India Cement & Construction Materials (vol 1 / issue 18)

india CemWeek A CemWeek Publication

Cement issue 18

MAY / JUNE 2014

& construction Materials

Interview with

Mr. G Jayaraman Executive President, Birla Corporation Ltd.

contribution by: Dr S N Pati

Life Cycle Assessment A study of the construction industry FEATURE

LOHIA CORPORATION News

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Analysis

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Market Coverage

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Interviews

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People

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DEPARTMENTS

FEATURES 3

Interview: Mr. G Jayaraman

9

life cycle assessment

15

Executive President, Birla Corporation Ltd.

A study of the construction industry (3/3) Written by Dr S N Pati

1

EDITORIAL LETTER

2

NUMBERS IN BRIEF

42

LOHIA CORPORATION Overview

Cement & construction Materials

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Indian cement industry ranking second in the world cement production

rOBERT MADEIRA

Indian stocks sprint ahead with 2014 General Elections

cemweek publisher head of cw group research

ANALYST RECOMMENDATIONS

Dr. S. N. Pati SNM Khan Pradeep Kumar

Latest Broker Recommendations

EDITORS-AT-LARGE

research and analytics 21 24 25

cement volumes

29

MARKET AND COMPETITION

coal market update

31

M&A and FINANCE

33

PROJECTS AND EXPANSIONS

34

VOLUME AND PRICING

energy price update

construction & building materials 40

cement

INFRASTRUCTURE & PROJECTS New residential project in Gurgaon

35

PEOPLE

36

REGIONAL UPDATE

38

EQUIPMENT HIGHLIGHTS

LIVIU DINU project manager

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letter from the editor

indian cement industry ranking second in the world cement production ndia has an annual production of 260 million tonnes from an installed capacity of 350 million tonnes. The robust growth is to continue for cement industry in India to reach 550 to 600 million tonnes per annum by 2025. Today’s Indian cement industry is on the threshold of a new era of energy efficient and pollution-free activities. The depleting energy resources clubbed with rising cost of energy have compelled the industry to develop and upgrade modern techniques and methodologies on a continuous basis. India, the second most populous country in the world, with a large pool of highly-skilled workers, greater integration with the world economy and increasing domestic and foreign investment is expected to grow at a GDP rate of 6% p.a. and above over the next 10 to 15 years. The per-capita consumption of cement is still low at around 200 Kg compared to the world average of 450 Kg. GDP growth is directly related to cement consumption. In order to maintain a GDP growth rate of moderate 5 to 6%, cement growth has to be around 8 to 10%.

Indian cement industry has adopted the best available technology (BAT) in most of their one million and more capacity cement plants. With the competition growing in India for better quality cement at reasonable price, the cement manufacturers have been selecting the latest pyro processing as well as advanced grinding units. It can see almost continuous improvement in terms of energy reduction, improvement in quality and retrofitting of latest plant and machinery. Few major multinationals have come into this

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country for cement manufacture. They are also finding the cement market quite lucrative as we see not only new plants coming up with multi-national companies taking keen interest but also consolidation among two major MNC has taken place.

However, the R&D efforts in developing new cements or cement process and technology are negligible in India. Indian cement manufacturers have not shown much interest in investing in R&D. Value added products and superior quality cements will trigger R&D efforts in cement industry. During last one and half decade in India, efforts were made to improve the quality and consistency of blended cements that have contributed to a remarkable shift in demand in the market for these products. The use of blended cement has not only increased the consumption of large amounts of industrial waste like fly ash and slag, but also reduced carbon dioxide emissions. Alternate fuels are biomass, municipal waste, agro-waste in our country.

However, there is no systematic disposal of wastes. At present we do not realize that wastes they generate could be someone else’s resource. Collection, segregation, processing and logistics can be an extremely profitable business model. Even wastes must adhere to some uniform quality specification. Different wastes have different chemical composition. Thus processing of wastes can make a good business sense.

The best part of cement industry is that it can absorb all kinds of wastes. Hence it’s an immensely good business opportunity. Alternate fuel has immense untapped potential in our country.

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The Government should encourage use of alternate raw materials and fuel by reducing levies, duties and taxes on cement and plant and machinery. Government can also formulate environmental policies which will help the industry to adopt the latest practices, increase in capital subsidy on environmental improvement. The environmental performance of cement industry is in line with global standards. Many plants have achieved the dust emission of less than 100mg/m3. There are efforts for further improving the environmental requirements. New regulations at par with global standards on SOx and NO x are expected to be brought in and these also will be adopted by the industry. Already a few of the new plants under installation have taken these up. The proactive measures of cement industry and government support in place, the industry’s long term vision will be achieved.

Dr S N Pati Former Joint Director, National Council for Cement and Building Materials

Liviu Dinu

PROJECT MANAGER

NUMBERS IN BRIEF major Indian stocks sprint ahead with 2014 General Elections 1600 1400 1200

1000 800 600 400

The Ramco Cements Ltd.

Sagar Cements Ltd.

OCL India Ltd.

Mangalam Cement Ltd.

Kakatiya Cement Sugar & Industries Ltd.

JK Lakshmi Cement Ltd.

JK Cement Ltd.

Deccan Cements Ltd.

0

Birla Corporation Ltd.

200 Ambuja Cements Ltd

Indian cement sector is still seen as offering profitable bargains, while there are hopes that the new government’s potential infrastructure projects would spur the economic recovery.

1800

ACC LTD

The pre-election period ended on May 16 pushed India’s stock markets ahead, and fueled investors’ optimism for a business-friendly government. Most Indian cement producers’ shares edged up on May 28 as cement stocks rose on value buying. Despite this performance, the gains were limited by modest foreign investors, while the expiry of May derivatives also caused a cautious behavior. The benchmark BSE index rose 0.03 percent, or 6.58 points, ending at 24,556.09.

May 6 to June 16 period

India Cements Ltd.

The weak demand caused by the domestic economic downturn as well as the sharply fall in South India’s building materials’ prices has eroded Indian cement industry margins. Consequently, at the end of 2013, most cement companies’ shares underperformed with the top ten players’ stock prices declining 6 to 50 percent YTD.

Stock price increase May 6 to June 16 120% 100% 80% 60%

JK Lakshmi Cement Ltd.

Heidelberg Cement India Ltd.

Barak Valley Cements Ltd.

NCL Industries Ltd.

Orient Cement Ltd.

The Ramco Cements Ltd.

India Cements Ltd.

Burnpur Cement Ltd.

KCP Ltd.

Andhra Cements Ltd Prism Cement Ltd. JK Cement Ltd.

40% 20%

Gujarat Sidhee Cement Ltd.

UltraTech Cement Ltd. Kakatiya Cement Sugar & Industries Ltd. Rain Industries Ltd. Birla Corporation Ltd.

Sagar Cements Ltd.

Shree Cements Ltd.

Mangalam Cement Ltd.

ACC LTD

OCL India Ltd.

Ambuja Cements Ltd

0%

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INTERVIEW

Mr. G Jayaraman Executive President

Birla Corporation Ltd.

an Interview by

Dr S N Pati Former Joint Director, National Council for Cement and Building Materials

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Mr G Jayaraman is an important name in the cement industry. He had long association with ACC, Gujarat Siddhi Cement, Indian Rayon and Grasim Industries Ltd. He was Head of the Technical Consultancy Division of PriceWaterhouse Coopers and Director of Renco Technologies Pvt Ltd, a renewable energy intervention services company at Chennai. He was the main architect in institutionalizing the National Award Scheme of CII for excellence in energy management.

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INTERVIEW

How do you see the

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future of Indian cement industry in the coming decade?

With an annual production of around 260 million tones from an installed capacity of 350 MT, India, a developing country, is already the second largest producer of cement. The per-capita consumption of cement is still low at around 200 Kg compared to the world average of 450 Kg. GDP growth is directly related to cement consumption. In order to maintain a GDP growth rate of moderate 5 to 6%, cement growth has to be around 8 to 10%.

There are several areas where cement is not extensively used, one of the most essential among them being roads, Cement concrete roads will not only hike up cement demand, it would revive the current sagging economy, reduce fuel consumption in transport and minimize road maintenance costs. There is considerable potential in other infra-structural growth areas such as, ports, power and industry.

The demographics of India show that 65% of the population is below the age

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group of 40, which is a big strength for growth of the country. These are people who have aspirations and expectations for improved quality of their lives. And this is a very positive sign, because it triggers demand for housing, transport, education, health and several social, cultural amenities. We are already short of around 20 million houses today. We will be required to provide mass urbanization or 250 million people over the next 15 years. Growth demand is expected to grow to 550 - 600 MT by 2025, per capita currently would go upto 400 to 450 kg. You can see how large is the potential for expansion of cement industry in India.

With simultaneous improvement in percapita income, affordability of all means of comfort is not in doubt. Moreover, I feel that cement prices have been quite stable except on account of seasonal variations in demand-supply.

Our cement industry have been controlling the costs very efficiently, there has been continuous process improvement for cost reduction. Also on considerations of economics of scale, larger size plants of 3 million tones and above are cost effective in operation and maintenance. All out efforts to save energy area also commendable. All signals show the scope for growth of cement industry is very large.

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What is the level of

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adaptation of best available technology (BAT) in Indian cement plants ?

The Indian cement industry has been keeping pace with the global developments in cement technology. This has particularly happened after the partial de-control in 1984 and full de-control in 1988. With the competition growing in India for better quality cement at reasonable price the cement manufacturers have been selecting the latest pyro processing as well as grinding systems. We can see almost continuous improvement in terms of energy reduction, quality improvement and retrofitting of latest plant and machinery.

We started matching the level of our international counterparts from 80’s and for our delight today, we have marched ahead of them. In terms of manufacturing efficiency, quality, cost effectiveness, management and even environmentally, we are really ahead!

Why the percentage of

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alternative fuel usage is

very low in cement plants in India?

Alternate fuels are biomass, municipal waste, agro-waste in our country. There is no systematic disposal of waste. People do not realize that wastes they generate could be someone else’s resource.

Collection, segregation, processing, logistics can be an extremely profitable business model. Even wastes must adhere to some quality specification. Different wastes have different chemical composition. Thus processing waste can make a good business sense.

The best part of cement industry is that it can absorb all kinds of wastes. Hence it’s an immensely good business opportunity. I feel when the waste is properly channelised, only then can alternate fuel market grow and develop in our country. Alternate fuel has immense untapped potential in our country.

The major problem here is the polluters are not penalized. Once there is fear of punitive action, polluters will rush to recycle the wastes or look for other users for disposal.

What policy interven-

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tions are required from

government to enhance the more use of alternate fuels in Indian Cement Plants ?

The best way that the Government can make the cement plants use alternate fuels is to legislate a new environmental regulation with the focus on ‘polluters to pay” principle. This will enable the entire process of collelction, process of waste and supply to possible user a good business activity. Government also could give some tax exemptions for the plants which make use of waste as raw material and fuel.

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INTERVIEW

What is your perspec-

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tive regarding the pres-

LOCATION OF PLANTS IN INDIA

ence of various MNC’s in Indian cement industry ?

Already quite a few multinationals have come into this country for cement manufacture. They are also finding the cement market quite lucrative as we see new plants coming up with multi-national companies taking keen interest. With a low rate of growth in western countries, they perhaps find India’s growth in cement demand a very encouraging environment for putting up or acquisition of cement plants.

Are you satisfied with

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indigenous R&D outcome ?

The R&D efforts in developing new cements or cement process and technology are negligible in India. Indian cement manufacturers have not shown much interest in investing in R&D. As the new technology in construction comes up in this country, there will be simultaneously pressure on cement industry to produce value added products and superior quality cements. This will trigger R&D efforts in cement industry.

What are major modifications which have been adopted towards achieving benchmarks in your group of cement plants ?

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The cement industry, in general, in India have done considerable work in brown field expansion. New energy equipments

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are retrofitted in the cement plants to increase production and reduce energy utilization. This trend has been in practice for the last 15 years. Birla Corporation Ltd(BCL) have also adopted the latest technology while carrying out brown field expansion of our cement plants. We have also installed waste heat recovery systems in our cement plants.

Where in your view the

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Indian cement industry is

What more needs to be

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done in this regard from

Government Policy Makers?

The Government should encourage use of alternate raw materials and fuel by reducing levies, duties and taxes on cement and plant and machinery. Government can also formulate environmental policies which will help the industry to adopt the latest practices, increase in capital subsidy on environmental improvement.

lagging behind in terms of performance?

C o m p any P r o f i l e

As already mentioned above, our cement industry is quite ahead in adopting new technologies. They are preparing to take considerable risk in installing new technologies, installing new plant and machinery to be rated as the first plant to adopt the latest state of the art technology.

Are you satisfied with

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the environmental perfor-

Birla Corporation Ltd Birla Corporation Ltd(BCL), a flagship

hya Telelinks Ltd and Birla Ericsson

company of “M.P.Birla Group” and in-

Optical Ltd, is also reputed for its dis-

corporated as Birla Jute Manufacturing

tinguished contribution in the areas of

Company Ltd in 1919, is a multi-prod-

social welfare through educational and

uct business conglomerate. It has con-

health services open to all in both urban

siderable market share in Cement, Jute,

and rural areas. The renowned, Bombay

PVC Floor Covering, Auto Trim, Iron &

Hospital in Mumbai, Belle Vue Clinic,

Steel Castings businesses.

M.P.Birla Eye Clinic and Priyamvada Bir-

The Company enjoys significant posi-

la-Aravind Eye Hospital at Kolkata and Birla Vikas Hospital at Satna are well

mance of Indian cement

tion in the Indian Cement Industry with

industry ?

Madhya Pradesh, Uttar Pradesh and

The Group’s educational institutions

Rajasthan with a total installed capac-

such as South Point Group of Schools

ity of about 10 million tons. BCL units

and M.P.Birla Foundation Higher Sec-

are already certified under ISO 9002 and

ondary School at Kolkata, other schools

The environmental performance of cement industry is in line with global standards. Many plants have achieved the dust emission of less than 150mg/m3 There are efforts for further improving the environmental requirements. New regulations on SOx and NO x are expected to be brought in and these also will be adopted by the industry. Already a few of the new plants under installation have taken these up.

seven plants spread in West Bengal,

IS/ISO 14001 systems.

CAPEXIL awarded the Company Top Exports Awards for 1990-91, 1991-92 & 1994-95, and Special Award for couple of years.

known health centers in the country.

at Birlapur, Satna, Chittorgarh, Industrial Training Institute at Rewa(M.P.), M.P.Birla Institute of Management at Bangalore, Birla Institute of Astronomy & Planetarium Science at Kolkata are eminent educational institutions rank-

M.P.Birla Group with, other companies

ing among some of the well known ac-

in its fold – Universal Cables Ltd, Vind-

ademic institutions in the country.

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feature

Life Cycle Assessment

Written by: Dr S N Pati, Former Joint Director, National Council for Cement and Building Materials

a study of the construction industry PART 3 OF 3

A

s discussed in the earlier chapter, the LCA study of cement sector was completed from cradle to grave

i.e. from mining of limestone upto dispatch of cement from cement plant.

As Cement is mainly consumed in construction sector for production of concrete, hence, in order to complete the life cycle from cradle to grave, MoEF entrusted NCB to study LCA of Construction Industry – Concrete (from gate to grave).

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he life cycle of a building starts from the extraction and mining of raw materials and minerals, encompasses through various production stages of building materials, transportation of those materials to the building construction site, construction of the building’s structure using those materials, water and energy, after construction, the use and operation phase upto the final disposal of the demolition waste from the buildings. As the age of the primary material used in the construction of the buildings i.e. concrete, is expected to be 50 to 100 years. Hence, the use and operation phase generally lasts with upto 50 years of operation.

After the end of the use and operation phase of the buildings, the structure may be demolished and the debris is generally disposed of to the landfills and dumps.

Thus the life cycle of the building ends with the final disposal of the demolished debris of the building. Hence, the life cycle of a building can be divided into four phases viz construction Phase, Operation (Use) Phase, Maintenance phase& Demolition phase.

Figure 1 shows the different inputs and outputs associated with the various phases of the building. Inputs are in the form of materials, water, resources and energy while the outputs are in the form of air as well as water emissions and waste.

Building Construction The decisions made at the time of construction of building will greatly influence the environmental impact potentials associated with the life cycle of a building.

The materials consumed during construction phase will have impacts not only during construction phase but also have far reaching effect on the other phases of the buildings. Construction activities include site preparation, construction of foundation, superstructure, mechanical, electrical equipment installation, and interior finishing.

Construction phase of a commercial building involves large quantity of build-

ing materials. This phase includes production of building materials, burdens from energy used for power tools and lighting as well as diesel fuel used by equipments at the construction site and associated transportation of the construction materials from factory site to the construction site. Data related to the construction process of the commercial building and transportation distances of construction materials to the construction site are obtained from the construction company using a LCA Questionnaire and discussion held with the contractor’s officials during site visits.

Building Operation After completion of construction phase and occupation of offices and building spaces by the occupants, the operation/ use phase of the building starts. This phase extends upto the end of the life of the building. In this study, the life cycle of the buildings is considered as 50 years. However, it may be possible that the building may continue to serve its occupants even

after its assumed end of life. The Commercial buildings normally operate for 5 days in a week for 12 hours daily operation.

There may be some commercial buildings that work for 24 hours depending on the usage and type of the commercial activities carried out in those buildings. This phase of the building’s life cycle may account for 60 – 80 % of the impacts associated with the life cycle of a building.

The operations phase includes interior and exterior lighting of Building, water supply to the occupants and waste and waste water management, energy requirements for cooling, ventilation of the building and equipment operation. For housekeeping operations, materials used for housekeeping such as phenols and soaps are used and their inventories are accounted for the impact assessment.

In this study, it is assumed that only electricity from thermal power plants is used as Grid power, due to unavailability of data for other type of power plants, along

Life cycle phases of a building (fig.1)

MATERIAL ACQUISITION RAW MATERIALS ACQUISITION MANUFACTURING PRODUCTS / ASSEMBLIES MATERIALS RESOURCES ENERGY

EMISSIONS TO: BUILDINGS ( CONSTRUCTION )

AIR

OCCUPANCY ( USE, REUSE, MAINTENANCE )

WATER

DEMOLITION / DISPOSAL WATER

LAND PRODUCTS / MATERIALS RECYCLE / REUSE WASTE MANAGEMENT LCA – AN ITERATIVE APPROACH

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feature with electricity generated from DG sets inside the compounds of the buildings.

The energy consumption of the building during operation phase is based on the data provided by the Construction Company as well as based on the daily usage pattern of the building (daily usage 12 h per day, 5 days a week). Actual electricity consumption records for the buildings exist for two building and for the rest, a period of less than a year as those buildings had just started operation at the time of collection of data for this study.

One of the major assumptions of this study is that materials used for building services such as wires, power cables, AC ductworks, chillers, electricity boards, AHU/ PAUs are not considered under the scope of the study.

Building Maintenance Construction materials have a service life and needs replacement after the end of their use/service life. The service life of a building as a whole as discussed earlier is assumed as 50 years to 100 years and depends upon the structural components which generally do not require any replacement. However, with regards to other materials used in the construction of the building’s structure, they may require frequent replacement. Some of the examples of frequent maintenance requirements in a building are painting which is required after every five years and plywood etc. For a commercial building such as office build-

ings and retail malls, the interior design and decoration usually change with the choice of the occupants. However, in this study it is assumed that the occupant remains same for the entire life cycle of the building.

Emissions from the maintenance stage were computed based on the life span of materials and it is assumed that 10% of the building materials used during construction phase is used during maintenance phase. For paints, it is assumed that painting of the buildings is carried out twice in 10 years and plywood is assumed to be replaced twice within 50 years.

Building Demolition The last phase of a building’s life involves demolition and disassembling of the structure. The conventional demolition and decommissioning process often results in disposal of the majority of materials and debris to the landfill and dumps. The demolition waste of economic materials is generally recycled such as reinforced steel bars and aluminium. The debris comprising of demolished concrete, broken bricks and mortar, broken glass and other waste materials are presently not recycled and disposed in the nearby areas.

The impacts associated with the demolition phase of a building are mainly due to the energy consumption and emissions associated with the demolition machinery as well as the energy required for the transporta-

tion of the demolished materials from the building site to the recycling facility. Due to a lack of data on the energy requirement of the demolition process in India, energy consumption during demolition stage is not used. For the alternate paths suggested for future buildings, It is suggested that majority of the waste generated from the demolition of a building would be utilized as recycled sand an coarse aggregates. The emissions avoided by use of C&D waste due to saving of virgin materials will result in negative impacts for all impact potentials.

Commercial Buildings A commercial building can be defined as a building that is used for commercial use.

The various types of commercial buildings include office buildings, retail (i.e. convenience stores, shopping malls, etc.) and IT parks. In some urban centres, a commercial building may often combines functions with office and retail mall on different floors.

The working days of a commercial building may vary from 5 to 7 days a week depending upon the location and the users it caters to. For office buildings, the working days are generally 5 days a week and for retail/malls, it may be 6 or 7 days a week.

Also, the working hours for commercial building in India may vary from 10 hours to 24 hours a day depending upon the activities carried out in the commercial buildings. For offices of IT/BPO compa-

Table 1 Details of Four Commercial Buildings

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S. NO.

Commercial Building

Type/ Usage

Land Area (m2)

Constructed Area (m2)

Open Area (m2)

Pavement Area (m2)

Area for Parking (m2)

Gardening Area (m2)

1

Gurgaon

2

Official/ Retail

4382

15885

1970

1922

6652

Chennai

IT Park

161850

797893

107107

80625

3

Kolkata

IT Park

104812

258012

70889

4

Hyderabad

IT Park

106128

374642

63660

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No of Floors

No. of Units

37

3B+G+8 (Tower) & 3B+G+3 (Non-Tower)

2

222638

26482

2B+G+11 / 3B+G+9

9

26212

18464

26212

B+G+11

7

26540

149058

6540

2B+G+15

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Table 2 Impact Assessment of Commercial Building Impact category Global warming (GWP100) Ozone layer depletion (ODP) Photochemical oxidation Acidification Eutrophication Non renewable, fossil

Unit

Total

Construction Phase

Building Operation

Building Maintenance

Demolition Phase

kg CO2 eq

7760.92

487.10

7167.93

54.94

50.95

kg CFC-11 eq

1.64E-05

1.85E-06

4.58E-06

1.81E-06

8.19E-06

kg C2H4

3.42

0.22

3.12

0.03

0.05

kg SO2 eq

101.56

2.29

98.70

0.23

0.34

kg PO4--- eq

8.13

0.23

7.82

0.02

0.07

MJ eq

14349.00

986.55

11912.98

178.61

1270.85

nies, the working hour may be 24 hours as the offices works in two or three shifts. For this study, four commercial centers/buildings are selected comprising of IT Parks, retail and office buildings at four different locations of our country four commercial buildings selected for this study varies a lot in terms of land area, constructed area, usage, number of floors constructed, type of structure and also are located in different climatic zones of our country. Table 7.1 shows the detailed analysis of four commercial buildings in terms of area, floors and cost.

Applications of LCA in Construction Industry Information about the environmental impacts associated with a product’s life cycle can be used as a decision support tool as well as for raising awareness of environmental issues. Due to its scientific and quantitative nature, LCA can be used to replace conventional wisdom and perceptive assessment of environmental impacts. The results of an LCA can assist across a wide range of applications which include: Environmental Product Declaration, setting ecolabelling criteria , Communication about the environmental aspects of products , Product and process improvement , developing product policies and policy strategies.

The wide range of possible applications implies that there is also a range of stake-

holders who might use LCA results. These include: Industry and other commercial enterprises, governmental and regulative bodies, Consumer organizations and environmental groups, and Consumers. Industry uses LCA for product improvement and product design, by identifying environmental hotspots in production processes, but also in upstream processes or downstream processes such as the use phase of a product. For example improving the durability of cladding product might require a higher environmental cost in the production stage, but looking at the whole lifetime of a house it might lead to significant savings by reducing the need for replacement. LCA results can also be used as part of an environmental management system to prove continuous improvement or for providing information for ecolabelling.

Code for Sustainable Building The Code for energy efficient commercial and office buildings in India is a voluntary initiative, by Bureau of Energy Efficiency, Government of India and Industry, to actively promote the transformation of the building industry towards more sustainable practices by requiring buildings to use: Energy resources more efficiently; Water resources more efficiently; Material resources more efficiently; and Practices and materials designed to safeguard occupants’ health and well being. The code aims at introducing a rating system for the sus-

tainability of buildings. Life cycle assessment data provided by manufacturers or suppliers are valuable for establishing the relevant information.

Guideline for Sustainable Buildings in other country The Guideline for sustainable building in Germany is a guideline which should be followed for all governmental buildings.

For the environmental aspect it requires the use of sustainable materials. Data based on life cycle assessments (LCA) according to the ISO standard 14040 should be used to determine the environmental preferences of a product. LEED is a rating tool for buildings in the US which provides a complete framework for assessing building performance and meeting sustainability goals. It has been adopted nationwide by federal agencies, state and local governments, and interested private companies as the industry standard of measurement for green building. It is compulsory for some government agencies. A review of this rating tool is currently under way with the goal of including LCA. A number of specific LCA based software tools for the building sector have been developed overseas for the assessment of building materials, building products, or whole buildings. The most common and widespread building-related databases and tools are briefly described. The Athena Sustainable Materials Institute in

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feature Stakeholders of Construction Industry (fig.2)

GOVERNMENT AGENCIES ( MC&I, MOEF, BIS, BEE, CPCB, SPCB, ETC ) MATERIAL & ENERGY INPUTS

SUPPLIERS

CONSTRUCTION INDUSTRY

PRODUCTS & EMISSIONS

BULK BUYERS

CUSTOMERS EMPLOYEES

CIVIL ENGINEERS AND ARCHITECT

BANKS

LEGITIMACY

FINANCIAL RESOURCES

INVESTORS

INSURANCE COMPANIES

INDUSTRY NORMS

CONSULTANTS BUILDERS

COMPETITORS

CONSUMERS

NGOS

MEDIA

THE COMMUNITY

COMPETITIVE ENVIRONMENTAL STRATEGY Canada has developed user-friendly software for the LCA of buildings. The tool allows architects and engineers to assess and compare building designs and material choices at an early stage. The maintenance of building assemblies is also considered assuming a user-defined building lifetime. The results are presented by lifecycle stage or by assembly type in terms of primary energy use, global warming potential, solid waste emissions, pollutants to air and water, and natural resource use.

Envest 2 is a software tool developed by the Building Research Establishment in the United Kingdom for the LCA and LCC of buildings. Based on the geometry of the building and the element choice the tool estimates the operating energy and calculates the life cycle effects and costs. Environmental results are expressed in a single Ecopoint score. Ecopoints are derived from the impacts caused by a typical UK

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citizen, which corresponds to 100 Ecopoints. BEES (U.S.) (Building for Environmental and Economic Sustainability) is an LCA based tool focusing on building products, developed by the National Institute of Standards and Technology with support from the US EPA Environmentally Preferable Purchasing Program. BEES is a simple tool aimed at designers, builders, and product manufacturers. The tool enables direct product-to-product comparisons based on LCA and LCC. Environmental and economic performance is combined into a single score with weights specified by the user.

Best Practices for Construction Projects Sustainable development of the construction industry in our country has been initiated recently, but needs to popularize and emphasize on the benefits of environmental and economic aspects. Buildings especially commercial buildings play a major

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role in the growth of economic activity of any country especially developing nation like ours. Hence, there is a need to build more and more commercial space taking into care the environmental aspects throughout the life cycle of the buildings, right from construction, operation and maintenance up to the demolition.

As from the point of environment – operation phase of commercial or any building is pivotal. While studying the life cycle assessment of any building, all the stakeholders need to consider the path of life cycle thinking for the new construction projects.

Design for Environment (DfE) The concept of Design for Environment (DfE) is vital for sustainable growth of the construction industry in India because it encompasses all the environmental aspects of inputs before the starting the construction of the building by identifying the

suitable usage of environmental friendly materials and low energy consumption techniques to possible extent. In last one decade, the construction industry especially major Indian and foreign collaborators of Indian construction industry have been proactive in adopting the environment management practices in the building construction. Green building concept and energy conservation in buildings has been slowly adopted in our country. Before the start of any major construction activity, the environmental assessment and its impacts need to be studied by the builder highlighting the energy, water, materials, and land requirements.

The proposed energy consumption taking into account the landscape and location of the building need to be designed as per the requirements of the building codes like National Building Code (NBC), ECBC and other required standards as per BIS. However, the scientific environment tool with regard to buildings is being used by very few major players of the construction industry.

There is a need to widespread environmental awareness amongst the construction industry and its stakeholders as there is a lot of potential for the reduction of energy consumption during operation phase and minimizing & conserving the resources while constructing the building. So the environmental sustainability of the construction industry, the very concept of “Design for Environment” (DfE) is vital tool which is of paramount importance before construction of a building. However, all stakeholders of a construction project like architect, designers, civil engineers, mangers, builders, pollution boards, occupants, users need to provide their inputs in order to optimize energy and material consumption while selecting local building materials considering the future environmental impacts not only during construction but also during the operation phase.

In order to practice the design for environment (DfE) tool and to achieve its benefits adaptation of LCA is the only option left for architect and designer by which one can ascertain the best environmental

option available for them by causing lowest environmental impacts covering the whole life cycle of the building. Hence, all the inputs in terms of materials, thermal and electrical energy requirements of the building should be available to calculate the life cycle impacts while selecting a particular material in comparison with other available options. An architect of the building should be able to choose materials considering the future environmental impact of the utilization of those materials for construction and also take into account the life cycle cost of using that material. It will include right at the stage of selection of site, location, design the buildings architecturally to preserve the existing ecology and proper management of C&D waste.

“

LCA methodology is a powerful analysis tool that permits the evaluation of the materials contribution and the construction phase within the environmental profile of different building scenarios.

Conclusion For the purpose of adopting DfE approach in construction industry, it is recommended that a LCA database of conventional and alternate building materials should be developed for our country and LCA tool consisting of that database should be made available online to architects and designers for considering and analyzing the alternates available to reduce environmental impacts associated with life cycle of buildings at the initiation of the construction activity itself.

Energy efficiency in buildings has assumed paramount importance owing to the tremen-

dous growth in the building sector. The energy saving potential is enormous, if addressed right at the design stage. The application of codes like ECBC as a benchmark can help in designing high performance buildings.

And there are tremendous opportunities to introduce new equipment, technologies, and materials, which can help enhance energy efficiency of buildings.

Green buildings rating systems have created a lot of awareness amongst construction industry, however, NCB strongly feel that integration of LCA into green building design will be fruitful to various stake holders. Green building design is an integrated design approach for minimizing the potential environmental impacts of a building which also indicates many other performance criteria.

The green building focuses on using energy, water and materials more efficiency during construction and operation of the building. But various environmental impacts depend not only on the building system but also on its interaction with external natural environment and internal environment – its occupants. LCA methodology is a powerful analysis tool that permits the evaluation of the materials contribution and the construction phase within the environmental profile of different building scenarios.

The building life cycle includes the extraction of different raw materials that make up the products for the building after their manufacture, transport and then installing building materials in the building and operating, maintaining and decommissioning the building. So by integrating LCA into the green building design process, design and construction processional can evaluate the life cycle impacts of building materials, components and system and find out the alternate paths to choose the combinations that reduce the building’s life cycle environment impact. The amount of LCA expertise and time required to employ the different types of tools varies. The appropriate tool depends on a project’s specific environmenCemWeek tal objective and budget. BmWeek

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Lohia Corp Limited is the flagship company of the Lohia Group and a global supplier of machinery for end-to-end solutions for plastic woven fabric industry.

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Copyright LohiaCorp Ltd.

feature

ohia Corp Limited is the flagship company of the Lohia Group and a global supplier of machinery for end-to-end solutions for plastic woven fabric industry.

Incorporated in 1981 as Lohia Starlinger Ltd. (a joint venture with Starlinger & Co GmbH of Austria) for the production of circular looms, the company expanded by including tape extrusion lines in manufacturing range in 1984 with technology support from another leading European supplier. On 7th March, 2013 Lohia Starlinger Limited changed its name to Lohia Corp Limited consequent to the exit of Starlinger & Co. GmbH.

Lohia has delivered till date accumulated plastic processing capacity of 2.5 million tons with installation base of 1,000 extrusion lines & 40,000 circular

duotec

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MAY / JUNE 2014

looms in over 70 countries. We are fully equipped and committed to support our customers for the complete life cycle of our machines. To provide timely services to customers, we have local sales offices in USA, Brazil, UAE, Indonesia & Thailand, supported by dedicated sales agents in all major global markets.

Our lorex & duotec model of tape extrusion lines with melt capacity ranging from 260-900 kg/hr with 75–150 mm screw diameter & film width of 600–2000 mm comes with operating line speed upto 600 m/min depending upon product requirement. The technology in the duotec series uses a unique double stage stretch process

Copyright LohiaCorp Ltd.

The company has a fully resourced, in-

house R&D and state-of-the-art manufacturing facilities in Kanpur (India) manned by qualified & experienced professionals.

This enables us to deliver significant developments and innovations in tape extrusion, tape winding, circular weaving, conversion and spinning machinery for PP multifilament yarn for producing value added flexible packaging like woven sacks/bags, FIBC’s, tarpaulins, geo-textiles, agro-textiles, ropes & twines etc. for diverse applications.

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where the tapes undergo a pre-stretch before the final stretch. This process can be used to improve anyone or mix of factors such as working speed, efficiency, increased process stability, tape properties etc.

autoroto

Copyright LohiaCorp Ltd.

Our latest generation autoroto winders are now benchmark in the industry. autoroto winders with speed upto 600m/min enables auto transfer of the tape from full package to empty tube, are capable of producing equal length bobbins resulting in higher weaving efficiency and reduction in wastage & labour cost.

Copyright LohiaCorp Ltd.

Lohia makes a variety of tape winders, as the most-appropriate solution for high speed winding of flat and fibrillated tape.

Our range of tape winder includes precision & step precision winders to suit a large variety of tape specification to produce perfect bobbins to deliver high efficiency during weaving & excellent fabric quality.

nova series

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The circular looms from Lohia are designed for high performance weaving of heavy to light tubular/flat fabric from PP/HDPE tapes. We offer these machines from 4 shuttle to 10 shuttle versions to weave fabrics upto a width of 2.5m (double-lay-flat) for covering the full range of the requirements. Special models for leno and ventilated fabrics are also available. Our latest nova series circular looms produce excellent weaving quality with higher working speed using electronic control system & tape tension control devices to produce nearly zero defect fabric.

bcs 850/45

Copyright LohiaCorp Ltd.

Our manufacturing range includes an extrusion coating coatec 1600/90 with 330 kg/hr melt capacity and line speed of 150 m/min suitable for flat fabric of 660 - 1600 mm width and tubular fabric of 300 - 750 mm width. It can coat on both sides of

coatec 1600/90

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Copyright LohiaCorp Ltd.

feature

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Copyright LohiaCorp Ltd.

tubular fabric in a single operation. It produces coated fabric with precise film thickness and excellent adhesion. The machine can be supplied with optional equipment to laminate BOPP film.

Our converting range of machines include bcs 850/45 for producing bottom folded and sewn woven bags with speeds of up to 45 bags/ min.

The valvomatic conversion line produces both sides stitched valve bags for packaging of cement and pulverous/granular materials.

Copyright LohiaCorp Ltd.

lofil

soloprint

maintains accuracy over long dependable life and ensures optimum performance.

stitching, webbings & slings, braids & ropes, geo-textiles and many more..

lofil range of Spin-Draw-Wind Lines are compact and flexible machines for producing fully drawn high tenacity PP multifilament yarns. The machine has extrusion capacity of 20,40 and 80 kg/hr and can produce wide range of deniers from 600-4800 with winding speeds upto 1500 m/min. These yarns have applications in sewing thread for bag

Lohia Corp Limited is committed to continuing its best practices in its efforts coupled with the highest standards of ethics and integrity in serving the industry globally. The company is strategically prepared to unlock its immense potential growing beyond boundaries and setting new industry standards.

We also offer special conversion machines for FIBC (jumbo bags) like fabric/belt cutting, baffle panel/profile/hole cutting, bag cleaning and hydraulic bale presses.

We have 6 colour roll to roll flexographic printing press soloprint for fine quality printing on tubular PP/HDPE woven fabric with speeds upto 150 m/min. The machine is a joint effort of Lohia & Pelican Rotoflex Pvt. Ltd and is distinctly designed and precisely machined, equipped with new generation electronics, this machine

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CEMENT MARKETS

CW Research

CEMENT VOLUMES Cement production in China registered an overall growth for the third consecutive month in May 2014. Volume rose 3.7 percent to 234.3 million tons, compared to 225.9 million tons reported in April 2014. Total cement output from January-May was 905.6 million tons, up 6 percent from a year ago. The positive trend has come as the Chinese economy is beginning to pick up. However, the sustained recovery of the cement sector in the coming months will largely depend on the growth of the real estate sector, which seems to face an inevitable decline. Recently, Chinese officials have taken measures to bolster confidence in the real estate prices and increase real estate sales. The local government has also loosened restrictions on who can buy houses and has planned to offer incentives to those who already do to increase housing sector’s performance. All these measures will play a key role in preventing knock-off effect on the cement industry in the coming months.

Domestic cement sales in Pakistan rose from 2.1 million tons in May 2013 to 2.3 million tons in May 2014 following an increase in the economic and overall construction activity in the country. A number of development projects launched by the federal and provincial governments are expected to further boost the demand for cement in Pakistan. The growth has been strong considering the increase in the prices of cement and transportation in the last year.

Chinese officials have taken measures to bolster confidence in the real estate prices and increase real estate sales

Cement production in Russia increased by 9 percent to 5.9 million tons in April 2014 compared with the same month of the previous year. This is largely due to the record rise in production of Eurocement’s Russian subsidiaries – Mikhailovcement and Nevyanskiy Cementnik. Eurocement’s Mikhailovcement showed steady production growth in both April 2014 and in the first four months of 2014 compared to the same period last year whereas Nevyanskiy Cementnik registered a 16 percent increase in its production in April 2014 as compared to April 2013.

Cement production in Colombia increased 16 percent in April 2014 over the same month of 2013. In the January – April 2014 period, production grew to 3.8 million tons, up 11 percent year-to-date (YTD). Local demand had been driven by social programs aimed to build around 100 thousand and to subsidize interest rates.

Cement consumption in Brazil declined 5 percent to 5.6 million tons from 5.9 million tons consumed in the same month last year. However, volume from January-April posted an increase of 3 percent as compared to the same period last year.

Feb 2014 YTD Cement Demand Growth Rate (%) 12.0%

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Argentina

Thailand

Mexico

India

Vietnam

US

Russia

Japan

-4.0%

China

0.0%

Colombia

4.0%

Source: CW Research

8.0%

CW Research CEMENT MARKETS

In Vietnam, cement production increased 10 percent in May over the same month of 2013. Growth has been fuelled by renewed interest of both the government and private investors in the sector in the country.

Domestic cement consumption in Argentina including imports reported a decline of 0.3 percent in April as compared to the previous month whereas it registered a decline of 5.4 percent compared with the same month of the previous year because of the drop in construction activity. Consequently, cement production saw a decline of 4 percent in January to May as compared to the same period of 2013. Construction in the country declined 5.2 percent despite growth in the public works center.

Spain’s cement consumption dropped 6 percent in April 2014 from the previous year and 8 percent from the previous month. The local cement industry continues to suffer the effects of the economic crisis and has been increasing its focus on export markets in a bid to offset the decline in domestic demand.

Feb 2014 YTD Cement Production Growth Rate (%) 25.0% 20.0% 15.0% 5.0% Saudi Arabia

Spain

Peru

France

Brazil

South Korea

Indonesia

Pakistan

-10.0%

Egypt

-5.0%

Germany

0.0%

Source: CW Research

10.0%

Cement consumption in the Kingdom of Saudi Arabia in April 2014 dropped 1 percent from the previous month. From Jan-April, cement production totaled 19.4 million tons, representing a decline of 7 percent compared to the same period of 2013. Year on year sales declined 5 percent because of the construction sector’s slowdown.

Cement production in the United States totaled 7.2 million tons, representing an increase of 21 percent compared to the previous month. The cement production rose based on a dynamic construction activity led by home building and government construction. In April, U.S housing starts jumped and building permits hit their highest level since 2008. The increased construction activity has offered hope that the troubled U.S. housing market could be stabilizing. The growth in the construction activity is expected to continue in the coming months because of the federal budget agreement passed by the senate earlier this year.

Cement sales in Indonesia fell 0.4 percent to 4.52 million tons in April 2014 compared with the same month of the previous year because of the country’s legislative election that took place in April 2014. Owing to the elections, consumers bought few building materials during the campaign period. Regionally, sales grew in the more eastern-located island as well as the country’s most populous island – Java but fell in Sumatra, Sulawesi, Bali and Nusa Tenggara. Although cement consumption in May 2014 increased 15 percent from the previous month, cement sales are expected to suffer again due to the presidential election to be held in July.

Domestic cement sales in Pakistan rose from 2.1 million tons in May 2013 to 2.3 million tons in May 2014 following an increase in the economic and overall construction activity in the country

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MARKET DATA SNAPSHOT

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Cement output in Russia increased by 9 percent to 5.9 million tons in April 2014 compared with the same month of the previous year. In Colombia production improved 16 percent in April 2014 over the same month of 2013. In terms of consumption, Argentina reported a decline of 0.3 percent in April as compared to the previous month.

Cement Production (million tons)

Cement Consumption (million tons)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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Cement Production MoM (%)

Cement Consumption MoM (%)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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Cement Imports (million tons)

Cement Exports (million tons)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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Cement Exports MoM (%)

Cement Imports MoM (%)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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

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CEMENT ENERGY MARKETS

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CEMENT ENERGY MARKETS Coal Market Update Colombian exports improve, while Australian exports drop Total coal trading volumes declined 1 percent in April following higher exports from South African and Colombian ports.

Richards Bay deliveries fell 21 percent MoM and 13 percent YoY, standing at 5.45 million tons.

Affected by a power failure in February, operations have since returned to normal. The terminal was scheduled to close in May for a period of 10 days for annual maintenance. The main destination for South African coal was Southern Asia, with 58 percent of the volume shipped in April, followed by Western Europe with 13 percent, where the volumes dropped to an eight-month low. Eastern Asian destinations such as Canada, Japan, South Korea and Taiwan declined to 0.53 million tons in April, down 68 percent compared to the previous month.

Chinese coal shipments from Port Waratah Coal Services’ (PWCP) coal terminals at Newcastle port in Eastern Australia stood at 2.36 million tons in April

Colombian coal exports recovered in April to 5.4 million tons, although being the first YoY fall of 10.8 percent in five months. The volume was the highest since January, improving 62 percent from March. On April 1, the exports from the largest Colombian thermal coal producer Drummond resumed to normal after being banned by the local government since January this year.

Chinese coal shipments from Port Waratah Coal Services’ (PWCP) coal terminals at Newcastle port in Eastern Australia stood at 2.36 million tons in April, only 0.4 percent higher than the volumes in March. 9.05 million tons of coal were shipped from PWCP, of which 26.2 percent had the Chinese destination. Australia exported 5 percent less coal in April compared to March, declining two months in a row.

Indonesia’s coal deliveries slightly improved 0.5 percent in April reaching to 35.7 million tons.

This compares with April 2013 exports of 33.9 million tons, the YTD indicator showing a 1.5 percent increase from the same period in 2013.

Coal Global Trading (million tons) Indonesia

120

Australia

Russia

South Africa

Colombia

US

Rest

100

40 20 Apr-14

Mar-14

Feb-14

Dec-13

Jan-14

Oct-13

Nov-13

Sep-13

Jul-13

Aug-13

Jun-13

Apr-13

May-13

Mar-13

Feb-13

Dec-12

Jan-13

Oct-12

Nov-12

Sep-12

Jul-12

Aug-12

Jun-12

Apr-12

May-12

Mar-12

Feb-12

Dec-11

Jan-12

Oct-11

Nov-11

Sep-11

Jul-11

Aug-11

Jun-11

May-11

Apr-11

0

Source: customs data

80 60

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CEMENT ENERGY MARKETS

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Energy Prices Update Coal May coal trading prices averaged US$77 per ton for the main export hubs. Poor demand in most markets, mild weather in Europe and oversupply are the major factors affecting prices.

US Central Appalachian thermal coal prices for early June delivery was set at US$63.50, the highest level since late February. Strong buying in the Illinois Basin increased the coal prices.

China’s boost expected in coal-fired capacity in the next year is not considered a big threat to thermal coal prices

In Australia, the average coal export price in May lost US$93 cent from the previous month. In Queensland’s Bowen Basin, Wesfarmers Resources negotiated the prices for metallurgical coal exports from the Curragh mine with a decrease of 16 percent for the second quarter compared to the previous one. The spot price of thermal coal at Newcastle Port was US$74.33 per ton in the week ending May 23, losing 45 percent since the maximum level of US$136.30 per ton reached in January 2011 in the post-recession period. Despite the hopes of a growth in Australian coal exports to India, Australian coal proves to be too costly. However, effective from June 1, the Indian Government announced an upward revision for the coal prices of Coal India, 5.25 percent more to US$6.8.

China’s boost expected in coal-fired capacity in the next year is not considered a big threat to thermal coal prices as the market is already oversupplied, and the growth in power demand is likely to be modest. The Bohai-rim steam coal price index is slowly increasing with 2 points per month starting from March, when it dropped 29 points compared to February.

US exported

Colombia exported

Australia Newcastle

Indonesian HBA

South Africa Richards Bay

150 130 110 90 70

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May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

50

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

Steam Coal FOB Average Prices (US$/ton)

Indonesian thermal coal prices dropped in May on limited buying, closing to the cost of production. The HBA coal export index price reached US$73.6 per ton, down 2 percent versus April and 14 percent from a year ago. Production is expected to remain flat this year, but a reduction would be possible considering small mines could be forced to close their business if the prices stay between US$72 and US$73. Some overseas buyers consider the prices recovering to US$80 average per ton in the second half of next year.

CEMENT ENERGY MARKETS

CW Research

Indonesian thermal coal prices dropped in May on limited buying, closing to the cost of production

In Russia, the biggest coal supplier SUEK settled a thermal coal import contract with Japan’s Tohoku Electric Power Co at a price around US$87 per ton starting in April. The price level is down 15 percent compared to last year, in line with benchmark Australian prices. European physical coal prices fell below Australian and South African levels as a result of low summer demand as well as the shutdown of a British coal-fired plant and delays to a new plant in Germany.

US Petcoke Export Price (US$/ton) rolling 12-month average 120 100 80 60

20

Petcoke Price of U.S. uncalcined petcoke for export markets slightly declined 0.3 percent in May from last month and reached US$76 per ton. The price remains at its 4-year low but fairly stable in the US$76 – US$80 range since the end of 2012. Petcoke prices, which closely follow steam coal prices, remain depressed due to ongoing uncertainty around coal prices and economic recovery in China.

In India, production capacity is expected to expand in the first quarter of 2015, curbing petcoke exports in the country. The new state-controlled refinery will be commissioned this year and could reduce the exports to the east coast of India by as much as 50 percent in 2015.

In China, Hualian Petrochemical officially started its new 800,000 tons coking unit on May 14. The facility is producing petcoke with 1 percent sulfur and 0.13 percent ash content. It is reportedly selling the product at around US$190 per ton. Local demand

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In China, Hualian Petrochemical officially started its new 800,000 tons coking unit on May 14. The facility is producing petcoke with 1 percent sulfur and 0.13 percent ash content

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

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CEMENT ENERGY MARKETS

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in China remains sluggish and under tight environmental pressures. Shandong Kenli Petrochemical has announced an increase of US$4.8/ton to the factory price of sponge coke. The product with 2.7 percent sulfur and 0.3 percent ash has a price of US$144/ton.

Natural Gas The Henry Hub spot price recovered to US$4.8/mmBtu at the beginning of May, being an exception among the most locations where the prices were flat or posted slow declines due to moderating weather and ample natural gas supply. In the Northeast, prices waned over the first week, being generally below the Henry Hub price. The trend followed a fall in the middle of the month as temperatures rose, while domestic production improved significantly. Prices remained flat in the Rockies and to the west, slowly increasing in the rest of the country. The average price for May closed at US$4.6/mmBtu, 2 percent below the April price but 13 percent over a year ago.

In Europe, natural gas prices are tumbling to the lowest in more than three years

In Europe, natural gas prices are tumbling to the lowest in more than three years. The continent is struggling to reduce its dependence on Russian natural gas, and the reduced average price level of US$10.2/mmBtu for the month of May makes from Europe an unattractive destination for new suppliers. The price declined lost 5 percent compared to last month and 17 percent compared to May 2013. However, Germany and Russia increased their energy cooperation, creating new gas storage capacities and increasing the reliability and stability of gas supply to European consumers. An important movement with high impact on Europe is the 400-billion deal signed by Russia and China, according to which the first will supply the second world economy with gas via the Eastern route for 30 years. The contract contains such major provisions as the price being linked to oil prices. Another agreement was signed between Gazprom and Italy’s Eni for a reduction in supply prices, involving also a change in the price indexation “to fully align it with the market”.

Natural Gas Prices (US$/MMBtu) US

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Europe

16 14 12 10 8

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

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May-14

Sep-13

Jan-13

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Jan-11

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Sep-07

Jan-07

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Coal demand is poor in most markets, mild weather in Europe and oversupply are the major factors affecting prices. In India, production capacity is expected to expand in the first quarter of 2015, curbing petcoke exports in the country. In Europe, natural gas prices are tumbling to the lowest in more than three years.

Coal - Exports (million tons)

Petcoke - US Exports (million tons - Sep)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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MARKET DATA SNAPSHOT

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

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

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

Coal - Imports (million tons)

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

Petcoke - US export prices (USD/ton - Sep)

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

Coal - Global export prices (USD/ton)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION. WWW.CEMWEEK.COM/SUBSCRIBE Coal export prices MoM (%)

Natural Gas Prices (US$/mmBtu)

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

Natural Gas prices MoM (%)

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

TABLE AVAILABLE IN THE ICCM MAGAZINE PRINT EDITION.

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

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

Source: CW Group analysis estimates

INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE

LM: latest month (October except where not speciямБed); MoM: month vs previous month; YoY: month vs same month last year; YTD: year-to-date; YTD%: year-to-date vs previous year

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cement market and competition

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arket and competition

Indian cement market shows positive signs India’s cement sector is relying on a pick-up in infrastructure and construction activity. The March period results of cement majors UltraTech Cement and the Holcim twins, ACC and Ambuja, revealed that the companies outperformed expectations for some parameters, but that volumes are still low and overall capacity utilization remains poor.

The cement industry is not only fragmented but has differing trends in different markets. For example, there was a price spike in northern India after Binani Cement closed its 6 million-ton

29 MAY / JUNE 2014

Rajasthan plant, and prices rose in the region by Rs 50 per bag. At the same time, overcapacity drove prices down by Rs 22 per bag in the southern markets. Prices have stabilized, however, and the industry grew 6-8 percent in FY2014, mainly due to pricing discipline.

The India-based unit of Swiss Holcim reports stabilization in Indian cement volumes. Holcim’s Indian subsidiaries declared marginally higher volumes in the first quarter of 2014, with ACC selling 6.48 million tons, up year-over-year from 6.42 million tons, and Ambuja reporting 6.06 million tons in cement sales versus

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5.96 million tons during the first quarter of the previous year. India is the single largest production base for Holcim, which has a combined 206 million tons per annum (mtpa) in cement-making capacity from its production facilities across 70 countries.

India’s cement demand is expected to pick up in the next few years, forcing local players to expand in order to keep up. Demand is expected to reach 550600 million tons per annum (mtpa) by 2025, mainly on account of rising infrastructure and housing needs propelled by rapid urbanization. Meeting the rising demand for cement will require con-

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siderable capacity addition along with a sharp rise in available resources, which could present challenges.

India probes complaint against Lafarge Suma India’s compliance advisor/ombudsman (CAO) is looking into a complaint against Lafarge Suma Cement’s land acquisition and limestone quarrying operation near the villages of Shella and Tynger in Meghalaya. The CAO, an independent recourse mechanism for projects supported by the World Bank Group, reported that the complaint was filed by a number of individuals on the Indian side of the project in January of last year.

India’s Konark Cement launches new high strength cement In India, Konark Cement has launched a new, high-strength DSP cement designed for casting works or dhalai use. The product offers high-endurance concrete casting and high compressive strength, and assures quality and quantity through its tamper- and moisture-proof packaging. Konark Cement, part of the house of cement major OCL India Limited—the flagshsip associate company of Dalmia Bharat Group—is one of the fastestgrowing cement brands in eastern India.

Ambuja launches new ad campaign India’s Ambuja Cement has launched a new TVC after four years, this time focusing on social awareness. The theme of the campaign is walls, including metaphysical walls that infuse disrespect and disharmony among people, as well as cement and concrete walls. The campaign emerged from Publicis’s effort to portray a dialogue started by Ambuja. The campaign reflects how Ambuja, an established cement brand, has always stood for strong walls.

Telengana asks cement firms to cut prices In India, the Telangana government has asked cement producers to bring down cement prices, which have skyrocketed in the last month. The prices have increased

by Rs 100 per bag, putting the construction industry in a fix, besides imposing a heavy burden on people planning to construct houses.

Builders have stalled several projects due to the steep increase in cement prices and construction activity has virtually come to a halt across the entire state. A cement bag, which used to cost Rs 230 to Rs 250 in May, now costs Rs 330 to Rs 350. Chief Secre-

tary, Rajiv Sharma, held talks with cement producers at the Secretariat.

In a different note, BJP district unit in Andhra Pradesh has sought government action on what it calls artificial shortage of cement. “The companies are creating artificial cement scarcity in the market and increasing the rates, which has adversely affected the common individual,” city president of BJP, P V Narayana Rao said.

India Cements believes demand uptick coming India Cement says it is planning to increase production, as it sees demand picking up in the near term. Cement prices have already gone up in most markets by Rs 20-30 per bag.

Speaking to CNBC-TV18’s Sonia Shenoy and Latha Venkatesh, N Srinivasan, VC & MD, India Cements said that the cement maker is looking to consolidate its cement capacity.

The company plans to merge Trinetra Cements and Trishul Concrete Products with India Cements to bring operations under one company. The cement industry has been witnessing sluggish growth rates for the past several years, something which Srinivasan hopes will change under the new regime.

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&a and finance

India’s Reliance Cement takes over grinding unit India-based Reliance Cement has taken control of a grinding unit in West Bengal, 180km from Kolkata, for an undisclosed price. The facility, located at Durgapur, can produce up to a half-million tons (mt) of cement per year. Reliance Cement plans to raise the annual production capacity of the unit.

Lafarge-Holcim merger asset divestment attracts attention Holcim and Lafarge, which agreed to a merger last month, may divest in Brazil, India, China, Canada, and the US. India-

based UltraTech Cement is looking to buy the companies’ local assets. The divestment underscores optimism among investors that a stable government after elections this month will spur revival in the $1.8 trillion economy as it crawls out of its slowest expansion pace in a decade.

The impact of a Holcim-Lafarge merger will be felt in one of the largest cement markets in India and will likely push some consolidation there. The industry has been in the doldrums in recent years, owing to slackening demand and overcapacity production. To satisfy anti-trust regulators in many parts of the world, Holcim and

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Lafarge is expected to shed off assets in India, the US, Canada, Brazil, and China.

India’s ACC says its brand name will remain intact after its Swiss parent Holcim merges with Lafarge. The merger of Lafarge and Holcim will create a $60 billion company, which will be the largest cement maker in the world. Holcim holds a 50 percent equity stake in ACC. The merged entity will become the largest cement producer in India, with a capacity of 69 million tons per annum.

UltraTech and Ambuja report higher Q1 profit India-based UltraTech Cement, part of the $40 billion Aditya Birla Group, has reported profit increases of 15 percent for the first quarter of 2014. The company’s net profits reached 8.4 billion rupees ($138 million) for the quarter ending March 31, beating market estimates of 6.5 billion rupees.

Net sales rose 9 percent to 58.3 billion rupees. The company has reined in rising costs via optimization of fuel mix and other initiatives. This cost control has occurred even though increasing input and energy costs have put pressure on margins at cement companies, while demand remains a concern in an economy where growth has fallen almost 50 percent, to below 5 percent, in the past two years.

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Ambuja Cements reported a 6.57 percent increase in standalone net profits, equaling Rs 520 crore, during the January-March quarter. The rise was mainly on account of higher income. Cement and clinker sales by volume increased by 1.7 per cent to 6.06 million tons during the period. For comparison, Ambuja registered Rs 487.90 crore in profits in the same quarter of the last fiscal year. Total income of the company rose to 2,649.34 crore during the January-March 2014 quarter, up year-over-year from 2,554.83 crore.

Ambuja Cements gets okay for Holcim merger Ambuja Cements has received approval from the Gujarat and Delhi High Courts to merge with Holcim India. The Gujarat High Court also approved reduction of the company’s capital as proposed in the scheme.

The merger now awaits certified copies of the order from both courts. The plan is subject to fulfillment of specified conditions, and the stock exchanges will be intimated once the merger becomes effective.

The amalgamation proposal was part of the plan by Ambuja’s Swiss parent, Holcim, to consolidate its holdings of Indian subsidiaries. As part of the complex consolidation plan, proposed last July, Holcim will transfer 50 percent of its stake in the company ACC to Ambuja.

Bheema Cements to raise fresh capital India’s Bheema Cements wants to expand operations and this may include getting a strategic partner to meet the funding requirement of its expansion as well as financial restructuring plans.

The company owns a cement plant with a one million-tons annual production capacity at Ramapuram in the neighboring Nalgonda district. It had received clearances for the expansion of the installed capacity by an additional 1.5 million tonns and also to set up a 45-Mw power plant proposed for captive usage.

Bheema Cements would be willing to divest a sizable equity if they found a right partner and right valuation.

Hon’ble High Court approved deal between UltraTech Cement and Jaypee UltraTech Cement announced that the Scheme between Jaypee Cement Corporation (JCCL) and the Company and its respective shareholders and creditors, for the acquisition of the cement unit of JCCL in Gujarat, comprising of an integrated cement unit at Sewagram and grinding unit at Wanakbori has been approved by the Hon’ble High Court at Bombay and the Hon’ble High Court of Allahabad.

The Scheme has also been approved by the Securities and Exchange Board of India (SEBI) in terms of the SEBI Circular No.CIR/CFD/DIL/5/2013 dated 04 February 2013 and Circular No. CIR/CFD/ DIL/8/2013 dated 21 May 2013.

The Demerger Implementation Commit-

tee has also allotted 114,382 equity shares of the Company of Rs 10 each credited as fully paid-up to the equity and preference shareholders of JCCL in terms of the Scheme.

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cement projects and expansions 5

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India’s JK Cement expands in the Middle East India-based JK Cement is expanding its operations in the Middle East. The company has seen its revenues grow at a compound rate of over 18 percent in recent years and last year earned the equivalent of $546 million in sales. JK has already invested $150 million in its new plant at Fujairah in the United Arab Emirates and is currently exhibiting at Project Qatar to showcase its capabilities.

The Fujairah cement plant was built by Taiheiyo Engineering Group and is able to produce up to 1,750 tons of white cement per day, along with 2,800 tons of grey cement. In total, JK Cement has the capacity to produce 7.5 million tons of grey cement per year, 0.6 million tons of white cement, and 0.3 million tons of wall putty. Capacity will be doubled in all areas in the next 5-7 years.

Shree, ACC, and Ambuja expand operations in India India-based Shree Cement is looking to expand its capacity to about 20 million tons per annum by 2015. The company had a cement production capacity of 13.5 million tons at the beginning of 2013. As part of its expansion drive, the company is setting up an integrated unit

33 MAY / JUNE 2014

in Chhattisgarh at an estimated cost of Rs 1,700 crore. The unit could be commissioned by April of next year. To tap the growing demand for cement in the eastern market, Shree is setting up a grinding unit in Bihar, at a cost of Rs 500 crore. The Bihar unit is expected to come online in the next month. The company is also expanding capacity at its plant in Rajasthan.

ACC is investing Rs 3,000 crore to revamp its existing plant in the eastern region of India and to add capacity by the middle of 2015. Activities will include modernization of the Jamul plant in Chattisgargh, as well as the construction of a 1.5 million-ton grinding unit in Jharkhand. Both plants will be commissioned by the second quarter of 2015.

This year, Ambuja Cements will invest Rs 802 crore in capital expenditures from internal accruals to partly finance its ongoing capacity expansion projects.

The company invested Rs 725 crore in 2013. The company, which has 27.25 million tons per annum (mtpa) capacity, is setting up three greenfield plants of 1.5 mtpa capacity each in Rajsthan, Madhya Pradesh, and Uttar Pradesh. It is also adding 0.8 mtpa of clinker capacity in both West Bengal and Rajasthan.

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focus Shree wants grinding unit in Dhenkanal Shree Cement has announced plans to build a grinding unit in Dhenkanal, which will have an installed capacity of 3 mm tons per year. The company will invest Rs 452.55 crore for the project.

The cement maker has opted for the site as it can use fly ash generated from power plants concentrated in Dhenkanal district.

“The proposed location near Managalpur village in Odapada would be ideal for the cement grinding unit as the ash generated from industries in the locality such as Bhushan Steel, GMR Kamalanga, Lanco Badbandh Power and Navabharat Ventures can be effectively utilized by the proposed unit for producing cement,” the project proposal of Shree Cement said.

volume & pricing

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olume and pricing

Indian cement prices rise In India, cement companies in the northern and western region have increased prices by around Rs 10-15 per 50-kg bag due to the closure of two Binani Cement plants and shortages of railway wagons to transport cement. Last month, Binani Cement closed the two Rajasthan plants, demanding relaxation from the Rajasthan government on the mode of payment of owed taxes to the tune of Rs 154.51 crore.

Demand continues to remain sluggish, but companies are increasing prices due to the shortage of cement supply. The increases help companies offset the rise in freight

costs, fuel costs, and other input costs on their margins. After the price hike, a 50-kg bag of cement will cost around Rs 300 to Rs 310 on average. “If the cement industry has to survive, the prices must go up. Before the slowdown, the cement production capacity in united Andhra Pradesh had been added phenomenally. But post-2008, our plants are running at 40-50 percent of the installed capacity,� Nagarjuna Cements Limited managing director K. Ravi said.

Experts positive on cement revival in Southern areas India cement prices are looking up and

experts are pointing at a recovery in the Southern areas in general. The key reasons for the poor performance of industry in this part of the country were the political turmoil in Andhra Pradesh and the low sentiments in the overall economy.

Cement prices per bag in Tamil Nadu increased to Rs 330-350, compared with Rs 300-330 a bag a year ago.

Prices in Karnataka vary, as in Bangalore they are Rs 280-290, while in Mangalore they are Rs 310 a bag. In Kerala, the price range is Rs 325-330 up Rs 15 compared with last year.

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cement people

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eople

Holcim installs new Area Manager in India Swiss cement maker Holcim has appointed Bernard Terver as its new Area Manager for India. The appointment follows Onne van der Weijde’s decision to leave the company, effective June 1.

HeidelbergCement India chief resigns HeidelbergCement India has announced that its CEO Ashish Guha will resign, effective in September of this year. The HeidelbergCement Board has accepted the resignation, but requested that Guha continue as CEO and MD of the company until the appointment of a successor.

Guha, who was previously an investment banker, has been heading the company for eight years. He was appointed CEO

35 MAY / JUNE 2014

after HeidelbergCement bought SK Birlaowned Mysore Cement.

HeidelbergCement India announces executive change HeidelbergCement India has named Jamshed Naval Cooper currently the Director (Sales & Marketing) as Chief Operating Officer, reporting to Ashish Guha with effect from 04 June 2014.

Cementrum I B.V. of Netherlands, the holding company of HCIL, has proposed the appointment of Cooper as Managing Director with effect from 01 July 2014, subject to the approval of Nomination & Remuneration Committee and the Board of Directors of HCIL. Cooper will succeed Ashish Guha, who resigned from the position of CEO &

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Managing Director but at the request of the Board of Directors of HCIL had acceded to continue in office till the appointment of a successor.

India’s ACC installs new CEO Holcim unit ACC has appointed Harish Badami as its CEO and MD starting next year. Badami would be replacing Kuldip Kaura whose term was extended till 31 December, 2014. In a statement, ACC said that Kaura will demit office as CEO & MD on 13 August and appointment of Badami will be effective from the same date for next five years. Kaura will continue to be associated with ACC in the capacity of advisor to the board. Badami, a B-Tech from IIT Mumbai and MBA from IIM Kolkata, has 25 years of experience in the chemical industry. Until rcently he was MD of Celanese India.

regional

news

Axle load limits for truck transportation imposed by Pakistani authorities are severely cu Multiple regional expansionary actions are announced by cement companies operating in

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In th lizati back 2007 are e ate a push boos

pakisTan’s CemenT sales affeCTed by loGisTiCs limiTaTions Pakistani cement companies dispatched 2.888 million tons of cement in May 2013, more than 7.5 percent below April 2013.

Apart from the slower pace of construction activities, the decline was also perceived as the direct consequence of strict application of the axle load limits imposed by the national highway and motorway authorities. The axle load rule had been lax for years, allowing trucks to be loaded with extra quantities. The stricter appliversus April Cementof cation754,000 impactstons not in only the2013. availability dispatches to the domestic market in April transportation, but also the logistics costs 2014 increased by 7.2 percent to 2.539 milincurred. lion tons, compared with 2.368 million tons duringcement same month last year. around Northern units dispatched 2.29 million tons of cement in May 2013, Retail cement of prices showed region24.3 percent which were some sent by sea to alexternal variancemarkets, in the last week of April, with mostly to Afghanistan, prices per bag coming in at Rs 513 in while around 2.7 percent were dispatched Islamabad, Rs 515 in Lahore, Rs 533 to India. The southern units provided in the Karachi, Rs 501 in Peshawar, and Rs 550 in Quetta. The government has made no effort to fix prices.

egional news

Pakistan cement industry: outlook positive but uncertainties loom The Pakistani cement industry has been boosted by a recent increase in cement sales. The industry has registered total dispatches of 21.3 million tons in local markets during the first ten months of current fiscal year, a growth of 2.7 percent over the same period of last year. Total sales in April 2014 were 3.21 million tons, compared with 3.12 million tons during the same month last year, an increase of 2.8 percent.

Exports in April 2014 totaled 672,000 tons,

38 MaY / JUNe 2013

domestic market with 0.39 million tons of cement, with their exports nearing 0.22 Pakistan’s cement industry is seeking million tons. government approval for additional tax incentives.

Allmonths Pakistan Cement During the The first 11 of the current Manufacturers Association (APCMA) fiscal year, Pakistani cement companies has Federal Board Revsolddemanded more thanthe 30.5 million tons,ofaround enue (FBR) to exclude cement from the one million tons above the correspondThird Schedule of Sales Tax Act, which ing period of the last fiscal year. Cement itexports says increases coststons andthis is burnotchedcement 7.7 million fiscal dening consumers. year versus more than 7.8 million tons in the last fiscal year for the first 11 months.

Holcim’s direction questioned in Sri Lanka Swiss cement maker Holcim has taken CW Group Coal Week CemWeek BMWeek INDIA CEMENT & CONSTRUCTION MATERIALS MAGAZINE flak for its operations in Sri Lanka, CemWeek CW Group some Coal Week BMWeek CemWeek BMWeek CW Group with Coal locals Week questioning the direction of the company.

pakis Their Attoc Kara that lion f Iraq. lion in Hu

Luck on its ed to millio

CEO Bernard Fontana arrived in Sri Lanka recently to open a facility in Galle, but his local communications staff at Holcim Lanka blocked attempts by The Sunday Leader and the Irudina to attend a press briefing at the Taj Hotel in Colombo.

Fontana also ran into trouble when it transpired that the investment of USD22 million in Galle was being formally opened on the second most holy day after Wesak, for Buddhists on Poson Poya day, causing consternation amongst some of the staff who described it as “insensitive”.

Pakistan nixes additional taxes on cement In Pakistan, Finance minister Senator Ishaq Dar says it will withdraw the gas

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regional news development surcharge and additional tax on cement. Ishaq Dar said that the Gas Infrastructure Development Cess (GIDC) has been reduced to Rs100 on power, zero on cement, Rs150 on general industry, Rs200 on captive power and zero on commercial sector.

Also in Pakistan, cement exports to Afghanistan posted a big fall of 17 percent the current fiscal year due to the NATO plan of troops withdrawal. Afghanistan is one of the leading importing countries with a share of over 50 percent in Pakistan’s total cement export to the world.

Pakistan started exporting cement to Afghanistan in 2001 after the NATO initiated its combat. The cement demand grew in Afghanistan with the NATO begging construction of its military bases in different parts of the neighboring country.

Around 13 Pakistani cement companies located in the north are exporting cement to Afghanistan at US$55 to US$65 per ton

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through Torkham, Khan Miram Shah Border.

Padma bridge business opportunities in bangladesh Local manufacturers of construction materials, especially cement and rod benefit from the business opportunities related to Padma bridge.

The local firms also provided cement and rod for the construction of the approach roads towards the Padma bridge. The construction of the main part of the bridge, including river training, will cost around Tk 20,000 crore. Shafiqul Islam, project director of the bridge, said both local and foreign companies may supply the construction materials. “We will only see the quality.”

Jashim Uddin Khandaker, vice-president (sales and marketing) of Holcim Bangladesh, a leading cement maker, said concrete is a major construction material and they have introduced a concrete solution

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targeting big infrastructure projects like the Padma bridge.

“We have already conducted research in our own laboratory on the construction materials that can be used in the project,” he said, adding that they may bring in foreign expertise, if necessary.

He said also that there is no need to import construction materials like concrete and cement, they are ready to supply them.

orders & equipment highlights

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rders & equipment

Repeat Siwertell road-mobile unloader order in less than three months A Turkish construction services company Mussa Insaat Dis Ticaret Ltd of Istanbul has ordered two road-mobile Siwertell 10 000 S cement unloaders from Cargotec in less than three months. The trailer based, diesel powered units will have a rated discharge capacity of 300t/h and are scheduled for delivery in mid-May 2014 and late August 2014.

“A second order, within two months of the first, is a significant vote of confidence for the operational advantages delivered by Siwertell mobile unloaders,” says Jörgen Ojeda, Director for Siwertell mobile unloaders. “Our customer plans to use the Siwertell units for cement unloading operations at several sites

along the Libyan coast, demonstrating the flexibility of our road mobile systems. Not only are they easy to move from one port to another but once at the new location, the unloader can be prepared for work very quickly by just one person.”

Further factors contributing to the orders were the well documented reliability of Siwertell mobile unloaders, along with their high unloading capacity and low operational and maintenance costs.

Each unloader will be equipped with a double bellows system and dust filter, ensuring that they deliver consistently high levels of efficiency and environmental protection.

“As with the first order, we take great pride in

being part of the re-construction of Libya, in view of the area’s recent history,” Mr Ojeda adds.

Complete solution developed for bypass dust treatment Ferro Duo is a medium-sized international raw material company based in Duisburg, Germany. In recent years, Ferro Duo has specialized on the recovery and processing of cement and steel industry dusts. In addition, A TEC has engaged in technologies for the re-use and recycling of bypass dust in cooperation with Holcim.

With the combined experience of A TEC in collaboration with Holcim’s factory Rohožník (Slovakia) as well as Ferro Duo, A TEC is now capable to offer a technically

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orders & equipment supreme investment solution for recovery of bypass dust in the cement industry for various conditions.

Ferro Duo as a partner with vast experience in the recycling of waste dust is an ideal partner for the construction and operation of such facilities and for the treatment of dusts and products formed therefrom.

Together the companies can offer an individual and optimal solution from plant operation to product recovery – clients will benefit from the most technologically and economically advanced system in the area of bypass dust treatment.

KHD Humboldt Wedag reports 2013 results KHD Humboldt Wedag International AG (KHD), a leading global provider of equipment and services for the cement industry, ended fiscal year 2013 with a turnover of EUR 249.6 million, a significant increase over the previous year, reports Finanz Nachrichten.

The continued intense competition and the unsatisfactory quality of margins in the backlog had a negative impact. Nevertheless, KHD reported a positive EBIT of EUR 1.2 million.

According to the report, orders of KHD dropped due to subdued investment activ-

39 MAY / JUNE 2014

ity and delays in contracting by 58.0% to EUR 172.4 million in the fourth quarter of 2013, however, KHD has won major orders from Russia, the USA and Turkey.

The increase in revenue by 16.9% to EUR 249.6 million was favored by the high order backlog from the previous year. In addition to the project business a solid business with spare parts and services with nearly EUR 38 million has contributed to revenues. The gross profit margin decreased from 20.5% to 11.8%. This was due in particular to the lower margin quality of some projects which have been obtained in hard competition under high pressure on prices, as well as difficulties in the execution of some orders.

LR1300 crawler’s complex cement lift Indian firm Bhoir Group used its 300t Liebherr LR 1300 crawler crane to complete a complex lifwt at a cement plant in Chattisgarh, India The crane was hoisted 8.3t with an 86m main boom, 89m luffing jib and derrick with 50t of suspended counterweight. The lift was carried out at a radius of 53m and the load was placed at a height of 118m.

The rental firm said that without the LR 1300 a bigger crane would have been needed to execute the lift, thus requiring more space and causing higher costs. The Bhoir Group

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has four LR 1300 crawler cranes and has used them for several high-rise and heavy lift erections.

The crane can be fitted with a maximum of 98m of main boom, a maximum of 113m of luffing jib and various fixed jibs including windmill fixed jibs of 7m and 8m.

Lafarge Pakistan acquires new vehicles The local unit of French Lafarge in Pakistan has introduced PRTS-compliant vehicles for the safety of its employees, reports The News.

Thirteen vehicles complying with PTRS (Public Road Transport Safety) were handed over to the company’s sales staff at a ceremony held on March 28 at Lafarge Pakistan’s head office in Islamabad.

According to the report, the cars have at least two airbags, seatbelts for all passengers and an anti-lock braking system (ABS).

Infrastructure & projects

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nfrastructure & projects

n terms of new projects, Godrej Properties is all set to construct a new residential project in Gurgaon. Meanwhile, Dubai-based Tecom has planned to set up a SmartCity in NCR. The project is worth Rs 10,000 crore and involves construction of several self-contained knowledge townships..

As for updates on projects, The first phase of Mumbai Metro has secured the final safety clearance from the Chief Metro Railway Commissioner and is ready for commercial operations.

NEW PROJECTS Godrej Properties launches new residential project in Gurgaon Realty developer Godrej Properties is all set to construct a new residential project worth Rs 150 crore in Gurgaon. The company has inked a joint venture (JV) with Oasis Buildhome Pvt Ltd that owns the land. The project is spread over 4.5 acre and has a saleable area of 5 lakh sq ft and involves construction of 306 apartments.

The residential project is one of the several residential projects which Godrej Properties is going to develop in 12 different cities across the country.

of 10 floors with retail and hospitality space. The luxurious project will include modern amenities such as gym, swimming pool and landscaped space. Akshaya already has around 40 on-going projects worth Rs 14,000 crore and has more than 75 million square feet under construction.

HCC bags new project from DMRC The Hindustan Construction Company

(HCC) has bagged new orders from the Delhi Metro Rail Corporation (DMRC) for the construction of underground metro rail. The project worth Rs 300 crore, which is a part of phase III development of Delhi Metro, involves construction of 1.54 km long twin tunnel on DwarkaNajafgarh metro corridor. The project also involves construction of one of the biggest underground station in Delhi.

Akshaya launches new luxury residential project in Chennai Chennai based real estate developer Akshaya has launched a new luxury project in Chennai. The project named ‘Tango’ is a 250-apartment luxury residential project and will also include a commercial block

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infrastructure & projects

Tecom Plans SmartCity in NCR Dubai-based Tecom has planned to set up a SmartCity in NCR. The project is worth Rs 10,000 crore and involves construction of several self-contained knowledge townships. The company plans to commission the construction of the first phase of project by March 2015. The SmartCity in NCR is expected to be bigger than the company’s 5,000 crore knowledge hub in Kochi - Kochi SmartCity. The Kochi SmartCity is a four-phase project. The first phase of the Kochi SmartCity which is on the heels of completion comprises a building of 6.5 lakh sq ft built-up area, spread across 11 acres.

JNPT to get new Terminal The Jawaharlal Nehru Port Trust (JNPT) has signed an agreement with the Port of Singapore Authority (PSA) to construct a new terminal at the port. The project involves construction of a new terminal that will have a

capacity of 4.8 million twenty-foot equivalent units (TEUs). The project involves an investment of Rs 8,000 crore and is going to be funded through 100% foreign direct investment (FDI).

UPDATE ON PROJECTS Mumbai Metro Phase I gets safety clearance The first phase of Mumbai Metro has secured the final safety clearance from the Chief Metro Railway Commissioner and is ready for commercial operations. The commercial operation of first phase connecting Versova with Ghatkopar in suburban Mumbai is going to begin once the fare structure is fixed. The project which has been jointly developed by Mumbai Metro One Pvt Ltd (MMOPL) and Mumbai Metropolitan Regional Development Authority (MMRDA) at a cost of Rs 4,291 crore is already running behind schedule by three years.

Jaipur Metro ready for Commercial Operations by August The first phase of Jaipur Metro is most likely to start its commercial operations by the end of August. The work on the first phase is expected to be completed by the end of May 2014. The second trial run on its first-phase route from Manasarovar to Chandpole of the metro is expected to begin in July 2014.

The project is developed by Jaipur Met-

Source: Mumbai Metropolitan Region Development Authority (MMRDA)

Supertech to invest in housing in Gurgaon One of the leading real estate developers in India, Supertech is all set to invest Rs 1000 crore in housing project in Gurgaon. The project names ‘Supertech Hues’ is spread over 70 acres and involves construction of 23 towers and 2,090 units. The construction has already begun and is expected to be complete in the next three years.

ro Rail Corporation (JMRC) at a cost of Rs 3,149 crore of which the JMRC has already spent Rs 1,800 crore on the first phase of the Jaipur Metro.

INFRASTRUCTURE AND CONSTRUCTION PROJECTS/EXPANSION

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analyst recommendations acc PhillipCapital (India) Pvt. Ltd. has downgraded its rating to ‘NEUTRAL’ for ACC at a target price of Rs 1,301, reducing it from current market price (CMP) of Rs 1,348.

The negative rating comes because of the company’s disappointing operating performance. The company posted a sequential de-growth of approximately 2% QoQ in cement realizations. Meanwhile, ICICI Securities Ltd. has recommended ‘HOLD’ for ACC with a target price of Rs 1, 375 increasing it from a CMP of Rs 1,295. The recommendation comes owing to expectations of good market fundamentals such as expectation of a stable government post elections, price hike in the north due to supply constraints and valuation gap. ambuja cement Firstcall India Equity Research has recommended a ‘BUY’ rating for Ambuja Cements with a target price of Rs 235. The positive recommendation comes as the company posted an increase of 1.75% in volumes of cement and clinker in Q1 2014.

The company is also working on improving its operational efficiencies; cost optimization and focus on customer and commercial excellence which are expected to preserve and grow margins of the company in the coming months. PhillipCapital (India) Pvt. Ltd. has maintained its ‘NEUTRAL’ rating for Ambuja Cements with a target price of Rs 191. The recommendation comes as the company posted a strong operating performance which was better than some of its peer companies. The company registered an EBITDA growth of 13% YoY; 100% QoQ owing to the increase in prices in the north despite the shutdown of one of its plant in the State of Himachal Pradesh. india cements Angel Broking has recommended ‘BUY’ rating for India Cements with a target price of Rs 108, upgrading it from CMP of Rs 67.

The recommendation comes as the company is considered to be one of the major beneficiaries of the expected increasing cement demand in south India – a key market for the company. The creation of the new state

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of Telangana from Andhra Pradesh in June 2014 is likely to drive the cement demand in the south and with India Cements having approximately 60% of its cement capacities in Andhra Pradesh is poised to benefit from this pick-up in demand. ICICI Securities Ltd. recommends ‘HOLD’ with a target price of Rs 50, reducing it from a CMP of Rs 68. shree cement ICICI Securities Ltd. has recommended ‘HOLD’ for Shree Cements with a target price of Rs 6,180, upgrading it from CMP of Rs 5,701. The company is all set to add 5 MT of capacity in the next 2-3 years which are set to increase its volume growth and lead the company to higher profitability. On the other hand, Angel Broking has remained ‘NEUTRAL’ on Shree Cements with a target price of Rs 5,691. The recommendation comes because of the weak performance of the Power division of the company.

ULTRATECH CEMENT Owing to the increase in housing demand and infrastructure development in the com-

ing years, Firstcall India Research recommends a ‘BUY’ rating for UltraTech Cement with a target price of Rs 2,344, upgrading it from CMP of Rs 2,170. The company’s increased sales made Karvy Stock Broking Ltd. upgrade to ‘BUY’ from ‘HOLD’ with a target price of Rs 2,380, increasing it from CMP of Rs 1,980. The positive rating comes as UltraTech continued to gain market share and posted an increase of 10% YoY in its sales volume in April 2014. The company’s recent production ramp-up which is going to increase its volume growth by 10% over the next couple of years, is going to be a key driver of the company’s stock in the coming years. jk cement ICICI Securities Ltd. has recommended ‘HOLD’ for JK Cement with a target price of Rs 190, reducing it from a CMP of Rs 227. The recommendation comes because of positive market fundamentals. The company has planned to double its white cement capacity and is expected to benefit from the recent hike in cement prices in the north – which remains a key market for JK Cement.

RATINGS CHAnGES

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MOST POPULAR ON CEMWEEK.COM The most-read stories on CemWeek over the past two months reflect the industry’s mixed outlook. The India column shows the 20 most popular stories from CemWeek featuring India-related coverage, and the Global column shows the global events that gathered the most attention worldwide during the period. Visit CemWeek.com to access the full stories.

INDIA

GLOBAL

1 Lafarge, Holcim merger to have wide effect on Indian market

1 Holcim and Lafarge explore potential merger

2 India: Cement prices in Andhra Pradesh plummet

2 China: Zhejiang Province reports lower prices

3 India’s ACC installs waste heat recovery unit

3 Dangote Cement seeking to double production

4 Report: Simec mulls India’s ABG Gujarat buy

4 Lafarge, Holcim tap advisers for merger

5 ACC to keep name even after Lafarge, Holcim merger

5 CRH reviewing partnership with Israel’s Mashav

6 India: Publicis secures deal with Ambuja Cement

6 Director quits Arabian Cement

7 Ambuja Cements gets okay for Holcim merger

7 KHD Humboldt Wedag reports 2013 results

8 India’s Sanghi Industries to expand operations

8 Turkey’s Akçansa to cut emissions

9 India’s Ambuja Cement to expand operations

9 Spain: Votorantim installs new Communications executive

10 UltraTech monitoring Lafarge, Holcim merger

10 Italcementi looking to boost eco-friendly portfolio

11 Shree Cement expanding operations

11 Croatia’s Našicecement Cement reports slower sales

12 India cement prices picked up

12 Lafarge-Holcim merger to impact Italian cement market

13 India: Orient Cement noted for cost efficiency

13 Malaysia’s CMS gets approval for second grinding unit

14 Reliance Cement is handed allotment letter for plant at Purulia’s Raghunathpur

14 Sri Lanka’s Singha building new cement terminal

15 Jaypee to sell cement unit by year’s end

15 Algeria: Sigus SCS to expand capacity

16 Madras Cement CSR funds for Engineer College contested

16 Cement project draws mixed reactions in Quebec

17 Pollution Board orders closure of India Cements unit

17 Complete solution developed for bypass dust treatment

18 Court issues notice to Jaypee, UItraTech Cement

18 KHD wins new order in Turkey

19 JK Cement to invest in kiln expansion and packaging unit

19 CRH closely monitoring Lafarge, Holcim merger

20 FLSmidth bags fresh order from Indian firm

20 Pakistan: Lucky Cement workers go on strike

43 MAY / JUNE 2014

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CW GROUP MEETING AGENDA The CW Group will be hosting and participating in a number of webinars and conferences.

We invite you to join us on-line or in person at the events to discuss our views of the industry.

Conferences where the CW Group will be presenting

COLOMBIA

AshTrade Americas 2014 Fly Ash Industry Conference

October 15-16, 2014

webinars hosted by cw research

Petcoke review H1 2014

Houston, United States

July 22, 2014 at 2:00 PM GMT Solid Fuels Summit (SFS) India 2014

November 11, 2014

Holiday Inn New Delhi International Airport, New Delhi, India

cw summits AshTrade India 2014 Fly Ash Industry Conference

November 11, 2014

New Delhi, India

Cement Business & Industry (CBI) India 2014

November 12-13, 2014

Holiday Inn New Delhi International Airport, New Delhi, India

CW Summit Americas 2014 September 11 - 12, 2014 Miami, US

CW Summit Middle East 2014 November 9-10, 2014 Dubai, UAE

For questions or inquiries please contact Liviu Dinu, Market Services & Marketing Consultant at the CW Group at ld@cwgrp.com For more information please visit http://research.cwgrp.com/meetings

Organized by GMI Global and again with the great support from the India Cement & Construction Materials (ICCM) journal, the event is expected to bring together more than 200 cement and lime professionals. GMI is excited to build on the success of the CBI series to expand the scope to include participants from the entire region this time around.

CBI India 2014 Conference will focus on the various aspects of India’s cement industry from a business growth & investment perspective. Notably, the program will take a dual-track business and technical approach to the issues around: Market perspective, forecast and competitive outlook PAST PARTICIPANTS: ACC Ltd. | Alley-Cassetty Companies, Inc. | Alliance Polysacks Pvt. Ltd. | Alternative Resource Partners | Ambuja Cements | Argus Media | ASEC Trading | Beroe Consulting Pvt. Ltd | BEUMER Group GmbH & Co. KG |Bharathicement Corporation Pvt. Ltd | Binani Cement | Browz | Burundi Cement (BUCECO) | Cachapuz Cement Manufacturers Association (CMA) | Cimpor | Claudius Peters India | Coal Insights | Credit Suisse | CRH India | CW Group | Dalmia Cement | Evonik Degussa India | Fives FCB | FLSmidth | FLSmidth Maag Gear AG | Golder Associates Canada | Golder Associates India | Golder Associates UK | HeidelbergCement Group | Hi-Bond Cement India | IFC | India Cements Ltd | J.K.Cement Ltd | JK Sons | KHD | Lafarge Inda | Larsen & Toubro Limited | Loesche | Loesche India | Madras Cement Limited | Magnesita Refractories | Mapei Construction Products | McKinsey & Co | Middle East Green Energies | Mitsui & Co. India Pvt. Ltd. | Mjunction Services | Mondi Oman LLC | Oman Cement | Orient Cement | Promac India | RAMCO Enterprise Process Solution | Ready Mixed Concrete Manufactureres | Association (RMCMA) | Refratechnik | Reliance Cement Company Pvt. Ltd. | Rexnord | Sagar Cements Limited | SAIF | Sanghi Industries Ltd. | Segezha Packing | Shree Cement Ltd. | SKF India Limited | Somi Conveyor Beltings Ltd | Starlinger & Co. GmbH | String Automation Pvt. Ltd. | The Crescent Group | Timken India Limited | UltraTech Cement Ltd. | Union Cement | Vicat | Vyankatesh Chemical Industries | W.R. Grace | Zuari Cement, Italcementi Group

India contact: Dr. SN Pati | dr.snpati52@gmail.com | 09891415719

Alternative fuels, new business models Environmental performance management Finance and capital markets Coal as mainstay fuel option and outlook EfďŹ ciency, innovation, new developments Technology, operations and best practices

Global contact: Beatrice Ene | be@gmiforum.com | +40-722-764-802 SUPPORTED BY

Organized by GMI Global LLC To learn more visit the GMI website: www.gmiforum.com