September 2024
Hima Cement to launch US$40m grinding plant in Tororo 19 January 2017
Uganda: Hima Cement is set to launch its new grinding plant in Tororo. The 1Mt/yr plant at Nyakesi, Rubongi cost US$40m, according to the Ugandan Observer newspaper. The new unit is planned to meet demand for local infrastructure projects and for regional markets.
Funding released for PPC to build new line at Slurry plant 19 January 2017
South Africa: PPC has completed the components of its 2008 broad-based black economic empowerment (B-BBEE) transaction, releasing US$74m in funding in mid-December 2016. Strategic black partners and community service groups subscribed for 15.6 million shares as part of earlier agreements. The funding will be used to reduce company debts and pay for a new production line at its Slurry cement plant in Lichtenburg.
More details on EcoCementos plant in Colombia revealed 19 January 2017
Colombia: A new cement plant to be built at Rio Claro in the Sonsón municipality of Antioquia for Empresa Colombiana de Cementos (EcoCementos) will have a production capacity of 1.35Mt/yr. The company is a joint-venture between Spain’s Cementos Molins and Grupo Corona. Cementos Molins and Grupo Corona originally started working together in September 2015 when they formed an alliance to develop their cement businesses in the country, according to the El Tiempo newspaper. The plant is expected to be completed in mid-2019 whereupon it is hoped that it will capture 7% of the market. Once operational the plant will create 450 direct and indirect jobs.
Arif Habib Group to expand production at Power Cement plant 19 January 2017
Pakistan: Arif Habib Group plans to spend US$235m on upgrading its Power Cement plant in Nooriabad to 3.37Mt/yr from 0.9Mt/yr. The upgrade will be completed by the end of 2019, according to the Express Tribune newspaper. Company chairman Nasim Beg said that he was hoping to take advantage of growing cement demand in the country as the effects of the China-Pakistan Economic Corridor heighten.
Power Cement has also completed a US$3.4m upgrade to its filter bag house equipment by installing new equipment to reduce dust emissions. Company officials say the plant is now capable of reducing dust emissions to just 17mg/m3. This is below the 300mg/m3 level set by the Environment Quality Standards in Pakistan and the World Bank’s limit of 100mg/m3 for old cement plants.
The other side of the wall 18 January 2017
With president-elect Trump due to take office this week we wonder what this means for the cement industry in Mexico. In 2016 this column looked a couple of times at the implications of Trump upon the US cement industry. First, we looked at who might benefit if he builds his wall along the Mexican border and then we wondered what his policies might mean for the US industry. To answer the latter first, the main issues for the US industry are infrastructure, changes to the Environment Protection Agency (EPA) and the repercussions if Trumps serious about a trade war with China. So long as a trade war doesn’t happen then Trump is probably good news for the US cement industry. As for Mexico, the joke has been that Trump will be good for the construction business ever since market analysts Bernstein’s passed a note around in the summer of 2016 about that wall.
Graph 1: Breakdown of Mexican cement industry by production capacity. Source: Global Cement Directory 2017.
The makeup of the domestic Mexican cement industry hasn’t changed too much in the last decade, even with the merger between Lafarge and Holcim, preserving the same market share in production capacity between the companies. Most of the producers have reported growth in 2016. Cemex reported that its cement sales volumes rose by 3% for the first nine months of 2016 and by 10% in the third quarter of that year. Overall though, its net sales fell slightly to US$2.16bn in the first nine months, alongside a fall in ready-mix concrete sales volumes. Cemex, crucially, also seems to have taken charge of its debts in 2016, saying that it was on track to meet its targets and that it had announced nearly US$2bn worth of divestments in that year. Currently the company is trying to buy out Trinidad Cement in the Caribbean, which may be a sign that it has turned a corner.
Grupo Cementos de Chihuahua’s (GCC) cement sales volumes rose in the first three quarters of 2016, in its case by 4%. Its overall net sales in Mexico rose by 4.2% in Mexican Pesos for the same period but fell when calculated in US Dollars due to currency variations. GCC attributed its sales growth to better pricing environment and increased cement volumes, mainly for projects in the commercial and industrial sectors that compensated for a decline in the public sector, following the culmination of two major urban paving and highway construction projects in 2015. At the smaller end of the market, Elementia reported that its cement sales skyrocketed by 30% to US$104m in the first nine months of the year aided by higher prices and volumes.
The major Mexican cement producers all have a presence in the US with the exception of Cruz Azul. Cemex has held assets north of the border for years, Cemento Portland Moctezuma has links to Buzzi Unicem, GCC bought US assets from Cemex in 2016 and Elementia completed its purchase of Giant Cement also in 2016. These companies have clinker in their kilns in plants on US soil manned by US citizens. This represents investment in local industry and it is exactly the kind of thing that appeals to the rhetoric of Trump’s approach so far. If the new president builds his wall then Mexican producers will probably be producing much of the cement that builds it. Even the Mexican Peso’s slow decline since 2014 could help the local cement industry, as it will cut the cost of moving exports and materials north of the border. Indeed, Enrique Escalante, the chief executive officer of GCC said in late 2016 that his company was ‘ready to build’ Trump’s wall.
However, the sheer uncertainty factor of an incoming president with as little experience of public office as Donald Trump must be giving chief executives pause for thought. After all, Trump's tweets before he has assumed office have forced car manufacturers to change policy. If he manages to disrupt the North American Free-Trade Agreement (NAFTA) in order to protect US jobs then the repercussions for the Mexican economy will be profound. It sends nearly three quarters of its exports to the US. Local cement producers would surely suffer in the resulting economic disruption.
So, currency devaluations aside, Mexican producers are making money from their cement operations at home and they are increasingly hedging their bets by operating or buying units in the US. Some, like GCC, are even being ebullient about the benefits that might come their way. It may be a bumpy ride but the Mexican industry is ready. However, it may wish to avoid appearing in any of Donald Trump’s tweets anytime soon.
BillerudKorsnäs buys minor stake in Hanhaa 18 January 2017
UK: Sweden’s BillerudKorsnäs has purchased a minor stake in technology company Hanhaa in order to invest in the so-called ‘internet of packaging.’ The company’s technology allows users to track the location and the condition of deliveries in real time and on a large scale across carriers and countries. The investment is being made by a development wing of BillerudKorsnäs in order to develop new solutions in the packaging value chain. No value for the transaction has been disclosed but the investment has been described as ‘small’.
“Combining our own core-related skills with the skills of these start-up companies will allow us to create fruitful collaborations and together identify entirely new solutions. We will also draw on our experience and knowledge of bringing products to market on an industrial scale. Together with Hanhaa, we’re continuing to build tomorrow’s internet of packaging. Expanding our offering of digital solutions will allow us to continue challenging conventional packaging for a sustainable future,” said BillerudKorsnäs Venture Managing Director Anders Persson.
BillerudKorsnäs produces packaging materials and its clients include cement producers.
US: Germany’s Takraf has acquired the Material Handling Systems business of FMC Technologies (FMC MHS) based in Lansdale, Pennsylvania. FMC MHS provides material handling solutions to a variety of industries including mining, minerals, power and food. It also manufacturers a line of proprietary equipment for rotary drying and cooling of various materials. FMC MHS will be integrated into Takraf’s US business, located in Denver, Colorado and it will retain its office presence in Lansdale. No value has been released for the transaction.
“This acquisition brings with it a number of advantages that we seek to leverage. We identified a need to add to our equipment portfolio and this opportunity enables us to realise our strategic goals – to strengthen our position in the lighter material handling business and reinforce our growth strategy,” said Frank Hubrich, chief executive officer of Takraf. He added that FMC MHS’ product portfolio will enable the company to provide a range of equipment catering to smaller volumes and integrated in-plant conveyor solutions.”
US: The CalPortland Rillito cement plant in Arizona has received an energy efficiency rebate of US$71,213 from Tucson Electric Power (TEP) as part of a programme providing incentive funds for energy efficiency projects. The cement plant installed an upgrade to its clinker cooler using funding from the TEP Commercial Energy Solutions program. To date, this is the construction materials producers largest rebate in the state of Arizona.
US: Titan America's Pennsuco plant, which includes cement manufacturing, aggregates, quarrying, block manufacturing and ready-mix concrete operations, has been officially recognised as a Gold Level Zero Waste facility, making it the only facility of its kind in the US to achieve Zero Waste Status.
"The Zero Waste Certification is a remarkable accomplishment and consistent with Titan America's commitment to striving for best-in-class sustainability practices. Congratulations to our Environmental Department and thanks to everyone at Pennsuco for their help and support. We should all feel very proud of this," said Randy Dunlap, president of Titan America's Florida business.
To qualify for Zero Waste Certification, the Pennsuco Complex was required to demonstrate greater than 90% diversion from landfill use for a minimum of 12 consecutive months. This includes reducing, reusing, recycling or composting discarded materials or recovering the materials for productive use in nature of the economy at biological temperatures and pressures. It requires implementing sustainable strategies for resource and waste management. The process for certification process also included an extensive on-site audit, which was performed by Zero Waste Council members.
Zero Waste recertification occurs every three years. The Pennsuco site is now aiming for Platinum Certification. Titan's Pennsuco Plant has also been recognised for other sustainability initiatives, including Wildlife Habitat Certification and EnergyStar Certification. Titan's two cement plants at Pennsuco and Roanoke have been EnergyStar certified for 10 consecutive years.
Competition body rejects Binani Cement’s appeal to relax fine 18 January 2017
India: The Competition Appellate Tribunal (COMPAT) has rejected an appeal by Binani Cement to waive paying a 10% deposit of a US$25m fine that was given to it by the Competition Commission of India (CCI) for cartel-like behaviour. COMPAT said that the cement producer had failed to add any further information to the situation or pointed out any errors in the procedure, according to the Press Trust of India. In August 2016 the CCI imposed fines of nearly US$1bn on cement producers including ACC, ACL, Binani, Century, India Cements, JK Cement, Lafarge, Ramco, UltraTech, Jaiprakash Associates and the Cement Manufacturers Association for alleged cartelisation activity.
In November 2016, the COMPAT delayed the CCI condition that the cement producers deposit 10% of the fine. However, Binani Cement requested to waive the deposit on grounds of severe financial hardship. Binani Cement now potentially faces interest charges on top of the deposit as its appeal was dismissed.