September 2024
KIMA Process Control to supply kiln cooling system for Cementa's Slite cement plant 17 November 2022
Sweden: Germany-based KIMA Process Control has secured a contract for the supply of a kiln shell cooling system for Cementa's Slite cement plant in Gotland. 88 water jets will deliver centimetre-precision cooling for the 55m-long kiln, while IR pyrometers measure temperatures over areas of 10cm2. According to KIMA Process Control, the equipment can avoid unnecessary cooling of the kiln shell, conserving the heat energy supplied by the main burner.
The new cooling system will eliminate the use of energy intensive electric fans, slashing 1700t/yr in CO2 emissions, according to the supplier. It said that noise emissions will also 'drastically' decline as a result of the upgrade. The system's operating costs are reportedly 98% less than those of the plant's existing fan system.
The supplier said that the new equipment will 'bring the cement plant in Slite an economic benefit in the shortest possible time.' It said "For the cement industry, this project represents a new milestone in terms of best available technology in the operation of rotary kilns."
Singaporean parliament enacts tightened carbon credit scheme 17 November 2022
Singapore: Parliament passed the Carbon Pricing (Amendment) Bill earlier in November 2022. Under the act, Singapore will raise the price of carbon credits to US$18.17/t from 2024, and to US$32.71/t from 2026. CNA News has reported that the government said that the new legislation will provide the basis for the realisation of carbon credit prices of over US$36.31/t by 2030, in line with the country's 2050 net zero CO2 emissions commitment.
Polluters which emit over 25,000t/yr of CO2 currently pay US$3.65/t for carbon credits.
Thailand: Siam Cement Group (SCG) recorded total national cement consumption growth of 6% year-on-year throughout the first nine months of 2022. The producer partly attributed the comparatively high figure to nationwide building site closures during the first nine months of 2021. In its management discussion and analysis of its third quarter 2022 results, the group noted commercial construction as the main driver of demand growth. Its cement consumption rose by 8% year-on-year, cement use by infrastructure projects grew by 6% and cement demand for residential projects rose by 5%.
Public construction supplies 40% of Thai domestic cement demand, with commercial and residential construction together accounting for the remaining 60%.
SCG previously reported that Thai cement demand had dropped by 5% year-on-year during the first half of 2022.
India: A court has dismissed Shraddha Binani's petition against summons by the Ministry of Corporate Affairs' Serious Fraud Investigation Office in its investigation of alleged related party transactions by the former Binani Cement. Mint News has reported that 'huge funds' from the company's related parties entered Binani's bank account, beginning in 2010.
Under corporate insolvency resolution proceedings, Binani Cement underwent acquisition by Aditya Birla subsidiary UltraTech Cement, becoming UltraTech Nathdwara Cement, in 2018.
Azerbaijan more than doubles 10-month cement production 17 November 2022
Azerbaijan: Azeri cement producers recorded 2.98Mt in total cement production volumes during the first 10 months of 2022. The figure represents growth by a factor of more than two from 1.46Mt in the corresponding period of 2021. As of 1 November 2022, producers had stores of 96,400t of cement in reserve.
During the same period, ready-mix concrete production also more than doubled to 1.15Mm3, while precast concrete elements production rose by 63% year-on-year to 40,800m3.
Update on Bangladesh, November 2022 16 November 2022
The Infrastructure Development Company in Bangladesh announced this week that it had agreed to loan Crown Cement US$25m to help it add a new mill to its cement grinding plant at Munshiganj, south of Dhaka. If completed it will be the plant’s sixth mill. Originally known as MI Cement the plant has a production capacity of 3.3Mt/yr and the most recent mill was added in 2017. The plan to add a sixth mill dates back to 2019 but was revised in 2021 with a total investment of US$90m. Securing a loan marks a significant step forward for the project.
The timing to expand a cement plant in Bangladesh is interesting given the problems facing the local cement sector. In August 2022 Mohammed Alamgir Kabir, the president of the Bangladesh Cement Manufacturers Association (BCMA), told the Daily Star newspaper that cement producers were facing both falling investment in infrastructure development and private projects. The local cement industry imports 90% of the raw materials it uses and most of the country’s cement plants grind cement use imported clinker. However, the aftermath of the coronavirus pandemic created supply chain problems leading to higher costs of raw materials, dearer transportation charges and started to push up global energy prices. This was then exacerbated by the Russian invasion of Ukraine in February 2022 and negative currency exchange effects as the Bangladeshi Taka fell in value against the US Dollar. In words echoing cement associations in other parts of the world, Kabir suggested that cement producers now faced the option of either continuing to raise prices or simply shutting down production.
The local cement production capacity utilisation rate appears to be around 56% based on data from a recent feature in the Financial Express newspaper. It placed total production capacity at 83Mt/yr from 37 active plants but demand at only 47Mt/yr. This is similar to the reported utilisation rate of 54% back in 2017 from a total production capacity of 50Mt/yr. Data from the Bangladesh Bureau of Statistics (BBS) suggests that cement production picked up in 2021 but then declined on a monthly year-to-date basis between December 2021 and February 2022. However, the BBS only reports production from a sample of plants. Masud Khan, the chief advisor to Crown Cement and its former chief executive officer, placed the cost of all that unused capacity at US$40/t or something like an investment of US$1.46bn for idle manufacturing potential. In his view, the larger local producers forecast an increase in demand around five to 10 years ago and invested accordingly to avoid losing market share. However, some smaller companies may also have done the same.
The local sector has likely been able to cope with a relatively low capacity utilisation rate previously because it was ‘grinding heavy.‘ How the current problems have shown themselves on cement company balance sheets has been mixed though. LafargeHolcim Bangladesh’s sales revenue and profit grew by 8% year-on-year to US$166m and 7% to US$32.2m in the nine months to September 2022. It was probably able to do this, in part, due to the fact that it operates one the few integrated plants in the country and it has direct access to limestone reserves across the border in India. By contrast, HeidelbergCement Bangladesh’s sales fell by 3% year-on-year to US$90.7m in the first six months of 2021 and it made a loss of around US$2m. Aramit Cement’s revenue fell by 60% year-on-year to US$6.09m in the nine months to March 2022 and it reported a loss. Premier Cement Mills increased its revenue by 5% to US$99m in the same period, although its net profit dropped by 91% to US$387,000. Crown Cement’s revenue rose by 16% to US$13m but its net profit fell by 81% to US$1.32m.
Geopolitics, high energy prices and local problems are all combining to make life difficult for cement producers in Bangladesh. As the market adjusts to the current situation the determining factor here is likely to be the cost of grinding cement to end users versus just importing cement directly. Current conditions do not seem to be stopping Crown Cement though nor LafargeHolcim Bangladesh. The latter, for example, launched a new blended cement product, Supercrete Plus, earlier in November 2022. One way out for the others might be explore exports and the BCMA suggested just that to the government over the summer, although this doesn’t seem like the most obvious solution for a country that imports so much of its raw materials.
Bui Xuan Dung appointed as chair of Vietnam Cement Corporation 16 November 2022
Vietnam: The Ministry of Construction has appointed Bui Xuan Dung as the chair of the Vietnam Cement Corporation (VICEM).
Bui Xuan Dung trained as a civil engineer and holds a master’s degree in business administration. He worked for the Hanoi Construction Corporation from 1995 to 2021 becoming its General Director in 2015. Since 2021 he has held the post of Director of the Housing and Real Estate Market Management Department at the Ministry of Construction.
VICEM is a state-owned cement producer controlled by the Ministry of Construction. It operates 16 production lines at 10 plants and holds around 35% of the country’s market share in the cement sector.
Lafarge Cement expects Czech cement shortage to continue into 2023 16 November 2022
Czech Republic: Lafarge Cement says that an on-going national cement shortage due to high operating costs will likely continue into 2023. MACR News has reported that Lafarge Cement chief executive officer Miroslav Kratochvíl said that the producer's Čížkovice cement plant would have suspended deliveries altogether if not for its existing commitments to customers. The company's pre-existing deals for its power supply enabled it to restrict energy costs growth to less than double 2021 levels in November 2022. Fuels, including alternative fuels, and other raw materials, are also at a price high due to shortages.
Lafarge Cement expects Czech construction activity to decline by 5 - 10% year-on-year in 2023. Kratochvíl said "We would welcome a slight drop in demand."
Belarus cement exports to Russia on the rise 16 November 2022
Belarus/Russia: Exports of cement from Belarus to Russia increased by 61% to 0.43Mt in September and October 2022 compared to the same period in 2021. Eurocement has also warned that Russia’s total imports could rise to 2.2Mt in 2022, comprising 1.5Mt from Belarus, according to RIA. The Russia-based cement producer forecast that total imports could rise to 5Mt in 2023, split mainly between imports from Belarus and Iran. Eurocement noted that it had encountered problems with rising imports already in 2022.
PPC’s earnings fall by 12% to US$42m in first half 16 November 2022
South Africa: PPC’s earnings fell by 12% year-on-year to US$42m in the six months to September 2022, excluding its subsidiary in Zimbabwe due to hyperinflation. In South Africa and Botswana the group reported higher sales in coastal regions due to less imports but tougher conditions inland that led to a 2.6% fall in cement sales volumes. Despite this, it raised its revenue through price rises. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 29% to US$29.9m. Performance was better in Rwanda where its Cimerwa subsidiary increased its sales volumes by 11% and its EBITDA by 63% to US$14.5m. PPC Zimbabwe’s sales volumes declined by 13% due to a planned kiln shutdown in the first quarter and margins were negatively affected by the use of imported clinker primarily from PPC South Africa and increased maintenance costs. However, sales volumes improved in the second quarter. EBITDA fell by 48% to US$8.59m.
Roland van Wijnen, the chief executive officer PPC, said, “The PPC group continues to deliver sound cash generation and deleverage the balance sheet despite difficult trading conditions in its core South African and Botswana cement market, offset by positive trading conditions in its Zimbabwe and Rwanda operations. To maintain volumes in the South African and Botswana cement markets, sales price increases were limited to 5% in the period under review. Key input costs, especially those related to fuel and energy, increased at double-digits in percentage terms.”