September 2024
China Triumph International Engineering starts building cement plant at Grobogan in Indonesia 25 December 2017
Indonesia: China Triumph International Engineering (CTIE) has started building a 2.1Mt/yr cement plant at Grobogan, Semarang in Central Java. Its subsidiary Nanjing Kisen International Engineering is responsible for the project design and equipment procurement, according to Inside International Industrials. CTIEC signed the engineering, procurement and construction (EPC) contract with with Giti Tire in November 2016. The project has a cost of US$350m.
Chinese competition body approves CNBM and Sinoma merger 22 December 2017
China: The Anti-monopoly Bureau of the Ministry of Commerce has approved the merger between China National Building Material (CNBM) and China National Materials (Sinoma). Shareholders approved the merger between the leading Chinese producer and the equipment manufacturer in early December 2017 following approval by the Fair Trade Commission in South Korea in November 2017.
Mechel signs coal deal with Jidong Cement 22 December 2017
China/Russia: Mechel has signed a memorandum for coal supply with China’s Jidong Cement. The Russian mining and metals company will supply the Jidong Cement with up to 3Mt of steam coal mined at Elgaugol’s Elga Open Pit and Yakutugol’s Neryungrinsky Open Pit. Prices will be adjusted on a monthly basis following negotiations and on the basis of index rates.
“Jidong Cement is our longstanding and strategic partner in Asia, and we aim to continue our long-term and mutually profitable partnership. Mechel’s mining division has met all its obligations on our prior agreement. Today, Jidong Cement is the chief foreign consumer of Elga’s steam coal,” said Mechel chief executive officer (CEO) Oleg Korzhov.
St Marys Cement suspends production at Dixon plant 22 December 2017
US: St Marys Cement has suspended production at its Dixon plant in Illinois. The move will result in about two-thirds of the employees losing their jobs, according to the Sauk Valley Newspapers. The company, a subsidiary of Brazil’s Votorantim, plans to continue cement grinding at the site until the summer of 2018 when its inventory will be exhausted. Then the plant will be used as a distribution terminal only.
The company said that the decision was made to improve cost efficiencies and that the plant’s location was poor compared to other sites. However, it plans to review its decision on stopping production by the end of 2018.
The Dixon cement plant originally opened in 1914 before becoming idle in 2008. Production then resumed in 2015.
Dalmia Bharat to acquire bankrupt Murli Industries 21 December 2017
India: Dalmia Bharat is set to acquire Murli Industries, a Nagpur based cement manufacturer, by investing US$62.4m. Murli owns a 3Mt/yr integrated cement plant. As per the resolution plan, Dalmia Bharat will cancel most of the equity of Murli Industries and pay its lenders US$54.6m. This is 80% below what Murli owes the banks.
Murli had a loan of US$140m but the amount it owes is US$265m after interest and penalties. However, since the lending banks have already either written off the loan or have sold it to asset reconstruction companies, the relatively low value of the rescue deal from Dalmia Bharat does not affect them.
Spanish consumption best for five years but exports fall 21 December 2017
Spain: Cement consumption is expected to have risen by 10% year-on-year to 12.3Mt in Spain during 2017. This represents the highest consumption by the sector since 2012. It is still massively down on the 25Mt/yr consumption seen during the building boom experienced by the country prior to the economic downturn.
Exports, which had been a ‘lifesaver’ for the sector during the crisis, fell by 7.6% year-on-year in the first eight months of 2017 to 5.8Mt. Spain exported 9.1Mt of cement in 2016.
Cementos Cosmos asks to burn tyres 21 December 2017
Spain: Cementos Cosmos has stated its intention to ask the Castilla León Board for permission to burn tyres in the kiln at its plant in Oral Sarriana. The move has already been met with resistance from the local Bierzo Aire Limpio platform, which has raised concerns about the effects of tyre burning on the local agricultural sector as well as ‘the alarming rates of contamination, cancer and premature deaths in a region closed in by mountains.’
This is despite the plant already having permission to burn paper and plastic waste. The increase in alternative fuels, ideally up to a 70% thermal substitution rate, is intended to reduce the plant’s dependence on fossil fuels.
2017 in Cement 20 December 2017
To mark the end of the calendar year we’re going to round up some of the major news stories from the cement industry in 2017. Like last year this piece also complements the corresponding article ‘The global cement industry in 2017’ in the December 2017 issue of Global Cement Magazine. Remember, this is just one view of the year's events. If you think we've missed anything important let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..
Recovery in Europe
2017 was the year that the European cement industry finally had something to shout about after a lost decade since the financial crash of 2007. The good news was led by a revival in cement consumption in 2016 that looks set to have continued in 2017. Prospects in Germany and Spain feel similar and a series of mergers and acquisitions have taken place in Italy suggesting that investors believe that the market is about to recover there too. Sure, Brexit is looming but as contacts have told Global Cement staff throughout the year, if the British want to damage their economy, that’s their business.
Renewal and recrimination at LafargeHolcim
Lafarge’s conduct in Syria during the civil war has cost its successor company LafargeHolcim dear, with the loss of its chief executive officer (CEO) Eric Olsen and potential reputational damage if the on-going investigation in Paris finds fault. At the time of writing Olsen, former Lafarge CEO Bruno Lafont and the former deputy managing director for operations Christian Herraul are all being questioned by the inquiry into the affair as it attempts to determine who knew what and when. LafargeHolcim has drawn a line under the debacle by appointing outsider Jan Jenisch as its new CEO in mid-2017. He has made changes to the group’s management structure that were announced this week but has he done enough? If anything truly ‘explosive’ emerges from the investigation, the question for anyone across the world buying LafargeHolcim’s products may be whether or not they want to finance extremism through their purchase.
US doesn’t build wall but does okay anyway
The US Portland Cement Association (PCA) may keep downgrading its forecasts of cement consumption growth but the local industry is doing fairly well anyway. All sorts of cement producers with a presence in the US have benefited from the market, despite extreme weather events like Hurricane Irma. President Donald Trump may not have delivered on his infrastructure development promises or built his fabled wall yet but his recently-approved tax reforms are likely to benefit the profits of cement producers. The decision by Ireland’s CRH to buy Ash Grove Cement in September 2017 may remove the largest domestically-owned producer from US hands but it shows confidence in the market and heralds the continued creeping growth of the building materials company into an international empire.
South America shows promise… just don’t mention Brazil
Countries like Brazil, Colombia and Venezuela may not be performing to expectations but other countries south of the Darian Gap, have been growing their respective cement industries. The leader here is Argentina that is riding a full-scale construction boom with capital investment chasing it from the producers. Bolivia is following a decade of growth although this may be starting to slow somewhat. Chile appears to be realigning itself to take in more exports. And finally, Brazil may also be starting to return to growth too. Although cement sales were continuing to fall year-on-year in the first nine months of 2017 the rate has been slowing. Local producer Votorantim also reported improved market conditions at home.
India stares into the demand gap
UltraTech Cement finally managed to buy six cement plants and five grinding plants from Jaiprakash Associates for US$2.5bn in 2017. The acquisition marked the end of the long-running deal between the companies and what may be a new phase in further integration in the Indian industry. In September 2017 the Cement Manufacturers Association (CMA) complained that the sector had 100Mt/yr of excess production capacity out of a total 425Mt/yr. The government’s demonetisation policy sank cement production growth in late 2016 and production has struggled to improve since then. Some estimates expect growth to return in around 2020 as the demand gap shrivels. Further merger and acquisition activity can only help until then, although the current government flip-flopping over a petcoke ban and import duties may get in the way.
China restructures with an eye on overseas market
As discussed last week the mind-bogglingly massive merger between China National Building Material (CNBM) and China National Materials (Sinoma) is proceeding with the press equivalent of radio silence. If one trusts the company figures then the largest cement producer in the world will get even bigger following completion. Once the big Chinese producers start building lots of overseas plants then the implications of combining a major producer with a major plant builder may become clear outside of China. Alongside this the buzzword on the Chinese cement company balance sheets this year have been a major rollout of co-processing at plants and a policy of ‘peak shifting’ or simply shutting off production at selected plants in the winter months. Somehow despite all of this the official figures suggest that cement production is still growing in China.
The African mega deal that wasn’t
The prospective bidding war for South Africa’s PPC has turned out to be a bust. A low offer was made in September 2017 by a Canadian investment firm with the aim of merging PPC with local rival AfriSam. Vague expressions of interest from the usual suspects followed over the following months before everything fizzled out. What the dickens was going on? A difference of opinion between the board and shareholders? A poor market in South Africa giving everyone the jitters? If any readers know, please get in touch. PPC’s poor showing at home mirrors Dangote Cement’s travails. Both companies have suffered domestically whilst going full tilt elsewhere in Sub-Saharan Africa.
Indonesia about to pick up?
And finally, a report from Fitch Ratings this week suggests that growth in Indonesia is set to pick up once again. The market dragged down HeidelbergCement’s mid-year financial results as cement consumption dropped in the same period. Like India, Indonesia faces a consumption-capacity mismatch. However, with annual consumption poised to grow at over 6%, the time to close that gap will narrow. Some good news to end the year with.
Global Cement Weekly will return on 3 January 2018. In the meantime Merry Christmas and a have Happy New Year!
Carthage Cement goes on sale 20 December 2017
Tunisia: The government and Bina, the controlling shareholders of Carthage Cement, are selling a majority stake in the cement producer via public tender. The two investors own a 50.52% stake of the company. The cement producer operates a 2.2Mt/yr plant at Djebel Ressas. Expressions of interest are being accepted until 16 February 2018.
Cruz Azul orders two mills from Fives 20 December 2017
Mexico: The Cooperativa La Cruz Azul has ordered two raw meal grinding mills from France’s Fives. The first grinding unit, with a capacity of 280t/hr of raw meal, will be dedicated to the new clinker line no. 10 project to be installed at the Cruz Azul Hidalgo plant. The second one, with a capacity of 300t/hr of raw meal, will be installed in the Oaxaca Lagunas plant, as part of the new clinker line no. 5 project. Each grinding plant will be fitted with one FCB Horomill 4000mm grinding mill and one FCB TSV Classifier 6500mm. The deal, including the engineering, supply, construction and commissioning of the mills, was agreed in November 2017.