September 2024
India: 15 companies have expressed interest in building cemeunt plants near to NTPC’s power stations. The electricity generation company sought cement producers in early 2017 to submit expressions of interest for partnerships to build 1Mt/yr cement plants, according to the Mint newspaper. NTPC wants its partners to sign long-term agreements with it to exclusively use fly ash and electricity from its power plants. The company has declined to name the companies that have expressed interest in the scheme. However, the power plants it wants to set up cement plants near include Barh, Farakka, Bongaigaon, Dadri, Badarpur, Moda and Aravali Power.
Philippines: Holcim Philippines has said its production capacity is expected to reach 10Mt/yr by the end of the first half of 2017, with company COO Sapna Sood stating that this would be achieved by ‘debottlenecking’ existing facilities following a US$40m project that started in 2015.
“We have a project where we are looking at safety and debottlenecking that is near completion,” said Sood. “When we look at the country, the infrastructure that is coming in and the commitment that we are making to infrastructure, it is pretty exciting for the country and the industry.”Sood added that, while the company had no immediate plans to build a new cement plant, Holcim Philippines planned to offer various solutions to help in the implementation of various infrastructure projects.
The total demand for cement in the Philippines reached 26.0Mt in 2016, up from 24.4Mt in 2015, although the final quarter of 2016 and first quarter of 2017 have been subdued.
Holcim Philippines operates four cement plants in La Union, Bulacan, Misamis Oriental and Davao.
Japla plant to reopen in Jharkhand 26 May 2017
India: Jharkhand Chief Minister Raghubar Das has reassured the people of Palamu that the Japla cement factory, which has been closed for many years, will be reopened soon. Das said that talks have been completed with the Steel Authority of India Ltd (SAIL) with respect to handing over of the limestone mines to Jharkhand State Mineral Development Corporation to serve the Japla Cement Factory. He added that reopening of the factory would provide employment to thousands of people.
US: The Portland Cement Association’s (PCA) Chief Economist Ed Sullivan has said that he expects US cement consumption to grow by 3.5% in the remainder if 2017 and 2018, based on analysis of data and policies likely to impact the industry in the coming years. Speaking before the IEEE-IAS/PCA Cement Conference in Calgary, Alberta, Canada, Sullivan said that, while details on specific federal US policies are not yet fully available, the association is forecasting growth in the years ahead using conservative baseline estimates for factors such as infrastructure spending and tax reform.
“While fiscal stimulus will boost cement consumption, there are other economic indicators that will temper growth,” said Sullivan. “Infrastructure policies also take time to implement, so you could be looking at 11 - 22 months before new projects truly get underway.”
“Tax reform will also influence cement consumption because it drives consumer spending and confidence that play heavily with the housing sector,” noted Sullivan. “When you hire a worker, you hire a taxpayer,” Sullivan said, adding that additional funds generated from consumer taxes and spending will help drive moderate growth in public construction and housing markets. “The underlying fundamentals supporting economic growth are positive, though we’ll maintain a watch on how the US Government addresses possible inflation and immigration,” Sullivan said. “This confidence in stable, sustained growth in cement consumption is likely to be unchallenged through 2018.”
The changeover at the top of LafargeHolcim, with Eric Olsen standing down and with the appointment of Jan Jenisch (CEO of Sika AG), is worthy of note for a number of reasons. American/French Eric Olsen has been in charge of the merged company since its inception and has made a good job of bringing together two very different companies, while at the same time battling uneven economic growth worldwide which has seen some patchy results over the last two years. Given more time, he would undoubtedly have presided over more robust results as yet more synergies are discovered in the newly-lean company.
In fact, lean-ness is one of the four ‘strategic pillars’ that are now governing LafargeHolcim, according to the recent fascinating 2016 annual report. Alongside ‘commercial transformation,’ ‘cost leadership’ and ‘sustainability,’ the report stipulates that the company will be ‘asset light.’ The report goes on to explain that LafargeHolcim ‘will optimise our current asset base, better leveraging our industrial footprint, reducing our capital expenditure and exploring new growth opportunities with lower capital expenditure.’ It says that ‘Future growth will be focussed on low-capital intensive business models that enable us to access more of the value chain.’ Putting numbers to the words, LafargeHolcim’s capex in 2016-2017 was CHF3.5bn (Euro3.21bn), but it will plummet to CHF2bn (Euro1.83bn) from then on. As CEO, Eric Olsen’s prints are all over this plan.
The company plans to use its ‘know-how in preventative maintenance and capacity optimisation’ to reduce its ongoing capex in the cement industry, and says that ‘we outsource our fleet management whenever possible and develop alternative logistics offers to reduce capital expenditure.’ So, out with its own fleets of vehicles, and in with contractors, freeing-up capital (but possibly leading to lower retained profits). The company also says that ‘the leveraging of our global trading platform enables us to serve some markets without the need to invest in local clinker capacity.’ Alongside various statements in the annual report that suggest that the company has quite enough clinker production capacity already, we can see that it intends to stop building any new greenfield plants, and to potentially invest in clinker grinding facilities in markets where it does not have a presence, supplied by its currently under-utilised clinker-producing plants. It plans to expand into low-capital concrete markets, stating that ‘we are implementing franchise models in the ready-mix and retail segments, enabling us to reach customers in a differentiated way while keeping capital expenditure low.’
Eric Olsen’s plan is/was a sensible one: stop sending money out the door, make the current assets work a lot harder, and get into businesses with a good margin but which don’t cost a lot in which to become established. This is a plan that will take time to come to fruition, but unfortunately, Eric Olsen will not be at the helm of the company to see the benefits. He resigned at the end of April after an internal investigation at the company showed that managers at the company’s cement plant in Syria had paid-off local militias in order to stay open. As Eric Olsen stated at the time, “While I was absolutely not involved in, nor even aware of, any wrongdoing I believe my departure will contribute to bringing back serenity to a company that has been exposed for months on this case.” It seems that the chairman and the board of directors owe Mr Olsen a few beers - at least - for taking the heat off the company.
German national Jan Jenisch steps into Eric Olsen’s shoes at an interesting time then. He is coming from a company, Sika AG, that has also seen some tumultuous events in the last few years. The company’s controlling family wish to sell its 16% stake (including 53% voting rights) to multi-national building materials group Saint-Gobain, which is eager to buy, against the wishes of the company’s board, senior managers and other shareholders. So far the sale has been foiled by Mr Jenisch, but a crucial court case decision is due later in the year. Who knows, in the meantime maybe another building materials company might step-in to try to take over Sika’s attractive business? Mr Jenisch managed to increase Sika’s profit by 22% in the last full year of operation of the company, and the board of LafargeHolcim will be hoping that he can repeat the magic with his new company. If he manages it though, just remember that he has inherited Eric Olsen’s ‘cunning plan that might just work.’
Aman Group inaugurates new mill 24 May 2017
Bangladesh: Aman Group has opened its second cement grinding plant at its Narayanganj complex, located 20km south of the Bangladeshi capital Dhaka. The new plant has a production capacity of 10,000t/day (~3.5Mt/yr), which, along with its first grinding plant, comfortably makes Aman the largest cement producer in the country. Commerce Minister Tofail Ahmed inaugurated the plant at the International Convention Centre Bashundhara in Dhaka on 23 May 2017.
Germany’s Loesche GmbH supplied the LM 56.3+3 CS type mill, which can grind Portland or composite cement to a fineness of 3200 Blaine. It can also grind granulated blast furnace slag at 175t/hr to a fineness of 4500 Blaine. In addition to the mill, the scope of supply also included additional technical equipment for the grinding plant such as a rotary feeder, 2-way chute, metal detector and permanent magnet drum separator.
Massive mill order for Loesche in Egypt 24 May 2017
Egypt: Germany’s Loesche GmbH has been contracted to supply 18 new vertical roller mills to China’s Sinoma CDI, which is building a six line cement plant at Beni Suef on behalf of the Egyptian Ministry of Defence. Each line will have a capacity of 6000t/day (12.6Mt/yr), making the plant one of the largest in the world.
Six raw mills, each with a capacity of 500t/hr, will grind cement raw material to a fineness of 12% R 90μm, six powerful cement mills, each with a throughput of 350t/hr will grind clinker to a fineness of 3200 Blaine and six Loesche coal mills will grind coal to a fineness of 10% R 90μm.
It is anticipated that the mills will be delivered within 2017, putting high demands on the delivery time of the mill components. Thanks to their long-standing experiences from a variety of fast-track-projects Loesche was able to carry conviction to the Ministry of Defence and assure the expected quick market entry with an elaborated plan of delivery.
New plant manager at Karsdorf 24 May 2017
Germany: Opterra, the German subsidiary of Ireland’s CRH, has announced a change of plant manager at its Karsdorf plant. Berthold Perschall, 50, will take over from Giuseppe De Donno on 1 June 2017. De Donno has been in the post since July 2015 and has left the company to pursue a new professional challenge.
Perschall has been with CRH (and Lafarge beforehand) since 2000. Before coming to the Karsdorf plant in 2009 he worked at Lafarge’s Sötenich and Wössingen plants. He was most recently the head of maintenance and production at Karsdorf.
US: China's Sinoma TCDRI and Amec Foster Wheeler are forming a joint venture to sell turnkey installations for the cement industry in the US. The two engineering companies revealed their relationship in the sector at the 2017 IEEE-PCA Cement Conference taking place in Calgary, Canada. The companies are negotiating their first US tenders and hope to make an announcement later in 2017. Sinoma is one of the largest suppliers of equipment for cement plants in the world but it has yet to build a plant in the United States.
Indonesia: PT Indocement, the second-largest cement producer in Indonesia, has reported a poor quarterly result amid stiff competition and lower cement prices. Its profit for the first quarter of 2017 was down by 53.8% to US$37.5m, despite the fact that its revenue only fell by 14.1% to US$248m.
Indocement president director Christian Kartawijaya attributed the slump to tight competition in the domestic market from other producers, such as Karawang-based PT Jui Shin and Banten-based PT Cemindo Gemilang, which frequently sell cement at lower prices. "The profit decline is inevitable amid very tight competition. Meanwhile, the cake is getting smaller, so we've experienced the decline in profits and revenue," said Christian.
Indocement, a part of major diversified conglomerate Salim Group, also cited persistent cement oversupply in the domestic market this year, while demand was estimated to rise by only 5% year-on-year to 65Mt. This pushed down the cement price by 12% in the January-March period compared to the first quarter of 2016. "As long as there is an oversupply, we can't avoid a price war," Christian added.
Despite a gloomy outlook throughout this year, the company has still earmarked a sizeable US$128m sum for capital expenditure for expansion, although the figure is still 5.9% lower than 2016. Its key projects include the development of cement terminals and cement packaging terminals in Sumatra and other undetermined sites. Christian also said Indocement would also go ahead with its plan to construct a cement factory in Pati, Central Java, which is subject to public controversy because of claims that there is no legal basis to execute it.