Displaying items by tag: Eurocement

Last month Soyuzcement, the Union of Russian Cement Producers, reported that cement production was on course to grow by 8% year-on-year to 58Mt in 2019. This estimate was based on growth from January to October 2019 followed by a modest rise in November.

Graph 1: Cement production in Russia, 2010 – 2019. Source: CM Pro, Ernst & Young.

The pickup is significant because it’s the country’s first annual resumption of growth since 2014. At that time low commodity prices, a worsening economy and international sanctions broke a fairly steady growth cycle that had started in 2000. The only blip in that run was the global economic downturn around 2008. In the medium to long term Soyuzcement’s review pinpointed growth drivers as being government-backed residential housing schemes, integrated land development projects and an increase in the construction of concrete roads. This increase has been driven by consumption growth in most regions, led by a 12% rise in the Central Federal District although the Volga Federal District started to slow in the second half of 2019.

Figure 1: Russian Federal Districts by cement production in 2016. Source: Soyuzcement.ru.

Anecdotally, this change in the fortunes of the Russian cement industry can be seen in the volume of news coverage on the Global Cement website over the last few years. The mean number of news stories on the country in 2016 and 2017, increased by half in 2018 and then again in 2019. Partly this is down to our attempts to increase our coverage of the region but it also shows a general trend. In the news specifically there haven’t been many new plant projects domestically but there has been a steady stream of upgrades and maintenance related stories. For example, Eurocement subsidiary Kavkazcement reported in recent weeks that it had installed a replacement dry kiln. This has been part of a group of upgrades that Eurocement has started in 2019. On the supplier side both Germany’s Gebr. Pfeiffer and Italy’s Bedeschi opened subsidiaries in Russia in 2019.

One thing that didn’t seem to slow down the growth were mounting tariffs on Russian exports into Ukraine. Russia’s neighbour first blocked imports of cement from Russia in May 2019 due to, what it said was a Russian ban on imports. It then followed this with an antidumping rate of 115% for imported clinker and Ordinary Portland Cement (OPC) from Russia. It also penalised imports from Belarus and Moldova, although at lower rates. Russia’s cement export rates seemed untroubled by this, rising by 13.5% year-on-year to 0.8Mt in the first 10 months of 2019. Exports hit of high of just below 2Mt/yr in 2014 but have since stabilised at around 1Mt/yr. Imports reached around 5Mt/yr in the early 2010s and have been slowly declining since then, reaching 1.5Mt in 2018.

The lowered production rate that the Russian cement industry has faced over the last five years has been noteworthy given the apparent low capacity utilisation rate. The Global Cement Directory 2019 records the country as having a production capacity of 111Mt/yr. This gives Russia a capacity utilisation rate of 48% in 2018! Unlike, say, the countries in southern Europe that have had to rationalise their cement industries following the post-2008 decline, Russia may have structural aspects to the industry that have helped protect it from lower utilisation rates. These include relatively low export-import rates and the large size of the country with limited sea access to many regions. Most of its production capacity is located in the west but a sizable minority of plants are based further east across the Ural, Siberian and Far Eastern regions. Even under subdued economic conditions, plants in these places are likely to be less susceptible to foreign imports, for example.

Looking ahead, the question is whether the current growth that the cement industry is enjoying is viable once government spending slows down. Alongside this the industry could also focus on sustainability. As the government announced in early January 2020, the country expects to face both negative and positive effects from climate change. The cement industry could be at the front of this trend if it decides to clean up production and/or move into new markets as the Arctic region opens up.

Russia: Eurocement subsidiary Kavkazcement has installed and commissioned a dry kiln to replace its reserve kiln at its plant in the Republic of Karachay-Cherkessia. The new kiln is part of a Euro5.79m investment which will increase the current 3.1Mt/yr integrated plant’s capacity by over 40% to 4.4Mt/yr when commissioned in mid-2020. Oleg Lopatin, Kavkazcement director general, said “A significant increase in the plant’s workload was made possible by the high demand for our cements.”

Uzbekistan: Russia’s Eurocement has revealed that construction work underway at its 2.0Mt/yr integrated Akhangarancement cement plant in Tahskent region includes the installation of a second plant on the site, bringing its total capacity to 5.0Mt/yr. Trend News Agency has reported that suppliers have delivered 4500t of machinery to Akhangarancement, including a clinker refrigerator, clinker conveyor and heat exchanger as well as electrical equipment and building materials for a raw materials warehouse. Eurocement’s total investment in the project has amounted to US$200m.

Eurocement Group Holding International president Mikhail Skorohod said, “Taking into account the growing needs of the Uzbek market in building materials, Eurocement is committed to creation of a building materials cluster based around the Akhangarancement plant.” The company said that the upgraded 5.0Mt/yr plant would become operational in 2020.

Russia: Eurocement’s Maltsovsky integrated plant in Bryansk Region has gained European certification for its CEMI 52.5N, CEMI 42.5R and CEMII / A-S 42.5N products. Local testing and independent certification confirmed the new designation. Following an earlier certification for CEMI 42.5N the plant now hopes to grow its exports to the European Union.

Russia: Eurocement has announced an expansion in its cooperation agreement with consumer goods retailer Castorama. Eurocement’s regional subsidiary Mikhailovcement, which operates a 2.0Mt/yr integrated cement plant in Ryazan, dispatched the first batch of cement to Castorama in October 2019. Mikhailovcement and other Eurocement subsidiaries will now supply bagged cement to all of Castorama’s 19 branches across Russia.

Russia: Eurocement Group’s subsidiary Kavkazcement has installed a gas-piston power plant at its 4Mt/yr clinker production plant in Karachay in the Karachay-Cherkass republic. The US$20.4m project forms part of a US$39.2m investment in the plant by the company and regional government, which includes the construction of an automated packing and shipping facility. Eurocement Group president Mikhail Skorokhod spoke of the impact of the power plant in terms of ‘improving energy efficiency and environmental friendliness, as well as cutting production costs.’

Russia: Mordovcement, the Mordvinian-based subsidiary of Eurocement, shipped a total of 2.3Mt of cement by rail in the nine months to 30 September 2019, representing an increase of 31%. In July 2019, the company says it set a Russian record for number of carriages filled with cement in a single shipment, with 210 carriages. Russian Railways recognised the company’s high shipping volumes with a formal expression of thanks for “ensuring high rates of growth in freight traffic” at a Russian Railways Company Day celebration ceremony.

Russia: Eurocement has received nine new Volvo FM 8x4 heavy-duty dump trucks for its Kavkazcement and Maltsovsky Portland Cement plants. The vehicles have a capacity of 32t and include Volvo’s CareTrack telematics system. The cement producer hopes to increase the volumes of limestone it transports from each plant’s quarries by 15%. It has spent Euro1.3m on the new trucks.

Russia: Eurocement has trialled a novel cement transportation solution to increase the capacity of its Volga river barges by 100%. Firstly, the company strengthened its pallets to bear a double load. It then piled a second layer of cement in all four holds of its vessel, which successfully conveyed the 1200t load 1000km upriver to Yaroslavl from its 1.3Mt/yr integrated Sengileevskiy cement plant. Eurocement’s Director of Transport and Logistics Tatyana Dureiko has stated that this was the first time that the company has directly overseen the transportation by boat of its cement from launch to reception.

Russia: Eurocement has invested US$2.26m in upgrades to its Pikalevsky cement plant in the Leningrad region.

Eurocement has reported that tests have proven a 27% decrease in the water separation rate and an increase in the rate of curing of Pikalevsky’s cement following the upgrade. Strength indicators showed a 20% improvement in performance to 25MPa after three days, and over 60MPa after 28 days. Setting start time also increased to 175 minutes. Eurocement’s solution for particle size distribution in clinker after grinding has caused a notable boost in durability indicators.

Representatives of KHD, Aumund and Siemens aided in the installation and instruction of plant employees in the use of the new grinding technologies.