Displaying items by tag: GCW302

2017 has started more uncertainly for the US cement industry than 2016 did according to the latest data from the United States Geological Survey (USGS). Cement shipment data from just two months, January and February 2017, can only present a limited impression of the state of the industry. Yet the key trend to look for in Graph 1 is the growth in Midwestern US states against a decline in the Western ones. Previously in 2016 this region’s shipments sunk below those in the West in December and didn’t overtake them until the spring. This time round they’ve stuck closely and overtaken them already in February 2017.

Graph 1: Portland and blended cement shipments by US Census Bureau region for 2016 to February 2017. Source: USGS.

The Midwest’s cement shipments jumped by 21% year-on-year to 2.2Mt for those first two months. Buzzi Unicem concurred with this picture in the Midwest with its first quarter financial results this week, reporting a boost in deliveries in the region. HeidelbergCement agreed, reporting sales volumes increases in the north of the country and a decrease in the West. In that region the USGS data shows an 8% fall in shipments to 2.2Mt. HeidelbergCement blamed heavy rain and flooding in California and Oregon as the cause of the problems. Another potential reason that the USGS hints at are increasing imports of cement that it says have been rising faster than sales. For example, imports of cement to the US as a whole grew by 23.9% year-on-year to 0.81Mt in February 2017.

Overall though the situation for the larger cement producers has been subdued. Many of them blamed good weather in the first quarter of 2016 giving them a hard quarter to measure against in 2017. For example, LafargeHolcim’s sales volumes of cement fell by 4.5% in North America although it did report sales growth off the back of cement pricing and cost controls. HeidelbergCement may have looked good on paper following its integration of the Italcementi/Essroc assets but its cement volumes only grew by 1% in the period. Cemex too reported a similar scenario with falling sales volumes of 5% but growing sales revenue.

To put this in perspective, as the Portland Cement Association’s (PCA) chief economist Ed Sullivan says in the May 2017 issue of Global Cement Magazine, cement production in the US grew in 2016 and it is expected to continue growing in 2017 and 2018. Just like the start of 2016 (see GCW251) the potential for US construction growth in the year ahead is a quietly confident one but it isn’t assured.

Cemex points out that housing starts rose by 8% in the first quarter of 2017, as did construction spending in the industrial and commercial sector. However, it says that infrastructure spending fell by 9% in February 2017. Indeed this last point is an important one given that one of the major Trump campaign pledges in the 2016 presidential campaign was to build more infrastructure. As commentators in Washington DC including the PCA have asked: where is the Bill? Rightly, the PCA are not letting the lawmakers forget this during ‘Infrastructure week’ as the issue is discussed. The US cement industry needs this.

For further information on the US cement industry take a look at the May 2017 issue of Global Cement Magazine

Italy: Paolo Zugaro has been appointed as the General Manager of Cementir Holding. He has also become the group’s chief operating officer with effect from 1 May 2017. Zugaro, aged 52 years, holds a degree in electrical engineering from Tor Vergata University, Rome. He has worked in a variety of managerial roles for both Caltagirone Group and Cementir Group since 1997. Notably he has been the head of the Nordic & Baltic Region of Cementir Group, the chief executive officer (CEO) of Aalborg Portland and CEO of Unicon. In his recent posting as the head of the East Mediterranean Region, he was the CEO of Cimentas in Turkey, Vice President of Sinai White Portland Cement in Egypt and the CEO of Recydia, a company which operates in the waste and recycling management business in Turkey and the UK.

Finland: Miikka Riionheimo has been appointed as the chief executive officer (CEO) of Finnsementti with effect from 1 June 2017. He will replace the current CEO Kalervo Matikainen when he retires. Riionheimo has worked in a variety of roles for Hella since 2004 and also worked for Sandvik. He became the chief operating officer of Finnsementti in 2016.

India: P R Ramasubrahaneya Rajha, the chairman of business conglomerate Ramco Group, has died at the age of 82 after a brief illness. He is survived by his wife and son P R Venkatarama Rajha, the vice-chairman and managing director of the group, according to the Press Trust of India. Ramasubrahaneya Rajha was the son of the group’s founder P A C Ramasamy Rajah.

Denmark: Bjarne Moltke Hansen has resigned as the Group Executive Vice President of FLSmidth. The 57-year old Danish national started his career in 1984 working for Unicon, a subsidiary of FLSmidth at the time. He subsequently held the position as chief executive officer (CEO) of Cembrit Holding for five years before taking up the position as CEO of Aalborg Portland Holding in 2000. In 2002, Bjarne took on the position as Group Executive Vice President, Customer Services Division until he was appointed Group Executive Vice President, Product Companies Division in 2015.

India: Shree Cement’s revenue rose by 4% year-on-year to US$442m for the quarter that ended on 31 March 2017 from US$424m in the same period in 2016. However, its profit fell by 54% to US$47.5m from US$103m. The fall in profit arose from the group’s power business and other income sources. The earnings before interest, depreciation, taxation and amortisation (EBITDA) after inter-segment transfers rose by 10% to US$76m from US$69m. The cement producer said that its results are not comparable as it adopted a change in its accounting year from the 2015 - 2016 period.

UK: It is hoped that a Euro23m upgrade project at Hanson’s Padeswood cement plant will be completed in early 2019. A planning application will be submitted to the local government in the summer of 2017 following consultation with local residents. The plant intends to install a new vertical roller mill to grind cement and to build a new rail loading facilities at the site.

“The plan is to mothball three of the old mills and install a new vertical roller mill capable of grinding up to 0.65Mt/yr of clinker. The new mill will be fully enclosed in a building, minimising noise and reducing the potential for escape of cement dust,” said plant manager Steve Hall. The project also includes construction of new cement silos alongside the existing railway line to load trains for delivery. At present the rail link is used to bring in coal to fire the kilns. In future, three trains a week will be despatched to Hanson’s depots in London, Bristol and Scotland or around 15% of total cement production.

Jordan: The Labour Ministry has helped to resolve a dispute between workers and management at Lafarge Jordan. Following several days of work stoppages the employees have agreed to sign a collective work contract and resume work as normal, according to the Jordan Times. In return workers at the Rashadia cement plant will receive a bonus payment at Eid Al Fitr and then pay increases based on performance. The parties have also agreed to let the ministry lead future talks on early retirement and workers’ association bans on employees.

Philippines: Republic Cement & Building Materials has approved a five-year capital expenditure programme to increase its clinker and cement production capacity to meet local demand. One of the cement producer’s owners, Aboitiz Group, announced that it was making the investment to take advantage of infrastructure development plants by the Duterte administration, according to the Philippines Star newspaper. The upgrade is expected to increase the company’s production capacity by 1Mt/yr from its current level of 7Mt/yr. The investment will be spent on both production efficiency improvements at existing plants and by building a new kiln.

Philippines: Two cement importers have asked the Regional Trial Court of Makati to issue a temporary restraining order against a Department of Trade and Industry (DTI) order restricting imports of cement. Fortem Cement and Cohaco Merchandising and Development allege that the Administrative Order 17-02 prevents imports of cement into the country, with the exception of importers operating integrated cement plants, according to the Manilla Bulletin newspaper. The importers say that the legislation will destroy their business. They also allege that the new rules violate anti-competition rules.

The DTI has defended its legislation, although it recognises the freedom of the importers to challenge it through the legal process. The government department says it issued the revised order to help safeguard the safety of consumers by requiring the strict conduct of standards compliance tests on cement imports. The order requires the application of the Philippine Standards licenses on foreign producers of cement imports, Import Commodity Clearance on cement imports and a minimum capitalisation level for importers to prevent smaller importers.