September 2024
Intercem replaces transformer at Cimfaso Cement 17 March 2017
Burkina Faso: Intercem has reported that it replaced the main transformer at the Cimfaso Cement plant in 10 days in February 2017 from the initial order to the resumption of production at the unit. Following a problem with the local power grid the transformer was damaged and production stopped. Intercem dismantled and flew the transformer from Germany to Burkina Faso and then supervised its reassembly, connection and commissioning including customs and visa clearance.
Seven Refractories opens plant in Kazakhstan 17 March 2017
Kazakhstan: Seven Refractories has opened a plant in Karaganda with a production capacity of 40,000t/yr. The first production run was completed in mid-February 2017. The unit is the Slovenian company’s most easterly production site.
Magnesita grows industrial refractory sales in 2016 17 March 2017
Brazil: Magnesita’s revenue from its Industrial Refractory Solutions division rose by 3.3% year-on-year to US$144m in 2016 from US$140m in 2015. Its sales volumes grew by 10.2% to 147,000t from 133,000t. It attributed the gains to good performance in the Middle East, Africa and the Commonwealth of Independent States (CIS) region despite a declining cement industry in Brazil. Despite its success in its Industrial Refractory Solutions division the group reported falling overall refractory volumes and revenue in 2016 caused by decreases in steel production in South America and Europe. The company remains committed to merge with RHI by the end of 2017.
India: Calderys India and Magnesita have entered into a strategic alliance to work together in India and to increase their product portfolios for the cement industry. Calderys India will be the lead contact for the sales, marketing and after sales for Magnesita in the region as well as continuing to sell its own refractory product line. Alongside this Magnesita will supply technical support to Calderys India to support the shared market.
Fijian fish exporter sues cement producers 17 March 2017
Fiji: The Fiji Fish Marketing Group, a fish exporter, is taking legal action against two cement producers for transporting and offloading clinker. Pacific Cement and Tengy Cement Fiji with RPA Group Fiji, a transport company, have been accused of causing damage to the Fiji Fish Marketing Group’s property and its personnel, according to the Fiji times newspaper. Tengy Cement Fiji operates a cement plant in Lami near to the island capital Suva.
Tabuk Cement acquires export license 17 March 2017
Saudi Arabia: Tabuk Cement says it has obtained an export license from the Ministry of Commerce and Investment. The licence will be valid for one year, according to Mubasher. Sales volumes of cement fell by 25% year-on-year to 4Mt in February 2017.
Zimbabwe: President Robert Mugabe has opened PPC’s US$85m cement grinding plant at Msasa in Harare. China’s Sinoma built the 0.7Mt/yr unit that includes a palletiser and cover-wrapping machine, according to the Xinhua News Agency. The plant, PPC’s third production site in the country, was commissioned in late 2016.
Government reveals more detail on plan to sell non-operational units of Cement Corporation of India 17 March 2017
India: Babul Supriyo, the Minister of State for Heavy Industries and Public Enterprises, has revealed that the government is planning to sell five plants in the first phase of its divestment of non-operational units of the Cement Corporation of India (CCI). In a letter to the Indian parliament he said that plants at Mandhar, Kurkunta, Bhatinda, Nayagaon and Charkhi Dadri would be sold first, according to the Press Trust of India. However, legal issues at Delhi Grinding Unit (DGU), Adilabad and Akaltaraneed need to be resolved before these plants can be sold. No value for the sale has been set yet as the plants have not been valued.
Cemex retains 9.5% stake in Grupo Cementos de Chihuahua 17 March 2017
Mexico: Cemex has retained a 9.5% stake in Grupo Cementos de Chihuahua (GCC) following a sale of some of shares in the Mexican cement producer. Cemex said that the underwriters did not exercise their over-allotment option to acquire shares in GCC. Originally Cemex said in late 2016 that it intended to sell its full 23% minority stake in GCC.
The Global Cement Weekly column of 22 February 2017 entitled ‘European Union (very) slowly tightens the screws on its Emissions Trading Scheme,’1 bears witness to the misconception that we must choose between protecting the cement industry OR the climate. Quite the opposite is true: the objective is the cohesion between economic prosperity, meeting cement market demand AND lowering CO2 emissions.
It is undisputed that, if climate protection is aspired to, there needs to be an adequate regulatory incentive that supports, perhaps even strengthens, industry’s profitability when companies act to lower their CO2 emission. Some companies have tried selling low CO2-cement at a price premium, marketing their lower embedded carbon. In a commodity market of a grey powder where low prices are a decisive purchasing point, this obviously doesn’t fly.
The only sustainable business incentive is to pass on the full cost of CO2 not only in production but also in consumption of products. This would effectively result in higher cement sales prices for high-CO2 cement and lower prices but higher margins for low-CO2 cement, without losing competitiveness to producers that do not face regulatory CO2 constraints. Hence, a win-win-win situation for low carbon cement producers, consumers and the environment. This is after all the purpose of the sectoral ETS mechanism with inclusion of importers and no free allowance allocation.
The studies undertaken by Boston Consulting Group (BCG) for CEMBUREAU simulated the potential gross margin for the domestic cement industry in case of different leakage prevention mechanisms. While this may sound shocking for some, there is nothing wrong with aiming at maximisation of gross margin. Quite the opposite, gross margin maximisation is absolutely necessary for the cohesion between economic prosperity and climate protection and the effectiveness of an ETS.
The BCG studies led to the conclusion that in case of a tightening CO2 allowance cap and under certain market conditions the importers’ inclusion mechanism can yield the best margin for the industry. Since however, as the Global Cement Weekly column mentions, the EU only very slowly tightens the screws on the supply of emission allowances, there will be sufficient free allocation for industry and there remains little need to lower emissions and thus little need for an importers’ inclusion mechanism.
CEMBUREAU called into doubt the representativeness of the technology penetration reported by the Cement Sustainability Initiative’s Getting the Numbers Right database. It is a well-established fact that the penetration of modern preheater precalciner kilns in most emerging countries is higher than in Europe, because the industry is younger outside of Europe and hence most installations have been built with more recent, more energy-efficient technology. Besides the CSI database, cement CO2 inventories exist for about 10 emerging countries. They all confirm the same.
Beyond the comparison with other regions however, an emissions trading system that after 12 years still enables one fifth of production being made using the most energy-intensive technologies objectively misses its purpose.
Despite consuming up to 50% more energy than the Best Available Technology, such installations can survive thanks to free allocation and the revenues from waste derived fuels. The industry legitimately highlights the environmental benefits of using waste as a fuel. However, it is questionable whether keeping energy-intensive installations alive thanks to cheap energy from waste is consistent with this environmental narrative.
The proposed changes to the EU ETS will not improve its effectiveness for the cement industry. Quite the opposite, it will make it even less effective because the introduction of a dynamic allocation based on a clinker benchmark completely nullifies the need for the industry to lower the clinker content in cement.
CEMBUREAU indeed has the right to protect the industry it represents, but is probably short sighted and ill informed when it does so to the detriment of society’s necessity to mitigate climate change. The rejection of the importers’ inclusion mechanism is a missed opportunity for the European Union to make the ETS effective and for the cement industry to maintain its competitiveness in a carbon constrained world.
Eric Olsen, CEO of LafargeHolcim, the largest global cement company, and chairman of the Cement Sustainability Initiative, has called for a meaningful and increasing carbon price that can be passed through the whole product value chain and for trade policy to be included in the ETS.2
Lakshmi Mittal, Chairman of ArcelorMittal, the largest global steel company, has also called for a border adjustment measure and inclusion of consumption in climate policies.3 High quality research by leading economists exists on this topic.4 Now that the reform of the EU ETS enters the trilogue negotiation between European Council, Commission and Parliament, these industry leaders should step forward with a concrete and workable solution to combine industrial, trade and climate policies by 2020.
1. http://www.globalcement.com/news/item/5836-european-union-very-slowly-tightens-the-screws-on-its-emissions-trading-scheme
2. WEF, Davos: https://www.youtube.com/watch?v=O_mhqcNR0uA
3. Financial Times: https://www.ft.com/content/8341b644-ef95-11e6-ba01-119a44939bb6
4. Climate Strategies, UK: http://climatestrategies.org/?s=consumption