September 2024
China: Fitch Ratings expects West China Cement to record a first-half sales decline of 10% in 2022, due to ‘sluggish’ residential construction, on-going Covid-19 restrictions and high coal costs due to the Russian invasion of Ukraine. The rating agency predicted a ‘mid-single digit’ full-year sales decline in 2022, with a gross profit margin for the group of 28%, compared to 30% in 2021. This probability results from higher costs arising from overseas investments during the year.
Kazakhstan: Steppe Cement has received notification from Consilium Investment Management that funds under its management have ‘collectively ceased as a significant shareholder’ in the producer.
Consilium Investment Management previously represented a 5% stake in Steppe Cement’s shareholding.
Switzerland: Indonesian citizens of Pulau Pari have launched a legal case against Holcim in Switzerland for its contribution to climate change. Holcim operated in Indonesia from 1971 through its subsidiary Holcim Indonesia, which Semen Indonesia acquired from the group in 2019. Pulau Pari faces increased climate change-induced flooding, including two floods in 2020. Four residents have launched the present case against Holcim for damages, funding for flood defences and positive measures towards further group CO2 emissions reduction. Indonesia-based environmental organisation Walhi, Swiss Church Aid (HEKS) and the European Center for Constitutional and Human Rights (ECCHR) are supporting the case.
Trinidad & Tobago: Workers at Trinidad Cement’s Claxton Bay cement plant have launched a protest at the plant against an alleged breach of employment contracts. Troubled Company Reporter Latin America News has reported that Trinidad Cement has allegedly underpaid employees for more than seven years, with no cost of living allowance or gain share payments, and resulting pension miscalculations, according to a union representing the workers.
South Korea: SK Group subsidiary SK Ecoplant has partnered with CMD Group to launch pilot production of building materials made using up to 60% recycled bottom ash from waste incinerators. The partners say that an exothermic reaction in the presence of non-sintered inorganic binders and expansion-reducing reactants increases the compressive strength of the end product to match that of concrete containing ordinary Portland cement (OPC).
AJU News has reported that South Korean waste incinerators produced 2.16Mt of bottom ash from 9.12Mt of waste in 2020.
Update on slag cements, July 2022 13 July 2022
A trio of slag cement stories have been in the sector news this week with reports from Australia, France and Sri Lanka. Of note from the first two reports is a focus on supplies of slag.
The first concerns Hallett Group’s US$80m supplementary cementitious materials (SCM) project in South Australia. This will see the company process slag and fly ash sourced from sites in the region to manufacture blended cement products and standalone SCMs. These will be principally milled, blended and distributed from a site at Port Augusta. However, an additional distribution site at Port Adelaide is also planned that can both import and export the company’s products in a bid to cut down on supply chain risk, particular for its mining customers. The company says it will replace up to 1.15Mt/yr of cement when fully operational, although initial production looks set to be about a third of this based on local media reports. Commissioning of the Port Adelaide distribution hub is scheduled for May 2023, following by the Whyalla Granulator in January 2024 and the Port Augusta processing plant in June 2024. Pointedly, Hallett Group is explicit about where is plans to source its SCMs from: Nyrstar Port Pirie and, potentially, Liberty GFG.
The second slag-themed story hails from France, where Hoffmann Green Cement has acquired ABC Broyage, which operates a slag grinding plant in North Dordogne. Like the project in Australia above, Hoffmann Green is focused on its supply chain. With this acquisition it will be able to grind its own blast furnace slag instead of buying it. Raw blast furnace slag will be imported via the port of La Rochelle where the company has storage silos. It will then be ground at the former ABC Broyage site and sent on to Hoffmann Green’s H1 and H2 production sites, located at Bournezeau in the Vendée region. Finally it will use it to manufacture its H-UKR and H-IONA cement products. There is no mention of how much the acquisition is costing Hoffman Green. Instead the emphasis, according to company founders Julien Blanchard and David Hoffmann, is very much to, “strengthen our control over our supply and secure our margins in the current highly inflationary context.”
Finally, the week’s third slag-themed cement story is from Sri Lanka, where local media reports that Insee Cement has started producing Portland Composite Cement, using SCMs such as slag, at its Ruhunu grinding plant. This story follows the trend of cement producers around the world switching to greater usage of blended cements, often for sustainability reasons. Unfortunately, political events in Sri Lanka are overshadowing everything else locally, with the president having fled amid social unrest provoked by the ongoing and severe economic crisis. To this end Insee Cement has astutely also donated medical supplies this week to the intensive care unit at the Colombo National Hospital.
These slag stories are important for the cement sector can be demonstrated by a recent update to the Center for International Climate and Environmental Research - Oslo’s (CICERO) research on global CO2 emissions from cement production. When it published its estimate for 2021 it found that overall emissions were 2.6Bnt in 2021 or just over 7% of the world’s total CO2 output. What is worse though, is that its data suggests that cement-based emissions have steadily grown year-on-year from 1.2Bnt in 2002. Apart from a dip in 2015 they have kept on rising! This can mostly be attributed to the growth of the Chinese cement industry in the early 2000s suggesting that a tipping point may be reached in the current decade as lowering cement production CO2 intensity finally kicks in.
Slag and other SCM-based blended cements fit in here as they are one of the ‘easiest’ ways to reduce the clinker factor of cement and concrete and thereby reduce the sector’s CO2 levels. Hence they keep popping up on the various roadmaps and reports for the cement industry to reach net zero. The flipside of this however is that slag is becoming harder to source as the demand for granulated blast furnace slag increases and less new steel plants get built, especially in North America and Europe. Hence the focus on the supply of slag in the first two news stories above. Blended cements may be the future but getting there will be far from simple.
Philippines: Cemex Holdings Philippines has appointed Luis Guillermo Franco Carrillo as its president and chief executive with effect from 1 June 2022. He has succeeded Ignacio Mijares, who will now lead Corporate Strategic Planning at the Cemex central office.
Franco Carrillo previously worked as the Builders Segment Vice President for Cemex Mexico. He holds over 23 years of experience with Cemex, since joining the company in 1999. Prior to his assignment to the Philippines, Luis worked in senior positions in the UK, Hungary and Mexico. He holds a bachelor’s degree in Chemical Engineering from the Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM) and a master’s degree in Business Administration (MBA) from the Stanford Graduate School of Business.
Nigeria: Guillaume Moyen has resigned as the chief financial officer (CFO) of Dangote Cement. He cited personal reasons for his departure from the post. Moyen will be succeeded by Gbenga Fapohunda as the acting CFO.
Fapohunda holds over 20 years of experience in corporate finance. He joined Dangote Cement as the Regional CFO in Nigeria in early 2021. Prior to this he held regional CFO roles for Japan Tobacco International and British American Tobacco. Earlier in his career, he was a manager within the financial advisory team at PricewaterhouseCoopers (PWC) and also worked as a consultant at KPMG Professional Services.
He holds a Master of Business Administration (MBA) in Finance from the London Business School and a Doctor of Philosophy (Marketing) from Delta State University in the US. Gbenga holds membership of a number of professional accountancy and finance bodies in Nigeria.
Four Vietnamese cement line projects cancelled 13 July 2022
Vietnam: High costs have resulted in the cancellation of four planned new integrated cement lines by a local cement producer. Viet Nam News has reported that the producer in question presently faces costs of US$59.9 - 64.1/t cement, with a net loss of US$8.55 - 10.30/t. Coal prices are US$237/t, more than triple those at the start of 2022 of US$85.5/t. Gypsum and diesel prices rose by 50% over the first half of 2022. The producer reportedly attributed the coal price rise to the effects of the Covid-19 conflict and the Russian invasion of Ukraine.
Steppe Cement increases sales in first half of 2022 13 July 2022
Kazakhstan: Steppe Cement's first-half sales were US$41.4m in 2022, up by 18% year-on-year from first-half 2021 levels. Sales volumes were 837,000t, down by 0.4% year-on-year from 841,000t.