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To mark the end of the calendar year we’re going to round up some of the major news stories from the cement industry in 2017. Like last year this piece also complements the corresponding article ‘The global cement industry in 2017’ in the December 2017 issue of Global Cement Magazine. Remember, this is just one view of the year's events. If you think we've missed anything important let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..

Recovery in Europe
2017 was the year that the European cement industry finally had something to shout about after a lost decade since the financial crash of 2007. The good news was led by a revival in cement consumption in 2016 that looks set to have continued in 2017. Prospects in Germany and Spain feel similar and a series of mergers and acquisitions have taken place in Italy suggesting that investors believe that the market is about to recover there too. Sure, Brexit is looming but as contacts have told Global Cement staff throughout the year, if the British want to damage their economy, that’s their business.

Renewal and recrimination at LafargeHolcim
Lafarge’s conduct in Syria during the civil war has cost its successor company LafargeHolcim dear, with the loss of its chief executive officer (CEO) Eric Olsen and potential reputational damage if the on-going investigation in Paris finds fault. At the time of writing Olsen, former Lafarge CEO Bruno Lafont and the former deputy managing director for operations Christian Herraul are all being questioned by the inquiry into the affair as it attempts to determine who knew what and when. LafargeHolcim has drawn a line under the debacle by appointing outsider Jan Jenisch as its new CEO in mid-2017. He has made changes to the group’s management structure that were announced this week but has he done enough? If anything truly ‘explosive’ emerges from the investigation, the question for anyone across the world buying LafargeHolcim’s products may be whether or not they want to finance extremism through their purchase.

US doesn’t build wall but does okay anyway
The US Portland Cement Association (PCA) may keep downgrading its forecasts of cement consumption growth but the local industry is doing fairly well anyway. All sorts of cement producers with a presence in the US have benefited from the market, despite extreme weather events like Hurricane Irma. President Donald Trump may not have delivered on his infrastructure development promises or built his fabled wall yet but his recently-approved tax reforms are likely to benefit the profits of cement producers. The decision by Ireland’s CRH to buy Ash Grove Cement in September 2017 may remove the largest domestically-owned producer from US hands but it shows confidence in the market and heralds the continued creeping growth of the building materials company into an international empire.

South America shows promise… just don’t mention Brazil
Countries like Brazil, Colombia and Venezuela may not be performing to expectations but other countries south of the Darian Gap, have been growing their respective cement industries. The leader here is Argentina that is riding a full-scale construction boom with capital investment chasing it from the producers. Bolivia is following a decade of growth although this may be starting to slow somewhat. Chile appears to be realigning itself to take in more exports. And finally, Brazil may also be starting to return to growth too. Although cement sales were continuing to fall year-on-year in the first nine months of 2017 the rate has been slowing. Local producer Votorantim also reported improved market conditions at home.

India stares into the demand gap
UltraTech Cement finally managed to buy six cement plants and five grinding plants from Jaiprakash Associates for US$2.5bn in 2017. The acquisition marked the end of the long-running deal between the companies and what may be a new phase in further integration in the Indian industry. In September 2017 the Cement Manufacturers Association (CMA) complained that the sector had 100Mt/yr of excess production capacity out of a total 425Mt/yr. The government’s demonetisation policy sank cement production growth in late 2016 and production has struggled to improve since then. Some estimates expect growth to return in around 2020 as the demand gap shrivels. Further merger and acquisition activity can only help until then, although the current government flip-flopping over a petcoke ban and import duties may get in the way.

China restructures with an eye on overseas market
As discussed last week the mind-bogglingly massive merger between China National Building Material (CNBM) and China National Materials (Sinoma) is proceeding with the press equivalent of radio silence. If one trusts the company figures then the largest cement producer in the world will get even bigger following completion. Once the big Chinese producers start building lots of overseas plants then the implications of combining a major producer with a major plant builder may become clear outside of China. Alongside this the buzzword on the Chinese cement company balance sheets this year have been a major rollout of co-processing at plants and a policy of ‘peak shifting’ or simply shutting off production at selected plants in the winter months. Somehow despite all of this the official figures suggest that cement production is still growing in China.

The African mega deal that wasn’t
The prospective bidding war for South Africa’s PPC has turned out to be a bust. A low offer was made in September 2017 by a Canadian investment firm with the aim of merging PPC with local rival AfriSam. Vague expressions of interest from the usual suspects followed over the following months before everything fizzled out. What the dickens was going on? A difference of opinion between the board and shareholders? A poor market in South Africa giving everyone the jitters? If any readers know, please get in touch. PPC’s poor showing at home mirrors Dangote Cement’s travails. Both companies have suffered domestically whilst going full tilt elsewhere in Sub-Saharan Africa.

Indonesia about to pick up?
And finally, a report from Fitch Ratings this week suggests that growth in Indonesia is set to pick up once again. The market dragged down HeidelbergCement’s mid-year financial results as cement consumption dropped in the same period. Like India, Indonesia faces a consumption-capacity mismatch. However, with annual consumption poised to grow at over 6%, the time to close that gap will narrow. Some good news to end the year with.

Global Cement Weekly will return on 3 January 2018. In the meantime Merry Christmas and a have Happy New Year!

Switzerland: LafargeHolcim has changed its management structure to make it more market focused. It has appointed Marcel Cobuz as the head of its European region and René Thibault as the head of its North American division. Two of the group’s global business functions, Performance & Cost and Growth & Innovation, will be merged into a new corporate department, Growth & Performance, under one leadership. Further changes will be made to the reporting of its regions with the addition of Mexico to its Latin America region, the addition of Australia and New Zealand to Asia and its Chinese and Trading divisions will now report directly to the group’s chief executive officer (CEO).

“Establishing a market-focused management organisation is an important step towards generating an attractive growth profile and taking the company to its next level of performance,” said CEO Jan Jenisch. “The strengthening of the profit and loss responsibility of the countries and the simplification of global business functions will create a leaner and more agile operating model. Countries will be fully empowered and accountable for market strategies, cost discipline and results. The new organisation will be complemented by a strengthened performance management system focusing on growth, cash conversion, capital efficiency and people development.”

The group’s 30 largest country organisations will directly report to the Executive Committee and the global business functions will be merged under one leadership. As a result of these changes, the Executive Committee will be reduced to nine members. All of the management changes will take effect from 1 January 2018.

Marcel Cobuz, aged 47 years, has been appointed as Head Region Europe and a member of the Executive Committee. He succeeds Roland Köhler, who has decided to retire. Cobuz, a Romanian and French citizen, joined LafargeHolcim in 2000. He has held various operational roles in six different countries and has been country chief executive officer (CEO) in Indonesia, Iraq and Morocco.

Köhler will retire at the beginning of 2018. He has worked for LafargeHolcim and its predecessors for more than 30 years and has been a member of the Executive Committee since 2010, most recently as the Head of Europe, Trading and Oceania. Köhler will continue to support LafargeHolcim as chairman of the LafargeHolcim Foundation for Sustainable Construction. He will also continue to represent the group as a non-executive director in local subsidiaries of the company.

René Thibault, aged 51 years, was been appointed as Head Region North America and a member of the Executive Committee. He succeeds Pascal Casanova, who has decided to pursue opportunities outside of the group. Thibault, a Canadian citizen, joined LafargeHolcim in 1989 and has held various roles in France and Canada. He has been the CEO of Western Canada since 2012.

Urs Bleisch, currently Head of Performance & Cost and Member of the Executive Committee, has been appointed Head of Growth & Performance. Gérard Kuperfarb, Head of Growth & Innovation, has decided to pursue a career outside the group.

Finally, the group’s new chief financial officer (CFO), Géraldine Picaud, will take over the role on 3 January 2018, earlier than the February 2018 date that was originally announced.

Tunisia: The government and Bina, the controlling shareholders of Carthage Cement, are selling a majority stake in the cement producer via public tender. The two investors own a 50.52% stake of the company. The cement producer operates a 2.2Mt/yr plant at Djebel Ressas. Expressions of interest are being accepted until 16 February 2018.

Mexico: The Cooperativa La Cruz Azul has ordered two raw meal grinding mills from France’s Fives. The first grinding unit, with a capacity of 280t/hr of raw meal, will be dedicated to the new clinker line no. 10 project to be installed at the Cruz Azul Hidalgo plant. The second one, with a capacity of 300t/hr of raw meal, will be installed in the Oaxaca Lagunas plant, as part of the new clinker line no. 5 project. Each grinding plant will be fitted with one FCB Horomill 4000mm grinding mill and one FCB TSV Classifier 6500mm. The deal, including the engineering, supply, construction and commissioning of the mills, was agreed in November 2017.

Russia: Eurocement’s subsidiary Lipetskcement has launched a new production and logistics unit at its cement plant at Lipetsk. The cement producer has spent around Euro9m on the upgrade that allows the plant to ship up to 10,000t/day of cement. Features of the new unit include an automated weighbridge and lines for road and rail transport with a capacity of 800t/hr and 1600t/hr respectively.

Romania: Xella has signed an agreement with two Polish private equity funds managed by Enterprise Investors (EI) to acquire the Macon Group. The Romanian building materials producer operates the Simcor Var lime plant as well as producing concrete and tile products. The transaction is subject to approval by the relevant competition authorities. The deal is expected to be completed in the first half of 2018. No value for the acquisition has been disclosed.

"With the acquisition of Macon, Xella becomes one of the market leaders in the Romanian building materials market and Romania’s main manufacturer in autoclaved aerated concrete (AAC). Xella becomes a major player in lime and precast concrete,” said Xella Group chief executive officer (CEO) Jochen Fabritius.

Zambia: The Board of Commissioners of the Competition and Consumer Protection Commission (CCPC) has fined Lafarge Zamiba over US$19,000 for abusing loyalty discount schemes, price discrimination and excessive pricing. The fine represents 10% of its annual turnover in 2012, according to the Times of Zambia newspaper. It follows an investigation in the cement producer from mid-2013 following accusations of ‘persistent’ price rises.

The CCPC says that Lafarge Zambia’s pricing policy discriminated the domestic market against the export market and particularly distorted the sector in Lusaka. It has ordered the company to cease and desist such behaviour and to report to the board in early 2018 regarding how it is complying with the ruling.

Lafarge Zambia operates two cement plants in the country. It says it made revenues of US$171,000 in 2016.

India: The government has raised the import duty on petcoke to 10% from 2.5%. This follows the abolition of a ban on petcoke and furnace oil to the cement and power industries in Delhi, Haryana, Rajasthan and Uttar Pradesh by the Supreme Court, according to Reuters. The increase in import duty is expected to create a rise in coal imports as companies change their energy mix. Shree Cement, JK Cement, J K Lakshmi Cement, UltraTech Cement and Mangalam Cement are all expected to be particularly affected by the tariff change. India is the world’s biggest consumer of petcoke, with much of it imported from refineries in the US.

India: Penna Cement has ordered a vertical roller mill from Loesche for its cement plant at Boyareddypalli in Andhra Pradesh. The mill will be equipped with four rollers to grind petcoke with a throughput capacity of 52t/hr, 3% R on 90μm. The delivery of the order to be managed by Loesche India and is scheduled to take place at the start of 2018. No value for the order has been disclosed. The mill upgrade will increase the plant’s cement production capacity to 4.6Mt/yr from 2Mt/yr.

Pakistan: Lucky Cement has completed a new 1.3Mt/yr production line at its Karachi cement plant. Clinker production started on the new line on 12 December 2017. It has also implemented efficiency improvements at its Pezu plant that have increased its production capacity by 0.3Mt/yr. The cement producer now has a total cement production capacity of 9.35Mt/yr.