CemWeek Magazine, Issue 29 by CemWeek

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

OCTOBER / NOVEMBER 2015

Feature

THE CEMENT PLANT OF THE FUTURE CW Research 2H2015 outlook:

THE GLOBAL EFFECT Exclusive Q&A

MR. ANIL SWARUP, COAL SECRETARY, GOVERNMENT OF INDIA News

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Analysis

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Market Coverage

•

Interviews

•

People Moves

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CONTENTS FEATURES 5 TRANSPARENCY IS THE GAME CHANGER FOR INDIA’S COAL SECTOR In conversation with Mr. Anil Swarup, Secretary, Ministry of Coal, Government of India 11 THE GLOBAL EFFECT The global cement and slag industry has been impacted due to China’s contraction in cement volumes.

19 THE CEMENT PLANT OF THE FUTURE During the next 20 years CO2 emissions will be the most important issue in the operation and design of a cement plant.

19 11 DEPARTMENTS EDITOR'S LETTER 2 Innovations Ahead NUMBERS IN BRIEF 3 Global Results Update RESEARCH 25 Cement Volumes Cement Energy Markets PEOPLE 33 People on the move 35 37 38 40

REGIONAL REPORTS Europe, Middle East & Africa South-East Asia Asia Pacific Americas

CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM 42 Construction and building materials update EQUIPMENT 43 Equipment and notable projects

CW GROUP MEETING AGENDA 45 CW Group’s upcoming events BUZZ 46 Top 20 CemWeek and BM Week stories

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EDITOR’S NOTE Letter from the editor

INNOVATIONS AHEAD

hese days, going green is the new mantra, globally. It is expected that by 2040, all cement plants will be using only electricity from renewable sources, possibly most of them wind and solar farms. Indeed, a valid step taken by some of the African countries and supported by the European Bank for Reconstruction and Development. This is likely to tame down the exploitation of limited natural resources such as coal for generating power. To a some extent, the use of state-of-the-art technology with the help of regulations, also plays a significant role in the energy efficiency. Primarily, the efforts in the next 10 years will focus on reducing electricity consumption and waste heat recovery. Today, China, India and Brazil, thanks to radical and fast changes in technology are the worldwide leaders. To cite an example, China, driven by incentives and national regulations, passed from 525 waste heat recovery installations in 2009 to 865 by 2012. Going forward, it is expected that by 2030, around 80 percent of the plants, globally, will have a system for waste heat recovery. . Meanwhile, several years back, the Apple Inc founder, Steve Jobs said that innovation distinguishes between a leader and a follower. Incidentally, the cement industry does provide small players to be a leader in its own space. Every product and every industry are subject to a process of creative destruction. And, innovation is much more than technology and will increasingly become part of every facet of modern life.

Hence, using an approach, where innovation and sustainability can be linked together, the bigwigs of the cement and construction industry can shift their thinking towards sustainable construction and the intelligent use of concrete. On a positive side, some global markets, are trying to replace the traditional brick and mortar building with alternative building technologies such as pre-cast, tilt-up and light steel-frame. The article, “Innovating a sustainable cement industry”, will definitely an eye opener as how innovations, even at a minimal intervention, can change the industry’s approach towards the environment. Cut to India, the current issue of CemWeek Magazine features a Q&A with Mr Anil Swarup, the firebrand coal secretary who is responsible for changing the tented coal sector. Ergo, the current issue also gives us an overview of a two dimensions of the cement market, globally. Surprisingly, such is the situation where the emerging and developing markets, which were trailing ahead of developed countries, earlier, are now being dwindling down. The report, published by CW Resreach— Global Cement Trade Price Report—points out a relative weakness of the cement pricing on an FOB basis at the beginning of the second quarter of the year. Lastly, CemWeek Magazine provides all the relevant news about the main indicators of the industry, including the latest facts and figures about cement volumes, energy prices, relevant people in the business, regional developments, equipment and construction projects. Don’t miss out the numbers

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NUMBERS IN BRIEF

LARGE CEMENT MANUFACTURERS SEE BETTER RESULTS IN 3Q 2015

Large cement manufacturers have seen mixed financial results in the third quarter of the year, but the story took a positive turn despite adverse market conditions 3Q2015 EBITDA MARGINS (%) Ultratech Cemex Italcementi HeidelbergCement 10%

20%

30%

Source: CW Research

Of the major cement manufacturers, HeidelbergCement increased its revenues by three percent year-on-year during the third quarter of the year, and recorded double-digit increases in North America, Western and Northern Europe, and Africa-Med Basin. The acquisition of Italcementi is reportedly making good progress, with clearance for the merger in India already in place. Cemexâ&#x20AC;&#x2122;s cement volumes fell in Northern Europe (by 9 percent year-on-year), but increased by 5 percent in the Med Basin and by 16 percent in Asia. 3Q 2015 REVENUES

(MN USD)

4,500

3,000

1,500

HeidelbergCement

Cemex

Italcementi

Ultratech

Source: CW Research

In Cemexâ&#x20AC;&#x2122;s case, EBITDA margin slightly improved (by 0.2 percent) year-on-year in the third quarter of 2015. In spite of price increases in core markets, HeidelbergCement benefited from the low cost of fuels which led to an improvement of EBITDA margins.

OCTOBER / NOVEMBER 2015

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LEADERS: QUESTION & ANSWERS

RANSPARENCY is the game changer

In an exclusive interview with CemWeek, Mr Anil Swarup, Secretary, Ministry of Coal, Government of India, has shared how the coal sector in the last fiscal witnessed a turnaround in terms of production. And going forward, how the Ministry of Coal has envisaged a mine-by-mine plan to achieve one billion ton target by 2019-20. 5

OCTOBER / NOVEMBER 2015

for Indiaâ&#x20AC;&#x2122;s coal sector

Our primary focus was on putting together a transparent process for coal auctions. For the 42 schedule II mines, the peak rate is 90 million tons (MT).

hat are some of your key takeaways since the first ordinance was passed and the recent coal auctions? The use of IT applications to achieve transparency in a situation as complex as the coal auctions is the biggest key takeaway here. The coal issue is complex because of cancellation of blocks by the Supreme Court. In the past all actions related to coal were questioned, some rightly and some not so rightly.

So long as the process is transparent the results are not in our hands. The revenue will go to the State Governments. If the companies do not mine and pay as per the mining plan, there is an option to invoke the performance guarantees and re-auction the blocks. In your view will this be the process for the future blocks as well? Do you think that this auction process can become the model of allocation for other minerals too? We would follow the same auction methodology with minor modifications on the basis of our past experience. But this process would, by and large, remains the same for all the 204 blocks.

As far as other ministries are Given the large number of concerned, it will be their stakeholders in the coal sector, Our primary focus was on putting together decision. But my understanding bringing in transparency and is, having demonstrated a objectivity were essential a transparent process for coal auctions. successful auction process to mitigate the challenges. it would be useful for other This is why we opted for the ministries to customize this for their use. auction route and it seems to have gone fine so far. In fact, the auctions have clearly demonstrated that even a complex issue such as coal can be tackled efficiently and efficaciously through the The government has set a target of coal production of one billion tons by by 2019 â&#x20AC;&#x201C; 2020, what in your view are the key application of IT in a transparent manner. milestones that need to be achieved to achieve this target and In the past, we have seen that companies have projected or bid what is the roadmap to achieve these milestones? aggressively, but have been unable to plan accordingly? What is The Ministry of Coal (MoC) is targeting coal production of 1.5 billion tons. Of this one billion tons will come from Coal India your assessment of this? The ministryâ&#x20AC;&#x2122;s objective is to create a process that generates optimum Limited (CIL) and the remaining 500 million tons will come from value of natural resource for the government. My assumption is that non CIL sources, particularly from the mines that are presently the bidders would have done what they did with their eyes wide open. being auctioned or allocated to non-Coal India entities. For the www.cemweek.com

OCTOBER / NOVEMBER 2015

LEADERS: QUESTION & ANSWERS

in varying degrees in different mines. Fortunately, the ministry has been able to identify these issues and we will follow a specific strategy to address each issue. For example; earlier all evacuation activities were being performed by the railways. Now a decision has been taken, along with the State governments, to set-up joint ventures in each of the concerned states. For these joint ventures, each evacuation line will be an independent profit center, unlike railways, where evacuation is one of their many projects. The State Governments have in-principle agreed to this arrangement and Memorandums of Understandings will be signed with them in the next one month. The Ministry is now in the process of circulating a draft, which is at various levels of approval. This arrangement will especially work well in the coal bearing states, as the intent is to move coal from accessible objective is to create a areas to inaccessible areas.

42 schedule II mines, the peak rate is 90 million tons (MT) and for the 32 additional schedule III mines the peak rate is 130 MT. That said, the 204 coal blocks, together have an estimated coal production of over 800 MT. Therefore, we can safely assume that by 2020, around 500 MT will be produced from these mines.

For the mines, currently held by The ministryâ&#x20AC;&#x2122;s CIL, the MoC has drawn up a mine wise plan clearly detailing process that generates optimum value of These will primarily be the what is required to take a mine natural resource for the government. projects to evacuate coal from level X to Y. This framework to the main lines. India sits includes, evacuation, land on 300 billion tons of coal. acquisition, environmental clearance, law and order, etc. However, there is no evacuation where these reserves exist. If the evacuation issue can be addressed, production will not be a All the issues associated with increasing production or productivity challenge. have been clearly identified and a strategy has been chalked out for each mine. In fact, the strategy is already being implemented. The progress is clearly evident in the coal production in the recent months. To my knowledge, in the past decade, coal production has never grown by 7 â&#x20AC;&#x201C; 8 percent, so it has given us hope that we can ramp up production.

We have a situation, where it takes around 12 hours to fill a rake and in others it is done in an hour and a half. Therefore the Ministry is also considering mechanization for improving the turnaround time leading to efficient evacuation.

What are the key challenges that you think you will face to achieve this target of 1.5 billion tons? Evacuation, environment and forest clearance, land acquisition and local law and order problems are the four major challenges,

Who are the concerned entities among which JVs will be formed? The JV will be formed between Coal India Ltd with a 64 percent stake, Ircon 26 percent stake and the concerned State government

OCTOBER / NOVEMBER 2015

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with a 10 percent stake. The State governments are necessarily a party because large numbers issues are still with the State governments. It is believed that once they have a stake in the JVs the clearances will move at a faster pace. The major chunk of the investment will come from CIL and Ircon.

mining. Once the State governments realized that the royalty from mining would accrue to the state, the issue has been addressed. What is the ministryâ&#x20AC;&#x2122;s approach towards Coal Swapping? There are two types of swapping that we are contemplating.

Initially, bilateral swapping has been approved which is relatively simple. It is being We would follow the same auction done at the level of existing methodology with minor modifications linkages, where coal is unnecessarily being carried on the basis of our past experience. to users located at a greater All coal related projects with the distance, when it can be Ministry of Environment, Forests utilized for closer units. So far 15 swaps have happened across the and Climate Change is being reviewed on a monthly basis, and country with the first set of swapping entailing a saving of INR the benefits of a transparent application and monitoring process 1,100 crore p.a. Ultimately, swapping is likely to lead to savings of are already visible. Clearances are taking lesser time. In Western INR 6,000 crore p.a. coal field, for the next 12 months, a mine will be opened for How are the other challenges of land acquisition, law and order, etc. being addressed? Like I mentioned, a clear strategy is already being implemented.

mining every month.

In West Bengal, a few blocks were stuck for last six years because the State government was not providing land to Coal India for

We are also contemplating a second kind of swapping, i.e. trilateral and multi-lateral. These types of swapping are more complex as multiple stakeholders are involved and take longer to execute. What are the various challenges in executing the swapping? The challenges that we are facing are multi-fold. Initial swapping was simple, but in trilateral and multi-lateral swapping, while one entity may have to sacrifice, gains will accrue to the other stakeholder. The mechanism of transferring the gain from one stakeholder to the other will need to be worked out. The government is facilitating such negotiations with the stakeholders involved.

The 204 coal blocks, together have an estimated coal production of over 800 MT.

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OCTOBER / NOVEMBER 2015

LEADERS: QUESTION & ANSWERS What is the objective of the government behind auctioning coal linkages? We are not just looking at the auctioning coal linkages, but are looking into the whole process of allotting linkages. The reason behind such thinking is that for any such allocation we have to clearly identify the price at which the coal linkage should be given and who it should be given to. There has to be transparency in this process as well. We are evaluating whether the pricing and allocation methodology is transparently determined in the existing system.

plan has been worked out with these chief secretaries. Once this happens, there will be an increase in demand for power. There will be financial restructuring, detailed planning on how to reduce transmission losses, how to improve the efficiency of power plants. A huge plan has been worked out and we are very hopeful that the demand from discoms will pick up and so will the demand for coal.

Is it true that the ministry of coal has decided not to allocate next round of coal mines to the regulated sector? Although the coal production has increased so far, but the No, we have not decided yet on who will be the major beneficiaries offtake is not much as we of the upcoming round of expected from regulated and coal blocks. But we still have All coal related projects with the Ministry non-regulated sector. What is blocks for the power sector. the rationale behind it? of Environment, Forests and Climate Change In three-four cases, some It is mainly due to the subdued of the entities have gone is being reviewed on a monthly basis. demand by the power utilities to the court of law due to in India. Interestingly, even some issues that are being though the production level has increased, the demand is yet considered (there). Once these cases are resolved, we will start to pick up. But let me tell you honestly that we are still short of the next round of coal block auctions. We are also thinking of the required coal, and need to grow that number in the coming handing over these coal blocks to be auctioned as in the case months. And this scenario, according to my understanding is just of ultra mega power projects. So we are looking at varieties of a temporary phase. instruments through which the government can settle these The central government is very intensively discussing with state problems. governments to improve the financial health of the distribution companies (discoms), initiated by the Prime Minister. This has How many coal mines have been envisaged for the next round? led us to meet all the chief secretaries of the states, and a detailed There will be eight coal blocks have been envisaged for the next round of auctions, which are for unregulated sector. And around 4 million tons have been already earmarked. Meanwhile, in the previous auction, around seven mines which are allocated to The coal ministry will earmark 25 per the unregulated sector has already started producing around cent of the coal 3 million tons. production for the unregulated sector.

OCTOBER / NOVEMBER 2015

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But which industry among the unregulated sector will be a major beneficiary? I donâ&#x20AC;&#x2122;t think so that there will be any individual beneficiaries of this e-auction. What we are trying to do through this e-auction is a transparent mechanism as was available for the other category of blocks. Earlier, these linkages were allocated through a standing linkage committee (SLC) and there could be chances of discretion, subjectivity, and could be questioned subsequently in a court of law, as had happened. So, we feel we should have a similar transparent mechanism to determine who should get these linkages. Could you quantify the coal linkages to the unregulated sector through e-auction? Since the coal production is on an increasing mode, we will earmark 25 per cent of the coal production for the unregulated sector. Which would mean that there will be an additional coal available to the unregulated sector. Last year, through the linkages, we we allocated were 55-60 million tons and we will be increasing the limit almost by 40 per cent; so we will have another 25 million tons or maybe more coming to this segment. Now, this additional amount will certainly be auctioned, not allocated through the standing committee system. If there is going to be an additional availability of coal for the unregulated sector, then why there is an opposition to e-auction from the present linkage allotments through a standing committee? Interestingly, those who already have these linkages are opposing the governmentâ&#x20AC;&#x2122;s move. No specific sector is opposing. Letâ&#x20AC;&#x2122;s take a hypothetical case for reference: if I have a privilege of having a linkage by some way or the other, why would I like to be deprived of it? In an auction, I have to bid. Obviously, people who are benefiting from the existing system are opposing this move, which is very fair, but I think it is fairer that everyone should get an equal opportunity to bid. Any comment on when India can have a coal regulator? Meanwhile, the ministry has rolled out an interesting draft for To be honest, first, we need to understand the value the regulator e-auction of coal to be introduced to the unregulated sector. will bring to the system. As you know that we have been occupied Any timeline set for the same? with the coal auction and We will take a final call in the next coal production, which The auctions have clearly demonstrated couple of months. And for your at present is our priority. information, all the analysis has that even a complex issue such as coal Hence, we have not given been completed. Moreover, we a thought of having a coal can be tackled efficiently. have got the feedback from the regulatory authority, at this industry and the inter-ministerial moment. According to me, committee has discussed and deliberated. We should now be able until we fully appreciate the nuances of having a regulator, we to come out with a clear policy within one and a half months on should not unnecessarily jump into it. We have to understand it settling the linkages for the unregulated sector. very clearly, what value it will bring to the system and then decide.

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OCTOBER / NOVEMBER 2015

FEATURE

CW Research 2H2015 Global Cement Volume Forecast Report

The Global Effect

The global cement and slag industry has been impacted due to Chinaâ&#x20AC;&#x2122;s contraction in cement volumes as well as the decline in economic growth in several major emerging markets. As developed economies are taking over as global drivers of growth, although at lower rates, the cement industry may witness a decrease in 2015, before resuming growth in the following year.

11 OCTOBER / NOVEMBER 2015

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OCTOBER / NOVEMBER 2015

FEATURE

ement markets, which had been on a growing path are dwindling down—a new development that is most noticeable on the emerging and developing markets. According to the latest world economic outlook released by the International Monetary Fund in July 2015, a two-speed situation is going to define this year. This time, however, it is the developed markets that are witnessing a higher growth rate, while emerging economies as slowing their pace, after several years of trailing ahead.

quarterly growth stemmed from changes in inventories. With weaker underlying momentum in real wages and consumption, the pickup in growth in 2015 is now projected to be more modest. Growth in emerging markets and developing economies is projected to slow from 4.6 percent in 2014 to 4.2 percent in 2015, broadly as expected. The slowdown reflects the dampening impact of lower commodity prices and tighter external financial conditions—particularly in Latin America and oil exporters.

Coupled with the re-balancing The economic recovery in the in China, and structural In order to decrease the CO2 emission euro area seems broadly on bottlenecks, as well as economic track, with robust recovery by transport, plant size will depend on distress related to geopolitical in the domestic demand and factors—particularly in the the demand for cement in a radius not inflation beginning to increase. Commonwealth of Independent Growth projections have been States and some countries in the greater than 300 km. revised upward for many euro Middle East and North Africa area economies, but in Greece, According to the IMF, in 2016, unfolding developments are likely to take a much heavier toll on growth in the emerging markets and developing economies is activity relative to earlier expectations. expected to pick up to 4.7 percent, largely on account of the projected improvement in economic conditions in a number of In Japan, growth in the first quarter of 2015 was stronger than distressed economies, including Russia and some economies in expected, supported by an increase in capital investment. the Middle East and North Africa. However, consumption remains sluggish and more than half of

ECONOMIC OUTPUT (2015E YoY growth %) Apr-12

World

Oct-12

Advanced economies

Source: CW Research

AUGUST / /SEPTEMBER NOVEMBER 2015 2015 13 OCTOBER

Apr-13

Euro area

Oct-13

Apr-14

Oct-14

Emerging market Middle East and and developing North Africa economies

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Apr-15

Sub-Saharan Africa

CEMENT CONSUMPTION 2016 (growth %)

Source: CW Research

As noted in earlier world economic outlook reports, in many other emerging market and developing economies, much of the growth slowdown in recent years has amounted to a moderation from above-trend growth.

Oil prices have rebounded more than expected in the second quarter of 2015, reflecting higher demand and expectations that oil production growth in the United States will slow faster than previously forecast.

Some of the developments affecting the forecast are the weaker first-quarter growth, the oil price rebound, inflation and the rise in bond yields. In the first quarter of 2015, world growth—at 2.2 percent—fell some 0.8 percentage points short of the forecasts in the April 2015 outlook.

Nevertheless, the average annual oil price expected for 2015— US$59 a barrel—is in line with the oil price assumption in the April 2015 economic outlook. This has coupled with a modest increase forecast for 2016 and beyond, as global oil supply is running well above 2014 levels and global oil inventories are still of modern automatic rising.

The implementation The shortfall reflected to an important extent, an unexpected control systems could reduce the kiln output contraction in the United The reduction in oil investment States, with attendant spill overs calorific energy up to 6 percent, may, however, lead to a somewhat to Canada and Mexico. One-off weaker boost to activity in North according to a study. factors, notably harsh winter America from a lower oil prices weather and port closures, as well than expected earlier. as a strong downsizing of capital expenditure in the oil sector contributed to a weakening U.S. activity. With the rebound in oil prices, fuel end-user prices have started rising. Monthly headline inflation has thus started to bottom out Outside North America, positive and negative surprises roughly in many advanced economies, but the impact of deflationary offsetting. Growth in output and domestic demand in emerging factors earlier in the year was stronger than expected, particularly market and developing economies broadly weakened, as expected. in the United States. In many emerging market economies, www.cemweek.com

OCTOBER / NOVEMBER 2015

FEATURE notably those with weak domestic demand, headline inflation has declined. As for financial markets, conditions for corporate and household borrowers have remained broadly favorable. Higher yields, partly reflect improving economic activity, and the bottoming out of headline inflation. While in the European regions, they also reflect a correction after earlier declines to an extremely compressed level. This is in response to an increased bond purchases by the European Central Bank. Other factors that may have had an impact on the economic outlook are the depreciation of the US dollar by two percent in real effective terms, while the euro has appreciated by about one percent. But compared to average levels in 2014, the euro and the yen are still at depreciated levels and will, therefore, continue to support the recovery in the euro area and Japan in 2015â&#x20AC;&#x201C;16.

Fact file

4.6%

Growth in emerging market and developing economies is projected to slow from 4.6 percent in 2014 to 4.2 percent in 2015.

According to the IMF, in 2016, growth in the emerging markets and developing economies is expected to pick up to 4.7 percent.

4.7 %

2.4% The aggregate growth for the period between 2015 and 2020 will amount to 2.4 percent.

Japan, India, Germany, Italy, France, Belgium. Slag markets continue to be dominated by Japan, India, Germany, Italy, France, Belgium.

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CIF PRICES SLAG BRAZIL IN JAN-JUL â&#x20AC;&#x2DC;15 (USD/ton) 40

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15

Jul-15

Source: CW Research

Bond yields and risk premiums in the emerging economies have risen broadly in line with those on advanced economic instruments. But the capital flows to those economies are estimated to have decreased in 2015, compared to the second half of 2014, and many have seen further currency depreciation. Slag and fly-ash Looking at slag and fly as production levels, CE Research figures, based on official statistics and analyses indicate a strong producer of slag including EU countries and Japan, which are reducing volumes as compared to recent years. It is somehow a worrying scenario, given that demand for slag, as a supplemental material, is on the upside, and it is increasing at a rather fast pace, globally. Fly ash volumes on the other hand are increasing globally. As far as prices are concerned, one of the main findings of CW Researchâ&#x20AC;&#x2122;s Global Cement Trade Price Report points to a relative weakness of the cement pricing on an FOB basis at the beginning of the second quarter of the year. According to CW Research, another trend was witnessed in the strengthening of the export volumes, which is likely to continue for the next months. A similar trend was mirrored in the slag segment, though the strengthening of exporting volumes is not as stagnated as one witnessed in the cement markets. Of course, this market is somehow driven by some top producers such as Japan and Germany. Slag markets continue to be dominated by Japan, India, Germany, Italy, France, Belgium and to a smaller extent by Spain. Of course Japan stands out, based on the fact that in the second quarter of 2015 the country exported about 2.9 million tons of slag. Japan is followed by India, with a far smaller amount of slag, at 0.5 million tons. In the first seven months of the year, Brazil, which recently hosted the Slag and Ash Trade Conference, relied mainly on

France have sourced slag for an FOB surpassing USD 15 /ton, and according to CW Research estimates, September ended with an FOB of about USD 18 per ton in France, both are rather high price points. Germany, Italy, Spain, Japan and Belgium for slag imports. The trade, however, differed from month-to-month, which is why we are seeing such big discrepancies in terms of CIF prices. In May, for instance, Brazilâ&#x20AC;&#x2122;s main trading partner was Belgium, from which it bought slag priced at about USD 35 /ton, which is a lot larger, when compared to Proper maintenance of Japanâ&#x20AC;&#x2122;s prices.

Surprising developments in cement demand From a cement volume perspective, there are some outstanding upsides, such as Mexico and surprisingly Argentina, where the uncertain political situation is not affecting the construction segment and the cement sector as one may expect.

compressed air systems helps cement manufacturers to maintain compression efficiency and reduce air leakage

Taking a look at FOB prices, actuals and forecast, based on qualitative information, for July and September there were no major changes in terms of pricing, with Japanese slag continuing to be the least expensive exporter.

Cement demand increased in the two countries by almost 10 percent, with similar values reported in other countries such as Kenya, Saudi Arabia and Vietnam. One of the highest increases in year-to-date demand, as compared to 2014, occurred in the Czech Republic, with an almost 15 percent.

With a net FOB of about USD 6-7 per ton followed by Italy with FOB price of USD 8-9 /ton. On the other hand, Germany and

On the downside, China, one of the strongest emerging economies with traditionally high growth rates, now stands out www.cemweek.com

OCTOBER / NOVEMBER 2015

FEATURE Votorantim, Brazil - one of the largest and fastest growing cement companies

Today, China, India and Brazil, thanks to radical and fast changes in technology are the worldwide leaders in energy efficiency.

SLAG FOB PRICES: ACTUALS AND FORECAST (USD/t FOB) Japan

Germany

Italy

France

FOB USD/ton

India

Apr-15

May-15

Jun-15

Source: CW Research

17 OCTOBER / NOVEMBER 2015

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Jul-15

Aug-15

Sep-15

Lebanon

Switzerland

France

Turkey

Ecuador

China

Russia

Germany

Japan

Chile

Indonesia

Thailand

Pakistan

Malaysia

Greece

India

Egypt

Morocco

Poland

Senegal

Canada

Spain

Colombia

Vietnam

Argentina

Mexico

Saudi Arabia

Kenya

Czech Rep.

YTD CEMENT DEMAND (2015E YoY growth %)

Source: CW Research

with a contracted cement volume by around five percent for the first time in decades. However, China is known as a market that can surprise external observers, so predicting what will be the outcome that required to watch closely. As far as future cement demand is concerned, CW Research estimates that the aggregate growth for the period between 2015 and 2020 will amount to 2.4 percent, taking global consumption from this year’s 4,001 million tons to 4,512 million tons for the next five years, from now onwards. The growth is however not linear.

Among them are China, Russia, Brazil, Ukraine, as far as emerging markets are concerned, with estimated declines of a 2 percent to 6 percent. In Eastern Europe, Russia stands out as a negative market, pressured by both—commodity wise and politically.

In Brazil, the economic implosion and the fast approaching full price, the country will have to face sooner rather than later, are causing pessimism with a strong impact on demand for cement. Brazil is an exception to the situation presented by other countries in the region, such as Columbia - most notably, Argentina, Bolivia, which are CW Research indicates a doing better and are expected to negative rate of growth in In order to compete on cost and reduce pick up in growth terms. 2015, with the global cement Growth in those markets is owed emissions, in less than 10 years, the demand contracting by 2.7 to the fact that their respective percent. The negative trend, operating efficiencies of all plant quipment governments are lining up a lot of course, is largely driven of construction projects that are shall be of at least 95 percent. by China, just as well as in finally looking like they will go the past it has had the lion’s through. share of global growth. There Dim perspectives are also are of course other risks as noticeable in Western Europe, well that are creating the conditions for a decline. Among them according to CW Research estimates, especially in France, are geopolitical risks, commodity depreciation and fiscal risks, Germany and Italy, where the cement consumption is expected which add up to the macro situation described earlier. to drop by up to two percent. A regional look at what 2016 will bring in terms of cement demand and consumption shows an overwhelming amount of declining trends on the map. While growth in North America, parts of northern Africa and Southern Asia looks compelling, with figures ranging from 2 percent to 7 percent, there are major areas, where the situation is dramatically opposite.

One of the main factors that will impact the global market in the following year is China’s contraction in cement volumes. It will be coupled with the future developments on the emerging and developing markets. Based on the recent change in trends, which saw developed economies taking the lead from emergent ones in terms of growth pace, the main question is whether the latter will be able to regain their position of global growth drivers.

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OCTOBER / NOVEMBER 2015

FEATURE Authored By Luis Fuentes

THE CEMENT

PLANT OF THE FUTURE Have you wondered, how cement plants will run in the future? For those of us in this industry, itâ&#x20AC;&#x2122;s crucial to know what changes there will be, because it may depend our survival, professional success or failure.

uring the next 20 years CO2 emissions will be the most important issue in the operation and design of a cement plant. The kg CO2/ton Cement will be the main Key Performance Indicator. All started in 1997 when the â&#x20AC;&#x153;Kyoto Protocol was signed by the United Nations Framework Convention on Climate Change (UNFCCC) that commits State Parties to reduce greenhouse gas emissions. Later, different environmental organi-zations developed road maps to reach the targets according to their influence areas. Finally, in 2012 was launched for the International Energy Agency (IEA)

19 OCTOBER / NOVEMBER 2015

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A cement processing plant by Masaba.

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OCTOBER / NOVEMBER 2015

FEATURE

Clean Air

Removing CO2 from the atmosphere.

Absorption

Industrial Plant

Electrochemistry

Bicarbonate

Salt

CO2

ate

rb Ca

Carbonate

SCM & Self-Cement

Dewatering & Drying

Green Chemicals

Calcium

Enginered CaCO2

Precipitation in partnership with the World Business Council on Sustainable Development Cement Sustainability Initiative (WBCSD CSI) a specific low-carbon technology roadmap for the Indian cement industry, which aims to reduce the industry’s carbon emissions by 45 percent by 2050, as compared to 2010 levels.

The minimum efficient size of a cement plant is around one million ton a year. Keeping this in mind, we must balance it with the rest of the issues mentioned before. For example, in 2004 a study was carried by the Siam Cement Company to optimize the cost of logistics and CO2 generation, which has mentioned that the transportation could vary between 2 to 20 percent of the The demand for carbon footprint reduction will come not only cement plant’s CO2 emissions. from international organizations related to climate change, as well the customers, government and community will require that Level of Automatization and Maintenance “the cement plants be green”. In order to compete on cost and reduce emissions, in less than 10 Plant Capacity years, the operating efficiencies of all plant equipment shall be of In our present times, cement at least 95 percent. This means that goes as far as demand, all areas will be fully automated In order to decrease the CO2 emission production costs and and that the level of maintenance by transport, plant size will depend transport permits, but in should be excellent. the future, the plants will The implementation of modern on the demand for cement in a radius not be based on the criteria of automatic control systems could greater than 300 km. CO2 production. In order to reduce the kiln calorific energy decrease the CO2 generated up to 6 percent, according to a by transport, plant size will depend on the demand for cement in a study developed by the CSI and the ECRA (European Cement radius not greater than 300 km. However, cement can be shipped Research Academy). economically and with a low carbon footprint by sea and inland waterway over great distances, greatly extending the competitive Up to four percent could be reduced with the use of preventive radius of cement plants with access to waterborne shipping lanes. maintenance practices, according to the report carried out

21 OCTOBER / NOVEMBER 2015

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by Berkeley National Laboratory about the energy efficiency opportunities in the cement industry.

energy needs in their 15 Mexican cement plants. Whereas, in 2014, Heidelberg in its Ketton UK plant built a 9 MWp solar farm that generates the 10 MW of the cement plant’s consumption and just a few months ago Italcementi announced the construction of a new 320 MW wind energy plant, which will cover up around 40 percent of the power requirement in its Suez Cement cost and reduce plant in Egypt.

For example, proper maintenance of compressed air systems helps cement manufacturers to maintain compression efficiency and reduce air In order to compete on leakage. Leaks, in compressed emissions, in less than 10 years, the air systems, are very common and are significant sources of operating efficiencies of all plant equipment Modernization For the next 30-35 years, cement wasted energy and money, shall be of at least 95 percent. plants will be transformed at an plants without proper unprecedented rate, at all times, maintenance of them may at least there will be a major have 20 to 50 percent leakage. project in every plant. This generates a great demand for capital and planning, project and commissioning personnel. Today, Standardization of Equipment China, India and Brazil, thanks to radical and fast changes in During the next 10 years, major cement companies will technology are the worldwide leaders in energy efficiency. standardize all equipment, possibly in four plant sizes: 4, 6, 8 and 10 Kton Clinker per day. This measure will allow to reduce costs and inventory levels of spare parts. Plant Areas Plants will be divided into four major areas: Cement production, alternative fuels, waste heat recovery (WHR) and carbon capture (CC). China, driven by incentives and national regulations, passed from 525 WHR installations in 2009 to 865 by 2012. In other words, the WHR area is already a reality in many of the cement plants in China. On the other hand, Europe has the leadership in alternative fuel replacement with 18 percent and followed by other countries, globally.

Some examples of this tendency: 2005 Lafarge inducted operation of a wind farm in its Moroccan plant covering the 50 percent of its electrical needs. Meanwhile, in 2009, Cemex installed 67 wind turbines in Oaxaca, Mexico, which is supplying 25 percent of the

856 WHR installations

in 2012 from 525 in 2009 in China, driven by incentives and national regulations.

By 2030, around 80 percent of the plants, globally will have a system for waste heat recovery and by 2040, all cement plants will be using only electricity from renewable sources.

80%



Definitely, in the near future, all the new cement plants worldwide will be designed with alternative fuels and WHR areas. Finally, the CC area will be the last one area to be integrated into the cement plant layout. These technologies are currently being investigated in pilot plants. The IEA is considering these systems as the main lever to reach the 2050 CO2 emissions goal. Generation of Green Electricity The efforts in the next 10 years will focus on reducing electricity consumption and waste heat recovery. By 2030, around 80 percent of the plants, globally will have a system for waste heat recovery. By 2040, all cement plants will be using only electricity from renewable sources, possibly most of them wind and solar farms.

Fact file

45%

The Indian cement industry aims to reduce carbon emissions by 45 percent in 2050.

85 www.cemweek.com

percent of the China’s kilns were obsolete in 2000 , but in just 12 years achieved modernization in more than 90 percent of its kilns.

OCTOBER / NOVEMBER 2015

FEATURE A modern cement plant by Moncement.

In 2000, 85 percent of the China’s kilns were obsolete, but in just 12 years achieved modernization in more than 90 percent of its kilns. In India, around 2010, after 20 years of constant efforts installing the best technologies, reached ranking as the best worldwide country in calorific and electrical performance in the cement industry. Proper maintenance of

Research and Development Cement companies, that survive all these changes will be those that have a very good focused and organized research and development area: either through their own research centers, partnerships with universities or agreements with leading manufacturing cement companies.

compressed air systems helps cement manufacturers to maintain compression efficiency and reduce air leakage.

Recent studies of 2015 state that China has developed a kiln system called XDL (Xu De Long), which reduces the heating and electricity costs by 15 percent compared to suspension preheater kilns as well reveals that using RM (Roller Mill) has reduced between 40-50 percent the energy consumption in the raw meal grinding area. 23 OCTOBER / NOVEMBER 2015

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An excellent example of this kind of network is this: Norcem and its parent company Heidelberg Cement have joint forces with the European Cement Research Academy (ECRA) to establish a small-scale test center for studying and compare post combustion CC technologies. The center is in Norcem’s cement plant in Brevik (Norway). The project has received funding from Gassnova (Norwegian state enterprise) through the CLIMIT (Norway Program for Power Generation

improvement. Retention of talent will be a great challenge for those responsible for Human Resources. New Schemes of investment The high cost of all these changes and the support systems will force the cement companies to seek for other sources of funding. One possibility is that the cement plants operate by a franchise scheme. Thus the franchisee manages the plant under the name of the cement company who will be acting as a franchisor, who determines the specifications of equipment, operation, etc. Under this scheme, the franchisee will pay for the investment of machinery and land, in this way, the cement companies could have liberated resources.

Today, China, India and Brazil, thanks to radical and fast changes in technology are the worldwide leaders in energy efficiency. At the end, the shape of the plants will be changed in the same way in which it occurred, when the rotary kiln replaced the shaft kiln. But these kind of changes that normally happen in the industry just once a time in a lapse of many years will now occur several times in a short period of time. The change is constant, and will accelerate the transformation in all the areas of the cement industry. The cement professionals have the great opportunity to be part of this technological revolution.

with Carbon Capture and Storage), the project is being carried out on behalf of the European cement industry and managed by Norcem. The providers of the testing four technologies are: Aker Solutions (Amine), US Research Institute Triangle (Solid Sorbent), DNV GL/Norwegian University of Science and Technology/ Yodfat Engineers (Membrane) and Alstom Power (Regenerative Calcium Cycle). Specialist Personnel Staff of cement plants will become increasingly specialized. The plants should include experts in: instrumentation and control, maintenance planning, process, renewable energy and energy saving. Also, the cement manufacturers need to have an excellent support in the areas of recruitment, selection, training and continuous

Now the big question is: Are we ready for the cement plant for the future?

ABOUT THE AUTHOR Luis Fuentes is a recognized expert in the cement industry, with over 24 years of progressive experience in different areas of cement plants; production, process, quality, quarry, training, continuous improvement, alternative fuels, total quality control, security, and human resources. He is a writer, speaker and consultant on cement trends, specialized in continuous improvement.

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OCTOBER / NOVEMBER 2015

CEMENT VOLUMES Pakistan’s domestic cement demand remains strong with September 2015 witnessing a 2.6 percent year-on-year expansion. Additionally, the January – Septmeber period saw consumption rates increase by 8.1 percent year-on-year.

In Saudi Arabia, cement demand has been aided by strong construction activity in the country, seeing steep YoY growth.

The major challenges facing the Pakistani cement players remain falling exports compounded by an influx of Iranian cement. The All Pakistan Cement Manufacturers Association has sought support of the authorities to impose a 20 percent additional duty aside from the existing customs duty to safeguard the domestic cement industry and help curtail cement smuggling. Pakistani cement players are seeking alternatives markets after their exports to South Africa were hurt by newly placed import duties.

Economic activity in Argentina continued to improve in September 2015, as the government increased public spending ahead of the 25 October presidential elections. Argentina registered one of the strongest year-on-year growth rates in cement consumption among main cement markets in the world. In September 2015, cement demand in Argentina rose 6.6 percent as compared to the same period in 2014, bringing year-to-date growth to 8.1 percent. Athough Argentina’s exports have been falling YTD until September, a recent decision by Paraguay to supplement its output from neighbouring countries could prove beneficial. However, Argentina’s exports will face tough competition from Brazilian players seeking

SEPTEMBER 2015 YEAR-ON-YEAR CEMENT DEMAND GROWTH RATE (%)

Poland

Spain

Germany

-10%

Pakistan

-5%

Cyprus

-15%

Source: CW Research

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Japan

France

10%

Saudi Arabia

15%

Argentina

CEMENT MARKETS

CW Research

CW Research CEMENT MARKETS

alternative regional markets to compensate for their weak domestic market.

new business. However, activity in the residential segment saw sustained growth.

Spain saw sustained year-on-year growth in cement demand in 2015, with consumption in recovery mode. However, the year-to-date growth rate eased declining from 5.5 percent in May 2015 to four percent in September 2015, mainly due to a slowdown in construction activity.

Though Cyprus’ cement demand posted strong growth in September 2015 in terms of year-onyear value, cumulative cement consumption in the first three quarters of the year remains subdued, falling by 1.8 percent below last year’s volume in the same period last year.

In Germany, cement demand continues to decline, but rates have eased in September 2015, when local consumption fell by 2.3 percent year-onyear. The pace of contraction quickened slightly since June with german construction companies noting a second consecutive monthly drop in

However, cement production expanded by 5.4 percent in January-September 2015, supported by a 24.7 percent year-to-date expansion in exports. Construction activity in Cyprus remains under pressure as the country posted one of the steepest declines among European countries.

Thailand’s cement production dropped 1.2 percent in July 2015 as compared to the same month in 2014, while production of the building material saw a 1.6 percent YoY fall.

SEPTEMBER 2015 YEAR-ON-YEAR CEMENT PRODUCTION GROWTH (%)

China

Ukraine

Poland

Vietnam

Argentina

-20%

India

-10%

Cyprus

Belarus

10%

Russia

Saudi Arabia

20%

Japan

30%

-30% Source: CW Research

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OCTOBER / NOVEMBER 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.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

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Source: CW Group analysis estimates MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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CEMENT ENERGY MARKETS

CW Research

CEMENT ENERGY MARKETS Coal Market Update Global trading volumes increased by 16.2 percent to 96.93 million tons in August 2015, as compared to 83.44 million tons recorded in July 2015. An increase in coal trading volumes was observed in Australia, Colombia, US, Russia and South Africa, whereas Indonesia showed some decline in coal trading volumes. According to a study by the National Academy of Sciences (NAS), many nations are attracted to the relatively low coal prices in order to satisfy their energy needs. It also finds that the share of coal in the energy mix indeed has grown faster in countries with higher economic growth. The US is shutting down coal plants at an unprecedented rate, on the other hand, India is adding coal-based power capacity even more quickly. Australia coal deliveries increased 109.4 percent MoM in August 2015 to reach approximately 35.4 million tons and up 93.7 percent when compared to August 2014 index. Japan was the largest importer of the Australian coals with 11.7 million tons, China was the second largest one with 6.39 million tons, followed by South Korea with 5.05 million tons. Despite challenges that the industry is going through, the coal chain in the Hunter Valley was running at a record rate for the month, well in excess of 180 million tons. Colombia exported 7.1 million tons of coal in August 2015, increasing 16.8 percent in comparison to July 2015 and declining 17.9 percent from August 2014 coal export volumes. Coal shipments from the countryâ&#x20AC;&#x2122;s miner, Puerto Drummond, increased four percent MoM to 2.1 million tons, while Puerto Nuevo shipped 1.8 million tons, its highest monthly level since February. Shipments from third party port Carbosan-Sociedad Portuaria de Santa Marta more than doubled to 346,220 tons as compared to July exports.

China has started moving coal from inland mines to coastal users. Therefore, it is expected that China will no longer have to import coal. Rather, it will have the capability to export the same to other countries.

South Africa exported 5.7 million tons of coal in August 2015, up by 1.7 percent MoM and down 5.9 percent as compared to August 2014 exports. India remained the largest destination for South African thermal coal in August, with 2.36 million tons shipped during the month. Exports to Pakistan picked up in August, with 648,267 tons shipped to the country. SEPTEMBER 2015 YEAR-ON-YEAR CEMENT PRODUCTION GROWTH (%)

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

Source: customs data

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OCTOBER / NOVEMBER 2015

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update COAL: The average coal price for October 2015 closed at $57.29 per ton, a decline by two percent as compared to September’s price of $58.68 per ton. Meanwhile, the coal price was down 19 percent as compared to October 2014’s price of $70.76 per ton.

Demand from China has also slowed as its economy grows at its slowest pace in decades and the Chinese government’s fight against pollution.

Major coal companies are suffering from the adverse effects of coal market’s bleak situation. US’ major coal companies paid billions of dollars to acquire metallurgical coal mines, when prices of this type of coal were soaring. The price has since collapsed, leaving the companies in debt. According to Carbon Tracker, in the past five years, 26 coal companies have fallen prey to bankruptcy, and US coal equities are down over 76 percent over the same period. International Energy Agency (IEA) predictions show that the demand for coal will grow at an average of a 0.5 percent annually, until 2040, considerably less than the 2.5 percent average for the past three decades. Moreover, the agency also stated that buyers will reduce their dependency on coal in favor of cheaper, cleaner alternatives. Globally, coal is suffering from reduced prices, oversupply, and weak demand. The major reason is an increasing shift away from coal due to market forces as well as regulatory pressure. The US is moving towards natural gas, while China is also trying to cut its coal consumption. China’s imports of coal for September dropped by 16 percent compared to the same month a year ago, forcing European coal prices to drop to a record low. China's economic slowdown is pushing down global coal prices, further. Spot prices for benchmark Australian thermal coal have fallen below $55 per ton. The prolonged price drop is starting to affect coal producers differently. Many Australian and Russian mining companies are profiting from exports because their countries' currencies are falling sharply against the US dollar. Meanwhile, the mining companies in Indonesia, engaged in dollarbased transactions, and are less likely to benefit from the depreciation of their own country's

STEAM COAL FOB AVERAGE PRICES (US$/TON)

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

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CEMENT ENERGY MARKETS

CW Research currency. As a result, Indonesian mining companies are becoming less competitive and are being forced to cut or suspend production. According to a new report from the IEA, renewables are set to become the largest source of new energy capacity over the next 35 years. The report states that renewables will overtake coal as the largest source of electricity by the early 2030s. Renewable energy technologies accounted for nearly half of all new electricity plants in 2014, and are now the second largest power generator after coal. PETCOKE: US petcoke exports decreased by three percent to 2.63 million tons in August 2015 as compared to the previous month, and down by five percent as compared to August 2014. The US export price for petcoke for August 2015 closed at $63.02 per ton, dipped by 0.5 percent as compared to July’s price of $62.73 per ton and down 14 percent as compared to August 2014’s price of $73.33 per ton. European buyers are currently reluctant in finalizing deals for buying USGC petcoke, as they await better offers due to the continued fall in petcoke prices. Additionally, an increase in Venezuelan petcoke exports can also have a negative impact on prices. The petcoke market is witnessing a modest demand from one of its key importers, Turkey. The country’s demand for petcoke has been declining since June 2015, partly due to political instability. The freight rate of carrying 50,000 millon tons (mt) of petcoke from Houston to Aliaga is around $14-16/mt. According to data released by the Turkish Statistical Institute, the country’s August imports of uncalcined petcoke increased 27 percent YoY to 522,721 tons, the highest monthly volume since May 2012. Total sales volumes of uncalcined petcoke in Turkey amounted to $51.5 million, up 71 percent from July and up 26 percent from the same month last year.

The Chicago Coalition to Ban Petcoke has created a tool to help Chicago residents make decisions about protecting themselves when the weather conditions present a hazard.

Due to stricter environmental legislation introduced by Beijing, shipowners may face a loss of the key US Gulf Coast to China petcoke route. Regardless of whether Beijing sets the sulfur content threshold at three percent or five percent, almost all of the mid and highsulfur petcoke out of the USGC will not be acceptable. Because of the same environmental US PETCOKE EXPORT PRICE (us$/ton) monthly price

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

Source: customs data

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CEMENT ENERGY MARKETS

CW Research regulations, Indian demand for US petcoke could increase as high sulfur petcoke production from China is eliminated. According to EPA’s final performance standard rules for petroleum refineries, delayed coking units will now be required to de-pressurize each coke drum to a closed blowdown system until the coke drum pressure equals 2 psig. The rule also establishes new provisions for decoking operations with water overflow design and double quenching.

In its August “Drilling Productivity Report,” EIA forecasts that gas production will decline in all seven of the US’ major shale regions in September, the first across-theboard slump in shale gas production ever recorded by the agency.

Komsa, a subsidiary of Koch Industries, has purchased 90 percent rights to the petcoke that will be produced at Colombia’s newly renovated Reficar refinery in the coming 10 years. The new unit is expected to produce 2,500 tons a day. The $8 billion renovation of Reficar will be completed by March 2016, though several units are already in operation and the plant will be producing 86,000 barrels per day by early November. NATURAL GAS: The US Henry Hub spot price traded at $2.34 per MMBTU in October 2015, dipped 12 percent as compared to September 2015 price of $2.66 per MMBTU and down 38 percent as compared to October 2014 price of $3.78 per MMBTU. Unusually, warm ocean surface temperatures in the equatorial Pacific have created a strong El Nino effect this year. This weather pattern means, warmer winter temperatures across parts of the northern US, which could result in much less demand in a region having a high demand for the fuel each winter. Moreover, the country is heading towards the winter months, with a record amount of gas in storage. Inventory figures released on November 5 showed 3.929 trillion cubic feet in storage across the country. Moreover, with two or three weeks of additional inventory gains expected in the remainder of 2015, it is likely the US will have a new record high by the time the summer and fall gas injection season ends. The only positive sign for the natural gas market is that the traders have already set prices anticipating a warm winter, so cold temperatures could cause a larger shift up in price than warm temperatures would cause down.

NATURAL GAS PRICES (US$/MMBTU)

Europe

Japan LNG

18 16 14 12 10 8 6 4

Source: EIA, World Bank

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Oct ’15

Feb ’14

Jun ’14

Oct’13

Feb ’12

Jun ’12

Oct ’11

Feb ’11

Jun ’10

Oct ’09

Feb ’08

Jun ’08

Oct ’07

Feb ’07

Jun ’06

Oct ’05

Feb ’05

Jun ’04

Oct ’03

Feb ’02

Jun ’02

Oct ’01

Feb ’00

Jun ’00

Oct ‘99

2 0

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.

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

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

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

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OCTOBER / NOVEMBER 2015

MARKET DATA SNAPSHOT

CW Research

DEPARTMENTS

PEOPLE LAFARGEHOLCIM APPOINTS NEW CFO Ron Wirahadiraksa has been appointed as a Chief Financial Officer of LafargeHolcim. He will report to the CEO of the group, Eric Olsen. Ron Wirahadiraksa will join the position in December 2015. He joined the executive committee after the retirement of Thoma Aebischer. Ron Wirahadiraksa has a PhD in economics and he has held many executive positions in his career, most notably at Philips in the Netherlands, Greece, Malaysia and USA.

OLDCASTLE CEO IS NEWLY APPOINTED CHAIRMAN OF CRH AMERICAS Oldcastle’s President and CEO, Mark Towe, is the newly appointed chairman of CRH Americas. Mark Towe will join his new office in January. The CEO of CRH Americas, Albert Manifold, will be helping Mark Towe to transition into his new role. Mark Towe joined Oldcastle in 1997 and handled materials hierarchy. He was appointed as president of the company in 2000 and as CEO in 2006. Two years later, he was elevated to his current position.

HEIDELBERGCEMENT ANNOUNCES CHANGES IN THE EXECUTIVE BOARD

The board of directors of Spain based Cementos Portland Valderrivas, a subsidiary of Fomento de Construcciones Contratas (FCC), appointed a new nominee directors at its head office in Spain. Mexican magnate Carlos Slim, the largest shareholder of FCC, appointed Carlos Jarque as CEO of FCC. The former director of the company, Juan Rodrigues Torres, was appointed as a president of Cementos Portland’s real estate arm,

Germany-based cement company Heidelberg Cement announced the resignation of two board members and the appointment of two new board members. The cement company plans to implement the new changes before its acquisition of Italcementi. In July 2015, HeidelbergCement signed an acquisition contract worth EUR 6.7 billion for Italcementi. The current board members, Daniel Gauthier and Andreas Kern, will be resigning from the board of HeildelbergCement. Hakan Gurdal, Jon Morrish and Kevin Gluskie will join the board as senior managers in the cement company. Morrish and Gluskie currently work as senior managers in the group, while Gurdal is a manager at Turkey’s Sabanci Holding, with which HeidelbergCement has a joint venture. Currently, Gauthier is responsible for western and southern Europe excluding Germany, while Kern heads the company’s operations in eastern Europe, Central Asia and Germany as well as sales and marketing.

Morrish has taken over the position from October 15, 2015. Morrish will join the company’s managing board in February, next year. He has worked as president of the company’s South Region before joining CEO position in the company. He joined

the company in 2009. Harrington had been the president and CEO of Lehigh Hanson since January 1, 2010. Harrington was helped lead the company through economic crises in 2008. Leigh Hanson is part of HeidelbergCement Group.

SPANISH CEMENTOS PORTLAND COMPLETES EXECUTIVE RESTRUCTURING

Ron Wirahadiraksa, CEO LafargeHolcim

LEIGH HANSON APPOINTS NEW CEO AND PRESIDENT Leigh Hanson has appointed Jon Morrish as the new CEO of the company after Daniel Harrington announced his retirement. Jon

33 OCTOBER / NOVEMBER 2015

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PEOPLE BOARD MEMBER OF ITALCEMENTI RESIGNS Italcementi’s board of directors has accepted the resignation of Elena Zambo, Independent director and member of the strategic committee with effect from October 1 2015. She resigned due to professional reasons. Italcementi is currently in the process of merging its business with HeidelbergCement.

GREECE’S HERACELES CEMENT APPOINTS NEW CEO Greece-based cement company, Heraceles Cement announces appointment of George MIchoes as CEO with effect from October. He succeeded Pierre Deleplanque, who will work as an area manager— emerging Europe for LafargeHolcim. He will remain on the board of Heracles as a nonexecutive member. George Michos worked as Senior Vice President at RMX Concrete for Lafarge since January 2013. Since July 2014, he served as leader of the operating model & the organization team for the LafargeHolcim merger. He has handled several executive positions in 24 years of his career.

EUROCEMENT SUBSIDIARY IN RUSSIA GETS A NEW CEO Igor Nikolenko has been appointed as a new CEO of Eurocement subsidiary Kavkaz Cement. Igor Nikolenko worked as First Deputy General Director Technical Director of Group Division in Ukraine from 2009 to 2012. During 2012 to 2015, Nikolenko served as head of Mikhaylov Cement. Kavkaz Cement caters to cement needs of Southern Russia. It has a production capacity of 3.1 million tons per year. The company became a part of the Eurocement Group in 2004. Kavkaz Cement’s raw material base is in Ust-Dzhegutinsky in Russia. Limestone and clay mines are sourced in KarachayCherkessia in Russia.

AFRICA’S DANGOTE CEMENT APPOINTS NEW REGIONAL CEOS African cement company, Dangote Cement has appointed two new Regional Chief Executive Officers for its units in Nigeria and West and Central Africa, last week. The new CEOs will support the cement company in its quest to serve the market and maintain its leadership in the African cement market. Arvind Pathak was appointed as new CEO of Nigerian unit of Dangote Cement. Pathak filled the position of Daljeet Ghai, who will retire by December 2015 after five years of performance. Pathak brings over 30 years of outstanding experience and accomplishment in the cement industry. In turn, Vivek Chawla has been

Arvind Pathak was appointed as new CEO of Nigerian unit of Dangote Cement

appointed as the new regional CEO for West and Central Africa. Chawla has over 30 years of experience in the cement industry working across functions including management, operations, sales & marketing, projects and commercial projects.

FLSMIDTH’S BOARD OF DIRECTORS WELCOMES NEW MEMBERS Marius Jacques Kloppers and Rob Smith have been nominated as new members of the Board of Directors of FLSmidth at the Annual General Meeting. The current member of the Board of Directors, Mr. Martin Ivert, has decided not to stand for re-election at the next Annual General Meeting. Marius Jacques Kloppers is the former CEO of the world’s largest mining company BHP Billiton. Rob Smith is Senior Vice President and

General Manager at EAME of AGCO, a global leader in the design. Marius Kloppers has knowledge about global business and mining experience from the largest mining company in the world. Rob Smith is an international senior executive with massive experience in manufacturing and sourcing from a multitude of industries and countries, whose outspokenness and competencies would be a great asset to FLSmidth.

US-BASED ESSROC CEMENT GETS ITS NEW CEO Alex Car has been appointed as the president and chief executive officer for Essroc Italcementi operations in the U.S., Canada and Puerto Rico. His predecessor Francesco Carantani, has taken over other Italcementi Group duties. Alex Car has joined, as a CEO is wake of an impending merger between Italcementi and HeildelbergCement.

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Alex Car has previously worked as senior vice president of Cement Sales & Marketing and general manager of Construction Materials. He has held various leadership positions since joining Italcementi Group in 2002, among them the general director of the Devnya Cement business in Bulgaria.

OCTOBER / NOVEMBER 2015

REGIONAL REPORT

EUROPE, MIDDLE EAST AND AFRICA BELARUS: BELZARUBEZHSTROY TO PRODUCE CEMENT-BONDED PARTICLEBOARDS Belarus’ civil engineering company Belzarubezhstroy has set up a cementbonded particleboards production unit in Krichev, Mogilev Oblast, Belarus. The unit, spread over the 17 hectares, at the company’s former metapackaging factory, will have a production capacity of 60,000 cubic meters per annum. The company will use technology provided by a Austria based company, VST Building Technologies to produce cementbonded particleboards. The new technology boasts high speed and quality of construction processes, energy effectiveness of construction, and wide geographical deployment. The company plans to export the product to other countries.

SPAIN: SLOWDOWN IN DEMAND HITS BACK CEMENT CONSUMPTION Cement consumption, associated with the public works, fell in the first half by 11 percent and a fall in total consumption is likely due to an even greater decline in public works. Meanwhile, cement demand in Spain posted a cumulative growth of 4.8 percent the first nine months of the year as compared to the same period in 2014. Cumulative growth of cement consumption saw a decline

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SHIPMENT OF CEMENT TO RESTORE PROJECTS IN THE GAZA STRIP

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As much as 290 tons of cement were shipped to the Gaza Strip through the Rafah land port. The cement will be utilized to complete the restoration and reconstruction projects in the region. Around 18 trucks carrying 290 tons of cement entered the region. Other construction materials like aggregates and gravel along with cement were transported to the state.

35 OCTOBER / NOVEMBER 2015

of almost four percent from the end of June, when it was growing at a rate of 8.6 percent. In September 2015, cement consumption rose 3.1 percent to 0.98 million tons, but the slowdown in demand is already becoming apparent with a fall in the whole of the third quarter of 0.8 percent as growth in the ninth month of the year as insufficient to offset poor results experienced in July, when demand fell 5.5 percent after seven months of steady growth.

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REGIONAL REPORT FÁBRICA DE CIMENTO KWANZA SUL SUSPENDS ITS OPERATIONS ESSROC ITALCEMENTI IMPORTS CEMENT FROM DEVNYA CEMENT PLANT Essroc Italcementi received a shipment of 25,000 metric tons of cement from the Devnya cement plant of Italcementi in Bulgaria. Essroc Italcementi has imported cement for the first time since the economic slowdown in 2007. The shipment arrived at U.S. Port of Newport News, Virginia earlier this week. “The import of cement from Devnya demonstrates the measurable recovery in the North American construction market,” Alex Car, President and CEO of Essroc. He added: “The additional supply of Portland cement from our sister company will allow Essroc to fulfil the needs of our customers and increase our share of the cement market.”

Devnya Cement facility in Bulgaria

The newly built Devnya Cement facility in Bulgaria is one the most modern cement plants in the Italcementi network and has state-of-the-art production capabilities.

LAFARGE AFRICA BEGINS ROAD REHABILITATION IN OGUN, AFRICA

Zambezi Portland Cement Plant

DAGONTE CEMENT AND ZAMBEZI PORTLAND UNDER SCANNER Zambia’s competition watchdog, the Competition and Consumer Protection is probing Dangote Cement and Zambezi Portland Cement for an alleged price fixing operation. Zambezi Portland Cement had approached Dangote Cement for the mode of pricing for their cement. Also in another development, the commission is investigating Lafarge Cement and Zambia Sugar for overpricing. The commission is looking into possible illegal imports of banned goods.

Lafarge Africa has begun its rehabilitation work at Agbesi-Itori road, Ewekoro, in the local government area of Ogun State, Africa. The cement company has invested around NGN 200 million for its rehabilitation of the road. The rehabilitation activity will reduce the daily traffic congestion on the road. The work has already started in the month of September and is expected to be completed within three

Government-backed Fábrica de Cimento Kwanza Sul, Angola has suspended production of the cement plant in Sumbe due to confusion over state affairs and business practices of the cement plant. The decision was mainly due to unsustainable operating cost. In addition, the Danish company LNS, in-charge of running the plant says, it owed USD 20 million in unpaid fees. Legal experts say that the uncertain future of the Kwanza Sul Cement Factory is directly related to its tangled history. The government’s investments in the cement factory have gone overboard, forcing its suspension. Fábrica de Cimento Kwanza Sul’s balance sheets revealed the initial budget for the project was USD 500 million. However, the total investment extended to USD 820 million. The cement plant is struggling to find balance between policies and expenditure for the completion of its factory projects.

IRAN STRUGGLES TO MAINTAIN CEMENT QUALITY The Iranian government is trying to implement strict policies for quality control, as the cement market struggles to preserve the best quality of cement. Iran has the annual cement production capacity of 75 million tons, while the annual cement consumption is 50 -55 million tons, only. The country is dealing with a recession, which had an impact on the quality of cement. Hence, the government is looking for ways to enforce a more efficient quality control policy.

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OCTOBER / NOVEMBER 2015

REGIONAL REPORT KASHMIR GOVERNMENT ENSURES QUALITY AND PRICE CONTROL OF CEMENT

SOUTH EAST ASIA HANIL CEMENT MAINTAINS ITS RANKING IN QUALITY SATISFACTION INDEX Korean-based cement company Hanil Cement has managed to maintain its leading position for the eight consecutive years in the Korea Quality Satisfaction Index. Hanil Cement has maintained its quality in all criteria of the Quality Satisfaction Index. The company has passed all criteria like performance, reliability, durability, service, safety, accessibility along with other descriptive qualities. The Korea Quality Satisfaction Index is a highly recognized quality index that gauges the consumer experience after using a product, along with the excellence of quality and customer satisfaction of various companies.

NEPAL FACILITATES ROAD NETWORK FOR CEMENT PROJECTS The department of Roads in Kathmandu, Nepal has opened 26 km road for connectivity for 18 cement plants in Nepal. The department has fulfilled all infrastructure requirements of Dang Cement and Rolpa Cement factories in the Dang region of Nepal. The construction of roadways for Ghorahi Cement and Sonapur Cement in the Dang district has achieved 95.16 percent and 99.54 percent of progress, respectively. The department has a few access roads to certain cement plants under construction. It includes, roads connecting to CG Cement, Sarbottam Cement, Palpa Cement and Butwal Cement in Palpa has been completed. The progress of Palpa Cement is snailpace, with the Forest Office demanding additional study on already-approved Initial Environmental Evaluation.

Kashmirâ&#x20AC;&#x2122;s Minister for Consumer Affairs and Public Distribution and Tribal Affairs

INDONESIA WITNESSES INCREASE IN CEMENT DEMAND The Indonesian cement industry has witnessed an increase in cement demand in the third quarter of 2015. The cement demand has picked up due construction projects being implemented by the Indonesian government. Cement demand increased by three percent on a quarter on quarter basis to 14.47 million tons in JulySeptember 2015. The growth was driven by a yearly increase in sales in August and September. According to the experts, cement demand is expected to grow as the government has begun implementing several of its proposed public work projects.

37 OCTOBER / NOVEMBER 2015

Kashmirâ&#x20AC;&#x2122;s Minister for Consumer Affairs and Public Distribution and Tribal Affairs called upon the cement producers to maintain the quality of cement and control cement prices. The minister has appointed a team of officials to nail the culprits who indulge in an unfair trading practices. Officials will take strong action against the people caught practicing unfair trade of cement. He also explained that the government has not increased cement prices over last three years and it would not increase the prices in the near future. The government wants to maintain healthy competition in the cement market. He assured that the government is taking active interest to solve the problems faced by the cement producers.

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REGIONAL REPORT

ASIA PACIFIC INDIA’S RELIANCE CEMENT PLANS TO EXIT FROM CEMENT BUSINESS The subsidiary of Reliance Infrastructure, Reliance Cement, plans to shut down its operations, in a move aimed at improving the company’s financial situation. The closure of cement operations will help Reliance Infrastructure to clear its debts and is part of the non-asset monetization activities of the group, Reliance Anil Dhirubhai Ambani. However, the move is at a preliminary stage. The company’s decision to close its operations comes at a time when India plans to increase its cement production capacity to reach 550-600 million tons per annum by 2025.

NIPPON STEEL & SUMIKIN CEMENT TO DEVELOP LOW-ALKALINE CEMENT Japan-based Nippon Steel & Sumikin Cement and Osaka University have jointly developed a new low-alkaline cement. The cement will be produced using rice chaff, which enhances the durability of nuclear waste disposal facilities. The new cement will help the government in constructing nuclear waste disposal facilities, which require durability up to 100,000 years to impede leakage of radioactive materials. The cement company mixed silica dioxide with the cement to reduce alkaline levels in the cement.

Reliance Cement began operating in 2007. At present, the cement company has a total installed capacity of 5.8 million tons per annum. Reliance Cement has set up its cement plants in various regions like it 2.8 million tons per annum cement plant in Madhya Pradesh, 2.2 million tons per annum cement plant in Uttar Pradesh and 0.5 million tons per annum cement plant in Maharashtra.

MALAYSIAN CEMENT SECTOR STRUGGLES DUE TO WEAK CURRENCY Malaysian cement producers are likely to witness a 20 percent increase of costs due to weak currency (MYR) in global markets. The country imports major components like coal and gypsum to produce cement. The import costs of coal and gypsum have increased due to the depreciation of MYR in the global market. Despite the increased raw materials prices, some cement companies might perform better. The cement sector is expected to perform moderately. Malaysia is a net importer of clinker. In the first nine months of 2015, Malaysia imported RMB 348.6 million worth of clinker. Malaysia has an overall 38.83 million tons of cement-grinding capacity and 23.66 million tons of clinker production capacity.

MALAYSIA GOVERNMENT LIKELY TO CONSTRUCT CONCRETE ROADS The Malaysian government is focusing on constructing cost-effective concrete roads, instead of asphalt. According to the Malaysian International Trade and Industry Ministry the country requires to build more roads with concrete as a prime source of material, as it has a longer life. “We would like to see more concrete roads in Malaysia as it is competitive in usage as well as cost,” said Bradley Mulroney, CEO and President of Lafarge Malaysia. He added, “Concrete roads are particularly suitable for rural and flood-prone areas as they are more durable.”

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It seems, the promotion of concrete roads would also support other industries in the country. Concrete roads make up less than one percent of Malaysian roads.

OCTOBER / NOVEMBER 2015

REGIONAL REPORT

INDIA’S CEMENT MARKET CONTINUED TO WITNESS LOW DEMAND The Indian cement market continued to witness a low cement demand, with output expanding by 1.8 percent from April to August 2015 as compared to the same period, previous year. Cement demand remained subdued due to depressed government investment and weak housing demand. In certain parts of India, cement prices have increased despite low demand at a national level. In northern India, cement prices have increased by between 8 to 10 percent. The price difference was INR 25 and INR 30, a 50 kg bag. The price difference in Punjab and Rajasthan, for a 50 kg bag of cement have soared to INR 70-INR 100. Prices have increased due to increased construction projects in these areas. However, the overall demand for cement in the country continues to remain low.

CHINA TO IMPROVE CEMENT EXPORT VOLUMES Due to lower cement intake in the infrastructure projects, the Chinese cement market is expected to increase its export to other countries. Meanwhile, many global players fear that China will respond to falling domestic demand by boosting exports. China’s annual production capacity for 2014 totaled 3.12 billion tons, but its intake was around 80 percent, leaving 644 million tons of capacity idle. This has led the Chinese government to cut the production, as Beijing plans to consolidate the 2,500 companies and 3,650 plants within its borders to 1,500 companies, and 2,500 plants in three years. However, the main concern is that China’s excess product will hit foreign markets, hurting Japan’s growing cement exports. Export prices for Japanese cement reached new heights in fiscal 2015 due to robust Asian demand, hovering between USD 40 per ton and USD 45 per ton.

HA TIEN CEMENT FACTORY, TO UPGRADE ITS OPERATIONS Vietnam-based Ha Tien 1 Cement and Ha Tien Transport under the Vietnam Cement Industry Corporation (Vicem) have agreed to invest adhering to the guidelines of Vicem’s Complex project in Ha Tien In Thu Duc in Vietnam. The Ha Tien complex has two sites located along the Hanoi Highway, which includes, a grinding station in Thu Duc, Ha Tien 1 Cement and office premises and transport in Ha Tien. The conversion is according to the plan approved by the Prime minister of Vietnam in 2010, including adjusted planning for construction of Ho Chi Minh City in 2025, and urban design plan Hanoi Highway axis approved in 2014.

VIETNAMESE CEMENT MAKERS TO REVIEW PRODUCTIVITY Vietnamese cement makers held a meeting in mid October to enhance labor productivity to meet domestic cement demand. The cement sector has decided to modernize its cement production process. It plans to use advanced technology to enhance product quality and meet standards to address increased demand. Increased demand of cement requires qualified professionals, technicians, technical workers, engineers, designers, as well as the appropriate application research. For the first eight months of 2015, the Vietnamese cement sector recorded an increase in cement consumption to 46.52 million tons, up by 10 percent, as compared to the same period, last year. Cement exports increased by 10 percent to 1.25 million tons in first eight months of 2015 as compared to the same period, last year. 39 OCTOBER / NOVEMBER 2015

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REGIONAL REPORT CEMEX CONFERRED WITH GOLD CERTIFICATION

AMERICAS CEMENTOS ARGOS SIGN PPP AGREEMENT WITH CARTAGENA Colombia-based cement company signed a public-private partnership agreement with the Mayor of Cartagena. The cement company will invest COP 360 million in reformation activities. The cement company has developed new designs for public parks and plans to implement them. The company will use sustainability and innovative designs to improve the quality of the cityâ&#x20AC;&#x2122;s landscape. In another move, Cementos Argos reallocated resources for development in Sogamoso, Colombia. The company likely to invest around COP 275 million to develop recreational and ecological

The data center of Mexican-based building materials company, Cemex, has received the Certified Energy Efficient Data center Gold Certification. This is the highest of the three levels of recognition for an energy efficient data center strategy. The certification was based on the assessment of Cemex for four months. The data center was consistent with best practices in the energy efficiency from CEEDA. The gold certification last two years, at which time a reassessment may be conducted.

CEMENTOS MOCTEZUMA TO INCREASE ITS PRODUCTION CAPACITY Cementos Argos Cement Plant

areas in the region. The investment includes, construction of integrated green areas, recreational areas and area for exercise equipped with fitness equipment.

ARGENTINA CEMENT MARKET RECORDS SEVERE SHORTAGES IN PRODUCTION

Argentina cement market has been struggling with a shortage of cement since August due to lack of production. Many cement companies are likely to import cement from Chile. Holcim Argentina had planned to begin operations at its Capdeville plant in Hera, Mendoza, Argentina. However, the cement company is unable to perform as its raw mill has stopped functioning. The dealers have begun importing cement from Chile and selling it at a high price. In some parts of the country, a 50 kg cement bag is valued at USD 100, which is usually sold for USD 90 per bag. Nevertheless, the shortage of cement is a critical situation as many construction projects have come to a standstill. www.cemweek.com

Mexico-based cement company, Cementos Moctezuma plans to increase its production capacity to 7.7 million tons by 2017. The cement company has an installed cement production capacity of 6.4 million tons per year. The company has witnessed a steady increase in its business activities despite slowdown in the construction sector. The cement company managed to increase its business by effective cost management and innovative business ideas while reducing debts. This has resulted in the company managed to sustain a double digit profitability due to better returns on its investments. The cement company is controlled by the Buzzi family, while Carlos Slim has a small stake in the cement company.

OCTOBER / NOVEMBER 2015

REGIONAL REPORT CUBA’S MORTAR CEMENT PRODUCTION DECLINED IN AUGUST 2015 Due to excessive rains, Cuba has witnessed a decline in its mortar cement in A ugust 2015. The excessive rains has affected the quarrying activities of Geóloga Minera, which heavily influenced the output of mortar cement. The Geóloga Minera mining company produced 205 tons of mortar cement. Production of mortar cement was satisfactory in July 2015 as compared to June 2015. Mortar cement is slowly gaining popularity amongst customers due to its high quality.

VOTORANTIM CIMENTOS TO START THE QUALITY CHECK PROGRAM Brazil-based Votorantim Cimentos, will conduct a qualification program for cement suppliers and entrepreneurs in Sorbadinho, Bahia. Officials of Votorantim Cimentos and Brazil’s Support for Micro and Small Enterprises will moderate the program. The focus of the program will be expansion of business from local suppliers and inviting interested parties to participate in the initiative. The purpose of the program is to increase the business performance, customer competitiveness and satisfaction ratings and reduce the degree of dependence of these companies relative to their main contractors. The cement company plans to help the cement entrepreneurs to implement the qualification program. Votorantim Cimentos believes in offering specialized support to suit the business as the market needs of small entrepreneurs.

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CHINESE IMPORTS AIDS COSTA RICA’S CONSTRUCTION SECTOR Costa Rica’s construction sector may observe a decline in cost of construction after the introduction of Chinese cement. The levels of savings will differ according to its usage. In the case of a housing project, the cost of Chinese cement alone covers 10 percent of the total cost. According to experts, the price of imported Chinese cement is up to 20 percent lower than the current level.

Importantly, the Chinese cement has passed the recent stress test successfully. It is expected that the cement will become popular among builders. As a result, Costa Rica’s construction companies plan to increase the import of Chinese cement. It is expected that the construction companies are likely to save around 10 percent, if they use Chinese cement. It would also help the constructon companies in reducing the overall cost of major public construction projects like roads and dams.

CEMEX PUERTO RICO FOCUSSES ON POLLUTION CONTROL SPENDING Cemex de Puerto Rico plans to spend around USD 1.7 million on pollution control measures. The company is also likely to pay a USD 160,000 penalty to settle claims its operations, which have violated the Clean Air Act. The cement company needs to reduce its nitrogen oxide emissions from its kiln system in Ponce, Puerto Rico. The company paid the penalty for making modifications in its plant without approvals from the concerned authorities. Cemex has instructed to install a control system, which will reduce its annual emissions by approx. 1,423 tons per year. Cemex Puerto Rico cement plant

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BMWEEK.COM UPDATE

CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM TARMAC CEMENT INTRODUCES WATER ABSORBENT CEMENT

CUBA MANUFACTURES ECO-FRIENDLY CEMENT FOR THE GLOBAL MARKET A Cuban cement company in Sigourney has developed a new ecofriendly cement, the calcinated Clay Limestone Cement (LC3), which is in high demand in the global market. The Cuban University, Marta Abreu of Las Villas, the Polytechnic University of Lausanne (Switzerland) and the Indian Institute of Technology worked together to design the new eco-friendly cement. The production process of the cement consumes less energy and is likely to reduce carbon dioxide emissions. LC3 has improved properties as compared to Portland cement. The production costs for the

The Cuban University, Marta Abreu of Las Villas

cement are around 28 percent lower than those for conventional cement.

British cement company, Tarmac, has launched a new cement, Tarmac Topmix, which absorbs huge amounts of water. The average permeability of new cement is around 36,000 millimeter per hour, much higher than a rain event of exceptional intensity. Tarmac Topmix can be used for construction of cycle paths, roads and in areas prone to flooding. It can also be useful to decrease the surface temperature when it gets too hot. Another highlight of the new cement that it works as surface layer of permeable concrete, allowing the water to flow to the ground and spread between cobblestones at its base. The water absorbency can be increased with the help of drains.

MEXICAN RESEARCHER DEVELOPS LIGHT EMITTING CEMENT Mexican researcher José Carlos Rubio Avalos, from Universidad Michoacana de San Nicolas de Hidalgo has developed a light emitting cement. The new cement will require a low maintenance and will have a low environmental impact, making the new product a new energy alternative. The new cement, will have a additional features like luminescence generation, which will make it light emitting cement. The new cement is being processed for patent and will be sold in the European

market as the European cement companies are considering the new cement for their technological and scientific innovation. “The conventional cement usually goes unnoticed, but is part of the environment. Its sales are indicators of a country’s economy, it is everywhere in the world and is considered the material used by humans after water,” said Rubio Avalos, an inventor and researcher from Universidad Michoacana de San Nicolas de Hidalgo.

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OCTOBER / NOVEMBER 2015

EQUIPMENT

EQUIPMENT GEBR PFEIFFER TO SUPPLY COMPLETE GRINDING STATION IN ECUADOR Gebr. Pfeiffer was awarded a contract to supply a complete grinding station to replace aging ball mills at the Hormicreto clinker plant in Ecuador. The new grinding solution, will not only help reducing the plant’s energy consumption, but likely to improve the overall grinding efficiency, allowing the plant to increase production from a single mill. Gebr. Pfeiffer’s delivery included: MPS 2500 BC swing mill with “Lift and Swing” technology, SLS 2250 BC classifier, bucket elevator, reject conveyor belt, chutes and divert chutes, reject silo, weigh feeder, de-dusting unit, metal detector, separator, rotary locks, bag filter, mill fan, ducting expansion joints and dampers, HML 1250 Pfeiffer hot gas generator, MCC control and instrumentation, and related engineering services. Delivery of the entire grinding station is expected to be complete by December 2015.

43 OCTOBER / NOVEMBER 2015

FEDERAL MARINE TERMINALS LOAD SHIPMENT OF ROTARY KIWLN New York-based oversized cargo handling firm, Federal Marine Terminals, has loaded six sections of the rotary kiln and plans to ship them from Port of Milwaukee to Quebec. The Canadian cement company, McInnis Cement will be receiving the six sections of rotary kiln at its unit in Quebec. The six units of the rotary kiln are manufactured by A-C Equipment Services, a division of German company ThyssenKrupp Industrial Solutions. The rotary kiln will be transported from Milwaukee, early this week. It will be delivered to the Port-

Daniels–Gascons in the Gaspésie-Îlesde-la-Madeleine region of Quebec and would be transported to the McInnis cement manufacturing plant.

OYAK ASLAN CIMENTO SANAYII SIGNS CONTRACT WITH KHD HUMBOLDT WEDAG

GEBR PFEIFFER RECEIVES ORDER FROM SINOMA SUZHOU CONSTRUCTION

Turkey-based Oyak Aslan Cimento Sanayii has signed an equipment contract with KHD Humboldt Wedag for the delivery of equipment to upgrade its cement grinding line. Oyaks’s 7th KHD roller press will be installed at its plant in Darica-Kocaeli, Turkey. The new machine will increase the capacity of the cement grinding unit no. 1 and will save approximately 20 percent of the energy use. The new machine is likely to help the Oyak Aslan Cimento to maintain its position in the Marmara region, Turkey. The new mill will be integrated with the

The Chinese General Contractor, Sinoma Suzhou Constructrion, Kunshan, Jiangsu, China has awarded an order with Gebr Pfeiffer for the supply of a new mill machinery, MPS 5000 B. The equipment, will be installed at Saman Cement in Iraq. The mill will have installed drive power of 4,000 kW and will be grinding around 500 tons per hour of cement raw material. Gebr Pfeiffer will supply sixth mill to Iraq via Chinese general contractor Sinoma Suzhou Construction. The order is likely to be delivered in 2016.

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BMWEEK.COM UPDATE DENMARK’S FLSMIDTH PLANS TO ENTER IRAN MARKET Denmark based cement market, FLSmidth has signed a memorandum of understanding for industrial cooperation with the Iranian company—Ehdas San’at. FLSmidth plans to expand its activities to Iran regional market. Ehdas San’at will act as FLSmidth’s representative for the implementation of projects and services in Iran. The Iranian company will offer its knowledge, technical and economic cooperation to FLSmidth. Ehdas San’at has agreed to establish a close cooperation with FLSmidth in the field of producing related equipment and implementing new projects, as well as the renovation of existing cement plants in Iran. Both companies have also decided to cooperate in exporting cement to regional countries.

EQUIPMENT FOR HOLCIM NEW ZEALAND SHIPPED FROM ROTTERDAM The final lot of Holcim’s Timaru dome is being shipped from Rotterdam. The shipment includes, two cement ship unloaders, a ship unloader and two conveyor belt systems purchased by the concrete company. The total cost of the project is around USD 50 million. The shipment is expected to arrive in Timaru, New Zealand in early November,2015 and will be used for completion of Holcim’s new dome at the port. The shipment is being shipped from Netherlands to New Zealand.

FLSMIDTH SIGNS ONE-YEAR SERVICE AGREEMENT WITH HEIDELBERG FFLSmidth has signed a one year service agreement with Heidelberg Cement. Under the agreement, the company will help support the Heidelberg cement plant in Kjøpsvik, Norway, reports Nasdaq. The FLSmidth team will monitor and diagnose the plant in real time. It will also offer an advice regarding cement plant’s process operators, and process engineers on further improvements. The team will also help in increasing availability and reducing operating costs, while ensuring the plant will maximize its performance. “Optimizing equipment performance is difficult without the access to a wide range of specialists. In this case, we have an experienced global specialist team ready to support the customers at all hours of the day anywhere in the world,” said, Skage Hem, Vice President and global R&D of FLSmidth customer services.

The one year service agreement between Heidelberg, and FLSmidth is based on a partnership between FLSmidth’s global team of specialists and the Heidelberg Kjøpsvik operators and process engineers. Service is increasingly important for FLSmidth and for its growing business. In the last quarter, alone service business of FLSmidth grew 24 percent as compared to the same quarter last year. Although global growth has slowed down, the equipment of existing customers’ needs to be maintained and optimized in order to increase the productivity of the plant. With more than 90 percent of the life cycle cost of cement plants being OPEX cost, service agreements are an area of continued growth potential for FLSmidth. The gap between the best and the worst run processes point to the fact that there is a valuable improvement potential for operating the plants better. FLSmidth may sell the technology if it becomes successful at the cement plant.

Heidelberg cement plant in Kjøpsvik, Norway,

KHD SUBSIDIARY WINS EQUIPMENT CONTRACT IN RUSSIA

Holcim’s Timaru dome

Zab Zementanlagenbau, Germany, a subsidiary of KHD Humboldt Wedag International, has signed a contract worth over EUR 100 million for the supply of equipment and services for a new cement plant in Russia. The plant will have a production capacity of 4,500 tons of clinker per day. The new cement plant is being built in www.cemweek.com

the North Caucasus region of Russia. KHD Humboldt Wedag International is a global leader in providing equipment and services to cement producers, with over 150 years of experience in the cement industry. The core competencies of the technology-focused company include process engineering and project implementation.

OCTOBER / NOVEMBER 2015

FLASHBACK NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS (darker red shows higher news volume)

CW Group Meeting Agenda The CW Group will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit http://research.cwgrp.com/meetings

CW RESEARCH WEBINARS: Global Cement Trade Price Report

CW Research

CONFERENCES WHERE THE CW GROUP WILL BE PRESENTING Thursday, November 26, 2015

February 24 – 25, 2016

Sao Paolo, Brazil

CW Summit Middle East & Africa

April 4 – 5, 2016

Dubai, UAE

Solid Fuel Summit Middle East 2016

April 5 – 6, 2016

Dubai, UAE

AshTrade Europe

April 21-22, 2016

Rome, Italy

WEBINAR

India Petcoke update: Petcoke and Coal

Thursday, December 10, 2015, 2:00 PM GMT

45 OCTOBER / NOVEMBER 2015

CBI Brazil & LatAm 2016

www.cemweek.com

BUZZ TOP CEMWEEK STORIES

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8 9 10 11 12 13 14 15 16 17 18 19 20

India’s UltraTech Cement plans new acquisition of Jaiprakash cement plant CPX to set up new cement plant in Brazil's Bela Vista Heidelberg-Italcementi deal finalized in India India’s Reliance Cement plans to exit from cement business Cement prices stabilizes in Egypt Africa’s Dangote Cement appoints new regional CEOs Semen Balfour, Indonesia declares performance report for the first eight months of 2015 Indian cement demand remains stable in H1 Qatar’s Alkhalij Cement adds new production line Cemtech to begin construction of new cement in Kenya Cemex and Suez to inaugurate plant upgrade FLSmidth plans to venture into remote monitoring business Credai NCR, Delhi likely to boycott UltraTech, Lafarge Senegal reacts to Dangote Cement’s entering the market India: Jaypee Group likely to sell its cement assets to JSW Ban on sale of India’s Ambuja Cements imposed Ibeto Cement to build greenfield cement plant in Enugu, Nigeria Sengileevskaya cement plant upgrades its cement delivery system Cementos Pacasmayo, Peru begins production at Piura cement plant Dangote’s cement plant in Tanzania to open in October 2015

CEMWEEK.COM aggregates

arabian brazil

building commerce concrete

consumption

countries delegation domestic dong economic egypt egyptian expansion fall fuels

increased

grinding holcim import industrial international loesche

morocco nigeria official pakistan petcoke plans portugal positive profits project quality rate records region research results revenues roads romania sinoma sold subsidiary tiles

University duo awarded with patent for new building system Fresh construction projects underway in Kuwait US construction material prices down in August Argentina: New Sika unit inaugurated US construction material prices down in September Use of recycled materials rising Fred Weber buys JH Berra unit UK construction numbers down in July Botswana curbs illegal sand mining Saudi okays new construction projects More efficient kaolin operations in Georgia Sika expanding product lineup in Africa Oman to increase investments in Vietnam Buzzi Unicem eyeing Sacci's business units LafargeHolcim signs partnership deal with property developers in Nigeria Duke Energy set to transfer coal ash to new facility Moldova unveils new concrete plant EPA okays Kansas' coal ash plan Iraq finding it tough to sustain construction projects Knauf building new plant in Russia

witnessed

zambia

BMWEEK.COM

TOP BMWEEK STORIES 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

materials

Africa Aluminum

Acquisition

Aggregate

Basf

Assets

Builders Central Coal

Aggregates Bbca

Boral

Concrete

Customers Development Dubai Earnings Energy Executive France General Global

Engineering

Growth Hanson Heavy Hungary Infrastructure Investment

Imerys Industrial

Islands Likely Management Manager Manufacturing Mixed Oman

Operations

Product Ready Region

Output Plants

Products Project

Pruitt

Sales Says Sheetrock Steel Transaction Units Vice Virgin Wind Work 2014 2015

Revenue

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OCTOBER / NOVEMBER 2015

 Market perspective, forecast and    

february 24-25, 2016

sao paulo

TIVOLI SÃO PAULO – MOFARREJ HOTEL

 

competitive outlook Finance and capital markets Alternative fuels, new business models Efficiency, innovation, new developments Technology, operations and best practices Global cement, clinker and slag trade prices Fuel prices and outlook

GLOBAL CONTACT Beatrice Ene Client Development & Marketing Director E: be@gmiforum.com M: +40 722 764 802