September 2024
Nigeria: Lafarge Cement WAPCO, Ashaka Cement and Unicem have started court action against the Standards Organisation of Nigeria (SON) regarding its plan to limit the application of 32.5 grade cement. The action follows a publication by SON restricting the application of 32.5R grade cement to plastering use only.
"We have instituted a suit against the SON over its recent pronouncement and plan to implement a new mandatory industrial standard order for cement manufacturing, distribution and usage in the country," said the three cement producers at a briefing in Lagos. The producers added that 32.5 grade cement is a widely used multi-purpose product and has 'never' been associated with building collapses.
India: The Himachal Pradesh state government has cancelled the 2Mt/yr cement plant project that was allotted to Jaiprakash Associates in Chamba District. The state cabinet cancelled the memorandum of understanding (MoU) for the project in February 2014. Another of Jaiprakash Associates' cement plants in Solan District is under investigation for overproduction.
The Chamba District cement plant was proposed at an estimated cost of US$136m near the Baroh-Sindh limestone deposits in Churah Tehsil, Chamba District. When the MoU was signed on 1 February 2007 it was claimed that the plant would provide direct employment to over 1000 people and indirect jobs to over 5000.
Finding that many cement companies have failed to set up their projects, the state cabinet in May 2013 decided to issue notices to Harish Cements, Lafarge India, India Cements and Jaiprakash Associates for failing to set up cement plants, despite the government having granted approvals. Following the cabinet decision the industries department issued show-cause notices to the companies. The industries department examined the replies and forwarded them to the state government. Finding the reply submitted by Jaiprakash Associates unsatisfactory, the cabinet cancelled the MoU in February 2014.
Industries minister Mukesh Agnihotri confirmed the cancellation of the proposed Jaiprakash Associates cement plant. Some other cement companies in Himachal Pradesh State are also under investigation due to reports of violations. The minister said that Jaiprakash Associates' cement plant in Solan District was allowed to produce 2.05Mt/yr of cement but that the company was actually producing 3.46Mt/yr.
"All these years, the company was making additional production without having the requisite permission," said Agnihotri. "When we started investigations the company approached the government seeking permission to regularise additional production." Agnihotri said that the order for an energy audit of Jaiprakash Associates has already been issued and that strict action would be initiated if violations are found on the part of the company.
Guatemala: Cementos Progreso will open a new cement plant, called San Gabriel, in San Juan Sacatepequez in the first quarter of 2017. The firm is investing US$700m on the 2.2Mt/yr capacity cement plant.
Saudi Arabia: Saudi cement producer City Cement Company has announced that it intends to invest US$29.7m to boost its cement grinding capacity to 265t/hr. The company said that it would use its own funds to finance the expansion. Construction will start on 1 June 2014, with completion expected in February 2016. Commercial production is expected in March 2016.
Canada: Community leaders and St Marys Cement Inc. executives were on hand on 29 May 2014 to celebrate the company's Bowmanville plant receiving the Gold Award Certification in Energy Excellence. Certification in Energy Excellence is a programme that tests an organisation's energy management processes. Over 160 energy management criteria, based on world-class best practices, are assessed. The programme is independently moderated and validated by the UK's National Energy Foundation.
The Bowmanville plant was recognised for its energy conservation performance and its success at energy management. To date, the plant's approach to energy management has saved US$10m. In 2014 it is on target to again reduce its energy bill by US$1m. These savings are achieved though an integrated and balanced approach of smart energy buying, matching energy-intensive plant operations with off-peak rates, common sense energy conservation practices and other plant-based energy initiatives.
John Pooley, Chief Assessor for the Certification in Energy Excellence, presented the plant with the award. "The Bowmanville facility is one of the largest cement plants in North America with a rated capacity of over 1.8Mt/yr," said Pooley. "Cement plants consume significant amounts of energy, but few other industrial operations in the world have come close to achieving the same level of integration in energy savings."
Marty Fallon, CEO of St Marys Cement, Celso Martini, VP Cement Operations, and Fabio Garcia, Manager of Plant Operations, accepted the award on behalf of St Marys. "St Marys is extremely proud of the effort, ingenuity and technical expertise deployed by the men and women working here to achieve the direct savings and establish systems to keep our energy purchase prices as low as possible," said Fallon. "The energy reductions at this plant are getting more and more attention as a benchmark in sustainability criteria for the entire sector. In fact, in 2015 the plant will be the featured site visit during the 2015 IEEE-IAS/PCA Cement Industry Technical Conference."
The Bowmanville plant manager Fabio Garcia said, "I want to especially commend the energy management and conservation committee, which we call E=MC2. With representatives from finance, human resources, environment, quality control, maintenance, mining and production departments, the committee identified and acted upon over 100 separate energy efficiency initiatives. The magic of the E=MC2 approach was many of the energy savings required little capital expenditure or were done at no cost."
Since the E=MC2 committee's inception, the plant has reduced its energy usage by a total of 171,429MW and has lowered CO2 emissions by 31,886t.
Brazil: Brazil's antitrust watchdog Cade has fined six cement makers a combined US$1.4bn for fixing prices for two decades and ordered the companies to dispose of many assets.
Votorantim Cimentos SA, Camargo Correa SA's Intercement Brasil, Itabira Agro Industrial SA and Cia de Cimentos Itambé SA, as well as Switzerland's Holcim Ltd and Cimpor Cimentos de Portugal SGPS SA agreed to set prices to force rivals from the market, according to councillors at Cade. Cade ignored the companies' claims that there was no evidence of price-rigging and ordered them to cut installed capacity in concrete-services by 20% in large markets. The ruling also requires the companies to do away with any cross shareholdings.
The ruling, which followed an eight-year inquiry, came as allegations of cost overruns have dogged preparations for the 2014 FIFA Football World Cup. Local cement sales have more than doubled over the past decade and prices have jumped by about 66% in that period following a commodities-based boom and government efforts to expand roads and other infrastructure.
"This cartel was so strong that it had clear strategic goals," said councillor Márcio de Oliveira Junior. The six companies named in the ruling control about 75% of the domestic market for cement and concrete. The decision was slightly milder than councillor Alessandro Octaviani's January 2014 proposal, which called for bigger asset disposals. Cade also imposed sanctions on Abesc (an industry group representing concrete producers), ABCP (Brazil's Portland cement group) and SNIC, which represents local cement factories.
Lawyers said that litigation could go on for years should the companies appeal. Cade had previously blocked any attempt for early settlements. One of the lawyers involved, who asked not to be named, told Reuters that the severity of the fines and the asset disposals are unheard of in similar antitrust cases around the world. Industry leaders allege that Cade has no legal power to impose any asset sales.
Under terms of the ruling, Votorantim will have to pay US$672m in fines, Cimpor will pay US$133m, Intercement Brasil will pay US$108m, Itabira will pay US$184m, Holcim will pay US$227 and Itambé will have to pay US$39.4m. Votorantim will challenge the decision, "Because it is unjustified, lacks legal basis and ignores market facts," said Votorantim. SNIC has also said that it plans to appeal Cade's decision.
India: Jaiprakash Associates' profit after tax fell by 18.7% year-on-year to US$17.1m in the quarter that ended in March 2014 on account of higher interest costs and lower revenues.
Net sales declined by 11.9% to US$578m during the January - March 2014 quarter, down from US$657m in the same quarter of 2013. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 2.3% year-on-year to US$148m. Interest costs for the quarter jumped by 38% year-on-year to US$128m, while cost overheads such as direct construction costs fell by 25% and other expenditures fell by 11%. Revenue from its cement division, which contributes 45% to the company's total revenue, increased by 0.5% year-on-year to US$280m. However, earnings before interest and cost margin plunged by 700 basis points to 6.7%.
Ethiopia: The Ministry of Mines (MoM) has granted a mining license to Habesha Cement for the excavation of minerals for the company's cement production.
The contract allows Habesha to mine limestone, gypsum, clay and sandstone from 1.12km2 of land in the West Shoa Zone, Oromia Region, at four different locations. The mining operations will be undertaken with a capital of US$1.38m. The land that Habesha requested for pumice is reserved for forestation and wildlife development and it has asked for a replacement.
The mines will provide raw materials for the Habesha cement plant, which will have a production capacity of 1.4Mt/yr of cement. The company is expected to begin production in November 2015.
The mining contract will be valid for 60 years, until the minerals are fully excavated. Habesha is expected to produce over 100Mt of limestone in that time. When the company starts cement production, it is expected to use 1.1Mt/yr of limestone, 70,000t/yr of gypsum, 288,000t/yr of clay, 72,000t/yr of sandstone and 450,000t/yr of pumice.
"To get the approval, we conducted a feasibility study and environmental assessment on the areas and paid US$1.55m as compensation to the former owners of the land," said Mesfin Abi, CEO of Habesha.
Habesha Cement was established in September 2008 by 30 shareholders with an initial capital of US$30,671. Construction of the cement plant, which will cost US$120m, is underway in Beketa and Koro Odo Kebele, Oromia Region, Ethiopia.
India: Mangalam Cement Ltd has announced that the company's new 1.25Mt/yr cement mill at Kota District, Rajasthan, which had been under a trial run, started commercial production on 28 May 2014. The cement plant's total capacity has increased from 2.0Mt/yr to 3.25Mt/yr.
Sustainable expansion for Semen Indonesia 28 May 2014
One of the ideas aired by several speakers at last week's 6th Brazilian Cement Congress was that using cement as a construction material is inherently a sustainable option.
The reasons for this included the durability of cement's construction products and the role cement plays in improving the living standards of a country. For example, under the onslaught of extreme weather like hurricanes, concrete structures are more likely to remain standing. Or, for a country like Brazil with sections of society living in long-term 'temporary' buildings in its favelas or shanty towns, providing affordable cement to help the country build better housing for its inhabitants is the only sustainable future that could be considered.
Perhaps in line with this concept of cement-as-sustainable-construction-material we see Semen Indonesia this week announcing expansion plans in three countries in South and Southeast Asia.
In West Sumatra a Semen Indonesia subsidiary has started building a 3Mt/yr cement plant in Padang. Then in Bangladesh Semen Indonesia revealed its intention to buy a 1Mt/yr plant. Finally, the state-owned Indonesian cement producer said that its Semen Gresik subsidiary was planning to build a new cement plant in Central Java at Rembang in June 2014. From previous press releases we can see that both new plants are FLSmidth builds. Both orders were announced in early 2014. Each has a capacity of 8000t/day.
The plans to expand outside of Indonesia echo reports that Semen Indonesia was set to buy a minority share in a Myanmar cement producer. Although the producer was unnamed as of early May 2014, Semen Indonesia CEO Dwi Soetjipto valued the stake at US$30m and the producer's production capacity at 1.5Mt/yr in comments to the Jakarta Globe.
Altogether the two new plants in Indonesia will place Semen Indonesia's total cement production capacity at 40Mt/yr by 2017 according to company figures. This would be enough to place the company within the top 20 of the world's largest cement producers by production capacity following the research from Global Cement's 'Top 75 global cement companies'.
In a nice coincidence, the company with a production capacity of 40Mt/yr on that list was Eurocement. Last week the Russian cement producer announced that it had signed contracts worth Euro387m with Chinese companies - including Sinoma, CNB, Sinomach and CAMC Engineering Co - to add 17Mt/yr cement production capacity across six plants in Russia. Another six or seven more construction agreements for cement plants are also expected to be signed in the coming months.
Certainly for the countries Semen Indonesia is focusing on – Indonesia, Bangladesh and Myanmar, with low gross domestic product per capita – providing the raw material for stronger and more durable buildings covers some of the sustainability bases. Yet if all these new plants only use fossil fuels and are subject to few environmental restrictions then that undermines some of this. However, whether all this expansion is sustainable or not, the cement industry never remains stationary.