CemWeek Magazine #49: April 2019 by CemWeek

GLOBAL CEMENT INDUSTRY. KNOWLEDGE.

ISSUE 49

APRIL 2019

Q&A with André Jasienski Director of FEBELCEM (Federation of the Belgian Cement Industry)

Insight Analysis

Top cement companies’ 2018 financial performance

How China’s decline will curb world cement demand 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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GLOBAL GLOBALCEMENT CEMENTVOLUME VOLUMEFORECAST FORECASTREPORT REPORT research.cwgrp.com The The Global Cement Volume Forecast Report (GCVFR) is a twice-yearly, data-oriented forecast report,report, research.cwgrp.com Global Cement Volume Forecast Report (GCVFR) is a twice-yearly, data-oriented forecast inquiries@cwgrp.com inquiries@cwgrp.com providing extensive details on the outlook as well keyascement markets worldwide. providing extensive details onglobal the global outlook as as well key cement markets worldwide. sales@ g rcpw. cgor m a l ce ws @ p.com The The benchmark report provides a five-year outlook on cement consumption, production, net-trade, cement 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 production capacity and other key cement metrics that decision makers cannot live without. The GCVFR is builtbuilt withwith investment-grade analytical rigor,rigor, informing industry professionals aboutabout what what is expected investment-grade analytical informing industry professionals is expected around the corner for world cement markets. visit: http://goo.gl/eib8fE around the corner for world cement markets. visit: http://goo.gl/eib8fE Our global presence: Greenwich (US) (US) • Mumbai (IN) (IN) • Porto (PT) (PT) • Bucharest (RO) (RO) • Sao• Paulo (BR) (BR) Our global presence: Greenwich • Mumbai • Porto • Bucharest Sao Paulo

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STAFFBOX ROBERT MADEIRA

A tamed dragon

CEMWEEK PUBLISHER HEAD OF CW GROUP RESEARCH

Gone are the days when China was boosting exponential growth. Today, the Asian giant finds itself evolving slower, taking more strategically calculated steps. The IMF’s latest forecast points towards a 6.3 percent growth rate for the country’s economy in 2019, an indication of things to come. The Chinese economy is now reaching a mature stage similar to that achieved by the western markets 20 to 30 years ago, when demand for cement started to reach its plateau. And the road towards maturity is bound to be rocky, especially if we take into account China’s seemingly never-ending trade war with the US. Much like its more developed peers, the Chinese cement market is now one that is adamant in deploying strict rationalization efforts when it comes to cement production. The government is cracking down on the cement industry, eliminating exceeding capacity and making sure environmental goals are met. It is hardly surprising, then, that world cement demand is poised to be curbed by China’s stricter cement capacity eliminations. Be sure to read more on CW Research’s forecasts for global cement volumes through 2023 a few pages ahead. In this issue, we also go back in time with André Jasienski, Director of FEBELCEM (Federation of the Belgian Cement Industry), who explains its evolution throughout the years. With his eyes also set on the future, Jasienski addresses the Belgian cement industry’s main challenges and shows how the sector is already going green – with over half of domestic production being blast furnace cement. Despite an increasingly cautious global economic outlook, major players in the global cement industry continue to experience sustained growth across different markets. We look back on 2018 and explain how, despite a few obstacles here and there, the year was quite positive for the industry’s main global producers. Growing pains are never easy, and that is something mature economies can show China. But the country is just slowing down, as it carefully ponders its next steps. The dragon may be tamed, but it is not sleeping.

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CW Analytics

contents FEATURES 4 Leaders Q&A: André Jasienski In an exclusive interview, André Jasienski addresses issues such as the evolution of FEBELCEM, the Belgian cement industry’s main challenges in the upcoming years, as well as the steps it can take towards a more sustainable production approach

10 Insight Analysis: Top cement companies end 2018 with a bang and are putting their right foot forward for 2019 Growth during the year remained strong, and companies enter 2019 with confidence, despite the expected challenges 14 CW Research: Slowing economy curbs global cement volumes up to 2023 CW Research’s latest update of its Global Cement Volume Forecast Report sees overall cement capacity falling over the next five years, mainly led by the Chinese government’s crackdown on the industry 22 Country Snapshot: Ivory Coast’s apparent cement demand to reach 8MT by 2023 CW Research analyzes the developing Ivorian cement industry, from its recently-overcome state of undersupply to the more than USD 40 billion worth of construction projects scheduled to be completed within a few years

DEPARTMENTS 1 EdiTor's letter A tamed dragon

34 cw group meeting agenda CW Group’s upcoming events

3 numbers in brief Capacity additions increased in most regions, but there was an overall net decrease in global cement capacity during the year

26 Research Cement Volumes 28 Departments People Equipment

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35 BUZZ Top 10 CemWeek, BMWeek and PetcokeWeek stories

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numbers in brief

Global cement capacity falls in 2018

Capacity additions increased in most regions, but there was an overall net decrease in global cement capacity during the year In 2018, the world’s cement capacity fell by 0.2 percent, from 5,791.2 million tons in 2017 to 5,777.6 million tons. Most of the decommissioned capacity came from China, which lost about 117.0 million tons year-on-year, a fall of 4.0 percent from 2017 to 2018, as a consequence of the government’s crackdown on industrial units due to the country’s new policies on environment. China’s capacity, in particular, has been undergoing a pronounced downtrend from 2013 onwards, after a rapid growth in capacity in the preceding decades, boosted by its population and industry growth. As these trends are now stabilizing, and the government is also trying to curb new capacity additions, new cement production capacity in China is decreasing. Meanwhile, the rest of the world saw a healthy expansion of around 3.6 percent in overall cement capacity, equivalent to 103.4 million tons. Most of these expansions came from emerging markets in Latin America, Asia, and Africa, which are now developing their infrastructure in order to keep up with a globalized economy, as well as more housing programs for their increasing population. CHART: China’s cement capacity addition growth 2013-2018 (mn tons)

Source: Company reports, CW Research’s Global Cement Volume Forecast Report

In more advanced economies, there has been a slew of mixed trends in the 2013-2018 period, with some countries expanding capacities marginally, in line with their own economic growth, while others have been decommissioning part of their cement production in favor of cheaper imports or other unique conditions. CHART: World ex-China cement capacity addition growth 2013-2018 (mn tons) World ex-China

Source: Company reports, CW Research’s Global Cement Volume Forecast Report

Others yet have left their capacity unaltered, as they have been able to maintain their sales due to healthy demand and growth, as well as seeking other opportunities. In these economies, an improvement was also recorded in overall production techniques and expertise, which shows a growing trend in companies’ investment in technology and environmental commitments. www.cemweek.com

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Leaders Q&A

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André Jasienski Director of FEBELCEM (Federation of the Belgian Cement Industry)

In an exclusive interview, André Jasienski addresses issues such as the evolution of FEBELCEM, the Belgian cement industry’s main challenges in the upcoming years, as well as the steps it can take towards a more sustainable production approach

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Leaders Q&A

ndré Jasienski’s professional evolution is intimately intertwined with FEBELCEM. With a background in Geotechnical Engineering, Jasienski worked for over 15 years at the Walloon Ministry of Equipment and Transport, where he was in charge of the Namur Road Division. Having joined FEBELCEM as a consulting engineer in 1992, Jasienski would become the Federation’s Director of the Department Promotion, Research & Development ten years later. Since 2009, he has been the Director of FEBELCEM. In an exclusive interview, André Jasienski addresses issues such as the evolution of FEBELCEM, the Belgian cement industry’s main challenges in the upcoming years, as well as the steps it can take towards a more sustainable production approach.

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FEBELCEM’s main objectives have revolved around controlling cement quality, and extending and improving the use of concrete Despite being called FEBELCEM only since 1994, the Belgian cement professional organization was founded in 1949. How has the organization evolved since its inception to the current day? The inception of FEBELCEM dates back to 1924. In that year, the Belgian cement producers, (at that time, more than 30) decided to create the Groupement des Producteurs de Ciment, a nonprofit association, as per the British and American examples.

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After World War II, national legislation was enacted in order to stimulate industrial research. In 1949, the information center of the cement industry was created. By then, the Federation was renamed the Federation of the (Belgian) cement industry: FIC (Fédération de l’Industrie Cimentière), finally becoming FEBELCEM in 1994. Ever since then, FEBELCEM’s main objectives have revolved around controlling cement quality, and extending and improving the use of concrete. The Federation achieves these goals by collaborating with the Université Libre de Bruxelles, through testing and certifying the quality of the ‘C’ and ‘CM’ labels. In parallel, we constantly produce and update documentation and in-house publications, from technical sheets, to annual reports, etc.

So far, how has FEBELCEM succeeded in stimulating and promoting the Belgian cement sector? Despite considerable economic importance, the Belgian cement industry has long been unknown to the public. As such, our basic philosophy and guideline since the 1920s have focused on ensuring

the quality of products and of execution. In parallel, the same goes for the quality of information we report to the media and the broader audience – which is always focused on technical promotion rather than on marketing. Some of that technical promotion regarding Belgian cement and concrete entails to inform public administrations and providing them with technical assistance. We also maintain a network of contacts with architects, architects associations, schools of architecture, and more. Since 2004, FEBELCEM has widened its efforts to include ‘B2C’ communication with future house builders and/or owners. Additional communication channels include our concrete platform (‘infobeton.be’), together with sister associations (ready-mix concrete, precast, and so on), partnerships with TV specialinterest channels, and social media.

The Belgian cement industry’s main challenges are likely to happen on two fronts: a societal level, and an industrial one the Belgian construction sector was not dramatically affected by the 2008 financial crisis. There was an availability of savings, with construction still being considered a good investment. A particular characteristic of Belgian cement consumption is the cyclic increase in the pre-municipal-election year, which takes place every six years.

cost. Mobility and infrastructure are also bound to be key pillars of the Belgian cement sector in the coming years. On an industrial level, the Belgian cement industry will be faced mainly with green challenges, such as promoting a more circular economy, and complying with the European Union’s Emissions Trading Scheme in the context of climate change. When it comes to alternative fuels, taxation and transnational waste flows are already pressing matters. Still on an industrial level, but on a broader scale, the Belgian cement sector is likely to have to deal with cement imports. In terms of cement and concrete production, the industry will have to continue investing in the digitalization of the construction process and in skill training.

The cement industry continues to be one of the most polluting What do you think are the in the world. What steps is the According to FEBELCEM’s 2017 main challenges of the Belgian Belgian cement industry taking annual report, the Belgian cement industry in the coming towards a more sustainable construction industry grew years? production approach? 2.5% over that year. What are In the medium term, the Belgian cement In order to comply with increasingly the main factors contributing industry’s main challenges are likely to stricter environmental frameworks, to this upward trend? happen on two fronts: a societal level, and already nearly 60% of the cement Traditionally, Belgium has a high cement consumption per capita – more than 570 kg per year That can be due to the fact that

an industrial one. On a societal level, the industry will have to focus on building needs, such as housing, education, and health care; and also on the building

produced in Belgium is blast furnace cement (CEM III). The domestic cement

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Leaders Q&A industry is also relying on the use of alternative fuels, waste in particular, to reduce its environmental footprint. Together with the European Association, FEBELCEM devised a Road Map 2050 to reduce CO2 emissions. In a circular economy, concrete is one of the best materials for construction. Its environmental impact is lower than that of steel and also than in timber constructions.

Belgium has developed the TOTEM (Tool to Optimize the Total Environmental Impact of Materials). How did it come to

aced with ever-evolving knowledge, FEBELCEM brings together a multidisciplinary team of engineers, technicians and researchers specialized in the different segments of the construction market: road, civil engineering, building, among others.

In a circular economy, concrete is one of the best materials for construction be, and what is its application for the cement industry? The TOTEM was created with the following goals: quantifying the environmental score of construction materials: to stop the indiscriminate use of the terms such as ‘sustainability’, ‘green’,

In terms of relevancy to the Belgian cement/concrete sector, the TOTEM represents an opportunity to identify opportunities for improving environmental performances of concretebased building solutions. That, in turn, could enable the achievement of the

Defending the interests of its sector, particularly in the legal and environmental fields, FEBELCEM maintains regular contact with other professional federations of cement-using industries, including the Centre Scientifique et Technique de la Construction

(CSTC), the Centre de Recherches Routières (CRR), the Fédération de l’Industrie du Béton (FEBE), the Union professionnelle des producteurs belges de fibresciment, and the Fédération des producteurs de béton prêt à l’emploi (FedBETON).

The Federation aims to assist, inform and train the users of cement products (technical assistance and information to ensure the product is used properly and the project concerned is successful). It also organizes courses and training days for practicing architects, construction designers and contractors. Lastly, it contributes to educational programs for future engineers, architects and construction workers.

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‘ecological’, ‘environmentally-friendly’ etc.; anticipating future European standardization in environmental product declarations by including additional indicators; creating a catalogue of functional units for designers, allowing to compare building solutions at the level of the building and throughout the entire life cycle.

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following goals: reducing the impact of materials by design for adaptable constructions, dismantling/reuse/ recycling; design optimization e.g., thermal mass; innovation for better performances (mechanical, thermal, acoustic, fire resistance, aesthetic, low maintenance, among others.

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Insight Analysis

Top cement companies end 2018 with a bang and are putting their right foot forward for 2019

Growth during the year remained strong, and companies enter 2019 with confidence, despite the expected challenges.

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Insight Analysis

our of the largest global cement companies saw their results improve in 2018, and are expecting that growth to continue in 2019, despite the looming economic headwinds that point to a mild slowdown in global growth for the year.

Starting with LafargeHolcim, net sales improved by 5.1 percent year-on-year, to CHF 27.5 billion in 2018, with sales in Europe topping the charts, at CHF 7.6 billion, closely followed by Asia, at CHF 7.4 billion. The company’s recurring EBITDA also reached CHF 6.0 billion in 2018, inching up from the previous year’s results, with all four business segments contributing to the growth. Cement in particular saw sales volumes expand by 4.4 percent from 2017 to 221.9 million tons in 2018, while sales rose 6.0 percent during the same period. This growth was more prominent in Asia Pacific, due to infrastructure and rural housing, and Europe, which was

supported by higher construction and residential activity as well as incremental infrastructure spending. North America also saw strong growth during the year despite the unfavorable weather, and demand in the Latin American markets of Brazil and Colombia recovered partially, while sales in the Middle East and Africa were in line with the previous year.

Results for the year were extremely positive for the companies Commenting on the year’s results, Beat Hess, the board chairman observed that LafargeHolcim “grew faster than the market and improved the Recurring EBITDA of the company through greater efficiency and cost discipline.” This growth particularly accelerated in the second

CHART: Net sales in 2018 (USD mn) Net sales in 2018 (USD mn)

Source: CW Research

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half of the year, having exceeded sales targets, just as profitability surged over proportionally as well. HeidelbegCement’s sales volumes and revenues attained new records during the year, despite considerable negative exchange rate effects. The company’s managing board chairman, Bernd Scheifele, commented: “In its 145-year history, HeidelbergCement has never sold more cement, concrete, sand, and gravel than in 2018. Thanks to robust demand in many markets, new record figures for sales volumes and revenue were achieved.” Cement and clinker volumes reached 129.9 million tons in 2018, increasing by 3.4 percent from 125.7 million tons in 2017, while revenue grew by five percent to over EUR 18 billion for the first time. The company recorded improvements across all regions, with the exception of North America, where revenues fell from EUR 4.4 billion in 2017 to EUR 4.3 billion in 2018, due to adverse weather conditions and margin pressure in the North region. In Western and Southern Europe, the positive development of results in the content helped to offset inflation and currency losses in the UK. In Northern and Eastern Europe-Central Asia, there was a significant increase in results due to the good development in Norway, Sweden, and particularly in Poland, Czechia and Hungary. Meanwhile, in Asia-Pacific, results fell below the previous year, but growth in Indonesia, Thailand and Australia remained high. In Africa-Eastern Mediterranean Basin, results increased despite the challenging environment, due to positive developments in Ghana, Tanzania, and Egypt. The company’s group services business segment also showed significant expansion during the year, to EUR 1.8 billion.

While the company’s growth was positive, there were still significant headwinds that affected its performance, namely strongerthan-expected increases in energy and electricity costs, and lower-than-planned income from the sale of depleted quarries. For Cemex, net sales in 2018 expanded by six percent from the previous year, reaching USD 14.4 billion, while net income for the year stood at USD 543 million, in part due to the growth in production volumes in the company’s operations in the United States and Mexico. The increase in net sales was in part due to higher prices for products in local currency terms in all of the regions, except for South, Central America and the Caribbean.

In Europe, operations’ net sales rose by three percent year-onyear to USD 3.8 billion, while in Asia, Middle East and Africa they expanded by seven percent to USD 1.4 billion. “We are pleased with our 6% top-line growth during 2018, supported by higher consolidated volumes and prices in our three core products. Operating EBITDA grew by 1% on a like-to-like basis in this period,” noted Fernando A. Gonzalez, Chief Executive Officer of CEMEX. “During 2018, we generated more than US$900 million in free cash flow after maintenance capex, with a strong EBITDAto-free-cash-flow conversion rate, which allowed us to reduce our total debt by 8%, or close to US$1 billion. We also made significant advances under our A Stronger CEMEX plan during the second half of last year and are on track to achieve our 2019 and 2020 targets under this program.”

Growth in demand expected across most regions for 2019

Buzzi Unicem sold 27.9 million tons of cement in 2018, a rise of 4.3 percent when compared to 2017, with net sales increasing by 2.4 percent to EUR 2.9 billion. The company’s international trade decelerated due to trade tensions at a global scale, but resilient building activity in the United States supported growth in this market. In Europe, activity slowed down in the third quarter, particularly in Germany and Italy, as foreign demand weakened, but the growth in the domestic market helped to support the recovery in investments, and Czechia and Poland continued to record a strong construction activity. However, there was a sharp decline in activity in Ukraine.

Outlook for 2019 overall solid While the companies are facing difficulties as prices for raw materials and energy are increasing, they remain confident that their margins will remain solid, boosted by demand in key markets.

LafargeHolcim is expecting solid global market demand in 2019 for all of its products, and is targeting a growth in net sales between three to five percent. The company is expecting continued growth in Europe and North America, Europe

and Asia Pacific, while the conditions in Latin America and Middle East and Africa regions are seen as challenging, but still stable. Nonetheless, the company is still wary of an economic downturn, as it would have a significant negative impact for its business and will likely affect market demand. LafargeHolcim also highlighted that political uncertainty could affect markets and construction efforts in some regions, which remained a key risk. HeidelbergCement is also confident about its results for 2019, despite the expected weakening in global economic performance. The company is expecting to benefit mainly from the positive economic development in industrial countries, namely the USA, Canada, Germany, France, Australia, and countries in Northern Europe. Economic recovery in growth countries such as Indonesia, Thailand, India, Morocco, and countries in Eastern Europe and Africa is also expected to boost the company’s performance, which is envisioning a growth in sales volumes for its products, as well as in revenues, for 2019.

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FEATURE

CW RESEARCH

Slowing economy curbs global cement volumes up to 2023 CW Researchâ&#x20AC;&#x2122;s latest update of its Global Cement Volume Forecast Report sees overall cement capacity falling over the next five years, mainly led by the Chinese governmentâ&#x20AC;&#x2122;s crackdown on the industry

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FEATURE

he cement industry’s overall capacity growth in the 2019-2023 period will be conditioned by several macroeconomic factors over the five-year period, as global economic growth prospects for the next two years were revised downwards by the IMF, and regional circumstances weigh on manufacturers’ decisions.

Overall, the next few years’ outlook remains muddled with growing trade tension between China and the United States, not only with each other but with other trade partners as well, while in the Euro Area lower consumer and business confidence, the uncertainty over Brexit, and the Italian debt add weighty risks. Meanwhile, demand for commodities and depreciation of local currencies in emerging markets and developing economies will also pressure growth, while in the economies in the Middle East, North Africa, Sub Saharan Africa, as well as Afghanistan and Pakistan will be affected by oil prices and weak oil output growth, as well as geopolitical tensions.

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Globally, the market that will change the most over this period is expected to be China, while the rest of the world is expected to show mixed trends in both demand and capacity expansion.

The next few years’ outlook remains muddled with growing trade tension between China and the United States A Sino-ous situation The Chinese market has been witnessing abrupt changes over the past few years, a result of the government’s efforts to cut emissions of fossil fuels, which has forced cement manufacturers to remove their outdated production facilities, as well as to switch to alternative fuels, a demanding task for an energy-intensive sector. Other than that, some plants have also closed due to their location and proximity to urban

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areas, in which the government is trying to promote a healthier lifestyle and limiting several of the industry’s impacts. Beijing and the provincial governments continue to impose restrictions on production in order to reduce overcapacity and pollution. Meanwhile, construction companies are facing a new paradigm in which cement imports are now relevant, with an influx of Vietnamese cement. As the industry adapts to new levels of base consumption, cement demand is forecast to experience a more prominent decline between 2019 and 2020, only to slide at lower rates until 2023. The country’s cement consumption is expected to decline from its current market share of more than half of the world’s production to two billion tons in by 2023, with global cement consumption in 2023 expected to stand at about 4.2 billion tons. Many other obstacles are expected to put a break on the industry’s growth in the country, such as the focus on the reduction of CO2 emissions set forth by the Paris Agreement, and current and future environmental goals. The Chinese cement market is the only one that CW Research forecasts to see cement demand decreasing up to 2023, as healthy growth is expected in all other regions, with cement capacity following the same trend.

World ex-China to show healthy growth, despite headwinds The outlook for the North American region is projected to be driven by the US’ construction outlook, as the country accounts for the majority of consumption in the region. In the upcoming years, we expect that President Trump’s USD 1.5 trillion infrastructure plan will result in an upsurge in cement consumption. However, an increase in interest rates and issues related to the trading war with China may cap the positive effects of more investment in infrastructure. In 2018, cement demand surged in India as elections caused a boom in new infrastructure investments, as well as a slew of housing programs which are yet to kick off. Meanwhile, oil exporting markets such as Saudi Arabia and Russia saw their building investment impacted during the year as the prices for the commodity slipped. In 2019, cement demand is expected to increase in advanced economies, although geopolitical tensions will weigh on the expected gains, particularly as the

slowdown in the US economy and the Brexit impasse affect investment opportunities and possibly delay construction efforts due to several obstacles. Up to 2023, however, overall ex-China cement demand is forecast to grow around three percent in terms of volumes, while per-capita consumption will remain mostly subdued as population growth is expected to explode, particularly in emerging markets and developing economies, as well as due to the consumption slowdown in China. Another driver behind the expanding global ex-China cement demand is the growth of the Nigerian, Indian and Brazilian economies, and their respective construction industries. Capacity growth on a global scale is expected to follow a mostly downward trend up to 2023, following China’s large decommissioning of plants. Nonetheless, the overall growth in most regions is positive, with 2019 marking the largest year of capacity additions, a pace that is expected to slow down over the remaining forecast period.

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FEATURE Turkey’s growth revised downwards As CW Research’s Global Cement Volume Forecast Report is a twice-yearly update on projections for cement volumes, analysts tend to take into account new information and revise their growth forecasts for the year. For 2019, the largest adjustment was made for Turkey, due to several financial constraints, which are causing investor and consumer confidence in the construction sector to decline, despite the low mortgage rates, among them the current political situation and the massive currency depreciation. In terms of demand gains, the region which saw the largest increase in cement

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Beijing and the provincial governments continue to impose restrictions on production in order to reduce overcapacity and pollution

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consumption during 2018 was Asia exChina, led by India and the favorable market conditions there. In Spain, demand is maintaining growth for the fourth year in a row, whereas the improvements in South Korea were surprising, but welcome. Cement consumption in Iran and Tunisia is projected to remain more subdued than expected, while demand for cement in Poland and Thailand is forecast to increase at a more accelerated pace. In terms of downturns, Kenya is expected to fall at a more accelerated pace, as well as Saudi Arabia, due to economic and financial headwinds that will dampen construction investment. Iraq’s growth is also expected to be more subdued, as is Hungary’s, during 2019.

HEATMAP: GLOBAL 2019 YEAR-OVER-YEAR OUTLOOK GROWTH

3Q2018 YoY (%) in USD -15%-15% to -11% -11% to -6% -6% to -2% -2% to 2% 2% to 6% 6% to 11% 11% to 15% 15%+ Source: CW Research

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FEATURE How will the global cement industry fare by 2050? By 2050, analysts are forecasting the cement market to continue growing at a global rate, with the exception of China, based on the current market trends. Chinese cement demand is expected to continue its steady decline, dropping 39 percent from 2018 to 2050, while the rest of the worldâ&#x20AC;&#x2122;s consumption is expected to surge by 45 percent, resulting in an overall net increase at a global level. In advanced economies, growth up to the half-century mark will be promoted by rehabilitation works and other punctual projects in the housing, infrastructure and other construction industry segments. That slice represents the smallest increase

We expect that President Trumpâ&#x20AC;&#x2122;s USD 1.5 trillion infrastructure plan will result in an upsurge in cement consumption

chart GloBAl eX-ChINA CAPACITy GRoWTh, 2023F (mn tons, %)

Source: CW Research

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of the accounted-for markets, especially as these are expected to resort to greener alternatives to cement and other building materials. Both overall demand and consumption per capita are expected to increase, but clinker usage in cement is forecast to decline. The largest increases, in both capacity and demand, are expected for emerging markets and developing economies, as they develop their housing and infrastructure and catch up with the advanced economies. Population growth in those markets is also expected to boost this expansion in overall cement demand and consumption per capita, and most markets are lacking access to cement alternatives, meaning they have more room to grow.

Due to this expected surge in cement demand, capacity is likely to be hand-inhand, especially as manufacturers want to increase their margins and promote a cheaper product, meaning they will likely flock to places with large demand and low wages, which is the case of these markets.

Conclusion Over the next five years, China is expected to be the market with the most changes in both its consumption and capacity, owing to the government’s efforts to curb emissions and its commitment to the Paris Agreement, as well as to an expected slowdown in consumption. The next few years are also expected to prove challenging at a macroeconomic level, with the IMF projecting some markets to face a more subdued growth, although the silver lining is that there are no expectations for a major downturn.

About the report

The world’s exChina cement consumption is expected to surge by 45 percent 2019 is expected to be a year of large growth in capacity additions, while 2020 is also poised to record some positive net gains, excluding China. Yet, the overall growth in cement capacity is forecast to remain subtle in the years up to 2023.

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 supply-demand 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.

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Country Snapshot: Ivory Coast cw research

Ivory Coastâ&#x20AC;&#x2122;s apparent cement demand to reach 8MT by 2023

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CW Research analyzes the developing Ivorian cement industry, from its recently-overcome state of undersupply to the more than USD 40 billion worth of construction projects scheduled to be completed within a few years

Photo Credit: Maxence Peniguet/RNW Media

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april 2019

Country Snapshot: Ivory Coast

he world’s leading cocoa supplier, Ivory Coast is highly dependent on cocoa exports, making the national economy and thus construction investments susceptible to pricing volatilities of the commodity. Coupled with the poor national road network and insufficient generation of quality power, these factors could prove challenging for the domestic cement industry. Nevertheless, a string of housing and infrastructure programs is bound to stimulate the construction sector in the coming years. Affordable housing program and large infrastructure projects driving demand

According to CW Research’s Ivory Coast Cement Market Report, apparent cement

More than USD 40 billion worth of construction projects are scheduled to be completed after 2018

demand is projected to reach 8 million tons by 2023. “From 2013 until 2018, the Ivorian cement market has been in a state of undersupply due to cement demand

Yamoussoukro

april 2019

Between 2010 and 2018, the Ivorian construction sector has benefitted from sustained growth, positively influenced by the country’s affordable housing program and ongoing large infrastructure projects. Backed by a positive economic outlook, which points to a growing GDP over the coming years, more than USD 40 billion worth of construction projects are scheduled to be completed after 2018.

Cement industry expanding despite structural issues

Côte d'Ivoire

outpacing cement supply. Only in 2018 did supply surpass demand, mainly due to capacity expansions and the entrance of new cement players”, assesses Carolina Pereira, Business Analyst at CW Group.

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The Ivorian cement industry is expanding at a rapid pace, with Ciments de l’Afrique (CIMAF), Dangote Cement, and LafargeHolcim among the main producers operating in the country. Due to Ivory Coast’s high necessity of clinker, attributed to the lack of limestone reserves, the commodity accounts for most of the country’s cementitious imports.

About the report The Ivory Coast Cement Market Report, part of CW Researchâ&#x20AC;&#x2122;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 five-year 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. Despite improvements along the past years, the domestic cement market is still being negatively influenced by the

poor national road network and insufficient generation of quality power.

chart: aPParent conSumPtion and Production ForecaSt (2018-2023e)

Cement Industry Country Reports also cover demand drivers, including macro-economic 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/cemweek-reports/product/284ivory-coast-cement-market-forecastreport-%E2%80%93-2023

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.

Source: CW Research

Photo Credit: abdallahh for Flickr

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april 2019

CEMENT MARKETS

CW Research

Cement Volumes In December 2018, the countries in the Middle East region saw mixed trends in consumption relating to their own economic performance, despite production in the region showing an overall healthy trend.

Argentina’s cement production fell by 14.2 percent year-on-year in December, to 0.86 million tons

In Saudi Arabia, both cement production and cement demand declined pronouncedly during the year, with production falling 11.6 percent to 47.2 million tons, while consumption stood at 41.8 million tons, a drop of 11.3 percent. Demand has been slowing down and competition has been tightening, and while the government has been promoting more infrastructure building, projects are slow to get off the ground, and companies remain doubtful that 2019 will be a positive year for the industry.

In Pakistan, year-to-date consumption expanded by 5.9 percent, as large infrastructure works continue to boost cement consumption in the country. Latin America, on the other hand, showed a pronounced decline in consumption, with only Peru recording a marginal year-to-date growth during the year. Argentina’s cement production fell by 14.2 percent year-on-year in December, to 0.86 million tons, while year-to-date cement consumption in the country slipped 2.4 percent in 2018, as several headwinds affected its economic output during the year. Meanwhile, Colombia’s production fell by 7.4 percent, to 11.4 million tons.

CHART: Year-to-Date Cement Production in December 2018 (%)

Sources: CW Research

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april 2019

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CW Research CEMENT MARKETS

Peru had a good performance during 2018, with production inching up by 0.4 percent through the year. Year-to-date cement consumption in Peru reached 10.0 million tons, a rise of 1.0 percent from 2017. In Asia, India and Vietnam were the top performers during the year, with cement production increasing 14.2 and 4.5 percent, respectively. Indonesia stood out from these economies, with its cement demand dropping 25.5 percent on a yearly basis, as the country is facing some economic difficulties â&#x20AC;&#x201C; and with elections coming in 2019, the road ahead looks bumpy, although infrastructure spending looks promising.

In China, cement production increased both MoM and YoY in December, but declined by 7.2 percent year-to-date, totaling 2,216.8 million tons in 2018. This result is not surprising, as the government continues to curtail production as part of its environmental plans. In Thailand, cement production reached 38.7 million tons in the twelfth month of the year, falling month-on-month and year-on-year. Year-to-date cement consumption in Thailand stood at 33.7 million tons, a rise of 2.7 percent from the previous year.

CHART: Year-to-Date Cement Demand in December 2018 (%)

In Asia, India and Vietnam were the top performers during the year, with cement production increasing 14.2 and 4.5 percent

Sources: CW Research

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april 2019

DEPARTMENTS

PEOPLE Tabuk Cement appoints new board chairman Tabuk Cement has appointed Saud Suliman Al Juhani as the new chairman of the board, reports ME Construction news. Al Juhani will replace Dr. Saeed Obaid officially on April 14. Dr. Obaid reportedly left his role due to his other business commitments At a recent meeting, Tabukâ&#x20AC;&#x2122;s board also appointed Khalid Al Angari as the new vice chairman for the company, with the current board term to end on January 25, 2020.

FLSmidth appoints new members to executive management team FLSmidth has appointed Annette Terndrup, Head of Group Legal and Strategy, and Cori Petersen, Head of Group HR, to its Group Executive Management. "I am very pleased to welcome Cori Petersen and Annette Terndrup to our Group Executive Management. Their combined experience will support our ability to navigate increased business complexity and enhance our talent development," says Group CEO Thomas Schulz. Terndrup was appointed Group General Counsel in 2013, and her role was expanded in 2016 to include Group Strategy and M&A, while Cori Petersen joined the company in 2016 as leader of Human Resources for the US, later expanded to all of North America, and in 2018, she was appointed head of Group HR. 28

april 2019

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PEOPLE LafargeHolcim proposes three new members for board of directors Beat Hess, Chairman of the Board of Directors: “On behalf of the entire Board I would like to thank Nassef Sawiris and Gérard Lamarche for their important contribution to the success of our company over the past years. I am very delighted that we are proposing three new members whose unique experience will complement the expertise of our existing Board members. It is a particular pleasure for me that with the new nominations we will be able to further increase the geographical and gender diversity in our Board.” The Board of Directors of LafargeHolcim will propose to its shareholders to approve at the Annual General Meeting the appointment of three new Members of the Board, after acknowledgment of the leave of two current Board members, announced LafargeHolcim. The Board also provides further details on its dividend proposal for 2018.

The Board of Directors will nominate Colin Hall, Naina Lal Kidwai and Claudia Sender Ramirez for election as new Board members at the Group’s upcoming Annual General Meeting on May 15, 2019. Nassef Sawiris and Gérard Lamarche have decided not to stand for re-election to the Board at the Annual General Meeting.

All other current members of the Board of Directors will be proposed for reelection at the Annual General Meeting: Beat Hess (Chairman), Oscar Fanjul (Vice-Chairman), Paul Desmarais, Jr., Patrick Kron, Adrian Loader, Jürg Oleas, Hanne Birgitte Breinbjerg Sørensen and Dieter Spälti.

Portland Cement Association happy with Andrew Wheeler on EPA The Portland Cement Association (PCA) revealed its satisfaction with the confirmation of Andrew Wheeler for head of the Environmental Protection Agency by the Senate. Before the confirmation, he was already acting as the administrator of the agency. “We congratulate Mr. Wheeler on his confirmation. We encourage him to continue the balance protecting human health and the environment while providing America’s manufacturers the regulatory stability for economic growth”, said Michael Ireland, president and CEO of PCA. “The cement industry looks forward to continuing to work constructively with Wheeler to expand the use of alternative fuels, and modernize permitting to assist manufacturers in making efficiency improvements that will benefit industry and the public”, he added. www.cemweek.com

april 2019

DEPARTMENTS

EQUIPMENT Cementos Argos debuts cement transport in electric trucks As part of its effort to reduce the environmental footprint, Cementos Argos is deploying 100-percent electrical trucks. The vehicles make no noise and are equipped with 600-volt batteries that give them the power to transport four tons of cement per trip. The trucks are already operating in MedellĂn and will soon start to cover other strategic cities. Gas-powered trucks are also part of the fleet. By reducing the use of traditional fuels, Cementos Argos is contributing towards the reduction on carbon dioxide emissions.

Kawasaki delivers grinding mills to Jiande Conch Cement The large-size models have the capacity to handle 220 tons per hour and are intended for full grinding of the final cement product. Kawasaki handled the design and operational technical guidance while CKW dealt with manufacturing and delivery.

Two CK Mills by Anhui Conch Kawasaki Energy Conservation Equipment Manufacturing, or CKM, were delivered 30

april 2019

to Chinese manufacturer Jiande Conch Cement, part of the Conch Group.

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In these model, Kawasaki introduced improvements to grinding roller configurations and product classification mechanisms, changed the material of the pressing mechanism's stand portion from steel plates to concrete, and made other such improvements to achieve a more environmentally friendly cement production process.

EQUIPMENT Holcim quarry commissions new mining equipment meters high and 1,500 HP strong. Every hour, at least 470 tons of raw materials can be mined. Work is done in a 1-shift system. Three employees were trained with driver training in the operation of this new large equipment, which replaces an older device. There was also special training for Holcim's maintenance staff. An extensive service package further secures the operability. "We are excited about the commissioning of this state-of-the-art equipment that sets new standards in performance, noise suppression, health and energy efficiency, and best meets our needs. There is always a lot of teamwork in such a demanding procurement project with extensive cost-effectiveness calculation - thank you to everyone involved.

Holcim announced it commissioned a new mining equipment at the Kollenbach/ Bruch Nord limestone quarry in Germany.

The lime extracted Cat 6030 machine

and limestone rocks will be directly from Zeppelin's FS hydraulic excavator. The is fifteen meters long, 7.5

The high-backhoe should now work reliably for at least ten years, thereby securing the long-term supply of raw materials for our cement plant," says Helmut Reiterer, head of the Holcim cement plant in Beckum.

Cemex launches new, eco-friendly locomotive in California A low-emission, high-efficiency locomotive has been presented by Cemex USA at its Victorville cement plant, in the state of California. The new locomotive was developed by Knoxville Locomotive Works. Equipped with an MTU-4000 Series engine, the locomotive slashes emissions by 80 percent and fuel consumption by 25 percent while still providing over 3,200 horsepower for the transportation of clinker. "Sustainability is embedded in our DNA at CEMEX, and this new locomotive illustrates that," said Carlos Uruchurtu, vice president for cement manufacturer in the West Region at Cemex USA.

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april 2019

EQUIPMENT Aumund supplying several machines to Dangote's projects in Nigeria and Senegal Working closely with Sinoma Nanjing NDI, AUMUND Beijing will supply more than a dozen machines to countries in Africa by 2020. Another of the AUMUND Group companies, SCHADE Lagertechnik, won the order to supply several machines for two Dangote projects in Nigeria. For each of the two 6,000 tpd plants, Dangote Obajana Line 5 and Okpella, AUMUND will supply three Belt Bucket Elevators with a capacity of 660 tph to convey raw meal, and to feed raw meal to the preheater towers at 520 tph. Three further AUMUND Belt Bucket Elevators with a capacity of 480 tph will convey cement to the silos. An AUMUND Pan Conveyor with a weighing scale mechanism and a capacity of 500 tph, running from the coolers to the clinker silos, and three further AUMUND Pan Conveyors under the clinker silo, round off this comprehensive machinery package. SCHADE also won orders for these plants, a Stacker with a capacity of 3,500 tph for Obajana and another at 2,160 tph for Okpella, as well as a Portal Reclaimer

to operate at 800 tph in the limestone storage of each plant. Additional stockyard equipment completes the supply package. For each of the Dangote projects Apapa and Onne Clinker Export & Gypsum Import Terminal, AUMUND Beijing will supply a Double Bucket Elevator to convey clinker to the silos at a capacity of 1,200 tph, and several other Chain Bucket Elevators. Those to convey gypsum to the bunkers will have a capacity of 720 tph at Apapa and 480 tph at Onne. Two 1600 Series

Samson® Material Feeders with a handling capacity of 400 tph of clinker, two AUMUND Telescopic Chutes and two Truck Loaders for clinker will also be supplied to each terminal. As a further outcome of the successful working relationship with Sinoma, AUMUND has received an order to supply a Belt Bucket Elevator with a capacity of 300 tph to convey cement to the new silo at the Dangote Cement Senegal Expansion Project.

Kuwait Cement modernizes three mills with Magotteaux’s equipment Equipment maker Magotteaux is modernizing three cement mills belonging to Kuwait Cement Company in a revamp project that started in early March 2019. The project includes closing the open circuit with a fourth-generation Magotteaux’s XP4®i separators, installing new mill internals such as diaphragms, and adapting a new ball charge gradation. With this new investment, Kuwait Cement Company expects to significantly increase the production rate of the mills while reducing energy consumption and improving the quality of the finished product.

april 2019

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Topkinsky Cement commissions new equipment The company regards these costs as a special kind of investment: reducing the impact on the environment, we preserve the nature of our native land, we care about the present and the future of the Kuzbass people,” stressed Gennady Rasskazov, the vice President of Siberian Cement. “Kuzbass has big tasks for the construction of regional and federal facilities and local construction materials will be in demand as never before. Cement production has a significant environmental impact. Therefore, the issues of eco-friendly production are increasingly relevant,” commented Irina Pecherkina, head of the construction department of the Kemerovo region.

Topkinsky Cement, a subsidiary of Siberian Cement, commissioned a new Elex precipitator at its kiln number 3.

“For the purchase and installation of an Elex electric filter, Siberian Cement allocated RUB 266 million rubles.

“The use of modern technologies to reduce dust generation is possible with competent management methods and systematic investment. I thank the management of the plant for the correct approach and close attention to environmental issues.”

Topkinsky Cement increases mining fleet Russian manufacturer Topkisnky Cement put into operation a new highperformance CAT D9R bulldozer at its mining site in Kuzbass. The new equipment has solid construction and enhanced protection, the company says. Previously, the mining division of Topkinsky Cement had five bulldozers: a CAT 834, three tracked T-2501, and a T-1501. The new machine has the capacity to replace two of the T-2501 the company operates. In 2018, the company launched an investment program to replace the resource transport equipment with new, more powerful and efficient machinery, explained Alexey Ospelnikov, managing director of Topkinsky Cement. www.cemweek.com

april 2019

Flashback NEWS FLOW IN CEMWEEK.COM LAST TWO MONTHS

Spain 21 articles

United States 38 articles

Turkey 22 articles Egypt 51 articles

Pakistan 34 articles Saudi Arabia 25 articles Kenya 19 articles

Philippines 21 articles Indonesia 24 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's meeting agenda includes: May 23, 2019

World Cement Bag & Bagging Equipment Industry & Forecast

June 6, 2019

Global Cement Trade Prices 1Q 2019

Cw Research's newest reportS:

Webinars

June 20, 2019

april 2019

World Cement, Clinker & Slag Sea-Based Trade Outlook

Global Cement Volume Forecast Report 1H2019 Webinars

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April 2019

World Cement Bag & Bagging Equipment Industry & Forecast May 2019

Iraq Cement Market Report 2019 May 2019

BUZZ

Cement and clinker trade prices improve in March

Cement exports surge in Pakistan

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India: Cement prices expand in Mumbai and Delhi

Infrastructure boosts cement prices in North China

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Rural, affordable housing boost cement demand in India

Cement prices stabilize in India, March 2019

10. Global cement demand curbed by China’s decline; India remains promising

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TOP BMWEEK STORIES activity 1. Chaney Enterprises acquires PCS Concrete IRAN 2. United States’ building materials sales decline in February Demand for environmentally-friendly building materials grows in Vietnam 4. Researchers want buildings to have more recycled materials 5. UK and French researchers re-engineer ancient sustainable building material 6. Australia’s residential construction sector continues to underperform 7. Mexican communities use new green building material 8. Construction index declines in Dubai 9. Abu Dhabi registers strong construction activity in 2018 10. Construction activity grows in the European Union, February 2019 3.

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