india A CemWeek Publication
issue 41
Cement
April/May 2018
& construction Materials
LEADERS Q&A
Ismail Bulut CEO of Turkish Cement Manufacturers' Association CW RESEARCH
Cement consumption climbing on global economic recovery Indian cement market
Who will win the battle for Binani Cement?
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GLOBAL CEMENT TRADE PRICE REPORT The Global Cement Trade Price Report (GCTPR) provides a must-have, data-centric assessment of monthly and quarterly prices (USD per ton) for cementitious products - gray cement, white cement, clinker & granulated slag (GBFS): Ex-works and retail prices Trade pricing Together with insights on cement producers' pricing strategies and important price revisions, the GCTPR provides insights and data on domestic cement pricing for over 30 key markets, as well as international trade prices for 70+ cement markets.
Analysis and forecast of global cement trade.
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FEATURES Leaders Q&A: Ismail Bulut 04 The CEO of the Turkish Cement
Manufacturers' Association tackles issues such as the evolution of the organization’s role, the main challenges faced by the Turkish cement market, and how the progressive incorporation of alternative fuels in the cement production process is unfolding
Research: Improving global 14 CW macro-economic scenario to drive cement consumption in 2018
Despite China’s capacity rationalization efforts, global cement consumption is expected to increase on the back of improving macroeconomic indices
Research: How will the cement 22 CW sector fare by 2050? In a thought exercise, CW Research presents its directional perspective on long-term cement demand
Analysis: The Battle for 30 Insight Binani Cement The sale of the Indian cement maker’s assets to competitors has been heated from the start, and as the Supreme Court is called into the matter, the question in everyone’s minds is: what will the final decision be?
Analysis: Imported petcoke 34 Insight prices rise on tight supply
india
Cement
DEPARTMENTS 2 Editorial Letter The
rOBERT MADEIRA
numbers in brief 3 Both positive volume and pricing evolution
Margarida Cunha
& construction Materials
www.cemweek.com/india
across geographies led to the positive results
Research and Analytics 36 Cement Volumes
cemweek publisher head of cw group research
Editorial Coordinator
Liviu Dinu Mihnea Manea Advertising
Filipe Gouveia Paulo Cruz Raluca Cercel Rui Correia Sara Ruas Tea Vukicevic
cement 38 people 40 equipment highlights 42 regional news
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BUZZ 44 Top 10 CemWeek, BMWeek and PetcokeWeek stories
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Prices of imported petcoke in India have displayed an increasing trend over March, boosted by a rising demand and supply shortages
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letter from editor
A break in the clouds
few clouds are hanging over the Indian cement sector. The sale of Binani Cement’s assets to its competitors remains heated, which is telling of how much the outcome can influence and reshape the configuration of the national cement industry. But even before cement is shipped into the market, manufacturers are struggling during the production process, as the use of petcoke remains a question mark. Prices have been increasing, boosted by a rising demand and supply shortages. And as uncertainty remains over a possible countrywide ban, some cement producers are shifting their preference towards thermal coal. Even more uncertainties remain regarding the long-term future of cement. On the one hand, cement demand in emerging economies is likely to be driven by population growth and rising urbanization rates. In contrast, stricter emissions, cement substitutes, and alternative construction methods in developed countries could negatively affect the cement industry. Based on GDP per capita and cement per capita projections, CW Research tried to answer the question: what will the cement sector look like by 2050? Their findings can be found ahead in the magazine.
Meanwhile, in the present, world cement demand is gradually improving on the back of recovering macroeconomic indices. Despite China’s capacity rationalization efforts, and some impending volatility arising from unresolved geopolitical questions, the first half of 2018 has shown positive signs for the global cement sector. Some regional markets even outperformed CW Research’s previous forecasts. One of them is Turkey, whose cement capacity is projected to show solid improvement due to new projects being developed, especially within the framework of infrastructure and urban transformation. Nevertheless, the road towards growth is one made with challenges; challenges that Ismail Bulut, CEO of the Turkish Cement Manufacturers' Association, was not afraid to discuss with us in a revealing interview. The clouds hanging over the industry may be greyer than cement. But that means one thing: an opportunity for reinvention, for catching that break in the clouds.
Margarida Cunha
Editorial Coordinator
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numbers in brief Global cement
manufacturers reap the fruit of A year markeD by cement demand growth
Both positive volume and pricing evolution across geographies led to the positive results Positive pricing and volume growth reflected in a positive performance for Cemex, CRH and HeidelbergCement. On the other hand, the USD-CHF exchange rates affected Lafarge’s revenue in USD terms, though the company’s revenue increased by 4.7 percent in local currency. Similarly, Buzzi Unicem’s revenue increased in 2017 in EURO terms, but decreased in USD. Positive market trends in Europe and North America were instrumental for the growth position of the major cement manufacturers in the world. Positive pricing, combined with a diversified mix of building materials offered, led to sustained performance in developed markets. Nevertheless, traditional emerging markets that are volumetric in terms of cement sales continued to grow. CHART: 2017 and 2017 revenue (USD bn)
2017
2016
Source: Company reports, CW Research
Stabilizing EBITDA margins have been successfully achieved over the year 2017. CRH’s EBITDA margins continue to be under 15 percent, as the group continues its buying spree across geographies and across building materials. In Cemex’s case, EBITDA decreased to 18.8 percent in 2017, impaired by the repurchase of shares and non-recurring expenses, such as the expenses related to he antitrust fine in Colombia. CHART: 2017 and 2016 EBITDA margin (%)
2016
2017
Source: Company reports, CW Research
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Leaders Q&A
Ismail Bulut Turkish Cement Manufacturers' Association CHIEF EXECUTIVE OFFICER
Ismail Bulut, CEO of the Turkish Cement Manufacturers' Association, tackles issues such as the evolution of the organization’s role, the main challenges faced by the Turkish cement market, and how the progressive incorporation of alternative fuels in the cement production process is unfolding.
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Leaders Q&A is raising the public awareness about the role of the Turkish cement industry in the development of the country.
The Turkish C e m e n t Manufacturers' Association (TÇMB) plays a significant role in the industry. How do you characterize the evolution of TÇMB to date? Turkish Cement Manufacturers' Association was founded in 1957 by the industries manufacturing cement and other hydraulic binders. TÇMB, as the common voice of the cement industry, is fully acting under the rules of free market economy and is representing a total of 66 enterprises in Turkey, as 49 of them being integrated facilities and 17 cement mills. TÇMB provides common solutions to these enterprises for their research and development activities, analysis works, quality control, training services and executes common initiatives for legal and administrative regulations. As TÇMB, our main goal
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International cooperation is increasingly highlighted in all fields of the industry in the global economic system. TÇMB became a member of the European Cement Association (CEMBUREAU) in 1972 with the mission of pioneering for the Turkish cement industry in its contacts with the international platform. Turkey, being a leader in cement production and export in Europe, continues to be a strong player of the industry thanks to the initiatives of TÇMB. Membership of CEMBUREAU helped the industry to develop its international relations. Strengthening its position on a global scale, TÇMB became an associate Member of EUPAVE (European Concrete Paving Association) in 2009. Afterwards, TÇMB signed several
TÇMB’s membership of CEMBUREAU helped the industry to develop its international relations Memorandum of Understandings with other Global Cement Associations, like Arab Union for Cement and Building Materials (2009), Indian Cement Association (2010) and finally China Cement Association (2011), to organize joint activities and to support each others’ events. On the other hand, being a member of ECRA (European Cement Research
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Academy) since 2014, TÇMB has had a chance to enhance its view on technological developments. Besides, being a communication partner of the Cement Sustainability Initiative (CSI) of World Business Council for Sustainable Development (WBCSD) since 2015, we have had an opportunity to explore what sustainable development means for the cement industry and identify actions and facilitate steps cement companies can take, individually and as a group, to accelerate progress toward sustainable development. Besides, TÇMB has been organizing International Technical Seminars and Exhibitions since 1987. The program is open for both national and international attendees from the cement industry’s service and technology providers. The event is important for the manufacturers to follow up the recent developments and creates an opportunity for the participants to consider the new investments, while
having a chance to benchmark their business for every two years with the participation of more than 500 participants, also 120 foreign and national companies from cement and related industries. For better and more effective action on the Turkish cement market, what strategies has TCMA adopted? As Turkish Cement Manufacturers' Association, our vision is to protect and develop the image of the Turkish cement sector at home and abroad. We also emphasize how cement is esential for a sustainable economic progess of our country. Therefore, to become more effective in the Turkish market we are promoting usage areas of cement and emphasizing how beneficial it is for society. Firstly, as is generally known, the cement industry produces five percent of total worldwide CO2 emissions, thus carbon dioxide reduction strategies by the cement industry largely aim at reducing emissions per ton of cement product. These strategies
include the installation of more fuel-efficient kiln technologies, partial substitution of noncarbonate sources of calcium oxide in the kiln raw materials, and partial substitution of supplementary cementitious mater. As TCMB, we try to encourage the use of alternative fuels in cement plants to reduce embodied CO2 levels in cement. Implementing
Implementing widespread alternative fuel use could make the industry more economically competitive
planned to be incorporated into the efficiency applications of our sector in 2018. In addition to these actions, we are promoting the use of concrete roads in Turkey. In Turkey, the share of road transportation in freight transport is 92% and the passenger transport is 95%. Despite the presence of heavy trucks and buses on our roads, most of the intercity roads of Turkey are made of flexible pavements. Today, the Turkish cement sector produces over 83 million tons of cement – the main binding agent for rigid pavements ranking fourth (as of 2017) throughout the entire world in production.
widespread alternative fuel use could make the industry more economically competitive, as well as more sustainable in the future.
If concrete pavement and concrete barrier technologies are utilized sufficiently, they will provide important advantages to the country’s economy. Especially in the construction phase, concrete solutions are beneficial in regards of time and money.
On the other hand, unlike many major cement industries in the EU and the Americas, the Turkish Cement industry has numerous waste heat recovery (WHR) systems that have been implemented in recent years. As much as a total capacity of 101 MW was put into use at 18 kiln lines in 10 plants at the end of 2017, with an additional capacity of 34 MW also being
As a result of all these efforts, we try to reduce energy imports to Turkey. I would like to point out the fact that with the use of wastes as alternative fuels, primary fossil fuels like coal, petroleum coke, and lignite will be consumed less, and energy imports will decline, thus there will be cost advantages and energy efficiency is ensured.
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Leaders Q&A Currently, what are the most pressing challenges for the cement industry? In the following years we are expecting that Iran’s cement exports to our neighboring countries will increase, also as the deterioration in external demand conditions caused the Turkish cement sector to lose market share. In the upcoming period, it is forecasted that competition in the Middle East market will increase further, as Saudi Arabia could be a major player in the market as well. Turkey is the second leading cement producer in the Middle East and North Africa, and is the world’s seventh largest producer of the industrial material. The Turkish cement industry is very sensitive to economic crisis and involves many uncertainties including cost and technology. The cement demand is mostly affected by demand of ready-mixed concrete. Demand of cement is also related to activities in the construction industry, therefore cement demand increases with housing and infrasturucture investments.
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It is forecasted that competition in the Middle East market will increase further
In this context, urban transformation projects and residential estate investments are very important for cement producers. Uncertainties in production costs cause important technological uncertainties in the cement industry. One of the most remarkable price-technological uncertainties in cement industry are the limitations in carbon dioxide emissions. On the other hand, the industry faces significant supply-side issues. The country’s ongoing energy crisis has had an outsized influence on the cement industry, with the gas and power shortage hitting producers hard. Turkey’s increasing energy consumption raises the importance of
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energy efficiency due to costly imports in energy supply. What is the contribution of the Turkish cement sector to Circular Economy? A “Linear Economy”, which is based on the fact that resources are unlimited and waste disposal is very cheap, produces a vast amount of waste. Additionally, as environmental degradation and climate change occurs, resources become scarce, and the import of fuels and raw materials increases. Limited natural resources, environmental protection and a need for reduced waste production promotes a “Circular Economy” model. Cement is a specific process that allows for the recovery and the recycling of materials. Thus, the cement sector contributes to circular economy.
In cement production, energy recovery and material recycling can be realized by: • Using wastes as alternative fuels (i.e. industrial wastes, used tires, solid recovered fuel) • Using other wastes and byproducts as alternative raw material (i.e. fly ash, slags) The Turkish cement sector contributes to a circular economy by using waste as alternative fuel and raw materials for more than 10 years. The sector used about 600,000 tons of waste as alternative fuels, and 1.1 million tons of waste as alternative raw materials in 2016. The Turkish cement sector also supports the use of alternative fuels produced from municipal solid wastes (SRF). The sector is ready to pay for SRF produced by municipalities/private sector via mechanical biological solid waste treatment plants.
The Turkish cement sector used 1.1 million tons of waste as alternative raw materials in 2016 What can be done to make alternative fuel usage more attractive to cement companies? Thermal substitution rate with waste fuels in the EU is about 30%, whereas some EU plants have about 100 % substitution rate. Thermal substitution rate of the Turkish cement sector is about 4%, which is very low when compared to the EU. In Turkey, the most abundant waste is of industrial origin, thus there is limited waste usage by cement plants close to industrial regions. However, cement factories distant to industrial areas have the potential to use solid waste
recovered from (SRF) municipal solid waste and/or dried sewage sludge. For the production of solid recovered fuel (SRF) by using municipal solid waste, municipalities or private sector investors should establish "mechanical, biological pretreatment facility" (MBT) facilities close to landfill areas. The cement sector is ready to pay for a high-quality SRF. Common barriers are: the municipalities are not willing to establish MBT plants, and Turkish laws do not allow for longterm contracts. These problems can be solved through the revision of the laws to allow long-term contracts. The other barrier is that the cement factories are competing with unfair incentives provided to municipal waste incinerators. In Turkey, power generated by waste incinerators is subsidized by a feed-in tariff of 13.3 USD Dollars cent/ kWh. This price is 2-3 times higher than conventional
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Leaders Q&A
power generation selling prices. Thus, municipalities intend to invest for waste to power incinerators that are 5-10 times more expensive than MBT plants. In order to increase the use of SRF in the cement sector, the Turkish government should provide fair play by issuing special incentives for the cement sector. Similar barriers exist for usage of dried sewage sludge. Municipalities do not prefer to dry the humid sewage sludge. Instead, they are willing to invest on incinerators for power production due to the feed-in tariff of 13.3 USD cent/kWh provided for biowaste incineration. Municipalities should be aware that they are responsible for the disposal of produced sewage sludge, and they should bear all costs for its disposal. How does TÇMB's Cement and Concrete Research and Development Institute work?
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In 1978, TÇMB laboratories were established under a UNIDO project with the purpose of making them a “Center of Excellence” in the region for quality control testing and research on cement and similar materials. With 40 years of experience, the R&D Institute staff and the laboratory facilities have extended their services to all of the producers and users of cement and concrete in Turkey for quality control testing, research and development, and consulting, earning a reputation for high-quality and unbiased work. TÇMB Laboratories were awarded the Accreditation Certificate by Turkish Accreditation Agency (TÜRKAK) for the following standards: • EN ISO/IEC 17025 for testing laboratories in 2003 • EN ISO/IEC 17025 for calibration laboratories in 2006 • EN ISO/IEC 17043 for proficiency testing in 2017 As such, TÇMB Laboratories serve as “Independent Quality Control Testing Laboratories” to Cement and Concrete Sector in Turkey and abroad. The main objective of the Institute is to provide technical and scientific research and development services for the industries producing and using hydraulic binders, concrete and concrete
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aggregates and to encourage the same. Besides these main services, the Institute provides expert report and consultancy services, coordinates for the universityindustry cooperation and issues scientific publications. Parallel to the developments in science and technology improvements, TÇMB R&D Institute is determined to follow up innovations in the cement sector with hitech laboratories, and continues to extend its scope to serve best at all times. Independent Quality Control Testing Laboratories (IQCTL) The IQCTL investigates chemical, physical and mechanical properties of cement and related raw materials, concrete, chemical and mineral admixtures, fuels & alternative fuels, wastes and flue gas. The properties can be tested by using European, ASTM, ISO and National standards, specially validated test methods and scientific principles.
Sustainability and environmental commitments are becoming increasingly pressing. How important are environmental considerations for TCMA? All the cement plants in Turkey issued environmental permits and licences as per the Turkish legislation. Due to EU acquis period, the environmental legislation generally is in line with the EU rules. Due to the great emphasis TÇMB places on environmental considerations, TÇMB has a special department related to climate change and environmental issues. The main duties of the department include: •
• •
•
•
Execution of verbal / written negotiations with public authorities, regarding the TÇMB Board decisions taken as per the requirements of the cement sector. Evaluating draft legislation and preparing consultation notes for the public authorities. Contribution and consultation to the projects related to environment (legislation, environment, use of waste, circular economy, etc.) regarding sectoral perspective. Carrying out the organization and implementing Vice Chair of the TÇMB Working Group of the Environment and Climate Change. Providing support to different TÇMB working groups related to energy, natural resources and quality control. Taking role in the environmental actions of the Turkish Union of
•
•
Chambers and Commodity Exchanges of Turkey. Participation in the European Cement Manufacturers’ A s s o c i a t i o n (CEMBUREAU) working group meetings. Preparation of a section called “Environmental News” for the TÇMB Periodical “Cement and Concrete World”. Preparation of various publications related to the environment, waste and climate change.
Turkish cement exports will continue to rise because the country's capacity will boost until 2020
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Leaders Q&A What will happen to the highly oversupplied markets? Despite temporary economic difficulties, the TÇMB estimates that Turkish cement exports will continue to rise (at least at the same pace) because the country's capacity will boost until 2020. The clinker capacity, which was 83 million tons in 2017, is expected to be 97 million tons in 2020 for Turkey. With planned capacity increases, Turkey will reach 121 million tons of equivalent cement capacity at the end of 2020. With forthcoming projects, continuing infrastructure projects and the expansion of major cities at home (and the fact that Turkish laws go a long way to keeping producers competitive), Turkey's
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domestic cement demand is only ever a few years behind its capacity. By producing high-quality, affordable cement for itself and others, the cement industry becomes efficient. The country will be able to provide large amounts of cement at competitive prices for the forseeable future, making the most of its natural resources. On the other hand, cement surplus will continue to exist with a moderate capacity expansion. What are the main expectations for the Turkish cement sector in 2018? Turkey is one of the most promising real estate markets in Europe. Strategically situated at the crossroads of Europe, the Middle East, and Central Asia, and home to almost 80 million people, Turkey offers great opportunities for real estate developers and investors by combining
a large construction sector with growing commercial and industrial output. Economic growth, rising per capita income, positive demographic trends and the rapid pace of urbanization have been the main drivers of cement demand. In 2030, Turkey’s population will be approximately 88.5 million, and this demonstrates an annual average increase of 0.88% between 2012 and 2030. Therefore, as the population will grow, society will need more housing and infrastructure. High levels of public spending on infrastructure will be required, with the government being set to spend $6.3 billion. Also, the government plays several important roles in shaping the real estate market. A key channel relates to urban regeneration plans to rebuild the existing stock of buildings prone to disaster risks. Another important channel is through the activities of the government’s Mass Housing Administration (TOKI), in
charge of social housing for poor and low-income groups. Also, in the specific case of Istanbul, the government has also embarked on some mega projects, including the Istanbul Financial Centre, Istanbul 3rd Airport and Channel Istanbul projects, which may all have important implications for the housing market. On the other hand, a look at urban renewal projects is very important for the construction and the cement sectors. This will certainly increase the demand for cement in parallel to the investments to be made for the infrastructure and similar/ related construction activities in Turkey until 2023. As a result, we hope that in the upcoming period we will see higher growth rates in investments, as well as increased confidence and stability in our country. Consequently, with all these mega projects, the Turkish cement sector expects
domestic cement demand to grow in 2018. Growth is expected in housing, energy and dam investments, and motorways and infrastructures. Furthermore, while the Syrian and U.S.A markets are keeping their importance, ongoing war conditions at the same regions will affect our cement exports. Ending the embargo to Iran will pose a threat to the Turkish cement export market due to their low-cost cement. Moreover, the Iraqi Administration will ban cement imports while the Saudi government lifted the cement export ban, which will also affect our export markets sharply. In summary, Turkey's cement sector is likely to grow at a steady pace for the foreseeable future thanks to healthy demand by the domestic and export markets.
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CW RESEARCH:
Improving global macroeconomic scenario to drive cement consumption in 2018 Despite China’s capacity rationalization efforts, global cement consumption is expected to increase on the back of improving macroeconomic indices
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C
W Research has prepared a forecast for cement demand and capacity volumes in 2018 and forward. An overall improvement in the global macro-economic scenario will frame an increase in consumption and new capacity concentrated in Asia ex-China and Africa regions. Chinese policies to reduce domestic capacity and slowing construction activity will have a strong impact on global figures, given that the country accounts for half of the world’s capacity and demand. However, when China is taken out of the picture, demand and capacity actually show healthy growth rates in the period between 2017 and 2022. Macro-economic scenario
Global economies are showing a synchronized recovery in their gross domestic products, with an uptick in the developed economies of the United States and the Eurozone. The IMF has improved its outlook for economic growth in 2018 to every major region except for Sub-Saharan
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Africa, where political uncertainty continues to create reserves among investors. Overall, the fund is now expecting a 3.9 percent improvement in the world’s gross domestic product. Coupled with an increase in the flow of capital and equity markets, such macro-economic scenario may lead to an increase in investment on the construction market and an increase in cement demand.
Some volatility should be expected as some unresolved geopolitical questions remain on the table However, some volatility should be expected as some unresolved geopolitical questions remain on the table. Tension in the Korean Peninsula, even if it does not result in full-blown war, could affect investor confidence in one of the fastest growing regions in the world, Asia ex-China. At the same time, a harsh stance from the Trump administration on trade, with the
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introduction of import duties in products such as steel and automobiles could lead to trade conflicts with a dampening effect on international trade. Finally, east-west relations could potentially affect global confidence, and specifically investment in Russia and other countries from the community of independent states.
Cement demand in 2018 In 2018, the team at CW Research expects a global decrease in demand of 0.2 percent. However, that decrease will be mainly caused by China, which accounts for over half of the global consumption and has been experiencing cement sector maturity and demand decline. Excluding the effect of China, cement demand may increase by almost four percent this year, propelled by the rest of Asia, some markets in Africa, and Western Europe. The major Asian markets are expected to show strong growth this year, with both Pakistan and the Philippines clocking an eight-percent jump in demand. In Pakistan, the private and public construction sectors will both contribute to an increase in cement demand, with the China-Pakistan Corridor having lingering positive effects on demand. In the Philippines, a large boost in investment on infrastructure announced by the Duterte administration
2018E change in cement demand (growth YoY %)
Source: CW Research
under the motto “Build, Build, Build” will to the introduction of the local currency be the major driver of demand. to free floating, which led to widespread inflation and lack of investment. Since the In Africa, the two largest cement markets beginning of 2018, inflation has stabilized – Egypt and Nigeria – are posed to make and the government has introduced new a recovery from a particularly bad year. In laws that facilitate business-making and Egypt, demand was muted last year due with USD 3 billion worth of projects
currently being developed, cement demand is expected to reboot this year.
Revisions on the last forecast Since CW Research’s latest forecast of cement demand for the current year, published in October 2017, evolving
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feature 2017-2022F Capacity additions
Source: CW Research
market trends have resulted in some adjustments to the previous model. China’s cement demand was revised downwards by around four percent due to a slowdown in the construction of major infrastructure projects, such as communication ways observed in 2017, and that have set the pace to lower demand in 2018. Likewise, a surprisingly low performance of the Indian cement market last year led to a downward revision of 0.5 percent in the demand outlook for this year. However, in the case of India, the upcoming election season, the development of infrastructure projects, and a two-fold increase in the housing budget of the Union are all reasons to be optimist regarding the market’s performance in 2018.
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Kenya was another of the markets that missed the expectations that were set for 2017, after the inconclusive results of the presidential election led to economic stability and, consequently, lower cement demand. The situation will likely persist towards 2018, resulting in a three-percent downward revision in the demand forecast. On the other hand, several markets in Europe and the Middle East have outperformed CW Research’s expectations in 2017, earning an improvement in their forecast for this year. In Europe, growing public spending, good financial conditions, and improving confidence have created the setting to growing cement demand in markets such as Spain, Poland,
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and Hungary. As for the Middle East, Turkey’s forecast was upgraded by almost three percent thanks to new projects being developed, especially within the framework of infrastructure and urban transformation. In Iraq, the government has recently announced the end of the war against Daesh. This may not mean a complete cease in conflicts in the region, but a decrease in intensity of hostilities opens a more positive outlook that resulted in a five-percent improvement in its demand forecast. Meanwhile, Saudi Arabia is now looking into a
better forecast thanks to higher oil prices that will also help other economies such as Nigeria and Algeria.
Asia ex-China and Africa will lead the way in capacity growth Capacity trends CW Research expects global capacity to reach about 6 billion tons by 2018, an increase of 1.3 percent, after growing by
just 1.1 percent last year. China, which concentrates around half of the global capacity, will continue to impose policies designed to scale down said capacity and to reduce production of low-quality grades. Last year, the government agreed with the local manufacturers’ association to introduce supply-side reforms that will only get harsher in 2018, including measures such as surprise inspections and longitudinal monitoring. Excluding the effect of China and its downsizing policies, overall global capacity is expected to rise by 4.5 percent in 2018, and almost four percent on average between 2017 and 2022. In total, installed additional capacity, excluding China, is expected to increase by 450 million tons until
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feature 2022. Asia ex-China and Africa regions will lead the way in capacity growth and should account for almost 400 million tons added until 2022, around 70 percent of the new accruals. At country level, the largest growth will be seen in India, Indonesia, and Turkey.
Long-term predictions In China, the largest cement consumer in the world, demand is expected to fall by an average of 1.6 percent per annum during the next five years, mostly due to slowdown in pace of construction. Per capita cement consumption is still very high in the country, but the construction will not be able to maintain the expansion rate it has shown in the past, as the Chinese economy becomes more mature. As a consequence, China’s share in global demand will decrease from 57 percent in 2017 to 51 percent in 2022. In the Asia ex-China region, cement demand is expected to show a 4.7 percent CAGR for the next five years, thanks to urbanization and infrastructure development in its major economies such as Indonesia, India, and Vietnam.
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However, overcapacity remains a problem in the region and it is only expected to become worse as capacity continues to grow faster demand, putting additional strain on prices.
In Asia ex-China, cement demand is expected to show a 4.7 percent CAGR in 2017-2022 In North America, the United States will drive regional demand in a large measure thanks to the Trump administration’s investment plan on infrastructure of USD 1.5 trillion. The effect of the investment will be more salient in the years of 2018 to 2020, and fade out in 2021-22 as the projects come to an end. Western Europe benefited from a surge in cement demand during 2017 that will likely not be repeated in the coming year,
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as the recover cools down. The year was very positive to France, where residential construction boosted cement demand by three percent. In the coming years, infrastructure will replace private housing as the factor sustaining cement demand. An even more impressive recovery was witnessed in Spain, where demand has remained in historical lows since the 2008 crisis. Finally, in Africa, some major economies are expected to live behind more troubled times. In the case of Egypt, the economy is now stabilizing after soaring inflation and depreciation of the Egyptian pound against the dollar, with the business environment expected to further improve in the next half decade. In Algeria and Nigeria, where low oil prices add a depressing effect in spending, cement demand is expected to make a recovery, mainly supported, in Nigeria’s case, by infrastructure and urbanization. Going forward, CW Research expects that until 2050 cement demand will begin to show a falling trend, even as the gross domestic product of major economies increases. This will be due to developing economies using less cement thanks to the already existing infrastructure and lower demand for housing, in turn driven
by shrinking populations. As China demonstrates, developing economies generate a large per capita consumption of cement in order to close the gap in terms of housing and infrastructure standards compared to developed economies. However, as those economies start to mature, they eventually reach a demand plateau before starting to decline, with maintenance becoming more important to demand than new projects.
Conclusion For different markets such as Saudi Arabia, India have shown in the past years.
reasons, cement Western Europe, Egypt, and muted demand A widespread
improvement in macroeconomic conditions, which includes higher gross domestic product growth and higher commodity prices, has created the conditions to a recovery in demand in those geographies. China seems to be an exception, as domestic demand decreases from a slowdown in construction activity and the government cracks down on overcapacity. However, with half of the global consumption and installed capacity, this domestic downward trend is enough to obstruct further worldwide improvements. In the future, a growing economy may not be an assurance of higher cement demand. The stage of development of each country may be detrimental to that correlation. While in developing economies, growing gross domestic products are synonymous with higher cement demand, in more developed economies, where stocks of housing and infrastructure are already high, the relation may not be so linear. As it stands, China seems to be going through a transition from the first to the second group, with the high per capita cement consumption becoming rather unsustainable in a more mature economy.
About the report CW Group’s Global Cement Volume Forecast Report (GCVFR) is a twiceyearly update on projections for cement volumes on a national, regional and global level. The forecast provides global and regional outlooks, as well as detailed perspective on 57 of the world’s most important countries’ cement consumption, production, net trade and cement production capacity. The five-year outlook presented in this benchmark study enables industry professionals to shape their perspective on markets and business priorities. The report also includes a long-term forecast through 2050, with qualitative analysis on drivers and constraints of global cement demand. The Global Cement Volume Forecast Report has two updates a year: Extended (October): an extended update (includes briefs on the 55+ key markets with principal supply-demand impacting drivers and CW Research's analyst market assessments presenting a detailed numerical worldwide analysis, as well as the regional and global supplydemand model). Quantitative update (March): a quantitative update (only includes the numerical sections of the report, not country write-ups).
More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/12-global-cement-volumeforecast-report
For more information and placing an order, please contact Liviu Dinu, Market Services & Marketing Consultant, CW Group (Europe), by phone at +40-74467-44-11, or e-mail at ld@cwgrp.com.
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feature
CW RESEARCH
How will the cement sector fare by 2050? In a thought exercise, CW Research presents its directional perspective on long-term cement demand.
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feature
C
W Research’s latest Global Cement Volume Forecast Report presents a different perspective in longterm cement forecast. Taking into account several factors and the latest trends, this thought exercise provides a bird’s eye view of what might be in store for the sector in 2050 The probable decline
Taking into account certain assumptions and current trends of the worldwide and regional cement industry, CW Research’s team has proposed a directional perspective on long-term cement
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demand up to 2050 in the latest Global Cement Volume Forecast Report. Under this thought experience, global cement consumption is seen declining by around three percent from 2017 to 2050. The regions that would likely see the most pronounceable decline in the scenario are Europe, North America, Developed Asia-Pacific, and China. However, underdeveloped and emerging and industrialized economies would offset this decline as their economic indicators improve and population grows further. Rising urbanization rates in these economies could also potentially boost demand levels up to 2050. Due to these population growth rates, per capita cement demand is likely to grow at a slower pace than total cement demand.
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China’s environmental policy is likely to be the main factor driving down cement demand by 2050
Per-capita cement consumption and GDP curve, 2017 and 2015
Source: IMF, CW Group
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feature In markets such as Poland, Malaysia, South Korea, France and the United States, total and per capita cement consumption would likely experience a modest decrease up to 2050. Due to their higher rates of development and higher purchasing power, these economies are likely to see an increase in the use of alternative building materials. Environmental regulations are also a concern, as they are likely to tighten over the next few decades. Research of materials with properties similar to cement is also strong in several countries, and these are likely to replace traditional building materials at a faster rate than in emerging economies, although it is unlikely that these will become the “new normal” by 2050. By 2050, the regions more affected by cement consumption decline will likely be North America, Western Europe and Developed Asia/Pacific, offset only by recurrent construction and maintenance needs. Consumption in Eastern Europe is expected to stagnate up to 2050, while markets in North Africa, Middle East, South America, and Emerging Asia are expected to have a higher rate of cement consumption when compared to the rest of the world.
Urbanization to drive growth Under-developed and emerging economies are likely to experience an expansion in their GDP, as there is more to build in order to catch up with the
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Emerging economies to boost cement consumption rates over the next few decades standards of more developed nations. This rise in GDP, with cement demand largely driven by investments in infrastructure and housing, will contribute importantly to the expected growth of cement consumption in the coming years. Brisk population growth in some regions, coupled with rapidly growing urbanization rates in under-developed and emerging economies, would under this scenario positively impact demand levels to 2050. Given that population growth in emerging and under-developed markets is growing at a clipper rate, percapita cement demand will grow slower than total cement demand in these markets. Nevertheless, for the forecasted future and beyond, it is improbable that emerging and under-developed
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markets will experience the fast-paced consumption growth developed European markets enjoyed in the last century. The constant need for infrastructure renovation and reconstruction will also be a plus for the cement industry over the next few decades, particularly in China and other emerging Asian economies. In some areas, such as the Middle East and North Africa, it is likely that stricter construction regulations will play in favor of the industry by the year 2050, as governments strive to increase quality of life for their citizens. Cement is likely to be favored for its durability and strength, especially when compared with other traditional materials such as wood. Even so, stricter emissions in developed countries are likely to negatively affect the cement industry. Other dampening factors include the growth in cement substitutes and alternative construction methods and materials, especially in mature markets. Already developed, these markets are likely to see an increase in the usage of alternative building materials. Coupled with the purchasing power that enables the usage of new materials and ever-tightening environmental regulations, using materials other than cement with properties similar to the conventional building materials will probably occur more often. However, it is unlikely that alternative materials will be the “new normal” in the developed world
Key TAKe-AWAyS
Source: IMF, CW Group
by 2050. Nonetheless, the period will presumably see new materials make small, but significant, strides in capturing a share as a building material.
The Chinese problem China’s environmental struggle has caused several industries to reel under the government’s requests and legislation to
curb production. The cement industry has been highly affected by this, as the cement manufacturing process produces several polluting gases under the reduction target, chief among them carbon dioxide.
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feature dRIVeRS ANd CoNSTRAINeRS (%)
Source: IMF, CW Group
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Cement demand in emerging economies is likely to be driven by population growth and rising urbanization rates
Under the current political and economic context, this process of shutting down production will likely continue. Due to this and other factors, it is expected that China will be one of the main countries driving down global cement demand up to 2050, both totally and per capita.
production and consumption. Current trends and a thorough analysis based on data can provide us with some clues as to what the industry might look like over the next few decades, or, at the very least, what is there to watch out for to achieve a meaningful understanding of the sector’s development.
Conclusion The dynamics of the global cement market will change in many ways by 2050, propelled by changes in technology,
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insight analysis
The Battle for
Binani Cement
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Photo Credit - Binani Cement
The sale of the Indian cement maker’s assets to competitors has been heated from the start, and as the Supreme Court is called into the matter, the question in everyone’s minds is: what will the final decision be?
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insight analysis
he Aditya Birla Group and Dalmia Bharat are locked in a fight for the acquisition of Binani Cement. The stressed company filed for bankruptcy in July 2017, but the race for its acquisition has been heated in the last few months, as the creditors reached a seemingly final decision. The accepted offer was contested, and now the company’s current owner has requested the Supreme Court to get involved in a process that is challenging the legal limits of a regular acquisition. Binani’s downfall
Binani Cement was set up as part of the Braj Binani Group, an India-based global group with several areas of performance and interest. Established in 1997, the company is the largest subsidiary and asset of Binani Industries, and is also a significant cement producer in northern India, with a total production capacity of 11.3 million tons per year of ordinary Portland cement and pozzolana Portland cement. Binani also owns foreign assets, such as Shandong Binani Rong’An Cement, in China, Bhumi Resources in Singapore, a Binani Cement plant in the United
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Arab Emirates, and a ready-mix concrete company, Binani Ready-Mix Concrete, apart from non-cement related subsidiaries, such as Binani Energy, Merit Plaza, Swiss Merchandise Infrastructure, among others.
Dalmia Bharat secured the winning bid, but not all lenders were on board In the fiscal year of 2016-17, Binani Cement reported a net loss before tax of INR 42,722 lakh, compared to a net loss of INR 37,036 lakh in the previous fiscal year. This led the company to enter insolvency on July 2017, and the interested companies to scale up their competitive edge in order to acquire the asset. Several creditors acquired the company’s debt in different shares, being divided into large and small lenders, according to their acquired amounts. Six companies contended for the auction of the stressed assets of Binani Cement, including JSW Cement, HeidelbergCement, Ramco Cements, and businessperson Rakesh
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Jhunjhunwala, but it was Dalmia Bharat and the Aditya Birla Group’s bids that were favored. And their fight for the company wasn’t finished even though Dalmia Bharat’s bid was secured.
Two giants at arms
The two firms wrestling for the acquisition of Binani Cements right now are Dalmia Bharat and the Aditya Birla Group, which owns UltraTech, the largest cement producer in India, and one of the biggest cement players at the global level as well. The larger lenders of the distressed company decided in favor of Dalmia Bharat, which offered INR 6,700 crore for Binani Cement’s assets, along with a twenty percent stake on the company to the creditors. However, some of the smaller lenders were unhappy with the situation, claiming that the decision achieved by the majority would only allow them to receive a small percentage of the cash they lent to Binani Cements’ subsidiaries back. Therefore, once UltraTech’s parent company contested the decision, several of these smaller creditors decided to support it. After regulatory approval for the deal between Binani Cement and Dalmia Bharat was cleared, Aditya Birla decided to reach Binani Industries, still the owner of the cement maker despite the insolvency process, directly and offered
INR 7,266 crore so that the company could end the insolvency proceedings against Binani Cement in exchange for a 98.4 percent stake on the cement producer. UltraTech also contacted the Competition Commission of India to discuss its merger proposal with Binani Cement, with the Supreme Court now being involved with the decision due to the unorthodox and legally gray move from the part of the company. Dalmia Bharat has protested this move among the Central Vigilance Commission in the bankruptcy proceedings for Binani Cement, arguing that this move violates the guidelines and circumvents the dedicated insolvency process. According to the bid winner, UltraTech’s mails to members of Binani Cement’s Committee of Creditors requesting them to revise its offer were out of order, as the bidding process did not allow the submission of revised bids. Braj Binani, the owner of Binani Industries, has since bypassed the National Company Law Tribunal and has directly requested the Supreme Court to prevent the sale of the company to Dalmia Bharat, as it prefers the outof-court deal with the Aditya Birla Group. This decision is also supported by majority lenders, which destabilizes Dalmia Bharat’s deal with the company. However, the Supreme Court has rejected this proposal, after other creditors
contested the constitutional validity of the Insolvency and Bankruptcy Code.
Supremacy or survival
UltraTech is the largest cement company in India, with a total annual capacity of over 96.5 million tons of gray cement, and is also one of the major players at the global level. With the possible brownfield expansion of several million tons of capacity, UltraTech could elevate its status on the global playing field, and cement its position in the domestic market further beyond its competitors, remaining the leader regarding cement manufacturing in India.
UltraTech’s parent company contested the decision and submitted a different bid Compared to the Aditya Birla Group, Dalmia Bharat Cement’s capacity stands at around 25 million tons, but the acquisition of Binani could elevate it to close to 40 million tons. This acquisition
would allow the company to close the gap in terms of production capacity with its competitors, and make it one of the top three cement companies in India, while also reinforcing its foothold in the northern region of the country. Both companies are, therefore, highly invested in securing each of their interests during this process, as the final decision will have a severe impact on India’s cement industry, and could also hold a similar effect at the global level.
Conclusion
There is no clue as to whom the Supreme Court might favor, but it is likely that UltraTech’s unorthodox move may be deemed inappropriate when taking into account the regular proceedings of mergers and bidding processes. However, as several lenders and even Binani Industries support the company’s new offer, given that it is more favorable to them, there could be a chance that Dalmia Bharat’s proposal, even if also backed by creditors and within the usual guidelines, could be scrapped. Whatever the decision is, the landscape of the cement industry in India will forever be altered; either we will witness a company reaching its production apex at a national and global level, or we will see an already large competitor solidifying its position as an even larger contender in the northern Indian market.
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Insight Analysis
Imported petcoke prices rise on tight supply rices of imported petcoke in India have displayed an increasing trend over March, boosted by a rising demand and supply shortages. As uncertainty remains over a possible country-wide ban on petcoke, some cement producers are shifting their preference towards thermal coal In March 2018, prices for high-sulfur imported petcoke for the India CFR West Coast recorded a significant single-digit improvement compared to the previous month. Mid-sulfur imported petcoke rates registered a similar increase.
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For India CFR East Coast, prices for both high-sulfur and mid-sulfur imported petcoke also rose, compared to February. By the end of March, the average cost of burning high-sulfur petcoke stood at a premium of around 19 percent, on an mmBTU basis, when compared to Richards Bay coal for West Coast. The figure represents a month-on-month decline of roughly eight percent.
Cement manufacturers are expecting imported petcoke prices to ease in April
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Indian petcoke prices reach new heights The price of imported petcoke to India has reached about USD 117 per ton in March 2018, a great increment when compared to USD 76 in March 2015. This rising trend mirrors a soaring demand, and follows a supply shortage due to refiners undertaking maintenance. The March quarter is a seasonally strong one for cement producers, but cement prices are plunging across the country, which is hurting margins. Cement manufacturers are expecting imported petcoke prices to ease in April, as more refiners return from their maintenance outages. However, if they are unable to, they will likely have to switch to the also expensive, imported thermal coal.
Petcoke regulations affect Supramax freight The new regulations on petcoke in India over the past six months have trimmed ton-mile demand for Supramax vessels in the US Gulf Coast, as Indian buyers are preferring thermal coal from the US East Coast. Indian cement producers, the main end-users of US petcoke, have become increasingly reluctant to purchase material ever since the late October 2017 announcement that the Indian Supreme Court would be banning petcoke in the states of Haryana, Rajasthan and Uttar Pradesh as of November 1. After the ban, cement producers were exempted and allowed to use petcoke at their kilns, but the Court then imposed a hike on the import duty up to ten percent, from the existing 2.5 percent. Speculation remains on whether the ban could be
extended towards the entire country after the state of Gujarat prohibited the use of petcoke with a sulfur content of over seven percent. These developments have proven harsh on dealers, who have then turned towards thermal coal as buyers are unwilling to
Speculation remains on whether the ban could be extended towards the entire country
risk their cargoes being turned away upon arrivals, and taking only minimum contractual volumes.
Reliance’s gasification project still uncertain When it comes to Reliance’s gasification project, the outlook remains clouded with uncertainty. The company announced in its third quarter results that the project is expected to be commissioned in the first quarter of the year, and its effects remain largely unpredictable. The most likely strategy for the company is to stock up on the byproduct previous to the project starting date, reducing the amount of petcoke available domestically, thus translating into higher prices.
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CEMENT MARKETS
CW Research
Cement Volumes
On the back of the continuing recovery of the economy, as well as of growing residential and infrastructure construction, cement demand in the United States rose by 1.5 percent in 2017, compared to 2016.
Indian cement production improved 20.7 percent year-on-year in January 2018, on the back of an improvement in the housing segment and a higher infrastructure spends. As the country sees an improvement in rural incomes, a higher rural credit and an increasing allocation for rural, agriculture and other related sectors, this will allow an increase in demand for rural housing. Moreover, production is likely to be supported by the higher outlay on urban housing and increased lunge on infrastructure. On the back of the continuing recovery of the economy, as well as of growing residential and infrastructure construction, cement demand in the United States rose by 1.5 percent in 2017, compared to 2016. Demand for new houses in the southern states, running into the southwest and Pacific northwest, had a high impact on the increase of cement demand, mainly due to the hurricanes Irma and Harvey occurred during the year. Spending directed towards infrastructure, specially a proposed plan of $1.5 trillion in infrastructure iniciatives and other public works programs, has, and will continue to, help sustain the growth of cement demand in the United States.
Saudi Arabia’s cement production faced a decrease of 8.8 percent year-to-date and cement demand saw a 8.3 percent year-todate decline, in February. On the back of government austerity measures, Saudi Arabia saw a slowdown of the domestic construction activity. The government announced the cancelation of the export fees, that, until recently, were fixed at 50%. However, there is limited benefit from it, mainly due to a sluggish domestic demand and political instability in the neighboring markets, excess supply, as well as competitive pricing in the region. The Chinese government’s environmental sustainability efforts have led to a cement output cut, materializing into a 0.6 percent decrease in cement production in 2017 compared to 2016. A supply shortage of cement since September 2017 generated an increase of cement prices, suspending some construction projects, including key governmental ones. The government is being successful in reducing the industrial overproduction, but, at the same time, promised more cuts as part of structural reforms and efforts to address environmental pollution. Pakistan’s cement demand, comparing to 2016, experienced a year-to-date increase of
CHART: Year-to-Date Cement Demand (%)
Sources: CW Research
To learn more, please contact the CW Research team at sales@cwgrp.com
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CW Research CEMENT MARKETS
13.5 percent in 2017. The China-Pakistan Economic Corridor (CPEC) continues to have a huge impact on cement production levels. The cement demand from the infrastructure and housing sectors has surged to a record high with work on multiple governmental infrastructural spendings. The government has also released Rupees 2.35 billion for the Housing and Works division, with construction set to start on new housing schemes. The government is also exploring the possibility of reviving the stalled Apna Ghar Housing scheme, a bold initiative set up to build 500,000 housing units per year. Cement demand increased 10.1 percent year-on-year in Indonesia in January. On the back of the government-led infrastructure development programmes, cement demand is growing particularly on the construction of toll roads. The construction of toll roads, dams and power stations are the main reasons for the strong cement demand growth. At the same time, strengthening commodity prices boosted people's purchasing power in the commodity-rich areas in the country. This is particularly visible, since in these areas cement demand grew rapidly in accordance with higher coal prices.
Vietnam’s developing economy is growing, mainly driven by increasing industrial output, reflecting a 35.8 percent year-on-year increase in cement production in January 2018. Investments in housing from both public and private sectors, and a sharp rise expected in commercial and retail construction, are boosting cement consumption. Also, the government is expecting to invest in infrastructure programs by pouring in additional investments to boost cement plants capacity, so that manufacturers are prepared for the expected increase in cement demand for the upcoming years. Reduction in export taxes as well as financial aid to the cement industry are also positively helping reduce the surplus in cement production that the country faced last year. Compared to 2016, Turkish cement demand increased 7.8 percent year-to-date to December 2017, due to an increase in public investments in the infrastructure and housing. With Turkish cement prices decreasing, the government keeps the plan of increasing cement exports, making Turkish cement very competitive compared to other European countries.
Vietnam’s developing economy is growing, mainly driven by increasing industrial output, reflecting a 35.8 percent year-onyear increase in cement production in January 2018.
CHART: Year-to-Date Cement Production (%)
Sources: CW Research
To learn more, please contact the CW Research team at sales@cwgrp.com India Cement and Construction Materials Journal
April/May 2018
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cement PEOPLE
P
eople
Satitpong Sukwimol becomes director of Siam Cement At Siam Cement Group’s annual shareholders meeting, held on March 28, Satitpong Sukwimol was elected director at the company. Sukwimol is a close aide of Thailand's King Maha Vajiralongkorn Bodindradebayavarangkun. He has been responsible for the personal affairs and assets of the king for many years, and has gained prominence since Vajiralongkorn succeeded to his father. He was recently been appointed by Vajiralongkorn as the new directorgeneral of the Crown Property Bureau, which manages major stakes in Siam Commercial Bank and Siam Cement Group.
Lafarge Malaysia appoints new president and CEO Mario Gross has been appointed the new president and chief executive officer of Lafarge Malaysia, succeeding to Thierry Legrand. The appointment became effective on April 1. Gross started his carried in chemicals firm Sika, in 2002, and has 15 years of experience in the construction materials business across Germany; Switzerland, China, and
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Thailand. Until his appointment, he was the head of global procurement, quality and sustainability at Sika. “I am privileged for the opportunity to serve Lafarge Malaysia as president and CEO. We would like to thank Thierry for his great work in developing the fundamentals of our business and in strengthening the Lafarge brand in Malaysia”, Gross said.
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cement orders & equipment
O
rders & equipment
Wonder Cement orders new vertical mills The Indian manufacturer bought two new vertical mills from Gebr. Pfeiffer, adding to the five delivered since 2010. Those include mills for raw material, petcoke and cement grinding. One of the mills now acquired by Wonder Cement Is an MVR 6000 C-6, capable of drying the material while grounding it. This is advantageous to Indian companies as they are using more stored fly ash that is kept outdoors and has a high moisture content.
The mill has a total drive power of 5,820 kilowatts and is capable of grounding
materials to a fineness degree of up to five percent R 45 micrometers.
Gebr. Pfeiffer sells mills to Indonesian company to be set in the Grobagan cement plant, located in Semarang, Central Java. This was the first ordered received by the company for MVR mills from an Indonesian client. Each cement mill features a drive power of 4,000 kilowatts, providing for the grinding of 190 tons per hour. The MVR 5000 R-4 mill has a drive power of 4,300 kilowatts and the capacity to process 500 tons of raw materials per hour, grounding it to a fineness of 12 percent R 90 Âľm. The equipment maker Gebr. Pfeiffer received an order for two MVR 5000 C-4
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mills for cement grinding and one MVR 5000 R-4 mill for raw material grinding
India Cement and Construction Materials Journal
LOESCHE supplies vertical roller mill to Vicem LOESCHE received an order to supply a type LM 59.3+3 CS vertical roller mill
(VRM) for the existing Hoang Thach cement plant in Hai Duong province.
With a transmission power of 6,200kW, the vertical roller mill is well suited to grinding clinker and additives in the top power segment and is able to grind 250tph of OPC to a fineness of 3,600 Blaine. Along with facilities for handling raw material, the scope of supply includes an external reject system, dedusting equipment, a material conveying system and multi-chamber silos with two packaging systems downstream. What’s more, the system, which is expected to go into operation in the coming year, is equipped with a LOMA LF20 heater run on heavy oil, which produces around 30,000Nm³ of hot gas per hour at a temperature of 450°C. In addition, LOESCHE is supplying the required equipment for the power supply and distribution and the grinding plant control.
Palpa Cement Industries orders mill for Nepalese plant The equipment manufacturer received a new order for a vertical roller mill. This was the fourth of its kind coming from a Nepalese client since the beginning of the year. The mill, a MVR 3350 C-4 with a drive power of 2,150 kilowatts and capable of grinding 130 tons per hour of cement at 3,000 Blaine and 100 tons per hour at 3,800 Blaine, will be delivered to Palpa Cement Industries Private and installed in Sunwal town, district of Nawalparasi. Commissioning of the mill is planned for mid-2019.
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cement Regional news
R
egional news
Indian cement makers among the best performing on emissions According to CDP, formerly known as Carbon Disclosure Project, cement manufacturers from India show a good performance when it comes to carbon dioxide emissions, thanks mainly to good access to alternative materials. Compared to European companies, India makers also benefit from more recent factories that are better equipped to deal with emissions. As such, Dalmia Bharat and Ambuja Cement were some of the best performing companies on climaterelated metrics according to CDP. Also in CDP’s top is Cementos Argos. To the contrary, Taiheiyo Cement, Cementir Holding, and Asia Cement Corporation ranked the lowest, according to the organization.
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UltraTech commissions greenfield plant at Madhya Pradesh UltraTech announced the commissioning of a greenfield plant with a clinker capacity of 2.5 mtpa at Manawar, District - Dhar, Madhya Pradesh (“M.P.”). The plant has been commissioned in a record time of less than 365 days - setting a global benchmark for size of such capacity. Yet another benchmark is setting up the greenfield plant at less than $90/mt.
The plant is strategically located in the South-West region of M.P. There are no other cement manufacturing units within a radius of 300 kms. Currently, the cement demand in M.P. is growing close to doubledigit mark and UltraTech’s existing plants in the State are already operating at over 85% utilization level, well above industry benchmarks.
The kiln is designed for multi fuel and the entire system of using alternative fuels, which enhances the energy efficiency and reduces environmental impact, is an integral part of the plant. Along with the kiln, UltraTech has also commissioned a cement grinding facility of 1.75 mtpa capacity and an auto loading facility. This state-of-the-art manufacturing facility has been built with best-in-class safety standards. Another cement grinding facility of 1.75 mtpa capacity as well as a waste heat recovery system of 13 MW capacity are under erection and both are expected to be completed before September 2018.
This new plant will provide a strategic advantage to UltraTech for serving the growing cement demand from the State of Madhya Pradesh’s main industrial belt - the Dewas-Ratlam-Pithampur-Indore sector. It will also help the company to increase its market share in a fast growing market. The company will enhance its presence in the North markets, by reallocating its capacities suitably.
India Cement and Construction Materials Journal
With the commissioning of this plant, UltraTech now has 19 integrated plants. The total cement manufacturing capacity will stand augmented to 96.5 mtpa.
Vietnamese cement exports surge in 1Q2018 Strong demand from China has contributed to an increase of 68 percent year-on-year on cement production during the JanuaryMarch 2018 quarter, supporting an increase of 18 percent in production during the period.
Outlook for Indian cement prices remains sluggish Cement prices in India continue to face a dire outlook.
Cement prices have achieved a partial recovery in the beginning of April, rising by seven and five percent in the West and South, respectively, during the first fortnight of the month, and by one percent in the remaining regions.
Offtake across the Indian cement market remains discouraging, except for the east region. The accumulation of inventory in the supply chain led to a sharp decrease in prices during the end of March.
Still, the ability of cement producers to sustain those hikes remains a concern, as some volatility was witnessed in the last days of those two weeks, especially in the South and West, with prices increases being rolled back.
With China ordering the closure of numerous cement plants during the period between November 15, 2017 and March 15, 2018, to control air pollution, Vietnamese cement caught the attention of distributors in the country. Clinker exports from Vietnam to China have reached 1.5 million tons per month since the end of 2017. The year ended with 21 million tons of clinker exported, compared to an initial prediction of 15 million tons.
Telangana builders complain of cement cartel over price hike Real estate developers in the state of Telangana say that cement makers have formed a cartel to agree on prices. In the last month, the builders say, prices surged from INR 220-250 to INR 300-350 per 50-kilogram bag. �With open market, competition among companies should decide prices, but cement manufacturers lobby and escalate prices. We have been requesting them again and again to keep the price fluctuations limited, but to no avail� said C Shekar Reddy, former national president of the builders’ association CREDAI. Ravinder Reddy, marketing director at Bharat Cement, responded to the accusations saying that prices have not increased but merely stabilized after a
particularly negative first quarter. He also stressed how cement manufacturers have been facing higher petcoke, coal, and diesel prices, and have been forced to increase prices to cover those additional costs.
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11 articles
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cw Research agenda / reports The CW Research will be hosting and participating in a number of webinars and conferences. We invite you to join us on-line or in person at the events to discuss our views of the industry. To learn more, please visit https://www.cwgrp.com/research/webinars-and-meetings
CW Research meeting agenda include: May 10, 2018
Global Cement Trade Prices 1Q2018
June 7, 2018
Global White Cement Market and Trade – 2018 Update
June 21, 2018
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Cw research newest reportS:
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World Cement, Clinker & Slag Sea-Based trade – 2018 Update
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Global Quicklime, Slaked Lime and Hydraulic Lime Market Report
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Global White Cement Market and Trade Report
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industrial activity
1.
Indian gov't considers nationwide ban on petcoke 2. Dalmia Bharat prepares for legal battle over Binani Cement 3. Indian gov't promises to fight cement "cartelization" 4. Wonder Cement orders new mills from Gebr. Pfeiffer 5. UltraTech commissions greenfield plant at Madhya Pradesh 6. Binani Cement lenders ask for Supreme Court approval on UltraTech bid 7. Indian cement makers among the best performing on emissions 8. UltraTech secures conditional support from Binani lenders 9. Vicat prepares capacity expansion in India 10. Indian cement makers fight for market share
using
output
materials results
investment
INDIA
region economic development
sold
coke
refinery
recorded
power reach
short thermal volume
IRAN
large
decline exports
exports consumption crore
waste
products
recorded
IRAN
Indonesian coal exports become cheaper Petcoke prices in China contract Indocement secures a quarter of the Indonesia market share 4. Dangote Cement converts plant in Tanzania to gas 5. Chinese petcoke prices increase 6. US businesses against aluminum tariffs 7. Power prices increase in Europe backed by coal futures 8. Whitehaven Coal expects coal prices to remain strong 9. US: Coking unit overhaul in Texas refinery to finish in early June 10. Pakistani industry sector faces high coal prices
petroleum
vietnam
produce
1. 2. 3.
imports
LAFARGE
increased
decline
Votorantim looks for new investment opportunities 2. CRH shareholder group asks members to vote against executives' pay 3. New cement plant to be inaugurated in Beni Suef, Egypt 4. Cemex expects solid growth in the United States, Mexico 5. LafargeHolcim announces changes in the Foundation Board 6. Cementir becomes majority owner of Lehigh White Cement 7. LafargeHolcim promotes executives in the United States 8. PPC considers move for Ghana's market 9. Vicem faces financial troubles over its subsidiaries 10. Dyckerhoff prepares closure of the Erwitte cement plant
TOP petcokeweek STORIES
saudi
india
1.
imports
product
official
GLOBAL
lafargeholcim short
GRANITE
seeks
india
TOP BMWeek.com STORIES 1.
Sika first quarter results top expectations
2.
Calix secures â‚Ź3.4 million to build CO2 capture facility in Belgium
industrial
3.
Knauf delivers letter to board of USG
4.
UK: Breedon acquiring Lagan
imports
region results
5.
Ellerston Capital to acquire Fletcher Building
6.
UK: Construction output drops in February
7.
Nigeria promotes local materials for construction
8.
US: Building material prices rise in March
9.
Liberian construction companies face several hurdles
paid
FACTORY
produce
10. Qatar’s construction sector to grow
India Cement and Construction Materials Journal
April/May 2018
45
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