September 2024
Philippines: Thailand-based producer Shera announced that its upcoming fibre cement plant in Mabalacat, Pampanga, has reached 60% completion and is on schedule to commence commercial operations by January 2025. The plant will be the company’s first production facility outside Thailand, capable of producing 0.24Mt/yr of fibre cement. The Mabalacat facility will also export to Taiwan, South Korea and parts of North Asia and Oceania and will create jobs for up to 150 people.
Ongek Taechamahaphant, chair and director, said “Our Mabalacat plant is a major step in Shera’s plan to expand further in the Philippine market. We know that once this facility is fully operational by 2025, more Filipinos will easily be able to access our eco-friendly and durable fibre cement products.”
Philippines: Cemex has received approval from the Philippine Competition Commission (PCC) to sell 90% of Cemex Holdings Philippines's shares. The approval relates to a joint acquisition by DMCI Holdings, Semirara Mining and Power and Dacon of shares in Cemex Asian South East Corporation, which holds a major stake in Cemex Holdings Philippines. This clearance is a requirement for finalising the transaction, contingent on further compliance by the acquiring companies.
Taiwan initiates anti-dumping investigation into Vietnamese cement and clinker imports 16 August 2024
Vietnam: Taiwan has launched an anti-dumping investigation into cement and clinker imported from Vietnam. The Trade Remedies Authority of Vietnam announced that Taiwan's inquiry, initiated on 8 August 2024, focuses on cement and clinker with the import codes 2523.29.90.00.2 and 2523.10.90.00.3, requested by the Taiwan Cement Manufacturers Association. The investigation will assess imports from 1 July 2023 to 30 June 2024, targeting seven specific Vietnamese companies, among other exporters. The Vietnamese companies are mandatory respondents in this investigation and must engage fully by submitting the required information to the Ministry of Finance within the stipulated 20 days from initiation of the investigation.
Vietnam: Several Vietnamese cement producers have reported losses in the first half of 2024, attributing the downturn to reduced domestic demand and competitive pricing pressures, reports Vietnam Investment Review. Vicem But Son recorded losses of US$1.5m in the second quarter of 2024, marking its seventh consecutive quarter of losses, with a 2024 first half revenue figure of US$50m, down by 10%, and total losses reaching US$3.83m. Vicem Hai Van also continued its decline, with a 43% drop in second quarter revenue to just over US$4m and losses of US$396,000. Vicem leaders said that challenges arose due to a reduced demand following limited civil engineering projects and a stagnant real estate market.
Despite the sector's overall downturn, firms like Vicem Ha Tien and Chinfon have recorded profits, with Ha Tien posting US$141m in revenue and US$875,000 in profits, and Chinfon doubling its yearly profit to US$25,250. However, the outlook for the remainder of 2024 remains bleak, with anticipated difficulties in market recovery and increasing input costs. Acoording to Vicem, the cost of electricity will continue increasing, while the demand for cement is not anticipated to recover before the end of 2024.
Heidelberg Materials North America secures funding for Mitchell cement plant decarbonisation project 15 August 2024
US: Heidelberg Materials North America has finalised award negotiations with the US Department of Energy's (DOE) Office of Clean Energy Demonstrations. The Mitchell cement plant in Indiana will receive US$300,000 to begin the first phase of its decarbonisation project, part of a broader initiative of up to US$500m in DOE funding to support full-scale carbon capture, transport and storage developments. The Mitchell cement plant has tripled its previous production capacity, with this project aiming to capture and process about 2Mt/yr of CO₂.
Chris Ward, president and CEO of Heidelberg Materials North America, said "This critical milestone of bringing our project under award with the US Department of Energy is a significant step in building the first full-scale application of carbon capture and storage for the cement industry in the US.”
Denmark: FLSmidth has reported a 23% decline in group revenue for the second quarter of 2024. Despite the decline, gross profit rose by 5% to US$233m from US$221m in the same period in 2023. The cement division experienced a revenue decrease of 32%, though it achieved an adjusted earnings before interest, tax and amortisation (EBITA) margin of 9.6%.
Group CEO Mikko Keto said "Our performance in the first half of 2024 is testament to our continued strong progression across all our key transformation activities, with additional improvements in profitability. The largely stable cement market continues to provide good opportunities for our service business. Looking ahead, the resilience of our service-oriented business model, our continued focus on business simplification to ensure a cost-efficient operating model and our dedicated focus on strategy execution gives us great confidence that we are well on track to meet our long-term financial ambitions."
Latvia/Lithuania: Capsol Technologies has won a contract to carry out two CapsolGo carbon capture demonstration campaigns at the Brocēni cement plant in Latvia and the Akmenės Cementas cement plant in Lithuania. Both plants are owned by Germany’s Schwenk Zement. Following a feasibility study earlier in 2024, the demonstrations will run from the fourth quarter of 2024 to the fourth quarter of 2025 and will showcase the CapsolEoP capture technology.
Philipp Staggat, chief product officer of Capsol Technologies, said "CapsolEoP offers lower energy consumption with higher CO2 concentration than competitive technologies, and the capture cost for cement owners is reduced further as it doesn't require external steam supply. We are looking forward to demonstrating our technology on Schwenk's cement plants.”
CEO of Akmenės Cementas, Arturas Zaremba added "In collaboration with our clients and stakeholders, we are dedicated to addressing these challenges. The implementation of CapsolEoP technology at our Latvian and Lithuanian plants is a testament to our commitment, marking a significant stride towards the goal of capturing over 1.5Mt/yr of CO₂.”
Mexico: A second industrial byproducts processing line has been inaugurated at the Cemento Cruz Azul plant in Tepezalá, Aguascalientes. The new facility, which cost US$8.5m, will create 100 jobs and convert over 66,000t/yr of post-consumer materials into energy for the cement plant's processes.
Víctor Manuel Velázquez Rangel, president of the board of directors of Cooperativa Cruz Azul, said "This is the result of joint work, teamwork and a shared vision with the State Government, which has always been concerned about the carbon footprint, sustainability and the environment. With this project we leave testimony of our great commitment and demonstrate that innovation and technology can go hand in hand with the preservation of the environment."
Carbon Upcycling joins Portland Cement Association 15 August 2024
Canada: Canada-based carbon capture, utilisation and storage (CCUS) company Carbon Upcycling has been admitted to the Portland Cement Association (PCA). This new membership aims to support industry efforts to achieve carbon neutrality. The US Department of Energy previously announced over US$1.2bn in funding for PCA member companies to launch decarbonisation projects under recent federal initiatives. Carbon Upcycling has been developing a commercial CCS system at CRH’s cement plant in Mississauga.
PCA president and CEO Mike Ireland said "We are thrilled to have Carbon Upcycling join us as a member of the PCA, given our shared commitment to sustainability. Their efforts are helping the cement industry increase circularity and advance the industry's commitment to achieving carbon neutrality."
CEO of Carbon Upcycling Apoorv Sinha said "The most effective and credible pathway to decarbonising the cement industry is through strategic partnerships and collaboration with long-time industry leaders in the infrastructure sector. Joining the PCA underscores our commitment to advance sustainable practices and substantially reduce carbon emissions. We look forward to forging a low-carbon, resilient future with our fellow members."
First half 2024 update on selected cement producers 14 August 2024
Votorantim Cimentos released its half-year results this week giving us the opportunity to assess how well some of the larger cement producers are doing so far 2024. The general picture from the western multinational cement companies has been one of sluggish sales in the first half of the year but respectable earnings. So, for example, both Holcim and CRH were reporting static sales or revenue but earnings increases of over 10%. Heidelberg Materials and Cemex noted similar situations.
Graph 1: Sales revenue for selected multinational cement producers in the first half of 2024 and the first half of 2023. Source: Company financial reports.
Holcim was keen to play up that its net sales actually rose on a local currency basis. However, its recurring earnings before interest and taxation definitely rose, by 12% year-on-year to €2.33bn. Net sales were down in both North America and Europe, the group’s main two regions, but earnings were strong in both. Sales revenue for cement and aggregates may have been down across the group but earnings were up sharply. No such luck for ready-mixed concrete though, with both sales and earnings down overall. Another trend to watch is that sales and earnings were both up in the group’s Solutions & Products division. This part of the business has been growing due to merger and acquisition activity, and it is nearly the group’s second largest division after Europe.
CRH reported similar things overall. However, it has been busy selling off its Europe-based lime business, finishing the acquisition of its new assets in Texas and buying a majority stake in Australia-based AdBri. Its Americas Materials Solutions division reported both increasing revenues and earnings in the second quarter of 2024, at least, and the acquisitions in Texas helped too. Revenue in its Europe Materials Solutions division fell by 5% on an organic basis and this was blamed on subdued markets in Western Europe and poor weather.
Heidelberg Materials had a tougher time of it in the first half of 2024, with revenue down by 5% to around €10bn. It attributed the falling revenue to decreasing sales volumes across all business lines. It described its second quarter as follows, “The pressure on volumes is largely attributable to prolonged weak activity in the construction industry and adverse weather conditions in individual core markets. Active cost and price management largely offset the impact.” For clinker and cement this was noticed prominently in Europe despite volumes increasing in North America and Asia-Pacific. However, its result from current operations rose slightly. One reason for this appeared to be a ‘significant’ fall in material costs including energy.
Similarly, Cemex’s net sales were flat but its operating earnings were positive. Drilling down between its main geographical markets revealed a strong market in Mexico, a stable one in the US and declines in Europe, Middle East, and Africa (EMEA). In the US Cemex apportioned falls in cement and ready-mix concrete sales volumes to “...difficult weather conditions, a softening residential sector, portfolio rationalisation, competitive dynamics in certain micro markets and timing of several large projects.” Operating earnings were also hit by higher maintenance costs. In its EMEA region the trend was downwards but this was due to volume declines in Western Europe and geopolitical issues in the Middle East.
Votorantim Cimentos’ net revenue and adjusted earnings were down slightly in the first half of 2024 stemming from softer results in North America and Brazil in the first quarter. Revenue in Brazil was flat for the half year after a better second quarter. Revenue in North America though was hit by a slowdown in demand although price rises staved off some of this. Meanwhile, the group’s Europe, Africa and Asia region reported higher revenue due to higher volumes in most places.
Finally, UltraTech Cement is the odd company out in this group. The size of its annual revenue earns it a place in the list but it is more like some of the large China-based cement companies because it mostly sticks to one territory: India in this case. Yet, its revenue rose by nearly 6% to €4.2bn in the first half of 2024, making it the best performer in this article’s grouping. Domestic sales volumes increased at a similar rate in the April - June 2024 quarter. Similar to Heidelberg Materials, UltraTech Cement also reported that its energy costs fell by 17% year-on-year mainly due to reduced fuel prices. Its profit didn’t grow by much especially but the company is racing against Adani Cement to build capacity. It added 8.7Mt/yr alone in the April - June 2024 period compared to 13.3Mt/yr in its entire 2024 financial year that ended in March 2024.
The picture from the companies covered above suggests that the US market may have cooled for some since 2023. Despite this the earnings have mostly held up and cement companies enthusiasm for the market remains high led by Holcim’s impending market spin-off. Europe has been mixed, with declines in the west and stronger markets towards the east. Energy costs have finally fallen following the market shock when Russia invaded Ukraine in 2022 and this is helping earnings. That last point may be universal here given that it has affected both western multinationals and a large regional player such as UltraTech Cement. That’s it for now. In a future week Global Cement Weekly will take a look at how well the large China-based cement companies have done in so far in 2024.