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Update on California, July 2022

06 July 2022

CalPortland completed its acquisition of the Redding cement plant from Martin Marietta this week. As previously announced the transaction involved the integrated cement plant in northern California, related cement terminals and 14 ready mixed concrete (RMC) plants also in the state. However, CalPortland’s parent company Japan-based Taiheiyo Cement revealed this time round that it is considering buying the Tehachapi cement plant from Martin Marietta too. It says it has some sort of preferential purchase agreement in place, although a final decision is yet to be made.

If CalPortland and Taiheiyo Cement do end up buying the Tehachapi plant as well as Redding then it will mark a fairly quick turnaround of owners. HeidelbergCement subsidiary Lehigh Hanson announced that it was selling up assets in its US West region to Martin Marietta for US$2.3bn in May 2021. The deal was completed by October 2021. Then, CalPortland said it was buying the Redding plant in March 2022. From an outside perspective it was not clear what Martin Marietta might have had planned for its new assets. Over three quarters of Martin Marietta’s revenue in 2021 came from its Aggregates and RMC products. However, it is also a prominent regional US cement producer with two plants in Texas and two plants in California, along with associated terminals. So, building up its cement business in California didn’t seem unfeasible. Now, as can be seen, it is likely to be sticking to its primary focus of aggregates and RMC. It is also worth noting that California has some of the stricter CO2 reduction policies in the US with a 40% reduction target for 2030 (compared to 1990 levels) and a local emissions trading scheme that started in 2013.

Looking at the local cement production base in California, the latest development with the former Lehigh Hanson plants shows the changing situation since the subsidiary of HeidelbergCement left the region. Beforehand, Cemex, Lehigh Hanson and CalPortland each had a similar clinker production capacity. Then, Martin Marietta took the lead and now CalPortland looks set to become the frontrunner if it buys Tehachapi. With the Redding deal completed it now operates three integrated cement plants in California and one in Arizona. Alongside this it runs 15 terminals in Alaska, Arizona, California, Nevada, Oregon and Washington – and – two terminals in Alberta and British Colombia in Canada. The Redding plant is also a distinctive addition to its portfolio as it is further north than the other clinker units.

United States Geological Survey (USGS) data shows that cement shipments to California grew by 5% from 10.05Mt in 2019 to 10.57Mt in 2021. So far in 2022, shipments to the state rose by 3.4% year-on-year to 3.56Mt for January to April 2022 compared to 3.44Mt in the same period in 2021. However, clinker production fell by 5% to 8.94Mt in 2021 from 9.45Mt in 2019. This trend seems to have continued into 2022 with a 9% fall to 2.54Mt for January to April 2022 compared to 2.81Mt in the same period in 2021. Despite this, California remained the second largest OPC and blended cement producer in the US in April 2022. In its Western US Regional Outlook in May 2022, the Portland Cement Association (PCA) forecast that the Pacific region of the US (including California) will experience flat growth in cement consumption in 2023 due to a slowdown in residential consumption. However, consumption is then expected to bounce back sharply in 2024 as the effects of the infrastructure bill take effect.

This suggests that CalPortland has picked an uncertain time to start buying cement plants in California. Yet only last year, in 2021, Cemex began restarting production at a previously mothballed cement plant in Mexico to supply the south-west US. Alongside all of this, environmental regulations are tightening. However, the key difference between Martin Marietta and CalPortland is that the latter is owned by Japan-based Taiheiyo Cement, which is more cement-focused than the aggregate and concrete oriented Martin Marietta. No doubt Taiheiyo Cement’s intention to become more international also played a part in its decision making. If CalPortland does decide to buy Tehachapi then this may give observers an idea of how much further its ambitions go.

Published in Analysis
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Sunil Kumar resigns as managing director of RCC Cements

06 July 2022

India: Sunil Kumar has resigned as the managing director of RCC Cements. He said he was unable to devote his time to company business.

Published in People
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Joonas Rauramo appointed as chief executive officer of Coolbrook

06 July 2022

Finland: Coolbrook has appointed Joonas Rauramo as its chief executive officer. In this role he will be responsible for overseeing the transition from a research and development focused organisation to a commercial-led business with the aim of partnering with the large companies in petrochemical, steel and cement sectors. Rauramo succeeds Harri Johannesdahl in the role, who has chosen to take a less hands-on role at the business and will stay on in an advisory capacity.

Rauramo joined Coolbrook in late 2021 as its Executive Vice President, Strategy and Industrial Partnerships. Prior to this he worked for the Finland-based energy company Fortum for over a decade.

Finland-based Coolbrook is a technology and engineering company that is developing processes to replace the burning of fossil fuels in major industrial sectors. Its RDH has potential applications in cement, steel and chemical production process. Its Roto Dynamic Reactor (RDR) is intended to eliminate CO2 emissions from the steam cracking process used in the production of plastic.

Look out for an interview with Joonas Rauramo in the September 2022 issue of Global Cement Magazine

Published in People
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Hoffmann Green Cement Technologies launches Swiss joint venture with construction company

06 July 2022

Switzerland: Hoffmann Green Cement Technologies has launched a new joint venture with a Switzerland-based construction industry partner. Hoffmann Green Cement Technologies will hold a minority stake in the new subsidiary, which will produce its reduced-CO2 clinkerless cement at an upcoming plant. The producer says that the unit will apply the vertical production model of its existing H2 plant in France.

Co-founders of Hoffmann Green Cement Technologies Julien Blanchard and David Hoffmann said "After signing our first contract outside France more than a year ago, we are proud to accelerate our international development through a licensing model for Hoffmann Green technologies and processes. The opening of this first subsidiary in Switzerland proves the attractiveness of our carbon-free solution without clinker outside our borders, and constitutes a structuring step in the development of Hoffmann Green."

Published in Global Cement News
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Holcim to acquire Cantillana

06 July 2022

Belgium: Switzerland-based Holcim has agreed to acquire façade and external insulation systems producer Cantillana. Cantillana employs 200 people across nine plants in Belgium, France, Germany and the Netherlands. Its forecast full-year sales are Euro80m in 2022. Holcim says that the move is in line with its Strategy 2025 - Accelerating Green Growth target of expanding its solutions and products unit to 30% of group sales.

Published in Global Cement News
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Calcom Cement must create 20 jobs for locals

06 July 2022

India: The Assam Human Rights Commission (AHRC) has directed Calcom Cement to create 20 new full-time jobs for local people by January 2023. The Sentinel newspaper has recorded that the new positions must go to people from designated Project Affected Families (PAFs) with regard to the plant's Pipapukhuri cement plant in Assam. The designation covers any household which lost a source of a livelihood following the company's refusal to deliver a previously agreed rehabilitation package.

Published in Global Cement News
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Dangote Cement launches US$77,000 prize campaign

06 July 2022

Nigeria: Dangote Cement has launched a promotional prize campaign worth a total US$76,700. The campaign consists of rewards of up to US$11,870, alongside other prizes for customers. The Sun newspaper has reported that the promotion will run until 31 October 2021.

Dangote Cement's Nigeria sales director Sanni Funmi said that the campaign is the producer's way of saying 'Thank You' to Nigerians.

Published in Global Cement News
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UltraTech Cement declines to pay US$126m for Jaiprakash Associates cement plant in Uttar Pradesh

05 July 2022

India: UltraTech Cement has declined to pay US$126m for a 3Mt/yr cement plant in Uttar Pradesh which it acquired from Jaiprakash Associates in 2017. The Economic Times newspaper has reported that the acquisition was part of a US$2.05bn deal covering 21.2Mt/yr-worth of cement capacity across six cement plants and five grinding plants. With environmental clearances pending on the Uttar Pradesh plant, the companies had agreed to a delayed final payment for the US$126m asset, to be made on 30 June 2022. UltraTech Cement says that it is unwilling to pay for the plant ‘in the present circumstances,’ given that the required clearances are still lacking. The group is reportedly seeking a revaluation of the plant down to US$78.3m.

Published in Global Cement News
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Pakistan’s cement despatches drop in 2022 financial year

05 July 2022

Pakistan: All Pakistan Cement Manufacturers Association (APCMA) members despatched 52.9Mt of cement in the 2022 financial year, down by 7.9% year-on-year from 57.4Mt in the 2021 financial year. The News International newspaper has reported that exports fell by 44% year-on-year to 5.25Mt from 9.31Mt. In June 2022, despatches rose by 1% year-on-year to 5.26Mt from 5.21Mt. Exports declined by 48% to 284,000t from 543,000t. APCMA said that high costs caused the decline, which continues into the current 2023 financial year (which begun on 1 July 2022).

An association spokesperson said “The export of cement has declined massively during the ongoing financial year due to the high cost of production.”

Published in Global Cement News
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Betolar customers to produce 250,000t/yr of Geoprime concrete by 2023

05 July 2022

India: Three new Indian concrete companies have separately secured agreements for the use of Finland-based Betolar’s Geoprime alkali-activated slag and fly ash additive. Reuters News has reported that the companies are Balaiji Cement Products, Shiv Tiles and SNEH Precast. Engineering company Godrej & Boyce has also signed a letter of intent with the supplier for pilot production of concrete blocks, paving slabs and other elements.

Betolar expects producers to achieve global concrete production volumes of 250,000t/yr of concrete containing Geoprime by 2023.

Published in Global Cement News
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