Displaying items by tag: Türkiye
Arda Aba appointed as Purchasing Group Manager at Çimsa
24 January 2024Türkiye: Çimsa has appointed Arda Aba as a Purchasing Group Manager. He has worked for the cement company in purchasing and investment roles since 2015. Before this he held a number of similar roles in the automotive industry with positions at Pimsa Adler and Ford Otosan. He holds a master’s degree and a bachelor’s degree in mechanical engineering from the Istanbul Technical University and Yıldız Teknik Üniversitesi respectively.
Türkiye: Sinoma Overseas Development has won a contract to execute the first phase of a four-plant solar power project across three of LIMAK Cement Group’s cement plants in Türkiye. The contract covers engineering, procurement and construction (EPC) of an initial 28.2MW-worth of new solar power capacity.
Sinoma Overseas Development said “This project opens a new chapter of our robust partnership built on many successful practices of cooperation on projects of cement EPC and supply services over the past decade, leading us into a new field of green energy. The deeper and wider cooperation between LIMAK and us reflects its recognition and trust in our company's ability to perform the contracts in the past, indicating another significant leap in exploiting the Turkish market, expanding localised operations, and transforming to providing green energy projects.” The supplier added “We will exert our utmost in project execution and client services to propel LIMAK’s strategic blueprint of energy saving and carbon reduction in its pursuit of a greener, more sustainable future.”
As Lafarge Cement Syria's Jalabiyeh cement plant burns again, survivors of ISIS still await justice
17 January 2024This year will mark the 10th anniversary of the Yazidi genocide in Sinjar, Iraq. Beginning on the night of 2 - 3 August 2014, ISIS displaced the entire Yazidi population from its homeland, amid a campaign of abductions and killings that claimed 12,000 victims.1 A striking detail of this and other crimes of the self-proclaimed caliphate is the proximity of a Western corporate actor: cement producer Lafarge, whose subsidiary Lafarge Cement Syria operated the Jalabiyeh cement plant in neighbouring northern Syria. On-going investigations have since helped uncover what may amount to complicity on the part of Lafarge and Lafarge Cement Syria in the form of payments dating back to August 2013.2
In a week that began with the abandoned Jalabiyeh cement plant ablaze following a drone strike,3 Lafarge learned that it will face trial in France over its alleged complicity in crimes against humanity committed by ISIS.4 On 16 January 2024, the French Court of Cassation upheld Lafarge and Lafarge Cement Syrias' indictments on the charge. Also reportedly indicted are (all former) Lafarge CEOs Bruno Lafont and Eric Olsen, vice president Christian Herrault and security director Jean-Claude Veillard and Lafarge Cement Syria CEOs Bruno Pescheux and Frédéric Jolibois, along with an intermediary and a Jordan-based risk management consultant.5, 6 The collaboration in question includes monthly payments to ISIS and other armed groups worth US$15.5m, a lower French court found in May 2022. It may be more than another 20 months before the thorny mass of issues to be considered by the court resolves itself in convictions, or cleared names.
Another front in Lafarge and Lafarge Cement Syria's legal battle over what happened in Syria is the US civil court system. Activist and survivor Nadia Murad and 426 other Yazidis have filed an Anti-Terrorism Act claim for damages, based on the companies' previous guilty plea to the US Department of Justice to conspiracy to the tune of US$5.92m in October 2022. Murad and fellow claimants allege ‘far higher’ total payments, pointing to correspondence between Lafarge Cement Syria and its intermediary that references ‘[sic] ten millions that we pay directly to them, i.e. to ISIS.’ The DoJ estimates the total value of the conspiracy for all parties at US$80.5m.
On 6 August 2014 (the fourth day of the Yazidi genocide), Lafarge and Lafarge Cement Syria signalled their agreement to enter into a new long-term agreement to share their revenues with ISIS. On 15 August 2014, the UN Security Council issued Resolution 2170 condemning 'any engagement in direct or indirect trade' with the organisation.7 Lafarge and Lafarge Cement Syria allegedly concluded the revenue-sharing agreement, under new terms more beneficial to ISIS, on that same day.
Lafarge Cement Syria finally evacuated the Jalabiyeh cement plant in September 2014, whereupon ISIS added it to its own five-plant international cement network, with sales worth US$583m/yr. The US-led Coalition bombed the site in October 2019 and it was subsequently occupied by Kurdistan Workers’ Party (PKK) forces. The strike on 14 January 2024 was part of a drone campaign by Turkish forces against Kurdish positions that the invaders say destroyed 23 targets.
It is conceivable that Turkish armed forces also had personal reasons for destroying this monument to Lafarge’s former presence in the region: on Lafarge’s stipulation, ISIS implemented a duty on Turkish cement entering its area of control, ostensibly charged at US$150/truck. As anyone familiar with the Turkish cement sector knows, one of the major investors in the industry happens to be the country’s military pension fund.
For the 400,000 Yazidis who have survived, the tragedy that began in August 2014 will not end soon. More than half remain in refugee camps. Among the missing are 2000 girls and women who the International Centre for Counter-Terrorism suspect ISIS may have 'further entrenched in human trafficking,' constituing a continuation of the genocide that has outlasted both the self-proclaimed caliphate and the French multinational that may have helped to bankroll it.8 Courts in different countries are helping bring to light a reign of terror that spanned international borders. In the US, some of its victims may find redress, while in France, justice may be closing in on anyone who might prove to have made common cause with the perpetrators.
References
1. RASHID, 'DESTROYING THE SOUL OF THE YAZIDIS,' Augut 2019, https://www.rashid-international.org/downloads/RASHID_Yazidi_Heritage_Destruction_Report_2019.pdf
2. Jenner & Block, 'IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK,' 14 December 2013, www.jenner.com/a/web/fy85Wd97fANx7fwBecn31r/23-9186-as-filed-complaint2.pdf
3. ANHA, 'Turkish occupation army targets former Lafarge site,' 14 January 2024, https://hawarnews.com/en/turkish-occupation-army-targets-former-lafarge-site?__cf_chl_tk=mSB3Ph6iU.3FEJ.Z3ywRvcu2n.tOahhpLnd.Fmqk0SU-1705415232-0-gaNycGzNDHs
4. Reuters, 'Lafarge can be charged with 'complicity in crimes against humanity' over Syria plant, French court says,' 16 January 2024, https://ca.news.yahoo.com/lafarge-charged-complicity-crimes-against-132904436.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANqF5SKpSZ7KB5rT5rjo_vFZ5LGdZ9bVkC5SeNw3iZGneLy5Tir2dsb1O3GQjITBRSF_xEs2GDBcSU94nKOocm-npnTznmbfhKB_FgOsBCg-9lO7ilPP2phHAcGahghG9yjmFoWVd24uU7xEwZ2RZqmmMaE2bSIIcTGRuh4LAlXD
5. Madeline Young, Lafarge's Case Cemented, 2021, https://scholarlycommons.law.emory.edu/cgi/viewcontent.cgi?article=1032&context=eilr-recent-developments
6. Le Télégramme, 'Complicité de crimes contre l’humanité : les poursuites contre Lafarge validées par la Cour de cassation?' 16 January 2023, www.letelegramme.fr/france/complicite-de-crimes-contre-lhumanite-les-poursuites-contre-lafarge-validees-par-la-cour-de-cassation-6505590.php
7. UN Security Council, 'Security Council Adopts Resolution 2170 (2014) Condemning Gross, Widespread Abuse of Human Rights by Extremist Groups in Iraq, Syria,' 15 August 2014, https://press.un.org/en/2014/sc11520.doc.htm#:~:text=Through%20the%20unanimous%20adoption%20of,as%20ISIS)%20and%20Al%2DNusra
8. Al-Dayel et al, ‘ISIS and Their Use of Slavery,’ 27 January 2020, https://www.icct.nl/publication/isis-and-their-use-slavery
US cement shipments fall in first nine months of 2023
21 December 2023US: Shipments of cement, including imports, in the US and Puerto Rico fell by 2.5% year-on-year to 80.7Mt in the first nine months of 2023 from 82.8Mt in the same period in 2022, according to data from the United States Geological Survey (USGS). Shipments fell in most states with the exception of Texas and Pennsylvania. The USGS estimated that, in September 2023, 98% of all blended cement shipments were of Portland Limestone Cement. Turkey was the biggest exporter of cement to the country during the reporting period at 6.3Mt followed by Canada, Vietnam, Greece and Mexico.
Türkiye: Taiwan Cement Corporation (TCC) has concluded an agreement to acquire an additional 20% stake in OYAK Denizli Çimento from OYAK Çimento. Reuters has reported that this will raise TCC’s stake in the company to 60%. The deal aligns with a previous memorandum of understanding (MoU) between the two parent companies.
OYAK Denizli Çimento operates the 3Mt/yr Honaz cement plant in Denizli Province. It reportedly has an enterprise value of Euro1.4bn. OYAK Çimento bought the business from Eren Holding and Ireland-based CRH for US$400 – 450m in 2014.
Taiwan Cement heads west
29 November 2023Taiwan Cement Corporation (TCC) has struck a deal to take control of the Türkiye and Portugal-based parts of OYAK’s cement business. The arrangement will see TCC grow its share of the joint-venture business in Türkiye to 60% from 40% at present and it will fully take over the Cimpor joint-venture in Portugal by purchasing OYAK’s 60% stake. Overall TCC is expected to pay around Euro740m for its acquisitions. A final agreement on the deal is expected to be signed in early December 2023.
The proposed deal follows on from when TCC originally spent US$1.1bn towards setting up joint-ventures as a junior partner with OYAK back in 2018. The situation now appears to have reversed with TCC becoming the main owner of the cement business in Türkiye and the sole owner of Cimpor in Portugal. In Türkiye this gives TCC control over the largest cement producer with seven integrated plants, three grinding plants, 47 ready-mixed concrete (RMX) plants, three aggregate quarries and one paper packaging plant. In Portugal (and Cape Verde) this puts TCC in charge of three integrated plants, two inactive grinding plants, 42 RMX plants, 15 quarries, two mortar plants and a cement bag unit.
This contrasts with last week’s news that CRH is buying one cement plant in Texas (with associated assets) for US$2.1bn. TCC is taking control of 10 plants in Türkiye and Portugal for Euro740m. It is not a fair comparison given the woes of the Turkish economy in recent years, prior joint-venture business ownership and so on. Yet it is one more example of the changing nature of cement company ownership around the world since the mid-2010s.
The state of the economy in Türkiye may well be a factor for the change in ownership at OYAK and Cimpor as well as negative exchange rate trends. High inflation has caused problems in recent years, although the government changed its stance on avoiding putting up interest rates following the elections in May 2023. Yet, in a statement about the OYAK deal, chair Nelson Chang said that “companies that do not understand carbon will not survive in the future.” His company is about to spend Euro740m and become the fifth largest cement producer in the world on the assertion that it does understand carbon. Good luck!
Accordingly, the language in the press releases both OYAK and TCC have released is all about sustainable growth and reducing carbon emissions. However, the detail on how exactly they intend to do this is vague. What is clearer though is that OYAK is hoping that TCC invests in energy storage and related industries such as lithium-ion battery additive carbon black in Türkiye. To this end a TCC subsidiary and OYAK are collaborating on a carbon black plant in Iskenderun and further investments may be in the pipeline. TCC and OYAK are also responsible for a couple of calcined clay projects in Sub-Saharan Africa.
Readers may recall that the chair of Chang pronounced in June 2023 that TCC was aiming to diversify the business towards over 50% sales from non-cement sectors by 2025. However, the share from the cement business was around 68% in 2022 and this latest deal with OYAK will likely send it in the ‘wrong’ direction. The company already has a production capacity of around 77Mt/yr from its cement plants in China and Taiwan. Majority ownership of OYAK Çimento and Cimpor Portugal will bump this up to 99Mt/yr and put the company into the top five of the world’s largest cement producers by capacity.
The final question here is what kind of owner TCC intends to be to its growing cement businesses in West Asia and Europe. Publicly at least, it has come across as a backseat investor since 2018 although it has been a minority owner. This has now changed but it will be interesting to observe whether the subsidiaries in the west will be run at arm’s length or more closely and if TCC unifies its global branding and so on. Watch this space.
Türkiye: Taiwan-based Taiwan Cement Corporation (TCC) has signed a preliminary memorandum of understanding (MoU) with OYAK Çimento. Under the MOU, the parties will enter into negotiations over the transfer of a further 20% stake in OYAK Denizli Çimento to TCC. This will raise TCC’s stake in the company to 60%. Reuters has reported the total enterprise value of OYAK Denizli Çimento as US$1.42bn.
Italy: Cementir Holding raised its sales by 0.5% year-on-year during the first nine months of 2023, to Euro1.3bn. It sold 7.93Mt of cement, down by 3.1% year-on-year from 8.19Mt in the corresponding period of 2022. Cementir Holding attributed the decline to reduced demand, primarily in Belgium, Denmark, Egypt, Malaysia and the US. This offset an increase in consumption in China and Türkiye. The group’s operating costs dropped by 6.6% to 1.01bn, while its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 33% to Euro321m.
Update on Iraq, November 2023
08 November 2023Northern Region Cement announced this week that it is planning to build a new cement production line in Iraq. It has signed an engineering, procurement, and construction deal with Germany-based KHD and its parent company AVIC for the supply of a 1.3Mt/yr production line. The contract has been valued at US$139m with a duration of 16 months, suggesting that the earliest the new plant might be commissioned would be from early 2025.
The Saudi Arabia-based company operates an integrated cement plant at Arar in Northern Borders Province and an integrated plant at Muwaqar, near Amman, in Jordan. It also took over a grinding plant in Basra, Iraq, in 2017 and runs this via its Um-Qasr Northern Cement subsidiary. It has not been disclosed so far where the new production line in Iraq will actually be or what type of equipment is being supplied. However, the price suggests a clinker pyro-processing line.
The timing of this project is noteworthy as it follows a number of other such announcements so far in 2023. In mid-August 2023 China-based Sinoma International Engineering said that it had signed a US$219m deal with Al-Diyar Company for Cement Industry and Industrial Investment to build a 6000t/day clinker production line with a 50MW captive power plant. The project is located in the Samawah area of Al Muthanna Province. First clinker production is scheduled from mid-2025. This followed the start of construction at another project in the Erbil province in the Kurdistan region of the country in June 2023. Kurdistan Region Prime Minister Masrour Barzani laid the foundation stone for a new 6000t/day cement plant. The DCCP Cement and Power plant is being built by local partner Dabin Group and China-based China Power Investment Corporation (PowerChina).
In May 2023 Pakistan-based Lucky Cement revealed that it was preparing to build a second production line at its integrated plant at Samawah. It runs the plant under the Najmat Al Samawah joint venture together with UAE-based Al Shumookh Group. The first 1.31Mt/yr line at the plant was started up in 2021. It said that the new proposed 1.82Mt/yr production line was intended to take advantage of renewed economic activity in Iraq, benefit from increasing numbers of construction projects and further supply clinker to Lucky Cement’s grinding plant joint-venture at Basra. Construction work on the new line was expected to start by September 2023 with a completion date scheduled by mid-2025. Earlier still in March 2023 the Iraqi General Cement Company signed a deal with Turkey-based Zodiac for the latter to build a new 1.8Mt/yr plant at the Hammam Al-Alil Complex in Nineveh Governorate.
The Cement Manufacturers Association in Iraq (CPA) has reported various meetings in 2023 it has held with the Minister of Industry and Minerals with the aim of supporting the sector. In March 2023 it was discussing developing a five year plan to increase cement production with the aim of surpassing a capacity of 40Mt/yr. For reference the Global Cement Directory 2023 placed local capacity at just under 10Mt/yr. Then, in June 2023, the conversation had moved on to talking about awarding new licences to build plants on a regional basis, warnings that capacity is growing too fast and setting standards.
All of this is positive news 20 years on from the US-led invasion of Iraq in 2003 and the insurgency that followed. The local economy has benefited from high oil prices and a period of political stability, followed by infrastructure investment. Holcim runs two cement plants in Iraq via its Lafarge Iraq subsidiary and it noted “strong domestic cement demand” in the country in 2022. The number of new cement plant projects so far in 2023 underlines a new confidence in the market. Unfortunately the war between Israel and Hamas in the Gaza Strip threatens to undermine the previous period of calm should hostilities spread. However, the news from Northern Region Cement about its proposed new plant suggests that some level of business confidence remains for now.
New directors appointed at Norm
18 October 2023Azerbaijan: Norm has appointed Ülkü Özcan and Stephan Sollberger to its board of directors, according to the Trend News Agency.
Ülkü Özcan holds over 20 years of experience in the cement industry. She has held various positions in Cimsa and held the position of its chief executive officer from 2018 to 2020. Since then she has been working in the energy & telecommunication cable business in Türkiye. Additionally, she has held various roles at Afyon Cement, including a member of the board of directors, a representative for the Global Cement and Concrete Association and a member in the Audit Committee of the Cement Manufacturers Association of Türkiye. She has also worked for Lafarge Turkey previously. Özcan is a business graduate from Marmara University and has completed the Advanced Industrial Marketing and Strategy Program at INSEAD Business School in Paris.
Stephan Sollberger holds over 30 years of experience in cement and concrete manufacturing companies. From 1992 to 2001, he occupied various positions at Holderbank Cement und Beton. Until 2006, he worked as the manager of the technical centre of Holcim Switzerland and later as a plant director, also in Switzerland. He also holds managerial experience at Jura Group. Since 2020, he has held the role of Chief Operations Director at Landqart. Sollberger is a graduate from the University of Applied Sciences Zurich and the University of Applied Sciences Bern.