The news in this month's Global Cement Magazine that Cemex is to institute a global water management strategy for its cement plants (and presumably all of its other industrial assets as well, since cement production is not necessarily a thirsty industry, but concrete production certainly is a major user of water) is a fantastic, far-sighted development.
In common with the other multi-nationals, most notably the signatories to the WBCSD's Cement Sustainability Initiative, Cemex has foreseen that sustainability is crucial for its continued existence. With the news that the company will 'regularise' its water management, with a view to reducing its specific water consumption, Cemex has brought to the forefront of its environmental agenda the issue of a The Last Word column, Dr Robert McCaffrey, thirsty world.
Although drought has been a problem around the world since before biblical times, we are heading into an age where - whatever happens with climate change - water will become more scarce, more sought-after and more valuable. The planet's burgeoning population will ensure that there will be less water available per person in much of the world. Under-investment in water infrastructure (which, ironically, would be cement-intensive), over-pumping of slowly-regenerating underground aquifers, increases in water-intensity in our lifestyles (and diets) and increasing pollution of water sources will all lead to a reduction in the availability of water. An increase of the planet's population from 7 billion now to around 9 billion in 2050 will further reduce the water available to each of us on average.
For example, the experts1 suggest that a country or region experiences 'water stress' when annual water available per person drops below 1700m3. Below this level, and down to 1000m3, periodic water shortages can be expected, and below 1000m3/person/year, the area is said to be facing 'water scarcity.' The UN Food and Agriculture Organisation estimates that by 2025, two-thirds of the planet's population will be living under water stress (where not enough water is available for sanitation and waste disposal, for example) and 1.9bn people will be living in countries or regions with water scarcity. Even now, nearly 900m people have inadequate access to safe drinking water. Six million children each year die from diseases caught from insanitary water. That's equivalent to one London Olympic stadium full, every five days. No wonder Cemex is bringing water to the front of its global sustainability agenda. Well done.
Too much of a good thing?
Reading this issue's news, our always-interesting columnist Yves De Moor and Peter Edwards' excellent article on the cement industry in Ethiopia is enough to make me dispair. As usual, my dispair is over the ridiculousness of human nature and our own collective stupidity (don't be offended - I'm sure that you are one of the clever ones).
As usual, in various parts of the world, we are hurtling towards a self-made industrial car-crash and there is seemingly nothing that we can do to prevent it happening. Why-oh-why do we perpetually drive our factories, companies, national and global cement industry towards over-capacity? Is it greed? Hubris? Ignorance? All three?
I sometimes imagine a conference table in the head office of some cement company - it could be a big company, it could be a small company - and surrounding it the company's directors. The managing director has been updating them with market trends. They have made a small profit in the last year and demand is rising, but their competitors have started building a new cement plant which will take market share from them, while at the same time flooding the market with product and reducing the price (and profitability). What do they do? Swallow their pride and take a reduced market share while probably maintaining their profits? Or borrow the money to build a new plant to compete with their countrymen and compatriots? You only have to look around the world to see which way the majority of those decisions have gone over the years: Build, build, build. In the end, with region-wide overcapacity, everyone loses.
Except, that is, for the plant builders and perhaps the shippers. With 'Chinese prices,' the barriers to entry into many cement markets are now lower than they have ever been. Oversupply also offers shippers (and perhaps those countries with a structural shortage of cement, like the US) a good business opportunity.
Although centrally-planned cement industries do not always work out for the best (for example the inexplicably oversupplied and indebted Vietnamese cement industry), a sensible central policy on allowing mining and cement plant construction permits would go a long way to ensuring reasonable prices to consumers and reasonable profits to cement producers. If required, region-wide coordination might be necessary, but this is not beyond the wit of mankind. Perhaps, for once, we can change human nature. Or is that too much to ask?