Displaying items by tag: China

China: China Resources Cement’s turnover rose by 29.5% year-on-year to US$4.94bn in 2018 from US$3.82bn in 2017. Its profit jumped to US$1.02bn from US$0.46bn. Its cement sales volumes grew by 9% to 82.6Mt from 75.9Mt. Cement sales volumes grew in all regions except for Hainan and Yunnan, where they declined slightly. Its concrete sales volumes increased by 5.7% to 14.2Mm³ from 13.5Mm³. No reason for its growth in 2018 was given but the producer’s average sales price of cement grew by 25%.

The cement producer is upgrading 106 cement bagging machines in the reporting year as part of its ‘digital’ cement-bagging project. It completed the construction of three sets of wet-process desulphurisation systems and 11 sets of composite desulphurisation systems. It launched co-processing projects in Changjiang County in Hainan, Tianyang County in Guangxi, Midu County in Yunnan and Fengqing County in Yunna.

China: Anhui Conch’s Jining Conch subsidiary has signed a contract worth US$23m with Conch Design Institute for selective catalytic reduction (SCR) units. Conch Design Institute will supply SCR denitration technology to Jining Conch including engineering design, equipment supply, construction and installation, engineering supervision and project management. The project is expected to be completed by the end of June 2019.

Vietnam: The Ministry of Construction says that demand for cement and clinker is expected to increase slightly to up to 99Mt in 2019. This will consist of 70Mt locally and 29Mt of exports, according to the Vietnam News Agency. Demand grew by 19% year-on-year to 96.7Mt in 2018, with growth driven by a 55% rise in exports to 31.6Mt. It shipped 9.8Mt to China in 2018. The main export markets in 2019 are expected to be the Philippines, Bangladesh, China, Taiwan and Peru.

South Africa: The Concrete Institute says that the International Trade Administration Commission (ITAC) should impose a temporary ban on cement imports to protect the local industry. The institute is preparing an application to the commission, according to the Business Daily newspaper. Bryan Perrie, its managing director, said that imports from Pakistan dropped in 2016 after tariffs were introduced. However, this has been replaced by imports from China and Vietnam. He added that prices have dropped ‘drastically,’ especially in coastal areas, that this is starting to effect jobs and cement producers are delaying expansion plans. The Concrete Institute represents PPC, AfriSam, Lafarge Africa, Sephaku and Natal Portland Cement.

China: Japan’s Kawasaki Heavy Industries has delivered two 220t/hr CK Mills to Jiande Conch Cement via Anhui Conch Kawasaki Energy Conservation Equipment Manufacturing (CKM), a joint venture between Kawasaki Heavy Industries and Anhui Conch. Kawasaki is handling design and operation-related technical guidance, whereas CKM is in charge of manufacturing and delivery. The mills have a table track diameter of 4900mm, 5100kW motors and four rollers. No value for the order has been disclosed.

Italy: Cementir Holding’s sales revenue fell by 4.2% in 2018 on a like-for-like basis due to poor performance in Egypt and Norway. Military operations in the Sinai impacted production in Egypt between February and May 2018 and bad weather in Norway affected the first quarter. However, it noted good results in Malaysia, Belgium and China.

On an adjusted basis its revenue rose by 4.9% to Euro1.2bn from Euro1.14bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7.1% to Euro239m from Euro223m. Grey and white cement sales volumes fell by 4.4% to 9.8Mt from 10.3Mt. Ready-mixed concrete volumes fell slightly to 4.9Mm³.

China: Anhui Conch has chosen Conch New Materials, a fellow subsidiary of Conch Holdings, as one of its grinding aids suppliers for 2019 following an open tender process. The value of the deal is estimated to be worth no more than around US$125m for no more than 0.15Mt of cement grinding aids. Conch New Materials develops, produces and sells cement additives, concrete admixtures, related chemical products and technical services. The other supplier has not been named.

Algeria: El-Hamel Sidi Moussa group’s Timegten cement plant has made its first 2000t export to Niger. The Chinese-Algerian joint venture used the Freight Transport and Logistics Group (Logitrans) to make the delivery overland via the In-Guezzam border crossing, according to Radio Algeria. The 1.2Mt/yr plant plans to target other countries, including Mali, Mauritania and Burkina Faso.

The Euro156m plant was commissioned in 2017. It is being run under a seven-year cooperation agreement where the Chinese partners manage the unit until the local workforce is trained. The plant also manufactures oil well cement.

China: Data from the National Development and Reform Commission reports that the profits of local cement companies more than doubled to US$64bn in 2018 compared to 2017. Cement output grew by 3% year-on-year to 2.18Bnt, according to the Xinhua News Agency. Cement sector growth has been attributed to rising cement prices. In December 2018 the average price of cement was 10.6% higher than at the same time in 2017.

Two supplier news stories this week presented a snapshot of the global cement industry. The first was FLSmidth’s annual results for 2018. The second was the announcement by France’s Fives that it had signed a collaboration agreement with China’s CNBM.

Overall FLSmidth reported its highest order intake in six years with revenue growth driven by its minerals division. On the cement side though the equipment manufacturer was blunt, describing the market for new cement capacity as, “subdued with low plant utilisation globally.” In its assessment a slow increase in global consumption outside of China was not enough to absorb overall production overcapacity. It said it saw a ‘healthy’ level of small to mid-sized orders for grinding plants, upgrades, retrofits and single equipment orders. The market for replacements and upgrades was identified as a strategic focus. It also noted environmental upgrades for plants in China and India as environmental regulations tighten.

Fives’ news touched on the rivalry that western-based manufacturers have faced from Chinese competitors. Fives and CNBM have agreed to explore projects together in new plants, expansions and upgrades. Although the press release was brief, this seems to involve CNBM using Fives technology such as grinding mills, pyro-lines and burners. Like the rest of the industry Fives has had a tough time of it in recent years in the cement sector although 2018 seemed to have improved considerably at the nine-month stage in September 2018. So signing an agreement with a competitor at this stage is interesting. FLSmidth did a similar deal with CNBM in mid-2018 when it signed a framework agreement for future collaboration.

The context here is that the new plants that are being built are often part of China’s One Belt, One Road Initiative, typically in Central Asia or Africa. Mostly these plants are being financed by Chinese joint ventures and built by Chinese suppliers. This week Reuters published a map of new cement plants being built in 2018 with Chinese involvement along the silk road using Global Cement data. Rightly, FLSmidth and Fives are taking steps to be a part of this growth.

Figure 1: New Chinese cement plant projects outside of China in 2018. Source: Reuters using Global Cement data.

There is a tendency in the western press to play up Chinese imperial ambitions exemplified by US Vice President Mike Pence’s comments at the Asia-Pacific Economic Cooperation summit in Papua New Guinea in November 2018. Yet, Sinoma International Engineering, one of CNBM’s engineering subsidiaries, reported that its new order intake fell by 14% year-on-year to US$4.56bn in 2018. No reason for the decrease was given but most of this fall seemed to come from its construction division. In turn most of this came from a fall in foreign orders. The implication is that China’s attempts to move its cement industry out of the country may not be happening fast enough to preserve the size of these companies.

Returning to European equipment suppliers, FLSmidth summed up its response to this situation in its annual report. The cement market is split between premium and mid-market projects, with the latter dominated by Asian suppliers. FLSmidth says it is targeting the mid-market by becoming the preferred original equipment manufacturer (OEM) of choice. They are not alone in their ambition as the Fives deal shows.