September 2024
Canada: An agreement has been struck between Lafarge Canada and Metro Vancouver in which Lafarge Canada will use the solids removed during drinking water production by the municipality as an alternative raw material in cement production.
The residuals are the solids removed during the drinking water filtration process and consist of natural sediment and elements from the source water as well as coagulants and polymers from the treatment process. Between them, they have a chemical composition similar to that of red shale, one of Lafarge Canada’s raw materials. This means that the residiuals need not be landfilled and that less virgin red shale must be removed from the ground. The contract is for a minimum of 10,000t/yr.
“We are proud to have this partnership with local government and industry,” said Pascal Bouchard, the plant manager of the Richmond cement plant, which will use the residuals. “These residuals will soon be part of our city landscape, reused as an ingredient in concrete that is used in construction, from sidewalks to skyscrapers. I am hopeful that the research we have undertaken will allow other municipalities to consider industrial re-use options for their water treatment residuals.”
“We are very excited to be working with Lafarge on this innovative project, which uses residuals as a product, while reducing our overall environmental impact,” said Darrell Mussatto, Chair of Metro Vancouver’s Utilities Committee. “Our goal is to recover valuable resources from our utilities, and this project aligns perfectly with what we are hoping to achieve.”
Two new plants for Sison 14 August 2017
Philippines: Businessman Ramon Ang, the president of Northern Cement Corp. (NCC), has announced that he will spend US$683m on the construction of two new cement plants in Sison. He made the announcement as NCC donated two new ambulances to the town and announced a range of other public-facing projects. NCC has operated a cement plant at Barangay Labayug since 1967.
Cement sales and production fall in Puerto Rico 11 August 2017
Puerto Rico: Cement sales in Puerto Rico experienced a year-on-year decline of 0.5% in July 2017, following two months of increases. This fall was chiefly attributed to the lack of public investments in infrastructure and a decline in residential property development projects. Cement production fell by 11% in July 2017, following a rise of 10% in June 2017.
Misr Beni Suef net profit slumps in first half 11 August 2017
Egypt: Misr Beni Suef Cement made a net profit of US$3.13m in the first half of 2017, compared to a net profit of US$5.32m in the same period of 2016. This represents a 41% fall year-on-year.
Birla to invest US$375m in new plant at Mukutban 10 August 2017
India: Birla Corporation is considering a US$375m investment in a greenfield cement plant at Mukutban, Maharashtra. Harsh V Lodha, the group’s chairman, stated that the decision would be put before the board for approval.
Speaking about the company’s recent acquisition of Reliance Cement, Lodha added, “Reliance’s plants did not have a captive power plant, so we are in the process of setting up a waste heat recovery system at a cost of US$19.5m.” The company is also studying the feasibility of a captive thermal power plant there. Lodha also said that demand for cement is rising in Central India and no new capacity was coming up in the region, which he said bodes well for the company’s new assets.
FLSmidth makes further gains in first half of 2017 10 August 2017
Denmark: Cement plant manufacturer FLSmidth has seen its revenue increase by 11% year-on-year in the first half of 2017, as its earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 25%. The group highlighted that strong momentum in orders from service activities continued along with a higher operating profit, despite one-off costs. Revenues were Euro1.21bn, while cement sector revenues were Euro140m.
"We are pleased to report solid progress towards our key performance indicator targets. The group's service activities continue to benefit from the firming global growth and improvement in confidence. With the second quarter marking the fourth consecutive quarter of strong aftermarket momentum, especially in mining, the service business is stabilising at a higher level," said CEO Thomas Schulz.
Sanghi increases net profit by a third 10 August 2017
India: Sanghi Industries has reported a rise of 33% in net profit for the first quarter of the 2018 financial year, the period from 1 April 2017 to 30 June 2017. The company’s net profit stood at US$4.9m, a 32% rise compared to the US$3.7m it made in the first quarter of the prior fiscal year. Its total income rose by 4% to US$49.2m, compared to US$47.2m a year earlier.
Alok Sanghi, Director, Sanghi Industries said, “There has been improvement in price realisation in the first quarter of the 2018 fiscal year, which has improved our margins. However, we were impacted due to higher fuel and diesel costs, which in turn affected our logistics costs. Moving further, we expect very good cement demand in the 2018 fiscal year due to infrastructure projects announced by the government.”
Update on Indonesia 09 August 2017
One of the surprises from the recent round of half-year results has been HeidelbergCement’s struggle to grow its sales so far in 2017. Part of this has been down to a variable market in Indonesia where the German cement producer runs the second largest player, Indocement.
Cement consumption for the country as a whole dropped by 1.3% year-on-year to 29Mt in the first half of the year, according to Indonesian Cement Association figures. This appears to be due to a particularly poor month in June 2017 where local consumption fell by 27% to 3.7Mt. Prior to that, consumption was actually showing 4% growth up until the end of May.
Fairly reasonably HeidelbergCement blamed the decline in part on this year’s timing of Ramadan. Unfortunately this could not explain everything, as its total sales volumes including exports fell by 2.4%. Remove the exports and its sales volumes fell by 4.4%, more than the national average. It said this was due to its concentration in weaker markets in Jakarta, Banten, and West Java where competition pressures had forced prices down ‘significantly.’
They weren’t alone in feeling the pain in June 2017 with both Semen Indonesia and LafargeHolcim reporting reduced sales. However, LafargeHolcim also raised the issue of production overcapacity creating increased sales volumes and pushing down prices. This was reflected in lower earnings for its Asia Pacific division. HeidelbergCement too saw its earnings crumble.
Graph 1: Cement production capacity and consumption. Source: Semen Indonesia investor presentation, March 2017.
Graph 1 shows quite nicely the fix the Indonesian cement market is in at present. Consumption surpassed production capacity in the early 2010 before incoming capacity jumped ahead again around 2013. You can also view Global Cement’s version of this graph here. Even at an optimistic annual growth rate of 8%, consumption won’t get close to capacity until 2020. Yet before the market collapsed in June, consumption was growing at 4%, which is the weakest of Semen Indonesia’s growth scenarios.
Admittedly the graph is in an investor document so we can forgive ebullience but they are going to need a magic bullet to dodge this one. Lucky then that the graph also has infrastructure highlighted. The cement producer says that the Indonesian government earmarked US$26bn for infrastructure spending in 2017 and that this spending campaign can be seen in the changing ratio of bulk to bagged cement it has been selling. Independent of Semen Indonesia, the Fitch credit rating agency was also predicting rising consumption off the back of infrastructure plans in a report it put out in June.
However, as more cement plants are being built, cement plant utilisation rates seem destined to stay subdued for the foreseeable future unless the government seriously ups its infrastructure investment or unless the economy goes into overdrive. Unsurprisingly exports have shot up so far in 2016, by 74% to 1.14Mt. Cement producers in neighbouring countries beware!
Brian Egan appointed to board of Dangote Cement 09 August 2017
Nigeria: Brian Egan has been appointed as an executive director to the board of Dangote Cement. Currently the company’s Chief Financial Officer, he has worked for the cement producer since 2014. Previous to this he worked as the executive director and chief financial officer of Petropavlovsk and of Aricom. He has also held senior finance positions at Gloria Jeans Corporation, Georgia – Pacific Ireland and Coca-Cola HBC-Russia. He trained with KPMG and is a member of the Institute of Chartered Accountants in Ireland.
Manoj Agarwal resigns from Star Cement 09 August 2017
India: Manoj Agarwal has resigned as the company secretary and compliance officer of Star Cement, with effect from 2 August 2017. His successor is Debabrata Thakurta, a member of the Institute of Company Secretaries of India.