Displaying items by tag: GCW310

Sad news this week from the Talcahuano cement plant in Chile that is to stop producing clinker. Local media reports that the Cementos Bío Bío unit has decided to import clinker from Asia instead, which will reduce its production costs. At the same time it has laid off a third of its workforce. The plant has been producing cement since 1961.

The decision carries echoes of Holcim New Zealand’s closure of its Westport cement plant in 2016, another unit in a country on the Pacific Rim. However, in that country LafargeHolcim has purposely moved towards becoming a distribution company by opening import terminals and depots. Plus the local subsidiary benefits from the cement-trading arm of a multinational company. By contrast, local producer Cementos Bío Bío still retains two integrated plants and a grinding plant in Chile. Following the closure its production share from integrated plants will drop to 2.4Mt/yr (39%) from 3.2Mt/yr (45%). The country will retain a total production capacity of 6.2Mt/yr from its clinker producing plants.

The timing of Cementos Bío Bío’s decision is also interesting given that the Chilean competition authority (TDLC) approved Hurtado Vicuña Group to buy a controlling stake in Cemento Polpaico from LafargeHolcim in early July 2017. The deal was originally announced in October 2016 to sell LafargeHolcim’s 54.3% stake in Cemento Polpaico for US$225m. The sale includes one integrated plant with a cement production capacity of 2.3Mt/yr and two grinding plants. Hurtado Vicuña has not been required by the regulator to sell any of its cement units but it has been asked to sell parts of its concrete business and to abide to a ban on repurchasing the assets within 10 years. Hurtado Vicuña owns Cementos BSA, a subsidiary that runs the El Bosque cement grinding plant in Santiago and it has just started-up production at a new 0.95Mt/yr grinding plant at Quilicura, also near the capital.

In its 2016 annual report LafargeHolcim reported that cement sales volumes of cement fell in Chile due to a fall in the residential construction market in the second half of the year. However it did manage to raise its operating earnings before interest, taxation, depreciation and amortisation (EBTIDA) off the back of higher prices and lower production costs compared to the previous year. Cementos Bío Bío concurred with this assessment of the market in its 2016 report, lamenting the country’s poor economic growth since 2015 and declines in the mining and construction sectors. Despite this its cement despatches rose very slightly to 1.56Mt in 2016. The big drop in its sales occurred in 2014 when its sales fell by 10% year-on-year to 1.51Mt. More recently, Bío Bío noted a 37% decrease in its operating profit for its cement, concrete and lime division for the first quarter of 2017 due to falling sales volumes and margins in cement and lime. However, it did benefit from falling costs for energy and petcoke inputs. The group also announced plans to sell a minority stake in itself in February 2017.

These stories show another country that is realigning its cement industry to a clinker-rich world market. Chile appears to retain a ‘big three’ group of local clinker producers that has shifted with the rise of Cementos BSA and the departure of LafargeHolcim. However, the market share in the cement grinding business has changed significantly as Cementos BSA has gained both an integrated plant and a more national profile, away from the capital, with its grinding plants. Once the local market picks up it will be interesting to see whether this trend towards clinker import and local grinding continues.

UK: Michel Andre has been appointed as the Country President for Cemex UK. He joins the UK subsidiary of the Mexican-based building materials producer after spending seven years as the Country President for Cemex France. Andre has worked for Cemex’s French business for 12 years with roles in strategic planning and its readymix business. Previous to this he worked for Lafarge in the US and France and was employed by Pricewaterhouse Coopers.

He has also served as a board member and then president of the Unicem Association France, the National Union of Quarrying and Building Materials Industries. His three-year term finished in June 2017.

Andre succeeds Jesús Gonzalez in the UK post. Gonzalez has been promoted to the executive team in Monterrey, Mexico as Executive Vice President Sustainability and Operations Development. His role covers health and safety, operations and technology, energy, sourcing, research and development and sustainability.

Uzbekistan: Bakhtiyor Bakhronbekovich Bobokulov has been appointed as the deputy chairman of the board for the production and implementation of modern technologies at Uzqurilishmateriallari, the Uzbek Construction Materials company. Previously, Bobokulov held the post of general director at the subsidiary Samarkandmramor.

Brazil: SNIC, the Brazilian National Union of Cement Industry, reports that total cement sales have fallen by 9% year-on-year to 26Mt in the first half of 2017 from 28.6Mt in the first half of 2016. SNIC president Paulo Camillo Penna said that the figures were in line with the organisation’s forecasts and that they show a deceleration in the decline of cement consumption. Consumption is expected to pick up in the second half of the year and SNIC predicts that it will fall by 5 – 9% for the year as a whole.

Bangladesh: FLSmidth has confirmed that is to supply a cement grinding production line for Meghna Cement Mills. The Danish equipment manufacturer has signed a contract with Meghna Cement Mills for engineering, procurement and supply of equipment for a 415t/hr Portland composite cement at 3800 Blaine grinding unit at it plant in Mongla in the Bagerhat District. No value for the deal has been disclosed.

The scope of the order includes an FLSmidth OKTM 54-6 mill, planetary gear unit from FLSmidth MAAG Gear, fabric filters from FLSmidth Airtech, weigh feeders from FLSmidth Pfister and a plant control system from FLSmidth Automation. The project is scheduled for completion by the end of 2018.

Romania: Holcim Romania has opened a Euro0.5m cement terminal in the town of Roman in Neamț County. The new unit will mainly supply cement to customers in the Moldovan region of the country. The 13,120m2 terminal has a railway connection and loading equipment for both bulk and bagged cement.

Southeast Asia: LafargeHolcim has signed an agreement on biodiversity conservation with Fauna & Flora International (FFI). Under the agreement, FFI will perform an independent external review of the group’s existing biodiversity management plans (BMP) at sites in Malaysia, Indonesia and the Philippines; contribute to the development of a group-wide strategy on karst management; identify opportunities for enhancing biodiversity in quarry rehabilitation; and organise a stakeholder dialogue bringing together an external expert group, local government, local non government organisations and LafargeHolcim staff to consult on BMP recommendations. The agreement is intended to help LafargeHolcim meet the biodiversity aspects of its 2030 sustainability plan.

“Biodiversity loss is a major global challenge. We aim to be good stewards of the land where we operate and demonstrate that proper management of quarries can reduce and reverse our impacts and even generate positive change for biodiversity. The new engagement work with FFI will play a key role in achieving our commitment,” said Caroline Hempstead, Group Head of Communications, Public Affairs & Sustainable Development at LafargeHolcim.

Brazil: The Brazilian competition authority CADE has cleared the proposed merger between Brazil’s Magnesita and Austria’s RHI Group without restriction. This is the last major regulatory approval the merger process has required. RHI and Magnesita announced in October 2016 that were to merge to create a new refractory company called RHI Magnesita in 2017.

Morocco: LafargeHolcim says that its 0.2Mt/yr Laâyoune cement grinding plant is complete. The cement producer is set to start production later in July 2017 it said in a director’s report, according to Medias 24. The company is also about to start building a 1.7Mt/yr cement plant in the Souss-Massa region. Thyssenkrupp Industrial Solutions has been contracted to build this project.

Oman: Tanfeedh, the National Programme for Enhancing Economic Diversification, is calling for captive coal power stations to be used to support new cement plants that are being planned for the Duqm special economic zone. The programme wants two Ordinary Portland Cement plants and a white cement plant to be built in the zone to reduce imports, according to the Oman Daily Observer newspaper. It also wants investors to build one cement grinding plants in Duqm and one in Suhar. Tanfeedh says that the country used 9Mt of cement in 2015 but that only 44% came from local producers.