Displaying items by tag: Egypt

Egypt: Ten cement plants, accounting for 70% of Egypt's capacity, have been forced to temporarily halt production after state-run Egyptian Natural Gas Holding Company (EGAS) stopped providing them with natural gas.

"These plants have not yet officially announced that they are shutting down. They initially gave employees 15 days off and have extended the leave by another week, because the agreed-upon daily supply of natural gas was stopped," said an official from the Federation of Egyptian Industries (FEI). He said that the plant owners are holding discussions with the prime minister to review gas prices to ensure that the cement sector can continue to operate. The shutdowns are costing each plant around US$2.14m/day on average.

EGAS supplies nearly 800Mft³/day of gas to the industrial sector at subsidised prices, of which 150Mft³/day is allocated for the cement sector. However, frequent power outages have forced the government to redirect gas supplies from some cement plants to meet the needs of power plants.

The Ministry of Petroleum had initially reduced gas supplies to cement plants by 35% in the first two months of 2014. "The government, represented by the petroleum sector, bears a cost of US$1.4bn from selling natural gas at subsidised prices to cement plants, whereas those plants export their production or offer it in the local market at international prices," said Petroleum minister Sherif Ismail.

Ismail said that the government is considering a new price mechanism for the industrial sector, however, any changes would be implemented gradually because of the difficult economic situation in Egypt 'which cannot withstand a sudden spike in prices.'

Egypt: Omar A Mohanna, Chairman of Suez Cement, has announced that the company intends to alter its energy mix to use 20% of its energy from waste recycling and 80% from coal during 2014. He added that the Ministry of Environmental affairs has not announced its position on the use of coal, according to AlAhram News. Previous energy supply shortages have reduced production at Suez Cement to 50%.

In related news, the CEO of the Misr Beni Suef Cement Company revealed that his company has received an official letter from the Egyptian government informing the company that the natural gas supply to their facilities will be completely cut in May 2014. The letter added that the government will supply enough Mazut to the company to operate one production line.

Egypt: Arabian Cement Company has announced that its initial public offering (IPO) is expected to take place before the end of the second quarter of 2014, with trading on the Egyptian Stock Exchange to start around 21 May 2014. The company plans to sell a 22.5% stake.

Arabian Cement Company has also invested US$35m to shift from using 100% natural gas to 70% coal and 30% alternative fuels. It expects to use coal within the next three to four months once the government issues the company with the necessary license. The company produced 4Mt of cement in the 2013 fiscal year from a capacity of 5Mt/yr. It expects no growth in the 2014 fiscal year on the back of energy shortages.

Italy/Egypt: Italcementi celebrated its 150th anniversary and 10 years of 'successful operations in Egypt' in March 2014. Director general of Italcementi, Giovanni Ferrario, said that the group's mission focused on 'product innovation, quality and opportunities for the future.' The new branding system, i.Nova, was presented at the event, a system that he said was, "The result of 15 years of research that rejuvenates the group's marketing strategy."

The company says that the i.Nova approach focuses on the client in a strategy that is no longer based on supplying a single product, but on the ability to offer solutions that can meet several different needs at the same time 'fast and efficiently.' ''Our industrial strategy centres around research, innovation and sustainability, values that are necessary for competitiveness,'' said Ferrario.

Egypt: Minister of Trade and Industry Mounir Abdel Nour has announced that cement companies can start using coal from September 2014. He added that using coal will save 12.7Mm³/day of natural gas.

In a separate announcement, an official source at the Petroleum Ministry said that the amount of natural gas supplied to cement factories during January and February 2014 dropped by 35% from contracted levels. Total natural gas and mazut (heavy duty fuel oil) levels fell by 23% during the same period. During the second half of 2013 the amount of natural gas supplied fell by 17% from contracted levels with compensation from the use of mazut.

Suez Cement and Italcementi's first waste treatment plant in Egypt was inaugurated this week. The project uses 45,000t of household waste to produce 35,000t of alternative fuel annually. Given Egypt's on-going fuel concerns the project will be watched closely.

Italcementi has much riding on the success of the project. It has five integrated cement plants in the country. As reported in early February 2014, the cement producer suffered reduced production capacity in Egypt despite 'potential' domestic demand due to limited energy availability. Cement sales volumes in Egypt for Italcementi have continually fallen since 2011, accelerating from a 5.4% year-on-year reduction in 2011 to a 17.6% year-on-year reduction in 2013. Yet, despite this, rebounding domestic demand was reported in 2012 and 2013.

It must be extremely frustrating for Italcementi. It has the production capacity, it has demand but it doesn't have the fuel to power its lines. Any additional fuel will be welcome. At a rough and conservative rate of 200kg of fuel per tonne of cement produced, Italcementi and Suez Cement's new alternative fuel stream could help to produce 175,000t of cement or about 1.5% of the cement producer's clinker production capacity of 12Mt/yr.

Lafarge, with its mega 10.6Mt/yr cement plant outside of Cairo, hadn't suffered (publicly) as much as Italcementi from fuel shortages until the publication of its financial results for 2013. Although sales had decreased year-on-year since 2009, this has been blamed on competition. Now it has been announced that cement volumes decreased by 30% in the first half of 2013 due to shortages of gas. This was mitigated through fuel substitution to a 19% drop in the third quarter and a 7% drop in the fourth quarter.

However, Lafarge's strategy for fuel security may be threatened as the Ministry of State for Environmental Affairs ordered the producer to stop preparations to build storage units for petcoke in February 2014 citing environmental and economic reasons. What happening here is unclear given that the Egyptian government has been encouraging cement producers to move away from using natural gas.

The examples above show the reactions two multinational cement producers, Italcementi and Lafarge, have made to secure their fuel supplies. The outcomes remain uncertain.

In other news, Shijiazhuang in Hebei province in China has started the demolition of 17 (!) more cement plants. This follows 18 plants that were demolished in December 2013. In total, 18.5Mt/yr of cement production capacity has been torn down.

This is more than the cement production output of most European countries or any single US state! Where was this cement going previously? What were the effects on the price of cement in China? Who is taking the loss for the destruction of this industrial production capacity? BBC News Business Editor Robert Peston has some ideas.

The 8th Global CemFuels Conference & Exhibition on alternative fuels for cement and lime takes place in Vienna, Austria on 24 - 25 February 2014

Egypt: Suez Cement and Italcementi inaugurated the first waste treatment plant in Egypt on 16 February 2014 with a Euro5m investment.

The project is part of the Suez Cement strategy to increase the amount of energy that it gets from fuel derived from waste. The project uses 45,000t of household waste to produce 35,000t of alternative fuel annually. "The project will use the latest equipment and technologies available in this area," said Egypt's minister of Environment, Laila Eskander.

Egypt's Ministry of Environmental Affairs opposes the import of coal due to its negative effects on the environment and public health. Coal is not among the alternatives for solving the energy crisis in Egypt, according to Eskander. "Suez Cement has been suffering from an energy crisis, yet it decided to respect the Egyptian laws and to contribute to solving the problem of waste as well," said Eskander.

Egypt: Lafarge has been ordered by the Ministry of State for Environmental Affairs (MSEA) to halt its preparations to build storage units for petcoke, according to a statement by the ministry. The MSEA expects the French cement manufacturer in Egypt to wait for a final decision on the use of petcoke as fuel in industrial operations.

France-based multinational cement producer Lafarge submitted a study to MSEA on the environmental impact of petcoke in May 2013 and awaits a government decision on its use. The MSEA does not allow cement factories to import coal, citing hazards to the environment and the economy. The cement industry consumes 9% of the total amount of natural gas produced in Egypt, after the electricity and fertiliser sectors. The switch to coal was first suggested as an alternative to gas when the government announced plans to gradually remove gas subsidies.

Egypt: An Egyptian court has accepted an appeal by Assiut Cement to prevent the overrule of its privatisation in 1999. The case regarding the Cemex subsidiary has now been referred to an administrative court.

Two former Assiut employees, who were among workers to take an early-retirement package following the privatisation, brought a lawsuit against Assiut and certain Egyptian government representatives in 2011, seeking to annul the privatisation. The civil court ruled to annul the sale in 2012, but Assiut appealed. The civil appeals court accepted the appeal, overruled the first instance court and has referred the case to an administrative court, said Maher Al-Haffar, Cemex's vice president of corporate communications and investor relations.

"The process will start from the beginning, and the new court will have to hear the merits of the case," Al-Haffar said. Meanwhile, Egyptian cement operations are continuing and will continue normally, he added.

Mexico-based Cemex purchased a controlling stake in Assiut Cement in 1999 from Egypt's state-owned Metallurgical Industries Holding. It has since increased its cement production capacity to 5.4Mt/yr from 3.7Mt/yr and added ready-mix concrete, aggregates and housing developments to its cement operations. Assiut had sales of US$471m in 2012, equivalent to about 3.1% of Cemex's US$15bn in global sales.

Egypt: Suez Cement has ordered a bag filter system from Boldrocchi srl for its Helwan Plant. The turnkey contract includes new bag filters, a heat exchanger and fans for the kiln, raw mill and clinker cooler. This will replace the plant's existing baghouse and glaver bed filters.

Previously Italian engineering firm Boldrocchi had signed a contract with the Helwan Plant in 2012 to provide bag filters and fans for the Helwan Plant. Line one was commissioned in November 2013 and Line two is expected to be completed at the end of May 2014.