September 2024
Polish cement sales rise by 7% to 18Mt in 2017 13 April 2018
Poland: Cement sales rose by 7% year-on-year to around 18Mt in 2017, according to the Polish Cement Association. The country has a cement production capacity of 24Mt/yr and the capacity utilisation rate is approximately 75%. The Institute of Economic Forecasting and Analysis forecasts that sales will grow by 8% in 2018 to 17.9Mt.
Dominican Republic cement sales fall slightly in 2017 13 April 2018
Dominican Republic: Cement sales fell slightly by 1.5% year-on-year to 4.18Mt in 2017 from 4.24Mt in 2018. Adocem, the Dominican Portland Cement Producers Association, blamed the slowdown on a slowdown of the general economy. It also reported that exports grew in 2017 to 20.1% of production from 17.3% in 2016.
Quinn chief not worried by Brexit 12 April 2018
Ireland: Liam McCaffrey, the chief executive officer of Quinn Industrial Holdings does not expect Brexit to slow growth. He said that the most damage could arise from a prolonged recession in the UK, although he though it was unlikely, as reported bythe Irish Times newspaper. He added that the UK has a housing shortage and it relies on imports for building materials. In his estimation the worst-case scenario would be a tariffs on building materials but these, if they happened at all, are expected to be low.
The building materials producer and owner of Quinn Building Products reported that its turnover grew by 7.4% year-on-year to Euro209m in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) increased by 31% to Euro23.9m.
“Despite the significant macro-economic challenges posed by Brexit, we continue to invest, grow sales, innovate and drive margin growth. Encouragingly, volume growth trends from 2017 are continuing year to date in 2018 and, at this point, we are firmly on track to deliver our fourth successive year of strong earnings growth,” said McCaffrey.
Court confirms fine by Polish competition body 12 April 2018
Poland: The court of appeal has supported a decision by the Office for Competition and Consumer Protection (UOKiK) in 2009 to fine six cement producers for cartel-like behaviour. However, the total fine has been reduced by one third to Euro67m from Euro98.3m, according to the Polish News Bulletin.
Grupa Ozarow is to pay Euro22.1m, Cemex Polska Euro16.6m, Gorazdze Cement Euro12.3m, Dyckerhoff Polska Euro7.51m, Cementownia Warta Euro5.55m and Cementownia Odra Euro2.87m. Some companies had their fines reduced by the court of appeal. Dyckerhoff will pay Euro7.5m instead of Euro13m and Cemex Polska will pay Euro5.88 less than the original fine. Some of the companies involved are considering appealing to the Supreme Court.
UK: Cemex has launched its digital customer integration platform, Cemex Go, in the UK. The system allows the company and its customers to will be used in real time to manage order placement, live tracking of shipments and invoices and payments for the company’s main products, including bagged and bulk cement. Cemex Go was introduced in Mexico and the US in late 2017.
Cutting cement’s carbon footprint 11 April 2018
Two reports out this week have looked at the carbon footprint of the cement industry. The first, a technology roadmap by the Cement Sustainability Initiative (CSI) and the International Energy Agency (IEA), laid out a technology pathway for the sector to reduce its direct CO2 by 24% from current levels by 2050 to meet the IEA’s 2°C scenario (2DS). The second, a report by the CDP (formerly the Carbon Disclosure Project) on the progress of 13 major cement producers to reduce their emissions, was a progress report on the business readiness for a low carbon economy transition.
Graph 1: European Union industry emissions by sector, 2013 - 2017. Source: Sandbag, European Commission.
The scene was set last week when the environmental campaign group Sandbag picked up on the latest emission data from the European Union (EU) Emissions Trading Scheme (ETS). Industrial emissions as a whole rose by 2% year-on-year to 743Mt in 2017. The cement and lime industry reported a rise of 3% to 148Mt in 2017 from 144Mt in 2016. As Sandbag reported, industrial emissions have remained ‘stubbornly high’ for the duration of the ETS. It then went on to say that, “the EU urgently needs a new industrial strategy to bring about radical industrial process changes and/or carbon capture and storage, especially for the high-emitting steel and cement sectors.”
The CDP’s report provided a global scorecard on the readiness of the cement industry to adapt to a low-carbon future. Unfortunately, the report used data from self-reporting questionnaires and it lacked data from the two largest Chinese cement producers, Anhui Conch and China National Building Materials (CNBM), although it did try to compensate for this. The CDP assessed companies across four key areas aligned with the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD).
Graph 2: Opportunity vs. risk for low-carbon transition. Source: Building Pressure report, CDP.
Surprisingly, the study, even with its limitations, found regional variation. As can be seen in Graph 2, the Indian cement producers came out on top from the criteria used: transition risks, physical risks, transition opportunities and climate governance and strategy. CDP pinned this on better access to alternative materials such as fly ash and slag coming from other carbon intensive sectors, such as thermal power generation and steel production. Reported process emissions measured by the clinker ratio for the Indian companies was 69% versus 78% for the other companies. They also benefited from newer cement plants driven by high market growth in the region compared to older plants in Europe.
The technology roadmap from the CSI and the IEA set out key actions for the industry to take by 2030 to have at least a 50% chance of achieving the 2°C 2DS scenario followed by a possible transition pathway that could be achieved through technology, legislation and investment. The key actions are protecting carbon pricing mechanisms from carbon leakage, putting new technology into action and supporting it by legislation, and greater government support for products with a lower clinker factor.
The CSI’s and IEA’s targets for 2030 included reaching a clinker to cement ratio of 0.64 in 2030 from 0.65 in 2014, a thermal energy intensity of clinker of 3.3GJ/t from 3.5GJ/t, an electricity intensity of cement of 87kWh/t from 91kWh/t and a alternative fuel co-processing rate of 17.5% from 5.6%. Perhaps the most optimistic is a CO2 capture and storage amount of 14MtCO2/yr in 2030 from nothing at the moment. This last target seems unlikely to be achieved given the lack of projects outside of the pilot stage, but it’s not impossible.
This column barely touches on the detail within either report or even the latest data from the EU ETS. Both reports offer ways forward to meet the 2°C global warming target outlined in the Paris Agreement. It’s easy to be pessimistic given the on-going clash between environmental optimism and business logic but both reports offer a way forward. The CDP report sets out a baseline with a look to the future, whilst the CSI/IEA roadmap offers what it says is a realistic route to reach that 2DS target. Lastly, if the CDP’s assessment is correct about the Indian producers then it’s possible that other developing cement industries may inherently be cleaner due to their use of newer plants and equipment. If worldwide government support can be provided for use of alternative fuels and materials on a much larger scale, as well as all the other recommendations, then meeting the Paris agreement may be easier than expected as new markets build new production capacity.
Two examples of carbon capture utilisation and sequestration projects will be covered in the May 2018 issue of Global Cement Magazine
Poland: Lafarge Poland has appointed Xavier Guesnu as the president of its management board. He succeeded Federico Tonettiego in March 2018. Tonettiego had held the role since 2014.
Guesnu has worked for LafargeHolcim for eight years. In 2010 he was responsible for Lafarge's strategy and development in global markets, acting as the Vice President for Strategy, Development, Acquisitions & Mergers. From 2013 he was the General Director of the aggregate business in eastern Canada. Previously he worked as a business consultant for Bain & Company. He is a graduate of Mines ParisTech engineering school in Paris, France.
US: Plibrico has appointed Norm Phelps as its new Vice President of Sales. Phelps will be responsible for aligning sales strategy and objectives with Plibrico's long term vision and corporate goals. He will be based in Atlanta, Georgia and will report to Plibrico president and chief executive officer Brad Taylor.
Phelps has worked in the refractory industry for 18 years, holding sales and marketing positions at Vesuvius and Zampell in the US. Later he moved to Europe to join Calderys as Global Market Manager responsible for the aluminum and boiler segments in 2011. In 2014, he took on the role of Business Development Manager, leading the Calderys expansion into North America, including the purchase and integration of Spar and the creation of Calderys USA. Most recently, he served as General Manager for Calderys North America.
Phelps holds a degree in Materials Science and Engineering from Pennsylvania State University and is a graduate of the Executive Development Program at the University of Chicago Booth School of Business.
Indian government considering ban on petcoke use 11 April 2018
India: The Supreme Court has been informed that the government is considering a ban on the use of petcoke by various industries. Additional Solicitor General A N S Nadkarni, representing the Ministry of Environment, Forest and Climate Change, told the court that a decision on the matter could be made within one month, according to the New Indian Express newspaper.
At present it is unclear whether the cement industry would be affected. However, if it was included in the ban, this potentially could be a problem for Shree Cement, which uses 100% petcoke in its fuels mix, according to India Infoline News Service. Additionally, UltraTech Cement, JK Cement, JK Lakshmi Cement and Mangalam Cement have petcoke usages in the range of 75 - 85% and would also be negatively affected.
India: Dalmia Bharat has sought intervention by the Central Vigilance Commission (CVC) in the insolvency proceedings of Binani Cement. It argues that the lenders’ reported move to allow owner Binani Industries to seek an out of court settlement violates CVC guidelines and circumvents the dedicated insolvency process, according to the Economic Times newspaper.
A consortium led by Dalmia Bharat won an auction for Binani Cement with a bid of US$974m in early March 2018. However, UltraTech Cement then made a direct bid to Binani Cement a few weeks later. In a letter to the CVC Dalmia Bharat alleged that UltraTech Cement’s direct offer was a revised bid in an auction that forbade them.