Displaying items by tag: Poland
Update on Ukraine, May 2024
15 May 2024Before Russia invaded mainland Ukraine on 24 February 2023, many predicted that full-scale conflict would be averted. When the attack began, Russian President Vladimir Putin himself expected a 10-day war, according to think tank RUSI.1 15 May 2024 marks two years, two months and three weeks of fighting, with no end in sight.
Ukrcement, the Ukrainian cement association, recently published its cement market data for 2023, the first full year of the war. The data showed domestic cement consumption of 5.4Mt, up by 17% year-on-year from 4.6Mt in 2022, but down by 49% from pre-war levels of 10.6Mt in 2021. In 2023, Ukraine’s 14.8Mt/yr production capacity was 2.7 times greater than its consumption, compared to 1.4 times in 2021. Of Ukraine’s nine cement plants, one (the 1.8Mt/yr Amwrossijiwka plant in Donetsk Oblast) now lies behind Russian lines. Four others sit within 300km of the front line in Eastern and Southern Ukraine. Among these, the 4.4Mt/yr Balakliia plant in Kharkiv Oblast, the largest in the country, first fell to the Russians, but was subsequently liberated in September 2022.
Before the war, Ukrcement’s members held a 95% share in the local cement market. Their only competitors were Turkish cement exporters across the Black Sea, after the Ukrainian Interdepartmental Commission on International Trade successfully implemented anti-dumping duties against cement from Moldova and now-sanctioned Belarus and Russia in 2019. Since then, Turkish cement, has also become subject to tariffs of 33 – 51% upon entry into Ukraine until September 2026. The relative shortfall in consumption has led Ukraine’s cement producers to lean on their own export markets. They increased their exports by 33% year-on-year to 1.24Mt in 2023, 330,000t (27%) of it to neighbouring Poland.
Russia’s invasion has made 3.5m Ukrainians homeless and put the homes of 2.4m more in need of repair. In a report published in Ukrainian, the US Agency for International Development (USAID) set out its three-year rebuilding plan for the country. USAID projects an investment cost of €451bn, with the ‘main task’ besides homebuilding being to increase the share of industrial production in the economy. Ukraine is 90% equipped to produce all building materials required under the plan. Their production, in turn, will create or maintain 100,000 jobs and US$6.5bn in tax revenues. Reconstruction will also involve the Ukrainian cement industry returning to close to full capacity utilisation, producing 15 – 16Mt/yr of cement.
CRH, an established local player of 25 years, looks best set to claim a share of the proceeds. Stepping down an order of magnitude from billions to millions, Global Cement recently reported CRH’s total investments in Ukraine to date as €465m. Since war broke out, the company has more than tripled its rate of investment, to €74.5m. The Ireland-based group is in the protracted administrative process of acquiring the Ukrainian business of Italy-based Buzzi. If successful, the deal will raise its Ukrainian capacity by 56%, to 8.4Mt/yr – 57% of national capacity. This unusual clumping of ownership may be made possible by the participation of European Bank for Reconstruction and Development in partly acquiring the assets, as per a mandate letter signed with CRH in 2023.
Leading Ukrainian cement buyer Kovalska Industrial-Construction Group bemoaned the anticipated increase in market concentration. On the one hand, this sounds like a classic tiff between cement producers and users with shallow pockets. On the other hand, an antebellum allegation of cement industry cartelisation should give us pause for thought. Non-governmental organisation The Antitrust League previously reported Ukraine’s four cement producers to the government’s Anti-Monopoly Committee for alleged anticompetitive behavior. This was in September 2021, when Ukraine was barely out of lockdown, let alone up in arms. With all that has happened since, it may seem almost ancient history, yet the players are the same, CRH and Buzzi among them.
Ukrcement and its members have secured favourable protections from the Trade Commission, and, for whatever reasons, evaded the inconvenience of investigation by the Anti-Monopoly Committee – a state of affairs over which the Antitrust League called the committee ‘very weak.’ The league says that producers previously raised prices by 35 – 50% in the three years up to 2021. In planning a fair and equitable reconstruction, Ukrainians might reasonably seek assurance that this will not happen again.
All these discussions are subject to a time-based uncertainty: the end of the war in Ukraine. A second question is where the finances might come from. The EU approved funding for €17bn in grants and €33bn in loans for Ukraine on 14 May 2024. Meanwhile, countries including the UK have enacted legislation to ensure Russia settles the cost of the conflict at war’s end. If Ukraine achieves its military aims, then the finances may flow from the same direction as did the armaments that demolished Ukrainian infrastructure in the first place.
The first piece of Ukraine annexed by Russia was Crimea in February 2014, making the invasion over a decade old. Against such a weight of tragedy, the country cannot lose sight of the coming restoration work, and of the need to ensure that it best serve Ukrainians.
Polish cement industry advances with CCS technology
19 April 2024Poland: Polish cement producers are set to build carbon capture installations, supported by government policies. After a decline in production from nearly 19Mt in 2022 to about 16.5Mt in 2023, the industry is facing an increase in cheaper imports from outside the EU, particularly Ukraine, and CO₂ emission fees that account for 30% of the cost of 1t of cement, according to the Dziennik Gazeta Prawna newspaper. The EU has also introduced a carbon border adjustment mechanism (CBAM) for imports.
Despite these challenges, the Kujawy cement plant in Bielawy, owned by Holcim, is launching the large-scale implementation of carbon capture and storage (CCS) technology.
Holcim Polska's president, Maciej Sypek, said "The construction of carbon capture installations in our plants will cost between €320m and €400m. We received a €264m grant from the European Commission's Innovation Fund." According to Sypek, the project is currently in the design phase, with construction expected to start in 2025 and operations beginning in early 2028.
The implementation of CCS at the Kujawy plant could potentially lead to an industry-wide adoption of the technology, costing between US$3.7bn and US$4.9bn, according to the newspaper. Holcim Polska plans to liquefy the CO₂ and transport it by rail to a terminal in Gdańsk, where it will be shipped to the North Sea for underground storage. Cement producers are urging the Polish government to appoint a commissioner for CCS infrastructure and to enact legislative changes to support the construction of such installations. They also believe that rapid modernisation of the energy sector needs to occur to support the energy-intensive process of gas capture.
Poland: Heidelberg Materials Polska has appointed Piotr Misz as a Regional Director.
Misz has worked for Heidelberg Materials Group in Poland since 2015. He became the subsidiary’s Head of Regional Sales in 2019. Prior to this he held positions with JD Group and RMC Beton Śląsk managing ready-mix concrete plants. He holds a master’s degree in economics from the University of Opole.
Poland: The Association of Polish Cement Producers has expressed increasing concern over quadrupled year-on-year growth in cement imports from Ukraine, to 330,000t in 2023.
Zbigniew Pilch, the head of the association, highlighted the contrasting rise in imports and 12% fall in domestic production, to 16.6Mt. He said “The scale of imports from Ukraine is growing almost every month, reaching nearly 50% of total imports in January 2024. These volumes are deeply concerning.”
A primary issue raised by the association is the difference in environmental regulations faced by Ukrainian and Polish cement producers. The association argues that Ukrainian producers are not subjected to as rigorous climate policies as Polish producers, leading to an uneven playing field. Additionally, the localised nature of the cement market means eastern Polish producers are particularly affected by the ‘influx’ of Ukrainian cement.
Cement production in Poland declines in 2023
04 April 2024Poland: The Polish Cement Association reported a 12% fall in cement production in 2023, with output reaching 16.6Mt, according to data from the Central Statistical Office. The decline reflects challenges faced by the construction sector amidst a slowing economy, despite a slight GDP growth of over 0.2%.
Zbigniew Pilch, chief marketing officer of the association, said "2023 was a difficult year for the construction sector as the economy slowed down while GDP grew by a little over 0.2%." The initial data for 2024 suggests a potential rebound in the Polish cement industry, however, with Pilch adding "In February 2024, cement production totalled 1.2Mt, which represents a 33% year-on-year increase.”
Xavier Guesnu appointed as CEO of Lafarge France
28 February 2024France: Holcim has appointed Xavier Guesnu as the CEO of Lafarge France. He succeeds François Petry, who is leaving the group.
Guesnu started his international career at Legrand before joining Bain & Company in 2005. He joined Lafarge in 2010 as the head of strategic business development and mergers and acquisitions. Operational management roles followed first in eastern Canada as managing director from 2013, then as the managing director of Holcim Poland from 2018. He holds an engineering degree from the École des Mines de Paris.
Buzzi grows sales in 2023
12 February 2024Italy: Buzzi recorded consolidated sales of Euro4.32bn in 2023, up by 8.1% from Euro4.32bn in 2022. This came in spite of a 7% year-on-year drop in the company’s cement sales volumes, to 26.3Mt. In its domestic market of Italy, Buzzi raised its sales by 13% to Euro818m. In the US, sales grew by 9.5% to Euro1.74bn, in Mexico by 33% to Euro1.03bn, in Germany by 9.2% to Euro872m, in the Czech Republic and Slovakia by 1.8% to Euro205m, in Poland by 11% to Euro157m and in Ukraine by 43% to Euro85.6m. On the other hand, Buzzi’s sales fell by 5.6% in Luxembourg and the Netherlands, to Euro214m, by 2% in Russia to Euro285m, and by 1.6% in Brazil to Euro394m.
The company said “The increasingly evident effects of monetary restriction, the worsening of consumer and business confidence, and the uncertainties dictated by the growing geopolitical tensions in Ukraine and the Middle East continue to weigh on the international economic framework. In fact, in the last part of 2023, global economic activity weakened further, with international trade contracting in the third quarter.”
Lafarge Polska and partners win EU grant for Gdansk CO2 terminal
13 December 2023Poland: The European Commission has granted Lafarge Polska, Air Liquide Polska and energy provider Orlen Euro2.54m in funding for their construction of a 3Mt/yr CO2 terminal in Gdansk, Pomeranian Voivodeship. The terminal will transmit captured CO2 from local industrial sites, including 1Mt/yr from Lafarge Polska’s Kujawy w Blelawach cement plant in Kuyavian-Pomeranian Voivodeship, for sequestration below the North Sea. ISB News has reported that the partners will use the European Union funding to complete plans, including front-end engineering design, for the terminal.
Europe: Mexico-based Cemex says that it will soon have obtained Type III environmental product declaration (EPD) certificates for the cement products it produces across its European network of cement plants. EPDs have been published for selected cements since 2021. Cemex has confirmed the publication of EPDs for all cement types in Poland and the publication of EPDs for its products produced in Croatia and Spain by the end of 2023. Phase Two of the publication process will see EPDs for cements produced in the UK, Germany and Czech Republic in early 2024, which will complete the full roll out in Europe.
Sergio Menéndez, President of Cemex Europe, Middle East, Africa & Asia, said, "EPD certificates enable our customers to make an informed choice about which materials offer the lowest carbon footprint and reduce the environmental impact of their construction projects. We have therefore made securing these objective and reliable documents, which demonstrate that our products meet the requirements of more sustainable construction, a priority across our whole European operation. I am very pleased with the progress made so far and look forward to celebrating the completion of this process."
SigmaRoc buys CRH’s European lime business
22 November 2023Europe: Ireland-based CRH has agreed to sell its European lime business to UK-based SigmaRoc for US$1.1bn. The business controls 16 sites across the Czech Republic, Germany, Ireland, Poland and the UK. CRH says that the first phase of the transaction, which is scheduled for completion in early 2024, will hand over control of the Czech Republic, Germany and Ireland businesses to SigmaRoc, while control of the Poland and UK business will pass over in two subsequent phases.
CRH chief executive officer Albert Manifold said “The decision to divest at an attractive valuation follows a comprehensive review of the Business and demonstrates CRH’s active approach to portfolio management. The proceeds from the divestment will provide us with significant additional capital allocation opportunities to deliver further growth and value creation for our shareholders.”