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A battle over cement pricing in Ghana reached a new stage this week when the Chamber of Cement Manufacturers (COCMAG) hit back at proposed government regulation. Frédéric Albrecht, the chair of the association, told a meeting that about 80% of local production costs linked to cement manufacture are related to the local currency exchange rate. So fixing the price would do little to address the main cause behind rises.

Albrecht was speaking at a stakeholders’ forum organised by the Ghana Chamber of Construction. The group was convened to discuss the government’s proposed Ghana Standards Authority (Pricing of Cement) Regulations 2024 that were formally presented in the country’s parliament in early July 2024. The association argues that the cement sector has not been consulted properly over the proposal and that introducing it could have negative consequences for the construction sector as a whole. It says that imported clinker is subject to numerous taxes and that the average price of cement has actually lagged behind the rate of inflation.

The government is dealing with an economic crisis that forced it to default on its external debts in 2022 and ask the International Monetary Fund for support. This has led to depreciation of the local currency and high inflation. Around the same time the authorities have also been attempting to regulate the cement sector more closely. In 2022 the Ghana Standards Authority (GSA) took action against a brand of cement, Empire Cement, that appeared to be on sale without any of the required permits. Then in the autumn of 2023 the Ghana Revenue Authority (GRA) shut down Wan Heng Ghana’s grinding plant in Tema after the company failed to pay a major tax bill. Action by the GSA followed when it shut down three more plants in the Ashanti Region - Xin An Safe Cement Ghana, Kumasi Cement Ghana and Unicem Cement Ghana - for using inferior materials in cement production.

In April 2024 a nine-member committee was established to monitor and coordinate the local cement industry. Notably, cement producers have been required to register with the committee in order to secure a licence to manufacture cement. Kobina Tahir Hammond, the Trade and Indus¬try Minister, then said in late June 2024 that the government wanted to intervene in cement pricing to protect consumers from what he described as the ‘haphazard’ increment in cement prices by manufacturers. A legislative instrument doing just that was presented in parliament on 2 July 2024. Around the same time the GSA reportedly threatened to close down ‘several’ more cement plants for non-compliance.

The cement industry in Ghana is particularly vulnerable to currency exchange effects as it is dominated by grinding plants. One integrated cement plant, Savanna Diamond Cement, was launched in the north of the country in the mid 2010s. However, this compares to 14 licensed grinding plants in the country reported in the local media. This includes units run by Ciments de l’Afrique (CIMAF), Dangote Cement, Diamond Cement (WACEM) and Heidelberg Materials subsidiary Ghacem and its CBI Ghana joint-venture amongst others. This makes it one of the countries in Sub-Saharan Africa with the most grinding plants, along with places such as Mozambique and South Africa. When the Ministry of Trade and Industry started a consultation on regulating the cement sector in late 2023 it calculated that the country produced 7.2Mt of cement in 2021 and that the country had an overcapacity of 3.5Mt. This gives the country an estimated cement production capacity of just below 11Mt/yr.

Some sense of the growing costs that the cement sector in Ghana is facing can be seen in the Ghana Statistical Trade Report for 2023. Clinker was the country’s third biggest import by value at US$206m. It was only exceeded by diesel and other automotive oil products. The Ghana Statistical Service reported that most of the country’s imported clinker in 2023 came from Egypt, South Africa and its neighbours in West Africa. Both Dangote Cement and Heidelberg Materials flagged up the country’s economy as being hyperinflationary in their respective annual reports for 2023.

Argument and counter-argument over cement pricing is prevalent around the world especially in Africa. Fellow West African country Nigeria, for example, has endured plenty of very public dialogue and debate about the price of cement. In Ghana’s case it seems more likely than not that factors beyond the control of the local cement companies are driving the prices given the grinding-dominated nature of the sector with lots of different companies involved. Negative currency effects and inflation look more likely to be driving cement prices than anything else, although one should always be wary of the potential for cartel-like behaviour by cement producers. The economic crisis in Ghana certainly fits the bill for the conventional introduction of price controls on selected commodities but getting the fine tuning right could be difficult in practice. Fixed prices will reassure consumers in the short term provided supplies hold. Beyond this the actual causes of the high cement prices should emerge in time.

UK: Aggregate Industries has appointed Lee Sleight as its new CEO. He succeeds Dragan Maksimovic in the post, who was appointed as Region Head West Europe earlier in 2024. Sleight will take up his new position from 1 August 2024.

Sleight joined the UK subsidiary of Holcim in 2021 as the managing director of the ready-mixed concrete division. He became the head of the aggregates division in late 2023. Prior to his time with Aggregate Industries, Sleight worked for Sika in the UK from 2008 to 2019 in a variety of managerial roles. He was then appointed as Business Unit Manager for Sika in 2019.

Kaziwe Kaulule will succeed Sleight as the managing director of the company’s aggregates division. Kaziwe joined Aggregate Industries in late 2023 as Director of Strategic and Commercial Growth, having previously been CEO of Holcim’s South Africa and Zimbabwe businesses.

Tanzania: Mbeya Cement has appointed Mohamed Ismail Elsaidy as its CEO. He holds 25 years of experience in the industrial sector with much experience in cement. He started his career working for Blue Circle in Saudi Arabia in the late 1990s. He later held engineering roles for the Egyptian Cement Company, Lafarge Emirates Cement and eventually became the Operation and Process General Manager for Wadi El Nile Cement. As well as holding academic positions, he also worked for the Egyptian General Authority for Standardization and Quality in the early 2020s. Elsaidy holds a PhD in chemical engineering from Cairo University.

US: Holcim US in Missouri will receive US$1.37m from President Biden's Inflation Reduction Act to support the reduction of climate pollution in manufacturing construction materials, as announced by the US Environmental Protection Agency (EPA). The grant is part of a broader effort to reduce emissions from the manufacturing industry and will aid Holcim's Environmental Product Declaration Accelerator Project.

EPA Region 7 Administrator, Meg McCollister, said "We commend Holcim for its work in advancing sustainable practices to reduce carbon emissions here in the Heartland and across our nation. Its innovative approach, supported by this grant, advances climate-friendly practices and sustainability in one of our nation's most important industries."

Argentina: The sale of the cement plant Loma Negra by Argentine company to Brazilian firm Companhia Siderúrgica Nacional (CSN) will not proceed. The exclusivity term for negotiations expired on 12 July 2024 without an agreement, as stated in a communication to the Buenos Aires Stock Exchange by Loma Negra. It is now speculated that businessman Marcelo Mindlin may become a candidate to acquire the company.

Philippines: Cemex Holdings Philippines has entered a retail supply agreement through its subsidiary Apo Cement with Sem-Calaca Res to supply 44MW of electricity to its cement plant in Naga, Cebu. The agreement will remain effective until 25 December 2024.

Chair and President Isidro Consunji said "While cement demand is currently low, we expect it to rebound as our turnaround plan progresses, supported by the 'Build Better More' programme and the anticipated easing of interest rates next year."

Türkiye: The value of Türkiye's cement exports to Russia has fallen by 15.5% to US$40m in the first half of 2024, compared to the same period in 2023, according to Türkiye's Trade Ministry. In June 2024, cement exports to Russia totalled US$7.2m, down by 5.5% from June 2023.

Additionally, Türkiye's total cement exports from January to June 2024 decreased by 9.4%, amounting to US$2.1bn. June 2024 saw a significant reduction, with exports valued at US$336.5m, an 18.3% decline from 2023.

Pakistan: According to brokerage firm AKD Securities, Pakistan's cement industry recorded a 2% year-on-year growth in dispatches, reaching 45.3Mt in the financial year 2024, largely due to increased exports. Domestic sales, however, fell to a seven-year low of 33.2Mt, a 5% decline from 2023. This drop is attributed to a slowdown in construction activities, influenced by high construction costs, rising inflation, and peak interest rates.

Exports grew significantly by 56% year-on-year, amounting to 7.11Mt. This was mainly due to the decreased international coal prices, which improves the viability of exports. Despite the overall increase, June 2024 saw a decline in both local sales and exports. Local sales fell by 12% due to fewer working days during the Eid holidays, and exports declined by 18%, mainly due to reduced clinker sales from the south regions.

France: The Eqiom Lumbres cement plant, part of CRH, has commissioned ThyssenKrupp Polysius to construct a fine grinding plant. The new plant will include the Polysius booster mill and the Sepol ultra-fine classifier, along with necessary auxiliary equipment. ThyssenKrupp Polysius is set to deliver the equipment by late summer 2025, aiming for commissioning in the fourth quarter of 2025. It will also provide on-site service and technical support for performance optimisation.

Project Manager Layal Haddad said "We are proud to be contributing to decarbonisation with the ultra-fine grinding plant and reducing the CO₂ footprint of cement. This is the first ultra-fine grinding plant based on a Polysius booster mill to be sold worldwide. We look forward to a successful project together with the Eqiom/CRH team."

Canada: Minister of Environment and Climate Change, Steven Guilbeault, announced the reinvestment of up to US$1.6m from industrial pollution pricing proceeds into a new emissions reduction project at St Marys Cement in St Marys, Ontario. This initiative will involve the installation of a new kiln utilising low-carbon fuels, including discarded plastics, to reduce the use of carbon-intensive fuels used in the manufacturing process by up to 30%. The project aims for a reduction of over 39,900t of greenhouse gas emissions by 2030, according to Foreign Affairs news.