Displaying items by tag: GCW542

Russia made imports easier last week. At the end of January 2022 an order from Rosstandart, the national standisation agency, relaxed inspection controls allowing for simpler imports from countries outside the Eurasian Economic Union (EAEU). Previously each such batch required a 28 day inspection period. This has now been dropped to encourage more imports of cement. Deputy Industry and Trade Minister Viktor Yevtukhov explained the reasoning behind the measure to InterFax, “In order to avoid problems in the domestic Russian cement market in the future, it is necessary to spur competition. It will balance the prices for this basic building material and will restrain their growth in case of such risks.”

Some idea of the situation facing the Russian cement market at the moment can be gleaned from market data supplied by CM Pro. Production rose by 7% year-on-year to 56.4Mt in the 11 months to November 2021. Imports rose by 26% to 1.6Mt at the same time. The Ministry of Industry and Trade has attributed this to a construction boom created by growth in both government-funded infrastructure projects and domestic housing. It also noted a local shortage and price increases in the Central Federal District in the autumn of 2021, although it said it redistributed cement from other regions to remedy the situation. This imbalance in the country’s main cement producing and consuming region, including Moscow, can also be seen in the figures. Production was about 2Mt below consumption in this area in 2019 and 2020. Yet so far, to November 2021, this gap grew to 2.7Mt. At the same time the price of cement reportedly jumped by 20% from November 2020 to December 2021.

Graph 1: Cement production in Russia, 2015 – 2021. Source: CM Pro and estimate from Global Cement.

It has been reported that the Ministry of Industry and Trade has also been wondering publicly why a study conducted in 2021 found that the national cement sector had an apparent operating capacity of 65Mt/yr compared to a total production capacity of 105Mt/yr, including mothballed and inactive plants and production lines. In other words the sector has been operating at a 62% production utilisation rate and the government is trying to coax it higher by opening up imports. And just to make sure that there was no confusion on the matter, Yevtukhov added, “I am sure that if the domestic producers will cope with the task of increasing the real volume of cement production and will not allow prices for their products to increase above the rate of inflation, the market will self-regulate, and additional imports of cement to Russia (which are traditionally small) will not be needed."

Given the country’s large size, imports seem to be mainly a threat to producers in the big population centres around Moscow and the Volga with good international transport links. Producers appear to have received and understood the message from the government as they have pledged to increase real operating capacity by 3 – 5Mt. The bear in the room for both Russian and European cement producers though is what happens in Ukraine in 2022. With North Atlantic Treaty Organization (NATO) members threatening economic sanctions and Russia supplying a significant share of Europe’s gas supply, any progression from the current rhetoric could cause discomfort to markets in both Russia and Europe. Turkish cement exporters, manufacturing in a NATO member country and hoping to take advantage of increased exports to Russia, could be in a particular bind if events heat up. All of this indicates that Smikom picked an interesting time to buy Russia’s largest cement producer, Eurocement, back in mid-2021. There’s an ongoing construction boom but also risks aplenty.

With apposite timing, LafargeHolcim Russia announced this week that it was going to reopen its integrated Voskresensk cement plant near Moscow. The unit was originally stopped in 2016. Now it plans to spend Euro23m on restarting the plant and building a dry construction mix unit at the site. Who says big government doesn’t work?

Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has appointed Mohammed Lawal Bello as its chair.

Bello started his career 1985 as an engineer with the engineering and technical services department of the Nigerian National Petroleum Corporation and left in 1988 to set up his businesses. He is the founder of the Universal Petroleum Company, Robinson International Inspections, International Diamond Drilling Company and he also owns a joint-venture with US-based Delaney. His executive positions include chair of Nitel-Mtel and vice-chair of the Nigerian Electricity Regulatory Commission in Ambuja. He is also the chair of the Gede Foundation, a non-government organisation focused on health projects. Bello is a graduate of Harvard University in the US and a member of the Energy Institute in the UK.

Argentina: Holcim Argentina has appointed Sergio Vaimberg as its Chief Marketing Officer. He joined Holcim in mid-2020 with roles in Argentina and Mexico, according to the Norte en Linea newspaper. Prior to this he worked mostly for Coca-Cola in Argentina. Vaimberg is a certified public accountant, holds a Master of Business Administration (MBA) and has a postgraduate degree in leadership from the Harvard Business School.

India: Shree Cement recorded consolidated revenues of US$430m in the third quarter of its 2022 financial year, down by 2.8% year-on-year and up by 0.4% quarter-on-quarter. The group’s cement sales totalled 6.4Mt, down by 10% year-on-year and up by 2.1% quarter-on-quarter. It reported a 26% year-on-year fall in earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$107m.

India: CK Birla Group subsidiary Orient Cement’s third-quarter sales rose by 2.1% year-on-year in the 2022 financial year to US$82.6m from US$80.9m in the corresponding quarter of the 2021 financial year. The company saw a 19% year-on-year decline in its net profit to US$5.84m during the quarter.

Colombia: Analyst S&P Global has given Grupo Argos the rank of Gold in its Sustainability Yearbook 2022. Grupo Argos is the only construction materials company to have achieved Gold in the yearbook. Thailand-based Siam Cement Group (SCG) ranked Silver, while Ireland-based CRH and Switzerland-based Holcim, along with the latter’s subsidiary Ambuja Cements, ranked Bronze.

Legal and sustainability vice president María Isabel Echeverri said “This recognition is a result of teamwork and the permanent commitment of Argos to building a better future in which the creation of value for society and for the company is our greatest motivation. We will continue to strengthen our initiatives and strive to positively contribute to the responsible development of our sector and the well-being of our stakeholders, to enable a more sustainable, prosperous and inclusive society.”

UK: Cemex’s corporate venture capital unit Cemex Ventures has invested in gas-to-hydrogen plant producer HiiROC. HiiROC’s thermal plasma electrolysis technology can process biomethane, flare gas and natural gas into hydrogen and carbon black without any CO₂ emissions.

Cemex Ventures president Gonzalo Galindo said “HiiROC's solution is sustainable, scalable, cost-effective and has strong growth potential inside the hydrogen ecosystem. This investment is yet another important step in our transition from fossil to alternative fuels (AF) and towards achieving our Net Zero goal for 2050. Cemex is the clear industry leader in the use of hydrogen, and this partnership allows us to further expand our hydrogen knowledge in the ultimate quest to replace fossil fuels with hydrogen in our plants." He added "With hydrogen becoming an increasingly attractive element for industrial decarbonisation, we are excited to be one of the top companies in the cement industry that includes a clean hydrogen production startup in its investment portfolio."

India: Orient Cement’s board of directors has approved a change to the company’s agreement for the acquisition of a 26% stake in renewables company AMPSolar Systems. Indiainfoline News Service has reported that the producer will now pay US$556,000 for the stake, up by 2.7% from the US$541,000 it previously negotiated in December 2020.

AMPSolar Systems recently commissioned its new 13.5MW solar power plant.

Russia: The Federal Technical Regulation and Metrology Agency (Rosstandart) has relaxed import rules for cement originating from outside the Eurasian Economic Union (EAEU). Under the new regulations the 28 day inspection period has been cut, according to InterFax. The Industry and Trade Ministry has taken the action to cope with a rise in cement consumption created by both government-backed infrastructure projects and domestic housing. It added that the Central Federal District experienced a shortage in the autumn of 2021 with associated price rises.

"We expect that the reduction of the procedure's duration may encourage importers of cement to increase the volume of its import into the country. And this, in turn, should in fact increase competition in the market and stabilise prices. This, I repeat, is the most important thing that needs to be achieved in the domestic building materials market for its balanced operation," said Deputy Industry and Trade Minister Viktor Yevtukhov.

Russia: LafargeHolcim Russia plans to restart its integrated Voskresensk cement plant near Moscow. The 1.3Mt/yr unit was originally stopped in 2016. The subsidiary of Switzerland-based Holcim says it will spend Euro23m on restarting the plant. It also intends to build a dry construction mix unit at the site.