Global Cement kicks off 2021 with a look at the cement sectors of Denmark, Estonia, Finland Latvia, Lithuania, Norway and Sweden.
While there are various definitions of Northern Europe, this review takes in four Scandinavian countries - Denmark, Finland, Norway and Sweden - plus three in the Baltic - Estonia, Latvia and Lithuania. Six of these seven countries are EU Member States. The exception is Norway, which, while not a member, is closely aligned with the bloc via its membership of the European Economic Area.
The seven countries are home to a total of 32.8 million people. Nearly a third of these (10.1m) live in Sweden, with Denmark (5.8m), Finland (5.5m) and Norway (5.4m) each home to similar numbers of people. Of the Baltic countries, Lithuania is the most populous (2.8m), with 1.5 times as many people as Latvia (1.9m) and more than twice as many as Estonia (1.3m).
Modern economies
The seven countries in this review all have market economies. The largest economy among them is that of Sweden (US$556bn) and the smallest is that of Estonia (US$30.7bn). Those in Scandinavia are characterised by high taxes that fund extensive social welfare programs. They have among the highest standards of living in the world with GDP/capita rates in the range of US$50,000 - 80,000.
Having gained independence upon the collapse of the Soviet Union in the early 1990s, the Baltic countries - Estonia, Latvia and Lithuania - have smaller economies and GDP/capita rates in the range of US$18,000 - 23,000.
Cement sector - By country
There are 10 cement manufacturing plants that share a capacity of 13.7Mt/yr in the seven countries in this review, plus one 0.5Mt/yr slag grinding plant. Of the seven countries, Sweden has the largest cement sector, with 3.1Mt/yr. Denmark, despite having just one plant, has the second-largest cement sector (3.0Mt/yr). Finland and Latvia are tied with the third-largest industries (2.0Mt/yr) (See Figure 1).
Cement sector - By company
The region defined in this review is unusual in that each country only has one cement producer. Three countries - Estonia, Norway and Sweden - have HeidelbergCement subsidiaries as the backbone of their cement industries. The German multinational is the dominant force in the region, with a share in 5.64Mt/yr of capacity across six plants. This is sufficient to give it almost 40% of capacity in the region.
The second-largest producer in the region is Cementir Holding (3.0Mt/yr), via its Aalborg Portland Cement subsidiary in Denmark. Schwenk Zement, which operates a plant in Latvia (2.0Mt/yr) and 34% of Akmenés Cementas in Lithuania (0.5Mt/yr), is third-largest (2.5Mt/yr). Ireland’s CRH is the fourth-largest producer, with 2.2Mt/yr across its Finnsementti operations and its 25% stake in Estonia’s Kunda Nordic Tsement. Akmenés Cementas is the smallest producer. It is partly owned by Germany’s Schwenk Zement (34%) and by HeidelbergCement (8.65%). Local investors hold the remaining 57.35%. LafargeHolcim is not present in the region and Cemex left in 2019.
Denmark
Denmark has a single cement producer, Aalborg Portland Cement, which has made cement at its Rørdal site near Aalborg, Jutland, since 1889. Today it has seven kilns, two for grey cement (2.1Mt/yr total) and five for white cement (0.9Mt/yr). It is part of Cementir Holding, the Italian multinational and global white cement market leader. Prior to its acquisition by Cementir in 2004, it was owned by Blue Circle (1990 - 2000) and FLSmidth (2000 - 2004).
Today the Rørdal plant supplies the Danish and wider Scandinavian grey cement markets, including with low-clinker cements such as its Futurecem™ product. It is a major producer of white cement, exporting to more than 70 countries around the world. Aalborg Portland Cement also controls seven terminals in Denmark, with 35 ready-mix concrete plants controlled by its subsidiary Unicon. Cementir reports that the plant’s alternative fuel substitution rate is 60%, while it supplies 36,000 local homes with hot water for heating. This will rise to 50,000 in 2022. It is also building a 8MW captive wind farm.
While it has no production capacity in Denmark, HeidelbergCement has imported cement into the country since 2006 via its DK Cement subsidiary. Cement originates from its Norwegian and Scandinavian plants and is imported via its Randers terminal in Jutland.
Estonia
There is only one cement manufacturing plant in Estonia, at Kunda on the country’s north east coast. Cement has been made in Kunda since 1870, with three kilns in operation by the 1920s. Production was halted between 1939 and 1942 due to the removal of equipment from the site during the Second World War. Extensive renovation came in 1957 - 1958 under Soviet control, when the company was known as Red Kunda. The plant made more than 1Mt of cement in a single year for the first time in 1973. Upon the collapse of the USSR in 1991, the company was renamed Kunda Nordic Tsement in 1992. It underwent a major overhaul in the late 1990s under the Swedish Scancem group, before that company became part of HeidelbergCement in 1999. Today, CRH owns 25% of the company’s shares.
Since March 2020 the former integrated site has only ground clinker from other facilities. The company said that the closure of the wet kiln was forced by the rising cost of emitting CO2 under the EU Emissions Trading Scheme (ETS), which made continued clinker production uneconomic at the site. Prior to its closure the Kunda plant emitted more than 1050kg of CO2 per 1t of cement, way in excess of the EU average of 766kg/t.
Estonia made 129,000t of cement in the first half of 2020, down by 31% year on year from 187,000t in the first half of 2019. Eesti Statistika has reported that the sharpest decline was in June 2020, by 41% year-on-year to 25,800t from 43,700t.
Schwenk Zement serves the Estonian market via its network of terminals in Finland, Sweden and Norway.
Finland
Finnsementti is the only producer of cement in Finland. It traces its history back to 1914 and the commissioning of the country’s first cement plant in Parainen, in the south west of the country. Previously also running plants in Lohja Kalkkitehdas Osakeyhtiö (1914), Lappeenranta (1938) and Kolari (1968), the company has since shrunk to just two integrated cement plants at Parainen (1.0Mt/yr) and Lappeenranta (0.5Mt/yr). It also operates a 0.5Mt/yr slag grinding plant in Raahe on the Gulf of Bothnia.
The company was controlled by Scancem between 1993 and 1999. Unlike some of Scancem’s other assets, the Finnish assets were sold to the Irish group CRH. In 2021 the company supplies the vast majority of cementitious materials in the country.
As well as its three cementitious product sites, Finnsementti also operates five slag and cement terminals across Finland at Kirkkonummi, Mariehamn, Pietarsaari, Pori and Oulu (shown right).
Germany’s Schwenk Zement supplies cement to the Finnish market via its Embra subsidiary. It imports material into Loviisa, Naantali and Joensuu. Scandinavian Cement also owns a cement import terminal in Hamina.
Latvia
Cement production in Latvia dates back to 1867 with the establishment of the JSC C CH Schmidt plant in Riga. A new plant in Brocēni came online in 1938. Intially with a capacity of 60,000t/yr, two Polysius kilns were added in the early 1940s but the plant suffered damage during the Second World War.
The Brocēni plant was renovated from 1947 onwards, during Soviet control of the country. Both plants diversified during the second half of the 20th Century, leading to the production of roofing slates, bricks, lime, limestone and ceramic tiles, as well as cement. The Riga plant has since closed.
Upon independence in 1991, cement demand in Latvia dropped significantly. A number of owners took on the Brocēni plant, with RMC taking over in the late 1990s. In 2005 Cemex took over the reins from RMC, with plans for investment in Latvia.
A new Euro300m plant began production at the Brocēni site in 2010 after a three year construction project. Another nine years later, Cemex decided to exit the Latvian market as part of efforts to reduce its debt, selling the plant, plus an extensive Northern European terminal network to Germany’s Schwenk Zement in 2019.
In 2021 the 2.0Mt/yr plant is one of the largest in Northern Europe. As well as supplying the domestic market, around 70% of the cement made in Brocēni is exported to Lithuania, Estonia, Sweden, Finland and Belarus. HeidelbergCement operates a cement terminal in Riga.
Lithuania
Like its northern neighbour, Lithuania has a single integrated cement plant, the Akmenés Cementas plant in Akmené. The company has produced cement on the same site since 1952. During the Soviet era, the plant was run as a wet process facility, with up to eight kilns that supplied cement all over the USSR.
After Lithuania gained its independence in 1991, the plant underwent a period of rationalisation to adjust to market demands and was progressively upgraded to modern standards. A new 4500t/day dry process line from Germany’s KHD Humboldt Wedag has been in operation since 2014.
The plant is predominantly owned by local investors, with a 34% stake held by Schwenk and an 8.65% stake held by HeidelbergCement, which also operates teminals in Kaunas and Klaipėda.
Norway
As elsewhere in Northern Europe, HeidelbergCement is the dominant force in the Norwegian cement sector. It operates two integrated plants via its Norcem subsidiary. The original Norcem was founded by the merger of three Norwegian cement manufacturers in 1968. It became part of Scancem in 1996 and then HeidelbergCement in 1999.
The larger of Norcem’s two plants is in Brevik, around 160km to the south west of Oslo. It was founded as Dalen Portland Cementfabrik in 1916 and made its first cement in 1919. Today it is a 1.2Mt/yr facility that could become the first in the global cement sector to fully decarbonise cement production. Its long-standing carbon capture and storage (CCS) project with Aker Solutions has been in development since 2010.
The project will use amine-based sorbants to selectively capture CO2 from the plant’s exhaust stream. The partners signed an agreement with Aker Solutions to order a CO2 capture, liquification and intermediate storage plant for the plant in June 2020. In September 2020, the Norwegian government introduced a bill to parliament to allow funding for industrial scale implementation of the project. If enacted, the legislation will provide for the majority of required funding, estimated at more than US$820m for installation and operation for five years. It is anticipated that the project will begin to capture and store CO2 in 2023 or 2024.
Around 1300km to the north is Norcem’s Kjøpsvik plant. At 68.1° north, it is the world’s most northerly cement plant and lies just within the Arctic Circle.
Schwenk Zement operates strategic terminals in Norway in Oslo, Bergen, Stavanger and Etne.
Sweden
As in Norway, HeidelbergCement is the dominant force in the Swedish cement sector. It operates two integrated plants under its Cementa subsidiary. The largest is located in Slite on the island of Gotland in the Baltic Sea. At 2.5Mt/yr it is the largest of the plants in this review and is perfectly situated for marine shipments to mainland Sweden via Cementa’s 17 domestic cement terminals. The plant uses around 60% alternative fuels and is involved in the CemZero project with Vattenfall, which seeks to electrify the cement production process.
Cementa also operates the 0.6Mt/yr Skövde plant in the south of the mainland. It closed its 0.3Mt/yr Degerhamn plant on Öland at the end of April 2019. The unit continues as a terminal. Schwenk Zement operates terminals at Surte, Landskrona and Västerås.
