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After the initial shocking coverage of the Russian invasion of Ukraine, which began in February 2022, came announcements of the most extensive sanctions in history by the EU, G7 nations and others against Russia. In the EU, this effectively deconsolidated companies' Russian subsidiaries, leaving decision makers with the choice whether to sell up or hold out for better times.¹ Four Russian-facing EU cement producers - Buzzi Unicem, CRH, Heidelberg Materials and Holcim - finalised their strategic responses in March 2022.

One year on, on 15 March 2023, 666 (21%) of 3110 eligible multinationals have withdrawn from Russia, according to the KSE Institute.² Ireland-based CRH led the cement sector exit. It abandoned its Finland-based subsidiary Rudus' ready-mix concrete joint venture, LujaBetomix, on 2 March 2022. Switzerland-based Holcim took longer, but affected its exit on 14 December 2022, agreeing to sell Holcim Russia to local management. One condition of the sale was a rebrand (to Cementum, in February 2023) to withdraw the Holcim name from Russia. Unlike CRH, Holcim's Russian business included multiple cement plants - though the producer stated that it contributed less than 1% of group sales during 2021.

The KSE Institute uses the equivocal label of 'waiting' for companies which have paused investments, or scaled back operations, in Russia, while retaining their subsidiaries. This applies to 500 companies globally (16% of the pre-war total). Germany-based Heidelberg Materials acted swiftly to freeze further investments in HeidelbergCement Russia on 10 March 2022. At that time, its three cement plants were in winter shutdown. In terms of capacity, the 4.7Mt/yr-capacity Heidelberg Materials Russia constitutes 2.8% of Heidelberg Materials. In 2022, Heidelberg Materials suffered a Euro102m impairment on account of its Russian business. CEO Dominik von Achten, announcing the freeze, had described the subsidiary as a 'pure local business with no imports or exports.' Its website has since come offline, but the corporate structure presumably maintains in its frozen isolation.

1220 global multinationals - 39% of all those previously operating in Russia - are still 'continuing operations.' Among these is Buzzi Unicem. Having decided that 12 months was long enough, the Ukrainian National Agency for the Prevention of Corruption (NAPC) placed Italy-based Buzzi Unicem on its list of Russian war sponsors on 8 March 2023 for the actions of its subsidiary SLK Cement. A scathing denouncement accompanied the listing, in which the NAPC set out its main charges. It accused Buzzi Unicem of:

1. Expanding its business in Russia since the invasion;

2. Supplying its products to Russian state-owned businesses, including energy suppliers Rosatom and Rosneft;

3. Voicing support for the invasion via its social media presence.

The NAPC concluded “Buzzi Unicem's continued business in Russia means direct support and sponsorship of terrorism by Russia.”

Buzzi Unicem responded in no uncertain terms that these allegations are untrue: it has no business in Russia, and the entity bearing its logo on its (SLK Cement's) website is entirely independent in its decision-making and commercial actions.

This goes to the root of what it means to be a subsidiary of a corporation. Buzzi Unicem seeks to define the relationship as beginning and ending in operational involvement. Yet Buzzi Unicem and other corporations have invested large sums in businesses like SLK Cement. According to the NAPC, Buzzi Unicem paid Euro62m in taxes alone in Russia between 2016 and 2021. Whether they have elected to 'continue operations,' 'wait' or write in favourable buy-back options into sales contracts, as has happened in other industries, companies can be expected to seek to return to their investment.

As such, it is not entirely surprising that Buzzi Unicem should have followed up its rebuttal with a defence of SLK Cement. It stated "SLK Cement is a Russian domiciled entity operating exclusively in that country and therefore subject to domestic legislation. Payment of taxes and having employees being mobilised to the army are not discretionary decisions, rather legal obligations within the Russian jurisdiction."

In the decision to sell or hold, multinationals face the usual considerations: can they afford to yield their market share to other - less conscientious - competitors? Or, in this instance, those from Türkiye, India and China, whose potential investments are unrestrained by sanctions? Even as Holcim thrashed out its exit deal in October 2022, China-based West China Cement announced plans for a new US$260m, 1.2Mt/yr cement plant in Tatarstan, Volga Federal District. Meanwhile, Cemros (formerly Eurocement) is carrying out a Euro3m mill upgrade at its Lipetsk integrated cement plant in Central Federal District, which will increase the plant's capacity by 20% upon commissioning in early 2023. Between them, Central Federal District and Volga Federal District host four former Holcim cement plants.

12 months into the Russian invasion of Ukraine, an onslaught of withdrawals has shrunk, but not collapsed, the Russian economy.³ The Russian government insists that cement demand remains high (up by 2.1% year-on-year to 58.3Mt during the first 11 months of 2022, according to the Russian cement association Soyuzcement).⁴ The country has substituted new sources of imports for those lost since the beginning of the invasion, the government claims. It is even preparing for a cement shortage from 2024 onward by 'further developing domestic production capacities.'

Far from shrinking, Russian cement production rose by approximately 2.5% year-on-year to 60.7Mt in 2022.^{4, 5} The two aforementioned districts - Central Federal District and Volga Federal District - contributed a healthy 15.3Mt (25%) and 13.4Mt (22%) respectively. If the statistics are to be believed, the EU's recalled producers are missing out on a bonanza.

At the same time, all four EU-based producers face the parallel burden of increased costs in their key markets, as sanctions keep energy prices at an all-time high, and nowhere more so than in Europe. These sanctions purport to target Russian businesses and individuals, but their bite is far less discriminating. Companies may well wonder why they are being penalised by governments whose policies failed to prevent a Russian invasion of Ukraine in the first place.

We have no idea what will happen in Ukraine and Russia in the rest of 2023, but we can be sure it will be uncertain territory for the two countries’ cement producers. Those with (former) assets in the Russian market will have to continue their delicate balancing act.

1. European Commission, 'Frequently Asked Questions,' 16 March 2022, https://trade.ec.europa.eu/doclib/docs/2022/march/tradoc_160079.pdf

2. KSE Institute, 'Stop Doing Business with Russia,' 15 March 2023, https://leave-russia.org/leaving-companies?flt%5B147%5D%5Beq%5D%5B%5D=9062

3. European Council, 'Infographic - Impact of sanctions on the Russian economy ,' 9 March 2023, https://www.consilium.europa.eu/en/infographics/impact-sanctions-russian-economy/

4. Soyuzcement, 'Cement Review,' December 2022, https://soyuzcem.ru/documents/%D0%A6%D0%B5%D0%BC%D0%B5%D0%BD%D1%82%D0%BD%D0%BE%D0%B5_%D0%BE%D0%B1%D0%BE%D0%B7%D1%80%D0%B5%D0%BD%D0%B8%D0%B5_%D0%B4%D0%B5%D0%BA%D0%B0%D0%B1%D1%80%D1%8C%202022.pdf

5. BusinessStat, 'In 2022, 60.7 million tons of cement were produced in Russia,' 21 February 2023, https://marketing.rbc.ru/articles/14025/

Mexico: Cemex has updated its logo to a new design, which it says presents a ‘fresher, closer, and more dynamic’ visual identity. The groups says that this signifies a ‘clear and decisive company transformation.’

CEO Fernando González said “I am excited to present the renewed image of our company. But what excites me most is what is behind the change: a renewed commitment to helping our customers push the boundaries of sustainable construction through innovative solutions.”

India: Hakkimuddin Ali, business head for Maharashtra at Dalmia Cement (Bharat), has been elected as vice chair of the Maharashtra branch of the Confederation of Indian Industry (CII). The CII serves as the connecting link between the industry and the government of India.

Ali said that he will use his new position to increase business and industry opportunities in Nagpur, Aurangabad and other cities in Vidarbha, identify problems faced by the industry and suggest necessary remedies to the state government.

France: Estelle Bletry has taken on the role of sales manager for Holcim’s waste management subsidiary Geocycle. Bletry held different positions in Lafarge France between 2007 and 2019. She worked as product development manager and business developer materials and solutions at waste management company Hesus from 2019 to March 2023. Bletry studied marketing at IUT Cergy-Pontoise in Paris.

Belgium: Carmeuse Group’s lime plant engineering subsidiary TECforLime has appointed Gaetan Ly to the role of head of digital development. Ly previously served as group process engineer since 2014. He has also worked for geotechnical engineering company G-tec. Ly holds a master’s degree in engineering and geotechnical engineering from the University of Liège.

Croatia: Nexe has awarded a contract to Germany-based ThyssenKrupp Industrial Solutions for the construction of a new clinker line and carbon capture installation at its 0.6Mt/yr Nasice cement plant. The Poslovni Dnevnik newspaper has reported that the work will cost Euro400m. When commissioned in 2029, the upgraded plant will produce carbon neutral cement and despatch 700,000t/yr of CO₂ by pipeline for storage near Bockovac in Osijek-Baranja County.

US: Continental Cement will hold a ribbon-cutting ceremony for the new 114,000t-capacity cement storage dome at its Davenport cement plant in Iowa on 20 March 2023. The dome will replace existing winter storage facilities at the plant, resulting in a safer and more efficient operation, according to the subsidiary of Summit Materials.

The company’s president, David Loomes, said "The investment by Summit Materials of US$30m in the largest cement storage dome in North America represents a strong vote of confidence in Continental Cement and a commitment to sustained operations and investment in the State of Iowa."

Continental Cement plans to invest an additional US$32m in an expansion to its Green America Recycling programme, whereby it expects to achieve an alternative fuel (AF) substitution rate of 55%.

Mexico: Cemex has made an issue of US$1bn-worth of notes without a maturity date. The producer says that the proceeds will fund its green initiatives.

Cemex said "Eligible green projects include capital, operating and research and development expenditures related to pollution prevention and control, renewable energy, energy efficiency, clean transportation, sustainable water and wastewater management and eco-efficient and/or circular economy-adapted products, production technologies and processes.”

Finland: UK-based SigmaRoc has acquired dolomitic limestone supplier Juuan Dolomiittikalkki. Juuan Dolomiittikalkki’s mines command 1.5Mt of reserves, with viability until 2053. SigmaRoc will integrate the company into its subsidiary Nordkalk’s Nordics platform.

SigmaRoc CEO Max Vermorken said “We are making good progress on the acquisitions pipeline to deliver on our objective to become the leading European quarried materials group.”

Germany: Beumer has redesigned its Paletpac palletiser on a modular pattern. The new design comprises modules that can be picked from either side, and reduce the necessary forklift capacity for configuration to 5t from 8t.

Product business divisional director Kay Wieczorek said "The performance of the machines can be modified at a later time if necessary, and if there is ever a need for retrofitting or repairs, the new design saves a lot of time.”