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We turn to look at the Chinese cement sector now that the larger China-based cement producers have released their financial results for 2023. In summary, national output of cement has continued to fall and many of the bigger companies are reporting weakening sales and profits. Yet this trend appears to be slowing, with a few of the producers managing to grow revenue, profits and sales volumes.

Graph 1: Cement output in China, 2018 to 2023. Source: National Bureau of Statistics of China.

Data from the National Bureau of Statistics of China shows that cement output fell by 4.5% year-on-year from 2.11Bnt in 2022 to 2.02Bnt in 2023. This is a slower rate of decline than the 10.4% drop reported between 2021 and 2022. However, it is worth noting that the rate of decrease in output on a half-year basis fell strongly in the first half of 2023 but remained similar in the second half of the year. In its commentary, the China Cement Association (CCA) said that the country’s real estate development investment fell by 10% year-on-year to US$1.53tn.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

Unlike in 2022 the two graphs above show that not every cement producer has lost revenue or sales volumes of cement in 2023. CNBM chair Zhou Yuxian used the phrase ‘storms and challenges’ to describe the situation faced by the world’s largest cement company. He left president Wei Rushan to deliver the bad news that the cement industry as a whole faced “insufficient demand, weakening expectations and weakening off-peak season characteristics” along with surpluses and high costs. He said that the cement sector in China saw its profit fall by 50% to US$4.42bn in 2023, its lowest figure since the mid-2000s.

In comparison CNBM Group’s revenue fell by 10% year-on-year to US$29bn and profit by 52% to US$534m. This was principally due to losses from the group’s basic building materials division, the section that makes heavy building materials, including cement. Alongside this, it pushed on with its supply-side structural reforms, implemented staggered peak production and worked on sustainability initiatives. These included preparations for the national carbon emissions trading scheme. Anhui Conch’s results showed that it managed to increase its revenue but its sales volumes of cement dropped and its profits fell by 33% to US$1.48bn. It achieved the boost in revenue by growing its trading business.

Of the smaller companies covered here, only Huaxin Cement managed to grow its revenue in 2023. It appeared to pull this off by growing its concrete and aggregate business domestically whilst growing the business overseas at the same time. The share of its international business grew to 16% in 2023 from 13% in 2022. Major overseas acquisitions in 2023 included Oman Cement and InterCement’s subsidiaries in Mozambique and South Africa. More recently Huaxin Cement has also been reported by local media as the preferential bidder for InterCement’s business in Brazil, although no formal announcement has been made. Of the rest, Tangshan Jidong Cement, CRBMT and China Tianrui all reported declines in sales revenue and profits. Tangshan Jidong Cement did manage to grow its cement sales volumes, but reported heightened competition in the north and north-east of China where most of its plants are located.

With the first quarter results for 2024 on the way soon, the CCA has been bracing itself and the sector for more bad news. It noted that national cement prices during the last week of March 2024 were about 1% lower than during the same week in 2023. Prices were lower in East, Central and South China, although they had increased in Chengdu and Sichuan. The CCA is worried that a price war, either nationally or regionally, will make a bad situation worse. It has called on cement producers to accept that the slowdown of infrastructure development in the country has led to a decline in cement demand and that this is the new normal. Apart from the usual watchwords of ‘self-discipline,’ ‘overcapacity reduction’ and ‘supply-side reforms’ the association has suggested that cement companies look for growth internationally and look to the leadership of associations to help everyone adapt to the new market situation. China’s sales output of cement may be starting to stabilise, but the market has a way to go yet to adapt to the new reality.

Saudi Arabia: Yamama Cement has appointed Naif bin Sultan bin Mohammed bin Saud Al Kabir as its chair. Abdullah bin Abdulrahman Al Obeikan has been appointed as the vice-chair. Members of the Compensation and Nomination Committee and the Audit Committee have also been announced.

India: Adani Group subsidiaries ACC and Ambuja Cement have both appointed Manish Mistry as company secretary. He succeeds Hitesh L Marthak in both posts, who is taking another job in the group.

Mistry has over 18 years of experience in corporate laws compliance, secretarial and legal roles. Before joining Adani Group in 2022, he worked for Bell Ceramics, Alembic Group, Cadila Group and GACL. He is a Fellow Member of the Institute of Company Secretaries of India in New Delhi, a graduate in commerce and law from the M S University of Vadodara and is a qualified Cost & Management Accountant (CMA).

Switzerland: Holcim has appointed Jelena Stamenkovski as Lead of Clinker Decarbonisation.

Stamenkovski has worked for Holcim Group since 2008. She originally held senior production roles at Holcim’s subsidiary in Serbia. In 2015 she took up group process roles based in Switzerland, becoming the company’s Cement Industrial Operating System Manager from 2017 to 2021. She later became the Group Process Expert - Plants of Tomorrow – Decarbonisation in 2023. Prior to working for Holcim she worked at Titan Cement’s Skopje plant in North Macedonia.

Stamenkovski holds undergraduate and master’s degrees in process engineering from Saints Cyril and Methodius University in Skopje.

China: Poor performance by CNBM’s Basic Building Materials division dragged down the group’s sales in 2023 despite positive performance by the group’s Engineering Technical Services and New Materials segments. Its revenue fell by 10% year-on-year to US$29.1bn in 2023 from US$32.3bn in 2022. Its profit after tax dropped by 33% to US$1.44bn from US$2.13bn. Sales volumes of cement and clinker decreased by 3% to 309Mt from 317Mt. Sales volumes of commercial concrete fell by 5% to 80.8Mm³ from 84.7Mm³.

Revenue for the Basic Building Materials division fell by 19% to US$16.4bn. The company blamed this on a fall in the price of cement, concrete and aggregates although an increase in sales volume of aggregates was noted. The group said that in 2023, the cement industry was characterised by ‘insufficient demand, weakening expectations and weakening off-peak season characteristics,’ coupled with and aggravating surplus and high costs.

China: Huaxin Cement grew its revenue and profit in 2023 by growing its concrete market domestically and increasing its international business. Its revenue rose by 11% year-on-year to US$4.67bn in 2023 from US$4.21bn in 2022. However its operating revenue from cement and clinker declined. The group’s net profit increased by 2% to US$382m from US$373m. Its cement sales volumes grew by 2% to 76.8Mt from 75.3Mt. Concrete sales volumes mounted by 66% to 27.3Mm³.

The share of its international business grew by 16% in 2023 from 13% in 2022. Notable acquisitions in 2023 included the purchases of Oman Cement and InterCement’s assets in Sub-Saharan Africa.

India: UltraTech Cement has allocated US$3.8bn for capacity expansion over the next three years, including the acquisition of Kesoram Cement. The company aims to increase grey cement production to 198Mt/yr. Recently, it commissioned two new greenfield capacities totalling 5Mt/yr in Chhattisgarh and Tamil Nadu, raising its total capacity to 152Mt/yr. This exceeds more than 150% of the capacity of the US and 80% of Europe's capacity.

In the last year, UltraTech Cement increased its capacity by 19Mt/yr, with an additional 36Mt/yr being added at 16 locations.

Thailand: Siam Cement Group (SCG) has introduced a new low-carbon cement, contributing to Thailand's net-zero ambitions. According to the company, SCG is Thailand's first cement manufacturer to produce this eco-friendly cement, reducing CO₂ emissions to as low as 0.05t during production. The new cement reportedly matches or is stronger than traditional Portland cement. SCG achieved this by improving its manufacturing processes, using clean energy sources and waste heat utilisation, leading to a 38% decrease in energy consumption. The company also modified raw material ratios in order to further reduce emissions.

SCG's president of the cement and green solutions department, Surachai Nimlaor, said “Since cement production consumes a considerable amount of energy and emits CO₂ during the process, we decided to find out how we could reduce this impact." He continued “With the initial low-carbon cement formula, we have reduced emissions by 15 to 20%. Moving forward, our goal is to develop new formulas that can reduce carbon emissions by up to 50%.”

India: Shree Cement has inaugurated its Guntur cement plant in Andhra Pradesh in southern India. The producer says that the move raises its cement capacity by 5.6% to 56.4Mt/yr, with six integrated cement plants. It already operates one other plant in South India, the 2.4Mt/yr Kodla cement plant in Karnataka. Press Trust of India News has reported that the Guntur cement plant cost US$300m and will employ 700 people. It will serve the ‘growing markets’ of Andhra Pradesh and Telangana. The plant will co-process up to 30% alternative fuel, consisting of municipal solid waste and biomass, as cement fuel.

Managing director Neeraj Akhoury said "We're committed to growing responsibly. The Guntur plant reflects this by using advanced technology for manufacturing and controlling emissions, making high quality cement with the efficient use of energy.”

India: Roofsol Energy has won a contract to supply solar power plants with a total capacity of 10.5MW for Shree Cement in Jharkhand and Uttarakhand, Saur Energy News has reported.

Roofsol Energy said “Shree Cement owns and operates cement grinding units in nine locations across India and owns production facilities in Rajasthan, Chhattisgarh and Karnataka and has operations in India and UAE. The company carries out power generation through waste heat recovery plants and now it is adopting solar plants as well.”