Displaying items by tag: GCW143

Three news stories this week cover the gamut of fuels used by the cement industry in North America.

First we had an example of the changing trends in fossil fuel usage when TruStar Energy announced a deal to supply compressed gas to Argos USA. Then we moved to an example of recycled fuels used in co-processing when chemical waste firm ChemCare trumpeted its 100 million gallon milestone (that's 379,000m³ to the rest of the world) in supplying fuel-quality waste to the Lafarge co-processing subsidiary Systech Environmental. Finally, Cemex rounded off the main fuels groups with renewables, when it released pans to build a US$600m wind farm project in north-east Mexico.

Obviously fossil fuels still dominate in kilns north of the Darian Gap, as they do almost everywhere else, and fuel buyers wouldn't be doing their job properly if they weren't searching for the next best deal. Yet the range here shows a dynamic industry.

Jan Theulen from HeidelbergCement pointed out one example in the US at the recent Global CemFuels Conference held in Vienna. Here, rising landfill prices are increasing opportunities for alternative fuels use alongside changing US Environmental Protection Agency (EPA) permitting for solid recovered fuel. Alternative fuels consultant Dirk Lechtenberg, in an interview with Global Cement Magazine in February 2014, singled out the US as one country that is developing its alternative fuels use. As he explained, "Even though the fossil fuel prices are quite low in the US, the industry is developing supply chains for alternative fuels to be more independent with their fuels sourcing."

This race between cheaper fossil fuels in the US (via shale gas) and increasing development in alternative fuels is fascinating. Specifically: why is it happening now? Gas prices have fallen and demand for cement is returning in the US. The annual mean Henry Hub natural gas spot price in the US fell from US$8.86/million BTU in 2008 to a low of US$2.75/million BTU in 2012. This compares to up to US$15/million BTU in Japan and US$9/million BTU in Europe.

Public environmental pressure made manifest by the policies of the EPA and general increased knowledge about co-processing may be factors for the surge in alternative fuels investment. Long lead times for alternative fuels schemes may be another. Planners making a decision about what fuels mix to pursue in 2008 at the start of the recession might well have bet on alternatives to spread their risk. Yet the cause could be something else, as shale gas takes over higher paying industries, such as electrical generation, and the cement industry continues to be priced out of the leftovers.

Ultimately what burns in a cement kiln comes down to price. Depending on how the shale gas market plays out in North America it would be ironic if 'frackers', the bogeymen of current environmentalists, inadvertently cleaned up the cement industry.

South Africa: The board of directors of Sephaku Holdings have announced that Johannes Wilhelm Wessels died on 23 March 2014. Wessels was an alternate director to Rudolph de Bruin since 2007 on the Sephaku Holdings board.

Wessels originally provided legal counsel on the emerging business structure in 2005 and he later joined Sephaku Holdings as Head of Corporate Affairs holding key responsibility for group legal counsel, transaction structuring advice and contractual negotiations. He led the process of the group's unbundling strategy and worked on the legal and tax aspects of the process. Wessels helped reposition the company from a multiple mineral exploration company to a construction and building materials focused company.

"Wes was pivotal in negotiating the relationship agreement with Dangote Industries PLC to establish Sephaku Holdings' partnership in South Africa's newest cement producer since 1934, Sephaku Cement. At the time of his untimely death Wes was also serving as a director of the Sephaku Cement board. We will always remember him for his astuteness, legal savvy, business acumen and spontaneous sense of humour," said Chief Executive Officer, Lelau Mohuba.

Bangladesh: Asadul Haque Sufyani has been promoted to Chief Marketing Officer of Seven Circle (Bangladesh), a subsidiary of Hong Kong-based Shun Shing Group. Previously Sufyani had been working as the General Manager (Sales, Marketing & Distribution) of Seven Circle. He joined in Shun Shing Group in 2009.

Sufyani, aged 40, started his career in the Brand Management department of Sanofi-Aventis and later worked as a Senior Marketing Manager in Bengal Group and Head of Trade Marketing in Robi (formerly AKTEL). Sufyani graduated in Commerce from Delhi University, India and later gained his MBA from the Lincoln School of Management, University of Lincoln in the UK.

Australia: Len Buckeridge, Australia's 19th richest person, died of a heart attack at the age of 77 on 11 March 2014. The billionaire owner of Buckeridge Group of Companies (BGC), was a well-known and long-standing character in the Australian construction industry. The group has interests in gypsum wallboard, bricks and cement as well as residential construction.

Buckeridge built up BGC, which turns over US$2.25bn/yr, from humble beginnings in the 1960s following his training as an architect at Perth Technical College. Hard-but-fair in business, his determined approach saw him amass a personal fortune of over US$1.5bn via the group. Despite his success he retained a down-to-earth approach to the company's day-to-day operations, latterly running the business from the dining room table in his house at Mosman Park, near Perth.

His hard-nosed stance, which helped him in some aspects of his business life, also made him a controversial figure. Buckeridge was involved in a number of deeply-entrenched confrontations with construction unions in Australia. He also attempted to sue the Government in the Supreme Court over a stalled private port project. Upon his death, Buckeridge was described by former construction union boss Kevin Reynolds as 'a formidable opponent.' "People will remember Len as a person who was prepared to take on anyone and everyone whether it would be the unions, government, other employer groups or other builders," said Reynolds. "If Len believed in something he would take them on."

Buckeridge, who had been contemplating succession plans for BGC without coming to a conclusion prior to his death, owned 100% of the group. The Australian business world and the global cement and gypsum industries is awaiting news on how the future ownership of the company will look. Buckeridge is survived by his wife, six children and eight grandchildren.

Vietnam: The Thach My cement plant in Quang Nam province has started operation after a period of delay, according to a statement by Xuan Thanh Investment and Development JSC. The plant had an investment of US$190m with a designed cement production capacity of 1.7Mt/yr in its first phase. It covers an area of 57.36 hectares.

The plant was identified as a key project in the province when construction started in July of 2010. Construction was later delayed due to a shortage of building materials. The plant will create jobs for 1000 labourers, with 800 of these from the local area.

Nigeria: The Standards Organisation of Nigeria (SON) has led a group of cement industry stakeholders is stating that poor construction practices and not the quality of cement is to blame for the growing incidence of building collapse in the country. The position was taken at a recent meeting in Lagos by the technical committee of stakeholders and put together by SON to review the cement standardisation in the country.

Speaking at a press briefing Lanre Opakunle, general manager of Industrial Performance at Lafarge WAPCO, said that the committee unanimously agreed that cement is not responsible for building collapse. According to the committee, factors like poor or low quality application at building construction sites, poor construction practices, poor supervision as well as corruption are mainly responsible for building collapses.

The meeting stressed the need for cement manufacturers to review their standards to align with the European standards. Cement producers were advised to indicate the usage and application of the cement types on their bags in a legible and clear manner.

Zimbabwe: Wang Yong, the managing director of the Sino-Zimbabwe Cement Company, has reported that the joint-venture is on track to complete a US$5m upgrade to the Gweru cement plant in the Midlands province. Once the work is completed the plant's clinker production capacity is expected to double to at least 0.2Mt/yr.

"We are now halfway through the upgrade... We have installed a modern bag filter system to cut emissions. No more thick dust or smoke from the chimney now," said Wang to the Chinese news agency Xinhua. He added that around US$1m was spent on improving pollution control and the rest is being used to refurbish cement mills, rotary kilns, build a cement warehouse and install new packaging lines. The Sino-Zimbabwe Cement Company wants to attract larger investment from China to fund further facility upgrade and expansion. Cement producers in Zimbabwe are set to benefit from increased infrastructure developments if the government's five-year economic plan is fully implemented.

The plant is a joint venture between the Industrial Development Corporation of Zimbabwe and China Building Material Industrial Corporation for Foreign Econo-Technical Cooperation with an initial investment of US$54m. The plant employs more than 400 workers, with 95% from Zimbabwe.

India: Dalmia Cement Bharat Ltd's (DCBL) cement production capacity will reach 20Mt/yr following its acquisition of Jaiprakash (JP) Associates' 74% stake in a joint venture with the Steel Authority of India (SAIL) for US$190m.

The board of DCBL has approved the acquisition of a 74% stake in Bokaro Jaypee Cement Ltd (BOJCL), which is a 74:26 joint venture between JP Associates and SAIL.

"With this acquisition, DCBL's current installed capacity (including subsidiaries and associates) will reach 20Mt/yr," said a DCBL spokesperson.

BOJCL has a 2.1Mt/yr cement unit at Bokaro in Jharkhand. The joint venture has a 30 year clinker supply arrangement with JP Associates and a slag supply arrangement for the same period with SAIL.

"The transaction was completed in a record time with excellent chemistry and cooperation between the professional teams of JP Associates and DCBL," said Mahendra Singhi, Group CEO of Cement, DCBL. "The total enterprise value is US$190m. The proposed acquisition would be funded through a mix of debt and internal accruals."

DCBL also holds a 47.3% stake in OCL India and is expanding capacity there. The company is also setting up a 2.5Mt/yt cement plant at Belgaum in Karnataka with an investment of US$222m.

Colombia: Jose Alberto Velez, president of Cementos Argos group, says that 2014 will be a year of integrating the assets acquired in 2013 in Honduras and the United States for the Colombian firm. Further acquisitions would only be considered as of 2015. He stressed that the US$720m purchase of Vulcan Materials needs time to be digested, as well cement assets in Honduras costing above US$250m.

Velez has forecast a growing cement demand in 2014 that Cementos Argos will strive to meet in the US, Central America and the Caribbean, while in Colombia new infrastructure concessions will also increase cement and concrete sales.

During 2013, Cementos Argos had sales of 11.4Mt of cement, up by 5% on 2012. Income grew by 13.4% to US$376m and profits reached US$13.9m. Cementos Argos is also earmarking investments of US$200m in 2014 for various projects, including the start up of a US$35m cement distribution centre in Cartagena, in addition to the expansion and modernisation of several plants in Rio Claro, El Cairo and Nare costing US$100m.

Thailand: Siam Cement Group (SCG) is poised to revamp its business plans to cope with the impact of the political turmoil and adverse economic outlook, setting its sights on more exports and trading with the Asean market.

President and chief executive Kan Trakulhoon said that the country's prolonged political problems and the absence of a functioning government have affected the operational plans of SCG. According to Trakulhoon, the existing business plan called for the company to cut cement shipments from 5Mt in 2012 to 4Mt in 2013 and 3Mt in 2014, to better serve domestic consumption. However, given the unfavourable market conditions in Thailand, SCG will keep cement exports at 4Mt in 2014, with Myanmar, Cambodia and Vietnam as the target markets.

"The overall market of cement and construction materials has shrunk over the past couple of months thanks to the sluggish economy, which has been hit by the prolonged political problems,'' said Trakulhoon. "Earlier we forecast that the two industries should grow by 8 - 9% in 2014, but now we see they will grow at best by 4 - 5%."

According to Trakulhoon, sales of cement and construction materials fell by 7 - 8% during January and February 2014 against the 4 - 5% growth that SCG had projected. Normally late December 2013 until April 2014 is the peak selling season for products in this group, as people build and renovate their homes.

Cement and construction materials are expected to be harder hit in the second and fourth quarters of 2014 as the construction and property business slows down in line with tepid economic prospects and a lack of new private investments because of the absence of a new Board of Investment (BoI). Investment proposals worth US$15.3 – 18.4bn are still awaiting approval from the BoI's main board, which has yet to be appointed because of the political crisis since October 2013, when board member terms expired.

SCG itself has one project, a joint venture with a Japanese partner, which is pending approval from the BoI. The company also has two other joint venture investment projects with the Japanese investors waiting to submit the investment privileges with the BoI.

Trakulhoon said that he remains upbeat that SCG's sales revenue would grow by at least 10% in 2014, up from US$13.3bn in 2013. Domestic sales are expected to make up 65% of the group's sales revenue in 2014, with overseas sales contributing the remaining 35%, 20% of which will come from Asean nations.