Displaying items by tag: CalPortland

CalPortland completed its acquisition of the Redding cement plant from Martin Marietta this week. As previously announced the transaction involved the integrated cement plant in northern California, related cement terminals and 14 ready mixed concrete (RMC) plants also in the state. However, CalPortland’s parent company Japan-based Taiheiyo Cement revealed this time round that it is considering buying the Tehachapi cement plant from Martin Marietta too. It says it has some sort of preferential purchase agreement in place, although a final decision is yet to be made.

If CalPortland and Taiheiyo Cement do end up buying the Tehachapi plant as well as Redding then it will mark a fairly quick turnaround of owners. HeidelbergCement subsidiary Lehigh Hanson announced that it was selling up assets in its US West region to Martin Marietta for US$2.3bn in May 2021. The deal was completed by October 2021. Then, CalPortland said it was buying the Redding plant in March 2022. From an outside perspective it was not clear what Martin Marietta might have had planned for its new assets. Over three quarters of Martin Marietta’s revenue in 2021 came from its Aggregates and RMC products. However, it is also a prominent regional US cement producer with two plants in Texas and two plants in California, along with associated terminals. So, building up its cement business in California didn’t seem unfeasible. Now, as can be seen, it is likely to be sticking to its primary focus of aggregates and RMC. It is also worth noting that California has some of the stricter CO₂ reduction policies in the US with a 40% reduction target for 2030 (compared to 1990 levels) and a local emissions trading scheme that started in 2013.

Looking at the local cement production base in California, the latest development with the former Lehigh Hanson plants shows the changing situation since the subsidiary of HeidelbergCement left the region. Beforehand, Cemex, Lehigh Hanson and CalPortland each had a similar clinker production capacity. Then, Martin Marietta took the lead and now CalPortland looks set to become the frontrunner if it buys Tehachapi. With the Redding deal completed it now operates three integrated cement plants in California and one in Arizona. Alongside this it runs 15 terminals in Alaska, Arizona, California, Nevada, Oregon and Washington – and – two terminals in Alberta and British Colombia in Canada. The Redding plant is also a distinctive addition to its portfolio as it is further north than the other clinker units.

United States Geological Survey (USGS) data shows that cement shipments to California grew by 5% from 10.05Mt in 2019 to 10.57Mt in 2021. So far in 2022, shipments to the state rose by 3.4% year-on-year to 3.56Mt for January to April 2022 compared to 3.44Mt in the same period in 2021. However, clinker production fell by 5% to 8.94Mt in 2021 from 9.45Mt in 2019. This trend seems to have continued into 2022 with a 9% fall to 2.54Mt for January to April 2022 compared to 2.81Mt in the same period in 2021. Despite this, California remained the second largest OPC and blended cement producer in the US in April 2022. In its Western US Regional Outlook in May 2022, the Portland Cement Association (PCA) forecast that the Pacific region of the US (including California) will experience flat growth in cement consumption in 2023 due to a slowdown in residential consumption. However, consumption is then expected to bounce back sharply in 2024 as the effects of the infrastructure bill take effect.

This suggests that CalPortland has picked an uncertain time to start buying cement plants in California. Yet only last year, in 2021, Cemex began restarting production at a previously mothballed cement plant in Mexico to supply the south-west US. Alongside all of this, environmental regulations are tightening. However, the key difference between Martin Marietta and CalPortland is that the latter is owned by Japan-based Taiheiyo Cement, which is more cement-focused than the aggregate and concrete oriented Martin Marietta. No doubt Taiheiyo Cement’s intention to become more international also played a part in its decision making. If CalPortland does decide to buy Tehachapi then this may give observers an idea of how much further its ambitions go.

US: CalPortland has appointed Hamed Maraghechi as its Director of the Central Research Laboratory. He will be based at the CalPortland Center of Technical Excellence in southern California where he will conduct new research and testing related to issues such as carbon reduction and sequestration to help the company achieve its commitment to lowering greenhouse gases. He will also oversee all advanced analytical services for customers and for internal operations, in this newly created position.

Maraghechi holds a PhD in Civil and Environmental Engineering with a materials focus from the Pennsylvania State University, a master’s degree in Civil and Environmental Engineering from the University of Hawaiʻi at Mānoa and a master’s degree in Polymer Engineering from the University of Tehran in Iran. He was most recently a senior scientist at Fortera working on the design and development of low CO₂ cement and concrete formulations. Prior to Fortera, he worked as a scientist at Boral IP Holdings and the École Polytechnique Fédérale de Lausanne (EPFL) in Switzerland.

US: The Portland Cement Association (PCA) has received the 2022 Energy Star Partner of the Year award from the Environmental Protection Agency and the Department of Energy. This is the third year in a row that PCA has earned this award.

"We are proud to have won this award for the third consecutive year. This latest award confirms our commitment to reducing cement sector CO₂ emissions through longstanding, long-term efforts to improve energy efficiency," said Michael Ireland, president and chief executive officer of the PCA. "This award shows once again that the cement and concrete industries are leading the way toward a more sustainable future, even as demand for our products grows."

The 2022 Energy Star Partner of the Year Award follows the launch of PCA's Roadmap to Carbon Neutrality in October 2021. In addition to PCA's recognition, two member companies also earned awards. CalPortland and Cemex won Partner of the Year awards in the energy management category. This is the fifth year in a row that Cemex has won this award, and the 18th successive year for CalPortland.

US: CalPortland has converted production at the 1.3Mt/yr Mojave cement plant in California to its Advancement HS, a Portland limestone cement (PLC) product. The plant will reduce its CO₂ emissions by 10% on a per ton basis. The company said the move supported the Portland Cement Association’s Roadmap to Carbon Neutrality and the industry’s overall efforts to address climate change.

US: The Environmental Protection Agency (EPA) has awarded its Energy Star certification to cement plants belonging to two Titan America subsidiaries. Titan Florida’s Pennsuco, Florida, cement plant has secured its 14th consecutive Energy Star, while Roanoke Cement’s Troutville, Virginia, cement has secured its 15th consecutive Energy Star.

Other cement plants to receive Energy Stars in 2022 included two Argos USA plants (Calera, Alabama, and Harleyville, South Carolina), two GCC plants (Pueblo, Colorado, and Rapid City, South Dakota), Buzzi Unicem’s Chattanooga, Tennessee, plant and three plants in Arizona: CalPortland’s Rillito plant, Drake Cement’s Paulden plant and Salt River Materials Group’s Clarkdale plant.

US: The former Lehigh Hanson Redding cement plant is the subject of a new acquisition deal. Martin Marietta has now agreed to sell the plant, which is in California, and related cement terminals to CalPortland for US$250m. The deal also covers 14 ready-mix concrete locations. The parties have also established arrangements for any future agreement for the sale of Martin Marietta’s Tehachapi cement facility and its related cement distribution terminals. Martin Marietta acquired both plants from Lehigh Hanson in October 2021.

CalPortland’s parent company Taiheiyo Cement said that the acquisition will enable it to build a supply system to meet the growing demand for cement in northern California, Oregon and Nevada. It added that the Redding Plant is an important plant in northern California, which its expects can improve customer satisfaction through an investment to develop more efficient systems. The company concluded “As a result, we expect steady growth in revenue and profits for Taiheiyo Cement’s US cement and ready mixed concrete businesses, which in turn will contribute to the achievement of the medium-term management plan from fiscal years 2022 to 2024.”

Holcim Schweiz hit a milestone recently with the aerial drone programme at its Siggenthal cement plant. The project with Voliro, a Switzerland-based technology start-up, has started to use multi-rotor drones to conduct official measurement flights. They used them to take measurements to determine the steel wall thicknesses of the cement kiln and the cyclone preheater. The work has been part of Holcim’s ‘Plants of Tomorrow’ industrial automation plan with unmanned aerial vehicles (UAV). Key features of the particular drones being used are that they can be rotated around all axes by a special rotor system and can even fly upside down.

Holcim has been using drones in and around cement plants for a few years now. When it launched the Plants of Tomorrow plan in 2019, Switzerland-based drone supplier Flyability said that the cement company had chosen its Elios 2 model to perform confined space inspection. Earlier in 2017 another supplier, SenseFly, said that LafargeHolcim Tanzania had been using its fixed-wing products. Holcim is also far from alone in its use of drones. A few examples among many include Cemex USA’s work with Kespry earlier in 2021, HeidelbergCement’s work in North America and Germany in 2020 and 2021 and Votorantim’s testing at its Córdoba and Niebla plants in Spain back in late 2015. 

UAV usage by armed forces dates back to examples like unmanned incendiary balloons being deployed in the 19^th century to Azerbaijan’s reported decisive use of drones in its war against Armenia in late 2020. The current era of industrial UAVs began after 2000 when governments starting issuing civilian permits, miniaturisation occurred and improvements in cameras, sensors and computing power followed. For the mineral processing sector the trend started with drones being used for stockpile management and quarry surveying. At present this is the main area that UAVs are used for by the sector, often coupled with photogrammetry techniques. CalPortland’s Adam Chapman’s paper at the 2021 IEEE-IAS/PCA Virtual Cement Conference described one company’s use of UAVs in the cement industry since 2016, looking at licensing, cost, quality of data, drone technology, fleet management and field experiences.

More recently though, tests of drones used to survey cement plant buildings and structures have started being publicised such as Holcim’s work at Siggenthal. A presentation by consultant John Kline and Chris Place of Exelon Clearsight summarised the use of drones for structural inspection at cement plants at the Global CemProducer 3 webinar in January 2021. The key benefits they promoted of using an UAV in this way were: improved safety because workers have reduced risk from climbing, working at height or in confined spaces; less time to conduct a survey; higher resolution photographs and video; better coverage through grid method surveying; and an overall lower cost. However, on that last point, other commentators have noted that market-leading drones for surveying are relatively expensive and easy to damage. Drones have since been used to start going inside structures at cement plants with Kline demonstrating their use to inspect the condition of refractory within the cooler, kiln, pre-heater and cyclone of a production line at the Global CemProducer 2 webinar in July 2020. HeidelbergCement has also been doing similar things, with an inspection trial using a drone of the kiln at the Schelklingen plant in Germany during the 2021 maintenance shutdown period at the site.

So far the use of drones by the cement industry has mostly been in a surveying or inspection capacity. Given the short time that UAVs have been used like this there is likely to be scope for lots more development both within existing fields and new ones as the sector works out how best the technology can be used. One application we couldn’t find in the research for this short article was the use of drones for security and surveillance tasks at cement plants and quarries although this may be happening already. However, there could be a more active role for drones if or when a company finds a way for them to start making basic repairs or carrying out simple maintenance in those hard to reach areas that drones excel at accessing. Research examples exist of UAVs being used to spray concrete or repair materials onto minor defects in concrete structures. Yet considerable challenges face these kinds of applications such as the weight of a loaded multi-rotor drone or damage from rebound. Before we all get too worried about drones replacing our jobs though it is worth considering that Amazon’s plan to deliver packages by UAV was first announced in 2013 and it still hasn’t happened yet. It may yet, but for now in most situations humans remain cheaper and more practical than robots or drones.

North America: US-based CalPortland has become a corporate member of the Wildlife Habitat Council. The council manages habitats to support sustainable ecosystems and the communities surrounding them. The Japan-based Taiheiyo Cement subsidiary says that the move formalises its commitment to integrating biodiversity and conservation action into its sustainability efforts.

President and chief executive officer Allen Hamblen said "Our membership with the Wildlife Habitat Council provides a unique opportunity to take corporate sustainability goals and objectives and translate them into tangible, on-the-ground actions which ensure a sustainable environment for the next generation."

HeidelbergCement confirmed the rumours this week with the announcement that it was selling assets in the western US to Martin Marietta for US$2.3bn. The deal covers subsidiary Lehigh Hanson’s US West region cement, aggregates, ready-mixed concrete and asphalt businesses in California, Arizona, Oregon and Nevada. This includes two of its cement plants, with the exception of the 1.5Mt/yr Permanente cement plant in California, related distribution terminals, 17 active aggregates sites and several downstream operations. The companies expect to conclude the deal by 2022 but naturally it is subject to approval by competition bodies.

Well, this is a big one considering that one of the catalysts for the group’s divestment plan was the reduction of the value of its total assets by Euro3.4bn in July 2020 following a review. Depending on the exchange rate, the value of the divestment to Martin Marietta covers half to two thirds of that amount. Group chairman Dominik von Achten later told the media in February 2021 that the company was planning to sell the first of the five assets in early-to-mid 2021. However, cement isn’t the full story here since Lehigh Hanson operates three integrated plants in California and seven terminals. So, by elimination, the Tehachapi and Redding plants are the ones that are being sold along with some combinations of the terminals. Both of those plant have production capacities of around 0.8Mt/yr. Unless the terminals being sold have been valued highly, then the majority of the deal appears to encompass some or all of the 25-odd aggregate sites, 15 asphalt sites and 30 ready-mix concrete sites the company operates in the four states.

On the cement side it doesn’t seem unreasonable at face value for the authorities to allow Martin Marietta to take over most of Lehigh Hanson’s business in the region since it should broaden competition from a production angle. Instead of five companies in California with integrated plants, there will be six. For Martin Marietta, the deal also carries the feel of unfinished business in the region since it briefly held a cement business there for around a year in the mid-2010s. It acquired Texas Industries (TXI) in July 2014 and then sold the cement business in California to CalPortland in September 2015.

Both companies are pursuing different strategies. HeidelbergCement says it is hunkering down on its other four North American regions – the US Midwest, Northeast and South, plus Canada - through selected ‘bolt-on’ acquisitions and plant upgrades. Martin Marietta says it wants to take advantage of long term demand trends such as increased state infrastructure investment in California and Arizona and private-sector growth. It also reassured shareholders with its version of the acquisition/divestment story by saying it was going to generate value the same way it did previously with TXI. It’s a small thing but the acquisition also sees the US’ largest domestic cement producer increase its production base. The top five North American cement producers will remain controlled by companies headquartered in Europe but it is a step towards regionalism.

As for who’s right, in the short term, the west coast region looks good. The area included some of the best performing states in 2020 in terms of growth in cement consumption year-on-year in 2020 with the exception of Oregon. In its winter forecast the Portland Cement Association (PCA) attributed growth in the Mountain region of the US (including Nevada) to underlying economic fundamentals and favourable demographic trends, although it expected this to slow down in 2021. In the Pacific region it forecast consumption to grow modestly in 2021 due to residential construction. As if to underline the current situation, Cemex decided to recommission a kiln in Mexico in February 2021 to cope with cement shortages and project delays in California, Arizona and Nevada.

In the face of these figures HeidelbergCement’s decision to sell suggests either it dangled a juicy proposition with good short term prospects in front of the buyers or its long term projections are pointing elsewhere. Selling up, yet holding onto its largest cement plant in the region, also smacks of hedging its bets. No doubt it will be holding on to a few terminals too. On the other hand, it would be very interesting indeed to know what part, if any, HeidelbergCement’s internal carbon price played in its decision to divest in the western US. California has the country’s biggest carbon emissions trading scheme (ETS). If say, legislators suddenly decided to follow the price trend of the European Union’s ETS then things might look different.

US: The Portland Cement Association (PCA) has received the 2021 Energy Star Partner of the Year award from the US Environmental Protection Agency and the US Department of Energy. It is the second year in a row the association has been recognised in this way. Each year, the Energy Star program recognises a group of businesses and organisations that have made outstanding contributions to protecting the environment through superior energy achievements.

“The PCA and its members are proud to be recognised for continuously improving energy efficiency to reduce emissions,” said PCA President and chief executive officer Michael Ireland. “The cement and concrete industry is leading the way towards a more sustainable future as PCA and its members are developing an industry roadmap across the entire value chain to reach carbon neutrality by 2050."

In addition to PCA’s Partner of the Year recognition, two PCA member companies, CalPortland and Cemex USA, earned corporate Partner of the Year awards and 13 US cement plants earned Energy Star certification for superior energy performance in 2020.