3.50% -4.10%

2012

2013

2014E

2015

2016

2017

-4.40%

2018

-0.04

-0.06

Source: Mexico’s National Institute of Statistics and Geography, CW Research

1H2015 fct

We expect stability to be the name of the game for the upcoming period, and that slight variations in consumption levels will be the norm. 3

DECEMBER - MARCH 2015

www.cemweek.com

NO MORE DRILLING AND BLASTING T1460Surface Miner SUITABLE FOR NEW GREENFIELD OR BROWNFIELD LIMESTONE

QUARRIES AND EXPANSION OF EXISTING LIMESTONE QUARRIES. TRENCOR SURFACE MINERS PROVIDE A RAPID INCREASE IN PRODUCTION WITHOUT HAVING TO INVEST IN NEW OR ADDITIONAL CRUSHER CAPACITY.

REDUCES INVESTMENT IN STAFF AND EQUIPMENT COMPARED TO CONVENTIONAL MINING WHERE DRILL & BLAST TECHNIQUES ARE PART OF THE OVERALL EXTRACTION PROCESS.

COST COMPETITIVE ALTERNATIVE FOR MINING IN DENSELY POPULATED, SECURITY AND/OR

ENVIRONMENTALLY SENSITIVE MINING AREAS.

CHAIN TRENCHERS • WHEEL TRENCHERS • SURFACE MINERS

trencor.com • +1 (419) 869-7107 • 800-324-4930

FEATURE

A huge success for CBI Brazil & LatAm 2015

Bringing together hundreds of professionals in the cement industry, the 8th Cement Business & Industry conference proved to be a fitted and needed platform for sharing perspectives, insight and innovations for the cement market.

DECEMBER - MARCH 2015

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

eld on February 4-5 at the InterContinental Hotel in Sao Paulo, Brazil the CBI Brazil & LatAm 2015 - Brazilian and Latin American Cement and Lime Conference, organized by GMI Global, hosted an audience of over 200 regional and international executives, as well as cement industry professionals. Revolving around themes such as the future of cement production, the innovations occurring in the cement industry, as well as their technical and business implications, the environmental performance of the industry, and trading, shipping and logistic challenges, the annual event has once again proved its necessity in the sector. The exhibition space brought together nineteen booths from different equipment suppliers for the cement and lime industry. Some of the most renowned manufactures from Peru, Colombia, United States, Germany and China participated in the show. The audience, comprising chief executive officers, director, managers, technicians, entrepreneurs, consultants, specialists and other professionals in the cement and lime sector, has once again had the opportunity to meet under the same context and entertain discussions on current affairs, the challenges and the perspectives of international and domestic markets, sharing their views and their input on the topics.

The conference became a medium for accessing cutting edge information, trends and novelties that will soon become the norm on the market 7

DECEMBER - MARCH 2015

Creating new networks and strengthening existing ones As per usual, the conference became a medium for accessing cutting edge information, trends and novelties that will soon become the norm on the market, as well as for sharing knowledge. Most importantly, CBI Brazil & LatAm 2015 enabled the participants to create new partnerships and new networks, and to strengthen existing ones. Jean Nogueira, New Business and Development Director at GMI Global, commented that “CBI Brazil & LatAm 2015 brought together outstanding professionals in the field of cement and lime and provided up to date information through the panel of distinguished lecturers are exhibitors.” Day 1- dedicated to analyzing the cement market During the first day of the conference, the event, dedicated to senior executives and industry professionals in the Brazilian and Latin American cement and lime business environment, took on a technical and commercial approach, lectures and talks being mostly focused on outlooks and perspectives for the market. The opening lecture was delivered by Robert Madeira, Managing Director and Head of Research, CW Advisory. In his presentation “Cement market growth perspective in Brazil and Latin America”, Mr. Madeira discussed the outlook of the cement markets and their further growth potential. Cassio Mortari, General Manager of Projects CSN Cimentos, followed with a discussion on “The Strategic Role of Engineering in Capex Cement Plant Construction”. The last session was presented by Walter Cover, President of ABRAMAT, who delivered a lecture on “Materials Industry Perspective in 2015.” The keynote speaker for the first day of the event was Edvaldo Rabelo, Executive Director of Votorantim Cement. In his lecture on “Sustainable growth in Votorantim”, Mr. Rabelo emphasized on the opportunities,

www.cemweek.com

plans, investments and goals towards the strategic expansion of the company, one of the largest in Brazil and on the entire Latin American continent. The expansion of Votorantim Cement has already surpassed the borders of Brazil, the company now focusing on new projects in strong markets such as Turkey, Morocco and Bolivia, as well as projects in emerging markets. He emphasized on one of the main assets Vorotantim Cement has, namely “a strong national and international team” that has helped greatly in making the cement manufacturer the successful domestic and international player that it is today. Though Mr. Rabelo’s speech was an optimistic and hopeful one, he warned caution in regard to the macro business scenario in Brazil, saying that Votorantim, a company which has been founded in the 1930s, is still trying to better understand it. The business and technical sessions were started by Rene Vogelaar, Managing Director of Bahamut, who gave a talk on “Brazilian Lime Industry outlook”, commenting on the challenges of the industry in the context of a low CO2 economy. During the same time, Alejandro Terrazas, Sales Manager Central and South America at Christian Pfeiffer, delivered a lecture on the optimization of mills. On the business track, talks on cement additives, delivered by Mike Sumner, Technical director at Grace Construction Products, and on the demand for sustainable cementitious materials, by PhD Prof. Rafale Pileggi, Professor and Researcher at the University of Sao Paolo, followed. On the technical track, Tome Sinzato of Scheuch-Tersel delivered a lecture on innovative filtering technology, while Luiz Felipe de Pinho, Technical Director of Dynamis, discussed about the D-Glasifier, a compact solution for CGCs with solid fuel. The series were followed by a fresh perspective on the outlook of coal and petcoke during 2015, delivered by Robert Madeira, and by an assessment of the world

www.cemweek.com

Though Mr. Rabelo’s speech was an optimistic and hopeful one, he warned caution in regard to the macro business scenario in Brazil economy in 2014 and of the prospects for 2015 by Marcos Franco, Country Manager at Pigmencem. Other interesting lectures were delivered by Mr. Clelio Tonelli (Haver & Boecker0), Chris Oesh (Pfeiffer Gebr.), Ricardo Paiva (Petrobas), Carlos Trubbianelli (Abimaq), Tom Dannemiller (KNOW), Luiz Fernando Gomes (PANalytical) and Markus Peitzmeier (BEUMER Group). The first day of the event ended with the Dr. Clemente Greco award ceremony. The German equipment manufacturer Gebr. Pfeiffer won the “Best Cement and Lime Project” award with their “Latest date from the largest operation in the VRM Australia- Port Kembla” project. The “Best Cement Innovation, Environmental or Sustainability Project Award” went to Votorantim Cement for its “Eco-efficiency through technological innovation in the production of artificial pozzolan in the PortoVelho plant (RO)” project. Ms. Silvia Vieira, Research and Development Manager at Votorantim, received the award. Day 2 innovating on the cement market The first part of the second day of the event was dedicated to topics such as sustainability and innovation in the cement and lime industry, as well as to the challenges of the sector, discussions ranging from energy

DECEMBER - MARCH 2015

FEATURE

solutions, the carbon footprint caused by producing cement, to the energy production chain of cement and nano-technology employed in making cement manufacturing more sustainable. The opening lecture was held by Columbia Energy’s Director of Business and Head of the Department of Solid Fuels, Carlos Manoel Mussato, whose main focus was solid fuel cluster and customized energy solutions. He was followed by Prof. PhD Vanderley M. John, Univesity of Sao Paulo, who engaged the audience in an interesting discussion on how cement production could be made both more environmentally and financially sustainable. During the second part of the day, the much awaited talk on cement additions and their uses and benefits on the Brazilian cement market was conducted by M.Sc. PhD Silvia Vieira, Research and Development Manager at Votorantim Cement. Using as an example the Porto Valhe plant, located in the North of the country, where Votorantim successfully manages to manufacture pozzolan and use the alterna-

tive cementitous material in manufacturing the commodity. Delivering a presentation in which technical and economic details were well balanced, Ms. Silvia Viera rightfully concluded that professionals in the industry ought to invest more capital in finding some other supplementary cementitious materials in the near future. This lecture was followed by a presentation delivered by Tiago Couto, Director of Densit do Brazil on “Leading gas solid separation with cyclones”, and by Monica Vatenim’s of ThermoFisher talk on thermo-scientific solutions for the cement industry. CBI Brazil & LatAm ended with a short presentation of the projects awarded with the Dr. Clemente Greco Award. A decisive success for CBI Beatrice Ene, Global Marketing Director, GMI, said that “the event exceeded our expectations and goals, bringing together the leading companies in the area at a quality, content orientated meeting.” Just like the Annual Cement Business & Industry Brazil & LatAm conference organized last year, a large portion of the industry was in attendance, making the event a huge success, determining the organizers of the event to believe that each of the CBIs they put together will be able to top the previous one. This year’s event was sponsored by Haver & Boecker-LatinoAmericana, VERBOR Latin America, Christian Pfeiffer, Scheuch Tersel, SABIA, GRACE Construction, Columbia Energy, BEUMER Group, Thermoteknix, PragoTec, Dynamis, Loesche-Innovative Engineering, Densit-D, Thermo Scientific, RUD, Claudius Peters, Schenck Process, Gerb. Pfeiffer Inc., PANalytical, SAXUM, DEG, FONS Tech-

DECEMBER - MARCH 2015

www.cemweek.com

nology and SIKA. CBI 2015 was supported by CemWeek, Abimaq, ABRAMAT, CCA and Visit Sao Paulo. GMI Global wishes to express its gratitude to sponsors, supporters and participants to whom this event’s success is owed, and looks forward to next year’s meeting.

Professionals in the industry ought to invest more capital in finding some other supplementary cementitious materials in the near future

Dr. Clemente Greco Award 2015 winners The Best Cement Manufacturing Project: (engineering award) winner: Latest operating data of largest VRM in Australia – Port Kembla Project Scope: Cemengal / Pfeiffer • • • •

Sea terminal grinding station Pfeiffer MVR 6000 C-6 Clinker storage hall (2 x 45kt) Additives (slag, LS & gyp.) delivered by truck to storage area ( 1 x 700t, 2 x 250t) • Steel storage silos for cement (6 x 3kt) and steel storage silo for slag (1 x 3kt). • Cement/slag dispatch by truck • 1.1 million tpy of cement and ground slag Unique requirements for this project: • Plant modules to be delivered with very high degree of pre-assembly to minimize site works • Facility to be fully automated operation with no more than 5 people!

• Energy efficient grinding system • Highly available and reliable grinding system • Added value thanks to gypsum calcining system allowing to produce tailor-made cement products • Significant reduction of thermal energy requirement • Avoidance of lumps and blockages in Silos • Quick achievement of performance data • Potential for optimization and increased throughput rates

Dr. Clemente Greco Audience Award winner:

The Best Cement Innovation, Environmental or Sustainability Project winner: Eco-efficiency through technological innovation in the production of artificial pozzolan in the Old Port plant (RO)

Conclusion

Modernization of the Phoenix plant grinding system with high efficiency separator QDK The grinding of raw materials for the production of clinker and cement clinker grinding with end additives for the production of cement is still one of the phas-

The cement plant in Old Port is designed to supply the north of the country

es of higher energy consumption in the production process of cement factories.

and, in particular hydropowers Santo Antônio and Jirau, under construction

About 65 percent of the energy used in cement plants is consumed in milling

in the heart of the Amazon. What allowed the installation of a factory where

plants. Therefore, the optimization of grinding plants related to income is very

there is shortage of limestone, was the replacement of 35 percent of clinker in

important for end users.

cement this through technology obtained in clay calcination research (artificial pozzolan) conducted since 1999.

Within the optimization of grinding circuits you have to pay special attention to the transport of material through the mill. The two-chamber mill work with two

Building materials such as cement were required to supply in large pro-

different types of grinding on a single machine. The possibility to influence the

jects such as power plants of Santo Antônio and Jirau, and the challenge of

performance of the two chambers individually is a valuable tool in relation to

Votorantim Cimentos to build a factory in the region enabled the availability.

energy consumption.

The innovations introduced in the Old Port made possible a 50 percent reduc-

The diaphragms have to meet a number of structural, wear, technology and process-

tion in CO2 emissions of 25 percent in electricity consumption, 10 percent in the

es. The new solution developed by Christian Pfeiffer for intermediate diaphragms for

consumption of thermal energy, 40 percent water, 10 percent in the generation

4th Generation ensures discharge of material separately from the central air flow. The

of 6 percent waste and pozzolanic cement in the production costs, and 10 per-

material is discharged to the load balls immediately after the intermediate diaphragm

cent increase in productivity compared to traditional production process.

and the total length of the second chamber is used for grinding.

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

Highlights from:

CW Research

white cement

accelerate

11 DECEMBER - MARCH 2015

www.cemweek.com

According to CW Researchâ&#x20AC;&#x2122;s latest study, at the end of 2014 over 100 active white cement production plants existed globally

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

lobal white cement consumption growth is expected to accelerate in the next five years, according to the recently released CW Research 2015 Global White Cement Market and Trade Report. The global economy has yet to recover from the financial crisis, the prospects for white cement have improved due to the rise of emerging consuming countries like India, the resurgence of demand in the US and the consolidation of the Middle East as a major consumption hub. Small, but important share of global cement demand Recognized for its superior esthetic and thermal properties, white cement is largely

a niche product within the global cement industry accounting for approximately 0.5 percent of total cement in 2014. The main reason is that white cement is used mostly for design-conscious projects and to enhance the cooling properties of residential buildings. However, the higher quality of the raw materials and the specialized equipment increase the price of white cement by at least two times, as compared to the ubiquitous gray cement. The global white cement industry experienced subdued growth from 2011 to 2014, as compared to the four-fold growth in gray cement consumption over the same period. The difference can be partly attributed to white cementâ&#x20AC;&#x2122;s dependence on demand

from developed markets such as Greece, Spain, the Netherlands and Italy, where consumption volumes reversed dramatically as economies collapsed. China alone accounts for over a quarter of the worldâ&#x20AC;&#x2122;s consumption, and uses almost exclusively only domestically produced white cement. While being relatively protected from external market fluctuations, China could have an impact on regional trade dynamics in a scenario with reduced local demand. In such a case, some of the local white cement capacity would have to be considered in regional industry calculations, with a potential notable impact on the global trade landscape. All in all, around 26 percent of global white cement production was located in China.

Recognized for its superior esthetic and thermal properties, white cement is largely a niche product within the global cement industry accounting for approximately 0.5 percent of total cement in 2014

13 DECEMBER - MARCH 2015

www.cemweek.com

New capacity being added According to CW Researchâ&#x20AC;&#x2122;s latest study, at the end of 2014 over 100 active white cement production plants existed globally, and the highest concentration of these facilities was in China (38 percent of total production units and 26percent of total capacity), the Mediterranean Basin, and the Middle East. The main manufacturers based on their white cement production capacity of the market are the top four global producers Aalborg (Cementir), Cemex, Lafarge and Cimsa. Other producers include major groups such as JK Cement, HeidelbergCement, Italcementi, Holcim, as well as independent producers: RAK White Cement, and Federal White Cement.. Many

CAPACITY AND PRODUCTION (2005-2014E) MILLION TONS Capacity

2005

2006

2007

2008

2009

of these global manufacturers have extensive trading networks, and to varying degrees work through centralized trading or product management teams to coordinate worldwide white cement activity. The CW Research report highlights that the trading environment is likely to change in the Middle East, Eastern Europe and the CIS region, as new capacity additions have occurred in the UAE and Uzbekistan. The Middle East remains not only as a leading white cement consumer, but also an important production hub. J.K. Cementâ&#x20AC;&#x2122;s new

GLOBAL TRADING VOLUMES AND SHARE OF GLOBAL CONSUMPTION (2005-2014E) MILLION TONS

2005

2006

2007

2008

RH: Share of consumption

2009

2010

2011

2012

2013

2014E

Source: CW Research

LH: Trade

www.cemweek.com

Production

2010

2011

2012

2013

2014E

Source: CW Research

Demand has also expanded in the Middle East, where white cement has over the years found a strong following, as economies are looking for culturally compatible, innovativeand design-friendly architecture. Growth is also supported by the reflective quality of white cement that aids in naturally cooling structures, an important characteristic in the high temperature environment of the Middle East. Consumption is also expected to grow notably in India, as a result of the sustained push to revive construction sector, albeit from a low usage intensity today.

white cement plant in Fujairah, UAE started production in March 2014.. With the capacity expansion at RAKWhite cement, the UAE now has a significant volume of additional product to put in the market, building on a sizeable production base in Saudi Arabia, Iran and other countries. As such, has the potential to transform the exiting supply-demand and trade scenario not just in the Middle East, but also in Africa and the Mediterraneanas it could affect Turkish exports into the region. Other non-China expansion projects are in progress or already functional in Uzbekistan, Tanzania, Brazil, and possibly Saudi Arabia. Worldwide trading on steady rise Globally, white cement manufacturing is not equally spread across continents to be able to serve most of the demand. As a result, global trading plays an important part in satisfying the needs of importers. Trading volumes have fluctuated but generally remained within a range of one million tons over the last nine years. In 2014, global trading was two percent higher than in 2005 , for two main reasons. Firstly, after the decline of the real estate sector in Spain new markets have been approached. Furthermore, new plants have come up in countries such as UAE, increasing capacity beyond current demand levels, which means those companies need export markets to grow.

DECEMBER - MARCH 2015

FEATURE

The worldwide top three importers of white cement were the US, Saudi Arabia and the United Kingdom, the last of which depend entirely on foreign suppliers for its white cement needs. The volume of imports has grown since 2010, with an increase in the share of world imports of white cement. The largest importer, the United States, bought about 16.6 percent of the total traded white cement in 2014.The US gap between production volume and demand for white cement was made even deeper by the increasing emphasis placed by the department of transportation on safety and aesthetics, in the construction of highways and bridges. The majority of US

Figure: GLOBAL AVERAGE WHITE CEMENT PRICES (2005 â&#x20AC;&#x201C; 2014) Estimated USD/ton FOB, Median and Range

Global Average FOB Prices

2005

2006

2007

2008

Min

2009

imports originatefrom Canada and Mexico, that latter of which is one of worldâ&#x20AC;&#x2122;s largest exporters. In 2014, the top five exporters of white cement providers were Turkey, Denmark,

2010

Max

2011

Median

2012

www.cemweek.com

2014

Spain, UAE and Mexico. The main 11 exporters accounted for 83 percent of the exports, while the 13 major importers contributed to 67 percent of the imports in 2014. Trade between these two groups represented about 43 percent of the global

In 2014, the top five exporters of white cement providers were Turkey, Denmark, Spain, UAE and Mexico

15 DECEMBER - MARCH 2015

2013

Source: CW Research

White cement is traded worldwide, but for most exporters, a large percentage of their export markets were regionally focused. Regional movement is cost-effective for producers who seek to create a customer base in areas where low transportation costs creates a business advantage.

trade volume. Some of the biggest trade flows in 2014 included Canada to the US, Egypt to Saudi Arabia, Mexico to USA, and Turkey to Israel. Globally traded white cement prices have remained relatively stable between 2010 and 2014, which highlights parity in supply and demand, as well as a more disciplined sector directed by the big international groups. Going forward This year’s issue of CW Research’s Global White Cement Market and Trade Report forecasts an increase in the demand for white cement through 2019, driven by North America, Middle East, Asia ex-China and Africa. The growth, however, will be differentiated, as consumption in China and Eastern Europe is expected to decrease while Africa’s share (driven by North Africa) is expected to increase by 2019. The outlook for the Middle East is stable. Along with the increase in consumption,

capacity will also show an upwards trend due to new investments and new facilities being set up for white cement. With global manufacturing capacity utilization rate of 70 percent in 2014, there was sufficient supply to meet demand. However, there are countries where capacity utilization at certain plants is above the 90 percent threshold and if demand expectations increase, then either new plants will need to be built or current plants will have to be upgraded. While gray cement is by far the largest cementitious segment, the white cement market is an important and distinct subsegment. Viewed largely as a niche market, it represents only half of a percent of the total cement market by volume. The interest for the use of white cement has had an upward trend in past years, and this growth is expected to continue between 2014 and 2019.

www.cemweek.com

About the report CW Research’s Global White Cement Market and Trade Report (2015 edition) is a comprehensive source of industry data covering the global white cement market as well as principal demand, supply and trade trends. The 195-page report provides a 5-year projection of global white cement consumption, production, and new capacity additionsthrough 2019. To purchase the full version please contact sales@cwgrp.com.

DECEMBER - MARCH 2015

FEATURE

CRH acquires

Lafarge-Holcim assets the company walks towards becoming

third largest cement manufacturer

17 DECEMBER - MARCH 2015

www.cemweek.com

With CRH winning the auction for the largest part of the LafargeHolcim assets, it seems that the French and Swiss companies are on the right track to creating a powerful company that will control 20 percent of the global market outside China.

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE hen Holcim and Lafarge, the two giants of the cement industry, announced their plans to merge in the spring of 2014, the sector’s responses were mixed. Some feared that the new company, representing a merger of equals, will be too large to compete with, making little, if any, room for medium and smaller manufacturers who were struggling as it were to survive on the market, while some large companies worried that the market will no longer be segmented, but monopolized as a result of the merger. Others, nonetheless, saw the merger as an opportunity to expand their businesses by taking advantage of the assets the two companies were bound to sell in order to meet competition regulations. Such a company is CRH, an Irish building materials manufacturer which choose this opportunity as the one to lead to the largest expansion the company has seen in its over 40 years of existence. Almost a year passes since the two companies announced their merging plans As part of the merger deal between the Holcim and Lafarge, the two companies

agreed to sell assets worth US$6.9 billion in revenues in order to win regulatory approval for their deal. Lafarge’s CEO, Bruno Lafont, announced at the moment of the signing of the deal that about two thirds of the divestments will come from Europe, but assets would also be sold in Canada, the United States, Brazil, Morocco India and China- all of them being markets where the two companies would cause critical issues on the market were it for the fusion to occur without shedding off some assets. None of the parts involved in the merger were naive enough to believe that the merging process would be an easy one, Lafont stating that he expects to have to address about 15 competition authorities around the world, with Canada and Morocco being considered the main concerns from an antitrust point of view. Caroline Brugere, an analyst at Credit Agricole in Paris, said in an intervention on the topic that the merger “will have to undergo heavy scrutiny from several competition authorities” in Europe as well, since both of them hold prominent positions in Europe. The merger is expected to be finalized some-

time by mid-2015, but progress up until now has been hurdled by delays in picking up assets , by bureaucratic issues and by the changing interests of other market players. If, for instance, some assets were allegedly appealing to cement makers like Heidelberg and Cemex, these companies soon denied any intention to tap on the deal, claiming that the merger is too risky market-wise.

The merger is expected to be finalized sometime by mid-2015, but progress up until now has been hurdled by delays in picking up assets

Map showing CHR’s worldwide operations Operations exisitng prior to acquisiton

New operations in countries CRH already existed

New operations after the acuisition

With an already impressing worldwide presence, as a result of the transaction CRH managed to strengthen its market position in Canada, the United Kingdom, France, Germany, Romania, Hungary and Slovakia, and to enter new markets in Brazil, Serbia and the Philippines. Source: CW Group Research

19 DECEMBER - MARCH 2015

www.cemweek.com

How CRH entered the picture The highly anticipated move from CRH’s part in buying assets resulting from the merger unburdened Holcim and Lafarge of assets worth US$7.3 billion , allowing the companies to put their tie-up on track to complete during the first half of 2015. With the completion of this acquisition, CRH added 36 million tons per year to its worldwide annual capacity, moving upwards towards the third place on the hierarchy of global cement producers, having previously occupied the sixth place. CRH emerged as the result of a merger of two leading Irish public companies, Cement Limited and Roadstone Limited, in 1970, being at the time the only producer of cement and the principal manufacturer of aggregates, asphalt and concrete products in Ireland.

Why CRH was brave enough To put it in CRH’s terms, the LafargeHolcim assets were the “right assets” at the

In terms of cement plants, CRH now manages with 24 cement plants more than before the completion of the deal, precisely 3 in North America, 9 in Western Europe, 5 in Central and Eastern Europe and 7 in emerging countries, most of the cement capacity and volumes being concentrated in Western Europe. The transaction for the Canadian assets

Distribution of newly added cement capacities and volumes according to regions cement volumes 14

cement capacity

12.3

7.4

8 6 4

10.1

9.8

2.9

4.3

3.7

2 0 North America

Western Europe

www.cemweek.com

Central and Eastern Europe

Emerging markets

DECEMBER - MARCH 2015

Source: CW Group Research

As far as the group’s organization is concerned, CRH is organized as six regionally focused business segments, three in the Americas and three in Europe, all of them being supported by a lead group center that assures local autonomy. With a strict development strategy in place, CRH has an expansion philosophy based on performance and growth that has been proven to work. The main points of its strategy are reinvesting existing assets, gaining exposure to new development opportunities and creating platforms for future growth, and employing generally mid-sized deals augmented from time to time with some larger transactions.

“right time” , the opportunity coming at a time when the company had already set up the infrastructure needed to absorb the assets from the two companies. The deal came about with a total of 685 new locations for CRH, most of them in Western Europe, namely 490, being followed by Central and Eastern European locations, by 85 new ones in North America and 10 in emerging markets.

million tons per year

Its operations span over 35 countries, serving several segments of the construction industry. The company’s core market is the North American one, being the largest company of its kind on the continent. CRH is also a regional leader in Europe, and is currently trying to consolidate its presence on the Indian and Chinese building materials markets.

The highly anticipated move from CRH’s part in buying assets resulting from the merger unburdened Holcim and Lafarge of assets worth US$7.3 billion

FEATURE

At the global level, CRH’s cement volumes have more than doubled following the acquisition, reaching 42 million tons per year after previously standing at 19 million tons per year. Such a figure now places the company as the third largest building materials player in the world.

The Lafarge-Holcim assets were the “right assets” at the “right time” Cement volume prior and following the acquisition million tons per year

CRH+new assets cement volume

CRH cement volume

Regional strategic fit The North American assets, which brought about an increase in cement volumes of 1.9

The financial crisis hit hard the Irish building materials manufacturer, causing its revenues to fall by almost EUR 3 billion since the beginning of the depression. In spite of the harsh financial environment, particularly in Europe and in North America, CRH is making moves towards a secure recovery CRH’s revenues between 2006 and 2013 CRH's revenues 25,000 20,992

20,887

18,737

17,373

18,081

18,659

18,031

15,000 10,000 5,000 0 2005

2006

2007

2008

21 DECEMBER - MARCH 2015

2009

2010

2011

2012

www.cemweek.com

2013

2014

Source: CW Research

million EUR

20,000

Source: CW Research

has made CRH the regional leader in the cement market, a similar situation occurring for the Brazilian, British, German and Slovakian markets. In Hungary, Serbia and the Philippines, the assets propelled CRH to control the second largest share of the market, while in Romania and in France it will occupy the third market position.

million tons, add 16 million tons to the company’s aggregates production, 3 million cubic meters of RMC and 1 million tons of asphalt, have made the region the most profitable one for the company, further strengthening its position. CRH assesses that the market is enjoying a good momentum in the United States, and that Canada’s stability can only generate good revenues. In Western Europe, from where CHR will draw most of its growth, the company will gain an additional 7.4 million tons of cement, 59 million tons of aggregates, 6 million cubic meters of RMC and 7 million tons of cement. The main markets are Great Britain, where CRH already had a rather solid market position, Germany, where the company intends to strengthen its reach in the southern market, and France, a market which will enable CRH to reach Belgium and the Netherlands. As far as Central and Eastern Europe is concerned, CRH will benefit from an extra 4.3 million tons in cement volumes, 4 million tons of aggregates and one million cubic meters of RMC. The European market, though still in its incipient phases of recovery, is thought to offer multiple opportunities in the infrastructure sector.

Financial prospects From a financial point of view, CRH has been seeing its average cost of debt falling, and is expecting for similar drops for the years to come. Much of this situation was due to the fact that funding acquisitions had slowed down considerably, reaching historically low level for the Irish building materials manufacturer. As such, the company created a plan which would allow it to recycle capital at higher

The company created a plan which would allow it to recycle capital at higher return

return . In 2014, the company has had a revenue of EUR 18.9 billion, a figure which would have reached EUR 24 billion had CRH acquired the Lafarge-Holcim assets sooner. In terms of EBITDA, the sum would have rose by less than EUR 1 billion, standing at EUR 2 billion. In other words, 2014 would have come with a 17 percent increase in revenues and a 26 percent one in EBITDA. Future of the transaction Though the acquisition was announced on February 2nd 2015, the EGM still has to approve the acquisition. Moreover, the Lafarge-Holcim merger is expected to close sometime in June, meaning that the completion of the transaction between CRH and the merging companies will happen in mid-2015. When the merger was made public, shares in CRH rose by as much as 7 percent, showing that investors welcomed the move, seeing it as a potentially successful

attempt on the part of the company to expand its global reach. Nevertheless, many consider that CRH has made a huge leap into the dark, paying too high of a price for the assets when the construction market is still subjected to a faltering global economy . Merrion Stockbrockers’ David Holohan pointed out that “with two-thirds of the assets in Europe, the deal is going to be dependent on benefiting from any increase in construction activity in Europe”, recommending CRH investors to sell rather than hold shares in the company. Albert Manifold, CHR’s CEO commented that, even though the company has had a rather shaky record in what expansions are concerned, this time things are different because the assets fit will with CRH’s existing operations. “This is just one that’s too good to turn down,” he said, expressing his strong belief that the United States’ economy will recover and that Europe is done with its series of deplorable economic situations.

Many consider that CRH has made a huge leap into the dark, paying too high of a price for the assets when the construction market is still subjected to a faltering global economy.

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

Colombia:

Long darling market is becoming more complex Colombia has enjoyed a decade of strong economic growth where producers enjoyed strong margins and volume growth. The outlook is however getting more complex with new entrants fragmenting the supply side, growth slowing and a watchful regulator – but the Colombian cement market still remains a favorite.

tation of the “Forth Generation Network” infrastructure program.

ith the third largest population in the Latin American country, Colombia is set to become the fourth largest economy on the South American continent, as well as the 31st largest in the world, having all the premises needed to succeed in doing so. The political context, otherwise traditionally troubled by internal conflicts, is becoming favorable for foreign investments, an aspect which is tipping the balance in favor of Colombia’s long awaited economic success.

Under this ambitious plan the government intends to carry out under the public-private partnership scheme, more than 8,000 kilometers of road will be built, the flagship item of the project being “Autopistas para la Prosepridad”, one of the largest highway developments in Latin America (1,160 kilometers), entailing a total investment of over USD7.22 billion. A total of USD100 billion have been allocated for infrastructure development up until 2021 under the 4 G project, with the construction sector being expected to grow by the largest margin since the global financial crisis.

Nominal GDP is currently estimated at USD 516.6billion (2014) and expected to grow 4.5 percent annually from 2014 to 2018 to reach USD 616.5 billion. Nonetheless, Colombia is not without its problems. Extreme poverty and significant disparities between income levels remain important issues.

Cement sector- opportunity to meet the growing demand Supplying for the need for demand are six principal (and one other small legacy producer) cement producers operating in Colombia: Cementos Argos, Cemex LatAm, Holcim, Cementos Taquendama, Cementos San Marcos and Ultracem, between them having twenty production units.

Boost in infrastructure spending The construction sector, which is currently growing at an average rate of about 10 percent per year, plays a crucial role in the present economic climb of Colombia, mostly due to the anticipated implemenReal GDP (constant national currency)

YoY% change 900,000

8.00%

4.00% 300,000

2010

2011

2012

23 DECEMBER - MARCH 2015

2013

2014

2015E

2016E

2017E

www.cemweek.com

2018E

0.00%

Source: CW Research

600,000

The largest market share is controlled by Cementos Argos, which is also the fifth largest cement manufacturer in Colombia, being followed by Cemex Lat Am and Holcim. Plans for news cement plants have already been advanced by the likes of Cemex LatAm and Cementos Argos, both of which are betting on the increase in demand to come once the mega-infrastructure projects will take off. In 2012, Cemex lanuched an IPO for some Latin American operations, including those in Colombia. The IPO was done in Colombia since the company had planned to expand its operations in the country, where both prices and market conditions were favorable, and needed the capital to do so. Moreover, Cemex hoped that the move would help it compete better with Cementos Argos. Structure of the cement market These three companies combined produce the lion’s share of cement output, while Cementos Taquendama, Cementos San Marcos and Ultracem are greenfield entrants that are trying to penetrate the market, buying market share with lower prices. Cementos Tequendama operate a 0.3 million tons per year unit in Cudinamarca, while Cementos San Marcos has a 0.2 million tons facility at Yumbo. Ultracem, a new entry on the Colombian cement market as well, has recently initiated operations at a cement grinding plant with 0.5 million tons per year capacity in Barranquilla. Both grey and white cement is produced in Colombia, with an overwhelming majority of production units being focused on the manufacturing of grey cement. Between 2005 and 2014, white cement consump-

In 2013, when prices expanded beyond the inflation rate, allegation of price fixing in Colombia’s cement industry prompted the start of investigations on the matter. The climb in prices was moderated with the growth in demand and with the increasing competition on the market in the following year, making us to confident that the prices of Colombia cement will further align with those on the rest of the continent. CW Research estimates that consumption and production volumes will grow in the coming years. With new capacity coming on line, the utilization rate is expected to be under pressure and remain well below 80 percent through 2018.

Production capacity (2014 mm tons)

Market share

Cementos Argos

9.6

53%

Cemex LatAm

5.2

29%

Holcim

2.1

12%

Cementos Tequendama

0.3

Cementos San Marcos

0.2

Ultracem

0.5

3% Source: CW Research

Location of Colombia’s cement production units New plant

Existing plant

Argos Colombia (Baranquilla) Argos Colombia (Sabanagrande) Argos Colombia (Cartegana) Argos Colombia (Tolcemento) Cemex Colombia (Los Patios) Cemex Colombia (Clemencia) Argos Colombia (Satander) Cemex Colombia (Bucaramanga) Holcim Colombia (Nobsa) Argos Colombia (Boyaca)

Tequendama Colombia (Suesca) Cemex Colombia (Carcalito)

Argos Colombia (Belencito) Cemex Colombia

Cemex Colombia (Santa Rosa) Argos Colombia (PuertoNare)

Argos Colombia (Montebello)

Source: CW Research

Stabilizing prices When there were only three main cement producers on the market, prices increased broadly. This trend reversed as new manufacturers, upsetting some of the long-term supply-demand balance. On the other hand, when demand had been sluggish in the country, with infrastructure and housing projects being put on hold out of lack of funds, manufacturers compensated somewhat with higher prices.. In 2014, however, prices started stagnating and slowly decline. On the Colombian Caribbean Coast, where demand spiked during 2014, a 50 kilograms slidto cost with about 30 percent less.

Cement producers n Colombia

Argos Colombia (Sonson)

Argos Colombia (Yumbo)

San Macros Colombia (Yumbo)

Real GDP (constant national currency) YoY % change 20

20.00%

10.00%

2010

2011

2012

2013

www.cemweek.com

2014E

2015E

2016E

2017E

0.00%

DECEMBER - MARCH 2015

Source: CW Research

The Colombian cement market is still largely a bagged one where the retail segment makes up for the majority of demand. In major urban centers there are developed ready-mix concrete operations selling in bulk. For the latter there are three main groups of cement buyers: the government, large construction companies bidding for important building projects and household owners. The first two types of buyers represent about 40 percent of cement demand, while the remaining 60 percent of cement is being bought for self-construction.

Demand outlook for the Colombian cement sector CW Research concludes “Colombia is poised to be the next Latin American growth story, ripe with opportunity for foreign investment. Heavy industries, particularly infrastructure, will be the big winners. Much like a house, the foundation for the new Colombia will be built upon the cement industry. The bulk of infrastructure spending will be directed toward transportation (primarily roads) and housing, whose key input product, is cement.”

million tons

tion increased by 8.3 percent, but the Nare cement plant, owned by Cementos Argos, is the only one producing white cement in the country and switching between white and gray production. Even though the country has exported in the past, its more recently become a white cement importer.

FEATURE

a leader in innovation in clinker cooler manufacturing

www.claudiuspeters.com

25 DECEMBER - MARCH 2015

www.cemweek.com

laudius Peters, worldwide leader manufacturer of equipment for the cement sector, is a brand name that has been synonymous of innovation and efficiency in the industry.

Cement granules x100 magnification. ÂŠ Claudius Peters. www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

laudius Peters, one of the world’s most respected engineering houses in the world, has more than 100 years’ experience in setting the benchmarks for the design, manufacturing and commissioning of materials handling and processing systems for the gypsum, cement, coal, alumina and bulk-handling industries. The foundation of the company goes back to 1906, handling the European main dealership for Fuller mills and Fuller pumps, at first on a commission basis, later under a licensing agreement. The product range is soon enlarged by the addition of FullerKinyon conveyor systems and by additional licensing agreements with Bailey Meters of Cleveland/Ohio and Detrick of Chicago. The company’s first products were a coal pulverizing mill and a range of pumps. These were soon joined by conveyor systems for bulk materials (coal, limestone meal, cement, gypsum, lime, soda, magnesite etc.). The product range was expanded over the years to include installations for a number of other manufacturing operations and manufacture of components like stringers for the aircraft industry. Claudius Peters clinker coolers Claudius Peter’s clinker cooler has enjoyed wide spread popularity since it has entered the market. The company started supplying coolers for the cement

ETA Hydraulics

The product range was expanded over the years to include installations for a number of other manufacturing operations and manufacture of components like stringers for the aircraft industry. industry in 1950. By the early 1990’s it was building the then largest models of cooler with a daily throughput of 10,000 tons of clinker.

Clinker Coolers Units sold 90 80 70 60 50 40 30 20 10 0 Through 1979

1980-1989

27 DECEMBER - MARCH 2015

1990-1999

2000-2010

www.cemweek.com

2011 and after

On the span of little over 60 years, more than 600 coolers have been commissioned around the world. The debut was marked with the Claudius Peters grate cooler, which came to meet some noteworthy improvements over time. In 1975, the cooler was enhanced with a hydraulic grate cooler, whereas four years later the roller crusher was added to the piece of

Clinker Coolers Units sold per region

America Africa Middle East Asia ex-China-HK-Taiwan China-Hong Kong-Taiwan Europe 0

equipment, both of these features being present in the most recent versions of the cooler. More so, Claudius Peters made an effort to achieve optimum clinker distribution across the cooler width through adding a cross motion grate in 2000. One year later, a new feature was added to the equipment, its purpose being of preventing fine material from falling through the grate, resulting in a minimum construction height.

Reducing costs and improving efficiency Most outstandingly, if the first Claudius Peters cooler had a capacity of 500 tons per day, the newest model, the ETA Clinker Cooler, has a capacity of up to 13,000 tons per day. The company understood that adapting its products is essential in the fast moving industry of manufacturing cement, realizing that their pieces of equipment and the innovations they bring on the market play a significant part in aiding cement plants to increase their capacity and reduce operational costs.

On the span of little over 60 years, more than 600 coolers have been commissioned around the world. ETA Roller Crusher

www.cemweek.com

DECEMBER - MARCH 2015

FEATURE

Optimizing fuel utilization was a focus point in creating the ETA Clinker Cooler The latest cooler, named after the ancient Greek symbol for efficiency, incorporates the evolution of clinker cooling in one complete system. Optimizing fuel utilization was a focus point in creating the ETA Clinker Cooler. In other words, the goal was to create a cooler that would increase heat recuperation while reducing cost fuels, enabling the piece of equipment to be both fitter to meet environmental standards and more cost friendly.

ETA main test Features that have stood the test of time The hydraulic driver added to the Claudius Peters clinker coolers in the 70s remains an important feature in the ETA model. Now called the Claudius Peters Full Stroke Hydraulic Cylinder Drive, the piece of equipment is improved as to control and monitor all actions of the lane/cylinder motion, while continuously measuring the position of the cylinders. Its main purpose is to ensure the stroke lengths required for each individual lane. The hydraulic cylinder drive benefits from an extremely compact design, complete autogenously wear protection and controlled air distribution www.cemweek.com

The roller crusher, a feature that innovated the cement equipment industry, remains an alternative to the conventional hammer crusher that has been a standard tool for ridding of oversized clinker. The roller crusher, which is integrated in the ETA model, reduces the rotational speed of the crusher, leading to minimal wear and reduced maintenance costs. Among the assets of the roller crusher, one would mention its long crushing life, minimal dust generation, low power consumption, ease of maintenance, lack of refractory damage and its ability to crush large lumps without kiln stoppage.

The ETA Clinker Cooler has proven that a correctly chosen piece of equipment can increase productivity and minimize operational costs

Overall, the ETA Clinker Coolerâ&#x20AC;&#x2122;s design ensures minimal operating costs and a low overall investment costs, be it that we are talking about a new plan or a conversion. Its adaptability to any rotary kiln system on the market shows that the engineers at Claudius Peters have completed the task of creating a higher availability and customizable piece of equipment. The ETA Clinker Cooler can be found in cement plants in China, the United States, Indonesia, India, Vietnam, Syria, Saudi Arabia, Turkey, Albania, Azerbaijan, Russia, Spain, France, Switzerland, Italy, Sudan, Angola, Nigeria, Sudan, Ethiopia and Tanzania. Being highly reliable and benefiting from the brand name Claudius Peters, the ETA Clinker Cooler has proven that a correctly chosen piece of equipment can increase

productivity and minimize operational costs, regardless of the cement plant where it is installed. Claudius Peters leadership Technical experience, coupled with unremitting product development in the companyâ&#x20AC;&#x2122;s Technical Center, continuous to be the main aspect that recommends the German company as a leading player in what cement technology is concerned. The group manufactures an extensive array of products for the industry, starting from hydraulic drivers and roller crushers for clinker coolers, to expansion chambers for silos and reduced power consumption pneumatic conveying systems. Such products have assured that Claudius Peters is a name synonymous with innovation and leadership in the industry of manufacturing cement technology. ETA moving Floor

www.cemweek.com

DECEMBER - MARCH 2015

CEMENT MARKETS

CW Research

CEMENT VOLUMES In Saudi Arabia consumption rose by 29.7 percent in January 2015 as compared to the same month of the previous year (which was a weak month), reaching 5 million tons. Production increased by 15.4 percent, up to 5.5 million tons per year. Growth was driven by new construction and infrastructure projects sustained by the Emirate. The construction sector is set to grow by an estimated 10 percent during 2015 in Saudi Arabia, as the budget for the year is in line with the country’s usual solid strong spending in this direction. Total expenditures of US$16.8 billion have been allocated for setting up nearly 2,000 kilometers of roads, airport upgrades, railways and ports.

The construction sector is set to grow by an estimated 10 percent during 2015 in Saudi Arabia, the budget for the year maintaining the country’s usual strong spending in this direction. Total expenditures of US$16.8 billion have been allocated

Though demand did not increase significantly in Vietnam, the country’s cement production experienced the highest growth in the world during the first month of the year, namely 23.8 percent. Vietnam is well on its way to being fully independent from cement imports, investing into production growth, most of it bound for the export markets. Spain’s cement sector has been showing signs of recovery after the difficult period it experienced after the financial crisis. As such, cement consumption grew by 9 percent after having dropped by 12 percent in December 2014. Pakistani cement consumption levels have climbed as well, namely by 7.6 per-

January 2015 Year-on-Year Cement Demand Growth (%) 30% 20%

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. 31 DECEMBER - MARCH 2015

www.cemweek.com

China

Argentina

Japan

Russia

Colombia

Saudi Arabia

-10%

Vietnam

Source: CW Research

10%

CW Research CEMENT MARKETS

cent. The growth was influenced by both better macro-economic conditions and by the higher political stability of the country. France’s cement consumption levels reached 1.2 million ton in January 2015, by 1 percent more than in the previous month and 15 percent below last year’s amount for the same month, a telling sign of the still rough economic conditions in the country . Seasonal circumstances have also come about with a drop in construction activity, yet the figures are worrisome for the country’s cement industry. Similar contractions have been experienced in Germany as well, with cement demand dropping by 14.5 percent when compared to January 2014. One million tons of cement was consumed during the month, 27 percent less than in December 2014. As for production, Russia saw a jump of 5.4 percent compared to the same period of the previous year, yet contractions came about in Japan and Argentina - the two countries now facing periods of economic depression. China saw a decrease in cement production at its turn, namely of 0.6 percent, mostly because of the new economic policy of the country to adopt a more paced growth model.

Spain’s cement sector has been showing signs of recovery after the difficult period it has experienced following the financial crisis.

Cement production Year-on-Year Production Growth Rate (%)

40.0%

Source: CW Research Source: CW Research

Germany

France

Indonesia

Peru

Pakistan

-20.0%

Spain

0.0%

Saudi Arabia

20.0%

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. www.cemweek.com

DECEMBER - MARCH 2015

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.

WWW.CEMWEEK.COM/SUBSCRIBE

Cement Production MoM (%)

Cement Consumption MoM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Cement Exports (million tons)

Cement Imports (million tons)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Cement Exports MoM (%)

Cement Imports MoM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates

MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. 33 DECEMBER - MARCH 2015

www.cemweek.com

CEMENT ENERGY MARKETS

CW Research

CEMENT ENERGY MARKETS Coal Market Update Coal trading volumes remain resilient Global coal trading volumes remained almost unchanged in December gaining only 1 percent versus November, with significant recovery in South Africa, Australia and Colombia but declines in Indonesia, the US and Russia. In South Africa, coal deliveries increased 23 percent from November to reach 7.4 million tons, up 13 percent when compared to December 2013. Shipments out of South Africa’s Richards Bay terminal set a record year in 2014. The terminal delivered 71 million tons, 1 percent over the 70 million achieved in 2013. The main destinations for South African coal remains Western Europe and Southeastern Asia. After dropping to an 8-month low in November 2014, Colombian coal deliveries recovered in December and grew 64 percent to 8.4 million tons. Total exported during 2014 amounted 84 million tons, 12.6 million more than 2013. Cerrejon Coal, owned by Australia’s BHP Billiton and Switzerland’s Glencore Xstrata, reported 34 million in exports. Cerrejon operates private terminal Puerto Bolivar in La Guajira, whose went through an expansion phase in 2014, adding a second pier with two direct loaders capable of loading 6,000 tons of coal per hour.Puerto Bolívar is the largest coal terminal in Latin America and one of the largest in the world. Australia’s deliveries rose from 2013 to more than 200 million tons in 2014, thanks to qa pick up in China’s import volumes. However, local producers Glencore, Rio Tinto and Vale already announced a cut in exports for 2015 in order to cope with softer demand and possible negative effect from China’s new coal regulations.

In South Africa, coal deliveries increased 23 percent from November to reach 7.4 million tons, up 13 percent when compared to December 2013.

The US has felt the impact of the oversupply and plunging coal prices. In overall West Virginia, the nation’s largest coal exporter, shipments drop from $7.4 billion in 2012 to $3.1 billion in 2014, a decrease of 58 percent. In Indonesia, 2014 coal exports have remained relatively flat even though some small producers have been forced to close down due to low prices. Coal Global Trading (million tons) Indonesia

120

Australia

Russia

South Africa

Colombia

Rest

Dec-14

Nov-14

Oct-14

Sep-14

Jul-14

Aug-14

Jun-14

Apr-14

May-14

Feb-14

Mar-14

Jan-14

Dec-13

Oct-13

Nov-13

Sep-13

Aug-13

Jul-13

Jun-13

Apr-13

May-13

Mar-13

Feb-13

Dec-12

Jan-13

Oct-12

Nov-12

Sep-12

Jul-12

Aug-12

Jun-12

May-12

Apr-12

Feb-12

Mar-12

Dec-11

Jan-12

Source: customs data

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. www.cemweek.com

DECEMBER - MARCH 2015

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update Coal The average price for January closed at US$67 per ton, losing almost one dollar and down 20 percent from January 2013 as thermal coal markets remain broadsided by structural and temporal supply-demand forces. European thermal coal ARA import prices still under pressure. Mild winter weather across all Europe in January and 28-year low shipping rates challenge coal trading markets. In China, a glut of liquefied natural gas (LNG) could affect demand for coal and drive down prices. Local coal firms have agreed to cut contract prices with power plant customers for the first quarter of 2015, but prices are still well above global levels as regulators work to prop up a sector hit by overcapacity and weak demand. As coal dropped, China enacted a raft of policies from quality restrictions to import reductions to protect domestic suppliers.

The average price for January closed at US$67 per ton, losing almost one dollar and down 20 percent from January 2013 as thermal coal markets remain broadsided by structural and temporal supplydemand forces .

Britainâ&#x20AC;&#x2122;s Prime Minister David Cameron, Deputy Prime Minister Nick Clegg and the leader of the opposition Ed Miliband have pledged to end power generation from coal plants that do not use emissions-capturing technology, and to push for a global climate deal. The government has committed one billion pounds to carry out engineering studies for two carbon capture and storage (CCS) projects which capture carbon emissions generated during power production and store them underground. The low Australian dollar and the drop in the price of diesel will help Australian coal miners capture market share from other producers. However, the devaluing of the Russian ruble, along with the oil price slump, will also assist Indonesian coal producers.

Steam Coal Fob Average Prices (Us$/Ton) US exported

Colombia exported

Australia Newcastle

South Africa Richards Bay

130 110 90

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. 35 DECEMBER - MARCH 2015

www.cemweek.com

Jan-15

Nov-14

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

Sources: EIA, Colombia Ministry of Mines and Energy, IMF, Indonesia Ministry of Energy and Mineral Resouces

150

CEMENT ENERGY MARKETS

CW Research

Consensus among some industry players is that thermal coal prices will not weaken further this year and prices will start to recover in 2016. US Petcoke Export Price (US$/ton) Monthly price 100 80 60

Petcoke Indian cement makers are showing increased buying interest for imported fuel-grade petcoke amid falling dry bulk freight rates, which had made landed cost economically viable. It has been reported that several cement companies are already consuming imported petcoke and gradually other industries like power generators might also start using it as newer boilers are designed to burn fuel of various grades. Fluor Corporation has started construction activities on a new delayed coker unit for ExxonMobil at its Antwerp refinery in Belgium, which will expand the refinery’s production capabilities. Motiva Enterprises’s coking unit at its 600,250 bpd Port Arthur, Texas, refinery has been shut down for maintenance work and is expected to be out of production for a total of four weeks. The company is repairing piping on a 95,000 bpd coking, where production has been reduced due to planned work on other units. In addition, Husky Energy Inc. had temporarily shut down operations at its 160,000-b/d Lima, Ohio, refinery for a week following an explosion and ensuing fire that hit one of the plant’s processing units.

J-15

D-14

N-14

O-14

S-14

A-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

M-13

A-13

M-13

F-13

J-13

Source: customs data

Indian cement makers are showing increased buying interest for imported fuel-grade petcoke amid falling dry bulk freight rates

US and Venezuelan spot petcoke prices moved very little this week as sellers held on while buyers waited to see how falling coal prices and supply shifts would affect price. Petcoke buyers are tentative to lock into spot purchases while thermal coal prices continue to fall.

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. www.cemweek.com

DECEMBER - MARCH 2015

CEMENT ENERGY MARKETS

CW Research

Natural Gas The Henry Hub spot price traded at $2.99 per MMBtu in January, decreasing 14 percent month on month as forecasts showed a mix of mild and colder-than-normal weather that would limit demand for the heating fuel. According to EIA, supplies by the end of this winter may be 9 billion cubic feet above the five-year average for the time of year.

Despite above-normal temperatures to start the winter, concerns are rising about the natural gas supply in the UK .

Prices in Europe decreased 5.9 percent month on month, reaching to $9.25 per MMBtu. Despite above-normal temperatures to start the winter, concerns are rising about the natural gas supply in the UK. The countries of the European Union had 5.6 billion cubic meters of natural gas in storage, down 26 percent since October. Gazprom is going to use the already constructed South Stream infrastructure in Russia to build a new gas pipeline across the Black Sea to Turkey. Croatia and Poland plan to link their liquefied natural gas terminals by 2020 to boost energy security and cut dependence on Russian supplies of the fuel. The US is expected to start exports of LNG at the end of 2015. The first shipments will be delivered to India and Japan, but other markets are likely to emerge in the near future. With new major players emerging in the global energy market, the world production capacity of LNG can at least double by 2020. The construction of 20 LNG plants with total capacity of up to 200 million tons per year has been claimed in North America. Ten plants (six in the US and four in Canada) have already received export licenses for 100 million tons per year.

Natural Gas Prices (US$/MMBtu) US

Europe

16 12

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. 37 DECEMBER - MARCH 2015

www.cemweek.com

Jan-15

May-14

Sep-13

Jan-13

May-12

Sep-11

Jan-11

May-10

Sep-09

Jan-09

May-08

Sep-07

Jan-07

May-06

Sep-05

Jan-05

May-04

Sep-03

Jan-03

May-02

Sep-01

Jan-01

May-00

Sep-99

Jan-99

Source: EIA, World Bank

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.

WWW.CEMWEEK.COM/SUBSCRIBE

Coal Exports MoM (%) US petcoke exports prices MoM (%)

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

Natural Gas Prices (US$/mmBtu)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

Natural Gas prices MoM (%)

Coal export prices MoM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates

LM: latest month Jan 2015 except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

To learn more, please contact the CW Research team at sales@cwgrp.com or +1-702-430-1748. www.cemweek.com

DECEMBER - MARCH 2015

MARKET DATA SNAPSHOT

CW Research

CEMENT RESEARCH INTERVIEW

CW Research

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 PRODUCT DESCRIPTION

2015

UPDATE

WHO IS THIS REPORT FOR?

The Global White Cement Market and Trade Report (GCWMR) examines the worldwide white cement industry, analyzing the current and future state of the market segments, industry trends, global movement of product as well as major suppliers and consumer nations. 5-year projection of global white cement consumption,

Business development professionals Industry and trading analysts Financial investment institutions Other executives and decisionmakers involved

production and net trade through 2019 Worldwide white cement plant production facilities

PRICING

Extensive quantitative information on consumption,

Individual (one license)

production, local prices, regional benchmark trade prices,

Electronic (PDF)

trading facilities and trade-flows

Group (multi-user license)

1 copy

US$ 3,650 5 copies to 1 location

Electronic (PDF)

SELECTED VIEWS

Enterprise (multi-user license)

US$ 7,300 10 copies to 3 locations

Electronic (PDF)

US$ 18,250

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.

CEMENT • CHEMICALS • ENERGY • STEEL • METALS & MINING • PORTS COMMUNICATIONS • FINANCIAL SERVICES • AGRICULTURE

39 DECEMBER - MARCH 2015

www.cemweek.com

GREENWICH (US) • HOUSTON (US) • MUMBAI (IN) • BUCHAREST (RO) • SAO PAULO (BR)

research.cwgrp.com •

CW Group

inquiries@cwgrp.com • +1-702-866-9474 PO Box 5263 • Greenwich, CT 06831 • USA

NEWS

“We are very pleased to sign this joint venture with Pattern Development. This is a mutually beneficial deal, that will help us leverage the use of our knowledge to continue our industry-leading expertise in the use of clean energy and alternative fuels,” said Luis Farias, Cemex Vice-president of Energy and now head of Cemex Energia. CEMEX- will not consolidate any projects from this joint venture and any debt incurred to fund such projects will have no recourse to Cemex. The company expects to contribute approximately US$30 million into Cemex Energia over the next 5 years.

Siwertell closes deal with Medcem Global in Turkey Siwertell, part of Cargotec, recently secured a road-mobile unloader order from Medcem Global Pazarlama AS, in Turkey. This is the third order of its kind received from the operator in eighteen months. The order was booked into Cargotec’s fourth quarter 2014 order intake. In common with the two previous deliveries, the new 10 000 S, trailer-based, dieselpowered Siwertell unloader will be used to discharge cement at a rated capacity of 300t/h. It will be fitted with a dust filter and double bellows system for uninterrupted loading of trucks or rail wagons. Originally developed for cement, the roadmobile Siwertell unloader is one of the most reliable, eco-friendly and sustainable systems available for cement operations available. So far, more than 110 units have been delivered worldwide.

cargotec.com

Cemex Energia has signed of a joint venture with Pattern development, a partner backed by Riverstone, with strong and proven development expertise that will help to put together a pipeline of renewable energy projects in Mexico and share the development costs, with the objective of creating significant development value. Cemex Energía will have the option to take minority equity stakes in the energy projects developed by the joint venture.

cemex.com

Cemex creates “Cemex- Energia” Cemex announced the creation of Cemex Energia, an energy division seeking to develop a portfolio of power projects in Mexico. Cemex Energia envisions advancing development opportunities with no significant capital commitments and expects to build a portfolio that aims to supply about 3% to 5% of Mexico´s electricity needs over the next 5 years.

www.cemweek.com

CEMEX Recognized by CDP as Leader for Climate Change Transparency For the third consecutive year, CEMEX has been recognized as a leader for the depth and quality of climate change data it has disclosed to investors and the global marketplace through CDP. CEMEX’s status is awarded with a position on the Latin America Climate Disclosure Leadership Index (CDLI), released in the “CDP Latin America 80 Climate Change Report 2014. CDP, formerly Carbon Disclosure Project, is an international, not-for-profit organization providing the only global system for companies and cities to measure, disclose, manage and share vital environmental information. The CDP has as its main objective to promote transparency and improve the rate of action on climate change.CEMEX is aware of the importance that climate change has on the economy and on global well-being. For this reason CEMEX is fully committed to applying its resources and leading edge technologies to minimize the environmental impact of its operations. Receiving this recognition for a third consecutive year is an indicator of CEMEX’s fully integrated strategy and the maturity of the initiatives undertaken by the company to address climate change. In addition, CEMEX has implemented a methodology for measuring the carbon footprint of its main businesses: cement, aggregates and ready-mix concrete, the results of which are communicated to various stakeholders. Each year, CEMEX audits and reports on carbon emissions, in accordance with the Greenhouse Gases Protocol of the WBCSD and World Resources Institute.

DECEMBER - MARCH 2015

people

Ash Grove Cement hires new CFO Ash Grove Cement, a cement manufacturer headquartered at Overland Park, Kansas, announced that it will name David Meyer as its new Chief of Financial Operations, replacing Randy Vance, who was promoted as president and COO in August 2014. David Meyer will also serve as the company’s vice president. The company’s president said that Meyer brings 17 years of corporate finance leadership in strategic planning and capital markets, as well as experience in financial planning and reporting within a large corporate setting. Meyer previously served as CFO of Dairy Farmers of America, a $13 billion dairy cooperative. New board of directors for South Africa’s PPC The shareholders of PPC have elected six new members to the company’s board during the annual general meeting of the company. From a reduced list of 10 nominees, shareholders elected former Reserve Bank governor Tito Mboweni, former PPC finance director Peter Nelson, Nicky Goldin, Timothy Leaf-Wright, former Afrisam CEO Charles Naude and Daniel Ufitikirezi. During this meeting, the shareholders also approved the appointment of Darryll Cas41 DECEMBER - MARCH 2015

tle as the Chief Executive Officer. Semen Indonesia appoints new president director The company has officially appointed Suparni as the president director of the statecontrolled company. The director’s main responsibility will be guiding the company through slowing revenue growth and stalled overseas expansions. Surparni plans to continue expanding the company’s business overseas while keeping growth in the domestic market first priority. Previously, Surpani served as production and research director at Semen Indonesia before becoming interim chief. Surpani will replace Dwi Soetjipto, who has now taken over the state-owned oil and gas giant PT Pertamina. New CEO at Dangote The Nigerian cement manufacturers has appointed Onne van der Weijde as Chief Executive Officer. According to outgoing CEO, Devakumar Edwin, the management change may help pave the way for a London listing of Dangote Cement. More so, the transition comes at a time when some of the large capital expenditure projects at Dangote Industries have started to materialize. www.cemweek.com

Kenya’s East African Portland Cement Board adds two new directors

he Kenyan company has added former Capital Markets Authority chairman Kung’u Gatabaki as one of the two new directors nominated by the global conglomerate Lafarge, replacing the former Kenya Airways CEO Titus Naikuni who has held the position for the last eight years. Prof. Saroneole Sena, the chairman of Eldoret University Council, has also joined East African Portland Cement’s board. The two new members of the board will help reverse EASPCC’s financial situation, which has been characterized mainly be losses.

REGIONAL REPORT:

exports increased by 31.6 percent, reaching 9.59 million tons, with almost 2.5 million tons more than in 2013.

EUROPE CHR buys Assets from Holcim-Lafarge The Irish cement manufacturer agreed to buyUS$7.3 billion of cement assets from Holcim and Lafarge, CHR seeing this opportunity as a chance to grab a chunk of the market share. The shares comprise operations in Europe, Canada, Brazil and the Philippines, having generated about 5.2 billion euros in revenue and 722 million euros in earning last year. The Dublin-based building-materials supplier saw its stocks rise most of the year, having now the possibility to make the largest acquisition it has made thus far. Chief Executive Officer Albert Manifold said in an interview that though the assets are a great fit for the company, not all of them will remain long term in the CHR group. The Holcim-Lafarge merger is under some pressure as of lately, being investigated for insider trading by Switzerland’s Public Ministry of the Confederation. According to those in charge of the investigation, information about the merger has been allegedly disclosed in an unauthorized manner. POLAND Cement sales rose in 2014 Polish cement manufacturers’ sales rose by 6.6 percent in 2014, reaching 15.59 million tons of cement. Though the figure has increased in 2013 and 2012, cement sales in the country are still far behind the record figures posted in 2011, namely 18.9 million tons. For 2015, the sector expects further increase in cement sales, estimating that they will grow by 5 percent and reach more

than 16 million tons. Much of the sector’s hopes are rooted in the governmental announced project to build over 800 kilometers of road by 2020. No more investments in expanding capacities With Polish cement capacity currently standing at 24 million tons per year, and demand at 25 million tons, the industry players have decided not to further invest in plant expansions. Jan Deja, Director of the Association of Cement Producers, announced that, over the years, the Polish cement industry has been completely modernized and is in close ranks with European leaders, meaning that further investments are not needed for the moment. Cement demand in 2015 is expected to exceed 16 million tons. Italian company expects boosted demand Italy’s Cementir expects 2015 to come with boosted cement sales and with better financial margins. For 2014, the company recorded a gross operating profit of EUR 192.4 million, with 13.4 percent more than in 2013. Overall, the company ended the year with operating results above the objectives set for the year, having also managed to decrease its net financial debt. For 2015, the company expects to reach an operating margin of EUR 190 million and a lowered debt. Revenue growth in Spain and Turkey In 2014, Spanish cement production rose by 5.4 percent over 2013 volumes, yet demand only grew by 0.4 percent, amounting to 10.79 million tons. On the other hand, www.cemweek.com

Cement companies in Turkey have posted both revenue growth and higher profitability in 2014, the sector still enjoying high demand in the housing sector. Though cement demand is expected to further increase, rising input costs are being problematic for the industry. RUSSIA AND CIS Expansion plans in Russia One cement plant will undergo modernization, while others are opening for the first time in Russia’s cement sector. The modernization plan has been drafted for the cement plant in Savinskoye with the aim of increasing its capacity. The project is part of a modernization program by Eurocement, which has signed contracts with 9 major Chinese manufacturers of equipment for the cement industry for the construction of new plants on the sites of existing enterprises. The Savinskoye plant’s capacity will be increased to 3 million tons of cement per year, representing an increase of 3.5 times. The modernization process also involves improving energy efficiency by transferring production from coal to gas, a measure which will reduce the plant’s impact on the environment by 2.5 times. New plants will open in Russia’s Tyumen region, including a facility for the production of dry concrete mixtures and additives, and a unit for the production of ceramic bricks. Moreover, a production unit for energy-efficient thermal insulation materials will start operations this year, the investment in the project totaling more than 5 billion rubles. Tajikistan and Azerbaijan to fully meet cement demand by 2018 It is expected that by the end of 2015, Tajikistan will start manufacturing cement at DECEMBER - MARCH 2015

EUROPE, RUSSIA AND BALTIC REGION

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

three new ventures. Industrial enterprises are currently being set up in the Yavankom and BoboszhonGafurovskom areas of the country. The combined cement capacity of the two plants will be of 1.6 million tons of cement per year. At the moment, there are 10 cement plants in Tajikistan, but not all of them are operating at full capacity, not to mention that several are in need of major upgrades. With the new plants to be put into operation, the country is expected to fully meet cement demand by 2018. In Azerbaijan’s case, such expectations are thought to materialize sooner, namely by 2015-2016. At the moment, the country has a cement dement of 4.4 million tons, with production reaching 3 million tons. On the other hand, the country’s production capacity is 5.2 million tons. Turkmenistan and Uzbekistan manufacturers to boost cement production Turkmenistan plans to boost cement the national cement production in able to meet the requirements of the infrastructure projects it has line up. There are high hopes for this endeavor since the country has created a beneficial industrial infrastructure for the production of cement. The three cement plants operating in the country, most of them modernized, have been growing since their establishment, and they are thought to be the drivers of increased volumes. In Uzbekistan, Almalyk Mining and Metallurgical Plant (AMMC) has announced its 43 DECEMBER - MARCH 2015

intention to expand production at its Jizzakh plant in 2015 and bring it to 1 million tons of cement per year. The estimated cost of the project is about US$120.3 million. MIDDLE EAST Saudi Arabian cement sector to grow Though cement sales during the first half of 2013 declined to 25 million tons, actors in the industry are confident that cement sales will reach 35 million tons for the first six months of this year. Much of the growth is thought to come from exporting the commodity, prompting cement makers to meet with officials of the Ministry of Commerce and Industry to re-discuss the possibility of targeting new export destination. The Egyptian market, Iraqi, Yemeni, Sudanese, Ethiopian and Eritrean ones are thought to be the most viable destinations for Saudi cement. Saudi companies share end of the year results Saudi Arabian cement manufacturers have announced disappointing financial results for the quarter ended December 31, 2014.

fourth quarter of the year, with earning amounting to SAR 60 million. Over the course of 2014, profits dropped from the SAR 234.6 million recorded in 2013, mainly because of the decline in profits caused by lower sales of cement and high sales of clinker but for large input costs. Al-Jouf Cement is one of the few to post profit increase and an impressive growth. The company’s net profit was up 160.49 percent from the same period in 2014, for the entire year, net sales grew 11.69 percent compared to 2013 levels. Saudi Cement recorded growth of 8.9 percent in net profits for 2014, and a 16 percent increase during the quarter when compared to the same period in the previous year. Improving cement demand has been found as the reason why Saudi Cement managed to improve its performance during the year 2014. New production line at Yemen plant The Governor of Al Hudaydah, Yemen, Ahmed Hassan Alheji, agreed on the installation of a new production line at the Bajil cement plant in Yemen, stressing on the economic importance the cement factory has at the national level. The new production line will have a daily output of 850 tons of Portland cement, but the next stage of implementation requires more effort into the modernization of the entire plant. The capacity goal for the Bahil plant is of 1.1 million tons per year, a capacity that is reachable with an investment of US$113 million. AFRICA

Umm Al-Qura Cement recorded losses of SAR 28 million at the end of 2014. Representatives of the company quoted the fact that the company is in pre-operating phase as the reason why the end of the year came with unrealized losses.

EGYPT High cement prices for cement The construction sector in Egypt is being heavily challenged by the rising prices of cement, a large number of projects now being threatened by the continuing increase of the cost of cement. One major project now affected by the price crisis is the construction of 1 million housing units.

Northern Region Cement’s net profits also fell, though by a smaller margin, over the

Prices have been increasing because of the high operating costs the manufacturers

www.cemweek.com

Source: media.thyssenkrupp.com

have to deal with, with energy costs alone accounting for about 40 percent of the production costs of cement. The country has some of the highest cement prices in the world, a ton of cement being sold for US$98, while globally cement prices hardly go over US$60 per ton. Output will not be boosted by new cement licenses The country’s efforts to add new licenses for cement production will not succeed in boosting output, mostly because of the fact that energy supplies that would help run new production units are lacking. The government has been making efforts to introduce new licenses for cement production in order to meet the needs of the domestic market. The situation of supply and demand is problematic, and it is expected that the production gap could reach 30 million tons of cement by 2020 if the production capacity continues at its current rates. Egypt considering allowing cement companies to import fuel oil Several companies, which have seen their production affected by the severe lack of natural gas the country is facing, have requested to use diesel fuel as a substitute for natural gas. The fuel would be bought from the world market and would prove to be beneficial financially given the decline in the prices of petroleum products. Battle for cement market dominance in Nigeria Major cement manufacturers in Nigeria

have engaged in a war of attrition to reach the largest market share, cement prices being used as the most commonly deployed weapon.

474,000 tons during the year. According to the company’s officials, the increase in production can be attributed to higher demand for the commodity.

In November 2014, Dangote Cement announced that a 50 kilograms bag of cement would cost N 1,000, while cements of higher grades had slightly increased prices. At its turn, BUA Cement announced a similar price reduction, while Lafarge silently implemented its new price regime.

With the market in Zambia being encouraging, the company is considering investing in Masaiti by expanding and setting up a lime plant.

Nationwide, the different cement brands are selling cement for as little as N 1,800 and as much as N2,200. Zambian company exceeds its annual production Zambia’s Zambezi Portland Cement has exceeded its annual cement production capacity by more than 100,000 tons in 2014, with production volumes reaching about

Cement demand in Morocco drops In 2014, cement demand in Morocco continued to decline, falling 5.41 percent when compared to 2013’s levels, reaching 14.1 million tons. As of 2008, the cement sector has been struggling with falling demand caused by a weakened construction activity in the country. In 2014, both social housing and self-construction have been on a downward trend. Per capita consumption in Morocco was 430 kilograms per year in 2014, the world average being 550 kilograms per capita per year.

AFRICA

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

www.cemweek.com

DECEMBER - MARCH 2015

REGIONAL REPORT:

INDIA India’s cement sector expected to recover According to the Finance Minister of the Union, Arun Jaitley, the flagging housing and highways infrastructure sectors will recover enough to help cement demand get back to its glory days of the early 2000s. The statement was made in response to India Cement’s N Sirinivasan, who expressed his concerns about cement plants operating at less than their capacity across the country. The minister is confident that the situation will improve, albeit slowly, once the new government’s efforts in this direction will pay off. He was also quick to add that the current administration is dealing with a legacy that is difficult to reverse. Indian companies prepare for capacity expansions Several Indian cement manufacturers are ready to expand their capacity, in spite of the fact that many plants in the country are not running at full capacity. JSW Group is

planning on becoming a major player in the sector by bringing its current capacity to 30 million tons per year by 2025. UltraTech Cement has similar plans, though it relies more on acquisitions than on setting up new cement production units. Recently, the cement company’s board of directors has approved the acquisition of Jaiprakash Associates cement units located in Bela and Sidhi, in the state of Madhya Pradesh, adding 5 million tons per year to the company’s current capacity of 645 million tons of cement per year. Though UltraTech has posted a slight decline in profits during the third quarter of the 2014-2015, optimizing production remains a priority for the company. By 2016, UltraTech plans to have a cement capacity of 71 million tons per year. Wonder Cement is also ramping up its production capacity, having plans to double its current 3.25 million tons capacity to 6.75 million tons by the end of 2015. The estimated cost of this expansion stands at about Rs 1,600 crore, the location for the plant being RK Nagar, Tehsil-Nimbahera, District Chittorgarh

CENTRAL &AFRICA SOUTH EAST ASIA

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

45 DECEMBER - MARCH 2015

www.cemweek.com

Cement plants in India no longer have to seek renewal leases for mines Several cement plants in India will be relieved from seeking renewal of lease after every 10 years, as was the early norm, the Union Government having promulgated a the Mines and Minerals Amendment Ordinance at the beginning of the year. according to the new regulations, all mining leases will be granted for a period of 50 years after the expiry of the current lease period. PAKISTAN Pakistan cement sales increased Cement sales in the country increased by 6.18 percent, reaching 20.02 million tons during the second half of 2014. According to All Pakistan Cement Manufacturers Association, domestic consumption increased by 9.45 percent, plants in the north of the country having seen a 10.63 percent increase in local sales. Cement manufacturers in the south registered a 3.76 percent growth, reaching 2.54 million tons. On the other hand, export dipped for the northern region of the country, reaching 2.78 million tons, while exports in the south increased by 12.18 percent. NEPAL Dangote to pick site for Nepalese plant The Nigerian company has selected two possible locations for its proposed cement factory and mine quarry. The two sites are Mahadevstahan in Dhading and Makawanpur, a team of technicians from the Nigerian conglomerate now conducting field studies to select one from the two, or even both. Dangote is to invest US$550 million in Nepal, aiming to start its Nepalese project by May or June 2015. The construction is expected to come to an end within 27 months and operations will most likely start with the first half of 2017. The plant Dangote has designed will produce 6,000 tons of cement per day, the company’s aim being to manufacture 2 million tons per year.

REGIONAL REPORT:

Improved forecasts for the Chinese market After having been under pressure because of dropping demand, the Chinese cement market is expected to make a comeback in the following months. Some notable players in the sector have expressed their confidence that the elimination of excess production capacity, coupled with an increasing number of infrastructure projects, will aid in improving market conditions. Production capacity will be reduced by about 800 million tons from 2014’s levels, when they reached 2.47 billion tons. This means that the cement output will be of 1.6-1.7 billion tons per year. As far as infrastructure projects go, if such projects accounted for 69 percent of cement demand in China, 2015 will come with 30 percent more investments in infrastructure.

During the fourth quarter of 2014, declining demand weight down on the industry, with ongoing infrastructure projects stalled because of lack of funds, and newly approved ones in preparatory. Revised cement industry norms The country’s Ministry of Industry and Information Technology has issued revised 2015 norms for the cement industry. Focusing on aspects such as the standard conditions in the cement industry with the aim of solving the issue of excess capacity, and creating additional environmental protection norms, the revised set of rules are also meant to reduce energy consumption and improve efficiency and competitiveness. The environmental aspect is particularly pressing in China, the quality of the air coming to suffer greatly as a consequence of the intense industrial activity in the country. As such, low-carbon environmental protection projects are now more frequent than ever. For instance, renovation

Energy efficiency is also high on the agenda of some Chinese cement manufacturers. Such companies in China’s Shanxi Province have set the target to enhance energy efficiency, with comprehensive energy consumption per unit of production comparable to the national average. Anhui Conch Cement’s plans for the future After having reformed its management at the end of 2015, Anhui Conch Cement is moving forwards with its expansionand modernizing plans. Oversees, the company is seeking to accelerate its reach by means of a merger integration of domestic and overseas markets. The plan will rid the company of excess domestic capacity which will be transferred to other Southeast Asia markets. On the domestic plan, the company has completed its investment in a new production line in Linxia. The production line has a capacity of 4,500 tons per day, being part of a plan announced by company executives in 2012. The investment in the facility, which is now fully operational, has been of 2.6 billion yuan.

Source: english.conch.cn

CHINA

and expansion projects employing highperformance concrete technology that aid is reducing production costs, save resources and reduce pollution and ecological damage are slowly but surely becoming the new norm in China.

www.cemweek.com

DECEMBER - MARCH 2015

JAPAN Japanese manufacturers to expand overseas Several cement companies in Japan are turning their attention towards foreign markets in an attempt to divert the losses caused by the decline expected in domestic demand. Taiheiyo Cement Corporation has introduced new manufacturing facilities in the Philippines, boosting cement capacity at the location by 1.7 times. Another group planning an overseas expansions is Tokuyama Group, which plans to export intermediate raw materials of cement in Australia and New Caledonia. Low performance for Japanese cement manufacturers Two cement manufacturers from the country have posted losses or decline in cement shipments over the previous months. NS United Group recorded a decline in transportation volume of cement related cargo at the end of 2014, and a 29.6 percent decline between April and December 2014in operating income.

VIETNAM Vietnam’s cement demand moves upward Cement demand during January reached 5.87 million tons, with 30 percent more than in the same month of the previous year, but representing only 95 percent of the total cement consumption posted in December 2014. Much of the demand, namely 1.5 million tons, came from foreign markets. On account of the positive signs given by the market, several companies are trying to take over control the largest market share. Song Gianh Cosevco plans to become the leading brand of cement, having already has a successful year in spite of the difficulties posed by the gap between supply and demand. Vicem is planning on restructuring its Song Thao Cement plant in the country in order to better meet the conditions of the market. The restructuring plan includes the implementation of new strategies in engineering, production management, marketing and finance solutions. More so, the products exiting the plant will be homogeneous to the standards of Vicem. In other news concerning the Vietnamese cement market, Vissai cement has taken property of the Do Luong cement plant, re-

naming it Song Lam Cement Factory. The expansion is part of Vissai Cement Group’s plan to boost its capacity in order to meet the increasing cement demand, the new plant has a capacity of 2,500 tons of clinker per day, or 0.91 million tons of cement per year. Nonetheless, Vissai Cement will increase the existing capacity by raising clinker output to 2 million tons per year. INDONESIA Indonesian manufacturers enter 2015 with great expectation For 2105, cement manufacturers in Indonesia are targeting a 5 to 6 percent increase in sales, mainly due to the new government’s concentration on infrastructure development. The projects included in the new infrastructure plan are the setting up of highways, expansion of roads, irrigation, power plants, and others. This is an ambitious plan when considering that the competition is set to increase in the country’s cement sector, five new plants being expected to begin operations in 2015, namely Holcim in Tuban, TigaRoda in Bogor, Bosawa in South Sulawesi, Merah Putih in Banten, Siam in Sukabumi, and China Cement Onhui in South Kalimantan. Moreover, Indonesian cement sales have been below the target of 4 percent in 2014, but manufacturers blame this situation on it being an elections year, which caused the

Source: media.thyssenkrupp.com

Sumitomo Osaka Cement has low expectations for the first quarter of the year, expecting its sales to reach 236 billion yen, with only 0.4 percent more than in the same period of 2014. Operating income is thought to increase by 2.3 percent over the first quarter of 2014. On the other hand, the company’s net profit is forecasted to

stand at 12.1 billion yen, declining 9.2 percent from the similar period of 2014.

47 DECEMBER - MARCH 2015

www.cemweek.com

postponement of several infrastructure projects. The market is dealing with another worrisome issue, namely a drop in cement prices, with a 50 kilograms bag of cement being now sold at Rp 67,500, down from previously costing Rp 72,000. The sharp decrease in prices came as a result of a regulatory measure taken by the new government. The situation has forced cement makers to cut back on their expenses and take cost-saving measures. For instance, state-run cement manufacturers were instructed by President Joko Widoto to focus on achieving better sales and keep the price of cement down.

Semen also plans on reusing one of its old plants, namely the Gresik factory. According to officials of Semen Indonesia, the construction of public facilities needed for the reusing of the plant may take as long as two years. South Korean cement industry to grow The South Korean cement sector is expected to post sustainable growth in 2015, mainly due to efforts to manage the excess capacity in the country. The main goal in the industry is to stabilize domestic sales of cement, as well as exports and the price as which cement is sold. In so far as exports go, prices on foreign markets are currently lower than the domestic ones, namely by about 20 to 40 percent, making for an unprofitable situation for companies dealing with surplus. In 2014, 9.52 tons of cement were exported to foreign market, with 5.2 percent more than in 2013, the main destinations being Nigeria, Angola and Ecuador.

Source: loesche.com

Semen Indonesia move on with expansion plans The company, which controls the largest market share in the country, has several strategies lined up, including the optimization of the cement plant of Thang Long Cement in Vietnam, and accelerating works at the cement plant in Rembang in Central Java, the latter being expected to have a production capacity of 3 million tons of cement per year. Cement sales rose in the Philippines During the previous year, cement sales rose by 9.6 percent when compared to 2013 levels, amounting to 21.3 million tons. Special growth was registered during the final quarter of the year, when sales in Philippines posted growth of 16 percent over the same period in 2013.

Good news for cement manufacturers also came in so far as new fuel options are concerned. Under project meant to stimulate recycling practices and reduce the amount of waste at the landfill, a plastic-to-fuel facility will be set up. The plastic fuel fluff will then be sold to cement manufacturers as an alternative to coal and other traditional fuels used in powering cement plants.

ASIA-PACIFIC AFRICA

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

www.cemweek.com

DECEMBER - MARCH 2015

REGIONAL REPORT:

Cemex Latam expects cement volumes to grow in 2015 After reporting decline in consolidated net sales for the fourth quarter of 2014, Cemex Latam expects cement volumes to grow by 3 percent during 2015. Over the said quarter, the company reported a 15 percent decline in its operating cash flow, with consolidated net sales reaching US$725 million. Other estimations made by the company for 2015 show expectations for resources for strategic assets to reach US$190 million, while investments in maintenance capital expenditures to stand at US$45 million. Boosted output in Colombia for 2014 National demand has been increasing in Colombia, thus cement manufacturers have boosted their output during 2014 by 10.2 percent, producing 12.3 million tons of cement. Demand rose by 10.3 percent in 2014 when compared to 2013’s figures, reaching 11.9 million tons. The regions where demand rose most notably were Narino, where a 49.2 percent rise was recorded, Magdalena, with a 30 percent increase, and Huila, with a 21.3 percent growth in demand. With demand climbing in the country, several companies have expansion strategies lined up. Cementos Argos, the company which controls the largest share of the Colombian market, is poised to continue to expand its business by putting into operation two new plants in Antioquia in the first half of 2015. For its Colombia operations, Argos has prepared a capital of US$93 million that would aid in increasing domestic capacity by 1 million tons. 49 DECEMBER - MARCH 2015

Peruvian manufacturer invests in Bolivia Grupo Gloria, an industrial conglomerate from Peru, is planning on expanding its business in Bolivia after buying out the Bolivian Cement Company (Soboce). The company has already approved an investment plan of US$250 million for the expansion of its four cement plants in the country, and the possibility of purchasing more companies in Bolivia is currently being evaluated. One of the main investments will be the setting up of a new cement plant in Santa Cruz, aiming to cater La Paz and the western region of the country. With the demand in the country being on the rise and the local manufacturers’ inability to keep up with it, Insumos Bolivia has announced that it will keep importing cement in 2015, namely 600,000 bags of cement. During the previous year, the company imported the same amount of cement from the Peruvian brand Yura. Demand has reached 1 million tons of cement per year in the department of Santa Cruz, representing about 35 percent of the country’s total demand. Cement shortages have prevailed following the rise in demand, leaving room for an urgent need to implement the development of new production units. COSTA RICA New market regulations for the cement market New news for the cement market and commercialization will be announced in March following requests from the Chamber of Industries and the Costa Rican Institute www.cemweek.com

of Cement and Concrete. The two institutions have emphasized the need for technical criteria in the cement industry. As part of the changes to be implemented, the weight of a cement bag will exceed 50 kilograms, manufacturers would have to set the expiration date of the cement (45 days), and the packing would be changed. Experts on the market predict that these new regulations will cause a rise in the production cost of construction. Cemex Puerto Rico posted historical low sales The company has posted the lowest sale volumes in 55 years, sales dropping in 2014 by 10.4 percent when compared to the previous year. The downfall of sales was more acutely felt in 2013, when the company sold 16 million bags of cement, with 65 percent less than the volumes sold in 2000. As a consequence of Cemex Puerto Rico’s weak performance, the management of the company has proposed to restructure its operations for 2015. PERU Boosted cement exports Between January and October 2105, Peru’s cement exports rose by 159.5 percent from the year ago period, amounting to US$39.7 million in the reporting period. These export levels are the highest the sector has met in the last five years. In 2009, exports amounted for US$3.2 million, rising by US$0.7 million in 2010, and reaching US$8.5 in 2011. In 2012, Peru exported cement worth US$15.6 million.

Source: usbcsd.org

The main client for Peruvian cement has been Bolivia, which imported with 31 percent more cement in 2014 than in 2103. Chile also exported Peruvian cement, worth US$8 million, with 342 percent more than during the year ago period, being followed by Venezuela, Colombia, Brazil, Ecuador, Uruguay, Seychelles, and other.

On the other hand, in jurisdictions such as La Pampa, Jujuy, Tierra del Fuego and Neuquén, cement demand increased.

Complaints about Chilean cement quality The Peruvian Engineer Association made a complaint regarding the quality of the Chilean cement entering the local market. Following tests performed on the Chilean cement, the institution came up with negative results highlighting the poor quality of the product.

Venezuelan cement plan to start operations The Cerro Azul plant in Venezuela is set to start manufacturing cement soon. The plant was set up in order to add to the country’s current production capacity of 7 million tons per year, which is expected to reach 9 million tons per year in 2015.

As a consequence of the decreasing domestic demand, Argentina is preparing to export larger cement volumes, having already secured a trade deal with Ecuador.

per year, the country’s government having signed contracts with Chinese and Iranian manufacturers which would aid in boosting production. Venezuela currently imports cement in order to meet the local demand. Votarantim plans Great Lakes cement production upgrade Votorantim Cement North America has made public its plans to upgrade and modernize its Great Lakes cement production units through an investment of about US$130 million. Cortney Schmidt, spokeswoman for the company, said that the expansion is needed since the market has started to recover after a six-year lull. Company executives are worried that they will not be able to meet the larger demand in sight.

By 2017, production capacity in the counAMERICAS Moreover, professors working with the try is expected to reach 12 million tons institution said that the omission of information in the printed paper bag of cement can cause problems in what resistance of AMERICAS concrete is concerned. Cement demand dropped in Argentina Cement sales in Argentina have dropped by 4.8 percent year-on-year in November, with domestic consumption reaching a mere 0.9 million tons during the month. Nine jurisdiction in the country have showed a negative variation, the largest declines being registered in Misiones, where consumption dropped by 26.9 percent, Tucuman, with a 17.8 percent decline, followed by San Juan, Rio Negro and La Rioja.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE

www.cemweek.com

DECEMBER - MARCH 2015

sector coverage : Construction & BUILDING MATERIALS by BmWeek.com

AGGREGATES Qatar expects demand for washed sand to grow this year Qatar expects demand for primary construction materials to hit a peak in the next two years, with consumption of washed sand to rise 106 percent this year alone. As a result of these projections, two key market players have announced their decisions to boost production capacity of washed sands. The first company to announce an increase in its washed sand supply to the market is Qatar Primary Materials Company, which will rise its volumes by 15,000 tons a day as well as use its strategic pile by adding 18,000 tons a day. Such a move will help boost QPMCâ&#x20AC;&#x2122;s washed sand distribution to more than 33,000 tons a day.

South Korean company produces recycled aggregates by collecting construction waste South Koreaâ&#x20AC;&#x2122;s S Industrial, located in Gangneung, Gangwon-do, is producing recycled aggregates by collecting construction waste such as reinforced concrete. The company is only licensed for recycling aggregates, but it has been found that the company conducted unauthorized inhouse workshops.

Qatar Industrial Manufacturing Company has also announced that its sand treatment plant will increase its production capacity up to 30,000 tons a day. 51 DECEMBER - MARCH 2015

www.cemweek.com

Vulcan Materials acquires quarry in California Vulcan Materials, the largest producer of concrete and other crushed stone in the United Sates, has acquired Pilarcitos quarry in Half Moon Bay, in San Mateo County, California. According to representatives of the company, the works to be performed at the new quarry will abide to the environmental stipulations already in place.

Vulcan bought the quarry as part of US$320 million expansions focused mainly in the Western states, yet the amount paid for this particularly quarry is not being disclosed as per the terms of the deal. CONSTRUCTIONS Algeria will import more construction materials Algerian imports of construction materials continued to rise in value and quantity in the year 2014, standing at US$3.6 billion against 2013’s figure of US$3.43 billion. According to the National Computer Center and Customs Statistics, cement, wood, iron, ceramics, aluminum and taps and valves entered the country, the total quantity being of 10.3 million tons, up 15.6 percent from the previous year’ figure. Positive end of 2014 for US construction spending In the United States, construction spending rose sharply during the last month of 2014, the amount spent on public construction works during the year increasing for the very first time since 2009. According to an analysis drafted by the Associated General Contractors of America,

the president’s budget proposal and suggested infrastructure funding program could help construction spending to continue to grow. Construction spending in December totaled US$983 billion, with 0.4 more than in November, and with 2.2 percent more than in December 2013. The full year total for construction spending was up 5.6 percent from 2013. Large scale construction projects expected in Egypt In Egypt, the government has put forward plans to build a new town named after Shaikh Mohammad Bin Zayed, the Abu Dhabi Crwon Prince, and a university in honor of the late King Abdul Aziz of Saudi Arabia. President Abdul Fattah Al Sissi, has mentioned that the construction projects were named so in appreciation of the princes’ efforts. According to the governmental report, the

www.cemweek.com

new town will be constructed by the army, but the exact location has not been disclosed. UK construction sector set to grow Construction output in the United Kingdom is forecast to increase by 5.3 percent in 2015 and by 17.8 percent by 2018. Nonetheless, with the elections coming up and with the uncertainty they bring about, growth is expected to slow down in the medium-term. Industry growth will be more broad-based with a 10 percent increase expected in private housing building supported by an 8 percent growth in commercial offices and a 7.9 percent increase in new infrastructure. Spain’s construction sector to be the fastest growing one in Europe According to the Eurostat, the Spanish construction industry is the fastest grow

DECEMBER - MARCH 2015

sector coverage : Construction & BUILDING MATERIALS by BmWeek.com

The Pilarcitos Quarry produces about 500,000 tons of granite material every year, including concrete for building, asphalt for roads and rock boulders to stop erosion.

sector coverage : Construction & BUILDING MATERIALS by BmWeek.com

ing in Europe. In the report it was shown that many buyers have been returning to Costa Blanca, meaning that the property market could recover. Over the last 18 months, the housing market in Spain picked up, with a 16 percent increase in home sales in June 2014 when compared to the same month of 2013. CONCRETE Demand for ready-mix concrete declines in Saudi Arabia In 2014, a 20 percent decline was felt in the demand for ready-mix concrete in the Kingdom. Despite the unfortunate situation, producers of the commodity have denied allegations that they intend to increase prices after being accused of having this intention by contractors. According to concrete manufacturer Hossa Bikhamseen, demand for ready-mix concrete fell because of market anticipation of government decisions related to housing. Egyptian company to set up readymix concrete plant Egyptâ&#x20AC;&#x2122;s Arab Contractors plans to deliver a ready mix concrete plant by April 2015. The new plant would serve the new Suez Canal Projectsâ&#x20AC;&#x2122; tunnels. The tunnels with which the canal will be improved are designed for cars and railway, the purpose being to eventually create logistic services in the area.

53 DECEMBER - MARCH 2015

www.cemweek.com

equipment

KHD and Orbit launch partnership KHD Humboldt Wedag has launched a partnership with Orbit for the provision of Simpli Vitys OmniCube solutions to improve operational efficiency and a unified global management. SimpliVity is a leading provider of software-defined infrastructure for data centers. The partnerships was set up in order for KHD to better manage its global data centers. Moreover, the partnership is expected to improve operating efficiency and reduce operating costs for the global data centers. FLSmidth and Haldor Topsoe sign cooperation agreement The two companies have signed a cooperation agreement to commercialize a newly developed unique catalytic filter bag technology. The new product, called EnviroTex, will be able to remove dust volatile, organic compounds and nitrogen oxides. The targeted sector for this product is the cement one, having a large global commercial potential.

plant will be located in the department of Antioquia and will be called Cementera del Magdalena Medio. Expectations of increased demand have surfaced in the region, prompting FLSmidth’s President of the Cement Division, Per Mejnert Kristensen, to state that FLSmidth’s presence in the region will enable it to serve the growing cement market. Wartsila to upgrade power plants for cement factories in Russia Wartsila has signed a deal with Eurocement, the leading cement manufacturer in Russia, to upgrade power plant for 11 of its plants in Russia. After the upgrade will be completed, the plants will have a combined capacity of 314 MW. The details of the deal between Wartsila and Eurocement include the supply of 36 of its natural gas fired 34SG engines.

There are several sizes of the plants, depending of the engines employed, from 19 to 49 MW. The power plants will produce electricity for the factories and work in parallel with the grid. All of them are schedules for fast-track delivery next year. UK arm of Cemex signs contract with Motiva The UK division of Cemex has signed a GBP 1.2 million contract with Motiva, under which the latter will supply 11 specialist 26-ton vehicles to Cemex. The DAF CF 330 FAT Euro 6 machines, fitted with McPhee Mixers, are being supplied by Heatgrow Truck Centre in Reading. Peter Wright, sales director of Longtonbased Motiva, mentioned that the size of Cemex’s operations all over the world makes this contract an important step forward for Motiva.

Source: media.thyssenkrupp.com

The product was developed by combining the experience of FLSmidth in filtration in industrial processes with Topsoe’s leadership in catalysis. The result was a product that will allow customers to meet increasingly stringent environmental legislation at a fraction of the operating cost that even the best available technologies offer today. Cemex commissions FLSmidth for a production line in Colombia The global cement producer Cemex awarded a contract to FLSmidth for the supply of a 2,800 tons per day cement production line for its new Colombian plant. The new www.cemweek.com

DECEMBER - MARCH 2015

FLASHBACK NEWS FLOW ( 2 MONTHS )

CW Research

Recent released reports:

darker red shows higher news volume

Global Cement Trade Price Report – 4H2014 update

Global Cement Volume Forecast Report – 1H2015 Quantitative update

Country report: Argentina Cement Market Report – 2015 update

Country report: Columbia Cement Market Report – 2015 update

Global White Cement Market & Trade Report – 2015 update

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

Cement Trade Prices: 1Q2015 update and outlook

APR 14, 2015 at 2:00 PM GMT

Global Energy Outlook - Petcoke, Coal

MAY 7, 2015 at 2:00 PM GMT

55 DECEMBER - MARCH 2015

www.cemweek.com

Cement Business & Industry (CBI) Africa 2015

JUN 25-26, 2015

Johannesburg, South Africa

Solid Fuels Summit India 2015

SEP 3, 2014

Mumbai, India

AshTrade India 2015 Fly Ash Industry Conference

SEP 4, 2015

Mumbai, India

Cement Business & Industry (CBI) India 2015

SEP 3-4, 2015

Mumbai, India

Slag & AshTrade Americas 2015

SEP 30 - OCT 1, 2015

Rio de Janeiro, Brazil

buzz TOP CEMWEEK STORIES 1

Lafarge and Holcim assets attract interest from CRH and Blackstone consortium

Holcim and Lafarge merger well on track in India

India’s Dalmia Cement Bharat moves to consolidate its presence in the eastern region

Holcim and Lafarge name management for merged company

India’s JSW Cement moves to increase production by over four-fold

India’s Kutch region to have new cement plants

CRH put bids on Holcim and Lafarge ahead of their planned merger

CRH streamlines ahead of possible bids for Lafarge and Holcim assets

India’s UltraTech Cement plans new greenfield expansion phase

Major cement manufacturers in Nigeria battle for cement market dominance

CEMWEEK.COM acting africa aims alexandria annual arabia’s argos assets bank

board building

cemex chairman chief china

Azerbaijan building materials production up

Chinese Premier highlights interests in infrastructure cooperation

Donald M. James to retire from Vulcan Materials

Dubai’s RTA awards internal roads construction contract

UK’s construction output fell

Turkish construction sector posts increase

Boral and CSR to merge their east coast clay brick operations

Qatar receives investments in tourism-related projects

Berkshire Hathaway acquires stake in USG Corporation

Illegal concrete production units demolished 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

BMWEEK.COM