CemWeek Magazine: January/February 2017 by CemWeek

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

January / February 2017

Q&a: LEADERS

Peter Sand Analyst, Bimco

Seaborne cement shipping outlook

CW RESEARCH:

World cement prices struggle FEATURE:

2016: A look in the review mirror

News

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Analysis

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Market Coverage

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Interviews

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People Moves

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Consolidation of the cement industry in 2016 This issue of CemWeek Magazine Reviews the year of 2016, as well as highlights an insider’s take on the shipping industry. Market conditions in the shipping industry have been highly challenging, yet there are glimpses of hope for 2017, as Peter Sand, BIMCO’s Chief Analyst, comments in an exclusive interview for CemWeek Magazine. 2016 continued the trend began in 2015, with the major cement industry players focusing on consolidation. Case in point, the global cement manufacturer, HeidelberCement, acquired Italcementi, following in the footsteps of the LafargeHolcim merger. But that is not to say that 2016 lived up to the manufacturers’ expectations in terms of volumes or revenues. Prospects for cement demand in 2017 are more optimistic than in previous years. Although cement consumption in the Middle East and Latin America will continue to be challenged there may be growth in other regions with higher infrastructural spending and stabilization in China. The Chinese domestic markets performance was under pressure following the continued adherence of the Republic to a slower growth economic model. Naturally, the once booming growth of the Chinese construction sector contracted significantly, sending a ripple effect across the board Asia Pacific region currently accounts for more than 55% of the overall market share and is envisaged to retain its dominating hold over the market by the end of 2020 due to the recent increase in the number of residential, non-residential, and infrastructure projects in markets like China and India. In 2016, the Indian cement market saw busy time in terms of mergers and acquisitions. In November, Dalia Bharat and OCL India merged their operations. The merged entity now has a combined capacity of 25 million tons per year. As usual, CemWeek Magazine provides all the relevant news about the main indicators of the industry, including the latest facts and figures about cement volumes, energy prices, and relevant people in the business, regional developments, equipment and construction projects.

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CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

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contents FEATURES 4 Q&A Leaders: Peter Sand Seaborne cement shipping to outgrow global cement demand growth rates in 2017, according to Peter Sand, BIMCOâ&#x20AC;&#x2122;s Chief Shipping Analyst. 10 2016 in review: Cement Business In 2016, the global cement industry grew on the backdrop of rising demand from the housing sector in emerging markets in Asia-Pacific and Africa.

16 Global Cement Trade Price Report 4Q 2016 Cement industry in a slow recovery

DEPARTMENTS 1 EdiTor's letter The future is closer than we think 3 numbers in brief Global gray cement and clinker seaborne trade 22 research Cement Volumes Cement Energy Markets 26 people People on the move

36 Construction & building materials by bmweek.com Construction and building materials update 38 Petcoke Market update from PetcokeWeek.com Petcoke industry news update

regional reports 28 Europe, Middle East & Africa 30 South-East Asia 32 Asia Pacific 34 Americas

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40 Equipment Equipment and notable projects 46 cw group meeting agenda CW Groupâ&#x20AC;&#x2122;s upcoming events 47 BUZZ Top 20 CemWeek and BMWeek stories

numbers in brief

Med Basin and Persian Gulf trade prices The new year debuts with slight recoveries in FOB pricings in the two regions Though too early to become over-enthusiastic over the recovery of the global cement market, the start of the year 2017 gives hopes for at least some cautious optimism for traders in Med Basin and Persian Gulf, as export prices seem to be on the track of recovery for the first time in several months. Ordinary Portland Cement FOB (USD/t)

$20

Persian Gulf

Med Basin

$50

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Source: CW Research

When looking at prompt cargos of ordinary cement in the month of January, FOB pricing has improved by an average of around four percent for the two regions we track through primary research. For Med Basin traders, this is the first increase seen since June 2016, while Persian Gulf traders have last seen positive pricing growth in May 2016. Ordinary Portland Clinker FOB (USD/t)

$10

Med Basin

Persian Gulf

$40

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Source: CW Research

Far more linear and stable, ordinary clinker pricing saw a small increase in January 2017 as well, improving by around one percent for the two regions CW Research tracks. At the moment, clinker pricing in Med Basin is with about USD 5 more expensive than clinker sourced from Persian Gulf. www.cemweek.com

August January / September / February 2017 2016

Q&a: Leaders

Peter Sand, Bimco:

Seaborne

Cement shipping to recov in 2017 Peter Sand, BIMCOâ&#x20AC;&#x2122;s Chief Shipping Analyst, responsible for analyzing the commercial markets for dry bulkers, tankers and containerships provides an analytical perspective about the challenges the shipping market is currently facing.

August / /September January February 2017 2016

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ver

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August January / September / February 2017 2016

Q&a: Leaders

About Peter Sand:

Chief Shipping Analyst, Peter Sand joined BIMCO, in 2009. During the rise and fall of the shipping markets Peter gained experience in the fields of shipping analysis, executive assistance, caretaking of investors and the art of transforming data and statistics into overviews and forecasts. With a Masterâ&#x20AC;&#x2122;s Degree in Economics from the University of Copenhagen, Peter also teaches Maritime Economics. Responsible for analysing the commercial markets for dry bulkers, tankers and containerships, Peterâ&#x20AC;&#x2122;s reports and focused analytical articles on the shipping market are widely read and have often been referenced in media.

eaborne cement shipping to outgrow global cement demand growth rates in 2017, according to Peter Sand, BIMCOâ&#x20AC;&#x2122;s Chief Shipping Analyst. Responsible for analyzing the commercial markets for dry bulkers, tankers and containerships, Peter provides his perspective about the challenges the shipping market is currently facing. BIMCO market analysis is unbiased and neutral, we aim to be realistic rather than optimistic or pessimistic. BIMCO Market Analysis is taking its outset in the global economic development, because the demand for shipping is a derived demand. BIMCO analyse the market for the industry, in order to understand what is fundamental. 6

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Q: How do you characterize the different shipping needs for cementitious products (cement, clinker, fly ash and slag)? Are the vessel requirements different?

The requirements are quite different from the one product to the other. Clinkers and bagged cement exclusively goes into normal dry bulk ships, mainly Coasters (2,000-12,000 DWT), Handysize (25,000-40,000 DWT) but also Handymax (40,000-50,000 DWT).

Cement in bulk primarily goes into more specialized ships like self-discharging cement carriers but also into normal dry bulk ships (2,000-50,000 DWT)

Q: What are the current challenges for shipping lines in the current bulk shipping market? How are the fortunes of specialized ships for cement faring relative to the general bulker market?

The markets of the two are closely linked to each other. As they can substitute one another. The overall dry bulk market is in a terrible condition, with all owners and operators losing money daily.

In short, seaborne shipping of cement is very cheap, by any standards. It should spur exports, but surely you need endconsumption to pick up. Currently we expect global cement demand at 2.1% in 2017. Shipping of cement growing slightly more.

In BIMCOâ&#x20AC;&#x2122;s Road to Recovery project for the dry bulk industry, we project that the sector may become profitable again in 2019, if supply side growth is zero and demand side growth is 2% for the years to come.

Q: In your opinion, what kind of factors and drivers affect cement trade nowadays? Cement carrier fleet vs bulker?

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August January / September / February 2017 2016

Q&a: Leaders DRY BULK SUPPLY GROWTH

To be delivered p.a.

Demolition

Growth rate (RH-axis)

Growth rate p.a.

Million DWT

-20

-40

2013 A

2014 A

2015 A

2016 A

2017 F

2018 E

2019 E

Source: BIMCO estimates on Clarkson's raw data A is actual. F is forecast. E is eastimate which will change if new orders are placed. The supply growth for 2017-2019 contains existing orders only and is estimated under assupmtions that the scheduled deliveries fall short by 10% due to various and 40% of the remaining vessels on order are delayed/postponed.

It’s all about the location of the cement plants and the where the cement will be consumed. For seaborne trading markets prospects, it does not look particularly good. New cement plant capacity is coming online in Africa and Indonesia, limiting imports. Growing imports into the US and other Asian nations have not been sufficient to lift demand.

Q: In the next 5 years, do you believe cement / clinker trade will intensify or be lower?

Infrastructure investments in most parts of the world is good for cement demand, but it doesn’t always translate into higher seaborne shipping demand. If cement demand rise in places with surplus capacity at cement plants. The positive effect is not mirrored in the shipping market. 8

August / /September January February 2017 2016

Cement plants are highly energyintensive businesses, and not something most western people would like to see as their next-door neighbor. This in turn may have the silver lining to it, that seaborne demand may go up, if plants are built in remote areas, also due to environmental legislation. I see places in the world where demand is contracting, like Latin America and Middle East. But for the world as such cement and clinker trade will be growing, albeit at slower pace than seen up to and through 2013.

Q: Concerning the Bulk Dry Index (BDI), in what circumstances do you see a recovery?

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The BDI is only an indication of what’s going on. An indicator that takes both the demand side as well as the supply side of the dry bulk shipping market into consideration. BIMCO’s unique Road to recovery model – also gives guidance into this. If we use the BDI as the standard to go by, and expect the recovery on the market to benefit all the four sub-sector (from Handysize to Capesize) equally, then sustainable freight rates for all the four ship sizes starts at an index value of 1,375. At this level OPEX and financing costs are both covered, and the industry is starting to make money. BDI on 17 January was 922, with no dry bulk ships trading within a profitable freight rate level.

Q: China’s new five-year plan should support commodity imports as the country intends to remove excessive and unnecessary industrial capacity. What are your thoughts concerning China’s new policy on volumes? Do you believe it will help in the recovery of shipping rates?

Moreover, as China expands its railway system in 2017-2020, plans to spend USD 503 billion on infrastructure investments also supports both OBOR and dry bulk shipping. As in past years, China’s investments in housing and connectivity is critical for the dry bulk shipping sector as the rest of the world isn’t growing its dry bulk imports.

Q: How do you predict ship owners will approach (bulker) China is at the center of shipping, demolitions in the next year not just dry bulk but all shipping. and maybe on the longer term?

Especially since the offset of the financial crisis in 2008 it’s been China, singlehandedly, that has grown its dry bulk demand. The rest of the world still imports less than what they did in 2007/2008. In short, everything depends on China.

China’s five-year plan involving transport connectivity will not only boost the economy in a “traditional” sense by increasing public spending, but also the planned investment into physical infrastructure improves the forecast for dry bulk imports. In support of the One-Belt, One-Road (OBOR) initiative, USD 259 billion is set to be spent on highway and waterway projects in 2017.

BIMCO see dry bulk owners scrapping 19m DWT in 2017. With the number coming further down in 2018-19. Dry bulk ship owners find it increasingly difficult to part with their ships. In 2016, we saw a record high level of scrapping being done in the first 6 month. While in the final 6 months is came down to a very low level, as the market improved from being “disastrous” to become only “terrible”. To stay on the Road to recovery we need a zero-supply side growth rate, as we cannot rely on the demand side to save us going forward. China is also stalling in several ways – it wasn’t that clear in 2016, but its happening.

Q: How many bulkers were sold for demolition in 2016? And for the following year?

2016 has 400 dry bulk ships scrapped. Equal to 28.9m DWT of capacity. At the same time, new deliveries amounted to 47.2m DWT – giving a net supply side growth rate of 2.2%.

Q: For the next year, do you believe this demand side will continue to improve?

Demand grew at almost 2.2% in 2016, that was slightly higher than expected. Going forward BIMCO estimate 2% as the long-term potential average.

Q: What role will increasing environmental regulation play in the shipping space in the near and medium term?

Plenty of regulation affecting the shipping industry right now, on top of BIMCOs agenda is to find a way to implement and enforce the global sulfur gap that is to come into force in 2020. Work on this started at the IMO just last week.

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August January / September / February 2017 2016

FEATURE

2016 Cement in review

2016 was a year of global expansion in the cement industry. Older markets have consolidated and markets such as Asia Pacific and Africa have emerged. The increasing demand in the housing sector has made the industry a step forward. The cement industry also had to adapt to stricter environmental regulation, especially in developing markets.

August / /September January February 2017 2016

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August January / September / February 2017 2016

FEATURE n 2016, the global cement industry grew on the backdrop of rising demand from the housing sector in emerging markets in Asia-Pacific and Africa. However, growth in the industry was offset by China’s severe slowdown during the year. The Chinese domestic market’s performance was under pressure following the continued adherence of the Republic to a slower growth economic model. Naturally, the once booming growth of the Chinese construction sector contracted significantly, sending a ripple effect across the board. Moreover, the focused governmental effort to reduce industrial CO2 emissions, especially in the North of the country, where much of the cement capacity is concentrated, resulted in massive cement capacity cuts that are nowhere near being completed. As the largest cement manufacturer in the world is undergoing major changes, the balance with which cement players have grown accustomed to is shifting. As such, the industry went through significant consolidation in 2016, translated into relevant mergers and acquisitions, both new and updated environmental and trade regulations, as well as sporadic capacity expansions. As such, the industry went through significant consolidation in 2016, translated into relevant mergers and acquisitions, both new and updated environmental and trade regulations, as well as sporadic capacity expansions.

Industry Consolidation – M&A Deals International players such as LafargeHolcim, Heidelberg and Cemex made significant acquisitions in 2016. The biggest deal of the year was HeidelbergCement’s acquisition of Italcementi. With this acquisition, HeidelbergCement secured its position as the top global producer of aggregates, second global producer of cement, and third largest ready-mixed concrete manufacturer worldwide.

August / /September January February 2017 2016

However, acquisitions with this type of impact can hardly go unnoticed. Antitrust questions were promptly raised by the Federal Trade Commission in the US regarding this merger. FTC asked HeidelbergCement and Italcementi to divest USbased assets to avoid unfair competition in five regional markets in the US. Thus, the merged entity decided to divest a cement plant in Martinsburg, WV and up

over integrated cement plant and distribution terminals from Lehigh Hanson and Essroc at an expense of US$660m. With this acquisition, Cementos Argos will expand its operations in the US, where it is the second-largest concrete producer. During the year, several significant merger and acquisition deals took place in China and India - the top two cement

International players such as LafargeHolcim, Heidelberg and Cemex made significant acquisitions in 2016 to 11 cement distribution terminals in the country. FTC’s decision regarding the Heidelberg and Italcementi merger led to another major acquisition when Argos USA purchased two of the divested assets from Lehigh Hanson and Essroc Cement, subsidiaries of HeidelbergCement. Argos took

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producing markets. The China Cement Association has instructed the Ministry of Industry and Information Technology to speed up the consolidation process and move to consolidate at least 60% of the production capacity into ten producers by 2020. According to the association,

July, UltraTech Cement, the cement unit of Aditya Birla Group, entered into a deal to purchase Jaypee Group’s cement assets in Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh for USD 2.38 billion. Moreover, LafargeHolcim has increased its shareholding in Ambuja Cement and ACC via its subsidiary Holderind Investments. The cement manfucaturer now owns 63% of Ambuja Cement’s shares and 4.5% of ACC’s shares. Also in India, Orient Cement entered into an agreement to buy three cement plants from Jaiprakash Associates for USD 292

Moving to Latin and Central America, in December, Cemex announced that its subsidiary, Sierra Trading, will present an offer and take-over bid to all shareholders of Trinidad Cement Limited, a company which is publicly listed in Trinidad and Tobago, Jamaica and Barbados. The price of the acquisition is still subject to negotiations.

New Projects Emerging markets of Asia-Pacific and Africa had a record number of new plants and capacity expansion projects in 2016. This was primarily due to increasing demand from rapidly growing housing needs

Emerging markets of Asia-Pacific and Africa had a record number of new plants and capacity expansion projects in 2016

China may have to reduce production by 390Mt/yr and cut 130,000 jobs in the next five years to maintain the balance between supply and demand in the industry. To make the consolidation process successful, existing cement companies will pool together US$3bn in a restructuring fund. This is expected to aid the larger cement producers, including Anhui Conch, Huaxin Cement, Qilianshan Cement and Sichuan Shuangma Cement. In 2016, already major steps were taken in different provinces to cut cement production. In the northern province of Hebei, the government announced that the production of cement will be capped at 200 million tons by 2020 to alleviate overcapacity.

million. Through the deal, Orient Cement will acquire a 74% stake in Bhilai Jaypee Cement at US$217m from Jaiprakash Associates and the Nigrie cement grinding plant from Jaiprakash Power Ventures for USD 75 million. These acquisitions will provide Orient Cement access to limestone reserves and other raw materials, such as slag.

and infrastructure projects. One of the major capacity expansion was planned by My Home Industries’ flagship Maha Cement, a producer based in Southern India. The company invested in a new greenfield cement plant. With this investment, the company’s capacity is expected to rise to 10 million tons per annum.

In 2016, the Indian cement market saw busy time in terms of mergers and acquisitions. In November, Dalmia Bharat and OCL India merged their operations. The merged entity now has a combined capacity of 25 million tons per annum. In www.cemweek.com

August January / September / February 2017 2016

FEATURE DMCI Holdings announced its plans to spend USD180 million to build a 1.7Mt/ yr cement plant on Semirara Island in the Visayan Islands, Philippines. DG Khan Cement announced its plans to build a new 9000t/day cement plant at Hub in Balochistan Pakistan. In Africa, one of the major expansion project was announced by Ciments de L'Atlas (CIMAT), with an investment in a new greenfield project in Morocco. In Mali, Ciments de l'Afrique (CIMAF) has inaugurated a 0.5Mt/yr grinding plant at Diago in the Koulikoro Region. Dangote Cement, Africa’s largest cement producer announced to invest US$ 1b to build a cement factory in Okpella, Nigeria. This new plant will have the capacity of 6 million metric tons per annum and expected to start operation within next 26 months.

Environmental Regulations Impacting Global Cement Industry The cement industry has also had to adapt to stricter environmental regulation, especially in developing markets, where governments are now trying to upgrade environmental restrictions to be more in line with those in developed markets. China amended the country’s Environmental Protection Law (EPL) for the first time in almost 25 years. These amendments impose higher penalties for polluters and force industries, like steel, coal and cement, considered the main polluters, to cut capacity. One of the primary aim mentioned in China’s 13th five-year plan which was announced in 2016, was reduction of emissions from coal burning industries. These regulations took shape due to the snowballing overcapacity in coal burning sectors such as steel and cement. Tightening regulations come with the unescapable reality of some major cement plants having to shut down. Authorities of Tangshan, a major industrial city in northern Hebei province of China announced that all cement plants and coal-fired power plants that did not reach the minimum emission standards for four months from November will be shut-down. 14

August / /September January February 2017 2016

Similarly, in India, environmental norms were reformed and made stricter in 2016. Prior to 2016, there were no specific regulations on the emission of hazardous wastes from cement. In 2016, a new set of norms was proposed to tackle the issue. The active norms’ particulate matter emission was reduced from range of 50-150 milligram per normal cubic metre (mg/ Nm3) to 30mg/Nm3.

mium. With more stringent norms, several cement plants were closed or announced to be shut down in the future.

Trade barriers and sickening of antitrust Regulations But apart from expansions and growth, the cement industry experienced its fair share of limitations in 2016, particularly in developing markets.

Ghana’s government imposed a new trade regulatory bill that restricted bagging and importation of cement to Ghana starting from 5th August 2016 New environmental norms, along with updated regulations in several countries throughout the year, have imposed limits for hazardous pollutants such as hydrochloric acid, hydrogen fluoride, and for heavy metals such as mercury and cad-

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Ghana’s government imposed a new trade regulatory bill that restricted bagging and importation of cement to Ghana starting from 5th August 2016. Under this new regulation, imports from ECOWASmember countries are exempt. However,

have an annual quota of 150,000 tons each. One of the major development in the industry was Iraq’s announcement to remove the ban on cement imports from Iran. Earlier in 2016, Iraq government passed the bill to ban cement import from Iran to protect domestic production. This decision impacted Iran’s cement industry adversely as Iraq accounted for nearly 60% of the Iran’s cement export. Iran‘s Cement Industry Employers Association announced that Iraqi authorities has promised to remove its ban on the import of Iranian cement. This in turn could help the Iran’s cement sector to revive. In August, The Competition Commission of India imposed a penalty of more than usd 1 billion on eleven cement companies and one

bon dioxide and calcium silicate. The look of this new material is like conventional cement but the properties would make it last longer in some applications. Use of this carbonated cement would help to reduce the carbon emission for cement industry. Also in North America, Mexico's University of San Nicolas Hidalgo has created a new type of cement that glows in the dark. Dr. José Carlos Rubio, the leading scientist on the project, stated that it has taken nine years to restructure the micro-structure of cement to illuminate. The cement charges with the exposure of light and can glow up to twelve hours. The longevity of this new type of cement is close to a century. This new kind of so-

Engineers from Oregon State University, Purdue University and Solidia Technologies developed a type of cement called calcium silicate cement that gains strength from carbonation, rather than hydration.

those looking to import cement from non-ECOWAS-member countries must apply for renewable licences. According to the government authorities, this decision was taken to avoid the issue of overcapacity that has lately saddled the sector. The government announced to form a Portland Cement Monitoring Committee (PCMC) to enforce the new regulations. This move was taken primarily in response to the calls from local producers who have approached government authorities to protect them from unfair competition from imported cement. Another African country, Angola, has also imposed ban on cement import in fifteen of its provinces. According to the Angolese government, the installed capacity in the country far exceeds domestic needs. This decision however is not imposed on the border provinces of Cabinda, Cunene and Kuando Kubango, which will continue to

Cement Manufacturers Association (CMA) for allegedly forming a cartel to control cement prices. ACC, Ambuja Cement and Binani Cement were some of these companies which received penalties. Apart from penalties, trade regulator has directed all the parties to refrain from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. The commission also ordered CMA not to collect wholesale and retail prices, details of production and dispatch from its member firms.

Innovation Multiple research and development activities are taking place across the globe to produce cost effective as well as environment friendly cement. Engineers from Oregon State University, Purdue University and Solidia Technologies developed a type of cement called calcium silicate cement that gains strength from carbonation, rather than hydration. This new type of carbonated cement reacts with car-

lar powered cement absorbs solar energy and radiate it back during night. The application of this product is wide in commercial platform. Most importantly, this new cement opens the possibility to illuminate streets and buildings without wasting fuel energy.

Conclusion Amidst snowballing challenges, the cement industry has evolved in 2016. New cement plants were inaugurated in several countries, especially in developing nations. As China slows, other major cement producing countries such as India, Turkey and Indonesia are slowly taking over as the markets to cover supply gaps in other markets. However, strengthening environmental regulations require cement companies to mend their old ways and adjust to new ones. With such changes, innovation becomes a key factor for the industry. In 2016, green products have started to gain in popularity and the trend is expected to remain the same in the near future.

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August January / September / February 2017 2016

Report

cw research:

International cement

trade activity drops

in 4q2016

ex-works prices decreasing Qoq Global export prices for gray cement recovered on a quarterly basis in the third quarter of 2016, but remained below the $60 per ton mark, according to the 4Q2016 update of CW Researchâ&#x20AC;&#x2122;s Global Cement Trade Price Report (GCTPR).

August / /September January February 2017 2016

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Source: bulk-distributor.com

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August January / September / February 2017 2016

Source: masterbuilder.co.in

FEATURE Report

Amid slower economic recovery, demand for cement is expected to remain subdued 18

August / /September January February 2017 2016

hile export pricing for gray cement increased in the third quarter, quarter-on-quarter (QoQ) ex-works pricing, however, decreased in most of the markets. As far as ex-works pricing is concerned, the third quarter of the year brought about QoQ decreases in China and Nigeria. On the other hand, some markets saw YoY increases owing to foreign exchange rates (e.g., Brazil) and better pricing environment in the domestic market (e.g., Colombia). Weak economic growth, prospects revised downwards At a global scale, global demand for cement has remained under the influence of weak economic development. In its latest update (October 2016), the International Monetary Fund (IMF) has www.cemweek.com

revised downwards its growth expectations for the world economy. On the other hand, recovery is expected to pick up in 2017, more notably for emerging economies, while the bright spot in developed markets is projected to be the United States.

During the quarter, global clinker export prices fell 13.2% YoY. Nonetheless, the

S ‘16

J ‘16

M ‘16

J ‘16

N ‘15

S ‘15

J ‘15

M ‘15

J ‘15

N ‘14

S ‘14

J ‘14

Source: CW Research

global average clinker FOB price rose QoQ in the third quarter of 2016. For granulated blast furnace slag (GGBFS) exports, CW Research analysts show average prices for the third quarter of 2016 at the highest level seen in a year. The price increase was mainly on account of strong growth in the Mediterranean Basin.

Average selling prices decline, future pricing mostly stable Globally, ex-works prices fell further YoY in the third quarter of 2016 across most of the world markets. While most markets saw QoQ declines as well, India and Indonesia showed recovery on a quarterly basis. Indonesian average selling prices

Source: metso.com

For the white cement segment, export prices dropped both QoQ and YoY to a global average of $100.3 per ton in the third quarter of the year. On the other hand, volumes trended higher on account of strong volumes shipped from markets in the Mediterranean Basin, as well as Western Europe and North America.

M ‘14

Global trade prices for gray cement fell 4.1 percent YoY in 3Q2016, with over 50 percent of global trade evaluated in the three months to September 2016.

M ‘14

Trade prices fall in the quarter for gray and white cement

Global FOB prices for gray cement (USD/ton)

J ‘14

Amid slower economic recovery, demand for cement is expected to remain subdued due to slowdown in China, struggling economies in Latin America (e.g. Brazil, Venezuela). Weak demand growth will in turn impact cement trade and result in lower traded volumes.

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August January / September / February 2017 2016

Source: mediad.publicbroadcasting.net

FEATURE Report

Regional gray cement export prices (USD/ton)

Indonesian average selling prices increased by 1% in the third quarter of 2016

Asia Pacific Japan North America & Caribbean

August / /September January February 2017 2016

Mediterranean Basic Western Europe

Mar ‘16

Apr ‘16

Source: CW Research

Eastern Europe Scandinavia & Baltics

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May ‘16

Jun ‘16

Jul ‘16

Aug ‘16

Sep ‘16

Oct ‘16

Nov ‘16

Dec ‘16

Jan ‘17

Feb ‘17

Mar ‘17

increased by 1% in the third quarter of 2016 and in India domestic prices grew to almost $67 per ton mark.

Pricing for traded cement expected to contract further Looking ahead, pricing for internationally traded cement is expected to contract in most regions. Notably, Mediterranean Basin gray cement FOB prices are projected to fall below the $50 per ton mark by March 2017, on average. Additionally, contractions are expected to be experienced in pricing for Western European exports as well, while pricing in North America and the Caribbean and Asia Pacific Japan are projected to remain more stable.

Ex-works prices decreased in most major cement markets As far as ex-works prices are concerned, CW Research expects pricing improvements in the main markets in Asia-Pacific-Japan, as well as a rather positive pricing environment in North America. Stable pricing development will be seen in average sale prices for cement produced in Mediterranean Basin.

About the Report The Global Cement Trade Price Report (GCTPR) is CW Researchâ&#x20AC;&#x2122;s benchmark price assessment for monthly gray cement, white cement, clinker and granulated blast furnace slag prices and volumes. The 200+ page report, with extensive coverage through tables and charts throughout, published on a quarterly basis, serves as the industry go-to source for monthly price data for about 70 individual markets worldwide, including multiple cornerstone data series: import, export, ex-works and market prices. Additionally, the GCTPR includes extensive discussion of key playersâ&#x20AC;&#x2122; pricing strategies as well as trading price forecast and select trade volumes for each country. The Global Cement Trade Price Report also provides regional price indices and a review of notable trading dynamics and drivers in different regions. GCTPR is a must-have resource for all industry participants that need to know and track cementitious prices, including cement traders & exporters, accountants & controllers, producers, analysts and shippers. If you need to know pricing, CW Researchâ&#x20AC;&#x2122;s Global Cement Trade Price Report is the go-to resource. More information about the report can be found at http://www.cwgrp. com/research/research-products/ forecasts/product/1-global-cementtrade-price-report

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August January / September / February 2017 2016

CEMENT MARKETS

CW Research

CEMENT VOLUMES

The Pakistani cement industry is experiencing its golden period in terms of demand, and is expected to grow at a rapid pace in next few years. The demand for cement in Pakistan rose by 15% in November 2016 compared to the same month previous year. The increased in demand of cement is due to the boom of construction sector in the country and various government projects. The Chinese cement production increased 4.2% in November 2016, as compared to the same period previous year. Cement manufacturing is one of industries in China that is going through

a major change. Due to the slowdown of Chinese economy, the demand for cement has come down not only in China but globally. Currently, China’s cement industry is facing increasing challenges from overcapacity and weak pricing. Country’s policymakers discussed the need for cut in cement capacity from 2003, however, it was not put into practice due to double digit industrial growth. However, with the recent slowdown, China’s cement production could face massive cuts in the near future. Cyprus cement production has reduced by 10.3% in November 2016 as compared to the same period previous year, whereas the demand for cement has increased by 26.1% in November 2016 as compared to the November previous year. The Indian cement production rose 0.7% in November 2016 as compared to November last year. Despite the slight increase in cement output in the second half of 2016, demand for cement and implicitly production were on the lower side as compared to the first half due to expected drop in the monsoon period as heavy rains affect construction development in the country. The demand and production is expected to rise from December to March as the construction sector is at its height at that time.

Source: CW Research

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Indonesia

China

Argentina

Ukraine

India

Belarus

Cyprus

-25%

Italy

-30%

Colombia

20%

-20% Russia

-15%

Argentina

-10%

Morocco

-10%

Cyprus

10%

-5%

Pakistan

20%

Peru

30%

Colombia

10%

Saudi Arabia

Cement production November 2016– YoY change (%)

Cement demand November 2016 – YoY change (%)

Saudi Arabia

The cement sector in Saudi Arabia is expected to improve as the government has announced to further lift limitations on cement exports, thereby reducing the load on clinker inventories.

Saudi Arabian cement production fell 20.2% in November 2016 as compared to the same month previous year, while demand fell 22.4% as compared to the same period. Manufacturers of cement in Saudi Arabia are struggling with high clinker inventories and overcapacity as the government has yet to fully lift the ban on exports of cementitious materials. The cement sector in Saudi Arabia is expected to improve as the government has announced to further lift limitations on cement exports, thereby reducing the load on clinker inventories. Moreover, domestic demand will be supported by ongoing construction projects.

CW Research

CEMENT PRODUCTION (million tons) Country

MoM (%)

CEMENT CONSUMPTION (million tons) YoY (%)

YTD

YTD (%)

MoM (%)

YoY (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

CEMENT PRODUCTION MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

YTD

YTD (%)

YTD

YTD (%)

CEMENT CONSUMPTION MOM (%)

CEMENT EXPORTS (million tons) Country

Country

CEMENT IMPORTS (million tons) MoM (%)

YoY (%)

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

YTD

YTD (%)

Country

MoM (%)

YoY (%)

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

CEMENT EXPORTS MOM (%)

CEMENT IMPORTS MOM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

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

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August January / September / February 2017 2016

CEMENT MARKETS

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.

CEMENT ENERGY MARKETS

CW Research

Energy Prices Update COAL: The average coal price for October 2016 closed at $73.86 per ton, increasing 34.1 percent YoY as

compared to October 2015’s price of $55.09 per ton. It increased by 18.8 percent when compared to September 2016’s price of $62.15 per ton.

Steam Coal FOB Average Prices (us$/ton) US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

110 100 90 80 70

An increase in coal trading volumes occurred in Indonesia and United States while Australia, Russia, Colombia, and South Africa all showed volume decreases in the month of October.

60 50 40

Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct ’12 ’12 ’13 ’13 ’13 ’13 ’13 ’13 ’14 ’14 ’14 ’14 ’14 ’14 ’15 ’15 ’15 ’15 ’15 ’15 ’16 ’16 ’16 ’16 ’16

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

COAL TRADING VOLUMES: Global trading volumes for six major coal countries decreased to 80.07 million tons in October 2016, declining by 3.3 percent in comparison with the 82.83 million tons recorded in September 2016. An increase in coal trading volumes occurred in Indonesia and United States while Australia, Russia, Colombia, and South Africa all showed volume decreases in the month of October.

PETCOKE: US petcoke exports decreased by 20.1 percent to 2.79 million tons in October 2016 when compared to the previous month, and up by 6.1 percent as compared to October 2015. The US export price for petcoke for October 2016 closed at $41.07 per ton increasing by 0.9 percent as compared to September’s price of $40.69 per ton and up 0.27 percent when compared to October 2015’s price of $50.82 per ton.

US Petcoke Export Price (us$/ton) 80 70 60 50 40 30 20

O ‘16

S ‘16

A ‘16

J ‘16

M ‘16

A ‘16

M ‘16

F ‘16

J ‘16

D ‘15

O ‘15

N ‘15

S ‘15

J ‘15

A ‘15

J ‘15

A ‘15

M ‘15

J ‘15

F ‘15

D ‘14

N ‘14

O ‘14

Source: Customs data

NATURAL GAS: The US Henry Hub spot price traded at $2.98 per MMBTU in October 2016, up 6.0 percent as compared to September 2016 and up 12.4 percent

as compared to October 2015’s price of $2.34 per MMBTU. Price in Europe increased 1.9 percent MoM, reaching $4.29 per MMBTU in October 2016.

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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.

COAL - EXPORTS (million tons) - Oct 2016 Country

MoM (%)

PETCOKE - EXPORTS (million tons) - Oct 2016 YoY (%)

YTD

YTD %

Country

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

YTD %

COAL EXPORTS MoM (%) US PETCOKE EXPORTS PRICES MoM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

COAL - IMPORTS (million tons) - Oct 2016 Country

MoM (%)

YoY (%)

YTD

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

YTD %

PETCOKE - GLOBAL EXPORT PRICES (USD/ton) - Oct 2016 Country

COAL - GLOBAL EXPORT PRICES (USD/ton) - Oct 2016 LM

MoM (%)

YoY (%)

YTD

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

COAL EXPORT PRICES MoM (%)

MoM (%)

YoY (%)

YTD

YTD %

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Country

WWW.CEMWEEK.COM/SUBSCRIBE

YTD %

NATURAL GAS PRICES (US$/mmBtu) - Oct 2016 Country

LM MoM (%) (%) YTD TABLE AVAILABLE IN THE YoY CEMWEEK MAGAZINE PRINT EDITION.

YTD %

WWW.CEMWEEK.COM/SUBSCRIBE NATURAL GAS PRICES MoM (%)

TABLE AVAILABLE IN THE CEMWEEK MAGAZINE PRINT EDITION.

WWW.CEMWEEK.COM/SUBSCRIBE

Source: CW Group analysis estimates LM: latest month Jan 2016 except where specified; MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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August January / September / February 2017 2016

CEMENT ENERGY MARKETS

CW Research

DEPARTMENTS

PEOPLE Eric Olsen confirmed as new Chairman of the Cement Sustainability chairman of CSI During the Cement Sustainability Initiative’s annual CEO Meeting in Madrid, LafargeHolcim CEO Eric Olsen was confirmed as the new Chairman of CSI for 2017. The organization supports the progress of the global cement sector toward sustainable development and helps to unite major cement producers with operations in more than 100 countries. LafargeHolcim is one of the founding members of the CSI, which was launched in 1999 as part of the World Business Council for Sustainable Development. “It is an honor for me to be chairing this important industry organization in the coming year,” says Eric Olsen in a LafargeHolcim press release. “Sustainability in the construction sector is not the preserve of one organization. I will focus on ensuring that the CSI continues to play an important role in building collaboration within our industry and encouraging joint action across the entire value chain. Our plans are ambitious, and we are conscious that we will only achieve them by working together.”

August / /September January February 2017 2016

Switzerland: African operations are restructured by LafargeHolcim LafargeHolcim makes large restructures on its African subsidiaries. The company have business in Africa for over five decades and the year 2016 was quite challenging for Lafarge and the main reasons are essentially external, such as gas supply, fuel increase and inflation. For this reasons, the Swiss company has decided to restructure its subsidiaries in Africa. This decision came following the merger of Lafarge and Holcim, the resulting group forced to restructure its subsidiaries throughout the African continent. The group's operation in Africa and the Middle East are now under sole manager, Saad Sebbar. Saâd Sebbar has been a Member of the Executive Committee of LafargeHolcim since July 10, 2015 and is responsible for Middle East Africa.

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Saad Sebbar will be assisted by two directors, one for African countries and another for East and Southern Africa. Three additional regional directors were appointed to the main African markets: Algeria, Morocco, and Nigeria. The company invest over USD 565 million and is currently being made an additional 2.5 million tons capacity cement plant in Mfamosing, Calabar. Middle East Africa showed mixed growth as countries such as Kenya and Algeria performed strongly while some of the region’s markets were impacted by lower demand as a result of lower oil and commodity prices. Overall, cement and aggregates volumes in the Group region were up. In 2015 alone, LafargeHolcim invested EUR 4.3 billion in Africa, equivalent to 15 percent of its total capital expenditure around the world.

PEOPLE Neeraj Akhoury is the new managing director and CEO for Arabian Construction Company The Arabian Construction Company has appointed Neeraj Akhoury as Managing Director and CEO of the company.

Dimitry Kireev: New Angarsk Cement Board Member Russia-based Angarsk Cement has appointed Dmitry Kireev as the new board member of the company. "Despite the decline in the cement market, we will continue and in time to carry out repair activities, implement more efficient technologies and delivering storage

Hervé Mallet appointed President and CEO of Mcinnis Cement McInnis Cement announced the appointment of Hervé Mallet as president and chief executive officer. Hervé Mallet has considerable experience in sales, marketing and operations. He was until recently executive vicepresident – North America of Dynacast, a manufacturing company with 23 plants and 6,000 employees worldwide. As such, he oversaw eight production facilities in

Piero Corpina: New CEO for Aalborg Portland Aalborg Portland Holding, part of the Cementir Group, has appointed Piero Corpina as head of the Nordic & Baltic region and CEO of Aalborg Portland A/S and Unicon A/S. He joined the company on 2 January 2017. Piero Corpina has 20 years of experience in the industry with LafargeHolcim, where he covered Senior Line, Staff

products, improve customer service process,” said Dmitry Kireev, newly appointed board member of the company. In 2013, Dmitry Kireev was appointed as Managing Director of Timlyuy Cement. Under his leadership, the company implemented large-scale projects to optimize production. North America, delivering performances two times greater than the industry average, according to the company. “I am very pleased to join a company that is creating a world-class cement company, built on innovation and the strength of a strong and experienced cement team. I share with the company shareholders their vision of making McInnis an environmental and sustainable development leader in the industry, as well as an industry leader in customer service” and Project Roles with increasing responsibility in ordinary business and change contexts.

The board has also reluctantly acceded to the request of Harih Badami to step down as the Chief Executive Officer and Managing Director since he wishes to pursue other career opportunities. Accordingly, the board has accepted his resignation and relieve him from February 4, 2017. To ensure a smooth transition, Badami has volunteered to advise and support the new Managing Director and he will continue his association with the company until June 30, 2017. A steel and cement veteran, Neeraj Akhoury was the CEO of Lafarge Surma Cement and Country representative of LafargeHolcim Bangladesh. He started his career with Tata Steel in 1993 and joined the LafargeHolcim Group in India in 1999. Arabian Construction Company is India's foremost manufacturer of cement and ready mixed concrete with 17 modern cement plants, more than 50 ready mixed concrete plants, a vast distribution network of over 9,000 dealers and a countrywide spread of sales offices. This company is a leading construction firm in the Middle East and North Africa region and has constructed some of the most impressive high-rise buildings.

Most recently, he acted as General Manager of Holcim Divested Business Europe & North America, in context of the Global LafargeHolcim merger and as Delegate of the Competition Authorities. Beyond operational responsibility for the business, he steered its carve-out from Holcim and integration planning with the buyer.

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August January / September / February 2017 2016

regional report

EUROPE, MIDDLE EAST AND AFRICA Iranian cement sector struggles with natural gas shortage Iranian cement companies are struggling with shortage of gas supply and lack of liquidity and low sales. Cement producers in the domestic market have been struggling with short supply over the later 45 days due to the cold season. Companies are also struggling with lower liquidity and lower sales. Furthermore, producers have to deal with high transport of fuel to cement plants.

Saudi Arabian cement companies expect increase in profit Several companies producing cement in Saudi Arabia expect to record an increase in profit in the fourth quarter of 2016.

Utilization rates for the industry have declined from 65 percent to 60 percent in December 2016. Government officials are likely to implement measure to control cement prices in the market.

Saudi Cement Company expects its profit to reach SAR 101 million in the fourth quarter of 2016, higher than in the same period last year. Southern Province

The Iranian Cement Association anticipates an increase in cement prices over the next few months. A slight decline in production volumes and delays in delivery are expected to affect the cement prices in the market.

Saudi Arabia: Yamama Cement receives funds for new plant Saudi Arabia-based Yamama Cement has received SAR 1 billion funding from two sources, which will be used for the construction of a new greenfield cement plant. The scope of financing includes around SAR 750 million from the National Commercial Bank and SAR 250 million from the Samba Financial Group. In November 2015, the company has signed a SAR 4.2 billion contract with

August / /September January February 2017 2016

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Cement Company is expected to record a profit of SAR 193 million in the fourth quarter of 2016. Qassim Cement is expected to record a profit of SAR 96 million in the fourth quarter of 2016, as compared to the same period a year earlier. Yanbu Cemeht is expected to record a profit of SAR 165 million in the fourth quarter of 2016, as compared to the same period a year earlier. ThyssenKrupp Industrial Solutions to build the cement plant. The cement plant will have a daily production capacity of 20,000 tons of clinker.

regional report Iraqi cement producers require protective measures

GICA’s Benzireg cement plants faces delays GICA’s ongoing construction of cement plant is delayed due to unavoidable circumstances. The completion of works for the cement plant in Bechar region is expected to be delayed by six months. Meanwhile, the company continues to focus on important investments which

Morocco: Increase in cement prices expected LafargeHolcim is likely to announce a price hike in January, which is expected to have a ripple effect in the market.

are expected to absorb a large part of unemployment since the company envisages the creation of no less than 600 direct jobs and as much if not more indirect jobs. The company also held a meeting with governmental officials to discuss the status of works for the cement plant. Construction works of the cement plant has slowed down due to instability in the local management.

Local manufacturers of cement are appealing to the government, asking for measures to control competition by imported cement. They want new taxes and duties on imported cement and a quota law that force constructers to use nationally-produced cement for at least 50 percent of their needs. Cement factories in Iraq have the capacity to produce 32 million tons of cement. According to the president of Iraq’s Cement Manufacturers Association, Nassar Al-Manadi, with new cement plants under construction, capacity is expected to increase. Exporting cement may therefore be an option for Iraqi producers.

the market as the construction prices would increase. EUROPE, MIDDLE EAST & AFRICA COMPANY/LOCATION

OVERVIEW

The price hike by LafargeHolcim will force other operators to increase product prices in the market. The revision of prices is expected to be between 1.5 to 2 percent. The price hike is expected to impact the real estate sector and cement market in Morocco. The real estate prices are expected to increase by 25 percent in www.cemweek.com

August January / September / February 2017 2016

regional report

SOUTH EAST ASIA India witnesses major M&A activity in the cement sector The Indian cement market recorded major merger deal signed between Dalmia Bharat and OCL India in 2016. The companies valued the merger deal at around INR 10,000 crore. The merger will create the fourth largest cement maker in the county having a installed capacity of 25 million tons per annum. After the restructuring deal is complete, Dalmia Bharat will change the name of Odisha Cement, which will be absorbed into the company. Meanwhile, UltraTech Cement and Jaypee Group merged assets in Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand and Andhra Pradesh for around USD 2.38 billion. The merger will help UltraTech acquire a four million ton per annum cement grinding plant in Uttar Pradesh. The company will invest around INR 470 crore to complete the unit. The investment will increase UltraTechâ&#x20AC;&#x2122;s capacity to 91.1 million tons per annum over the next few months.

August / /September January February 2017 2016

Commissioning of Rudny cement plant, Kazakhstan, delayed Commissioning of the Rudny cement plant, in the Kazakh region of Kostanay, was postponed. Construction of the plant began five years ago and was expected to be completed in December

Demonetization hits Indian Cement Sector

2016. At least KZT 15 billion have already been invested in the project, but the plant still lacks KZT 2 billion to start production. Operation is now set to begin in mid2017 according to the deputy mayor of Rudny Maksut Duspalov.

The Indian cement sector is likely to see recovery delayed by a year, as operations have slowed down due to demonetization.

Further, strong monsoons had lifted the possibility of strong revival in demand especially from drought-hit regions in Maharashtra, Telangana and Karnataka.

Cement demand had increased by five percent in the first eight months of 2016, as compared to the same period a year earlier.

However, the demand slumped in the market after demonetization and the sales volume have declined considerably.

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regional report Maha Cement inaugurates new plant in India Maha Cement inaugurated a greenfeild cement plant in Tuticorin, Tamil Nadu. The new cement plant will help to increase the company’s production capacity to around 1 million tons per annum. The cement plant is expected to be fully operational by January 2017.

Semen Indonesia and Semen Gresik create joint venture Semen Indonesia, together with Semen Gresik, established a new company called KSO. KSO is a new vehicle designed to jointly operate cement plants and other supporting facilities. According to officials within Semen Indonesia and Semen Gresik, the company provides

Indonesia: Low demand for cement in 2017 Cement producers in Indonesia expected have a mellow outlook for 2017 due to sluggish demand and weak construction activities. However, producers are expected to weather this period and generate profit, although sales are expected to decrease.

for corporative restructure needed in the face of increased competition and developing local market. Both companies will contribute finically to the initial capital of KSO, with Semen Gresik contributing with IDR 1.45 trillion. However, there will not be any asset transfer.

“The total capacity of the company will be increased to 10 million metric tons from the present 84 lakh metric tons per annum with the factories located at Nalgonda in Telangana, Kurnool and Visakhapatnam in Andhra Pradesh,” said the Executive Director of the company. The company also launched a new cement product having long term strength, increased durability and better resistance as compared to other cements.

first ten months of 2016, as compared to the same period a year earlier. SOUTH EAST ASIA COMPANY/LOCATION

OVERVIEW

Semen Indonesia recorded a 1.2 percent increase in cement sales of 21.2 million tons in the first ten months of 2016, as compared to the same period a year earlier. Indocement recorded a three percent decline in sales to 13.2 million tons in the

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ASIA PACIFIC Cement sales improve in Japan Cement sales in Japan increased by 5.1 percent year-on-year during November. Japanese consumers bought 3.86 million tons of cement. For the first time in 17 months, cement sales in the country improved year-on-year. Cement consumption was especially encouraging in the provinces of Hokkaido and Kyushu, where several dams are being constructed. Also in November, cement production increased 0.8 percent year-on-year to 5.18 million tons, while stockpiles fell by 8.1 percent to 3.86 million tons. Further increases in production and demand should be expected as 2020 approaches and Japan prepares new infrastructures to host the 2020 Summer Olympics and Summer Paralympics. Nobuhara Masanobu, managing executive officer at Taiheyoaki Cement, expects an uptick in demand already in early-2017.

August / /September January February 2017 2016

Chinese Cement Production Demand Increases Cement producers in China have posted a 2 percent increase in output to 2.2 billion tons in the first eleven months of 2016 compared to the same period last year. In November, Chinaâ&#x20AC;&#x2122;s monthly cement output was around 210 million tons, up by 3.7 percent. The cement production

Huaxin Cement invests in greenfield production in China China's Huaxin Cement will invest around CNY 700 million in three greenfield cement plants. The cement plants will have a dry-process production capacity of 0.3 million tons to 1.2 million

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increased on a cumulative basis, however, declined on a monthly basis. The cement prices recorded constancy in November due to slowdown in the market. Meanwhile, the gross profit of the cement industry is CNY 33.2 billion in the period from January to October 2016. Whereas, the annual profit is expected to exceed CNY 50 billion over the next few months. tons of The three proposed cement plants will be setup in Shannan City. The new cement plants will help to increase production capacity, increase employment in the region, reduce the cement prices in the market and promote economic development.

regional report Cement prices stabilize in several Chinese provinces Chinaâ&#x20AC;&#x2122;s cement market recorded stability in cement prices since November in several regions.

Oversupply in the Vietnamese cement market Vietnamâ&#x20AC;&#x2122;s cement market is likely to witness a oversupply of 36-47 million tons of cement. Cement consumption is expected to reach around 82 million tons by 2020,

Handan Shexian Jinyu Cement invests in alternative fuels Handan Shexian Jinyu Cement, in the city of Handan, province of Hebei, will use municipal solid waste as alternative fuel for its kilns. The plant will dispose of 180 tons of municipal waste per day. The use of alternative fuel at the plant was agreed upon with the Handan City Environmental and Protection Assessment Center.

hence there will be a surplus of 36-47 million tons of cement. The domestic demand is expected to be around 60 million in 2016 to 2020. The current demand is around 80-82 million tons in 2016. The surplus is expected to begin in 2017, due to increase in competition and slow increase in market demand.

The cement market benefited from environmental protection, limited production efforts by cement companies. The cement companies also focused on integration of activities and the price system has also improved slightly. The cement demand is expected to increase due to higher number of PPP infrastructure projects which would help in capacity expansion. Meanwhile, Huaxin Cement is expected to undertake Lafarge cement production capacity in the southwest region, the company's control in the region will be further enhanced.

solution for the waste problem that is both energy saving and environment friendly. ASIA PACIFIC COMPANY/LOCATION

OVERVIEW

According to Handan Shexian Jinyu Cement, every caution will be taken to ensure a safe disposal of the waste. The company assures that using municipal solid waste as an alternative fuel is a safe www.cemweek.com

August January / September / February 2017 2016

regional report

AMERICAS Cement Argos signs 660 million deal for new production plant Cementos Argos has signed a USD 660 million deal with HeildelbergCement for production plant in West Virginia, USA. The company seeks to increase its foot print in North America. The company had installed a cement plant with installed capacity of 2.2 million tons of cement and 1.6 million tons of clinker per year. “We are pleased to announce the formal closing of this transaction and the start of operations of the new cement plant and its terminals under our culture and business model,” said Juan Esteban Calle, president of Cementos Argos. Meanwhile, the company recorded a 27 percent increase in revenue in the first half of 2016, as compared to the same period a year earlier. The company benefitted from better demand for cement in North American market.

August / /September January February 2017 2016

Titan Cement expects to benefit from US and Brazil markets Titan Cement has a positive outlook in the US and Brazil market. With total investment of over EUR 3.5 billion since 2000, Titan Cement has cement plants in ten countries.

The cement company is likely to benefit from positive trend in housing market and commercial real estate, and investment in infrastructure in the US market. Meanwhile, the company is engaged into mergers and acquisitions in a bid to increase market share in the market.

Intercement to sell stake in Loma Negra

based in São Paulo. The stake was bought in 2015, for USD 1 billion.

The Brazilian conglomerate Camargo Correa wants to divest from Loma Negra Cia Industrial, the largest cement producer in neighboring Argentina. Camargo Correa wants to sell its 40-percent stake at Loma Negra and is already negotiating with several unspecified potential bidders. The state is currently administered under Camargo’s subsidiary InterCement,

The conglomerate, controlled by the grandchildren of its founder Sebastião Camargo, is in the way to become an investment holding company. In the process, Camargo has made several divestments. Some years ago, InterCement had already tried to sell its stake at Loma Negra, but the tentative failed for unknown reasons.

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regional report McInnis Cement breaks ground at U.S. terminal

Cement consumption increases in Argentina Argentina’s cement market recorded an eight percent increase in cement consumption in November 2016, as compared to the same period a year earlier. Cement shipments increased by 1.8 percent in November 2016, as compared to the same period a year earlier. Meanwhile, with more than 1 million tons shipped to the domestic market

Lafarge Canada upgrades Exshaw Unit Lafarge Canada has completed the major modernization and environmental upgrade at its Exshaw mill. The modernization work began in 2013. “It is an incredible achievement, completing a project of this scale. Completing it safely takes focus and energy and I applaud the team for its dedication to this goal,” said René Thibault, president and chief executive officer, Lafarge, Western Canada.

last month, companies in the sector totaled so far this year 9.8 million, i.e., 1.3 million tons less than in JanuaryNovember 2015. According to statistics of the AFCP for August had aroused favorable expectations, witnessing an increase of 67,000 tons over the last 30 days, which stood to the industry at the highest level since October last year when he began the sharp decline the following months.

The technology upgrades led to a 60 percent reduction in sulfur dioxide emissions, a 40 percent reduction in nitrogen oxide emissions, and a significant reduction in fugitive dust and noise coming from the plant’s equipment. The Exshaw plant has also achieved zero water discharge from its operations.

McInnis Cement executives celebrates officially breaking ground at the new cement company’s first U.S. terminal in the Port of Providence. The overall cost of the project is expected to reach USD 22 million when completed, estimated for this coming winter. The Providence terminal, a deep-water port that provides access to large, oceangoing ships, will serve the entire New England construction market, including the metropolitan areas of Providence and Boston as well as the rest of Massachusetts, Rhode Island and Connecticut. McInnis will deliver ships with payloads of over 30,000 metric tons to the Providence terminal from the company’s plant in Port-Daniel–Gascons, Canada. The terminal’s facility will have the capacity to load about 100 trucks and around 10 railcars per day with cement. “We are proud to commence construction of our first terminal in the United States in the Port of Providence,” said Jim Braselton, Senior Vice President, Marketing, Sales and Distribution for McInnis Cement. “Thanks to the partnerships we’ve developed with state and city officials, our high-quality product will be able to efficiently and dependably reach customers throughout New England – an area that currently and routinely in the past has had challenges with reliable supply.”

AMERICAS COMPANY/LOCATION

OVERVIEW

He added, “By all accounts we consider the project to be a success, cementing our long term commitment to Exshaw, Alberta and western Canada.” The scope of the upgrade included major kiln improvements. The upgrade will increase production capacity from 1.3 million metric tons per year to 2.2 million metric tons per year. www.cemweek.com

August January / September / February 2017 2016

BMWEEK.COM

CONSTRUCTION & BUILDING MATERIALS BY BMWEEK.COM US: Two companies were purchased by Summit Materials for USD 110 million Summit Materials is buying Coloradobased Everist Materials and Arkansasbased Razorback Concrete Company. A Denver concrete, asphalt and aggregates company, Summit Materials bought two companies in the end of 2016. The acquisitions of Everist and Razorback will enable “Summit to expand its integrated materials model based on expanding markets throughout the Midwest of Colorado and Arkansas”, said Tom Hill, CEO of Summit. Summit Materials was formed to acquire and grow heavy-side building materials and is a leading vertically integrated materials-based company that supplies aggregates, cement, readymix concrete and asphalt in the United States and British Columbia, Canada.

August / /September January February 2017 2016

Qatar: Construction companies receive budget for 2017 enthusiastically The 2017 state budget includes sustained expenditures in key sectors such as health, education, infrastructure and transport. Infrastructure, education and health take most of the new budget, accounting for about USD 24 billion. Izabela Kruk, director of the Oxford Business Group, said that Qatar "continued to show good results in all economic sectors" and added that the

country's “ambitious project and key events, led by the 2022 FIFA World Cup™, will help diversify dependency from oil and gas. Due to this new budget, most companies are positive about works in the country's infrastructure, such as the new port of Hamad, the remodelling of the medical city and the Doha subway project. Izabela Kruk said that in 2016 the government carried out several important projects, including roads and sewage systems, and this year intend to remain involved in such projects.

Mexican researcher develops cement that generates light

Camargo’s subsidiary InterCement, based in São Paulo. The stake was bought in 2015, for USD 1 billion.

www.cemweek.com

BMWEEK.COM Houston: Rice University seeks ways to strengthen cement Researchers at Rice University have carried out a computational analysis of cement components that hold the concrete together. As part of the study, researchers aim to make cement more resilient and able to deform over the years.

Mexico: Saltillo technological institute creates a new cement type Mexicoâ&#x20AC;&#x2122;s Saltillo Technological Institute researchers have developed a cement type using industrial waste. The new cement type uses alternative materials with different mechanical properties and durability obtained from using blast kiln slag. It will reduce

Australia: Nu-rock wants to use ash from the old Port Augusta plant to manufacture construction materials The company plans to create a factory in Port Augusta that would create more than USD 3 billion worth of construction products. Nu Rock is already making the products at Energy Australiaâ&#x20AC;&#x2122;s Mt Piper

emissions by 80 percent. The new cement is expected to have lower emissions as it is prepared using microstructural characterization techniques that study its physical and chemical properties. The cement will also have better mechanical properties as slag is mixed with alkaline powder additives, which hardens when it comes in contact with water. power station in Lithgow, and has had strong interest from the US, particularly in Virginia. Senator Nick Xenophon has support the new proposal. "It basically converts fly ash into building products. It uses a chemical bonding process that actually exceeds Australian standards," he said.

One of the elements used in the analysis were tobermorite particles that allow the cement to form layers. The researchers found that these particles often have screw dislocations, shear defects that help relieve stress by allowing the layers to slide past each other. "Our study provides the first report on how to leverage seemingly weak attributes - defects - in cement and turn them into highly desirable propertiesâ&#x20AC;?, refers Mr. Shahsavari, an assistant professor of civil and environmental engineering, materials science and Nan engineering.

LafargeHolcim develops new concrete Researchers at the LafargeHolcim center near Lyon, are working on a new building material called "Airium". The product looks like a light gray frothy mass, which swells and, depending on the requirements, is placed on a terrace, under a roof, between a wooden constructions, in order to fill gaps. While classic concrete has enough resistance to be machined after about eight days, this building material is solid enough in 24 hours at the latest. Another advantage is the foam-like consistency at the beginning. "For us this marks the entry into a new market - the market for insulation materials," said Antoine Duclaux, CEO of the Vienna-based Lafarge Central and Eastern Europe division.

www.cemweek.com

August January / September / February 2017 2016

PETCOKEWEEK.COM

Petcoke Market update from PetcokeWeek.com India: Higher petcoke costs thinning cement companies’ margins Petcoke prices have surged nearly 75 percent in the current fiscal year in India, pressuring cement companies’ margins and affecting their results. Diesel costs have seen a similar rise, lifting the companies’ input spending in FY2017. From the start of the financial year, petcoke prices have rose from USD 40 per ton to the current USD 60-70. Demonetization is also greatly affecting the cement sector, with early estimates placing cement production at a modest growth of 4 percent in 2016-2017. Previous estimates placed growth at 4-6 percent during this period. The impact of the demonetization is expected to have a greater impact in the real estate and construction sectors, which are strongly connected with the cement sector, along with steel.

August / /September January February 2017 2016

Spain: Petronor upgrading coking unit Spanish Petronor will invest around EUR 49 million to renovate and upgrade its coking unit in Biscay, Spain.

Of the planned EUR 49 million budget, EUR 23 million correspond to the specific maintenance contemplated in the general stop itself, and EUR 26 million to investments in technological innovation in the plant.

The operations at the refinery will be halted temporarily in late January. Around 75 percent of the unit’s activities will come to a halt during renovation works.

After the upgrade, the refinery will reduce production of fuel oil, and increase that of products with higher added value such as propane, butane , gasoline and diesel.

Antipinsky Refinery increasing overall fuel capacity

2018-19. The total investment in the project is estimated to be around RUB 3.8 billion.

Russia-based Antipinsky Refinery has increased its overall refining capacity, as well as product offering. At the moment, the company is planning to install a unit which will process heavy coker gas oil, to be commissioned in

After the completion of several procedures, the company will be able to produce several oil grades, including gasoline A-92 and A-95, "Euro-5" grade diesel fuel, petroleum coke and granulated sulfur.

www.cemweek.com

PETCOKEWEEK.COM Brazil’s petcoke production falls in November Brazil’s petrochemical production declined once again during the month of November, with petcoke production dropping by 3.3 percent when compared to the previous month, along with petroleum byproducts and biofuels. The Brazilian industrial output grew in November after a 1.1 percent slip during October, improving by 0.2 percent monthly, but decreased by 1.1

Reliance to convert petcoke production into synthetic gas Reliance is investing USD 16 billion on the expansion of its petrochemical production. Of this amount, USD 4.6 billion will be headed to a project for the conversion of petcoke to synthetic gas. The company will use the petcoke it produces at its refineries for this project, a total of 6.5 million tons per year. This will eliminate its output and convert it into fuel to be used at the firms’ units. The rest of the investment will be used in a refinery off-gas cracker to extract

Russia: TANECO refinery to enter maintenance in 2017

percent when compared to November 2015. From January to November 2016, the industry retracted by 7.1 percent, but the math from December 2015 to November 2016 shows a steeper decline, of 7.5 percent. The country has been at arms with a political crisis which has affected its performance in the international markets and domestic cohesion, bringing instability to the domestic industrial performance.

ethane, ethylene, propylene, butanes and propanes, worth USD 4.5 billion, while USD 5 billion will be used to expand the current polyester production. The company also plans to use USD 1.5 billion to import ethane from the US in order to replace costly propane imports and naphtha.

Russia’s petrochemical company Tatneft is likely to halt operation at its TANECO refinery, in Tatarstan, from mid-April to mid-May 2017.

operational efficiency and conduct a technical assessment of the equipment at the mill. In addition, the company established a delayed coking unit in August 2016, having a production capacity of two million tons of petcoke per year.

The company will evaluate the condition of the equipment in a bid to improve its operations. It seeks to improve overall

Its processing capacity can reach 7 million tons of heavy crude oil per year, making it the sixth largest in Russia.

United States: LyondellBasell revokes intention of selling its Houston refinery Netherlands-based petrochemical company LyondellBasell has decided not to sell its United States refinery, located in Houston. Back in August, there were rumors that the company was willing to sell its refinery in Texas, which produces petroleum coke, reformulated gasoline, jet fuel, ultra-low sulfur, diesel and aromatics, conventional gasoline, lube oils, carbon black oil, refinery-grade propylene, sulfur, and residual fuel. According to LyondellBasell spokesman Michael Waldron, “Retaining the refinery was always a very real option for us”. The company may still sell the refinery in the distant future, as it has “tremendous value”. The 268,000 barrels per day refinery is the only in the company’s portfolio, which mostly owns chemical and plastics plants. In August, San Antonio-based Valero Energy, Saudi Aramco, Canadabased Cenovus Energy and Canadabased Suncor Energy reportedly had expressed interest in the refinery. Saudi Arabia’s state-owned Saudi Aramco and its Houston-based joint venture, Motiva Enterprises were later considered the leading contenders to buy the 700-acre facility located in the limits of Houston and Pasadena.

www.cemweek.com

August January / September / February 2017 2016

EQUIPMENT

EQUIPMENT Arabian Cement invests production Arabian Cement Company will invest in two new projects including installation of equipment in its production units. The company is in midst of assessing the import of equipment and machinery and is likely to invest around EUR 7 million in the project. All the equipment from the Arabian Cement Company is based on the state of the art and latest technology and system design, yet enjoying process simplicity and adaptability to local conditions. The plant machinery is of the most advanced proven design, supplied by worldâ&#x20AC;&#x2122;s leading equipment manufacturers. The company will invest a mechanical lever in one of the cement kiln and also upgrade the machines to reduce energy consumption.

Kazakshtan: Semey Cement plant upgrades machinery Semey has been increase productivity steadily for the last few years and been conducting several refurbishments works. The cement plant has seen many changes. The biggest achievement - is the installation of new electrostatic precipitators in the first and second kilns. The production plan releases about 50 million tons of cement, also made the replacement of outdated electrical equipment. Many power stations burn fossil fuels such as coal and oil. Smoke is produced when these fuels burn and comprises tiny solid particles, such as unreacted carbon, which can damage buildings and cause breathing difficulties. To avoid this, the company recently installed new electric filters to reduce its environmental impact, together with electrostatic precipitators.

August / /September January February 2017 2016

www.cemweek.com

An electrostatic precipitator is an extremely efficient way of filtering fine particles from a flowing gas and can handle large volumes of air without significantly slowing down the rate of air flow. The Semey cement plant was built in 1983 and has already faced hard times, especially after the fall of the Soviet Union. The construction of Astana, the new capital city of Kazakhstan, the plant received a much needed boost. Cement from Semey Cement Plant is mainly used in construction works. In particular, it was consumed for construction of a suspension bridge above Irtysh River, Almaty airport, Medeu mountain skating rink and a mud dam in Almaty. Between 1990 and 2000, the company produced 7.26 million tons of cement; that volume increase to 7.73 million tons in 2001-2009. Since 2010 until now, production has already ascended to 7.18 million tons.

EQUIPMENT Thailand: Siam cement commissions delivery of new mill Thai cement manufacturer Siam Cement has commissioned Loesche with the delivery of a new vertical roller mill of the type LM 56.3+3 CS for its cement plant in Kaeng Khoi.

wide range of different cement types. The flexibility that will be available in future for manufacturing the various different cement types also means greater profitability for SCG: The cement quality can be improved quickly and efficiently and adapted to the requirements of the market.

The Loesche mill will produce medium-fine cement qualities and is designed for grinding clinker, gypsum and limestone. SCG is able to quickly and easily switch between different products and qualities. As a result, the company will be able to produce a

A more energy-efficient production of the different cement types is also possible with the new Loesche mill. Compared to roller presses or ball mills, the achievable efficiency gains in electrical energy lie between 15 and 40 percent depending on the cement quality.

Egypt: Aumund Fördertechnik supplies 108 machines for greenfield project in Beni Suef Sinoma International Engineering announced that its subsidiary, Chengdu Design & Research Institute of Building Materials Industry had signed a contract with the Egyptian government to build six production lines for clinker in Beni Suef. Aumund Fördertechnik, in close cooperation with its Chinese subsidiary Aumund Beijing, has now won the order to supply the clinker conveying equipment for the project. Egypt is one of the world’s biggest producers of clinker, with a capacity of 70 million tons. Around 54 million tons of cement are consumed annually in Egypt. The identical lines will each be equipped by Aumund with four BWG belt bucket elevators, with

capacities up to 650 t/h and three BWZ chain bucket elevators. The machinery package also includes four BWG-L belt bucket elevators, one BWZ-L chain bucket elevator, as well as six pan conveyors for each of the six lines. The new greenfield project in Beni Suef is to be fully completed within the next three years. The pilot phase of the new production lines is due to start as early as December 2017. Aumund Fördertechnik will supply these 108 Machines to Egypt in three deliveries, between April and June 2017.

Germany: Gebr Pfiffer supplies equipment to Biarjaimand Cement Gebr Pfiffer has supplied a raw mill of the type MVR 4250 R-4 to Iran-based Biarjaimand Cement. MVR mills require few ancillaries, no or little building volume, their operation is dust free and they have a low noise level. In addition, MVR roller mills allow an ideal utilization of the thermal energy of process gases. The MVR allows common or separate grinding of main cement components and Production of various cement qualities in one mill. A raw mill is the equipment used to grind raw materials into "rawmix" during the manufacture of cement. Rawmix is then fed to a cement kiln, which transforms it into clinker, which is then ground to make cement in the cement mill. The raw milling stage of the process effectively defines the chemistry of the finished cement, and has a large effect upon the efficiency of the whole manufacturing process. The raw mill has designed capacity to grind 280 tons per hour of cement raw material to a product fineness of ≤ 12 % R 90 µm. The order was placed through the Chinese General Contractor Beijing Kaysun Trading. The delivery of the equipment is schedule to start in the second half of 2017.

www.cemweek.com

August January / September / February 2017 2016

EQUIPMENT ARIF HABIB GROUP TO EXPAND PRODUCTION AT POWER CEMENT PLANT Arif Habib Group plans to spend USD 235 million on upgrading its Power Cement plant in Nooriabad, increasing its capacityto 3.37 million ton. The upgrade will be completed by the end of 2019. Company chairman Nasim Beg said that he was hoping to take advantage of growing cement demand in the country as the effects of the ChinaPakistan Economic Corridor heighten. Power Cement has also completed USD 3.4 million upgrade to its filter bag by installing new equipment to reduce dust emissions. The new project will use the latest technology from FLSmidth, the top international cement equipment supplier, and will cater to local and international standards. Company officials say the plant is now capable of reducing dust emissions to just 17mg / Nm3, which is significantly lower than the 300mg / Nm3 specified Environment Quality standards in Pakistan, and the World Bank's 100mg/ Nm3 for old cement plants.

THYSSENKRUPP WINS MAJOR CEMENT PLANT ORDER IN ALGERIA Thyssenkrupp has received another major order for the cement plant business of its Industrial Solutions business area. The value of the contract awarded by Société des Ciments de Sigus, part of Groupe Industriel des Ciments d’Algérie (GICA) is in the mid three-digit million euro range. The turnkey cement plant will have a production capacity of 6,000 tons of clinker per day and will be constructed in Sigus, around 340 km east of Algiers. Start of operation is planned for early 2019. “This large order again proves that long-term customer relationships pay off. Combining our technological competence with a strong presence in growth regions allows us to support the infrastructure development in many emerging markets. Our strength is to provide customers with reliable and tailor-made plant solutions, components and services from one single source" said Stefan Gesing, acting CEO of the Industrial Solutions business area of Thyssenkrupp. From raw material preparation to cement packaging and loading facilities, thyssenkrupp Industrial Solutions will

August / /September January February 2017 2016

www.cemweek.com

provide all key equipment, construction and supervision services including commissioning for the new production line. M. Fawzi BECHIR, CEO of Société des Ciments de Sigus refers that: “We are looking forward complete the project with thyssenkrupp, considered to be one of the leading engineering, procurement and construction contractors in the cement business, providing reliable, highly energy-efficient technologies and equipment that meet the most stringent environmental requirements". In order to meet the growing demand for cement and in line with import substitution, GICA (Groupe Industriel des Ciments d’Algérie) has launched several projects to increase its cement production capacity from 12 million tons to 20 million tons per year by 2019. The plant is completed by two clinker silos with a total capacity of 60,000 tons, three 160 t/h ball mills, four cement silos with a capacity of up to 80,000 tons and a packaging plant equipped with four 3,000 bag-per-hour packaging lines. Monitoring and quality control will be provided by the laboratory automation system POLAB.

EQUIPMENT UK: NEW CRANE FOR CEMEX DAGENHAM WHARF CEMEX’s Dagenham Wharf on the River Thames has taken delivery of a new Fuch’s crane. The new crane will allow the site to add an additional sales line from other quarries, such as CEMEX’s Raynes Quarry in north Wales The crane digs material out of ships on the river and puts it onto a conveyor that takes the material to the land side where

it is stocked and sold out by trucks to the London market. The GBP 1.5 million investment comes after the wharf only re-opened in November 2015 as an aggregates processing plant. It was previously an asphalt plant and then depot for limestone being brought in from quarries in north Wales. The plant supplies aggregates into the busy London construction market and is part of CEMEX UK’s strategy to grow the aggregates business.

FLSMIDTH DELIVERS COMPLETE CEMENT PLANT TO ECOCEMENTOS FLSmidth has obtained the USD 60 million order from OHL Industrial for engineering, procurement and supply of equipment for a complete cement production line with a capacity of 3,150 tons per day. The plant will be located in Rio Claro, Municipality of Sonson Department of Antioquia, in Colombia. The end client of EcoCementos, a company jointly owned by Cementos Molins and Grupo Corona, with whom OHL Industrial has an EPC contract. The order includes a complete range of equipment from crushing to packing and loading. FLSmidth's supply also includes equipment from product companies of FLSmidth, such as planetary gear units from FLSmidth MAAG Gear, fabric filters from FLSmidth Airtech, packing plant from FLSmidth Ventomatic, control system and plant automation from FLSmidth Automation, and weighing and metering systems from FLSmidth Pfister.

ETHIOPIA: MUGHER CEMENT plant completes coal conversion In Ethiopia, Mugher Cement inaugurated its new system that will use coal to power the plant. Until now, the cement factory relied on high fuel oil as a source of energy for the plant. In a project that cost USD 39.2 million, the plant was reconverted to use coal as it main source of energy, cutting down the costs of production.

Mugher Cement currently produces 5,000 tons of cement per day. Converting from imported heavy fuel to domesticallysupplied coal will also help reduce the cost of production, said Project Manager Engineer, Mehari Alemu. The plant, at the time known by Addis Ababa Cement Factory, was commissioned in 1957.

"The project underlines FLSmidth's strength as a leading supplier of the most productive and energy-efficient equipment and technology - and our market leader position as a full scope plant provider," says Executive Vice President, Cement Division, Per Mejnert Kristensen.

“The replacement was crucial to increase quality, reduce production delay and supply energy on a regular basis,” said Fekadu Deme, Director General of Ethiopia’s Ministry of Public Enterprise. www.cemweek.com

August January / September / February 2017 2016

analyst recommendations Sanghi Industries, Kesoram industries and India Cements Analyst SP Tulsian recommends a few cement stocks, despite demonetization affecting the real estate sector, dragging cement companies with them. According to Tulsian, this is a great time to buy as stocks prices are low.

USG Corporation According to Gregg Sgambati, USG Corporation (USG) is an interesting investment for 2017 that will give you exposure to the green building boom. Only 14 companies in the building products sub-industry have disclosures for “Green Building Policy.” Those companies have taken steps toward using environmental technologies and principles in the design and construction of its buildings. USG stood out on this list because of solid fundamentals and sustained yearon-year sales growth. According to the S-Network Thomson Reuters ESG Best Practices Ratings, the company ranks in the top quartile of companies in the construction materials industry. And it is the top U.S. Company in its industry. While its low free float stock is a concern, the company is an innovator in green building. It is a founding member of the US Green Building Council (USGBC). According to BCC Research, the U.S. market for green building materials is expected

to grow at a compound annual growth rate (CAGR) of 9.5 percent to nearly USD 69 billion by 2019. Green building materials provide important benefits to the environment, the building owner, and the occupants. These products are environmentally responsible because using them can help reduce negative externalities associated with extraction, transportation, fabrication, and recycling associated with non-green products. Additionally, the building owner and its occupants can benefit from lower energy costs, reduced maintenance, and improved occupant health and productivity.

Cementos de Chihuahua

Zacks Investment Research upgraded shares of U.S. Concrete from a strong sell rating to a hold rating in a research note issued to investors.

August / /September January February 2017 2016

I will remain away from ACC and Ambuja Cement. But overall, I am keeping a very positive view on the cement sectors and in fact, as I said that the midsized cement companies having a capacity of two million to ten million tons will be able to give you better returns.“

The World Green Building Trends 2016 SmartMarket Report, presented by Dodge Data & Analytics and United Technologies Corporation, shows that green building continues to double every three years. And according to a report from Research and Markets, the global green building market is anticipated to grow at a CAGR of around 13 percent during 2015-2020.

U.S. Concrete

Separately, DA Davidson set a USD 80.00 price target on shares of US Concrete and gave the stock a buy rating in another report. One investment analyst has rated the stock with a hold

“If I need to pick and choose into the smaller ones, there are umpteen number of stocks available in that space like Sanghi Industries, Kesoram industries, NCL Industries or maybe India Cements. India Cements can get placed in the larger category as well.

rating and seven have issued a buy rating to the company. The stock has a consensus rating of Buy and an average price target of USD77.83.

www.cemweek.com

Grupo Cementos de Chihuahua’s (GCC) attributed its sales growth to better pricing environment and increased cement volumes, mainly for projects in the commercial and industrial sectors that compensated for a decline in the public sector, following the culmination of two major urban paving and highway construction projects in 2015.

OTHER REGIONS: Shree, Ramco and Dalmia

AMERICAS: Mexico and Cemex With president-elect Trump due to take office David Perilli wonders what this means for the cement industry in Mexico. The main issues for the US industry are infrastructure, changes to the Environment Protection Agency (EPA) and the repercussions if Trumps serious about a trade war with China. So long as a trade war doesn’t happen then Trump is probably good news for the US cement industry. The makeup of the domestic Mexican cement industry hasn’t changed too much in the last decade, even with the merger between Lafarge and Holcim, preserving the same market share in production capacity between the companies. Most of the producers have reported growth in 2016. The major Mexican cement producers all have a presence in the US with the exception of Cruz Azul. Cemex has held assets north of the border for years, Cemento Portland Moctezuma has links to Buzzi Unicem, GCC bought US assets from Cemex in 2016 and Elementia completed its purchase of Giant Cement also in 2016. This represents investment in local industry and it is exactly the kind of thing that appeals to the rhetoric of Trump’s approach so far. If the new president builds his wall then Mexican producers will probably be producing much of the cement that builds it. Cemex reported that its cement sales volumes rose by 3% for the first nine months of 2016 and by 10% in the third quarter of that year. Overall though, its net sales fell slightly to USD 2.16 billion in the first nine months, alongside a fall in readymix concrete sales volumes. Cemex,

Shree Cement, Ramco Cement and Dalmia Cement are Motilal Oswal Securities (MOSL) top picks in the cement sector, one of the victims of Prime Minister Narendra Modi's demonetization decision.

crucially, also seems to have taken charge of its debts in 2016, saying that it was on track to meet its targets and that it had announced nearly USD 2 billion worth of divestments in that year. Currently the company is trying to buy out Trinidad Cement in the Caribbean, which may be a sign that it has turned a corner. Shares of Cemex have been assigned an average recommendation of “Buy” from the eighteen brokerages that are covering the firm. Seven analysts have rated the stock with a hold rating, nine have given a buy rating and two have given a strong buy rating to the company. The average twelve-month target price among analysts that have covered the stock in the last year is USD 9.11. Several equities analysts have issued reports on the company. Zacks Investment Research upgraded Cemex from a “hold” rating to a “strong-buy” rating and set a USD 9.00 target price on the stock in a research note. Bank of America Corporation lowered from a “buy” rating to a “neutral” rating. Finally, HSBC upgraded Cemex from a “hold” rating to a “buy” rating and set a USD 9.00 target price on the stock in a research note.

The commodity, largely used by the construction industry in addition to infrastructure, has been affected because real estate developers are witnessing a fall in activity due to the cash crunch. "The key segments of the economy where cash transactions play a vital role are real estate/construction, gold and the informal sectors. The role of cash transaction in the case of real estate and gold is mostly dubious," India Ratings had said in a note on November 11 2016. The sector's woes got bigger due to weak demand and capacity addition, impacting pricing capacity for many companies. Brokerage house Nirmal Bang Institutional Equities had earlier cut the sector's growth rate projections for the current fiscal and 2017-18. "The demonetization move by Indian government coupled with other policy measures are likely to impact the two pillars of cement demand in the country the most - housing and infrastructure. We believe the weakness in demand is likely to be spread over the long run compared to the current understanding of it being a short-term phenomenon," it said. "We expect demand disruption to push down cement demand recovery by at least a year and hence capacity utilization will be lower for a longer period than what was expected earlier," the Nirmal Bang note added. On Friday, Dalmia Bharat closed 1.02 percent higher at INR 1,355, Shree Cement was up 6.66 percent at INR 14,724 and Ramco Cements ended 1.59 percent higher at INR 546.

www.cemweek.com

August January / September / February 2017 2016

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

Canada 6 articles

Iran

17 articles

Morroco 12 articles

37 articles

25 articles

Egypt

India

48 articles

Mexico

China Pakistan

40 articles

12 articles

Saudi Arabia Nigeria

30 articles

Indonesia

11 articles

Brazil

21 articles

7 articles

Bolivia

7 articles

South Africa 8 articles

cw group agenda / reports 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 group meeting agenda include:

Cw research newest report:

January 26, 2017

World Cement, Clinker & Slag Sea-Based trade

February 7, 2017

KPIs for Cement Logistics

February 9, 2017

World green petcoke market demand forecast Part 2

Webinars

March 9, 2017

Global Cement Volume Forecast - 1H2017 Update and Outlook

Webinars

August / /September January February 2017 2016

www.cemweek.com

Global quicklime, slaked lime and hydraulic lime market report (forecast to 2021) October 2016

Global Cement Trade Price Report (4Q 2016 Update)

World Cement, Clinker & Slag Sea-Based trade

October 2016

BUZZ

Indonesia to control cement capacity expansion

India cement sector to experience downturn in 4QFY2017

Cemex announces change in take-over bid for Trinidad Cement

Vietnam: capacity, sales increase during 2016

recorded

exports consumption crore

economic

products

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TOP BMWEEK STORIES activity 1. Australia: Nu-Rock wants to use ash from IRAN the old Port Augusta plant to manufacture construction materials 2.

US: Summit Materials buys two companies for USD 110 million

UK: Increased costs of construction materials may affect the industry

Austria: Price competition and demand growth in concrete transport

Italy: Mantovanibenne International launches new concrete clamp

US: Bagnell Dam undergo major structural updates

AUMUND equipment for six new clinker production lines in Beni Suef

region economic development

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materials results

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