CemWeek Magazine: March/April 2018

GLOBAL CEMENT INDUSTRY KNOWLEDGE

ISSUE 43

March / April 2018

LEADERS Q&A

Ismail Bulut

CEO of Turkish Cement Manufacturers' Association CW Research

Global cement volumes to rise on economic recovery Long-term forecast

How will the cement sector fare by 2050?

News

•

Analysis

•

Market Coverage

•

Interviews

•

People

The industry's go-to world

cement market forecast report and outlook

GLOBAL CEMENT VOLUME FORECAST REPORT The Global Cement Volume Forecast Report (GCVFR) is a twice-yearly, data-oriented forecast report, providing extensive details on the global outlook as well as key cement markets worldwide.

The benchmark report provides a five-year outlook on cement consumption, production, net-trade, cement production capacity and other key cement metrics that decision makers cannot live without. The GCVFR is built with investment-grade analytical rigor, informing industry professionals about what is expected around the corner for world cement markets. visit: http://goo.gl/eib8fE Our global presence: Greenwich (US) • Mumbai (IN) • Porto (PT) • Bucharest (RO) • Sao Paulo (BR)

research.cwgrp.com inquiries@cwgrp.com sales@cwgrp.com

We know the industry. let us guide you.

EDITOR’S NOTE Letter from the publisher and editor

The CemWeek Magazine is published by the CW Group LLC PO Box 5263 Greenwich, CT 06831, USA www.cwgrp.com www.cemweek.com

STAFFBOX A large-scale construction project named Future What will the cement sector look like by 2050? On the one hand, cement demand in emerging economies is likely to be driven by population growth and rising urbanization rates. In contrast, stricter emissions, cement substitutes, and alternative construction methods in developed countries could negatively affect the cement industry. In a thought exercise based on GDP per capita and cement per capita projections, CW Research presents its directional perspective on long-term cement demand.

In the medium term, and despite China’s capacity rationalization efforts, global cement consumption is expected to increase on the back of improving macroeconomic indices.

With some volatility to be expected as unresolved geopolitical questions remain on the table, this issue highlights CW Research’s cement volume forecast for the first half of 2018.

But our eyes are not set only on the future. This edition of CemWeek Magazine also looks back on 2017 and how the year affected major cement manufacturers in terms of volumes and sales.

ROBERT MADEIRA CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

Margarida Cunha Editorial Coordinator

LIVIU DINU ADVERTISING

Filipe Gouveia Paulo Cruz Raluca Cercel Rui Correia Sara Ruas Tea Vukicevic

CONTRIBUTING WRITERS & RESEARCHERS

Diogo Vieira SANTOSH SHETTYE DESIGNER

Meanwhile, the present is being shaped by the increasingly preponderant role of cement associations. Ismail Bulut, CEO of the Turkish Cement Manufacturers' Association, talked to CemWeek about how the organization has helped promote the Turkish cement market, and how the progressive incorporation of alternative fuels in the cement production process is unfolding in the country.

To subscribe or advertise, please contact us at E: sales@cwgrp.com

Time presents different challenges for cement markets. In this issue, we focus on the Maldivian cement industry, one that is integrally supplied by imports, and whose government-sponsored infrastructure projects will boost cement consumption until 2019.

©Photo cover: Votorantim Cimentos

Cement has been a preferred building material for many years, having so far successfully stood the test of time. In all its solidity and reliability, cement now stands before its largest construction project: the future.

The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances.

©2018 CemWeek LLC. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

Any submissions or contributions from readers shall be subject to and governed by CemWeek’s Terms and Conditions, which are available upon request.

The ownership of trademarks is acknowledged. No part of this publication or any part of its contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review.

CW Group

ROBERT MADEIRA

CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

Margarida Cunha

Editorial Coordinator

CW Group

To subscribe please http://www.cwgrp.com/subscribe-cemweek

CW Analytics

contents FEATURES 4 Leaders Q&A: Ismail Bulut Ismail Bulut, CEO of the Turkish Cement Manufacturers' Association, tackles issues such as the evolution of the organization’s role, the main challenges faced by the Turkish cement market, and how the progressive incorporation of alternative fuels in the cement production process is unfolding

4

14 CW Research: Improving global Macroeconomic scenario to drive cement consumption in 2018 Despite China’s capacity rationalization efforts, global cement consumption is expected to increase on the back of improving macroeconomic indices 22 CW Research: How will the cement sector fare by 2050?

In a thought exercise, CW Research presents its directional perspective on long-term cement demand 30 Top Cement Companies' 2017 Sales Performance In 2017, the world’s main cement manufacturers have registered overall positive sale results, backed by price increases and stable cement volumes

30

34 CW Research: Government projects driving Maldivian cement demand through 2019 With a cement market integrally supplied by imports, the Maldives will continue to see its cement consumption rise until 2019, boosted by government-sponsored, large-scale infrastructure projects

DEPARTMENTS 1 EdiTor's letter A large-scale construction project named Future

46 cw group meeting agenda CW Group’s upcoming events

3 numbers in brief Both positive volume and pricing evolution across geographies led to the positive results 38 Research Cement Volumes 40 Departments People Equipment 2

August / September March/April 2018 2016

www.cemweek.com

47 BUZZ Top 10 CemWeek, BMWeek and PetcokeWeek stories

2

numbers in brief

Global cement manufacturers reap the fruit of a year markeD by cement demand growth Both positive volume and pricing evolution across geographies led to the positive results

Positive pricing and volume growth reflected in a positive performance for Cemex, CRH and HeidelbergCement. On the other hand, the USD-CHF exchange rates affected Lafarge’s revenue in USD terms, though the company’s revenue increased by 4.7 percent in local currency. Similarly, Buzzi Unicem’s revenue increased in 2017 in EURO terms, but decreased in USD. Positive market trends in Europe and North America were instrumental for the growth position of the major cement manufacturers in the world. Positive pricing, combined with a diversified mix of building materials offered, led to sustained performance in developed markets. Nevertheless, traditional emerging markets that are volumetric in terms of cement sales continued to grow.

CHART: 2017 and 2017 revenue (USD bn) 2017

2016

Source: Company reports, CW Research

Stabilizing EBITDA margins have been successfully achieved over the year 2017. CRH’s EBITDA margins continue to be under 15 percent, as the group continues its buying spree across geographies and across building materials.

In Cemex’s case, EBITDA decreased to 18.8 percent in 2017, impaired by the repurchase of shares and non-recurring expenses, such as the expenses related to he antitrust fine in Colombia.

CHART: 2017 and 2016 EBITDA margin (%) 2016

2017

Source: Company reports, CW Research

www.cemweek.com

AugustMarch/April / September 2016 2018

3

Leaders Q&A

Ismail Bulut Turkish Cement Manufacturers' Association CHIEF EXECUTIVE OFFICER

In an exclusive interview to CemWeek Magazine, Ismail Bulut, CEO of the Turkish Cement Manufacturers' Association, tackles issues such as the evolution of the organization’s role, the main challenges faced by the Turkish cement market, and how the progressive incorporation of alternative fuels in the cement production process is unfolding.

4

August / September March/April 2018 2016

www.cemweek.com

www.cemweek.com

AugustMarch/April / September 2016 2018

5

Leaders Q&A is raising the public awareness about the role of the Turkish cement industry in the development of the country.

The Turkish C e m e n t Manufacturers' Association (TÇMB) plays a significant role in the industry.

How do you characterize the evolution of TÇMB to date?

Turkish Cement Manufacturers' Association was founded in 1957 by the industries manufacturing cement and other hydraulic binders.

TÇMB, as the common voice of the cement industry, is fully acting under the rules of free market economy and is representing a total of 66 enterprises in Turkey, as 49 of them being integrated facilities and 17 cement mills. TÇMB provides common solutions to these enterprises for their research and development activities, analysis works, quality control, training services and executes common initiatives for legal and administrative regulations. As TÇMB, our main goal

6

August / September March/April 2018 2016

International cooperation is increasingly highlighted in all fields of the industry in the global economic system.

TÇMB became a member of the European Cement Association (CEMBUREAU) in 1972 with the mission of pioneering for the Turkish cement industry in its contacts with the international platform.

Turkey, being a leader in cement production and export in Europe, continues to be a strong player of the industry thanks to the initiatives of TÇMB. Membership of CEMBUREAU helped the industry to develop its international relations. Strengthening its position on a global scale, TÇMB became an associate Member of EUPAVE (European Concrete Paving Association) in 2009. Afterwards, TÇMB signed several

TÇMB’s membership of CEMBUREAU helped the industry to develop its international relations Memorandum of Understandings with other Global Cement Associations, like Arab Union for Cement and Building Materials (2009), Indian Cement Association (2010) and finally China Cement Association (2011), to organize joint activities and to support each others’ events. On the other hand, being a member of ECRA (European Cement Research

www.cemweek.com

Academy) since 2014, TÇMB has had a chance to enhance its view on technological developments.

Besides, being a communication partner of the Cement Sustainability Initiative (CSI) of World Business Council for Sustainable Development (WBCSD) since 2015, we have had an opportunity to explore what sustainable development means for the cement industry and identify actions and facilitate steps cement companies can take, individually and as a group, to accelerate progress toward sustainable development.

Besides, TÇMB has been organizing International Technical Seminars and Exhibitions since 1987. The program is open for both national and international attendees from the cement industry’s service and technology providers. The event is important for the manufacturers to follow up the recent developments and creates an opportunity for the participants to consider the new investments, while

having a chance to benchmark their business for every two years with the participation of more than 500 participants, also 120 foreign and national companies from cement and related industries.

For better and more effective action on the Turkish cement market, what strategies has TCMA adopted?

As Turkish Cement Manufacturers' Association, our vision is to protect and develop the image of the Turkish cement sector at home and abroad. We also emphasize how cement is esential for a sustainable economic progess of our country. Therefore, to become more effective in the Turkish market we are promoting usage areas of cement and emphasizing how beneficial it is for society.

Firstly, as is generally known, the cement industry produces five percent of total worldwide CO2 emissions, thus carbon dioxide reduction strategies by the cement industry largely aim at reducing emissions per ton of cement product. These strategies

include the installation of more fuel-efficient kiln technologies, partial substitution of noncarbonate sources of calcium oxide in the kiln raw materials, and partial substitution of supplementary cementitious mater. As TCMB, we try to encourage the use of alternative fuels in cement plants to reduce embodied CO2 levels in cement. Implementing

Implementing widespread alternative fuel use could make the industry more economically competitive

planned to be incorporated into the efficiency applications of our sector in 2018.

In addition to these actions, we are promoting the use of concrete roads in Turkey. In Turkey, the share of road transportation in freight transport is 92% and the passenger transport is 95%. Despite the presence of heavy trucks and buses on our roads, most of the intercity roads of Turkey are made of flexible pavements.

Today, the Turkish cement sector produces over 83 million tons of cement – the main binding agent for rigid pavements ranking fourth (as of 2017) throughout the entire world in production.

widespread alternative fuel use could make the industry more economically competitive, as well as more sustainable in the future.

If concrete pavement and concrete barrier technologies are utilized sufficiently, they will provide important advantages to the country’s economy. Especially in the construction phase, concrete solutions are beneficial in regards of time and money.

On the other hand, unlike many major cement industries in the EU and the Americas, the Turkish Cement industry has numerous waste heat recovery (WHR) systems that have been implemented in recent years. As much as a total capacity of 101 MW was put into use at 18 kiln lines in 10 plants at the end of 2017, with an additional capacity of 34 MW also being

As a result of all these efforts, we try to reduce energy imports to Turkey. I would like to point out the fact that with the use of wastes as alternative fuels, primary fossil fuels like coal, petroleum coke, and lignite will be consumed less, and energy imports will decline, thus there will be cost advantages and energy efficiency is ensured.

www.cemweek.com

AugustMarch/April / September 2016 2018

7

Leaders Q&A Currently, what are the most pressing challenges for the cement industry?

In the following years we are expecting that Iran’s cement exports to our neighboring countries will increase, also as the deterioration in external demand conditions caused the Turkish cement sector to lose market share. In the upcoming period, it is forecasted that competition in the Middle East market will increase further, as Saudi Arabia could be a major player in the market as well. Turkey is the second leading cement producer in the Middle East and North Africa, and is the world’s seventh largest producer of the industrial material.

The Turkish cement industry is very sensitive to economic crisis and involves many uncertainties including cost and technology. The cement demand is mostly affected by demand of ready-mixed concrete. Demand of cement is also related to activities in the construction industry, therefore cement demand increases with housing and infrasturucture investments.

8

August / September March/April 2018 2016

It is forecasted that competition in the Middle East market will increase further

In this context, urban transformation projects and residential estate investments are very important for cement producers.

Uncertainties in production costs cause important technological uncertainties in the cement industry. One of the most remarkable price-technological uncertainties in cement industry are the limitations in carbon dioxide emissions.

On the other hand, the industry faces significant supply-side issues. The country’s ongoing energy crisis has had an outsized influence on the cement industry, with the gas and power shortage hitting producers hard. Turkey’s increasing energy consumption raises the importance of

www.cemweek.com

energy efficiency due to costly imports in energy supply.

What is the contribution of the Turkish cement sector to Circular Economy?

A “Linear Economy”, which is based on the fact that resources are unlimited and waste disposal is very cheap, produces a vast amount of waste. Additionally, as environmental degradation and climate change occurs, resources become scarce, and the import of fuels and raw materials increases. Limited natural resources, environmental protection and a need for reduced waste production promotes a “Circular Economy” model.

Cement is a specific process that allows for the recovery and the recycling of materials.

Thus, the cement sector contributes to circular economy.

In cement production, energy recovery and material recycling can be realized by: • Using wastes as alternative fuels (i.e. industrial wastes, used tires, solid recovered fuel) • Using other wastes and byproducts as alternative raw material (i.e. fly ash, slags) The Turkish cement sector contributes to a circular economy by using waste as alternative fuel and raw materials for more than 10 years. The sector used about 600,000 tons of waste as alternative fuels, and 1.1 million tons of waste as alternative raw materials in 2016. The Turkish cement sector also supports the use of alternative fuels produced from municipal solid wastes (SRF). The sector is ready to pay for SRF produced by municipalities/private sector via mechanical biological solid waste treatment plants.

The Turkish cement sector used 1.1 million tons of waste as alternative raw materials in 2016 What can be done to make alternative fuel usage more attractive to cement companies?

Thermal substitution rate with waste fuels in the EU is about 30%, whereas some EU plants have about 100 % substitution rate.

Thermal substitution rate of the Turkish cement sector is about 4%, which is very low when compared to the EU. In Turkey, the most abundant waste is of industrial origin, thus there is limited waste usage by cement plants close to industrial regions. However, cement factories distant to industrial areas have the potential to use solid waste

recovered from (SRF) municipal solid waste and/or dried sewage sludge.

For the production of solid recovered fuel (SRF) by using municipal solid waste, municipalities or private sector investors should establish "mechanical, biological pretreatment facility" (MBT) facilities close to landfill areas. The cement sector is ready to pay for a high-quality SRF. Common barriers are: the municipalities are not willing to establish MBT plants, and Turkish laws do not allow for longterm contracts. These problems can be solved through the revision of the laws to allow long-term contracts.

The other barrier is that the cement factories are competing with unfair incentives provided to municipal waste incinerators. In Turkey, power generated by waste incinerators is subsidized by a feed-in tariff of 13.3 USD Dollars cent/ kWh. This price is 2-3 times higher than conventional

www.cemweek.com

AugustMarch/April / September 2016 2018

9

Leaders Q&A

power generation selling prices. Thus, municipalities intend to invest for waste to power incinerators that are 5-10 times more expensive than MBT plants. In order to increase the use of SRF in the cement sector, the Turkish government should provide fair play by issuing special incentives for the cement sector.

Similar barriers exist for usage of dried sewage sludge. Municipalities do not prefer to dry the humid sewage sludge. Instead, they are willing to invest on incinerators for power production due to the feed-in tariff of 13.3 USD cent/kWh provided for biowaste incineration. Municipalities should be aware that they are responsible for the disposal of produced sewage sludge, and they should bear all costs for its disposal.

How does TÇMB's Cement and Concrete Research and Development Institute work?

10

August / September March/April 2018 2016

In 1978, TÇMB laboratories were established under a UNIDO project with the purpose of making them a “Center of Excellence” in the region for quality control testing and research on cement and similar materials. With 40 years of experience, the R&D Institute staff and the laboratory facilities have extended their services to all of the producers and users of cement and concrete in Turkey for quality control testing, research and development, and consulting, earning a reputation for high-quality and unbiased work.

TÇMB Laboratories were awarded the Accreditation Certificate by Turkish Accreditation Agency (TÜRKAK) for the following standards: • EN ISO/IEC 17025 for testing laboratories in 2003 • EN ISO/IEC 17025 for calibration laboratories in 2006 • EN ISO/IEC 17043 for proficiency testing in 2017 As such, TÇMB Laboratories serve as “Independent Quality Control Testing Laboratories” to Cement and Concrete Sector in Turkey and abroad.

The main objective of the Institute is to provide technical and scientific research and development services for the industries producing and using hydraulic binders, concrete and concrete

www.cemweek.com

aggregates and to encourage the same.

Besides these main services, the Institute provides expert report and consultancy services, coordinates for the universityindustry cooperation and issues scientific publications.

Parallel to the developments in science and technology improvements, TÇMB R&D Institute is determined to follow up innovations in the cement sector with hitech laboratories, and continues to extend its scope to serve best at all times.

Independent Quality Control Testing Laboratories (IQCTL) The IQCTL investigates chemical, physical and mechanical properties of cement and related raw materials, concrete, chemical and mineral admixtures, fuels & alternative fuels, wastes and flue gas. The properties can be tested by using European, ASTM, ISO and National standards, specially validated test methods and scientific principles.

Sustainability and environmental commitments are becoming increasingly pressing. How important are environmental considerations for TCMA? All the cement plants in Turkey issued environmental permits and licences as per the Turkish legislation. Due to EU acquis period, the environmental legislation generally is in line with the EU rules.

Due to the great emphasis TÇMB places on environmental considerations, TÇMB has a special department related to climate change and environmental issues. The main duties of the department include: •

• •

•

•

Execution of verbal / written negotiations with public authorities, regarding the TÇMB Board decisions taken as per the requirements of the cement sector.

Evaluating draft legislation and preparing consultation notes for the public authorities.

Contribution and consultation to the projects related to environment (legislation, environment, use of waste, circular economy, etc.) regarding sectoral perspective.

Carrying out the organization and implementing Vice Chair of the TÇMB Working Group of the Environment and Climate Change.

Providing support to different TÇMB working groups related to energy, natural resources and quality control.

Taking role in the environmental actions of the Turkish Union of

•

•

Chambers and Commodity Exchanges of Turkey.

Participation in the European Cement Manufacturers’ A s s o c i a t i o n (CEMBUREAU) working group meetings.

Preparation of a section called “Environmental News” for the TÇMB Periodical “Cement and Concrete World”.

Preparation of various publications related to the environment, waste and climate change.

Turkish cement exports will continue to rise because the country's capacity will boost until 2020

www.cemweek.com

AugustMarch/April / September 2016 2018

11

Leaders Q&A What will happen to the highly oversupplied markets?

Despite temporary economic difficulties, the TÇMB estimates that Turkish cement exports will continue to rise (at least at the same pace) because the country's capacity will boost until 2020. The clinker capacity, which was 83 million tons in 2017, is expected to be 97 million tons in 2020 for Turkey.

With planned capacity increases, Turkey will reach 121 million tons of equivalent cement capacity at the end of 2020.

With forthcoming projects, continuing infrastructure projects and the expansion of major cities at home (and the fact that Turkish laws go a long way to keeping producers competitive), Turkey's

12

August / September March/April 2018 2016

www.cemweek.com

domestic cement demand is only ever a few years behind its capacity. By producing high-quality, affordable cement for itself and others, the cement industry becomes efficient. The country will be able to provide large amounts of cement at competitive prices for the forseeable future, making the most of its natural resources.

On the other hand, cement surplus will continue to exist with a moderate capacity expansion.

What are the main expectations for the Turkish cement sector in 2018?

Turkey is one of the most promising real estate markets in Europe. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 80 million people, Turkey offers great opportunities for real estate developers and investors by combining

a large construction sector with growing commercial and industrial output.

Economic growth, rising per capita income, positive demographic trends and the rapid pace of urbanization have been the main drivers of cement demand.

In 2030, Turkey’s population will be approximately 88.5 million, and this demonstrates an annual average increase of 0.88% between 2012 and 2030. Therefore, as the population will grow, society will need more housing and infrastructure.

High levels of public spending on infrastructure will be required, with the government being set to spend $6.3 billion. Also, the government plays several important roles in shaping the real estate market. A key channel relates to urban regeneration plans to rebuild the existing stock of buildings prone to disaster risks.

Another important channel is through the activities of the government’s Mass Housing Administration (TOKI), in

charge of social housing for poor and low-income groups. Also, in the specific case of Istanbul, the government has also embarked on some mega projects, including the Istanbul Financial Centre, Istanbul 3rd Airport and Channel Istanbul projects, which may all have important implications for the housing market.

On the other hand, a look at urban renewal projects is very important for the construction and the cement sectors. This will certainly increase the demand for cement in parallel to the investments to be made for the infrastructure and similar/ related construction activities in Turkey until 2023.

As a result, we hope that in the upcoming period we will see higher growth rates in investments, as well as increased confidence and stability in our country.

Consequently, with all these mega projects, the Turkish cement sector expects

domestic cement demand to grow in 2018.

Growth is expected in housing, energy and dam investments, and motorways and infrastructures.

Furthermore, while the Syrian and U.S.A markets are keeping their importance, ongoing war conditions at the same regions will affect our cement exports. Ending the embargo to Iran will pose a threat to the Turkish cement export market due to their low-cost cement. Moreover, the Iraqi Administration will ban cement imports while the Saudi government lifted the cement export ban, which will also affect our export markets sharply.

In summary, Turkey's cement sector is likely to grow at a steady pace for the foreseeable future thanks to healthy demand by the domestic and export markets.

www.cemweek.com

AugustMarch/April / September 2016 2018

13

FEATURE

CW RESEARCH:

Improving global macroeconomic scenario to drive cement consumption in 2018 Despite China’s capacity rationalization efforts, global cement consumption is expected to increase on the back of improving macroeconomic indices

14

JULY / AUGUST August March/April / September 2018 2017 2016

www.cemweek.com

n

www.cemweek.com

AugustJULY March/April / September / AUGUST 2016 2018 2017

15

FEATURE

C

W Research has prepared a forecast for cement demand and capacity volumes in 2018 and forward.

An overall improvement in the global macro-economic scenario will frame an increase in consumption and new capacity concentrated in Asia ex-China and Africa regions.

Chinese policies to reduce domestic capacity and slowing construction activity will have a strong impact on global figures, given that the country accounts for half of the world’s capacity and demand. However, when China is taken out of the picture, demand and capacity actually show healthy growth rates in the period between 2017 and 2022.

Macro-economic scenario

Global economies are showing a synchronized recovery in their gross domestic products, with an uptick in the developed economies of the United States and the Eurozone. The IMF has improved its outlook for economic growth in 2018 to every major region except for Sub-Saharan

16

August / September March/April 2018 2016

Africa, where political uncertainty continues to create reserves among investors. Overall, the fund is now expecting a 3.9 percent improvement in the world’s gross domestic product. Coupled with an increase in the flow of capital and equity markets, such macro-economic scenario may lead to an increase in investment on the construction market and an increase in cement demand.

Some volatility should be expected as some unresolved geopolitical questions remain on the table However, some volatility should be expected as some unresolved geopolitical questions remain on the table. Tension in the Korean Peninsula, even if it does not result in full-blown war, could affect investor confidence in one of the fastest growing regions in the world, Asia ex-China. At the same time, a harsh stance from the Trump administration on trade, with the

www.cemweek.com

introduction of import duties in products such as steel and automobiles could lead to trade conflicts with a dampening effect on international trade. Finally, east-west relations could potentially affect global confidence, and specifically investment in Russia and other countries from the community of independent states.

Cement demand in 2018 In 2018, the team at CW Research expects a global decrease in demand of 0.2 percent.

However, that decrease will be mainly caused by China, which accounts for over half of the global consumption and has been experiencing cement sector maturity and demand decline. Excluding the effect of China, cement demand may increase by almost four percent this year, propelled by the rest of Asia, some markets in Africa, and Western Europe.

The major Asian markets are expected to show strong growth this year, with both Pakistan and the Philippines clocking an eight-percent jump in demand. In Pakistan, the private and public construction sectors will both contribute to an increase in cement demand, with the China-Pakistan Corridor having lingering positive effects on demand. In the Philippines, a large boost in investment on infrastructure announced by the Duterte administration

2018E change in cement demand (growth YoY %)

Source: CW Research

under the motto “Build, Build, Build” will to the introduction of the local currency be the major driver of demand. to free floating, which led to widespread inflation and lack of investment. Since the In Africa, the two largest cement markets beginning of 2018, inflation has stabilized – Egypt and Nigeria – are posed to make and the government has introduced new a recovery from a particularly bad year. In laws that facilitate business-making and Egypt, demand was muted last year due with USD 3 billion worth of projects

currently being developed, cement demand is expected to reboot this year.

Revisions on the last forecast Since CW Research’s latest forecast of cement demand for the current year,

www.cemweek.com

AugustMarch/April / September 2016 2018

17

FEATURE 2017-2022F Capacity additions

Source: CW Research

published in October 2017, evolving market trends have resulted in some adjustments to the previous model.

China’s cement demand was revised downwards by around four percent due to a slowdown in the construction of major infrastructure projects, such as communication ways observed in 2017, and that have set the pace to lower demand in 2018. Likewise, a surprisingly low performance of the Indian cement market last year led to a downward revision of 0.5 percent in the demand outlook for this year. However, in the case of India, the upcoming election season, the development of infrastructure projects, and a two-fold increase in the housing budget of the Union are all reasons to be optimist regarding the market’s performance in 2018.

18

August / September March/April 2018 2016

Kenya was another of the markets that missed the expectations that were set for 2017, after the inconclusive results of the presidential election led to economic stability and, consequently, lower cement demand. The situation will likely persist towards 2018, resulting in a three-percent downward revision in the demand forecast.

On the other hand, several markets in Europe and the Middle East have outperformed CW Research’s expectations in 2017, earning an improvement in their forecast for this year. In Europe, growing public spending, good financial conditions, and improving confidence have created the setting to growing cement demand in markets such as Spain, Poland,

www.cemweek.com

and Hungary. As for the Middle East, Turkey’s forecast was upgraded by almost three percent thanks to new projects being developed, especially within the framework of infrastructure and urban transformation. In Iraq, the government has recently announced the end of the war against Daesh. This may not mean a complete cease in conflicts in the region, but a decrease in intensity of hostilities opens a more positive outlook that resulted in a five-percent improvement in its demand forecast. Meanwhile, Saudi Arabia is now looking into a

better forecast thanks to higher oil prices that will also help other economies such as Nigeria and Algeria.

Asia ex-China and Africa will lead the way in capacity growth Capacity trends CW Research expects global capacity to reach about 6 billion tons by 2018, an increase of 1.3 percent, after growing by

just 1.1 percent last year. China, which concentrates around half of the global capacity, will continue to impose policies designed to scale down said capacity and to reduce production of low-quality grades. Last year, the government agreed with the local manufacturers’ association to introduce supply-side reforms that will only get harsher in 2018, including measures such as surprise inspections and longitudinal monitoring.

Excluding the effect of China and its downsizing policies, overall global capacity is expected to rise by 4.5 percent in 2018, and almost four percent on average between 2017 and 2022. In total, installed additional capacity, excluding China, is expected to increase by 450 million tons until

www.cemweek.com

AugustMarch/April / September 2016 2018

19

FEATURE 2022. Asia ex-China and Africa regions will lead the way in capacity growth and should account for almost 400 million tons added until 2022, around 70 percent of the new accruals. At country level, the largest growth will be seen in India, Indonesia, and Turkey.

Long-term predictions In China, the largest cement consumer in the world, demand is expected to fall by an average of 1.6 percent per annum during the next five years, mostly due to slowdown in pace of construction. Per capita cement consumption is still very high in the country, but the construction will not be able to maintain the expansion rate it has shown in the past, as the Chinese economy becomes more mature.

As a consequence, China’s share in global demand will decrease from 57 percent in 2017 to 51 percent in 2022.

In the Asia ex-China region, cement demand is expected to show a 4.7 percent CAGR for the next five years, thanks to urbanization and infrastructure development in its major economies such as Indonesia, India, and Vietnam.

20

August / September March/April 2018 2016

However, overcapacity remains a problem in the region and it is only expected to become worse as capacity continues to grow faster demand, putting additional strain on prices.

In Asia ex-China, cement demand is expected to show a 4.7 percent CAGR in 2017-2022 In North America, the United States will drive regional demand in a large measure thanks to the Trump administration’s investment plan on infrastructure of USD 1.5 trillion. The effect of the investment will be more salient in the years of 2018 to 2020, and fade out in 2021-22 as the projects come to an end.

Western Europe benefited from a surge in cement demand during 2017 that will likely not be repeated in the coming year,

www.cemweek.com

as the recover cools down. The year was very positive to France, where residential construction boosted cement demand by three percent. In the coming years, infrastructure will replace private housing as the factor sustaining cement demand.

An even more impressive recovery was witnessed in Spain, where demand has remained in historical lows since the 2008 crisis.

Finally, in Africa, some major economies are expected to live behind more troubled times. In the case of Egypt, the economy is now stabilizing after soaring inflation and depreciation of the Egyptian pound against the dollar, with the business environment expected to further improve in the next half decade. In Algeria and Nigeria, where low oil prices add a depressing effect in spending, cement demand is expected to make a recovery, mainly supported, in Nigeria’s case, by infrastructure and urbanization.

Going forward, CW Research expects that until 2050 cement demand will begin to show a falling trend, even as the gross domestic product of major economies increases. This will be due to developing economies using less cement thanks to the already existing infrastructure and lower demand for housing, in turn driven

by shrinking populations. As China demonstrates, developing economies generate a large per capita consumption of cement in order to close the gap in terms of housing and infrastructure standards compared to developed economies.

However, as those economies start to mature, they eventually reach a demand plateau before starting to decline, with maintenance becoming more important to demand than new projects.

Conclusion For different markets such as Saudi Arabia, India have shown in the past years.

reasons, cement Western Europe, Egypt, and muted demand A widespread

improvement in macroeconomic conditions, which includes higher gross domestic product growth and higher commodity prices, has created the conditions to a recovery in demand in those geographies.

China seems to be an exception, as domestic demand decreases from a slowdown in construction activity and the government cracks down on overcapacity. However, with half of the global consumption and installed capacity, this domestic downward trend is enough to obstruct further worldwide improvements.

In the future, a growing economy may not be an assurance of higher cement demand. The stage of development of each country may be detrimental to that correlation. While in developing economies, growing gross domestic products are synonymous with higher cement demand, in more developed economies, where stocks of housing and infrastructure are already high, the relation may not be so linear. As it stands, China seems to be going through a transition from the first to the second group, with the high per capita cement consumption becoming rather unsustainable in a more mature economy.

About the report CW Group’s Global Cement Volume Forecast Report (GCVFR) is a twiceyearly update on projections for cement volumes on a national, regional and global level.

The forecast provides global and regional outlooks, as well as detailed perspective on 57 of the world’s most important countries’ cement consumption, production, net trade and cement production capacity.

The five-year outlook presented in this benchmark study enables industry professionals to shape their perspective on markets and business priorities. The report also includes a long-term forecast through 2050, with qualitative analysis on drivers and constraints of global cement demand.

The Global Cement Volume Forecast Report has two updates a year: Extended (October): an extended update (includes briefs on the 55+ key markets with principal supply-demand impacting drivers and CW Research's analyst market assessments presenting a detailed numerical worldwide analysis, as well as the regional and global supplydemand model).

Quantitative update (March): a quantitative update (only includes the numerical sections of the report, not country write-ups).

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/12-global-cement-volumeforecast-report

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.

www.cemweek.com

AugustMarch/April / September 2016 2018

21

FEATURE

CW RESEARCH

How will the cement sector fare by 2050?

In a thought exercise, CW Research presents its directional perspective on long-term cement demand.

22

August / September March/April 2018 2016

www.cemweek.com

www.cemweek.com

AugustMarch/April / September 2016 2018

23

FEATURE

C

W Research’s latest Global Cement Volume Forecast Report presents a different perspective in longterm cement forecast. Taking into account several factors and the latest trends, this thought exercise provides a bird’s eye view of what might be in store for the sector in 2050 The probable decline

Taking into account certain assumptions and current trends of the worldwide and regional cement industry, CW Research’s team has proposed a directional perspective on long-term cement

24

August / September March/April 2018 2016

demand up to 2050 in the latest Global Cement Volume Forecast Report. Under this thought experience, global cement consumption is seen declining by around three percent from 2017 to 2050.

The regions that would likely see the most pronounceable decline in the scenario are Europe, North America, Developed Asia-Pacific, and China. However, underdeveloped and emerging and industrialized economies would offset this decline as their economic indicators improve and population grows further. Rising urbanization rates in these economies could also potentially boost demand levels up to 2050. Due to these population growth rates, per capita cement demand is likely to grow at a slower pace than total cement demand.

www.cemweek.com

China’s environmental policy is likely to be the main factor driving down cement demand by 2050

Per-capita cement consumption and GDP curve, 2017 and 2015

Source: IMF, CW Group

www.cemweek.com

AugustMarch/April / September 2016 2018

25

FEATURE In markets such as Poland, Malaysia, South Korea, France and the United States, total and per capita cement consumption would likely experience a modest decrease up to 2050. Due to their higher rates of development and higher purchasing power, these economies are likely to see an increase in the use of alternative building materials. Environmental regulations are also a concern, as they are likely to tighten over the next few decades. Research of materials with properties similar to cement is also strong in several countries, and these are likely to replace traditional building materials at a faster rate than in emerging economies, although it is unlikely that these will become the “new normal” by 2050.

By 2050, the regions more affected by cement consumption decline will likely be North America, Western Europe and Developed Asia/Pacific, offset only by recurrent construction and maintenance needs. Consumption in Eastern Europe is expected to stagnate up to 2050, while markets in North Africa, Middle East, South America, and Emerging Asia are expected to have a higher rate of cement consumption when compared to the rest of the world.

Urbanization to drive growth Under-developed and emerging economies are likely to experience an expansion in their GDP, as there is more to build in order to catch up with the

26

August / September March/April 2018 2016

Emerging economies to boost cement consumption rates over the next few decades standards of more developed nations. This rise in GDP, with cement demand largely driven by investments in infrastructure and housing, will contribute importantly to the expected growth of cement consumption in the coming years.

Brisk population growth in some regions, coupled with rapidly growing urbanization rates in under-developed and emerging economies, would under this scenario positively impact demand levels to 2050. Given that population growth in emerging and under-developed markets is growing at a clipper rate, percapita cement demand will grow slower than total cement demand in these markets. Nevertheless, for the forecasted future and beyond, it is improbable that emerging and under-developed

www.cemweek.com

markets will experience the fast-paced consumption growth developed European markets enjoyed in the last century.

The constant need for infrastructure renovation and reconstruction will also be a plus for the cement industry over the next few decades, particularly in China and other emerging Asian economies.

In some areas, such as the Middle East and North Africa, it is likely that stricter construction regulations will play in favor of the industry by the year 2050, as governments strive to increase quality of life for their citizens. Cement is likely to be favored for its durability and strength, especially when compared with other traditional materials such as wood.

Even so, stricter emissions in developed countries are likely to negatively affect the cement industry. Other dampening factors include the growth in cement substitutes and alternative construction methods and materials, especially in mature markets.

Already developed, these markets are likely to see an increase in the usage of alternative building materials. Coupled with the purchasing power that enables the usage of new materials and ever-tightening environmental regulations, using materials other than cement with properties similar to the conventional building materials will probably occur more often. However, it is unlikely that alternative materials will be the “new normal” in the developed world

Key TAKe-AWAyS

Source: IMF, CW Group

by 2050. Nonetheless, the period will presumably see new materials make small, but significant, strides in capturing a share as a building material.

The Chinese problem China’s environmental struggle has caused several industries to reel under the government’s requests and legislation to

curb production. The cement industry has been highly affected by this, as the cement manufacturing process produces several polluting gases under the reduction target, chief among them carbon dioxide.

www.cemweek.com

AugustMarch/April / September 2016 2018

27

FEATURE dRIVeRS ANd CoNSTRAINeRS (%)

Source: IMF, CW Group

28

August / September March/April 2018 2016

www.cemweek.com

Cement demand in emerging economies is likely to be driven by population growth and rising urbanization rates

Under the current political and economic context, this process of shutting down production will likely continue. Due to this and other factors, it is expected that China will be one of the main countries driving down global cement demand up to 2050, both totally and per capita.

production and consumption. Current trends and a thorough analysis based on data can provide us with some clues as to what the industry might look like over the next few decades, or, at the very least, what is there to watch out for to achieve a meaningful understanding of the sector’s development.

Conclusion The dynamics of the global cement market will change in many ways by 2050, propelled by changes in technology,

www.cemweek.com

AugustMarch/April / September 2016 2018

29

Insight Analysis

Top Cement Companies' 2017 Sales Performance In 2017, the world’s main cement manufacturers have registered overall positive sales results, backed by price increases and stable cement volumes

30

August / September March/April 2018 2016

www.cemweek.com

www.cemweek.com

AugustMarch/April / September 2016 2018

31

Insight Analysis

B

acked by strongperforming regions such as Asia Pacific, the largest cement producers worldwide managed to report solid sales volumes, thus reflecting in satisfying results in terms of net sales and EBITDA margins.

CEMENT VOLUMES REMAIN STABLE When it comes to sold volumes of cement, the selected largest cement manufacturers reported a stable trend on a yearly basis.

This sample accounts for approximately 30 percent of the global ex-China consumption of cement.

LafargeHolcim reported a 10.2 percent decline in sold volumes, reaching 209.5 million tons in 2017, due to company’s divestments. On a like-for-like basis, the company witnessed a 3.3 percent increase in cement volumes, reflecting positive performances in Asia Pacific and Latin America.

CEMEX, on the other hand, reported a negative impact of volume on EBITDA in 2017 when compared to the previous year.

The company recorded a USD 51 million decline in EBITDA due to volumes when compared to the previous year, as the company’s performance in Asia, Middle East and Africa fell two percent in terms of volume.

LafargeHolcim reported a 10.2 percent decline in sold volumes

CEMENT SALES AND EBITDA MARGINS IMPROVE

HeidelbergCement recorded a 1.1 percent on a LfL basis, reaching 125.6 million tons of cement in 2017. Operations in Asia Pacific and Eastern Europe & CIS witnessed positive trends in demand, backing up the company’s growth in volumes.

LafargeHolcim and HeidelbergCement both reported positive impacts of volumes on EBITDA, with Lafarge recording a slim CHF 65 million increase in EBITDA due to volume, and Heidelberg reporting a EUR 122 million increase when compared to the previous year.

In 2017, the majority of cement manufacturers reported an improvement in net sales, reflecting positive trends in volumes and pricing across major markets. While LafargeHolcim and BuzziUnicem both reported around five percent increase in net sales, CEMEX recorded an outstanding eight percent increase, while HeidelbergCement on the other hand reported a modest 1.1 percent increase in net sales.

When it comes to LafargeHolcim, net sales rose to USD 26.5 billion, making it the

Net sales and EBITDA margins of select cement manufacturers in 2017

Net Sales (USD bn)

Source: CW Research

32

August / September March/April 2018 2016

www.cemweek.com

EBITDA Margin (%)

Cement sales of select cement manufacturers in 2017 (mn tons)

Source: CW Research

CEMEX recorded an outstanding eight percent increase in net sales company with the highest net sales out of our set of companies. In its annual report, LafargeHolcim reported their highest increase in net sales, 6.7 percent, in their highest revenue region, Asia Pacific.

HeidelbergCement, on the other hand, reported a 4.9 percent increase in EBITDA in 2017 when compared to the previous

year, in spite of a lackluster increase in net sales. In the cement branch, the company reported stable sales across most regions, recording even a slight decrease in the Africa and Eastern Mediterranean region.

When it comes to EBITDA margins, in this set of countries, there is a correlation between net sales and EBITDA margins.

In this sample, companies with larger net sales have on average larger EBITDA margins.

In Ultratech’s case, the company reports a higher EBITDA margin on a par with LafargeHolcim’s, despite having a much lower revenue. This can be explained due to UltraTech’s operations being concentrated in India, where the company is the leading producer of cement. As a result, the company benefits from economies of scale, keeping their EBITDA margins high.

www.cemweek.com

AugustMarch/April / September 2016 2018

33

Country Snapshot: Maldives

cw research

Government projects

driving Maldivian cement demand through

2019

With a cement market integrally supplied by imports, the Maldives will continue to see its cement consumption rise until 2019, boosted by governmentsponsored, large-scale infrastructure projects

34

August / September March/April 2018 2016

www.cemweek.com

www.cemweek.com

AugustMarch/April / September 2016 2018

35

Country Snapshot: Maldives

T

he Maldivian cement sector witnessed a surge in demand in 2015, as public infrastructure projects entered the construction phase.

With completion of the projects scheduled for 2019, it is likely that cement consumption will begin to slide. Nevertheless, a rising GDP, population, and tourism sector are bound to keep cement demand at healthy rates in the following years.

The cement demand surge in 2015 was caused by the start of the country’s mega projects in greater Malé

Thilafushi

Cement demand supported by public infrastructure Cement demand in the Maldives is expected to decline at an annual average rate of 3.3 percent in the next five years.

The decreasing trend is projected to happen after 2019, due to the completion of large-scale construction projects.

The steady growth observed from 2012 to 2017 has resulted from a surge in 2015 caused by the start of the country’s mega projects in greater Malé. In that year, several large-scale infrastructure projects were initiated by the government, including a bridge connecting Malé to Hulhumalé, and the beginning of the second phase of the Hulhumalé project – a relocation initiative aiming at providing better infrastructure for the country’s population through economies of scale.

An import-driven cement market

MALDIVES

36

August / September March/April 2018 2016

www.cemweek.com

In the Maldives, cement is entirely supplied via imports, as there is no local cement manufacture. On the importing side, there are currently two companies that own cement silos in the country, Lafarge Maldives Cement and Villa Trading.

About the report CEMENT DEMAND (2012-2017)

Source: CW Research

There are currently two companies that own cement silos in the country

India, Malaysia and Indonesia are the most common origins of cement to the Maldivian market. When it comes to pricing, strong competition between Southeast Asian exporters and rising volumes have allowed gray cement import prices to remain stable over the previous five years.

The Maldives Cement Market Report, part of CW Research’s Cement Industry Country Report series, meets the country-level cement market research needs of small and large businesses, analysts and governments. The reports cover cement volume trends in detail, analyzing trade flows, cement demand and production (historical and a fiveyear outlook), per capita consumption, and the competitive landscape, including company profiles, cement production facility details, including past and announced brownfield production increases and greenfield projects.

Cement Industry Country Reports also cover demand drivers, including macroeconomic and construction sector dynamics, for the specific country.

Industry reports are presented in an objective, easy-to-understand format, providing hard-to-find answers to top market research questions.

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/203-maldives-cementcountry-report-2016

For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.

www.cemweek.com

AugustMarch/April / September 2016 2018

37

CEMENT MARKETS

CW Research

Cement Volumes

On the back of the continuing recovery of the economy, as well as of growing residential and infrastructure construction, cement demand in the United States rose by 1.5 percent in 2017, compared to 2016.

Indian cement production improved 20.7 percent year-on-year in January 2018, on the back of an improvement in the housing segment and a higher infrastructure spends.

As the country sees an improvement in rural incomes, a higher rural credit and an increasing allocation for rural, agriculture and other related sectors, this will allow an increase in demand for rural housing. Moreover, production is likely to be supported by the higher outlay on urban housing and increased lunge on infrastructure.

On the back of the continuing recovery of the economy, as well as of growing residential and infrastructure construction, cement demand in the United States rose by 1.5 percent in 2017, compared to 2016. Demand for new houses in the southern states, running into the southwest and Pacific northwest, had a high impact on the increase of cement demand, mainly due to the hurricanes Irma and Harvey occurred during the year. Spending directed towards infrastructure, specially a proposed plan of $1.5 trillion in infrastructure iniciatives and other public works programs, has, and will continue to, help sustain the growth of cement demand in the United States.

Saudi Arabia’s cement production faced a decrease of 8.8 percent year-to-date and cement demand saw a 8.3 percent year-todate decline, in February. On the back of government austerity measures, Saudi Arabia saw a slowdown of the domestic construction activity. The government announced the cancelation of the export fees, that, until recently, were fixed at 50%. However, there is limited benefit from it, mainly due to a sluggish domestic demand and political instability in the neighboring markets, excess supply, as well as competitive pricing in the region.

The Chinese government’s environmental sustainability efforts have led to a cement output cut, materializing into a 0.6 percent decrease in cement production in 2017 compared to 2016. A supply shortage of cement since September 2017 generated an increase of cement prices, suspending some construction projects, including key governmental ones. The government is being successful in reducing the industrial overproduction, but, at the same time, promised more cuts as part of structural reforms and efforts to address environmental pollution.

Pakistan’s cement demand, comparing to 2016, experienced a year-to-date increase of

CHART: Year-to-Date Cement Demand (%)

Sources: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com 38

August / September March/April 2018 2016

www.cemweek.com

CW Research CEMENT MARKETS

13.5 percent in 2017. The China-Pakistan Economic Corridor (CPEC) continues to have a huge impact on cement production levels. The cement demand from the infrastructure and housing sectors has surged to a record high with work on multiple governmental infrastructural spendings. The government has also released Rupees 2.35 billion for the Housing and Works division, with construction set to start on new housing schemes. The government is also exploring the possibility of reviving the stalled Apna Ghar Housing scheme, a bold initiative set up to build 500,000 housing units per year.

Cement demand increased 10.1 percent year-on-year in Indonesia in January. On the back of the government-led infrastructure development programmes, cement demand is growing particularly on the construction of toll roads. The construction of toll roads, dams and power stations are the main reasons for the strong cement demand growth. At the same time, strengthening commodity prices boosted people's purchasing power in the commodity-rich areas in the country. This is particularly visible, since in these areas cement demand grew rapidly in accordance with higher coal prices.

Vietnam’s developing economy is growing, mainly driven by increasing industrial output, reflecting a 35.8 percent year-on-year increase in cement production in January 2018.

Investments in housing from both public and private sectors, and a sharp rise expected in commercial and retail construction, are boosting cement consumption. Also, the government is expecting to invest in infrastructure programs by pouring in additional investments to boost cement plants capacity, so that manufacturers are prepared for the expected increase in cement demand for the upcoming years. Reduction in export taxes as well as financial aid to the cement industry are also positively helping reduce the surplus in cement production that the country faced last year.

Compared to 2016, Turkish cement demand increased 7.8 percent year-to-date to December 2017, due to an increase in public investments in the infrastructure and housing. With Turkish cement prices decreasing, the government keeps the plan of increasing cement exports, making Turkish cement very competitive compared to other European countries.

Vietnam’s developing economy is growing, mainly driven by increasing industrial output, reflecting a 35.8 percent year-onyear increase in cement production in January 2018.

CHART: Year-to-Date Cement Production (%)

Sources: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com www.cemweek.com

AugustMarch/April / September 2016 2018

39

DEPARTMENTS

PEOPLE InterCement appoints new CEO Paulo Eduardo Nigro is the new CEO of InterCement. His career started in 1981, as an engineering trainee at Philips and passed through Goodyear and Tetra Pak, reaching the post of president of Treta Pak’s Italian subsidiary.

Then, in 2007, Nigro returned to Brazil as the president of Tetra Pak’s Brazilian and Paraguayan division. In the same year, he was promoted to leader of the company’s operations in the Americas and moved to Dallas.

Besides appointing a new CEO, InterCement has also appointed Nicolas

Fournier as the new external adviser to the company’s administration council.

Satitpong Sukwimol to become director of Siam Cement In an appointment expected to have been confirmed at Siam Cement Group’s annual shareholders meeting, on March 28, Satitpong Sukwimol will become director at the company.

Sukwimol is a close aide of Thailand's King Maha Vajiralongkorn Bodindradebayavarangkun. He has be responsible for the personal affairs and assets of the king for many years, and has gained prominence since Vajiralongkorn succeeded to his father.

He was recently been appointed by Vajiralongkorn as the new directorgeneral of the Crown Property Bureau, which manages major stakes in Siam Commercial Bank and Siam Cement Group.

40

August / September March/April 2018 2016

www.cemweek.com

PEOPLE PPC appoints permanent CEO Johan Claassen, until now the interim chief executive officer of South-African cement manufacturer PPC, has become the permanent CEO and executive director of the group.

Claassen was managing director of PPC until last July, when Darryll Castle suddenly resigned from his post as CEO and Claassen was called to occupy the place in an interim basis.

The appointment became effective immediately after the announcement, on March 14.

CRH appoints new non-executive director Richard Boucher has been picked by CRH to be its new non-executive director, an appointment effective since March 1.

Boucher was the chief executive of Bank of Ireland Group since February and held key senior management roles in other banking institutions such as the Royal Bank of Scotland and Ulster Bank.

He is currently a consultant for Fairfax Financial Group and acts as its nominee on the Board of Atlas Mara. He is also a nonexecutive director of Eurobank Ergasias.

Boucher holds a Bachelor of Arts (Economics) from Trinity College, Dublin

and is a Fellow of the Institute of Banking in Ireland.

Managing Director appointed at Aumund On March 1st 2018, Reiner Furthmann took on the position of Managing Director Technology at Aumund Fรถrdertechnik GmbH in Rheinberg, Germany.

His main responsibilities are Research & Development, Design & Engineering, Quality Assurance, Production, Materials Management / Purchasing.

Reiner Furthmann has been developing his career with Aumund since joining in 1984, and he has progressed into this role from the position of Technical Director.

www.cemweek.com

AugustMarch/April / September 2016 2018

41

DEPARTMENTS

EQUIPMENT Vostok Cement deploys new road cement carriers Three new cement carriers have been added to the fleet of Vostokcement, replacing aging vehicles that had been operation for eight years and summed over one million kilometers.

The new carriers were transported from Moscow to Vostokcement's facilities, and one of them is already making deliveries to Vladivostok and the Primorsky Krai.

The new vehicles are equipped with semitrailers, which will increase their capacity.

Currently, Vostokcement operates 13 cars

to deliver cement.

Kavkaz Cement sets new raw materials pipeline The cement plant, part of the EuroCement Group and located in KarachaevoCherkessia, has constructed a 3.6-kilometer pipeline designed to transport raw materials as part of its modernization program.

According to the company, the new pipeline replaces an aged infrastructure and will allow for the uninterrupted supply of raw materials for cement production. During the same phase of the modernization program, Kavkazcement has also completed an overhaul of its rotary kiln number 1.

In the second stage of the modernization plan, the company will build a new grinding unit with the capacity to process 153 tons per hour and its own gas-piston thermal power plant capable of generating 24 megawatts.

42

August / September March/April 2018 2016

www.cemweek.com

EQUIPMENT Cemex pioneers remote control system at its plants

Cemex has created a network that allows it to monitor and control 14 cement plants, 25 kilns, and 86 grinding mills in Mexico, alongside two other cement plants located in Colombia and the United States, from its base in Monterrey, Mexico.

The manufacturing sites have been connected by a system called Cement Control Center that provides uninterrupted remote control and monitoring capabilities. The Monterrey base can therefore monitor performance and implement corrective measures on real time. ”Cemex applied the most modern technology to develop a system that marks a unique milestone in today’s cement industry” asserted Edgar Angeles, operations vice president at Cemex Mexico.

LOESCHE supplies vertical roller mill to Vicem LOESCHE received an order to supply a type LM 59.3+3 CS vertical roller mill (VRM) for the existing Hoang Thach cement plant in Hai Duong province.

With a transmission power of 6,200kW, the vertical roller mill is well suited to grinding clinker and additives in the top power segment and is able to grind 250tph of OPC to a fineness of 3,600 Blaine.

Along with facilities for handling raw material, the scope of supply includes an external reject system, dedusting equipment, a material conveying system and multi-chamber silos with two packaging systems downstream. What’s more, the system, which is expected to go into operation in the coming year, is equipped with a LOMA LF20 heater run on heavy oil, which produces around 30,000Nm³ of hot gas per hour at a temperature of 450°C. In addition, LOESCHE is supplying the required equipment for the power supply and distribution and the grinding plant control. www.cemweek.com

AugustMarch/April / September 2016 2018

43

EQUIPMENT BaselCement orders new expansion joints from Sinoma Sinoma International Engineering will supply four metal expansion joints that will be installed in the Serebryansky cement plant, operated by BaselCement.

RZD Logistics will be responsible for the transportation of this equipment, which was divided into two batches with two expansion joints each.

The branch of RZD in Saint Petersburg was responsible for leading the cargo from Sinoma’s factory in Tianjin, northern China, to the Oktyabrsky village, in the Ryazan Oblast, where the Serebryansky factory is located.

Gebr. Pfeiffer receives order from Nepalese manufacturer

The equipment manufacturer received a new order for a vertical roller mill. This was the fourth of its kind coming from a Nepalese client since the beginning of the year.

44

August / September March/April 2018 2016

The mill, a MVR 3350 C-4 with a drive power of 2,150 kilowatts and capable of grinding 130 tons per hour of cement at 3,000 Blaine and 100 tons per hour at 3,800 Blaine, will be delivered to Palpa

www.cemweek.com

Cement Industries Private and installed in Sunwal town, district of Nawalparasi.

Commissioning of the mill is planned for mid-2019.

EQUIPMENT FLSmidth introduces new optimization tool for mills With a new process control called SAGwise, FLSmidth promises a return of investment in less than six months through a reduction in the costs with power, media, and liners.

FLSmidth promises a slash of six percent in the power consumption of processing mills and 45-percent reduction in ballon-liner impacts that result in less media degradation and a longer lifespan for the equipment.

SAGwise is capable of analyzing impacts inside the mill to identify undesirable high-energy impacts of steel balls on the mill liners. It can then make adjustments to the mill’s operation in order to reduce those critical impacts.

Thyssenkrupp to supply new cement production line to LafargeHolcim in Morocco Thyssenkrupp has won a contract from LafargeHolcim to supply a new 3.500 TPD cement clinker production plant in Morocco. The project will cover the engineering, procurement and construction (EPC) of the new greenfield facility. The line will be built in the Souss Massa region near Tidsi, situated about 65 km south-east from the regional capital Agadir. Start-up of the plant is scheduled for the first half of 2020.

Thyssenkrupp will provide engineering, procurement and construction for the entire clinker production line, ranging from raw material preparation to clinker storage, and a grinding facility for solid fuels. The main components include a 1,000 t/h primary crusher, a longitudinal additives storage facility, a circular stockpile with a storage capacity of 12,000t, a QUADROPOL QMR² roller mill with an output of 290 t/h and a blending silo of 4,600tons. The kiln system consists of a 5-stage, single-string

polysius preheating tower, a two pier rotary kiln and a POLYTRACK clinker cooler. The line is completed by a ball

mill for solid combustibles and a clinker stock with a total storage capacity of up to 65,000 tons.

www.cemweek.com

AugustMarch/April / September 2016 2018

45

Flashback NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS

Russia 14 articles

Spain 11 articles

United States 27 articles

Egypt 47 articles

Pakistan 25 articles

China 16 articles

Saudi Arabia 14 articles Colombia 11 articles

Kenya 13 articles

Indonesia 17 articles

Brazil 14 articles

cw Research 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 https://www.cwgrp.com/research/webinars-and-meetings

CW Research meeting agenda include: April 5, 2018

What will be driving and constraining cement demand in 2050?

May 3, 2018

Global Quicklime, Slaked Lime and Hydraulic Lime Market 2018

May 10, 2018

46

Cw research newest reportS:

Webinars

Webinars

Global Cement Trade Prices 1Q2018

August / September March/April 2018 2016

Webinars

www.cemweek.com

Global Cement Volume Forecast ReporT

Global Cement Trade Price Report

Global Quicklime, Slaked Lime and Hydraulic Lime Market Report

March 2018

April 2018

April 2018

BUZZ

5.

New cement factory in Agrı, Turkey

6.

ACC, Ambuja sell each cement at discount prices

7.

LafargeHolcim announced overhaul plan

8.

CRH considers cement plant in Tanzania

9.

Taiheiyo Cement to increase capacity in the United States

10. Cemex looks into expansion opportunities

recorded

exports consumption crore

economic

products

slag

ministry

waste

global portland

materials

concrete

exports

growth

waste

sold

imports russia

materials results

investment results

industrial

TOP BMWEEK STORIES activity Irish construction industry federation calls for IRAN tax rebate

1.

2.

Bulgaria: Kaolin investing in new processing plant 3. Environmental justice advisor in the US disagrees with fly ash plan 4. India: State of Maharashtra to offer fly ash for free 5. India’s government launches fly ash mobile app 6. Construction output declines in Europe 7. Construction material prices in the US expand further in February 8. Indian government wants to award more benefits to construction industry 9. Hong Kong creates new Institute of Construction 10. UK’s construction sector growth accelerates in February

region economic development

using

large

paid

industrial

short thermal volume

india

TOP petcokeweek STORIES 1.

US to exempt select countries from tariffs on aluminum

2.

Lukoil sales increase in 2017

3.

European refiners entering maintenance

4.

Coal prices decrease in China

5.

China: Petcoke prices remain unaltered

6.

Petcoke prices in China decrease

7.

Coker in largest US refinery running below capacity

8.

India: Petcoke prices at multi-year high

9.

France: Cement manufacturers to replace petcoke with wood waste

10. Brazil: Port of Cabedelo moves thousands of tons of petcoke

ending

weather

produce

industrial metric

went

FACTORY

exports

Vicat prepares capacity expansion in India

power reach

reach

produce www.cemweek.com

basis

4.

products

Cemex sets remote control system on its plants

decline

recorded petroleum

3.

IRAN

imports

CRH prepares more acquisitions after Ash Grove

1h2016

2.

exports

vietnam

LafargeHolcim's new CEO prepares plan to reboot the company

products

LAFARGE

increased

decline

refinery

1.

saudi

india

produce

TOP CEMWEEK STORIES

GRANITE

product

official

coke

imports

seeks

output

lafargeholcim short

imports

region results

technology

AugustMarch/April / September 2016 2018

47

GLOBAL GLOBALCEMENT CEMENT TRADE TRADEPRICE PRICEREPORT REPORT The The Global Global Cement Cement Trade Trade Price Price Report Report (GCTPR) (GCTPR) provides provides a must-have, a must-have, data-centric data-centric assessment assessment of of monthly monthly and and quarterly quarterly prices prices (USD (USD perper ton) ton) forfor cementitious cementitious products products - gray - gray cement, cement, white white cement, cement, clinker clinker & granulated & granulated slag slag (GBFS): (GBFS): Ex-works Ex-works and and retail retail prices prices Trade Trade pricing pricing Together Together with with insights insights onon cement cement producers' producers' pricing pricing strategies strategies and and importimportantant price price revisions, revisions, thethe GCTPR GCTPR provides provides insights insights and and data data onon domestic domestic cement cement pricing pricing forfor over over 30 30 keykey markets, markets, as as well well as as international international trade trade prices prices forfor 70+ 70+ cement cement markets. markets.

Analysis Analysisand and forecast forecastofofglobal global cement cementtrade. trade.

LET LETUS USGUIDE GUIDEYOU. YOU.

The The report report notnot only only provides provides historical historical monthly monthly and and quarterly quarterly price price informainformation, tion, butbut also also offers offers a three-month a three-month forecast forecast forfor each each country. country.

The The unique unique report report is built is built onon CWCW Research’s Research’s long long and and proven proven expertise expertise in the in the cement cement industry. industry.

The The GCPR GCPR is is intended intended as as a tool a tool forfor understanding understanding thethe national, national, regional regional and and international international cement cement pricing pricing environment environment and and thethe around around thethe world. world. competitive competitive price price scenario scenario in key in key markets markets CEM CEMENT ENT • B•UILDING B UILDING M ATERIALS M ATERIALS • DRY • DRY BULK BULK CARGO CARGO & SHIPPING & SHIPPING • CHEMICALS • CHEMICALS • • INDUST INDUST RIAL RIAL MINERALS MINERALS • INDUST • INDUST RIAL RIAL EQEQ UIPMENT UIPMENT • PAPER • PAPER & PULP & PULP • PETCOKE • PET COKE r e s reeasrecahr. c hw.gcrwpg. cr po .mc o m• i•n q iuni qr iueisr i@e sc @ w gcrwpg. cr po .mc o m w gcrwpg. cr po .mc o m • s•a l se as l@e sc @