Displaying items by tag: HeidelbergCement
HeidelbergCement’s asset portfolio revalued
07 July 2020Germany: Following a comprehensive review of its assets HeidelbergCement has announced a Euro3.4bn impairment to its company value compared to the figure from a precious valuation prior to the second quarter of 2020. The company gave the reasons for the impairment as: the demand impacts of the coronavirus pandemic; economic effects on operations in individual countries; notably in the UK post-Brexit; and an increase in the market risk premium used by the Institut für Wirtschaftsprüfer (German public auditing body) for valuation to 7% from 6%. The largest regional impairment was Euro2.7bn, in Western and Southern Europe. Euro2.3bn of the total impairment, “relates to the Hanson acquisition” by HeidelbergCement in 2007.
Suez Cement records first quarter loss in 2020
02 July 2020Egypt: Suez Cement has recorded a loss of US$18.0m in the first three months of 2020, compared to a profit of US$11.0m in the first three months of 2019. Sales fell by 27% year-on-year to US$80.6m from US$110m in 2019. Domestic demand in relation to Egypt’s production overcapacity fell in March 2020 due to the coronavirus outbreak. Daily News Egypt has reported that the second quarter 2020 results will carry greater losses for Suez Cement due to coronavirus lockdown measures and seasonal factors such as Ramadan, with cement volumes down by 27% year-on-year in May 2020.
Sustainable thinking
01 July 2020HeidelbergCement released their sustainability report for 2019 this week. Every large cement producer publishes one but this one is worth checking out because of the company’s ambition to become CO2 neutral. Other companies are heading the same way but few of them have such developed and public plans.
Sustainability reports are often a hodgepodge of non-financial reporting bringing together environment, health and safety, community and other topics. Multinational companies cover a wide range of jurisdictions and combining reporting in these kinds of fields can be beneficial. Typically they are members of various bodies like the Global Reporting Initiative (GRI) or the Global Cement & Concrete Association (GCCA) that give various levels of conformity between reports. Yet, the wider focus of sustainability reports gives companies a chance to promote what they are doing well, away from balance sheets.
One highlight of HeidelbergCement’s report is its progress towards reducing its specific CO2 emissions per tonne of cement and its recognition by the Science Based Targets (SBT) initiative towards this goal. So far it has achieved a reduction of around 22% from 1990 levels to 599kg CO2/t (net) with a target of a 30% reduction or 520kg CO2/t by 2030. There is a lot more going on in the report but it’s led by the vision, ‘to offer CO2-neutral concrete by 2050 at the latest.’ It plans to achieve this by increasing the proportion of alternative CO2-neutral raw materials and fuels, developing lower clinker cement types and capturing and utilising CO2 emissions. A focus on concrete is worth noting given the pivot by building materials manufactures towards concrete in recent years.
Back in the present, HeidelbergCement is roughly in the middle of the pack of major European multinational cement producers with its specific CO2 emissions for cement in 2019. LafargeHolcim reported 561kg CO2/t and Cemex reported 622kg CO2/t. This is a bit of a moving target since corporate acquisitions and divestments can change both the starting point and the apparent current progress. HeidelbergCement’s acquisition of Italcementi in 2017 or CRH’s purchase of Ash Grove did exactly that. The other thing to consider is that these companies manufacture a lot of cement. The actual gross CO2 emissions from a multinational cement producer are immense. LafargeHolcim, one of the world’s largest multinational producers, emitted 113Mt of CO2 in 2019 from process and fuel sources whilst making cement. To put that into context, estimates for total global CO2 emissions range from 33 – 36Gt for 2019. The cement industry’s entire share was estimated by the International Energy Agency (IEA) to be 4.1Gt in 2018.
Where this sustainability report starts to become really interesting is where it talks about CO2 capture and utilisation. Its plans in this department are more mature than many of its competitors with various initiatives at different levels of development, mostly in Europe. Norcem, its Norwegian subsidiary, recently signed an agreement with Aker Solutions to order a CO2 capture, liquification and intermediate storage plant at its integrated Brevik cement plant. The deal is dependent on government support but it’s a serious proposal. As reported previously from the Innovation in Industrial Carbon Capture Conference 2020, HeidelbergCement is actively preparing to hook up with CO2 transport and storage infrastructure. The driver is CO2 pricing from initiatives like the European Union (EU) Emissions Trading Scheme (ETS). With the EU preparing for the next phase of the ETS and talk of the European Green Deal gathering pace, before the coronavirus outbreak at least, CO2 prices in Europe look set to rise. HeidelbergCement is positioning itself to benefit from being the first major cement producer to head into CO2 capture and storage/utilisation with a variety of methods intended for different CO2 prices and regional requirements.
HeidelbergCement doesn’t mention the coronavirus pandemic in its latest sustainability report. The report covers 2019 after all, before all of this happened. These reports do include health and safety information of employees, so this may be something to look out for next year. However, Cemex did mention the coronavirus in relation to its climate action plans this week. Essentially it wants to maintain its plans as a ‘fundamental component’ of its efforts to recover from the health crisis. This chimes with media talk around so-called ‘green-led’ government-backed relief programmes. Governments are the ones who are likely to be handing out the money, probably in the form of infrastructure projects. So it’s the perfect opportunity for them to encourage change from the companies bidding for this funding. Sustainability reports and the information behind them will be a useful tool in accessing this cash.
Germany: HeidelbergCement has published its sustainability report for 2019. The building materials producer says it decreased its specific gross CO2 emissions per tonne of cement by 0.9% year-on-year to 622kg/t in 2019 from 628kg/t in 2018. Absolute net CO2 emissions also fell, by 4.6% to 68.4Mt from 71.7Mt. Indirect CO2 emission grew by 4.8% to 4.4Mt from 4.2Mt, though energy consumption in cement production fell by 3.5% to 364,000TJ from 377,000TJ.
HeidelbergCement chair Dominic von Achten said, “We have declared our express commitment to the United Nations (UN) Sustainable Development Goals. In particular, we will continue to intensify our commitment to tackling climate change in the coming years.”
Canada/US: Lehigh Cement says that it has adopted the latest North American Product Category Rules (PCR) across its entire product range.
Lehigh Hanson Canada regional cement sales and logistics vice president Shawn McMillan said, “We have made it one of our top priorities to benchmark and lower our CO2 emissions with ambitious targets. Much like food nutrition labels highlight calorific values, our plant and product-specific environmental product declarations (EPD) communicate the environmental impact through global warming potential (GWP) for cement in a simple and easy-to-understand manner. We intend to use the added product transparency to more effectively gain adoption for our lower carbon products. We have several research projects and studies on-going to continue to optimise the carbon impacts from cement and concrete.”
Cementa to supply climate-enhanced cement Swedish Transport Association supply contract
26 June 2020Sweden: The Swedish Transport Association (ST) has arranged with Cementa for the supply of ‘climate-enhanced’ cement for the completion of an expansion of the Malmö – Lund Southern Main Line between Arlöv and Lund, including an underground section and three new stations. The company first concluded the contract with ST in 2017 and has since supplied normal Ordinary Portland Cement (OPC) to the major infrastructure project. It has now agreed with the client to switch to ‘climate-enhanced’ OPC produced at its 2.5Mt/yr integrated Slite cement plant, which burns over 60% alternative fuels in its kiln lines, for production of the remaining 65,000m3 of concrete required for the project. Cementa southern district manager Jenny Larsson said, “This project is in line with Cementa’s climate-enhanced vision for infrastructure.”
Norway: Norcem, a subsidiary of HeidelbergCement, has signed an agreement with Aker Solutions to order a CO2 capture, liquification and intermediate storage plant at its integrated Brevik cement plant. The final decision for the project depends on funding from the Norwegian government, which is expected to approve the unit in its national budget for 2021.
The project will use Aker Solutions’ Advanced Carbon Capture (ACC) technology and its S26 amine solvent. Once complete the unit will capture 0.4Mt/yr of CO2. This will be transported to the Northern Lights project for permanent storage offshore beneath the North Sea.
HeidelbergCement becomes World Green Building Council Europe Regional Network official partner
17 June 2020UK/Germany: The World Green Building Council has announced that HeidelbergCement is an official partner of its Europe Regional Network. HeidelbergCement joins 4500 other companies across Europe in supporting the regional network’s work towards networking leaders, raising awareness, proposing policy and providing assessment, certification and information.
HeidelbergCement chair Dominik von Achten said, “Together with the Europe Regional Network of the World Green Building Council, we now want to further intensify the promotion of sustainability and innovation in the construction sector. In this way, we are accelerating the development towards a carbon-neutral construction industry, and ultimately towards a carbon-neutral society in Europe.”
Australia: The Queensland Supreme Court has ruled that Wagners must meet lower prices offered by a competitor in the market in its cement supply contract with Boral. Wagners suspended its supply of cement products to Boral for six months in early 2019 when Boral said it found cheaper cement from Cement Australia, according to the Australian newspaper. However, the court found that an October 2019 pricing notice for cheaper supplies from Cement Australia was ‘valid and effective’. Boral will continue buying cement from Wagners until 2031.
HeidelbergCement India reports 8.9% fourth quarter profit growth in 2019 - 20 fiscal year
29 May 2020India: HeidelbergCement has recorded a profit of US$8.77m in the three months to 31 March 2020, up by 8.9% year-on-year from US$8.06m over the corresponding period of the 2018 - 2019 fiscal year. Sales fell by 4.7% to US$67.5m from US$70.8m. HeidelbergCement India has attributed the profit to a decrease in operating expenditure of 8.6%, to US$50.7m from US$55.4m, according to Dion News Service.