Displaying items by tag: UK
Update on Pakistan, April 2024
24 April 2024Changes are underway in South Asia’s second largest cement sector, with two legal developments that affect the industry set in motion in the past week. At a national level, the Competition Commission of Pakistan recommended that the government require cement producers to include production and expiry dates on the labels of bagged cement. Meanwhile, in Pakistan’s largest province, Punjab, a new law tightened procedures around the establishment and expansion of cement plants. At the same time, the country’s cement producers began to publish their financial results for the first nine months of the 2024 financial year (FY2024).
During the nine-month period up to 31 March 2024, the Pakistani cement industry sold 34.5Mt of cement, up by 3% year-on-year. Producers have responded to the growth with capacity expansions, including the launch of the new 1.3Mt/yr Line 3 of Attock Cement’s Hub cement plant in Balochistan on 17 April 2023. China-based contractor Hefei Cement Research & Design executed the project, including installation of a Loesche LM 56.3+3 CS vertical roller mill, giving the Hub plant a new, expanded capacity of 3Mt/yr.
Pressure has eased on the operating costs of Pakistani cement production, as inflation slowed and the country received a new government in March 2024, following political unrest in 2022 and 2023. Coal prices also settled back to 2019 levels, after prolonged agitation. Pakistan Today News reported the value of future coal supply contracts as US$93/t for June 2024, down by 2% over six months from US$95/t for January 2024.
Nonetheless, cost optimisation remained a ‘strong focus’ in the growth strategy of Fauji Cement, which switched to using local and Afghan coal at its plants during the past nine months. Its reliance on captive power rose to 60% of consumption, thanks to its commissioning of new waste heat recovery and solar power capacity. During the first nine months of FY2024, the company’s year-on-year sales growth of 14% narrowly offset cost growth of 13%, leaving it with net profit growth of 1%.
Looking more closely, the latest sales data from the All Pakistan Cement Manufacturers Association (APCMA) shows a stark divergence within cement producers’ markets. While exports recorded 68% year-on-year growth to 5.1Mt, domestic sales fell, by 4% to 29.4Mt. The association further breaks down Pakistani cement sales data into South Pakistan (Balochistan and Sindh) and North Pakistan (all other regions). Domestic sales dropped most sharply in South Pakistan, by 6% to 5.16Mt. In the North, they dropped by 3% to 24.2Mt. Part of the reason was a high base of comparison, following flooding-related reconstruction work nationally during the 2023 financial year. Meanwhile, the government finished rolling out track-and-trace on all cement despatches during the opening months of the current financial year, and commenced the implementation of axle load requirements for cement trucks. APCMA flagged both policies as potentially disruptive to its members’ domestic deliveries, amid a strong infrastructure project pipeline.
Pakistani producers suffer from overcapacity, but have established themselves as an important force in the global export market. They continue to locate new markets, including the UK in January 2024. Lucky Cement was among leading exporters overall, with a large share of its orders originating from Africa.
On 17 April 2024, the government of Punjab province set up a committee to assess new proposed cement projects, with the ultimate goal of conserving water. Falling water tables are considered a significant economic threat in agricultural Punjab. Besides completing an inspection by the new committee, proposed projects must also secure clearance from six different provincial government departments and the local government. While acknowledging the necessity of the cement industry, the government insisted that it will take legal action against any cement plant that exceeds water allowances.
Pakistan’s cement plants have grown in anticipation of a local market boom. Without this strong core of sales, underutilisation will remain troublesome, especially in North Pakistan where exposure is highest. At the same time, APCMA has given expression to the perceived lack of support affecting production and distribution. For an industry with expansionist aims, new restrictions on its growth and operations can feel like an existential menace.
Breedon Group reports first-quarter 2024 drop in sales
24 April 2024UK: Breedon Group's sales dropped by 5% year-on-year in the first quarter of 2024, according to a trading update from the company. It attributed this to macroeconomic uncertainty and unfavourable weather conditions in the UK. Sales volumes of its materials ‘softened,’ but prices remained ‘resilient,’ partly offsetting the decline. The quarter brought three new acquisitions, including the company’s first in the US. Two scheduled cement kiln shutdowns took place within budget and on schedule.
CEO Rob Wood said "We have laid good foundations for the remainder of the year: progressing pricing, pursuing efficiencies, completing two bolt-on acquisitions and launching our third platform by entering the US market. Although the economic landscape remains uncertain, I am confident our discipline and focus, coupled with our strong customer relationships, will see us deliver against our unchanged expectations for 2024."
UK: Heidelberg Materials UK has opened a new circular materials hub at its Appleford depot in Oxfordshire. The site will recycle construction waste for use in low-CO2 building materials. The move advances the company’s strategy to conserve natural materials and support the circular economy.
Recycling managing director James Whitelaw said “Recycling, reusing and reducing the use of primary raw materials is crucial to reaching net zero. Our network of recycling hubs will allow us to provide the most sustainable products to our customers through circularity and innovation to enable building more with less.”
UK: First Graphene has announced a third trial at Breedon Group’s Hope Cement Works to test an optimised formulation of its PureGRAPH-CEM product under full-scale production conditions. The trial aims to further improve the performance of graphene nanoplatelets in cement production using practical experiences obtained from the previous two trials. The third trial is based on a PureGRAPH grade with a particle size distribution and morphology optimised for use in cement grinding mills, designed for direct addition to the mill without the need for additional equipment. The trial will last eight hours and involves close monitoring of cement fineness during the process. It will use just over 2t of the graphene product in up to 1000t of cement, according to the company. The trial is scheduled to start in the second quarter of 2024.
Residents sign petition opposing expansion of quarry at Heidelberg Materials’ Ketton cement plant
28 March 2024UK: Over 450 people have signed a petition opposing plans to expand the quarry at Heidelberg Materials’ Ketton cement plant. The company has submitted a planning application for the extension to Rutland County Council, according to the Rutland Times newspaper. Residents including those at the nearby village of Empingham, cited negative effects upon air quality, lighting, noise, dust, sustainability, ecology and economic impacts in their criticism of the plans.
CRH sells UK lime business
27 March 2024Ireland: CRH says that it has completed the sale of its UK lime business. The sale concludes the second phase of the group’s divestment of its lime operations in Europe, first announced in November 2023. The total sale value of CRH’s European lime business is US$1.1bn.
UK: Capsol Technologies has been selected to conduct a study on its carbon capture technology at Aggregate Industries Cauldon cement plant in Staffordshire. Owned by the Holcim Group, the company’s plant will undergo a feasibility study by Capsol Technologies for its CapsolEoP® carbon capture system. The potential for carbon capture at this plant is 600,000t/yr of CO₂. The CO₂ captured will be stored geologically through the nearby MNZ Cluster or HyNet North West.
CCO Johan Jungholm said “CapsolEoP® provides a cost-efficient carbon capture solution for cement, and our solution can be run on electricity alone without expensive heat integration or external steam supply. It offers flexibility in the optimisation of the designs, allowing for high capture rates, high reliability and low energy consumption."
The contract includes supplier input for the feasibility study, and further pre-FEED engineering if Capsol's technology is selected. The UK Government's Industrial Energy Transformation Fund (IETF) is funding the study, with Petrofac as Aggregate Industries engineer. This study is part of Peak Cluster's objective to reduce over 3Mt/yr of CO₂ from cement, lime, and refuse facilities by 2030. Capsol Technologies is focusing on the cement industry, which accounts for about 8% of global CO₂ emissions.
UK: Tarmac will utilise River Logic's Digital Planning Twin™ for enhanced supply chain capabilities in its cement division.
Jim Dutton, cement supply chain planning manager at Tarmac, said "We're pleased to have commissioned River Logic as a partner to work with our cement business in the UK. Working with River Logic means we have further support to simplify, connect, and optimise our supply chain efforts. With this third-generation system, we can look at CO2 emissions data in addition to supply and demand information which supports our planning."
UK: Heidelberg Materials' Ribblesdale cement works in Lancashire is participating in a pioneering study to assess the use of ammonia as a hydrogen source for fuelling cement kilns. This 12-month feasibility project, conducted in collaboration with engineering consultants Stopford and Cranfield University, has received funding from Innovate UK through its UK Research and Innovation fund.
The research aims to investigate ammonia as a potentially energy-dense, cost-effective hydrogen carrier for cement manufacturing and other industries. Building on Ribblesdale's successful demonstration of using hydrogen in a net-zero fuel mix for a cement kiln, the new project will focus on the most efficient methods for on-site 'cracking' of ammonia to release hydrogen as kiln fuel.
Marian Garfield, Sustainability Director at Heidelberg Materials UK, said “We have already proved the success of using hydrogen as part of a lower carbon fuel mix, but its storage and transportation are currently technically challenging and expensive. Ammonia could offer a more viable hydrogen source that enhances fuel usage and reduces CO2 emissions. If successful, this project will pave the way for further investigations into the commercial viability of using ammonia as a hydrogen carrier for combustion in cement production and beyond.”
Breedon Group reveals 2023 financial results
07 March 2024UK: Breedon Group recorded a 7% year-on-year increase in revenue of €1.73bn in 2023. Earnings before interest and taxation (EBIT) were €171m, down by 2%.
CEO Rob Wood said “The record results we delivered in 2023 are a real accomplishment and something I am extremely proud of. The challenging trading conditions our team faced required agile and bold responses which they took with discipline and determination.”