September 2024
Cement plant utilisation jumps to 85% in Philippines 26 June 2015
Philippines: The Manila Bulletin has reported that the capacity utilisation of local cement plants has increased to 85% from 68% in 2014 due to strong domestic construction activities, according to the Department of Trade and Industry (DTI).
DTI undersecretary Victorio Mario Dimagiba said that there is enough cement supply to meet demand. He added that the Philippines had 31.3Mt/yr of cement production capacity in 2014, when consumption was 21.3Mt, or 68%. At present, however, plant capacity utilisation has reached 85%.
The increase in demand in the Visayas and Mindanao areas in the past two weeks was to pre-empt the onset of the rainy season. Dimagiba said that, even though there are cement plants in these regions, there is a huge logistical challenge in the transport of cement to the islands. He added that should local demand in these regions exceed production, imports could augment the shortfall.
Lafarge India names Ujjwal Batria as CEO 26 June 2015
India: Lafarge India has appointed Ujjwal Batria as CEO of the company effective from 22 June 2015. Batria will take over the responsibility from Martin Kriegner, who has been named as area manager for Central Europe of LafargeHolcim.
The development comes shortly before the expected completion of the LafargeHolcim merger. The Indian Competition Commission of India (CCI) has already approved the Indian leg of the proposed merger, with certain provisions, including divestment of two cement plants; Lafarge's plants at Jojobera, Jharkhand and Sonadih, Chhattisgarh. The two plants have a combined capacity of 5.15Mt/yr. Holcim's business in India is run through ACC and Ambuja Cements. It is not clear what Batria's role will be in the merged LafargeHolcim entity. Since ACC and Ambuja Cements are public listed firms, Lafarge's Indian unit may continue to operate separately, at least to begin with.
Prior to his appointment as CEO of Lafarge India, Batria was managing director of the company and was managing its cement business. He has been with Lafarge for 16 years. He had joined the company in 1999 and has served on different position across functions since then.
EAPCC renews hunt for COO 26 June 2015
Kenya: According to Business Daily, East African Portland Cement Company (EAPCC) has renewed its efforts to recruit a new COO after the candidates who applied to fill the new position in August 2014 'fell short' of the required qualifications. EAPCC has now re-advertised the position, which is expected to strengthen its governance structure.
The Athi River-based manufacturer first sought to recruit a COO and CFO in 2014 through consultancy PricewaterhouseCoopers. Kephar Tande, the company's managing director, said that the board deemed the applicants to be unqualified. "The first attempt in 2014 did not yield a suitable candidate from the shortlisted four, hence this new advertisement," said Tande. "This position is primarily required to improve the efficiency of our supply chain to make the company more competitive. We expect the position to be filled by August 2015."
EAPCC's current management executive structure is made up of heads of sections and divisions like financial management, research and development, internal audit and risk management, as well as strategy performance improvement. The new COO will be responsible for cement production operations, production engineering, product research and development, as well as sales and marketing.
EAPPC has not said whether it will re-advertise the CFO job, also a new position. The CFO is expected to streamline financial management at the company, which has recently faced accusations of having reported inaccurate accounts. "The position of CFO will be filled as soon as internal procedures are completed," said Tande.
Indonesia: According to the Jakarta Post, Semen Indonesia has lowered its prices by around 10% so far in 2015 to compete with rivals amid an economic slowdown that has seen a decline in the construction sector. With an increase in competition in the local market, Semen Indonesia had hoped that its exports would boost its revenues, according to company marketing director Amat Pria Darma.
President Joko "Jokowi" Widodo instructed state-owned cement producers to lower their prices in January 2015 to support the government's massive infrastructure projects. However, Darma added that state-run cement producers had to lower their prices further later in 2015 to cope with tighter competition and lacklustre demand. "A number of new plants have started operating and new supplies are coming in. We have to lower our prices to keep up with the market with overall plunging domestic demand," said Darma.
Semen Indonesia saw its domestic sales volumes fall by 5.3% in January – May 2015 to 9.91Mt, even steeper than the national decline in cement demand of around 3.8%. In May 2015 alone, the company's domestic sales fell by around 14%.
While cement demand has contracted since the start of 2015 on the back of the slowing economy, several cement producers have seen additional production from newly operating plants. New players have also entered the market, such as Semen Merah Putih. Semen Indonesia saw its market share in the country slip from 44% in 2015 to 43% in 2015. Darma said that he was pessimistic that Semen Indonesia could achieve its target of seeing sales volume up by around 6% in 2015, or even maintain it at the same position as 2014. The company will instead look to export markets as a strategy to cope with the domestic slowdown.
Semen Indonesia's exports rose by more than eight times from 22,155t in the first five months of 2014, to 184,181t in the same period of 2015. According to Agung Wiharto, the surges were not particularly good news as with high transportation costs, cement makers only exported their production when domestic sales were down and the contribution from exports was not significant. Exports, he said, were made to better ensure that its products were absorbed to maintain utilisation and efficiency. Wiharto said that Semen Indonesia was looking to initiate contract-based exports, in comparison to its current spot sales, in the near future if the economy does not show any signs of improvement. By relying on a six-month to one-year contract, the company could ship more cement, ensuring a more certain market.
"We hope to see our exports hit 1Mt in 2015. The prospect is good, given that some of our traditional markets have no cement producers," said Wiharto. Among Semen Indonesia's major export customers are Timor-Leste, Bangladesh and the Maldives.
New RDF plant comes online in Pasig, Manila 25 June 2015
Philippines: According to the Philippine Daily Inquirer, on 24 June 2015 the Pasig City government brought online what it described as, 'The country's largest facility for turning rubbish into fuel, capable of processing 600t/day of trash.'
The plant, which is Pasig City's joint project with the IPM Construction & Development Corp (IPM) and the Metro Manila Development Authority (MMDA), can process almost all of the city's daily waste production into refuse-derived fuel (RDF). Pasig City mayor Maribel Eusebio said that the plant would produce fuel pellets from the waste, which would then be supplied as an alternative fuel to cement plants. The RDF is majority-owned by Basic Environmental Systems & Technologies (BEST), a subsidiary of publicly-listed Minerales Industrias Corp, as well as France-based Lafarge Industrial Ecology International.
The plant mechanically segregates waste, selecting garbage with high thermal value that will be shredded, made into pellets and wrapped into bales. The plant is expected to convert 25 – 35% of the processed waste into alternative fuel for cement kilns. "The plant addresses serious concerns on increasing municipal solid waste and disposal," said Eusebio. "The RDF plant also complies with the waste diversion requirement of Republic Act No 9003 or Ecological Solid Waste Management Act of 2000. It also addresses climate change issues associated with how municipal wastes are managed."
The use of RDF in lieu of coal addresses the twin issues of solid waste management and climate change. "This is the largest RDF plant in the Philippines to date," said Isabelita P Mercado, president of IPM, which operates and manages the plant. "This is also a pioneering endeavour to save the environment by reducing our dependence on fossil fuel."
Slovenia: According to the Slovenian Press Agency, on 24 June 2015 the government adopted a proposal for changes to the environment protection act that remedies shortcomings in provisions governing environmental permits. The problems with the existing legislation had led to the European Commission (EC) taking Slovenia to the EU Court of Justice.
The government said that the key purpose of the amendments was meeting the demands of the EC and that all plants without environmental permits at the time when the changes enter into force will need to stop operations. The step is related to the Lafarge cement plant in Trbovlje, which was instructed to stop operations in March 2015 after lax legislative provisions allowed it to continue to operate for a protracted period even though it did not have an environmental permit.
The EC announced in February 2015 that it was taking Slovenia to the EU Court of Justice for its failure to implement environmental licensing in line with the integrated pollution prevention and control (IPPC) directive of 2007. The EC said that the legal action came because one of the country's major cement producers had continued to operate without the required permit, in reference to Lafarge. The EC was seeking a base fine of Euro1.6m for the country plus Euro9009 for each day that the violation persisted.
The small cement industry of Mozambique, in south west Africa must be an interesting place to make cement. On one side the country's producers, like their more vocal South African counterparts, have been fighting off cheap imports from Iran, Pakistan, China et al. On the other side of the coin though, Mozambique has growing domestic demand and is within striking distance of growing markets further into Africa, like Malawi and the Democratic Republic of Congo (DRC).
With the announcement this week that there will be not one but two new integrated cement plants in the country, bringing over 2Mt/yr of new capacity, everything should be set fair for the coming years then, shouldn't it? Domestic production will rise, the price of local cement will fall as a result, competition from imports will drop off and money will be made from new exports.
Except that might not happen. Before the announcement of these two plants, (one of which does not state a capacity), there was around 5.5Mt/yr of grinding and integrated capacity either currently active in Mozambique or due to come onstream in 2015. With the new projects this rises to over 7.5Mt/yr.
The desirable chain of events described above starts to break down due to the fact that domestic demand in Mozambique, while rising, is not currently anywhere near as high as domestic supply. The United States Geological Survey estimated that the country produced just 1.2Mt/yr in 2012. Data for 2013 and 2014, though unavailable, is highly unlikely to show a three-fold increase. Indeed Insitec, a minority shareholder in Cimentos de Moçambique, predicted in 2014 that demand for that year would rise to just 1.5Mt, before hitting the dizzying heights of 1.8Mt in 2018 – And that's still three years away!
So what are the options? Option 1: Some or all of the planned and mooted cement plants will fail to come to fruition. Option 2: Some or all of the plants will be built but will operate at reduced capacity and/or on a campaign basis. Option 3: The Mozambican cement industry becomes a regional powerhouse and starts to export to its neighbours.
Option 1 is certainly possible. Limak Group, one of the parties linked to the new projects, is a Turkish cement producer that is inexperienced outside of Turkey. There has also been a lack of information on the progress of projects by Austral Cimentos ('coming on stream in 2015'), Star Cement and Consolidated Building Materials, although a lack of progress reports does not necessarily imply 'no progress.'
Option 2 is more likely, as some producers already operate on a campaign basis. InterCement's plant at Nacala, formerly an integrated plant, currently operates only as a grinding station. Option 3 is also possible, with Malawi particularly lacking in cement production facilities.
In reality a combination of all three 'Options' is the most likely outcome. However, this will lead to Mozambique becoming yet another player in an increasingly busy African cement market. The desire for self-sufficiency in cement production, a common goal for the region's governments, can easily lead to over-estimates of local demand growth, with resultant over-capacity. Of course the expectation that all African countries can get rid of this extra cement capacity via exports will ultimately backfire.
In southern Africa we already have South Africa exporting. Angola declared 'cement self-sufficiency' in October 2014 and banned imports at the start of 2015. Zambia, Botswana, Zimbabwe and DRC all have large-scale Dangote and/or PCC projects near completion or in production that will greatly reduce their need for imports. Meanwhile, further north, Nigeria is already a gigantic producer and significant cement exporter. Cameroon has recently banned imports and Ghana is thinking of doing the same. Over in the east of Africa, Ethiopia's (and the rest of that region's) rapidly-developing situation was covered in this column just two weeks ago.
Finally, in the north of Africa, Algeria has declared its intention to be self-sufficient in cement by 2016. This news must have 'gone down like a lead balloon' in Italy, Spain and Greece, which have been reliant on north African markets after the bottoms fell out of their own economies. In the north east, Egypt has different problems at present, also described previously. It needs fuel not cement!
So where does this all lead for regional cement dynamics in Africa? Well perhaps the situation in India points the way. There, as in Africa, local and regional producers with the desire to expand grew from their local bases and eventually overlapped. Against a backdrop of lower-than-expected demand, the country now has overcapacity. This has resulted in smaller producers being acquired and leaving the market.
Could this eventually happen in Africa? Only time will tell. However one thing is certain: It's just not possible for every country to export to every other country!
US: According to Charlotte Business Journal, Duke Energy has proposed excavating 12 more of its 36 coal ash ponds in North and South Carolina and burying the waste in a fully-lined landfills or structural fill projects.
To date, Duke has proposed closure plans for 24 of the 36 ash ponds. In every case, it has proposed excavation and reburial. However, Garry Miller, head of closure engineering for Duke, said that might not be the case for the remaining 12 ponds. He said that the engineering work that remains to be done at those plants could yet show that a 'cap in place' process, which critics have said would be insufficient to protect against further contamination of groundwater, can effectively close them.
Miller said that none of the waste ash from Duke's 36 ash ponds would undergo beneficial reuse, the process of using the ash for commercial products such as a replacement for Portland cement in concrete and gypsum board. However, he added that Duke does send a portion of the dry ash it is currently producing at its largest plants for reuse. However, the time constraints imposed by North Carolina's Coal Ash Management Act of 2014 make it impossible for the existing ash ponds. "As we close these basins, the quantity in them is such that the market cannot handle it in a timely manner," said Miller.
Duke's current cost estimate for closing the ponds is US$3.4bn, although this is subject to revision.
India: According to Focus News, cement carrier MV Coastal Pride has sunk 45km south of Daman, Gujarat on 24 June 2015. The Navy and Coast Guard rescued 14 crew members of the vessel. The Coast Guard picked up six persons before the ship sank, a helicopter saved six crew members from the water and the Coast Guard rescued two further people after the boat sank. The rescued crew were evacuated to Umargaon, Gujarat.
Heavy industries set to miss deadline for installing online emissions monitoring systems 24 June 2015
India: According to Live Mint, the majority of 3261 highly-polluting industries in India, including the cement and steel sectors, are set to miss the June 2015 deadline set by the ministry of environment, forests and climate change (MoEFCC) to install online effluent and emission monitoring systems.
Most industries have recently sought an extension to September 2015, although some from sectors like petrochemicals and refinery asked the deadline to be extended to June 2016. The environment ministry is considering the former plea. "The ministry is favourably considering extending the deadline until September 2015 for the majority of industries. But we are not sure about extending it to June 2016 for certain industries. A final call will be taken soon in this regard," said a senior environment ministry official.
On 16 - 17 June 2015, the Central Pollution Control Board (CPCB) held a meeting of industrial associations and common waste management facilities to review the status of compliance of their directions regarding the installation of online effluent and emission monitoring devices. According to the minutes of the meeting, 'By-and-large, associations have agreed to meet the deadlines by September 2015, except in the case of mini cement plants, refinery, petrochemicals and common bio-medical facilities.'
In December 2014 the CPCB identified 3261 industries in 17 categories of highly-polluting industries, including the cement, iron and steel, thermal power plants, sugar, tannery, distillery, fertilisers and pesticide sectors. The CPCB had asked the industries to install online effluent and emission monitoring systems by June 2015, failing which bank guarantees of 100% of the cost of online systems (emission or effluent) would be forfeited. The CPCB had also said that its 'consent to operate' would be withdrawn from non-complaint industries.