India Cement and Construction Materials #45: January 2019

india A CemWeek Publication

issue 45

Cement

January 2019

& construction Materials

LEADERS Q&A

Tom Tietz

Executive Director of California Nevada Cement Association

CW Research

The recovery of oil well cement

Top Indian stories in

2018

News

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Analysis

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Market Coverage

|

Interviews

|

People

World Oil Well Cement Markets and Outlook

Comprehensive outlook of the World Oil Well Cement Markets.

LET US GUIDE YOU.

The World Oil Well Cement Markets and Outlook report provides an in-depth, data-centric market assessmentof the global API certified oil well cement industry. The global report details market dynamics, product market size, as well as price trends and key demand drivers for major markets by type of well (onshore, offshore, shale in oil, gas and geothermal applications).

The outlook report offers: A rigorous bottom-up regional and country-wise demand forecast model driven by indicators such as oil crude pricing, which provide an understanding of future drilling activity in terms of linear drilling distance and depth; An exhaustive scope to evaluate all well typology (API oil well cement classes A, G, H and other); A complete mapping of global oil well cement capacity; Strategic considerations and wild-cards and cementitious extender use, such as fly ash; The information is provided in a data-rich format that combines qualitative insights with extensive facts and data series to allow readers to make critical business decisions.

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FEATURES Leaders Q&A: Tom Tietz 04 With California among the top cement producing states in the US and some of its city streets and freeways approaching 100 years with limited maintenance, Thomas Tietz assesses how the story of concrete is underrated, and how California cement producers are planning to curb CO2 emissions over the long term

14 Most read stories of 2018 in the Indian cement industry

ICCM compiles the most popular news of a dynamic year marked by the sale of Binani Cement and an imminent nationwide ban on the use of petcoke as fuel

Research: Oil well cement – 20 CW Demand and premium pricing rising through 2024

CW Research takes a close look into the global oil well cement landscape and assesses how markets such as the US and Saudi Arabia will help contribute to the robust growth in demand of the specialty niche cement product used in oil, gas and geothermal well-bore drilling

india

Cement

DEPARTMENTS 2 Letter from the editor

An India built with resilience

rOBERT MADEIRA

numbers in brief 3 9M results show continuous improvement in

Margarida Cunha

& construction Materials

www.cemweek.com/india

the global cement market

cemweek publisher head of cw group research

Editorial Coordinator

Research and Analytics 22 Cement Volumes

Liviu Dinu Mihnea Manea Advertising

João Sobrinho Paulo Cruz Sara Ruas Simão Alvarez

cement 24 people 26 equipment highlights 28 regional news

CONTRIBUTING WRITERS & RESEARCHERS

sANTOSH sHETTYE DESIGN

BUZZ 30 Top 10 CemWeek, BMWeek and PetcokeWeek stories

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letter from the editor

An India built with resilience

018 was a challenging year for the Indian cement

such as Shree Cement relying on it for 100 percent of their

industry. If we pay close attention to the most read

fuel needs – the industry is bound to suffer a major blow.

news of the year, which can be found further ahead in the magazine, we will notice they tell the story of a

In the end, according to Morgan Stanley, cement

sector that refuses to give in to adversities.

manufacturers will be able to recover from the recent lows in profitability, albeit at a slower-than-expected pace.

The construction sector in India seeks to focus on

Besides, cement demand is expected to grow by nine to

project execution. Producers continue expanding and

10 percent during the current fiscal year, which probably

increasing capacity in anticipation of improved demand.

explains why, according to ICICI Securities, producers

After all, domestic cement consumption is poised to

are optimist regarding the market. Cement makers expect

rise in the current fiscal year, partly boosted by the Lok

higher price realization and an overall increase in margins,

Sabha elections, likely to be held in May 2019, plus state-

based on the latest improvement in utilization rates.

level elections in Andhra Pradesh and Maharashtra.

Nevertheless, cement prices remain subdued because of

If cement proves to have the same resilience and endurance

increasing production costs. Aggressive Pakistani exports

as the Indian manufacturers that produce it, then we can

to India do not help to paint a brighter picture.

be sure the future is being built with strong foundations.

Meanwhile, the government considers a nationwide ban on petcoke, after a Supreme Court decision had already banned its usage in the states surrounding the National Capital Region. Since cement manufacturing is one of the industries that most depend on petcoke – with key players

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January 2019

India Cement and Construction Materials Journal

Margarida Cunha

Editorial Coordinator

numbers in brief

Cement prices

and sales volumes continue to rise

9M results show continuous improvement in the global cement market With positive market dynamics present in the current cement market, some of the largest cement manufacturers in the world registered encouraging results in the first nine months of the year. Encouraged by a positive market environment, some of the biggest cement companies decided to increase their product prices. Nevertheless, despite the general improvement in cement pricing, cement manufacturers still registered higher sales volumes and thus a general increase in revenues.

CHART: 9M2017 and 9M2018 revenue (USD mn)

Source: Company reports, CW Research

Most of the largest players registered an increment in terms of revenue in the first nine months of this year when compared to the same period of last year. Increasing demand was the main driver behind the even more positive results of the first nine months of this year, which were enough to offset the bad start of the year – in turn damaged by seasonal bad weather.

CHART: 9M2017 and 9M2018 EBITDA margin (%)

Source: Company reports, CW Research

Even though companies such as Cemex, LafargeHolcim, Cementir and Heidelberg raised their prices, most manufacturers still registered a small reduction in margins mainly due increasing energy costs.

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Leaders Q&A

Tom Tietz

Executive Director, California Nevada Cement Association With California among the top cement producing states in the US and some of its city streets and freeways approaching 100 years with limited maintenance, Tom Tietz tells CemWeek Magazine how the story of concrete is underrated, and how California cement producers are planning to curb CO2 emissions over the long term.

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Leaders Q&A

T

om Tietz is the Executive industry, and on the challenges of a sector Director of the California that is trying to keep up with increasingly Nevada Cement Association tight environmental regulations.

(CNCA) and is actively involved with and oversees CNCA’s The resilience regulatory, legislative, marketing of concrete is a and education efforts. The core remarkable story that markets that the association is often unrecognized focuses on include pavement technologies, geotechnical soluand thus tions and buildings. underreported Tom’s career started in architecture. After receiving a Bachelor of Science and Master of Arts degrees in Architecture from the University of Illinois and practicing as a licensed architect, Tom has been working for trade associations since the mid 90’s.

These associations include CNCA and the Concrete Reinforcing Steel Institute. He has provided seminar topics to agencies, architects, engineers, contractors and universities across the United States.

The California Nevada Cement Association (CNCA) is committed to developing sustainable and economical construction solutions for California and Nevada with an emphasis on the use of cement and concrete. How would you describe the role of the Association, and what achievements have been In an exclusive interview with CemWeek accomplished so far?

Magazine, Tom shares his insights on the role the CNCA has been playing in advocating for the California cement

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I believe that the role of our association is more important than ever. We are in a crucial moment of time where new metrics are currently under development by the State to compare construction materials, not just on the traditional initial cost to install, maintain, repair and replace, but on the basis of a product’s environmental footprint. It is crucial that any comparison of competing materials be conducted in a manner that is open and transparent and achieves an applesto-apples life-cycle analysis.

We must assure that California and Nevada cement and concrete materials are understood accurately and truly valued for their superior performance. CNCA takes on these efforts by relentlessly advocating for our industry, whether that means providing project design assistance to testimony before State legislative committees to address crucial matters impacting our competitive standing.

Ultimately, CNCA is committed to

protecting and improving market share in a very challenging dynamic market. This is difficult but very rewarding.

CNCA’s engineers are highly regarded technical resources in our marketplace that are sought for their expertise on a full range of geotechnical and pavement solutions. They are also instrumental in pioneering innovative solutions that are both cost-competitive at initial installation with asphalt while reducing use-phase maintenance burdens. We have an excellent reputation for working collaboratively with State agencies and legislatures in both California and Nevada.

California already has benefited from city streets and freeways built in concrete that are still going strong for greater than 50 years

In 2017, CNCA released a “Study of Historical Concrete Pavements in California�.

What are the main takeaways of this study, and how does it reflect the evolution of the California cement industry throughout the years?

The resilience of concrete is a remarkable story that is often unrecognized and thus underreported. The simple fact is California

India Cement and Construction Materials Journal

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Leaders Q&A already has benefited from city streets and freeways built in concrete that are still going strong for greater than 50 years, with some approaching 100 years with limited or no maintenance cost whatsoever.

California is one of the top cement producing states in the US, which translates into high levels of energy consumption and of GHG emissions. How does the CNCA evaluate the environmental impact of the Californian cement sector?

Since the implementation in 2006 of the California Global Warming Solutions Act (AB32) and a series of complimentary legislation, regulations, planning and Executive Orders, California has begun a process to reduce GHG emissions 80% by 2050. The California cement industry immediately recognized the importance as well as complexity and cost to achieve

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January 2019

California has begun a process to reduce GHG emissions 80% by 2050 GHG reductions in the production of cement. For example, process emissions represent greater than 50% of the CO2 released during the production of cement.

Because of the magnitude of this challenge, California cement producers established a separate association to specifically address the environmental, economic and legal dynamics of protecting the viability of producing cement in California. This group, the Coalition for Sustainable Cement Manufacturing and the Environment, has committed to working with the California Air Resources Board

India Cement and Construction Materials Journal

to achieve workable solutions to achieve the State’s environmental goals. This is an ongoing effort that will only get more challenging with increasingly aggressive goals being set by the State.

In 2017, the American Society of Civil Engineers’ (ASCE) rated the country’s infrastructure a D+, showing minor improvements since 2013. In February that year, an emergency evacuation was carried out in California, as the Oroville dam main spillway was in danger of imminent collapse, posing a threat to 188,000 residents. What are the main challenges currently faced by the US national infrastructure, and what can be done do address those challenges?

CNCA’s focus is specifically on California and Nevada and not on US infrastructure.

However, events like the Oroville Dam auxiliary spillway failure is representative of the greater challenge facing the U.S. California’s pavements typically rank among the worst in the nation. To address these weaknesses and threats to public safety, we engage on two levels. One is to advocate to increase and protect transportation and infrastructure funding.

The second is to provide expert technical assistance to assure our materials are used to provide the ultimate solutions to withstand the pressures of time and natural disasters.

Absent the development of carbon capture and sequestration there isn’t much more that [California cement producers] can do

the steel industry, with 6% of global emissions (IEA, 2017).

It further states that 13 of the world’s largest publiclylisted cement companies need to more than double their According to “Building emissions reductions if they Pressure”, a report released are to limit global warming to in 2018 by CDP (Carbon below two degrees, as agreed Disclosure Project), the global cement industry is the second largest industrial emitter after

in the Paris climate deal. Why is the global cement industry taking so long to catch up with environmental commitments, and what can be done to accelerate the process?

I am amazed by the progress and innovation of California cement producers. The challenge is that absent the development of carbon capture and sequestration there isn’t much more that they can do in the production process to make big emissions reductions. This is why CNCA is working toward the acceptance of portland limestone cement in this market, which will allow producers to reduce emissions by nearly 10%. There is still research to be done and outreach to be made to drive demand for this.

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Leaders Q&A

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The Bixby Creek Bridge built in 1932 on the California Coast is an example of concrete’s superior resilience

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Leaders Q&A The California Nevada Cement Association (CNCA) is committed to developing sustainable and economical construction solutions for California and Nevada with an emphasis on the use of cement and concrete.

Nevada San Francisco

California CNCA serves these states as Las Vegas a non-profit association that provides expert technical leadership, research, and Los Angeles educational opportunities designed to responsibly transform the built environment and improve the lives of the people buildings, foundations, as well in pavement recycling, fullthroughout the region. reclamation, soil as concrete pavers, pervious depth concrete, roller compacted cement, cement modified CNCA specializes in providing concrete, concrete overlays soil, cement treated base, technical leadership for and concrete pavement lightweight cellular concrete, concrete highways, roads, restoration. The Association solidification, and brownfield bridges, parking lots, also has technical expertise remediation.

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The research of the MIT Concrete Sustainability Hub has also been vital to the environmental dialog in California.

MIT has effectively articulated the value of life cycle thinking that weighs the full environmental impacts of a given project from its cradle to grave so that cement emissions are put into proper context.

According to CW Research’s 1H2018 Global Cement Volume Forecast Report, factors such as environmental restrictions, cement substitutes and evolving construction methods will be among the main constraints

for cement consumption in developed markets by 2050. In an increasingly environmentaware global outlook, is there a place for the widespread use of cement and concrete?

I am convinced that there will still be widespread use of concrete by 2050 but the pressure to reduce cement contents will increase greatly as more and more entities strive for GHG reductions. The important part of this equation is to assure that concrete is still being specified in lieu of competing products. There will be cement used in concrete, even if at lower amounts.

It won’t be used in asphalt, steel or wood alternatives.

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Insight Analysis

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Most read stories of

2018 in the Indian cement industry

ICCM compiles the most popular news of a dynamic year marked by the sale of Binani Cement and an imminent nationwide ban on the use of petcoke as fuel

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Insight Analysis

2

018 was a challenging year for the Indian cement industry.

In the first issue of ICCM of 2019, we look back on a period that was mainly marked by an impending national ban on

petcoke and by the much anticipated, discussed and lengthy sale of Binani Cement.

The previous year may have been full of surprises, hardly of the good kind, but cement makers remain optimistic towards the future. Here is a selection of the most read stories regarding the Indian cement industry published on our CemWeek platform.

Construction sector in India seeks focus on project execution A construction equipment maker based in India, Hitachi, wants the budget of the next fiscal year to focus on the execution of road projects.

but the problem is yet to be solved. Some hope that the new law, which should come into effect on April 1, will help resolve part of the problem.

According to Sandeep Singh, MD of Tata Hitachi Construction Machinery Company, while the Center has been allotting new projects, such as the recently announced Bharatmaka project, the execution is still suffering due to banks NPAs and the inadequate flow of funds; as contractors were over-leveraged, this led to stressed assets with banks.

According to Singh, the greatest concern for the industry is the firming up of crude prices, the resulting inflation, and expansion of interest rates in some European economies. If there are any similar increases in India, said Singh, it will impact infrastructure growth adversely.

The Modi administration has paved the way for the exit of leveraged contractors,

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The company’s sales are expected to grow by thirteen to fifteen percent in the 2017-2018 fiscal, with capacity utilization reaching an average of 70 percent.

India Cement and Construction Materials Journal

UltraTech, Dalmia Bharat leading Binani Cement auction UltraTech Cement and Dalmia Bharat emerge as leading bidders for Binani Cement.

According to a source with inside information, the two cement manufacturers have offered INR 6,000 crore in cash for Binani Cement on top of paying the INR 4,000 crore owned by the latter to a consortium of lenders.

The big differences between the two bids are on the way they treat the INR 2,500 crore owed by Binani to unsecured creditors and on the size of the equity stake offered to the creditors.

Other companies and individuals making a final offer for Binani Cement include JSW Group, HeidelbergCement, Ramco Cements in consortium with private equity True North, and businesspersons Rakesh Jhunjhunwala and Radhakishan Damani.

In this contest, Dalmia Bharat has been backed by the India Resurgence Fund, which in turn is backed by Bain Capital Credit and Piramal Enterprises.

Indian cement makers fight for market share

Indian gov't considers nationwide ban on petcoke

Cement makers in India focus on market share in detriment of prices.

Cement makers prepare as government considers nationwide ban on petcoke.

Usually, the first quarter is a period of high activity in the construction market.

Even so, pan-Indian cement prices have declined in March by an average of INR 9 per 50-kilogram bag and are now selling for INR 322 per unit.

As a way of curbing air pollution, the Union government of India is considering a nationwide ban on petcoke burning. A Supreme Court decision has already banned petcoke usage in the states surrounding the National Capital Region, a ban that included cement makers between mid-November 2017 and mid-January 2018.

Indian cement manufacturers seem to be pursuing an increase in their market share in detriment of prices. In the last years, the major players in the market have ramped up their production capacity through new plants and acquisitions, contributing to an increase in competition.

The strongest decline was seen in the southern region, where cement prices sank INR 17 per bag. In the north, west, and central India, cement prices declined by around INR 5 and INR 9 per bag. Meanwhile, in eastern India, prices were relatively stable.

India's cement output to increase in 2018-19 According to rating agency ICRA, cement production will increase by six percent, with 19.22 million tons of new capacity being commissioned across the country, with special focus on the eastern states.

In the past fiscal year, cement production grew by 6.3 percent in India, to 298 million tons, compared to 280 million

Cement manufacturing is one of the industries that most depend on petcoke.

Shree Cement will likely suffer the biggest blow from a ban, as the company relies on petcoke for 100 percent of its fuel needs.

UltraTech Cement, JK Cement, JK Lakshmi Cement, and Mangalam Cement come after, as they are in the 75-85 percent range.

The cement sector is already dealing with an increase in its costs, including all-time high prices of petcoke and rising freighting rates, and is thus badly positioned to face another blow in the form of a petcoke ban.

tons in 2016-17. With the new additions in capacity, utilization levels in the industry are expected to remain under 70 percent.

Demand for cement in 2018-19 will be driven by affordable and rural housing – with the latter improving thanks to a normal monsoon and consequent increase in revenue in the rural areas – and large infrastructure projects, especially on road and irrigation.

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Insight Analysis

Indian cement sector's profits to recover at slow pace According to Morgan Stanley, cement manufacturers will be able to recover from the recent lows in profitability, but they would do so at a slower-than-expected pace. The company has increased its forecast for cement demand growth from the previous 7.5 percent to nine percent.

Cement prices remain lukewarm in India

During the first half of 2019 financial year, rapid demand growth gave hope to the market, but mild prices and an increase in costs have capped earning gains. Going forward, the capacity utilization rate of the sector is expected to grow by just one percent in 2019-20, to 79 percent.

Cement prices in India fail to keep with rising costs and demand.

During the July-September 2018 quarter, prices were mostly flat across India, with an improvement in North and Central India counterbalanced by a decline in the South, East, and West region.

In September alone, prices rose 1.4 percent, a seasonal hike caused by the end of the monsoon. Robust cement demand and the pressure from rising prices have not been enough to propel cement prices.

The highest increase in cement prices was witnessed in North India, where they increased by 5.1 percent quarteron-quarter and 3.1 percent year-on-year during the July-September quarter.

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Birla Corp doubles net profit in 2Q2018 Between April and June 2018, Birla Corporation posted a net profit of INR 83.86 crore, an increase of 94 percent compared to INR 43.21 crore registered during the same period last year.

"There was improvement in realizations during the quarter under review in all the regions except North, which was partly off-set by sharp increase in input costs, especially fuel," it said in a statement.

India Cement and Construction Materials Journal

RCCPL, one of the subsidiaries of the company, has recently announced a new cement project in Maharashtra with the capacity to produce 3.9 million tons of cement per annum. Once finished, the new plant will elevate the subsidiary’s capacity to 9.48 million tons per annum.

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 climate-related metrics according to CDP.

Cement companies express optimism in India According to ICICI Securities, cement manufacturers are optimist regarding the market, with expectations of higher price realization and an overall increase in margins, based on the latest improvement in utilization rates.

Analysts believe that clinker utilization rates may reach 80 percent during 2019-20

thanks to an increase in demand of over nine percent for the second consecutive year in 2018-19.

The east, central, and northern regions are expected to gain an edge, with clinker utilization going above 85 percent.

As for producers, Shree Cement and UltraTech Cement are considered to be on the pole position to benefit from that scenario.

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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feature CW RESEARCH

Oil well cement

Demand and premium pricing rising through 2024

CW Research takes a close look into the global oil well cement landscape and assesses how markets such as the US and Saudi Arabia will help contribute to the robust growth in demand of the specialty niche cement product used in oil, gas and geothermal well-bore drilling

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feature

G

lobal oil well cement consumption is poised to increase through 2024, with key markets such as the US and Saudi Arabia forecast to experience robust average growth rates above 50 percent, according to CW Research’s World Oil Well Cement Market Forecast 2024.

A steady recovery

“We’re seeing a more pronounced trend of ordinary Portland cement (close to grade A API) used instead of oil well cement in onshore and shale drilling as a means for drillers to cut costs. However, API certification remains the golden standard, and not using oil well cement can have risky and often dangerous consequences”, observes Raluca Cercel, CW Group’s Associate.

Similarly, the demand for oil well cement consumption in large-sized markets of above 100 thousand tons per year is expected to improve after 2018. Additionally, most markets which registered negative growth rates in terms of oil well cement consumption between

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January 2019

the years of 2008 and 2018 are expected to begin to recover in the forecast period after oil prices are estimated to start closing distance from previous price peaks.

The previous decline in oil well cement demand has led to a contraction of the premium A shrinking premium In 2018, global oil well cement consumption is estimated to have improved by over 30 percent to 5,460 thousand tons from 4,136 thousand tons in 2017.

Traditionally traded at a premium to the ordinary Portland cement, the previous decline in oil well cement demand has led to a contraction of the premium, with the drastic decrease in drilling activity in 2015/2016, following the oil price crash, also exerting a negative effect.

India Cement and Construction Materials Journal

“Bargaining power lies with the buyers, and oil well producers have had no chance but to adapt to the point that oil well cement has lost its premium pricing to ordinary Portland cement in many geographies”, notes Cercel.

Between 2012 and 2016, all the big oil well cement markets registered a decrease in their premium price, much due to the reduced drilling activity provoked by oil prices. Oil well cement prices in the US have fell approximately 14.4 percent between 2012 and 2016, but are estimated to recover to USD 110 per ton in 2018.

With the exception of Russia and the US, the price of oil well cement is still expected to register lower levels in 2018 in comparison with 2016.

US leading global consumption The North American market contributed to about 80 percent of the global demand in 2014, at around nine thousand tons.

Consumption has since declined to approximately four thousand tons in 2018.

About the report

Global Oil Well Cement Consumption Forecast (K tons)

CW Research’s World Oil Well Cement Market Forecast 2024 provides an indepth forecast analysis of the worldwide oil well cement market, including regional market shares, demand, imports, exports and types of oil well cement used by geography, as well as price trends.

Source: CW Research

The North American market contributed to about 80 percent of the global demand in 2014

In 2016, despite the globally rapid decrease in oil well cement consumption, the MENA (Middle East and North Africa) region only registered a 7.5 percent decline year on year.

From 2018 to 2024, oil well cement demand in MENA is forecast to increase at a strong, double-digit annual growth rate.

The report highlights detailed and specific demand by main types (including Class G & H) of oil well cement for key countries, and trends in the oil well segment. The World Oil Well Cement Market Forecast 2024 presents the role of extenders and onshore, offshore, and shale well counts with trajectory, depth, and well type to help ascertain oil well cement usage.

Bringing together CW Group’s principal research team, this business intelligence tool addresses important market dynamics about API-certified oil well cements, including a global capacity overview (market and major producers), regional market shares, demand, imports, exports, the types of oil well cement, and pricing trends.

More information about the report can be found here: https://www.cwgrp. com/cemweek-reports/product/281world-oil-well-cement-marketforecast-2024

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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CEMENT MARKETS

CW Research

Cement Volumes

In the US, cement production increased by 2.4 percent, while consumption rose 4.1 percent on a year-todate basis.

In China, infrastructure investments are slowing down. For the 2018 period, the investment is expected to grow around 12 percent, on a yearon year-basis, far from the 20 percent growth registered in 2017. This slowdown is a reaction to the authorities’ commitment to focusing on public debt. As a consequence, cement production in China declined 8.9 percent on a year-to-date basis, due to lower government investment.

This increment could have been higher if all governmental projects had been approved by the Congress.

In the US, cement production increased by 2.4 percent, while consumption rose 4.1 percent on a year-to-date basis. The increase in both production and consumption is a result of the continued growth of the residential sector, but the industrial and commercial sectors also contributed to this improvement.

From this country selection, India is the one that showed the best improvement in terms of cement production: 15.0 percent on a year-todate basis. This increase is a result of investment in infrastructure projects and the affordable housing program led by the government to meet affordable housing needs.

Kenya’s cement production weakened 9.6 percent year to date to 3.8 million tons in 2018 when compared to the previous year. This decrease follows a lower construction activity, and delays in several government projects.

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

Sources: CW Research

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

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CW Research CEMENT MARKETS

Argentina’s cement production improved by four percent on a year-to-date basis. This increase is continuing the trend from the previous year, when construction activity grew 12.7 percent comparing to the previous year.

Cement companies, as Cementos Molins and LafargeHolcim, are planning on expanding their plants capacity for the coming years.

From this set of countries, Saudi Arabia, on a year-to-date basis, is the market which saw the largest decline in terms of cement production (-13.2 percent). This decline is following the descending trend of cement consumption in the country (13.3 percent), given that the measures that the government has taken to encourage the construction sector have not yet reached cement manufacturers. As such, cement production and

consumption will likely see an increase until the end of 2018.

Regarding cement consumption, Pakistan was the country that reported the largest increase from this country selection: 8.9 percent on a year-to-date basis. This demand increase is due to the cement needed for the construction of roads and tunnels that are meant to connect the major motorways and roads.

In Brazil, cement consumption declined 1.7 percent, owing to the nationwide truck drivers’ strike, motivated by the increase in fuel prices.

This strike paralyzed 70 percent of cement plants in the country, thanks to the lack of raw materials and to the impossibility of shipping the finished products to customers.

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

Pakistan was the country that reported the largest increase from this country selection: 8.9 percent on a year-to-date basis.

Sources: CW Research

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

January 2019

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cement PEOPLE

P

eople

Mahendra Singhi elected president of the Cement Manufacturers Association, India

Mahendra Singhi, managing director and CEO of Dalmia Cement Bharat Group, has been elected as the new president of India’s Cement Manufacturers Association.

Singhi will take over from the outgoing president Shailendra Chouksey. He has previously served as the President of Rajasthan Manufacturers Association.

"India is on the cusp of great growth and infrastructure development.

The Indian cement industry is at a significant moment of its history and I look forward to leading the association towards a sustainable global future," Singhi said.

Lafarge Malaysia's president and CEO steps down Mario Bastian Gross has stepped down from his role as president and CEO of Lafarge Malaysia. He has continued to serve the company as non-independent non-executive director from November 16 until December 31 in order to facilitate the transition.

"During his tenure here, Gross laid the groundwork for the business turnaround plan, putting in place an experienced

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India Cement and Construction Materials Journal

leadership team and strengthened the fundamentals of the company and reorganized the company to more efficient," the group said.

Yeoh Khoon Cheng is provisionally assuming the post of CEO. In a separate event, Rebecca Fatima Sta Maria voluntarily resigned from independent and nonexecutive director of Lafarge Malaysia.

cement orders & equipment

O

rders & equipment

Researchers upgrade method to capture greenhouse gases during cement manufacture SINTEF researchers have upgraded the method used to capture greenhouse gases generated during the cement manufacturing process.

The method is based on the liquefaction of CO2, allowing it to be transported by ship, and can also be retrofitted to an existing plant. This technology is hybrid and is easier and cheaper to purify the CO2 produced by the industry.

"We propose a promising approach using a membrane filter combined with an inhouse developed system involving forced concentration of the CO2 by liquefaction," explains SINTEF researcher David Berstad. "We achieve this by cooling it down under pressure," he says.

"The best results that we have seen are about 99.8 percent, but it is theoretically possible to achieve even higher levels of purity," says Berstad. "The purer the gas the better, because it then requires less capacity to transport and/or store the CO2 in gas or liquefied form.

"During the experiments the lab rig behaved as expected, so now we know that we can be confident that it works and can force the limits of purity even further," says Berstad.

"We have constructed the rig to be as versatile as possible so that it can meet a number of different experimental needs,"

says Berstad. "As well as carbon capture and storage applications, we want to use it to find out exactly what level of purity is needed for the liquefaction of CO2.

Besides, we intend to use it to see how we can efficiently remove and liquefy CO2 during the production of hydrogen from natural gas," he says.

India Cement and Construction Materials Journal

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27

cement Regional news

R

egional news

India gov't promises to lower GST on dozens of products, cement may be included

According to Prime Minister Narendra Modi, the Union government wants to leave only luxury items such as flagging planes, expensive cars, and cigarettes in the upper slab of the Goods and Services Tax. Currently, cement is taxed under the upper slab of 28 percent, alongside marble, tires, air conditioners, digital and video cameras, monitors and projects, and video games consoles.

That could change after the upcoming tax council meeting.

“We have reached a point where 99 percent articles can be brought in the 18 percent or less than 18% bracket and we are progressing in that direction,” Modi said.

Major Indian cement makers boost capacity Almost every major cement manufacturer in India is making plans to expand its production capacity in the coming year, including UltraTech, ACC, Ambuja Cements, Ramco Cement, and Shree Cement.

“We are adding grinding capacity, which is a means to save costs. At an industry level, greenfield expansion has been

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planned on the premises with the hope that long-term utilisation with improve,” said H M Bangur, managing director for Shree Cement.

According to Mahendra Singhi, president of the Cement Manufacturers’ Association, utilization rates remain relatively low, at around 70 percent, but in some places of the country rates are much healthier.

Lower transportation costs benefit Indian cement makers Lower diesel prices and more lax transport regulations are to ease pressure on cement makers.

Indian cement sector's profits to recover at slow pace

According to Morgan Stanley, cement manufacturers will be able to recover from the recent lows in profitability, but they would do so at a slowerthan-expected pace. The company has increased its forecast for cement

demand growth from the previous 7.5 percent to nine percent. During the first half of 2019 financial year, rapid demand growth gave hope to the market, but mild prices and an increase in costs have capped earning gains. Going forward, the capacity utilization rate of the sector is expected to grow by just one percent in 2019-20, to 79 percent.

Indian cement manufacturers gained some room for maneuver after a decrease on retail diesel prices of INR 0.10-0.15 in some key cities thanks to lower seaborne oil prices.

In November, diesel prices declined by 10 percent.

Moreover, the cement sector is also expected to benefit from new rules on axle load for trucks. The vehicles can now carry additional weight, further diminishing logistic costs, which represent around 25 percent of cement production and distribution expenses.

Sanghi Industries to double production capacity in Gujarat Chamba continues to wait

for cement project

For many years, the prospects of a new cement plant in the region brought hope to the people of Chamba, in the state of Himachal Pradesh, of better economic and development conditions.

Still, as a new electoral season approaches, the cement plant continues to be just a promise. The government announced that a new tender for potential developers of the new cement plant will be hold soon.

With the presence of Chief Minister Vijay Rupani, Shanghi Industries announced an investment of INR 1,500 crore that will be used to expand its cement plant in the state of Gujarat.

Once expansion works are finished, by 2020, the production capacity of the plant will increase from the current four million to 8.6 million tons per annum. The investment was part of a larger package of industrial expansions announced in that state.

In the meantime the Chamba District Vikas Jan Mahnch and Chamba Janhit Sangathan have been writing to the state government continuously, calling for the construction of the cement plant and other promised projects such as a passport office.

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

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How are shifting filler needs affecting the PCC and GCC markets?

January 24, 2019

Global Calcium Aluminate Cement Market Forecast

Cw Research's newest reportS:

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World Oil Well Cement Market Forecast 2024

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Ground and Precipitated Calcium Carbonate Industry and Outlook 2023 December 2018

BUZZ

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Indian cement makers expect the market to improve

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South India's cement sector under pressure from lower prices

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India’s cement price with minimal growth expected in FY19

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Indian cement sector's profits to recover at slow pace

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First needle coke project in Russia still ongoing Ruwais West refinery starts up new delayed coker 3. Star Refinery launching production in 2019 4. Sanvira to set up new petroleum coke plant in Sohar 5. Chinese prices for petcoke remain unchanged 6. Russia’s oil export duty to decline in January 7. China: Prices for petcoke continue to decline 8. Cement companies consume more petcoke in India 9. MGX Minerals completes study on petcoke gasification 10. Petcoke prices in China contract

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Kenyan cement demand to top 7mn tons on road infrastructure and housing in 2023 2. Ararat Cement to lower prices in January 2019 3. Cement consumption stalls in Catalonia 4. Mexican concrete producers raise prices over costlier cement 5. Cement demand grows y-o-y in Portugal 6. Cement demand increases in Lanzarote, Spain 7. Coal price volatility represents risk to Australian budget 8. Cement prices keep rising in China 9. World Cement Association expects timid demand growth in 2019 10. Oil well cement demand to grow through 2024; premium pricing to slowly recover

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Sandvik develops new rock drill carbide grades US: Aggregate Industries wins supply contract for railway project 3. Sika acquires Arcon 4. Ramirent acquires new asset in Finland 5. Terex Trucks inks deal with third German dealer 6. Iranian construction sector faces recession 7. Vietnam’s construction materials industry to maintain high growth 8. Myanmar’s government establishing new roadmap for construction industry 9. Chuan Huat Resources signs MoU over building materials supply 10. Germany: Construction sector to grow in 2019

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