September 2024
Brazilian cement demand drops in 2023 12 January 2024
Brazil: Brazil consumed 62Mt in 2023, down by 1.7% year-on-year, according to data from the National Cement Industry Association (SNIC). This marks the second successive year of decline, after demand dropped by 2.8% to 63.1Mt in 2022. As a result, cement’s value on the National Construction Cost Index dropped by 6%, after having risen by 13% in 2022. The domestic cement industry recorded a capacity utilisation rate of 66% in 2023.
SNIC president Paulo Camillo Penna noted high household debt, high interest rates and poor income growth as impacting the industry’s sales. He said “The My House, My Life housing programme was not fully operational until the middle of the year. Up to September 2023, the construction industry experienced a 16% decline in the number of real-estate launches.” He continued “By 2026, we will experience a period of turnaround for the cement industry.”
Hume Cement Industries sells land in Pulau Pinang 12 January 2024
Malaysia: Hume Cement Industries has accepted an offer for a parcel of land it owns in Prai Industrial Estate, Pulau Pinang. Reuters has reported the value of the deal as US$8.57m, on which Hume Cement Industries expects to make a net gain of US$6.89m.
Germany: Rohrdorfer Zement has fired up a pilot clay tempering unit at its Rohrdorf cement plant in Bavaria. The project has received Euro8.65m in funding from the German Federal Ministry for Economic Affairs and Climate Action and the EU. It is one of a number of industrial projects under the EU’s Euro800bn NextGenerationEU post-Covid-19 economic recovery instrument. Sources of heat for the pilot unit at the Rohrdorf cement plant include waste heat from the plant’s clinker line. If the pilot succeeds, the introduction of tempered clay into cement production at the site will follow. This will entail the construction of an on-site full-scale clay tempering plant. Rohrdorfer Zement says that this would reduce the plant’s CO2 emissions by 16 – 18%, or by 30% if it achieves carbon neutral clay tempering through the use of green hydrogen.
Rohrdorfer’s dedicated Net Zero Emissions Labs team is working to turn the Rohrdorf cement plant carbon neutral by 2038. Other initiatives include the installation of carbon capture systems at the Rohrdorf plant and another in Austria, and participation in the H2-Reallabor Burghausen hydrogen partnership.
Regarding the latest pilot, Rohrdorf Net Zero Emissions Labs project leader Helmut Leibinger said “As a cement component, tempered clays make a significant contribution to CO2 mitigation. With the pilot project of process-integrated tempered clay, we are taking not just a step in our decarbonisation roadmap, but a leap.”
Middle East Calcined Clay and Kaolin Group International to build limestone calcined clay cement plant 11 January 2024
Oman: Middle East Calcined Clay and Netherlands-based Kaolin Group International plan to build a limestone calcined clay cement plant in Oman. The partners have hired Spain-based turnkey plant engineer IPIAC to supply equipment including its Plug and Clay clay calcination unit. The new plant will produce limestone calcined clay cement with 40% lower CO2 emissions than ordinary Portland cement (OPC), according to the supplier.
IPIAC previously introduced the technology in Cuba and Ivory Coast, and is currently retrofitting it to a clinker line in Angola.
JSW Cement prepares for initial public offering 11 January 2024
India: JSW Group has initiated the process for an initial public offering (IPO) for JSW Cement. The Financial Express newspaper has reported that the group expects the IPO to raise US$723m.
Heidelberg Materials sells French cement transport business 11 January 2024
France: Heidelberg Materials has completed its divestment of its French cement transport business, Tratel, to multiple local players. Tratel controls 450 trucks and around 770 trailers across France. Groupe Garnier has taken it over in the north western and Île-de-France, e-b-trans in south eastern and south western France, Groupe DESERT in western France and T2GL in eastern France, while Heidelberg Materials France continues to manage order intake, chartering and dispatch activities. Heidelberg Materials says that the move advances its portfolio optimisation strategy, which involves increasing its focus on core businesses.
JSW Cement and Coolbrook to install RotoDynamic Heater at Vijayagar steel and slag cement plant 11 January 2024
India: JSW Cement has appointed Finland-based Coolbrook to install its RotoDynamic Heater electric kiln technology at the Vijayagar steel works and slag and cement grinding plant in Karnataka. Press Trust of India News has reported that the partners expect the technology to reduce the CO2 emissions of the plant’s slag cement.
Update on Saudi Arabia, January 2024 10 January 2024
Eastern Province Cement said this week that it had awarded a new production line project to Sinoma CDI. The subsidiary of China-based CNBM Group and Sinoma International Engineering has picked up the contract to build a 10,000t/day plant from design to installation at the cement producer’s Al Khursaniyah plant. Word on project finance is to follow later and the contract should be signed by the end of March 2024. The cement company last mentioned the project to the Saudi Exchange back in March 2023, when it suggested that it was focusing on upgrading existing lines at its Al Khursaniyah plant rather than building a brand new clinker plant at Najibiyah. The plans for the latter project date back to 2015. Eastern Province Cement holds limestone extraction licences in both locations.
It is worth noting that the last couple of new conventional production line projects announced in Saudi Arabia have been picked up by Sinoma International Engineering and related companies. Sinoma International Engineering won an engineering, procurement and construction (EPC) contract to build Southern Province Cement's upcoming Jizan cement plant in May 2023. This followed the awarding of a new 10,000t/day line by Yamama Cement, also to Sinoma International Engineering, in November 2022. However, Germany-based IBAU Hamburg was confirmed by Hoffmann Green Cement Technologies (HGCT) in September 2023 as being the company that would build a ‘clinker-free’ cement plant in Saudi Arabia in 2024. This will be a copy of HGCT’s H2 plant in France, which uses a combination of activated clay, ground granulated blast furnace slag (GGBFS) and gypsum to manufacture its products. HGCT has signed a deal with Shurfah Group to build several Hoffman plants under a 22-year exclusive licensing agreement.
Arguably though, despite all these new plant news stories, the bigger issue so far this year was Saudi Aramco's decision to raise its feedstock and fuel prices from the start of 2024. Several Saudi cement producers released warnings in response that production costs would rise and earnings would fall. Al Jouf Cement, Arabian Cement, Qassim Cement, Saudi Cement, Yamama Cement and Yanbu Cement each made statements to shareholders on the issue, saying that they were working out the impact, would announce what this might be when known and that it was likely to make a difference from the first quarter results onwards.
The timing of Aramco's price hike is poor given that after a tough year, with falling sales for some producers, demand was expected to pick up somewhat. Aljazira Capital, for example, in a cement sector report released in late December 2023, forecast a 3% year-on-year increase in cement sales volumes in 2024 following an estimated fall of 8% in 2023. Its reasoning was that the domestic housing construction market had declined in 2023, leading to high levels of competition in the central region of the country caused by high levels of company inventory. Looking ahead, the competition was expected to ease as more projects were generated outside the central region and demand from the country’s various large-scale infrastructure plans took off. We will have to wait for Aljazira Capital’s next report to find out how they think the market will cope with higher fuel costs, but it seems likely that business may remain tougher than expected for the cement producers in the short term at least.
Finally, one more story to consider is that Al Jouf Cement signed a deal with Rabou’ Al-Taybeh Company this week to export cement and clinker to Jordan. The initial period covers six months with the option for renewal. Up until 2022, at least, clinker exports from Saudi Arabia were growing most years since the export rules were relaxed in 2017. With a difficult market reported domestically in 2023, the appetite to focus on exports may be growing and this could be a sign of that. Another example this week of Saudi-based cement companies looking outside the domestic market could be detected when Northern Region Cement said it had sold a 49% stake in its Iraq business to Al-Diyar Al-Iraqia for Investments Company. The cement company said that the new strategic partnership would help it to further expand its investments in the promising market. It will use the proceeds of the deal to repay loans and for ‘external investments.’ It valued the transaction at just under US$44m. For more on what Northern Region Cement and others have been up to in Iraq, see Global Cement Weekly’s analysis from November 2023.
The steady stream of new clinker production lines suggests confidence in the cement sector in Saudi Arabia in the medium to long term. It is also fascinating to witness a secondary cementitious material plant like the one HGCT is planning on the way too. Unfortunately though, the recent fuel price rise looks like it might ruin the party in the short term for those hoping for better things in 2024.
The 26th Arab International Cement & Building Materials Conference and Exhibition takes place in Cairo on 15 - 17 January 2024. Visit Global Cement at stand N3
Severin Weig appointed as head of Ciments du Maroc 10 January 2024
Morocco: Ciments du Maroc has appointed Severin Weig as its chief executive officer with effect from 1 February 2024. He will succeed Matteo Rozzanigo in the post, who will become the president of the Northeast-North America Region of Heidelberg Materials Group.
Weig joined Heidelberg Materials in 2012 and has held various corporate treasury roles in Germany before becoming the group’s Director of Treasury, Insurance and Corporate Risk within its German organisation. He was also appointed as a member of the Advisory Council on Sustainable Finance of the German Federal Government in June 2022. Prior to working for Heidelberg Materials Weig held a number of positions in multinational investment banks.
Sergo Vashakidze appointed as Commercial Director Africa & Mediterranean-Western Asia at Heidelberg Materials 10 January 2024
Germany: Heidelberg Materials has appointed Sergo Vashakidze as its Commercial Director Africa & Mediterranean-Western Asia. Vashakidze has worked for the group since 2011 in a variety of roles. He became the Deputy General Manager for RMC/AGG operations at HeidelbergCement Kazakhstan in 2014, that country’s Sales and Marketing Director Cement in 2016 and then the Area Commercial Director NEECA (Northern & Eastern Europe - Central Asia) based in Germany in 2021. Prior to this he worked in a variety of banking positions in Georgia and Germany.
Vashakidze holds an undergraduate degree in business administration from the Tbilisi State University and a master’s degree in economics and social studies from the University of Trier.