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Our latest look at South America starts by posing the question: how far can the market in Brazil keep growing? As Graph 1 shows below, cement sales skyrocketed through the coronavirus pandemic, due to a general recovery locally that started in 2018 and relatively weak lockdown measures compared to other countries. Rolling annual totals on a monthly basis from the National Cement Industry Association (SNIC) suggest that this growth period tailed off from May 2021. SNIC was also keen to point out that, despite nearly hitting nearly a 20% growth rate at one point, the sector was still 11% behind where it was before the lull that lasted from 2015 to 2018. As ever the association has an eye on potential risks. At present these include legislative reforms, price inflation and carbon pricing. It noted that Mexico, Colombia, Chile and Argentina all price carbon already but said that the country ‘has a great ally in the Brazilian cement industry’ on the issue.

Elsewhere the big story in Brazil has been the ongoing sale of Holcim’s local assets. The latest news at the start of August 2021 was that the bidders included CSN Cimentos, Cimentos Mizu, Cimento Apodi, InterCement and Votorantim. The first three companies were reportedly working in a consortium in an attempt to buy 10 production plants while InterCement and Votorantim were focusing on smaller bids to avoid the ire of the competition regulators. Aside from this, CSN Cimentos agreed to buy Cimento Elizabeth for US$220m in July 2021 and Companhia Nacional de Cimento (CNC), part of Italy-based Buzzi Unicem’s 50% subsidiary BCPAR, acquired CRH Brasil following approval by the regulators. Of note on the production side, Votorantim Cimentos started operation of a new production line at its Pecém grinding plant in Ceará in July 2021.

Graph 1: Cement sales in selected South American countries in first half of year, 2019 – 2021. Source: Local cement associations and national statistics offices.

Over in Peru the now familiar gap-tooth pattern of stunted growth in 2020 can be seen in the sector’s cement sales, but sales rebounded far stronger than comparable sized markets in Argentina and Colombia. Sales nearly doubled to 6.42Mt in the first half of 2021 from 3.33Mt in the same period in 2020 and were significantly higher than the 4.94Mt recorded in the first half of 2020. Imports are also worth watching. Combined cement and clinker importers nearly doubled from 0.76Mt in the first half of 2019 to 1.4Mt in the first half of 2021. Clinker imports made up about two thirds of this figure and the Association of Cement Producers (ASOCEM) noted in June 2021 that 88% of the imported cement came from Vietnam while about two thirds of the clinker came from Japan and Indonesia.

Away from the market data, both Cementos Pacasmayo’s and Unión Andina de Cementos’ (UNACEM) financial results bounced back in the first half of 2021. Cementos Pacasmayo attributed the rebound to sales of bagged cement to the self-construction sector and public sector reconstruction demand. UNACEM also noted the effect of the self-construction sector and said it expected its ‘solid’ cement despatches to continue for the rest of the year despite the risk of a third wave of coronavirus in the country and the messy presidential elections. Other stories of note so far in 2021 include new developments in Cementos Interoceanicos long-held plans to build a 1.0Mt/yr cement plant in Puno and a major upgrade planned to Yura’s integrated plant in Arequipa.

In Colombia local cement despatches grew by 34% year-on-year to 6.20Mt in the first half of 2021 from 4.61Mt in the same period in 2020. Cementos Argos reported major improvements in sales, sales volumes of cement and earnings due to the lockdown in 2020. However, a national wave of protests calling for social reform that started in the spring of 2012 forced the company to shut down its integrated Yumbo plant for over a month. This represented 18% of its national sales. The output of other plants in the country was also negatively affected by roadblocks created by the unrest. Cemex reported the same problems in the country.

Finally, Argentina’s cement despatches rose by 44% to 5.52Mt in the first half of 2021 from 3.83Mt in the same period in 2020. Loma Negra reported that its sales, sales volumes and earnings were all up by a similar rate. The subsidiary of Brazil-based InterCement started up the kiln on its new 2.7Mt/yr production line at the L’Amalí cement plant in Olavarría in June 2021 and commissioning of the new mill and despatch centre on the line were reportedly coming soon in early August 2021. Earlier in the year, in May 2021, Holcim Argentina inaugurated a new 0.5Mt/yr clinker production line at its Malagueño cement plant in Cordoba. These expansion projects were ordered long before coronavirus appeared so it will take a while to see their effects upon the local market. However, the government intervened in June 2021 when it persuaded some building materials producers to agree to reference prices in a bid to curb mounting inflation.

This is what recovery looks like so far in 2021 in the larger cement producing countries in South America. The Brazilian market’s growth phase may be waning after a furious period that even coronavirus wasn’t allowed to slow. Peru’s potential seems set to take off, Colombia’s rebound should have been greater (but it was dented by social unrest) and Argentina seems to be resetting to its usual level. Whatever else happens in the coming months the story to watch going forward will be which company picks up Holcim’s assets in Brazil.

India: Shree Cement has appointed Shrinath Savoor as its chief sustainability officer. Savoor trained at the Birla Institute of Technology and Science and the Institute of Chartered Accountants of India. He later worked for Holtec before becoming the Joint President for Strategy and Business Development at Shree Cement in 2009.

US: Solidia Technologies has appointed Russell Hill as its chief technology officer. He succeeds Nicholas DeCristofaro, who will retire in September 2021.

Hill joins Solidia after 25 years working for Boral, most recently as Group Chief Innovation Officer. In 2012, he led the discovery and development of a new series of ‘green’ products that opened new market segments and geography to the building materials producer. Hill holds a doctorate in chemistry from the University of North Texas and is named as an inventor on 56 patents, consisting of over 20 distinct families. He is a member of the American Concrete Institute, ASTM, the American Chemical Society and Alpha Chi Sigma.

Solidia Technologies produces reduced-CO₂ concrete with lower-energy cement and water-free CO₂ curing.

US: Pozzolan cement producer Green Cement has appointed Grant Quasha as its chief executive officer (CEO). He succeeds John T Preston, who will remain as chairman of the board. Quasha will be based in Texas, where the company has its headquarters and existing production facilities. He will also be joining the company's board of directors.

Quasha previously worked as the regional chief investment officer of GFG Alliance. Before this he was the CEO and managing director of Paringa Resources, a mining company, and the chief commercial officer of Wolverine Fuels, a producer of bituminous coal. He also worked as the North American Manager of Corporate and Structured Finance at Trafigura AG, as an investment banker in JPMorgan's New York mining and metals division and has worked on the board of directors of the National Mining Association. Quasha holds a Bachelor of Arts degree from Harvard College and a Master of Business Administration (MBA) from Harvard Business School.

Green Cement produces cements made using pozzolonic materials including its PozzoSlag product. It sold over 2Mt of cement in 2020.

Iran: 56 cement companies out of 78 have joined the Iran Mercantile Exchange (IME), a commodities exchange based in Tehran. Abbas Yaghoubi, Director of Commodity Exchange Market Operations, told the Mehr News Agency that all the country’s cement will eventually be traded on the exchange. The IME has to set a based offering volume for every cement production factory. The remaining cement producers outside of the IME have been asked to join and the Iranian Cement Industry Association has written to them also on the matter. Yaghoubi revealed that cement trading on the exchange reached 1Mt/week in August 2021 after starting from around 0.1Mt/week.

Spain: Construction work has started on 6.2MW solar plant that will supply electricity to Cementos Cosmos’ Toral de los Vados integrated plant in León. Commissioning is scheduled by February 2022. The photovoltaic plant will include over 11,400 solar panels in an area of around 10 hectares. It will meet 15% of the plant’s electricity demands. Spain-based solar specialist EIDF (Energía, Innovación y Desarrollo Fotovoltaico) is supplying the unit at a previously reported cost of Euro4m.

Russia: SLK Cement has ordered 100 gondola railway wagons to improve its logistics operations over the busy summer sales period. It increases the company’s fleet of railway wagons - including hoppers, gondolas and dump cars – to 570 units. Yevgeny Grishchenko, the Logistics Director of SLK Cement, said that the expanded railway fleet would reduce delays in deliveries and reduce transport costs.

Bahrain: Saudi Arabia-based Saudi Cement has increased its share in its Bahraini subsidiary United Cement Company (UCC) by 37% to 100%. The purchase of additional shares cost it around US$7.5m in May 2021. UCC is an importer and distributor of bulk cement. It operates a marine terminal and was founded in 1999.

India: The Energy and Resources Institute (TERI) and the Global Cement and Concrete Association (GCCA) India have signed a memorandum of understanding to accelerate sustainable development of cement and concrete sectors. Under the agreement, TERI will provide its domain expertise and knowledge to support GCCA India's work to achieve sustainability in the Indian cement and concrete sector, according to the Press Trust of India. The collaboration will see TERI's involvement in GCCA India work programs while GCCA India and its members will support TERI's projects on technology innovation, energy efficiency enhancement, and resource efficiency implementation.

"The demand for cement and concrete will only increase in the decades to come due to population growth and urbanisation. Therefore, reducing CO₂ emissions in the cement and concrete industry is critically important,” said Mahendra Singhi, chairman of GCCA India. He added that working with stakeholders across sectors and with civil society would be essential to reaching the association’s sustainability goals.

Denmark: 29 consortium members, including Aalborg Portland Cement, Aker Carbon Capture and INEOS, have signed up to phase two of the Greensand carbon capture and storage pilot project. Proof of concept planning is now underway with a potential start date of around late 2021 subject to securing funding from the government’s Energy Technology Development and Demonstration Program. If successful an offshore injection pilot is scheduled for late 2022.

A majority of the Danish Parliament decided in December 2020 to set aside a special funding pool to support a CO2 storage pilot project, aiming to investigate the reservoir-CO₂ interaction in the Danish North Sea. This pilot project, if designed correctly, could form the basis for a decision, to enable CO₂ storage by 2025.

Mads Weng Gade, Head of Country, Denmark and Commercial Director INEOS Energy said, “We are taking this step by step. We now have the consortium in place, and if we are successful in receiving ongoing support from the Danish Government and advisory board, Greensand will be able to take another important step forward in supporting the Danish Climate Strategy.”