India Cement and Construction Materials journal (ICCM) 42 by CemWeek

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issue 42

Cement

June/July 2018

& construction Materials

LEADERS Q&A

Hari Mohan Bangur Managing Director of Shree Cement

Insight Analysis

Can India replace petcoke with coal?

World seaborne trade

The shift from cement to clinker

News

Analysis

Market Coverage

Indian cement market

The expansion of UltraTech

Interviews

People

WORLD CEMENT, CLINKER &

SLAG SEA-BASED TRADE REPORT The World Cement, Clinker & Slag Sea-Based Trade Report offers a global analysis of seaborne cement, clinker, slag (GBFS), and fly-ash trade. Trade flows, pricing, trading infrastructure are also detailed, while providing a comprehensive review of terminals, and suppliers of cementitious materials to support your strategic decisions. The report projects main flows through 2023 expected to be shipped by ocean-going vessels and also includes prevailing cement trade prices and bulk / dry cargo shipping rates. Particular emphasis is given to understanding the possible supply options and export terminals around the world. Dedicated cement carriers are also analyzed in terms of routes, age, utilization rates and dead-weight tonnage.

Global analysis and forecast of seaborne trade.

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FEATURES DEPARTMENTS Leaders Q&A: Hari Mohan Bangur 04 2 Letter from the editor As Shree Cement prepares to expand abroad, Coal to action its Managing Director discusses one of India’s top cement producers’ accomplishments and ambitions, from pioneering the use of petcoke domestically to reaching the 40-million-ton capacity mark by 2020

Research: World Sea-Based 12 CW Trade – The shift from cement to clinker

Expected to top 150 million tons by 2023, global sea-based trade navigates its way towards shy growth amid a wave of environmental constraints

rOBERT MADEIRA

numbers in brief 3 EBITDA pressured by growing energy costs and cost of deliveries

Research and Analytics 36 Cement Volumes

BUZZ 44 Top 10 CemWeek, BMWeek and

UltraTech

Research: World lime market to 32 CW reach USD 30 billion by 2023

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CONTRIBUTING WRITERS & RESEARCHERS

Diogo Vieira sANTOSH sHETTYE

2Q 2018

Through a combination of greenfield and brownfield expansions, UltraTech solidifies its leadership in the Indian cement market

Margarida Cunha

Filipe Gouveia Paulo Cruz Raluca Cercel Sara Ruas Tea Vukicevic

Following a depressed 2017, the first quarter of this year is proving cautiously optimistic for the global cement industry, with factors such as stronger demand and costlier fuel driving cement FOB and ex-works prices up

28 Insight Analysis: The expansion of

cemweek publisher head of cw group research

Editorial Coordinator

Research: Global cement 22 CW domestic and trade prices to rise in

As a nationwide ban is still on the table, coal could be poised for a comeback

& construction Materials

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cement 38 people 40 equipment highlights 42 regional news

Analysis: Can India replace 18 Insight petcoke with coal?

Cement

PetcokeWeek stories

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letter from the editor

Coal to action

hat will become of petcoke in India? A few years have passed since the oil refining byproduct has become an object of environmental speculation. After decades of relentless growth, the cement industry has reached a maturation point where pondering on its ecological footprint is no longer an option. At least in India, where the government has not yet decided on a national ban on the use of petcoke as fuel, bringing uncertainty to cement producers. After all, when you get used to doing something in a certain way, you almost forget there are alternatives. What if that means going back to basics? In this issue, we take a look at the current state of coal production in India and whether it could be a fitting fuel option for Indian cement manufacturers. When petcoke represents almost 100% of fuel needs, and when both petcoke and coal prices have surged by over 30 percent year on year, going back may not be the way to go. Take it from Shree Cement. One of India’s most innovative players in the industry, the company pioneered the use of petcoke in the country since the early 2000s, in a time when Indian cement producers weren’t taking chances.

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Having earned multiple environmental awards ever since, it is worth reading the story of how Hari Mohan Bangur’s company managed to multiply its annual capacity over 19-fold from 1.8 million tons in 2000 to 34.9 million tons today. Meanwhile, UltraTech continues its expansion in the Indian cement market. The largest cement producer in the country continues to solidify its leading position through a combination of greenfield and brownfield expansions, of which the race for Binani Cement is the latest example. In our 42nd edition, we set our eyes on the most relevant landmarks in the company’s growth strategy. The times are changing, and they are calling the cement industry to action. It will be interesting to witness, in the upcoming decades, how the industry will decide to respond.

India Cement and Construction Materials Journal

Margarida Cunha

Editorial Coordinator

numbers in brief

Harsh weather

conditions affect sales in 1Q 2018

EBITDA pressured by growing energy costs and cost of deliveries Companies have been affected by the unseasonal cold weather of the first quarter of 2018, specifically in North America and Europe. The harsh weather conditions of the first quarter are expected to be mitigated by the end of the year, as some manufacturers now have to deal with a backlog of orders (such is the case of HeidelbergCement). Another common theme for the first quarter of 2018 has been the rising cost of energy. Cemex announced that cost of sales has increased, reflecting higher energy costs, and that it is realistic to expect a 4-6 percent increase in energy cost per ton of cement by the end of the year. On the other hand, HeidelbergCement expects energy costs to flatten by the end of 2018. CHART: 1Q2017 and 1Q2017 revenue (USD bn)

Source: Company reports, CW Research

Titanâ&#x20AC;&#x2122;s results in the United States were eroded by long maintenance stoppages and the harsh winter conditions. Tough conditions were also faced in South-East Europe, but were mitigated by growing pricing. Likewise, Cemex and HeidelbergCement reported price increases in most of the geographies they have presence in. CHART: 1Q2017 and 1Q2016 EBITDA margin (%)

Source: Company reports, CW Research

LafargeHolcim continues to struggle with a slowdown in revenue, in spite of increased cement volumes. For the rest of the year, the company expects positive signs in most regions.

India Cement and Construction Materials Journal

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Leaders Q&A

Hari Mohan Bangur Shree Cement, Managing Director As Shree Cement prepares to expand abroad, its Managing Director discusses one of Indiaâ&#x20AC;&#x2122;s top cement producersâ&#x20AC;&#x2122; accomplishments and ambitions, from pioneering the use of petcoke domestically to reaching the 40-million-ton capacity mark by 2020

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India Cement and Construction Materials Journal

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Leaders Q&A

018 started big for Shree Cement. The Indian giant was one of the ten largest cement manufacturers in the country to exceed market expectations, with sales improving 15 percent quarter on quarter to over INR 2,800 in March 2018. In addition, the company will acquire a 92.83-percent stake at Union Cement, based in United Arab Emirates – an operation that should be completed over the upcoming months. But Shree Cement’s story is not merely written with numbers. The Indian cement manufacturer was the first cement company to earn the World Economic Forum’s The New Sustainability Champions distinction. None of that would have been possible without Shree Cement’s Managing Director, Hari Mohan Bangur. Awarded with the Entrepreneur For The Year distinction by Forbes India Leadership Awards 2017, Bangur granted the publication a thorough interview about his life path, where he explains how Shree Cement’s capacity soared over 19-fold from 1.8 million tons in 2000 to 34.9 million tons today.

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What’s the story of Hari Mohan Bangur and Shree Cement?

“My father would always look at the micro picture—say, how they fixed a particular machine in the factory. My uncle would not bother with this… he would only look at the larger macro picture,” Hari Mohan Bangur told Forbes India in late 2017. That was one of the main lessons the entrepreneur and Managing Director of the second largest cement producer in India learned from working with his uncle.

Bangur’s first working years after studying chemical engineering at IIT Bombay were spent in a handful of family businesses, from cement to cotton. He ended up settling in cement in the mid-80s, a period of much regulation in the sector. Eventually, regulation loosened and cement companies focused on increasing capacity. By the 90s, the Indian cement industry found itself struggling with overcapacity.

I knew there is nothing 50-50 in business. If I like the color red and they like yellow, whose word prevails? In the 1960s, the Bangur family was among the top 10 business houses in India,

India Cement and Construction Materials Journal

When was Shree Cement’s most challenging phase? Bangur took over the business in a discouraging time. “After we expanded, the market became very bad and the company lost a lot of money as demand tanked as the cash was converted to assets,” he explained to Forbes India. In the early 2000s, Shree Cement was almost sold to Vicat. The French cement manufacturer was trying to penetrate the Indian market and was willing to form a 50-50 joint venture. It wasn’t an enticing prospect for Hari Mohan Bangur. “I knew there is nothing 50-50 in business. If I like the

color red and they like yellow, whose word prevails? Plus, in time, my stake would get diluted and I would be left with nothing”, he shared with Forbes India in 2013. Vicat even raised their offer, but that didn’t change Bangur’s mind. In 2017, he would add: “I thought that if it’s saleable [on that day], it’ll be saleable after another year. Their agreeing to buy gave me enough confidence that I could try [my hand at this] for another year.”

Shree Cement was the first cement producer in India to use petcoke as fuel. How did that come to be? Today, Shree Cement’s share of petcoke usage as fuel nears 100%. And the company can pride itself on pioneering the use of the oil refining byproduct at the domestic level. In the early 2000s, after almost selling the company, Bangur was looking for a strategy to get it back on track. That’s when he was approached by Reliance Industries, which was trying to promote petcoke as an alternative

to coal. Back then, petcoke was over 30 percent cheaper than coal, which could provide a competitive advantage to Shree Cement. But that would take time. A team of engineers and workers was sent to Germany so that it could get proper training on how to use petcoke as fuel. Furnaces had to be altered and would stop working every few days. “We had been failing in our efforts with it, and we were unenthusiastic about using it,” Bangur told Forbes India.

Using petcoke is very difficult. But we still persisted

In the first two years of petcoke use, the company’s cement

production slipped roughly 30 percent – translating into an effective loss of five percent, since the market was shrinking. But Bangur persevered. “Whenever someone [people from other cement companies] would call us, we would tell them using pet coke is very difficult. But we still persisted.”

A nationwide ban on petcoke in India is still on the table. How is the company preparing for that possibility? Shree Cement’s pioneering use of petcoke started as a cost advantage. However, it could prove an obstacle in the near future. The Indian government is still considering a nationwide ban on petcoke in order to curb air pollution, after effectively prohibiting its use as fuel in the states surrounding the National Capital Region – a ban that included cement manufacturers between mid-November 2017 and midJanuary 2018. Shree Cement’s plants can switch between petcoke and coal, but, considering that both fuels have recorded

India Cement and Construction Materials Journal

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Leaders Q&A a 30-percent price hike year on year, switching between them can still not be the safest bet. Eco-friendly waste-heat recovery systems could be the answer. Despite the capital cost required to implement a waste heat recovery system, which uses the heat emitted during cement production and converts it into power, it could prove a viable option in the long term. “It increases the cost, and recovery can take up to ten years, so you should do it only if you have spare cash, which we did,” Hari Mohan told Forbes India. “We end up spending more, but we’re investing for the future, for whenever the bad times come—we’re prepared.” Alternative fuels and practices are not foreign to Shree Cement. According to the World Economic Forum, which awarded

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Demand in the [Indian] cement sector is going to go up by 10 percent or so, year after year the company with the New Sustainability Champions distinction, Shree Cement was the first cement company in the world to be certified EN 16001, which is designed to continuously monitor and document energy use, identify action targets, and provide the necessary resources and employee training. It also became the first company in the cement industry worldwide to register “Optimal Utilization

India Cement and Construction Materials Journal

of Clinker” by the United Nations Framework Convention on Climate Change (UNFCCC), resulting in 0.45 million certified emission reduction units.

What plans does Shree Cement hold for the Indian market? The company is poised to reach the 40-million-ton capacity mark by 2020. Yet, Bangur wants more. “If we say that we’d like to grow at 12 percent a year, then capacity should double every six years,” he told Forbes India.

But will the Indian cement market be able to accommodate Bangur’s growth aspirations? According to Shree Cement’s Managing Director, prospects are positive. In February 2018, Bangur told The Economic Times he expects Indian cement demand to record double-digit increases. “Demand in the cement

sector is going to go up by 10 percent or so, year after year. When $1500 is the GDP or per capita income, we will find that expenditure into housing and infrastructure will increase suddenly and India is on that threshold.” For the upcoming three years, he believes cement demand will expand by 30 to 35 percent. Additionally, the entrepreneur projects utilization rates will also improve, reaching between 75 and 80 percent.

We are looking at areas that are familiar with the Indian culture In order to keep up with the market, Shree Cement has already started moving. Early in 2018, the company opened a new grinding unit with an annual capacity of 3.6 million tons in the state of Rajasthan. When setting its capital expenditure for 2018-19, the cement manufacturer revealed it intends to spend INR 3,500 crore, of which INR 1,500 crore will be used to acquire land

for the future grinding units in Odisha, Jharkhand, Maharashtra, and West Bengal. The new facilities will increase Shree Cement’s capacity by 7-8 million tons from the current 34.9 million tons per annum. Already in October, the company will open a new integrated cement plant in Gulbarga, Karnataka, with a threemillion-ton capacity, implying a 1,8001,900 crore cost.

Does Shree Cement’s growth strategy include expanding abroad? “We are looking at areas that are familiar with the Indian culture,” Bangur shared with Forbes India. The largest slice of its capital expenditure for 2018-19, INR 2,000 crore, is intended for the acquisition of United Arab Emirates-based United Cement. The company has an annual production of 3.3 million tons of clinker and 4 million tons of cement. According to Live Mint, Shree Cement plans to conclude the operation in July, a few months ahead of schedule. “In India, we could not invest so much money as land purchase would require five years. Further, after the 3 million tons per annum (mtpa) project in Karnataka, we didn't have anything big in sight in India. The cash balance with the company would have started piling up unless we had come up with a plan to use it profitably,” Bangur told Business Standard early in 2018.

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feature CW RESEARCH

World sea-based trade

The shift from cement to clinker Expected to top 150 million tons by 2023, global sea-based trade navigates its way towards shy growth amid a wave of environmental constraints

June/July 2018

India Cement and Construction Materials Journal

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feature

espite a decrease in the volume of cementitious materials traded between 2016 and 2017, seaborne transportation of those commodities will experience a slow but sure growth over the next five years. As Asia-Pacific reinforces its leadership as a global sea trade booster, increasingly tight environmental regulations, both in shipping and in limestone burning, are bound to turn the tide and relegate cement to a secondary position.

The international shipping industry continues to cement its role in the world commerce. Accounting for 90 percent of world trade, it is one of the safest and most environmentally benign forms of commercial transport. It is only natural

Due to proximity and pricing considerations, the largest volumes of cementitious materials are traded within the Asia-Pacific region that shipping is one of the preferred transportation means by the cement industry. On the one hand, seaborne trade ensures oversupplied markets can dispose of their surplus production. From the buyersâ&#x20AC;&#x2122; perspective, sea-based trade

of cementitious commodities enables markets with risky scenarios for business investments to import cement. The same goes for undersupplied markets where setting up new capacity is constricted or made too expensive by environmental regulations.

Asia-Pacific and gray cement boost trade in 2017 According to CW Research, in 2017 alone, more than 139 million tons of cementitious materials were traded by sea-going vessels, a decrease of 6.4 percent compared to the volume shipped in 2016. This contraction was mainly caused by even stricter Chinese cement and clinker rationalization efforts, combined with increasing cement capacity and selfsufficiency of many developing markets, namely East African ones. â&#x20AC;&#x153;The decline in Chinaâ&#x20AC;&#x2122;s gray cement exports and slower demand in some importing markets, along with selfsufficiency in other markets, have

Global gray cement trade outlook (million tons, 2018F to 2023F) Gray cement seaborne trade volume

Source: CW Research

June/July 2018

India Cement and Construction Materials Journal

YoY % change

Main trading regions and pairings (2017, mm tons)

Western Europe & Baltics West Coast US

Great Lakes Black Sea & intra-Med Basin

Eas t S Coa Am outh st eric a

& a st fric Weral A nt Ce

bean Carrib

North Africa

Middle East

Coast West merica A South

Eas t& Afri South ca

Ea st Co as t

Asia Pacific

Source: CW Research

hindered cementitious trade volumes in 2017”, notes Tea Vukicevic, CW Group’s Associate Analyst. “However, as of the beginning of this year, more than fifty new vessels have been added as a response to solid demand in Asia and a turnaround in the market and investors’ confidence.” Due to proximity and pricing considerations, the largest volumes of cementitious materials are traded within the Asia-Pacific region, which, in 2017, accounted for over 50 million tons (almost 40 percent) of the global sea-based trade. The Middle East ranks second, albeit with a much smaller market slice that nears 12 percent of the total cementitious seabased trade. At the global level, gray cement continued to be the most commercialized cementitious commodity by sea in 2017, making for almost half of the sea-based

CW Research forecasts clinker will replace gray cement as the most traded commodity by sea by 2023 cementitious trade. Clinker (including both white and gray), accounted for 35 percent of total seaborne cementitious trade in 2017, followed by ground blast furnace slag, with an 18 percent share. Far less traded, white cement and fly

ash made for three percent and for less than two percent, respectively, of total seaborne trade of cementitious materials.

Clinker to replace cement as most traded cementitious commodity by sea Over the medium term, trends in the seaborne trade of cementitious commodities will reflect a more environment-friendly approach to both producing cement, and shipping in general. Between 2018 and 2023, the total volume of sea-based traded cementitious materials will reach almost 151 million tons. The increasing trend represents an annual growth rate of over one percent, and is likely to be driven in particular by growing demand for clinker in limestonescarce markets that are constantly increasing grinding capacity, and supply chain optimization efforts.

India Cement and Construction Materials Journal

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feature Sustainability concerns are bound to shape the seaborne trade of cementitious materials at different levels. On the production side, a more stringent environmental approach to limestone burning in developed economies – coupled with scarcity of the sedimentary rock in emerging ones – represents an opportunity for clinker to grow its market slice. More so, the trend for future plant expansions is likely to be more materially translated into grinding units rather than integrated plants, since cement manufacturers benefit on the short term by reducing investment costs. Thus, CW Research forecasts clinker will replace gray cement as the most traded commodity by sea by 2023. “Looking onwards, Asia Pacific will remain the most dynamic route, trading mostly inter-regionally as well as regionally, and supplying clinker – which is expected to be the lead trading cementitious material by 2023”, observes Tea Vukicevic. From a transportation perspective, shipping costs, a key factor when competitively supplying customers with cement, are impacted by fuel costs,

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Solid demand in Asia has contributed to a turnaround in the market and investors’ confidence, and interest in new vessels and conversions has been increasing which in turn are being regulated by an increasingly stricter legal framework. The shipping industry is being pressured by the International Maritime Organization to reduce its fuels maximum sulfur content to 0.5 percent from the current average of 3.5

India Cement and Construction Materials Journal

percent, in an attempt to reduce pollution – a move that is likely to translate into increasing transportation charges.

Asia leading new cement carrier additions There are currently more than 360 cement carriers used for seaborne distribution of cementitious materials, with an average age of 27 years. Solid demand in Asia has contributed to a turnaround in the market and investors’ confidence, and interest in new vessels and conversions has been increasing. Therefore, the majority of the newly added vessels found their place in markets such as Japan, Vietnam, Indonesia, Philippines, etc. Allowing for environment-friendly, speedy and weather-independent cement distribution, utilization of cement carriers has currently reached almost 100 percent, and is a market CW Research forecasts to grow in the coming years (mostly concentrated in Far East Asia, India, United States and, to a lesser extent, in Med Basin). When looking at market shares of large cement companies by cargos moved, LafargeHolcim, HC Trading and Cemex control almost 30 percent of the market,

LafargeHolcim, HC Trading and Cemex control almost 30 percent of the market

while the two largest Asian cement traders, Taiheyo and Tong Yang Cement, account for around 11 percent of the market. At the global level, there are almost 800 cement terminals, more than 130 waterside grinding plants (slag and clinker), and almost 150 waterside integrated cement plants. Most of the cement

terminals at the global level are located in Far East Asia, followed by Europe, specifically Western Europe. In terms of waterside integrated plants (used as export facilities), the Far East has a total of 51 plants, and 43 integrated waterside plants are located in the Med Basin and Black Sea region.

About the report The World Cement, Clinker & Slag Sea-based Trade Report provides an in-depth and data-oriented analysis of trade-related development and analyzes the historical trade flows and prices, changes in exports and imports the past years from a regional perspective with a focus on key markets. The report also projects key cement and clinker supply-demand gaps that will sustain world cement trading in for the next few years. Key exporters, their facilities, and traders are profiled, as well as key ocean-going cement carrier operations and their vessels. Examined trade flows include gray cement, clinker, white cement, and slag, as well as a discussion of fly ash trade, in bag, big-bag, or bulk form. The report projects main flows through 2023 expected to be shipped by ocean going vessels and also includes prevailing cement trade prices and bulk/dry cargo shipping rates.

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/276-world-cement,-clinkerslag-sea-based-trade-forecastthrough-2023

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

India Cement and Construction Materials Journal

June/July 2018

insight analysis

Can India replace petcoke with coal? As a nationwide ban on petcoke is still on the table, coal could be poised for a comeback

June/July 2018

India Cement and Construction Materials Journal

June/July 2018

insight analysis

ndia is mulling whether or not it will ban the use of petroleum coke as a fuel on a national level, leaving the industries reliant on it to search for other viable options. However, logistic constraints for domestic coal and rising prices for foreigner-sourced coal could prove a challenge to Indian cement players. A supply problem

India’s ramping energy demand comes from many sources, with the main ones being the government’s increasing effort to reach higher rates of electrification in rural areas of the country, and growing industry demand for fuel across several manufacturing sectors. Even as both state and private bodies ramp up extraction of coal for distribution and use across the country, the supply has been insufficient to meet the growth of several energy-intensive industries, among them cement. Therefore, firms have been relying on alternate fuel sources other than domestic coal suppliers, having first turned to international coal, and later to petcoke once coal prices started to rally and the government imposed an INR 400 per ton duty on coal imports.

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Petcoke first proved a reliable fuel input as cement companies could use it in their kilns in the manufacturing process without having to execute many changes in their equipment. Its use in energy production also proved effective for similar reasons, with the cost-benefit value heightened as its initial value, when compared to coal, was very cheap, and it possesses a higher calorific value. Being a bottom-of-thebarrel leftover from the production of diesel, most companies that produce it tend to dispense of it as cheaply as possible, and the increase in prices proved a boon for refiners.

Petcoke could soon be banned across India, raising questions about its replacement Coal concerns As the Supreme Court mulls whether or not to ban petcoke, a decision that is expected by June 30 at the time of writing, cement companies are sure that they will still be allowed to use petcoke in their kilns, but remain unsure about its use for fuel.

India Cement and Construction Materials Journal

The most likely candidate to replace petcoke as a fuel input for power production is coal. At this point, most companies tend to either favor domestic or international coal, but each comes with a specific set of caveats that make its acquisition and use a strain on users’ costs; the domestic coal supply is unreliable and of poor quality, but the firming prices of international coal are turning many away. However, depending on their plants’ location, cement firms might not have much choice as to where to source the fuel from. While those closer to ports and coal mines or transportation hubs have a more flexible choice for fuel, smaller plants located deep within India may be restricted only to nearby domestic coal. Under these conditions, the companies face fierce competition from other industries, particularly energy providers, in providing a steady supply.

The Home and the World One option that domestic companies have in order to secure a steady supply of coal is to participate in an auction and secure their very own coal mine (named captive coal mines). But the take is vast, and a single mine can have an astounding number of bidders, making it difficult to secure, even if prices during the tender process are not disclosed as per government policy.

Captive coal mines also have another advantage: companies become able to sell excess stock to competitors, and to set the price, although the government will take some royalties from that same sale, as per the new regulations that opened the government-monopolized coal sale to private players. Something that deeply affects the companies’ willingness to acquire domestic coal, however, is its poor quality. Indian coal has a calorific value that is below internationally-sourced products, which means that companies will use a lot more coal in order to achieve the same results than a higher calorie content fuel, such as petcoke or international coal. Indian coal also tends to produce a lot of ash. This can create problems for the companies in terms of having to arrange its disposal and storage in a manner compliant with regulations. However, the Indian government’s policy on fly ash (ash produced from the burning of coal) is to have certain industries include it in its product mix in order to ensure sustainable use – and the cement industry is one of the main users of fly ash. This can be a positive

uptake for some companies, as they can use the fly ash produced right at their power plant and therefore scale back costs of supply of the material, or even sell it to other producers. Meanwhile, international prices for coal remain volatile, and the government is maintaining its INR 400 per ton tax in

Businesses are considering the use of coal, but supply issues from domestic players remain an issue

coal imports. This decision was taken in order to foster domestic coal consumption and to decrease imports of the fuel due to mounting environmental concerns.

Coal in the stocking? Regardless of the source, coal can be both a short-term and long-term solution for the cement industry’s fuel needs. Even if petcoke can still be used as a kiln input, which might help mitigate costs, it is likely that the switch will have its effects on the Indian cement market. Margins might be squeezed, as each decision comes with its ups and downs, but both big and small players in the industry will be affected. Location of the plant and access to a good line of transports will play a key role, but the volatility of the commodity prices means that it is not possible to say which source of coal companies might prefer – that, as everything else, is in the hands of the market.

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feature cw research

Global cement domestic and trade prices to rise in 2Q 2018

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India Cement and Construction Materials Journal

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feature

t the global level, FOB cement prices increased year-on-year during the first quarter, while ex-work prices showed an overall improvement. This trend is attributable to higher demand, costlier fuel, and fluctuations in the US dollar, along with other, more idiosyncratic motives. Still, some wide gaps can be found between markets in different regions, ranging from steep increase in cement prices caused by constrained supply Economic Corridor. India too is enjoying in China to insipient demand a period of higher cement demand owing and rates in Brazil. to rural housing construction and large

Demand has started to recover in Europe, with mounting construction activity

Demand highlights China, where several measures have been taken to reduce cement production capacity, was an exception in the Asian market, with demand falling considerably during the first quarter. To the south, Pakistan witnessed a remarkable increase of 14 percent year-on-year on cement consumption in March alone, thanks in large part to infrastructure development in the framework of the China-Pakistan

June/July 2018

infrastructure projects such as roads and irrigation. In South America, the macroeconomic scenario continues to depress cement consumption in Brazil, while Argentinaâ&#x20AC;&#x2122;s cement sector clocks a rapid growth. In the latter, dynamism in both the private and public sectors has contributed to

India Cement and Construction Materials Journal

a surge of 13.2 percent year-on-year in demand. Producers in the United States have enjoyed strong demand from continuous growth in residential and non-residential construction sectors, which were able to dodge the negative impact of the hurricane season and heavy rain across 2017. The trend was especially accentuated in the southern states and in the West Coast. Meanwhile, demand has started to recover in Europe, with mounting construction activity. To the contrary, the Saudi cement market continues to perform poorly after several quarters of falling demand.

Ex-works Prices Three factors have contributed to an almost universal increase in ex-works cement prices during the first quarter: demand progression, an increase in fuel prices, and the devaluation of the US dollar against other currencies, with different impacts depending on the region.

Regional gray cement export prices (USD/ton)

Source: CW Research

Fuel prices were determinant for Indian producers, whereas in Europe, local cement prices remained largely unchanged and appeared inflated only when inscribed in US dollars, given the latterâ&#x20AC;&#x2122;s poor performance against the Euro. In Egypt, the stabilization of the

pound also contributed to a sustained increase in prices tagged in dollars. For other markets, demand and capacity were the main predictive factors. Sluggish demand dragged down prices in Brazil, countering the trend in South America,

where prices showed vitality when compared to the same period last year. In Saudi Arabia, prices seemed to have had a small rebound after hovering over the production cost levels, even as demand continues low.

India Cement and Construction Materials Journal

June/July 2018

feature In Algeria and Tunisia, it was an increase in capacity that led to lower prices. Quite the opposite, rising capacity was not enough to hamper prices in Pakistan, as the country continues to experience steep demand growth. Similarly, in Argentina, prices have increased by a double-digit margin both in the local currency and in the US dollar supported by soaring demand. For China, constraints in cement and clinker production in place during the peak season, paired with stable demand and a more competitive landscape, were the force behind a whopping 51-percent year-on-year increase in prices.

FOB Prices Between August 2017 and February 2018, the median FOB cement price increased steadily, eventually reaching USD 65 per ton. Since then, prices have again retreated to an estimated USD 63 per ton. The lowest

June/July 2018

Sluggish demand dragged down prices in Brazil, countering the trend in South America assessed price rebounded from USD 31 per ton in January to USD 32 per ton by the end of the quarter, while the costlier cement assessed reached USD 146 per ton, Global FOB prices for gray cement posted a recovery in the first quarter, after a

India Cement and Construction Materials Journal

decline in December; this was in spite of lower export volumes during the first quarter, an expected seasonal movement. China remains the largest exporter of cement, accounting for around 12 percent of the global trade, a share expected to decline as the country continues to apply capacity cuts. Japan was the second largest cement exporter, even with a fourpercent fall in traded volumes. Local producers were forced to raise prices over workforce shortages and higher costs with raw materials, coal, electricity, and logistics, thus rendering their products less competitive in the seaborne market. Going forward, FOB cement prices are expected to show an overall improvement, held down by declines in North America and Eastern Europe and the CIS. CW

Global FOB prices for gray cement posed a recovery in the first quarter, after a decline in December Research predicts export prices to average USD 49 per ton in the Asia-Pacific region, propelled by Malaysia and partly displaced Vietnam, India and Japan. For the Mediterranean Basin, CW Research team expects a similar growth

of 0.9 percent in FOB rates, with Spanish producers hiking their prices due to costs with electricity and labor, while Portugal and Turkey are likely to observe price decreases. Finally, in Western Europe, healthy demand – especially in Germany, Austria, and Ireland – will convince producers to focus on domestic demand, hedging FOB rates by 3.9 percent.

Conclusion Overall, cement prices have performed well during the first quarter, with a noticeable 10-percent hike year-on-year in the global average FOB rates and a widespread improvement in ex-works prices, even if partly inflated by the weak US dollar. Demand growth contributed to that trend, along with variations in installed capacity, fuel prices, and exchange rates. Going forward, and with a few exceptions, prices are expected to keep rising.

About the report The Global Cement Trade Price Report (GCTPR) is CW Research’s benchmark price assessment for monthly gray cement, white cement, clinker and granulated blast furnace slag prices and volumes. The 150+ page report, published on a quarterly basis, serves as the industry go to source for monthly price data for about 60 individual markets worldwide, including multiple cornerstone data series: import, export, ex-works and market prices. Additionally, the GCTPR includes extensive discussion of key players’ price strategies as well as trade price forecast and select trade volumes for each country. The report also provides regional price indices as well as a quick review of trading dynamics and drivers in the different regions.

More information about the report can be found here: http://www.cwgrp. com/research/research-products/ product/1-global-cement-trade-pricereport

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.

India Cement and Construction Materials Journal

June/July 2018

Insight Analysis

The Expansion of UltraTech Cement

June/July 2018

India Cement and Construction Materials Journal

Through a combination of greenfield and brownfield expansions, UltraTech solidifies its leadership in the Indian cement market

Photo Credit: UltraTech Cement

India Cement and Construction Materials Journal

June/July 2018

Insight Analysis

n 2004-05, UltraTech Cement embarked in an expansion campaign that elevated its installed capacity from 15.5 million tons per annum at the time to 66.2 million tons by 2015-16, making it the largest cement producer in India, ahead of LafargeHolcim’s Indian business, including ACC and Ambuja Cement.

However, the company has not stopped there, having concluded a series of new investments in both brownfield and greenfield expansions since 2017, including the acquisition of the cement divisions from Jaiprakash Cement and Century Textiles, the bid for Binani Cement, and two new cement projects in Rajasthan and Madhya Pradesh.

Taking over Jaiprakash Cement During 2017, UltraTech took part in the largest consolidation ever seen in the Indian cement market, by taking over the cement business of Jaiprakash Associates. The company paid INR 16.19 billion for six integrated cement plants and five grinding units across the states of Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Uttarakhand, and Andhra Pradesh. Including a grinding unit under construction in Uttar Pradesh, the assets bought by UltraTech from Jaiprakash have the capacity to produce 21.2 million tons per annum, reinforcing the company’s presence in Central India. The deal was concluded on June 2017, after approval by the relevant competition authorities, with UltraTech promising to turn the assets around within the following three to four years by increasing utilization

June/July 2018

rates and cutting power costs. Shortly after, in August, UltraTech officially entered in Visakhapatnam, increasing its penetration in the market of coastal Andhra Pradesh.

share on India’s installed capacity to 24 percent and making it the third-largest cement producer in the world by capacity if Chinese companies are excluded from the ranking.

Acquiring Century Textiles’ cement business

Apart from the additional capacity, the deal also entails 6,000 new sales branches across India and the opportunities for synergies in inputs and logistics. UltraTech will pay a market value of INR 86.2 billion for the cement division, in the form of one share of its own for every eight shares held by shareholders of Century Textiles. Moreover, the company will become responsible for around INR 30 billion in debt.

Century Textiles and Industries, a diversified company, has decided to divest from its cement business – whose revenue ascended to INR 43 billion during 201718 – after finding the necessary capital to sustain its market share unbearable. UltraTech saw this as an opportunity to expand its capacity much faster than with greenfield projects, bypassing time-consuming processes such as land acquisition.

UltraTech took part in the largest consolidation ever seen in the Indian cement market

The deal, announced in May and expected to be completed within the next six to nine months, will bring 11 million tons of capacity in western and central India and a grinding unit in West Bengal under UltraTech’s wing. In total, UltraTech will add 13.4 million tons to its current cement manufacturing capacity of 96.5 million tons per annum, boosting its

India Cement and Construction Materials Journal

Going for Binani Cement UltraTech Cement and Dalmia Bharat have engaged in an arms race for Binani Cement, a distressed asset from Binani Industries that controls 11.25 million tons of cement production capacity, including integrated plants in India and China and a grinding unit in Dubai. Initially, Dalmia Bharat seemed to have emerged as the winner of the auction held by Binani Cement’s consortium of lenders, with an offer of INR 69.3 billion. However, UltraTech presented a revised offer of INR 72 billion that has since been improved to INR 79 billion. A ruling from the National Company Law Tribunal allowed the lenders to consider the revised proposal of UltraTech, triggering appeals by Dalmia Bharat to the National Company Law Appellate Tribunal and the Supreme Court. On May 28, the lenders, led by Bank of Boroda, unanimously voted in favor of UltraTech’s revised offer, with the condition that Dalmia Bharat’s appeal

A greenfield expansion Notwithstanding the appetite for acquisitions, UltraTech is also deeply involved in greenfield expansion projects. Grasim Industries, UltraTech’s parent company, announced a capital expenditure of INR 59 billion to be invested into capacity expansion, modernization, and upgrades to its logistics and infrastructure projects during 2018-19, up from INR 20.4 billion spent last year.

to the Supreme Court be rejected. The Supreme Court then restrained the finalization of the deal to its prior approval on June 4, with a new hearing scheduled for July 2. In the latest development, Binani Industries announced that it was preparing a plan to bail Binani Cement with INR 80 billion that would be used to settle the dues of the company. By acquiring Binani Cement, UltraTech would increase its production capacity in Rajasthan to 14 million tons, thus improving its chances of competing with Shree Cement, which boosts 19 million tons per annum of capacity in the state.

By acquiring Binani Cement , UltraTech would increase its production capacity in Rajasthan On December 2017, UltraTech’s board approved the construction of a new integrated cement plant in Pali, state of Rajasthan, with the capacity to produce

3.5 million tons of cement per annum. Commercial production is expected to start by June 2020. This will be the company’s 50th plant. On May 2018, the company secured a new limestone Deora-Sitapuri-Udipyapura limestone mining block, in Madhya Pradesh. The block will provide raw materials for the Dhar cement plant, a project announced in July 2017 which is expected to be completed by the fourth quarter of 2019, adding a further 3.5 million tons of integrated cement production capacity.

Conclusion In just a few years, UltraTech went from being a relatively small player to becoming the largest cement producer in India by installed production capacity. The company has not yet hit the brakes and has continued to add new capacity either by acquiring assets from other companies or through its own expansion projects. Such momentum will likely consolidate UltraTech’s lead in the Indian market and its status as a world-class cement manufacturer.

India Cement and Construction Materials Journal

June/July 2018

Insight Analysis CW RESEARCH

World lime market to reach USD 30 billion by 2023 The global lime market will face several changes over the next few years, most of which will be directly tied to Chinaâ&#x20AC;&#x2122;s industry policies and the development of emerging markets

June/July 2018

India Cement and Construction Materials Journal

June/July 2018

Insight Analysis

n the 2018-2023 period, the global lime market is projected to still be driven by China, despite the most recent policies effected by the Chinese government regarding the steel and aluminum sectors, which will dampen consumption in the world’s largest consumer of the commodity. In their most recent update of the Global Quicklime, Slaked Lime and Hydrating Lime Market Report, CW Research’s analysts expect total lime production to top 380 million tons over the next half decade, while in terms of value the market is projected to reach USD 30 billion during the same period. Growth drivers and dampeners

Lime consumption drivers in the 20182023 period are expected to vary wildly from region to region, but most of the growth will be boosted by several industries in Africa, particularly the metallurgy and aluminum ones, while in the Middle East the steel sector is projected to drive consumption over the period. In Asia and Europe, consumption of lime is expected to remain stable, with the paper and pulp industry in Asia ex-China, emerging as one of the major consumers of lime over the next five years. Meanwhile, consumption growth of lime in some sectors in China is projected to decrease or remain mostly flat in the 2018-2023 period, due to the country’s new policies for several key end-user industries of the product, including steel and aluminum.

June/July 2018

In the Americas, demand growth for lime over the 2018-2023 period is expected to be mostly derived from the alumina, road construction and oil sectors, with moderate growth across other key industries, despite a projected contraction in the flue gas desulfurization (FGD) segment by 2023.

Output of quicklime projected to decline, while hydrating lime is expected to grow Between 2018 and 2023, over 70 percent of lime production is projected to be accounted for by quicklime, followed, to a much lesser extent, by hydrating lime and slaked lime. Quicklime production will likely be affected by the new Chinese policies on steel output, and its demand is also projected to drop, while hydrating lime consumption is expected to rise. In terms of consumption, China is projected to account for nearly half of the total lime consumed in 2023, followed by the United States and India, each with a share of under ten percent. China’s foothold on lime consumption is therefore projected to decrease when compared to the estimated data for 2018, in which the country has a share of over half of the total global lime consumption, while its two closest competitors’ shares stand at around five percent.

India Cement and Construction Materials Journal

By 2023, worldwide demand, excluding China, is projected to be driven by the steel sector, FGD and alumina, followed by the paper and pulp industry.

A steely conundrum As CW Research’s report demonstrates, China is expected to be the largest consumer of lime in the global market by 2023, accounting for around 50 percent of the global demand for the period, with most of the consumption expected to be driven by the aluminum and civil construction sectors. One of the main end-user industries for lime is the steel industry, of which China is the largest global producer. However, the country is cracking down on excess output due to environmental concerns, and enforcing similar measures on the aluminum industry, having shuttered several mills, which the government deemed as “illegal capacity”. In 2018, output for both of these industries is expected to either decrease or grow at a moderate pace, after reaching near-record production levels in the previous years. Lime consumption for these sectors is expected to slow down as well, but remain overly robust, as China’s dominance over these industries in a global context is not likely to be challenged up to 2023.

Global production to expand In 2018, global lime production is estimated at just over 340 million tons, and is projected to reach a volume of around 380 million tons by 2023, with most of the product being outputted in the AsiaPacific region. While Asia-Pacific is projected to remain the main producing region during this period, its market share is expected to contract slightly to around 60 percent from

Lime production by type of lime 2018E-2023F (mm tons)

About the report CW Research’s Global Quicklime, Slaked Lime and Hydraulic Lime Market Report provides an in-depth assessment and outlook for the quicklime, slaked lime and hydraulic lime world market through 2023.

Source: CW Group

the estimated 67 percent for 2018, as other regions’ market shares increase marginally.

Worldwide steel sector to drive lime consumption over the period Europe and CIS and the Americas are projected to remain behind Asia-Pacific, with a similar share of just over ten percent each of the global lime market in terms of production. Africa’s slice is expected to remain under ten percent and Middle East’s not to surpass five percent by 2023.

Conclusions China’s foothold on the global lime market will remain mostly unchanged

over the next half-decade, as its large industrial machine, currently responsible for over half of the world’s consumption of lime, is expected to remain well-oiled and with few changes. Despite its most recent attempts at curbing excess output in highly pollutant industries all around the country, China remains the top producer of key inputs such as steel and aluminum, two of the main sectors with the highest demand for lime. As the country continues to move forward with expansions both at home and abroad, in search of synergies across several sectors, its demand for raw inputs such as lime will only increase as well. However, China’s consumption of lime is expected to remain mostly flat over the next few years, with the largest surges coming instead from developing markets in Asia, Africa, and the Middle East, as their industrial capacities increase, and further investments are made across key sectors.

The report provides detailed market sizing in a highly quantitative and datarich format to provide reliable and accurate decision support. Key areas such as demand by industry end-user segments, product price dynamics and competitive landscape for major lime markets and worldwide industry are extensively covered. Divided into regional demand (USD and in tons) as well as product segments, the report provides a strategic perspective on the evolution and outlook for the industry, including steel, construction, paper & pulp, mining & minerals, agriculture, petrochemical applications, precipitated carbonate and others.

More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/273-global-quicklime,slaked-lime-and-hydraulic-limemarket-report-forecast-to-2023

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

India Cement and Construction Materials Journal

June/July 2018

CEMENT MARKETS

CW Research

Cement Volumes The first quarter of 2018 proved to be a strong quarter for South American economies when compared to the previous year. Economies such as Argentina and Peru are showing signs of an increasing pace in their consumption sectors, while Brazilâ&#x20AC;&#x2122;s cement consumption remained mute, although declining at a slower rate.

In Argentina, continued momentum in public infrastructure and private construction is the main driver behind a 13.2 percent increase on a yearly basis for the first quarter of 2018.

In Argentina, continued momentum in public infrastructure and private construction is the main driver behind a 13.2 percent increase on a yearly basis for the first quarter of 2018. In just the first three months of the year, both cement production and consumption surpassed the 3.0-million-ton mark. Peruvian manufacturers have also recorded positive momentum, driven by reconstruction efforts from the El NiĂąo phenomenon in early 2017, as well as public investment in infrastructure. Imports have continuously recorded a rise over the past year, causing

cement production to drop 0.6 percent over this time period despite positive demand. Poor economic performance and lack of consumer confidence have kept Brazilian cement consumption at bay. In March 2018, cement consumption in Brazil reached 4.4 million tons, 8.4 percent lower than what was recorded in the previous year. In Africa, our two select markets for the region are both recording a contraction in cement demand. In Kenya, political instability coupled with a decline in economic growth are hampering investor confidence, and causing the construction sector to slow down. This has worsened conditions for manufacturers, with further projects coming online expected to contribute to reduced profits. In Morocco, a general decline in construction is being recorded in the major urban centers,

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

Sources: CW Research

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

June/July 2018

India Cement and Construction Materials Journal

CW Research CEMENT MARKETS

resulting in a decrease in cement consumption. In the first quarter, cement demand fell 6.9 percent on a yearly basis, reaching 3.3 million tons. In March 2018, the decline was the steepest, falling 15.1 percent when compared to March 2017. In South Asia, both India and Pakistan reported favorable conditions for cement demand and production in the first quarter of the year. In India, cement production rose to 81.8 million tons in the first quarter of the year, 18.2 percent higher than in the previous year. This strong upsurge in demand has caused prices to surge, increasing manufacturersâ&#x20AC;&#x2122; profits. Pakistan reported an 18.9 percent yearly increase when compared to the same quarter in the previous year. Construction activity in the country is being driven by infrastructure developments from the China-Pakistan Economic Corridor. In March 2018, cement

consumption in Pakistan rose 13.5 percent on a yearly basis, reaching 4.2 million tons. In China, cement production has reported a sharp decline in the first quarter, reaching under 400 million tons. Production reduction measures to combat smog and electricity consumption, coupled with a declining demand for cement, have caused the Chinese cement sector to contract. In the future, the Chinese cement market will be characterized by high cement prices, and by an overtime decline in overcapacity. In emerging Asia, cement demand has been rising at fast rates, with both Vietnam and Indonesia reporting higher volumes. In Indonesia, large-scale infrastructure projects are causing cement demand to rise 6.6 percent on a yearly basis when compared to the same quarter in the previous year. In Vietnam, on the other hand, cement production rose 10.4 percent, partly driven by an increase in cement exports.

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

In South Asia, both India and Pakistan reported favorable conditions for cement demand and production in the first quarter of the year.

Sources: CW Research

To learn more, please contact the CW Research team at sales@cwgrp.com India Cement and Construction Materials Journal

June/July 2018

cement PEOPLE

eople

Holcim Indonesia appoints new sales director

Surindro Kalbu Adi has been appointed the new sales director of Holcim Indonesia during the annual general meeting of shareholders, which took place on May 21. The former sales director, Raden Ali Permadiono Sumedi, decided to leave the company, seeking new profession ventures. The new director has extensive experience in sales, having worked for several multinational companies in senior management positions. According to Gary Schutz, president director of the company, Adi will have to face a market that has been rendered very competitive by overcapacity. Holcim Indonesia remains optimist regarding the outlook for 2018, hoping for a six percent increase in its sales volume and a surge of 25 percent in its aggregate and building businesses.

World Cement Association welcomes Meghna Group of Industries The World Cement Association has welcomed Meghna Group of Industries, Unique Cement Industries Limited, to its international membership. The company is one of Bangladesh’s biggest conglomerates and will join as a Corporate Member. The Association now boasts a network of 66 members and representatives that cover 36 countries. “We are delighted that an important player in the rapidly expanding Bangladeshi cement industry is joining our global network,” said Norman Greig, Secretary General of the World Cement Association. Meghna Group of Industries entered the Bangladeshi cement sector in 2001 and is the country’s second biggest cement

June/July 2018

India Cement and Construction Materials Journal

producer today with an annual capacity of nearly 4Mt. Running 30 different industrial units, Meghna engages in various businesses alongside its cement activities, including consumer goods as well as chemical and steel products. Since its foundation in 1976, the conglomerate has grown rapidly and today operates 32 companies and has an annual turnover of USD 3bn. Bangladesh is one of the fastest growing cement markets worldwide as a boom in the construction sector continues to fuel demand. According to a report published by CW Research, Bangladesh’s cement consumption is expected to increase by nine per cent per year through to 2021.

The information you need to make the right decisions.

The â&#x20AC;&#x153;Cement and Clinker Price Assessmentâ&#x20AC;? product series is a monthly price marker which offers prompt cargo (next 30-60 day deliveries) pricing insights, monthly updates for prices, cement market news and an overview of key developments that are crucial for those involved in the cement and clinker trade. The monthly updates cover distinct price markers: Mediterranean Basin

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Persian Gulf & East Africa Arabian Sea and East Africa: Persian Gulf - Arabian Sea bulk Portland clinker and cement FOB East Africa bulk Portland cement CFR

PO Box 5263, Greenwich, CT 06831, USA sales@cwgrp.com

Cement and clinker price assessments

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Aumund to supply equipment for Flying Cement

The Pakistani cement manufacturer, part of Flying Group of Industries, ordered several pieces of equipment from Aumund as part of its expansion plan. The company wishes to set a new kiln line with the capacity to handle 8,000 tons per day. Aumund Fördertechnik will supply two of the main bucket elevators for the new unit, one for the raw meal silo and another for the heat exchanger, two pan conveyors for clinker, and 13 Aumund silo discharge gates.

The bucket elevators will be dispatched to Pakistan in early August, while the pan

conveyors are scheduled for delivery in a second consignment at the end of this year.

Loesche delivers four mills to Bestway Cement province of Punjab, ordered four new mills from Loesche. The German equipment maker – a contractual partner of Sinoma International Engineering – will deliver one raw materials mill, one coal mill, and two clinker mills to the factory.

Loesche will deliver cement manufacturing equipment to Bestway Cement. Sinoma International Engineering, the company

June/July 2018

responsible for the modernization of Bestway Cement Company’s Farooqia cement plant, located in the Pakistan

India Cement and Construction Materials Journal

Those include a high-performance 4-roller mill VRM with the capacity to produce 450 tons per hour; two middle-performance range mills with an output of 170 tons per hour capable for grinding clinker to a fineness of 3,200 Blaine; and a large vertical roller mill with the capacity to handle 40 tons per hour and grind coal to a fineness of 10 percent.

LafargeHolcim Bangladesh renews conveyor belt

Works on the replacement of a 17-kilometer conveyor belt connecting the Surma cement plant, in Bangladesh, and LafargeHolcim’s limestone mines, in India, have successfully ended on April 18. “We have finished the replacement work one day ahead of the schedule,” revealed Harpal Singh project head of operations at the cement plant. The new conveyor belt reduces the noise caused by the old infrastructure. One of the largest trans-boundary conveyors in the world, it transports limestone from the Indian state of Meghalaya, allowing the Surma cement plant to be the only producer of clinker in Bangladesh.

Martin Engineering develops high-temp air cannon installation without production shutdown The inventor (and patent-holder) of lowpressure blasting using plant air for improved bulk material handling has announced a new technology for installing air cannons without a processing shutdown. The system allows specially-trained technicians to mount the units on furnaces, preheaters, clinker coolers and in other high-temperature locations while production continues uninterrupted. Martin Engineering developed the patent-pending Martin® Core GateTM to dramatically reduce expensive downtime associated with traditional installation methods, which require that high-heat processes be halted to allow core drilling and mounting of the cannons. The new system has been paired successfully with the firm’s Smart NozzleTM Series, a family of air cannon nozzle designs which can be serviced or replaced during production, without removing the cannons themselves. Currently the only technology to safely install air cannons and replace nozzles during production, the specialized equipment and process require no confined space entry. With all installation

and service performed from outside the vessel or process, the Core Gate system also contributes to a safer workplace by minimizing the difficulty and hazards of installation and maintenance.

The new Core Gate and Smart Nozzle technologies are expected to find utility in cement manufacturing, coal-fired operations, ash handling and other hightemperature applications.

India Cement and Construction Materials Journal

June/July 2018

cement Regional news

egional news

Indonesia's cement sector continues to face overcapacity

Overcapacity state is set to persist in the Indonesian cement market. In 2018, cement factories in Indonesia are expected to operate at a capacity utilization rate of 62.7 percent, compared to 61.8 percent last year. The small improvement still leaves a significant part of the installed capacity unused. The number of cement production units grew quickly in Indonesia, as new companies coming from markets such as China and Thailand were attracted by rapid growth observed between 2010 and 2013. However, the growth rate has since diminished. The older players in the market – Semen Indonesia, Indocement Tunggal Prakarsa, and LafargeHolcim Indonesia – have the capacity to produce 75 million tons of cement per annum, while newcomers account for 23 million tons.

UltraTech may become largest cement maker in North India Binani acquisition could make UltraTech the largest cement seller in North India. Currently, Shree Cement is the top cement seller in northern India, with a market share of 22 percent, followed by UltraTech Cement with 19 percent. The possible acquisition of Binani Cement would leave UltraTech with a market share of 26 percent. The improved market share would give more power over pricing to UltraTech.

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India Cement and Construction Materials Journal

Meanwhile, even in a post-sale scenario, Shree Cement would continue to be the largest cement maker in Rajasthan, with the capacity to produce 18 million tons per annum, compared to UltraTech’s 14 million tons per annum. Apart from the factories, Binani Cement’s assets also include large limestone reserves that could sustain a twofold expansion of its current capacity or be channeled to UltraTech’s existing plants in Rajasthan.

Vietnam exports more cement in 1Q2018

Between January and March 2018, Vietnam exported 8.5 million tons of cement valued at USD 296.88 million, an increase of 76.4 percent in volume and 76 percent in value compared to the same period last year.

Pakistani cement sector to have several new factories

Several new cement factories are under construction in Pakistan. Currently, there are eight brownfield cement projects in different stages of completion, with the combined designed capacity to produce 18.8 million tons of cement per annum. They are expected to be completed between June 2019 and June 2020. The projects belong to Bestway Cement, an investment of PKR 18.9 billion with the capacity for 1.9 million tons; Pioneer Cement with 2.5 million tons and PKR 19.89 billion; Gharibwal Cement with 2.5 million tons and PKR 19.89 billion; Maple Leaf Cement with 2.3 million tons and PKR 23 billion; Power Cement with

2.4 million tons and PKR 24.26 billion; Lucky Cement with 2.6 million tons and PKR 17.5 billion; Cherat Cement with 2.1 million tons and PKR 16.81 billion; and Kohat Cement with 2.3 million tons and PKR 18.47 billion.

During that time, the average export price fell by 0.2 percent year-onyear to USD 34.9 per ton. In March alone, exports reached 3.5 million tons worth USD 102.8 million, an increase of 58 percent and 52.6 percent over February, respectively.

Chinese company Sinoma is responsible for the projects of Pioneer Cement and Bestway Cement. Another Chinese company, CTIC, is carrying out the expansion for Gharibwal Cement. Denmark-based FLSmidth is setting the new units of Maple Leaf Cement and Power Cement.

Bangladesh was the largest importer of Vietnamese cement, with a market share of 38.6 percent, followed by the Philippines with 19.2 percent, and China with 15.7 percent. Exports to countries like Taiwan and Malaysia rose sharply during the quarter, by 114 and 96.9 percent respectively, exports to Australia and Mozambique plummeted by 92.2 and 77.5 percent, also respectively.

Currently, installed capacity in Pakistan ascends to 49.44 million tons per annum. The projects are, on average, at 46 percent completion, with Bestway Cement as the frontrunner with a 55 percent completion rate.

India: mid-sized cement makers bet on expansion Cement companies with the capacity to produce between 15 million and 20 million tons per annum are looking into doubling their capacity during the next four to five years through a combination of brownfield and greenfield expansions. Orient Cement tried and failed to acquire two cement plants from Jaypee Group in Central India. To compensate, the company will invest around INR 3,600 crore until 2023 to expand its capacity to 15 million tons. Meanwhile, Penna Cement is preparing brownfield expansions in the South and East and a greenfield project in the North that will increase its capacity from 10 million to 16 million tons per annum.

Finally, JK Cements announced that it would increase its capacity by eight million tons to 18 million tons by 2022, expanding into the eastern and central markets.

New cement project in Dhading, Nepal

A new cement project was endorsed by the Investment Board of Nepal. Maha Prasad Adhikari, CEO of the board, and Xu Gang, vice-president of Huaxin Cement, signed an investment agreement for the construction of a new cement factory in Dhading, Nepal. The future cement plant will cost USD 140 million and produce 3,000 tons of cement per annum. Every foreign investment in Nepal must first secure an investment with the Investment Board. Huaxin Cement Narayani, the vehicle set in place to develop the plant, has already acquired a limestone mine in Panikharkha, Dhading. A similar deal was signed last year between the Investment Board of Nepal and Hongshi Shivam Cement, for the construction of a new plant in Sardi, Nawalparasi, which is set to start commercial production within a month.

India Cement and Construction Materials Journal

June/July 2018

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

Russia

22 articles

Pakistan

China

27 articles

United States 24 articles

44 articles

Nepal

Egypt

18 articles

40 articles

Bangladesh 13 articles

Indonesia 21 articles

Brazil

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: July 26, 2018

June/July 2018

Cw research newest reportS:

Global Cement Trade Prices 2Q 2018 Webinars

Global Quicklime, Slaked Lime and Hydraulic Lime Market Report

World Cement, Clinker & Slag Sea-Based Trade report

Global White Cement Market and Trade Report

April 2018

May 2018

India Cement and Construction Materials Journal

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New cement projects emerge in India Indian cement companies beat market expectations 3. Shree Cement sets Capex for 2018-19 4. UltraTech Cement makes new acquisition 5. India's Supreme Court suspends Binani Cement's asset sale 6. India's cement output to increase in 2018-19 7. Jaiprakash Associates to sell cement assets to ACC 8. UltraTech may become largest cement maker in North India 9. India: mid-sized cement makers bet on expansion 10. Cement sector in India hurt by coal scarcity

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sold

coke

recorded

power reach

short thermal volume

IRAN

large

paid

industrial

FACTORY

produce

refinery

decline exports

exports consumption crore

waste

products

recorded

IRAN

Turkey imposing tariffs on coal and petcoke from the US 2. JX Nippon commissions unit that uses petcoke 3. Jindal Steel and Power to use petcoke as input on new fuel unit 4. Japanese refinery coker closes after earthquake 5. Fuel prices lead to growing cement costs in Brazil 6. Coking prices increase in the seaborne market 7. China: Prices for petcoke rise 8. Consumption of petcoke in India rises in May 9. Duqm refinery construction work to proceed 10. Pemex continues rehabilitation and upgrade of Tula refinery

petroleum

vietnam

produce

imports

LAFARGE

increased

decline

US Cement plans white cement factory Votorantim invests in cement production processes 3. Cemex sentence for cartel confirmed by State Council 4. New cement mixture uses slag and olive oil byproducts 5. Mexico imposes duty on US cement 6. LafargeHolcim Maroc explores opportunities in Gabon 7. Egyptian authorities inspect cement factories 8. World Cement Association warns of growing pressure on cement industry 9. Cementos Bío-Bío builds new cement plant in Arica, Chile 10. Italy: Colacem acquires Maddaloni Cementi

India Cement and Construction Materials journal (ICCM) 42

Articles inside

Q&A with Hari Mohan Bangur

World Seaborne Trade - The shift from cement to clinker

Global cement domestic and trade prices to rise in 2Q 2018

The expansion of UltraTech

World lime market to reach USD 30 billion by 2023