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News GCW177

Displaying items by tag: GCW177

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China rides out

19 November 2014

Startling news from Hebei, China this week. The northerly province intends to move out its excess capacity in heavy industries, including cement, to other countries by 2023. 5Mt of cement production capacity is planned for transfer by 2017 and 30Mt is planned for transfer by 2023. The larger figure is about the same as the cement production capacity of France or Germany!

Hebei isn't the biggest cement-producing province in China but it has received attention as the authorities have cut down on 'out-dated' production capacity. The region was targeted in a programme to cut emissions from heavy industry due to its proximity to Beijing and that city's smog issues.

The Ministry of Industry and Information Technology (MIIT) set a target of 60Mt/yr in cement production capacity to be cut by 2017. The region was also the site of massive cement plant demolitions in late 2013 and early 2014. 18 cement plants were demolished in December 2013 followed by 17 cement plants in February 2014 alongside the destruction of connected grinding and storage capacity. Overall an incredible 74 cement plants in the area surrounding Shijiazhuang alone were targeted for demolition by March 2014.

Following this massive spate of capacity elimination, the public announcement to actively move abroad marks a stark change to China's general cement industry strategy so far. The country's equipment suppliers like Sinoma have been taking business from European rivals like FLSmidth or KHD for some time now especially in developing markets.

In 2013, FLSmidth reported a cement market order intake of US$575m and KHD reported an order intake of US$216m. In comparison Sinoma's cement equipment and engineering services reported order intake of US$5.59bn. In its annual report for 2013 FLSmidth estimated that the global market for new kiln capacity was 50Mt. At a capacity construction price of US$150/t this suggests that Sinoma took orders for nearly three quarters of the world's required capacity for new cement kilns in 2013. Order intake covers more than just building cement plants, so this quick calculation presents only a rough impression of what's going on.

More recently Chinese cement producers have started building their own cement plants or funding them outside of China. In October 2014 State Development and Investment Corp and Anhui Conch Cement Company announced plans to fund a plant in Indonesia. In September 2014 ground breaking was held for a Chinese-funded plant in Kyrgyzstan. In June 2014, Huaxin Cement invested in Cambodia Cement. This was its second overseas investment following a project in Tajikistan in 2011.

With China's government still attempting to avoid a hard economic landing as its growth slows, moving industrial overcapacity overseas makes sense. International and national players must be worried about the potential scale of this transition. On the plus side, however, those notorious inscrutable Chinese production figures in the cement industry will be far easier to analyse in plants outside of China facing international competition. Today Hebei, tomorrow the world!

Published in Analysis
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Drouet appointed as Holcim Area Manager for Africa Middle East

19 November 2014

Switzerland: Dominique Drouet, CEO of Holcim Morocco, has been appointed Area Manager for Africa Middle East and member of Senior Management of Holcim with effect from 1 January 2015. He will assume this responsibility in addition to his current role. Drouet will succeed Javier de Benito, who has decided to leave Holcim effective from 1 January 2015, to take up a new challenge outside the group.

Drouet joined Holcim in 1994 as CEO of Holcim Outre Mer and was appointed CEO of Holcim Lebanon in 1999. He took over his current role in 2004. Before working for Holcim, Dominique occupied various engineering, commercial and managerial roles in the construction materials industry. He holds a degree in Engineering from the Ecole des Travaux Publics in Paris and a Bachelor's degree in Mathematics from the University of Toulouse.

Published in People
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Hebei to move excess cement production capacity overseas

19 November 2014

China: Authorities in Hebei Province have revealed a plan to transfer excess capacity from its heavy industries, including cement, abroad by 2023. Hebei intends to move 5Mt of cement production overseas by 2017 and 30Mt by 2023. The initiative also covers excess production in the steel and glass industries.

Chinese cement, steel and glass producers are struggling, with sluggish growth in the world's second-largest economy crippling demand for their products. The local government will encourage cement producers to establish subsidiaries or joint ventures in regions like Africa, Southeast Asia, South America and Central and East Europe to meet local demand.

Hebei is a major source of industrial pollutants blamed for the smog that often spreads to neighbouring regions like Beijing. The smog has prompted the authorities to rethink and change the growth model and to take more stringent measures to fight pollution.

Published in Global Cement News
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Bihar government approves US$54m grinding plant for Shree Cement

19 November 2014

India: The Bihar state cabinet has approved a US$54m cement grinding plant planned by Shree Cement planned in the Aurangabad district of the state.

"The company had proposed to set up a cement plant with a production capacity of 2Mt/yr. It will also have a 12MW biomass-based captive power plant," said B Pradhan, Principal Secretary of the Cabinet Secretariat.

The state government agency Bihar Industrial Area Development Authority (BIADA) has provided 27 hectares of land on lease for the project. The project will provide employment to 300 skilled and unskilled persons.

Published in Global Cement News
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Tanzania Portland Cement agrees prisoner labour limestone deal

19 November 2014

Tanzania: The Tanzania Portland Cement Company (TPCC) and the Tanzanian government have agreed to start producing limestone from mines within Boko prison territory in early 2015. Permanent Secretary at Ministry of Home Affairs Mbaruk Abdulwakil, Commissioner General of Prisons John Minja and TPCC Managing Director Alfonse Rodriguez have announced that a final agreement on the partnership will be sealed by the end of 2014.

"In principle, the government has approved this public private partnership, which is part of reforming and modernising the prison services," said Abdulwakil. The government will receive 1200 cement bags and US$58,000 to build Boko prison staff quarters and office facilities. In return TPCC will mine limestone within the Boko prison premises for use as raw material at its Wazo hill plant.

Published in Global Cement News
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HeidelbergCement closes Ukrainian plant because of separatists

18 November 2014

Ukraine: HeidelbergCement has shut down one of its cement plants in eastern Ukraine because separatists in the region want to impose their own agenda on the production process, according to a HeidelbergCement spokesman.

The plant was not occupied, but the separatists reportedly have their own ideas of how to produce cement. The spokesman added that HeidelbergCement would not engage in talks with the separatists. The 500 employees at the site are currently busy cleaning the facility, but if no solution is arrived at, their jobs will be threatened.

The plant has 2Mt/yr of cement production capacity. HeidelbergCement generates a turnover of Euro150m from its three Ukrainian sites, or 1% of its total revenues. However, in 2014 its turnover has fallen by 30% due to the conflict. Earlier in 2014 CEO Bernd Scheifele voiced his concerns about the developments in the region. Due to the political escalation interest rates exploded and loans vanished, putting the company's local production in danger.

Published in Global Cement News
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Holcim expects to pick buyers for assets in January 2015

18 November 2014

Switzerland: Holcim has said that it expects to have selected buyers for the assets that it must divest to push through its merger with Lafarge by the end of January 2015. Holcim's CFO Thomas Aebischer said that the company had received more than 60 non-binding bids by 20 October 2014.

Published in Global Cement News
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PPC profit falls by 9% due to lower local sales

18 November 2014

South Africa: PPC has announced that its full-year profit declined by 9% as its Africa expansion plan failed to offset declining sales in the domestic market. Net income was US$76.7m in the year through November 2014, compared with US$84.1m a year earlier. Sales grew by 9% year-on-year to US$8.13bn. Cement sales volumes grew by 2% year-on-year. "Performance was hampered by industrial action on the platinum belt, which had an adverse impact on trading conditions in South Africa," said PPC.

Published in Global Cement News
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HAVER & BOECKER wins Lafarge Global Supplier Award 2014

18 November 2014

France: Lafarge has held its first global supplier competition, which had a total of seven categories, in a ceremony at its headquarters in Paris. With its ADAMS® technology for filling powder-type products into watertight PE bags, HAVER & BOECKER was able to win in the category of 'sustainability.' The jury's reasoning was that the technology showed 'an ability to operate in a sustainable manner, including the deployment of appropriate corrective actions.'

"Suppliers play an important role in our operations, delivering value year after year and pushing the boundaries in terms of innovation and cost competitiveness," said Thierry Metro, senior vice president of Energy and Strategic Sourcing at Lafarge. "The Global Supplier Awards represents a victory for our suppliers, for Lafarge and for our customers."

Published in Global Cement News
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Vietnamese exports up by 15%

17 November 2014

Vietnam: Vietnam could earn as much as US$1bn via the export of 20-21Mt of cement and clinker in 2014, 15% more in value terms compared to 2013, according to the Vietnam Cement Association. Preliminary statistics from the Customs General Department showed that the shipment of cement and clinker increased in both volume and value in January-October, reaching nearly 18Mt over 10 months.

Tran Viet Thang, Director General of the Vietnam Cement Industry Corporation (Vicem), which holds 34% the Vietnamese cement sector's output, said that Vicem exported about 1.8Mt of cement and clinker in the first three quarters of 2014 and plans to sell a further 1Mt in the final three months of the year.

Published in Global Cement News
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