Displaying items by tag: GCW497

Several of South Africa’s cement and concrete producers joined up in early March 2021 to form an industry association called Cement & Concrete SA (CCSA). The Concrete Institute, Concrete Society of Southern Africa and the Association of Cementitious Material Producers established the organisation to, “take the lead on all matters relating to cement and concrete in South Africa.” Setting up an organisation like this takes time and it fits with the move in recent years of thinking about the whole building materials chain rather than just focusing on one part. The country is also in the first phase of its carbon tax and no doubt producers feel they need to make a renewed effort to fight their corner. Other aspects such as promoting the ‘value creation story’ of the cement and concrete industry in South Africa, research and training also makes sense.

The timing here is compelling due to the ongoing review of anti-dumping measures that were levied by the International Trade Administration Commission of South Africa (ITAC) upon imports by Pakistan-based cement producers. Local media in South Africa reported that ITAC started reviewing the tariffs in December 2020 in a process expected to take up to 18 months in duration. As reported in January 2021 (GCW 489), imports to the country fell after ITAC introduced tariffs in 2015 but they have started to edge up since then, particularly from producers in other countries such as Vietnam and China. Separately, the CCSA may have scored an early victory with the news that its application that government-based infrastructure projects should only use locally-produced cement was working its way through the government.

Looking at the general market, PPC reported ‘muted’ sales of cement in April and May 2020 due to the country’s first coronavirus-related lockdown from late March 2020. Similar to some other countries, construction projects halted and cement plants stopped producing. However, the market bounced back as the restrictions were relaxed with strong sales from June 2020 to September 2020 for the leading producer. It noted that the increase in volumes was mainly due to consumer retail although it noted that government infrastructure cement demand was also starting to be felt. PPC’s cement sales volumes fell by 5 – 10% in South Africa and Botswana from April to June 2020 but then rose by 20 – 25% from July to September 2020. The continuation of this sales momentum was also noted in October and November 2020. Dangote Cement’s operations in the country reported a similar situation, with sales up by 7% year-on-year in the first nine months of 2020 due to a surge in home improvement related demand after the first lockdown ended. Similar to PPC, it reckoned that demand increased by 25 - 30% year-on-year in the third quarter of 2020 as limitations in travel and entertainment led to some people saving money instead.

After the summer sales bounce, producers were soon complaining about rising import levels in the autumn of 2020 with volumes catching up with the amounts recorded in 2019. Hence the ITAC review is a timely reminder of the perils facing local producers.

South Africa’s general coronavirus experience has been an outlier compared to the rest of Africa with higher cases and deaths reported. Yet, it’s still reported lower per capita rates than many comparable countries in Europe and the Americas. Like the UK and Brazil, the country also holds the dubious distinction of having a coronavirus variant named after it. Its cement market appeared to snap back with pent up demand following the lifting of restrictions in common with other countries that implemented tougher public health rules. At which point the importers caught up again a few months later. The effects of South Africa’s second wave of coronavirus led to a lockdown in late December 2020. The effects upon building materials sales are likely to be less drastic than previously because this lockdown has had lighter restrictions compared to March 2020. Surrounded by all of this, the CCSA has sure picked a busy time to start work.

Mexico: Cemex has appointed Louisa (Lucy) P Rodriguez as its Executive Vice President of Investor Relations, Corporate Communication and Public Affairs. She was previously head of Investor Relations. In the new role Rodriguez will report directly to the group chief executive officer.

Rodriguez holds over 25 years’ experience in international finance and capital markets. She joined Cemex in 2006 in the Investor Relations Department. She also represents the company in the international financial community. Prior to working for Cemex, Rodriguez spent 15 years at Citibank where she worked in capital markets origination, debt syndicate and securitization financing for Emerging Market issuers. In her early career, she worked for KPMG in their Audit Department. She holds a BA in Economics from Trinity College in Connecticut, US and an MBA from New York University and a Masters from Columbia University School of International and Public Affairs. She has been a Certified Public Accountant.

Uzbekistan: The government has suspended tariffs on cement imports from all countries until 1 October 2021. The UzDaily newspaper has reported that the suspension is part of a raft of measures aimed at ‘providing the population with housing’ by bolstering construction. The measures consist of funding for multi-story housing developments, a separate trading exchange for cement and the roll-out of a new standard design for residential buildings from 1 May 2021.

India: The Supreme Court has ruled that depository and clearing agent IL&FS Securities Services (ISSL) release US$52.4m to Dalmia Cement owner Dalmia Bharat. The money was alleged stolen by Allied Financial Services in 2019, according to the Economic Times newspaper. The trial concerning the alleged theft of mutual fund units continues.

UK: Germany-based HeidelbergCement subsidiary Hanson has received the green light for its planned carbon capture and storage (CCS) study at its Padeswood cement plant in Flintshire after its partner, the HyNet North West consortium received Euro84m in funding. The study will support a design basis and cost estimate for a carbon capture unit at the cement plant and a connection to the planned HyNet North West CO₂ transport and storage system. Euro46m of the funding came from consortium partners while Euro38m came from a UK Research and Innovation (UKRI) Industrial Decarbonisation Challenge grant.

Hanson chief executive officer Simon Willis said, “Today’s funding announcement is fantastic news for everyone involved in HyNet North West. Cutting CO₂ emissions is a key priority for us, and we are excited to be one of the first UK cement producers working on carbon capture and storage (CCS) as part of this collaborative project.” He added, “We’ve taken big steps towards reducing carbon emissions and have set ourselves an ambitious target of achieving a 50% reduction in CO₂ emissions by 2030, based on 1990 levels, and net zero carbon concrete by 2050. CCS at cement plants is a key part of our roadmap to net zero.”

India: UltraTech Cement has selected Germany-based Aumund to supply conveyors, elevators and feeders for its ‘Project Spring’ expansion project to increase its installed production capacity to 130Mt/yr of cement from 117Mt/yr.

The expansion project includes three integrated cement production units in Madhya Pradesh, Rajasthan and Chhattisgarh, each with capacities of up to 10,000t/day. For these kiln lines, Aumund India will supply clinker cooler extraction conveyors as well as the transfer conveyors to the clinker silos. Six cement grinding plants in various locations in India are also part of the capacity expansion plans.

Aumund will supply six pan conveyors, 11 Samson material feeders and 68 bucket elevators including up to 157m-high kiln feed bucket elevators, up to 2200t/hr roller press recirculation bucket elevators and clinker and cement handling bucket elevators, among other products. The order is one of the largest to date for Aumund India.

China: Jidong Cement’s operating income rose by 3% year-on-year to US$5.46bn in 2020 from US$5.31bn in 2019. Its net profit attributable to shareholders grew by 5.5% to US$438m from US$415m. The large-scale producer said that its clinker and cement production capacities reached 117Mt/yr and 170Mt/yr in the reporting period. It operates in Hebei, Beijing, Tianjin, Shaanxi, Shanxi, Inner Mongolia, Jilin, Chongqing and Henan with a focus in the Beijing-Tianjin-Hebei region.

UK: Breedon Group’s revenue remained stable in 2020 at Euro1.08bn. Its underlying earnings before interest and tax (EBIT) fell by 34% year-on-year to Euro89.3m in 2020 from Euro136m in 2019. Cement sales volumes stayed stable at 2Mt but ready-mixed concrete sales volumes dropped by 13% to 2.6Mm³ from 3Mm³. The group reported a strong second half of 2020 following coronavirus-related disruption.

“Although we remain mindful of the ongoing impact of Covis-19, with the worst of the pandemic now hopefully behind us and some welcome clarity on Brexit, I believe the prospects for Breedon and for our industry are increasingly positive,” said Pat Ward, Breedon Group’s chief executive.

Europe: Members of the European Parliament (MEP) have adopted a resolution supporting a European Union (EU) carbon border adjustment mechanism (CBAM). If enacted by the EU then a carbon tax could be levied on certain goods imported from outside the EU that don’t meet local decarbonisation standards. MEPs stressed that it should be World Trade Organisation compatible and not be misused as a tool to enhance protectionism.

The new mechanism is intended to be part of a broader EU industrial strategy and cover all imports of products and commodities covered by the EU emissions trading scheme (ETS). MEPs add that already by 2023, and following an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers, which continue to receive substantial free allocations, and still represent 94% of EU industrial emissions.

“The CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. We must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon. This is our best chance of remaining below the 1.5°C warming limit, whilst also pushing our trading partners to be equally ambitious in order to enter the EU market,” said EU Parliament rapporteur Yannick Jadot.

The European Commission is expected to present a legislative proposal on a CBAM in the second quarter of 2021 as part of the European Green Deal as well as a proposal on how to include the revenue generated to finance part of the EU budget.

Colombia: Cementos Argos will hold the virtual launch of Argos Green Solutions on 17 March 2021. The company will use the group to set out its vision of innovation to build a sustainable future. President Juan Esteban Calle and sustainability vice president María Isabel Echeverri will host the event.