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Cement industry reactions to coronavirus
Written by David Perilli, Global Cement
25 March 2020
Cement producers and suppliers are now reacting to the coronavirus pandemic at scale. The biggest obvious development has been the lockdown in India that began on 24 March 2020. The implications for the cement industry are profound given the country’s population (1.3Bn) and massive cement consumption under normal conditions. It is the country with the world’s second largest cement production capacity.
UltraTech Cement, the biggest producer, said that it was suspending production at ‘various’ locations although it added that the situation was ‘dynamic’ and that it was monitoring it from time to time. Ambuja Cement and JK Lakshmi Cement have done likewise. The latter has suspended cement production at an integrated plant in Rajasthan and three grinding plants in Gujarat. Some Indian states have moved faster than others towards shutting down movement of people so JK Lakshmi’s decision may merely be based on legal necessity. However, a difference may arise in producer strategies between keeping integrated and grinding plants open. Building up inventory is one strategy seen in poor market conditions previously around the world. Alternatively, moving to more of a grinding model might make sense in some territories if, as is happening, countries implement lockdowns at different periods. However, some Indian states have moved faster than others towards shutting down movement of people and JK Lakshmi Cement’s closure pattern may simply reflect this.
At the international scale HeidelbergCement gave an idea to Reuters of the challenge facing the multinationals. Chief executive officer (CEO) Dominik von Achten described the start of 2020 as being strong but that construction projects were being delayed in the US and that activity in France and Spain was starting to weaken. Unsurprisingly, the company has shut down three of its plants in Lombardy at the centre of the Italian epidemic. He added that the group was holding a daily crisis call to assess the effect of the virus upon staff. He also said that the group was stockpiling cement amid the disruption. The clear warning sign was of an existential threat like that faced by the airlines whereby sales could simply stop for a three or four week period… or longer.
On the supplier side, Denmark’s FLSmidth has issued a robust plan on how it is aiming to maintain service and support for its customers. Past all the now-usual stuff such as remote working it included detail on how to support clients on site where absolutely necessary on a case-by-case basis. With regards to its supply chain it pointed out that it was confident, “that any local interruptions to our suppliers can be minimised, even when the agility of some suppliers is put to the test. We have redundancy built into the system.” To this end it emphasised the global nature of its business to ensure that it could deliver parts and equipment to its customers. It claimed that it coped with coronavirus in China due to its ‘very flexible’ supply chain but did admit to some supply chain impacts. Yet it says that production is back to approaching full capacity with workshops in Qingdao and Shanghai above 90% as they work their way through accumulated backlogs. Finally, it is also offering advice on how the company can support its customers on reducing or shutting down operations.
Other supplier comments on the situation have mainly been about protecting staff, working remotely and supporting customers through continued supply of equipment and services. Back in India, Sameer Nagpal, the CEO of refractory manufacturer Dalmia-OCL told Business Standard that the company was coping so far with the crisis with little major impact seen so far. Its raw material supply chain was dependent on China but after some minor disruption it was secure. Most of its customers are domestic, where it hadn’t reported problems so far, although this may change with the Indian lockdown. Exports were a different story as it sends around 10% of its production abroad and it has a plant in Germany. In Europe it was seeing a challenge due to supply chain disruption.
The experiences above are a snapshot of some of what is happening in parts of the industry as coronavirus disruption hits home. China’s restrictions are easing, most of Europe is in lockdown, India has started its quarantine and the US has restricted movement in about a third of its states. The current restrictions in the UK, for example, allow for construction work to continue but local media is debating the associated risks for workers. Other territories have different rules. All of this is affecting demand for cement and concrete. This in turn feeds through to producers and their suppliers. Global Cement continues to monitor the situation and wishes readers a safe passage through the pandemic.
Kenneth Capes re-elected CEO of Metier Mixed Concrete and Sephaku Holdings executive director
Written by Global Cement staff
25 March 2020
South Africa: The board of Sephaku Holdings, owner of Sephaku Cement and 36% owner of Nigeria-based Dangote Cement, has re-elected Kenneth Capes as chief executive officer (CEO) of Métier Mixed Concrete. The board also re-elected Capes as an executive director of Sephaku Holdings, a position he first attained in 2013. He co-founded Métier in 2007.
Frank Siefert appointed as head of Claudius Peters Group
Written by Global Cement staff
25 March 2020
Germany: Frank Siefert has been appointed as the chief executive officer (CEO) and managing director of Claudius Peters Group. He also takes the role of managing director of Claudius Peters Projects. Siefert was previously with the Liebherr Group, a manufacturer of construction machinery, and brings with him a wealth of experience in the capital equipment sector. He holds a degree in mechanical engineering and has also held various senior positions in sales, technology and production during his career.
Kurt Herrmann has also been appointed as Managing Director - Global Sales, Claudius Peters Group and Managing Director Sales, Claudius Peters Projects. He joined the Claudius Peters group in 1991 and has held the position of Managing Director of Claudius Peters (China).
Martina Merz to continue as chief executive officer of ThyssenKrupp
Written by Global Cement staff
25 March 2020
Germany: ThyssenKrupp has decided to retain Martina Merz as its chief executive officer (CEO) for a three year term from 1 April 2020. She was originally delegated to the position for a year. As part of the transition she will resign from the supervisory board.
The group has also decided to appoint Klaus Keysberg as its chief financial officer (CFO) following the resignation of Johannes Dietsch. Keysberg, who holds a PhD in business administration, will remain responsible for the materials businesses in addition to his new role as CFO. Plant Technology will in future be the responsibility of Martina Merz.
With these personnel changes the executive board of ThyssenKrupp now consists of only three members. In addition to Martina Merz as CEO and Klaus Keysberg as CFO, Oliver Burkhard will continue in his role as Chief Human Resources Officer and Labor Director.
Paulo Lima appointed Aumund Brazil CEO
Written by Global Cement staff
25 March 2020
Brazil: Germany-based Aumund subsidiary Aumund Brazil has appointed Paulo Lima its chief executive officer (CEO). Lima brings many years’ mechanical engineering experience, specialising in conveying technology in cement and other industries. He previously worked for Aumund Brazil in leading sales positions between 1996 and 2000 and from 2004 to 2008.