Displaying items by tag: Fuel

Egypt: Tourah Cement says it has stopped production due to a financial crisis caused by oversupply in the local market. Jose Maria Magrina, the managing director of Tourah Cement, told employees in mid-June 2019 that production would be stopped temporarily as it couldn’t cover its costs, according to Mist News. Estimated national cement consumption is 50Mt/yr but total production capcaity is 85Mt/yr.

In a statement the subsidiary of Germany’s HeidelbergCement said that new plants had forced producers to lower prices below the cost of production. It has also blamed higher fuel prices due to a cut in government subsidies.

India: JK Lakshmi improved its fuel consumption to 702kCal/kg of clinker in the October – December 2018 quarter from 705kCal/kg of clinker in the same period in 2017. Its revenue rose by 3.5% year-on-year to US$380m in the nine months to 31 December 2018 from US$368m in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 8% to US$45.4m from US$49.4m. The company said that it had been ‘facing pressure’ from increased petcoke and diesel prices. It also said that a 20MW thermal power plant and its Orissa grinding plant project were on schedule and are expected to be commissioned by March 2019.

India: JK Lakshmi Cement’s income fell slightly to US$250m in the first half of its financial year to 30 September 2018, from US$251m in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 13% to US$29.4m from US433.7m It has blamed the fall in its profitability on rising petcoke and diesel prices.

In its half-year report it added that work on a 20MW power plant at its Durg cement plant is expected to be completed by the end of March 2019. A cement grinding plant in Orissa is also expected to be finished from the start of 2019.

Germany: Poor weather in the US and rising energy prices have reduced HeidelbergCement’s earnings so far in 2018. Its result from current operations before depreciation and amortisation (RCOBD) fell by 7% year-on-year to Euro2.23bn in the first nine months of 2018 from Euro2.41bn in the same period in 2017. Despite this, its revenue rose by 3% to Euro13.4bn from Euro13bn and its sales volumes of cement grew by 4% to 97Mt from 93.5Mt. By region, revenue rose in all regions except for North America, but RCOBD fell in Western and Southern Europe, North America and Asia-Pacific.

“Improved financial costs and lower taxes overcompensated weaker than expected results from current operations due to significant rainfalls in our core markets in the USA as well as a higher than planned energy cost inflation,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. He added that, “Due to the weaker operational development, we had to partially adapt our outlook for 2018. As a countermeasure we have initiated an action plan with focus on three levers: portfolio optimisation, operational excellence as well as cash flow and shareholder return.”

India: Shailendra Chouksey, president of the Cement Manufacturers Association (CMA), has warned that cement prices could rise by up to 10% due to growing fuel and transportation costs. The local industry grew by 14% in the first half of the 2018 – 2019 year, according to the Press Trust of India.

"There is a very dire need to correct the pricing. In the last year we have seen 60-70% rise in the cost of fuel. To recover at least some portion of this increase, we need to increase the prices of cement," said Chouksey. He added that cement prices had been ‘almost stagnant’ since around 2011. However, he conceded that the industry still has surplus capacity.

Pakistan: Lucky Cement’s profit has fallen as its cost of sales including coal, other fuels and packing materials have risen. Its standalone profit after tax fell by 10.9% year-on-year to US$98.3m in the financial year that ended on 30 June 2018 from US$110m in the same period in 2017. Its gross sales rose by 9.4% to US$543m from US$497m. Cement and clinker sales volumes rose by 9.3% to 7.82Mt from 7.15Mt with increases in both local and export sales.

Paraguay: Industria Nacional del Cemento’s (INC) Vallemi cement plant has been paralysed by a coke shortage. All operations at the unit’s clinker kiln have been suspended, according to the Ultima Hora newspaper. The producer is still making cement deliveries but its clinker stocks have fallen to below 30,000t. The company reportedly only has fuel oil left for one day and sufficient coke for one day of full operation. It is awaiting the arrival of a 6000t consignment of coke.

Sudan: Fuel shortages and power cuts have reduced cement production by half. The Atbara Cement Plant reduced its production to 60,000t/month from 120,000t/month, according to Radio Dabanga. Production fell to 20,000t/month from 60,000t/month at Alsalam Cement, to 32,000t/month from 80,000t/month at El Takamol Cement, to 50,000t/month from 120,000t/month at North Cement and to 30,000t/month from 70,000t/month at Berber Cement. Parts of the country experienced fuel shortages in 2017 and this has continued in 2018, leading to problems far various industries.

Pakistan: The local cement industry has asked the government to increase the custom duty on imported clinker to support local production as export rates continue to decline. The industry has also recommended that cement importers should be registered with the Pakistan Standards and Quality Control Authority (PSQCA) and country of origin bodies, according to the Nation newspaper. Falling exports in Afghanistan have been blamed on Iranian competition and high local energy costs.

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