India Cement and Construction Materials #47: May 2019 by CemWeek

india A CemWeek Publication

issue 47

Cement

MAY 2019

& construction Materials

THE H FACTOR

How India’s housing industry is boosting cement companies’ sales

LEADERS Q&A

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

World cement demand curbed by Chinese crackdown on pollution

News

Analysis

Market Coverage

Interviews

People

GLOBAL GLOBALCEMENT CEMENT TRADE TRADEPRICE PRICEREPORT REPORT TheThe Global Global Cement Cement Trade Trade Price Price Report Report (GCTPR) (GCTPR) provides provides a must-have, a must-have, data-centric data-centric assessment assessment of monthly of monthly andand quarterly quarterly prices prices (USD (USD per per ton)ton) for for cementitious cementitious products products - gray - gray cement, cement, white white cement, cement, clinker clinker & granulated & granulated slagslag (GBFS): (GBFS): Ex-works Ex-works andand retail retail prices prices Trade Trade pricing pricing Together Together withwith insights insights on cement on cement producers' producers' pricing pricing strategies strategies andand importimportant ant price price revisions, revisions, the the GCTPR GCTPR provides provides insights insights andand datadata on on domestic domestic cement cement pricing pricing for over for over 30 key 30 key markets, markets, as well as well as international as international trade trade prices prices for 70+ for 70+ cement cement markets. markets.

Analysis Analysis and and forecast forecast ofof global global cement cement trade. trade.

LET LET USUS GUIDE GUIDE YOU. YOU.

TheThe report report not not onlyonly provides provides historical historical monthly monthly andand quarterly quarterly price price informainformation,tion, but but alsoalso offers offers a three-month a three-month forecast forecast for each for each country. country. TheThe unique unique report report is built is built on CW on CW Research’s Research’s longlong andand proven proven expertise expertise in the in the cement cement industry. industry. TheThe GCPR GCPR is intended is intended as as a tool a tool for for understanding understanding the the national, national, regional regional andand international international cement cement pricing pricing environment environment andand the the around around the the world. world. competitive competitive price price scenario scenario in key in key markets markets CEM CEM ENTENT • BUILDING • B UILDING M ATERIALS M ATERIALS • DRY • DRY BULK BULK CARGO CARGO & SHIPPING & SHIPPING • CHEMICALS • CHEMICALS • • INDUST INDUST RIAL RIAL MINERALS MINERALS • INDUST • INDUST RIAL RIAL EQUIPMENT EQ UIPMENT • PAPER • PAPER & PULP & PULP • PET • PET COKE COKE r e s eraersceha. rccwhg. cr pw. gc ropm. c o•m i n• q uiinr qi eusi @ r i ecsw@g cr pw. gc ropm. c o•m s a•l essa@l ecsw@g cr pw. gc ropm. c o m

FEATURES Leaders Q&A: André Jasienski 04 In an exclusive interview, André Jasienski addresses issues such as the evolution of FEBELCEM, the Belgian cement industry’s main challenges in the upcoming years, as well as the steps it can take towards a more sustainable production approach

Analysis: Indian cement 10 Insight companies' growth for 2019-20

supported by infrastructure and housing

India’s top four cement companies showed an overall increase in profit and sales for the period, due to healthy demand and a rise in prices

14 CW Research: Slowing economy

curbs global cement volumes up to 2023

CW Research’s latest update of its Global Cement Volume Forecast Report sees overall cement capacity falling over the next five years, mainly led by the Chinese government’s crackdown on the industry

Snapshot: Ivory Coast’s 22 Country apparent cement demand to reach

india

DEPARTMENTS from the editor 2 Letter 20 million reasons

Cement & construction Materials

www.cemweek.com/india

rOBERT MADEIRA

3 Capacity additions increased in most regions, numbers in brief

but there was an overall net decrease in global cement capacity during the year

Research and Analytics 26 Cement Volumes cement 28 people 30 equipment highlights 32 regional news

cemweek publisher head of cw group research

Margarida Cunha Editorial Coordinator

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CONTRIBUTING WRITERS & RESEARCHERS

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BUZZ 34 Top 10 CemWeek, BMWeek and PetcokeWeek stories

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8MT by 2023

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

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letter from the editor

20 million reasons

n the first quarter of 2019, new housing launches in

more developed peers, the Chinese cement market is now

India rose 3 percent to 42,504 units comparing to the

one that is adamant in deploying strict rationalization

previous quarter, according to Business Today. The

efforts when it comes to cement production. Be sure to

figure, coupled with the Indian government’s “Housing

read more on this topic and on other factors projected

for All” scheme and its ambitious goal of building 20

to curb global cement demand in the upcoming years,

million homes for low-income families through 2022,

according to CW Research.

is helping boost cement demand and, consequently, cement companies’ revenues. Read on to uncover

The outlook for world cement demand may be gloomy.

the main drivers behind the major Indian cement

But for now, Indian cement players have a comfortable

players’ financial performance in 2018, as well as their

roof over their heads as the housing sector is poised to

expectations for 2019.

continue growing thanks to government investment in affordable homes. There are reasons to be reasonably

But as Indian cement producers can expect an improving

optimistic. 20 million, at least.

demand, the world at large is bracing for a more modest forecast. With China’s days of exponential economic growth long gone, the Asian giant is now reaching a mature stage similar to that achieved by the western markets 20 to 30 years ago, when demand for cement started to reach its plateau. Furthermore, much like its

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India Cement and Construction Materials Journal

Margarida Cunha

Editorial Coordinator

numbers in brief

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

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

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

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

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

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Leaders Q&A

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India Cement and Construction Materials Journal

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

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

India Cement and Construction Materials Journal

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Leaders Q&A

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

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

India Cement and Construction Materials Journal

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

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

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

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

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

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

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

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

India Cement and Construction Materials Journal

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

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

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

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

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

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

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

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

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

India Cement and Construction Materials Journal

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

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Insight Analysis

Indian cement companies' growth for 2019-20 supported by infrastructure and housing

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India Cement and Construction Materials Journal

Indiaâ&#x20AC;&#x2122;s top four cement companies showed an overall increase in profit and sales for the period, due to healthy demand and a rise in prices.

India Cement and Construction Materials Journal

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Insight Analysis

t’s election year for India, and the cement industry shows it: the government has ramped up its efforts in infrastructure and in the affordable housing program, which is leading companies to have an optimistic outlook for the coming financial. Another reason behind Indian cement players’ confidence is their results for the 2018-19 fiscal, which displayed a healthy growth across key financial performance indicators.

While there were some headwinds from the tightening competition, the rupee depreciation and the rise in energy costs, major cement producers have reported an overall growth in their yearly or quarterly reports, and remain well-positioned for growth in 2020.

Proof is in the profit ACC’s profit before tax in 2018 reached INR 1,494 crore, compared with INR 1,298 crore in 2017, in part due to an 8.2 percent rise in cement volumes sales, which reached 28.4 million tons. Net sales for the period reached INR 14,477 crore, increasing as well from the previous year, in which they stood at INR 12,909 crore. Capacity growth will be the company’s focus in 2019, which aims to add 5.9 million tons of cement capacity in a new greenfield investment in Madhya Pradesh, as well as a new grinding unit in Uttar Pradesh, coupled with the expansion of its Tikaria and Sindri plants over the next three years. Ambuja’s net sales stood at INR 10,977 crore in 2018, expanding from INR 10,250 crore in 2017. Operating EBITDA declined mildly from INR 1,940 to INR 1,891, and overall cement production stood at 24.3 million tons, improving by 5.9 percent year-on-year.

chart: Net profit of companies in INR crore

Domestic sales volumes rose by 5.4 percent to 24.2 million tons in 2018, and the company also increased its use of alternative fuels to 5.5 percent during the year, to counteract higher fuel and energy prices.

ltraTech and ACC will continue to grow their capacity via greenfield and brownfield expansions UltraTech’s net sales rose by 21 percent in fiscal 2019 reaching INR 35,105 crore, from INR 28,930 crore in the previous year, while profit grew from INR 6,482 crore to INR 6,992 crore. This is the second consecutive year that the overall cement industry has achieved a double-digit growth, as demand has been increasing. The company has continued its expansion program during the year, having closed Binani Cement’s assets. Since the

Source: CW Research

Note: ACC and Ambuja Cements have their financial year in accordance with the calendar year, while UltraTech and Birla follow the Indian fiscal year, which starts April 1, and ends March 31.

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India Cement and Construction Materials Journal

acquisition closed, capacity utilization and other quality concerns are being upgraded, and the company hopes to launch its own brand from the acquired facilities soon. Earnings from previous acquisitions continue to grow, and further investments in these are planned. Total income for Birla reached INR 6,627 crore during the fiscal, expanding from the INR 6,012 crore achieved in the previous fiscal. Profit also recorded a healthy growth during this period, from INR 5,840 crore to INR 6,309 crore. Cement accounted for a healthy amount of these gains, with revenue for the segment reaching INR 6,215 crore in FY2019, compared with INR 5,628 crore in FY 2018. Profit also increased from INR 503 crore to INR 671 crore.

Outlook for FY20 Companies are expecting good growth for the current fiscal year, backed by an expected strong improvement of around 7.4 percent in the Indian economy, and the Union government now committing to further strengthen infrastructure initiatives. Both the government and private investors helped to boost overall cement consumption growth in 2018-19, with the factors from this rise to spill over into the next fiscal year and to aid the sector further. Cement demand grew during 2018-19, and is expected to continue its upward trajectory in the coming year, mainly driven by the Eastern, Central, and Northern regions. The government is playing a key role in these developments, as not only is it focusing on

Outlook for FY2020 remains bright due to macroeconomic factors and an expected increase in investment developing infrastructure such as concrete roads, metro rail networks, airports and irrigation projects, but is also proposing an affordable housing program. As the housing sector accounts for the majority of demand in India, consuming about 65 percent of the total, this will also have a large impact on the cement industry during the year. While urban housing is seeing a pickup in demand, the overall growth is being seen in rural areas, where cement prices in the most recent months have also been increasing. This has also angered some real estate developers, who have called for the governmentâ&#x20AC;&#x2122;s intervention, although

that is only likely to happen after the elections, which took place on May 19. The Goods and Services Tax rate on cement remains at 28 percent, which both manufacturers and end-users claim to be damaging for their business, but the government remains tight-lipped about any changes to it. While there are rumors that it could be reduced to eighteen percent, some are still skeptic, and uncertainty remains. If the government were to introduce changes to the tax rate, demand could rise even further, promoting growth in the sector. Meanwhile, ICRA is expecting domestic demand to grow by eight percent during the fiscal, and to push capacity utilization to 71 percent, from the recorded 65 percent in FY2018. They also expect cement capacity to rise a further 18 to 20 million tons per annum, with most of it being focused on grinding, rather than clinker, meaning that actual production of new capacities could be lower.

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feature

CW RESEARCH

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

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India Cement and Construction Materials Journal

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feature

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

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

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

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

India Cement and Construction Materials Journal

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

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

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

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

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

India Cement and Construction Materials Journal

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

HEATMAP: GLOBAL 2019 YEAR-OVER-YEAR OUTLOOK GROWTH

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

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

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

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

Source: CW Research

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

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

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

About the report

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

CW Group’s Global Cement Volume Forecast Report (GCVFR) is a twiceyearly update on projections for cement volumes on a national, regional and global level. The forecast provides global and regional outlooks, as well as detailed perspective on 57 of the world’s most important countries’ cement consumption, production, net trade and cement production capacity. The five-year outlook presented in this benchmark study enables industry professionals to shape their perspective on markets and business priorities. The report also includes a long-term forecast through 2050, with qualitative analysis on drivers and constraints of global cement demand. The Global Cement Volume Forecast Report has two updates a year: Extended (October): an extended update (includes briefs on the 55+ key markets with principal supply-demand impacting drivers and CW Research's analyst market assessments presenting a detailed numerical worldwide analysis, as well as the regional and global supply-demand model). Quantitative update (March): a quantitative update (only includes the numerical sections of the report, not country write-ups). More information about the report can be found here: https://www.cwgrp. com/research/research-products/ product/12-global-cement-volumeforecast-report

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

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Country Snapshot Ivory Coast cw research

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

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India Cement and Construction Materials Journal

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Country Snapshot Ivory Coast

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

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

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

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

Yamoussoukro

MaY 2019

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

Cement industry expanding despite structural issues

Côte d'Ivoire

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

India Cement and Construction Materials Journal

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

About the report The Ivory Coast Cement Market Report, part of CW Researchâ&#x20AC;&#x2122;s Cement Industry Country Report series, meets the country-level cement market research needs of small and large businesses, analysts and governments. The reports cover cement volume trends in detail, analyzing trade flows, cement demand and production (historical and a five-year outlook), per-capita consumption, and the competitive landscape, including company profiles, cement production facility details, including past and announced brownfield production increases and greenfield projects. Despite improvements along the past years, the domestic cement market is still being negatively influenced by the

poor national road network and insufficient generation of quality power.

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

Cement Industry Country Reports also cover demand drivers, including macro-economic and construction sector dynamics, for the specific country. Industry reports are presented in an objective, easy-to-understand format, providing hard-to-find answers to top market research questions.

More information about the report can be found here: https://www.cwgrp. com/cemweek-reports/product/284ivory-coast-cement-market-forecastreport-%E2%80%93-2023

Source: CW Research

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

MaY 2019

CEMENT MARKETS

CW Research

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

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

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

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

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

Sources: CW Research

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

MaY 2019

India Cement and Construction Materials Journal

CW Research CEMENT MARKETS

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

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

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

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

Sources: CW Research

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

MaY 2019

cement PEOPLE

eople

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

FLSmidth appoints new members to executive management team "I am very pleased to welcome Cori Petersen and Annette Terndrup to our Group Executive Management. Their combined experience will support our ability to navigate increased business complexity and enhance our talent development," says Group CEO Thomas Schulz.

FLSmidth has appointed Annette Terndrup, Head of Group Legal and

MaY 2019

Strategy, and Cori Petersen, Head of Group HR, to its Group Executive Management.

India Cement and Construction Materials Journal

Terndrup was appointed Group General Counsel in 2013, and her role was expanded in 2016 to include Group Strategy and M&A, while Cori Petersen joined the company in 2016 as leader of Human Resources for the US, later expanded to all of North America, and in 2018, she was appointed head of Group HR.

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

Med Basin bulk Portland clinker and cement FOB

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

cement orders & equipment

rders & equipment

Haver & Boecker introduces new VT module

Haver & Boecker announced that its machinery division has launched a new VT filling module, of which its SEAL and ROTO-LOCK innovations are also part. In the SEAL process, a sleeve in the specially designed filling spout inflates at the beginning of the filling process and seals the valve bag so that no bulk material can escape. After dust-free filling, the bag valve is ultrasonically welded shut. The ultrasonically sealed packaging protects the environment from possible contamination and promotes safety at all stages of the logistics process. It also protects the filled bulk material from product contamination, removal and illegal product theft. Clean filling increases process reliability and reduces wear and tear and production downtime that arises due to cleaning, maintenance and repair works. The SEAL technology can be retrofitted to all existing valve bag HAVER & BOECKER packers purchased after the year 2000. The effectiveness of the SEAL technology is increased through the use of the new dosing ROTO-LOCK unit. This module is ideal for dosing fine bulk materials into valve bags. The completely closed filling channel enables clean filling without any product leakage. The new dosing unit is

MaY 2019

maintenance-free. ROTO-PACKER beginning from the year of manufacture 2000 can be retrofitted with this new dosing system. Both the SEAL system and the ROTOLOCK as part of the new VT filling module. The (V) stands for valve bag and the (T) for turbine. The specially designed valve bag filling spout is home to all new technical components. The various ventilation points are automatically regulated and the air volume is matched to the respective product so that manual pressure adjustment is no longer necessary. The new VT filling module can be used modularly for the newly designed ROTOPACKER, INTEGRA and ELEMENTRÂŽ

India Cement and Construction Materials Journal

machine families. This enables customers who have several machines at their disposal to optimize maintenance work and minimize spare parts inventories on site. The need for operator training is also significantly reduced. The new VT filling module also can be easily extended to SEAL technology, i.e. for ultrasonic valve welding. The filling spout is designed for easy maintenance. Changing the complete module is easy to do and all components are easily accessible. Systems that are equipped with the VT module can also be operated with a replacement module while the single module undergoes maintenance under ideal conditions in the maintenance workshop.

FLSmidth launches new digital analysis tool for unplanned stoppages

FLSmidth announced they have developed ECS/UptimeGo, a downtime analysis solution to help plant staff identify the issues that interrupt the operation, and prevent unwanted future downtime. Real-time dashboards and Key Performance Indicators (KPIs) enable the measurement of the real impact of machine failures interrupting the production. In addition, ECS/UptimeGo provides Pareto charts and the ability to monitor maintenance and reliability

KPIs to give operators the fullest possible picture of a downtime event and its causes. Mikael Lindholm, FLSmidth Chief Digital Officer, says “ECS/UptimeGo shows how FLSmidth uses digital technologies and practical experience to further enhance the productivity of cement and mining customers.” ECS/UptimeGo can be integrated with existing process control systems and can be paired with FLSmidth ECS/

ControlCenter for an automated process to gather all production stoppages. It also features a user-friendly graphic interface that allows operators to have all the information they need to fully document and analyse stoppages. “We’ve designed ECS/UptimeGo with users in mind. This software is intuitive to use and will be quickly mastered by users,” says King Becerra, FLSmidth Global Product Line Manager, Digitalization.

Beumer Group unveils new conveyor for clinker transportation The Beumer Group is offering a new belt apron conveyor, which uses a belt instead of a chain as traction element. The equipment also has sealed and overlapping side walls and bottom plates in the cells, which prevent the clinker from exiting the conveyor, but also minimizes the escape of dust. The belt conveyor allows speeds of up to 0.6 meters per second, and, as it is made of steel wire, extends maintenance intervals, and does not need lubrication, when compared to chains.

India Cement and Construction Materials Journal

MaY 2019

cement Regional news

egional news

Star Cement’s net profit falls in March quarter

Star Cement’s sales rose by 1.33 percent year-on-year in the March 2019 quarter, reaching INR 534.43 crore. The company’s net profit fell by 16.76 percent to INR 89.78 crore in the quarter ended March, compared with INR 107.86 crore in the equivalent quarter of 2018. Full-year net profit declined by 9.64 percent to INR 298.78 crore, compared with INR 330.66 crore in the previous rose. Sales for the period expanded by 13.41 percent to INR 1,831.04 crore.

Ambuja Cement using paper waste in cement production Paper manufacturers in the state of Gujarat, India, are sending their plastic waste to Ambuja Cement’s Kodinar plant, to be used in cement manufacturing. The two industries signed a memorandum of understanding in 2010, when the Central Pollution Control Board released guidelines recommended the use of coprocessing technology to utilize the waste. “Besides this, co-processing reduces CO2 emissions since the inherent heat value

MaY 2019

India Cement and Construction Materials Journal

in certain wastes is utilized in the cement kiln and it replaces, to some extent, the fossil fuels utilized in the process. If these wastes had not been co-processed, they would have been incinerated or landfilled instead, it would have led to corresponding GHG emissions,” explains Berthold Kren, who heads Geocycle India, one of the largest waste management companies, which is part of global brand LafargeHolcim and Ambuja Cement in India.

HeidelbergCement’s Asia-Pacific business has positive impact in first quarter margins HeidelbergCement reported an increase in sales volumes across all of its business lines, while revenue grew fifteen percent year-on-year.

Indian cement companies to benefit from price hikes and rise in demand

Reliance Securities is expecting India’s cement sector to perform strongly over the next coming years, due to strong demand and the sharp price recovery taking place since February 2019. “We are hopeful that the recent price recovery should sustain hereon on account for sustained demand momentum and rising utilization of the industry,” said market analyst Reliance Securities. “Incremental demand from proposed ‘housing for all’ scheme and construction activities of Metro/irrigation projects are likely to aid utilization and profitability of the industry in the long-term. We further believe that incremental demand will be higher than incremental supply over the next three years, which is expected to aid pricing recovery,” Reliance Securities further said. “The sector witnessed further leap in cement prices as if the domestic industry

moved back to decadal trend. Though, industry’s utilization used to be in the range of 85-90 percent a decade ago, we’re still at far below than those levels, owing to huge supply,” they added. All-India average cement price in the trade segment reached INR 330-335 per bag at the end of April, a rise of ten percent year-on-year and seven percent month-on-month. This was due to significant price hikes in the northern region, a rise of 12.4 percent month-onmonth, followed by the western region, which increased by eight percent monthon-month, and the eastern region, at seven percent month-on-month. Prices have expanded by around INR 30-50 per bag in the month, and there are uncertainties that these may hold. In April, demand took a hit of around 15-30 percent month-onmonth due to the price increases, the emerging water shortage, slowdown in government projects and general liquidity tightening in the wake of the ongoing general elections.

Maadesh Cements to install new cement grinding unit in India

Revenue in the first quarter of 2019 grew significantly to EUR 4.2 billion (previous year: 3.6). This corresponds to a rise of 17 percent in comparison with the same quarter of the previous year and an increase of 15 percent on a comparable basis, i.e. excluding positive exchange rate effects of EUR 68 million. Key revenue drivers were – in some cases significant – increases in sales volumes in the Group areas Western and Southern Europe, Northern and Eastern EuropeCentral Asia, and North America as well as the price increases that were successfully implemented in many markets. Prices developed positively throughout the Asia-Pacific Group area. In Indonesia, the margin increased despite still relatively high coal prices. Although sales volumes in India and Thailand showed a sluggish development due to the elections, the result improved thanks to increased prices. In Australia, demand from major infrastructure projects offset the decline in residential construction. Savings in selling, general and administrative expenses had a positive impact on the result.

Maadesh Cement is planning to install a 300 tons per day standalone cement grinding unit in Tamil Nadu, India. The project is currently waiting for environmental clearance, and building should commence once it is received. The acquired land area is 1.57 hectares, while the estimated cost of the project is INR 13.5 million. India Cement and Construction Materials Journal

MaY 2019

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

Russia 10 articles

Uzbekistan 10 articles

Spain 9 articles

United States 12 articles

Egypt 41 articles

Mexico 14 articles

Pakistan 9 articles

Indonesia 11 articles Brazil 9 articles

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's meeting agenda includes: May 23, 2019

World Cement Bag & Bagging Equipment Industry & Forecast

June 6, 2019

Global Cement Trade Prices 1Q 2019

Cw Research's newest reportS:

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Global Cement Volume Forecast Report 1H2019

World Cement Bag & Global Cement Bagging Equipment Trade Price Report Industry & Forecast

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May 2019

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May 2019

BUZZ

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Cement demand grows in India Cement prices to rebound after elections in India 3. Cement producers announce price hike in India 4. Rural, affordable housing boost cement demand in India 5. Cement production in India accelerates growth of large industries in March 6. Cement prices in India rise in March 7. India: Cement prices expand in Mumbai and Delhi 8. Cement contributes to higher freight loads at South Central Railway, India 9. Cement prices decline in India, March 2019 10. Cement prices stabilize in India, March 2019

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India: Petcoke prices decline in April Star refinery delivers first products Handling of petcoke cargo in Moroccan ports expand in first quarter 4. Russia forbids petcoke exports to Ukraine 5. India: Decrease in use of petcoke causes slowest fuel consumption rise in five years 6. Valero restarts petcoke-producing refinery 7. Refinery in Azerbaijan undergoing modernization process 8. Reliance expects margin growth with petcoke project 9. Vessel unloads petcoke in Maine 10. New petcoke-producing plant to be set up in Russia

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Buzzi Unicem posts higher sales, lower profit in 2018 2. Cement and clinker trade prices improve in March 3. Cementos Argos reaches new production record in the Dominican Republic 4. Cement prices in Zhejiang, China, to rise further in May 5. Colombia’s cement output rises in March 6. Chinese cement prices rise in April 7. Bolivia’s cement imports drops in 2018 8. Cement prices in China to expand further in May 9. Global cement demand curbed by China’s decline; India remains promising 10. Senegal dealing with cement shortage