Displaying items by tag: GCW709

Demand for heavy building materials in the UK dropped in the first quarter of 2025, with ready-mix concrete sales reaching a new 60-year low.¹ In an update last week, the UK’s Mineral Products Association (MPA) attributed the decline to existing economic headwinds, compounded by global trade disruptions, reduced investor confidence and renewed inflationary pressures.

Major infrastructure projects – including the HS2 high-speed railway in the English Midlands, the Hinkley Point C nuclear power plant in Somerset and the Sizewell C nuclear power plant in Suffolk – failed to offset delays and cancellations by cash-strapped local councils to roadwork projects. Residential construction, meanwhile, is ‘slowly but steadily’ recovering from historical lows, amid continuing high mortgage rates since late 2024.

The most interesting part of the MPA’s market appraisal was its warning of ‘new risks emerging in the global economy.’ These concern the new tariffs raised by the US against its import partners. The possible consequences, the MPA says, imperil the UK’s supply chains, construction sector and growth.

Of particular immediacy is the threat of imports into the UK from countries that previously focussed on the US market. The MPA said that the industry ‘cannot compete’ against increased low-cost, CO₂-intensive imports. It named Türkiye, which sends around 6.9Mt/yr of cement and clinker to the US, as a key threat. Türkiye became subject to the blanket 10% ‘baseline’ tariff on 2 April 2025.

The MPA probably didn’t have a particular company in mind when it said this. However, it bears noting that Turkish interests gained a share of UK cement capacity in October 2024, when Çimsa acquired 95% of Northern Ireland-based Mannok. Besides the Derrylin cement plant (situated on the border between Fermanagh, UK, and Cavan, Ireland), Mannok operates the Rochester cement storage and distribution facility in Kent, 50km from London. The facility currently supplies cement from Derrylin to Southern England and the Midlands. It could easily serve as a base of operations for processing and distributing imported cement and clinker from further afield.

Meanwhile in South West England, Portugal-based Cimpor is building a €20 – 25m cement import terminal in the Port of Bristol. The company is subject to 20% tariffs on shipments to the US from its home country. Its parent company, Taiwan Cement Corporation, is subject to 32% US tariffs from Taiwan.

But the plot thickens… On 8 May 2025, the UK became the first country to conclude a trade agreement with the US after the erection of the new tariff regime, under which the US$73bn/yr-worth of British goods sold in the US became subject to a 10% tariff.² The latest agreement brought partial relief for an allied sector of UK cement: steel. 180,000t flowed into the US from the UK in 2024.³ In 2024, the UK exported 7120t of cement and clinker to the US, up by a factor of 10 decade-on-decade from just 714t in 2014, all of it into two US customs districts, Philadelphia and New York City.⁴

In what may be one of the first true ‘Brexit benefits,’ UK cement exporters now ‘enjoy’ a US tariff rate half that of their EU competitors, notably those in Greece. Like the UK’s more modest volumes, Greece’s 1.82Mt/yr-worth of cement and clinker exports stateside also enter via the US’ eastern seaports, at New York City, Tampa and Norfolk. Given the overlaps in ownership between the Greek and UK cement sectors, it is conceivable that optimisation of cement export flows across Europe may already be under discussion.

On 6 May 2025, the UK and Indian governments announced a trade deal that will lift customs duties on almost all current Indian exports to the UK. UK MPs are still seeking clarifications as to whether this will include industrial products that might be dumped.⁵ Theoretically, the threat from an oversupplied and fast-growing cement industry like India’s could be existential to the UK cement industry.

As the UK invests heavily in its future, including with the HyNet Consortium, imports pose a major threat. Given enough time, the UK could develop a leading position in the decarbonisation space. Will it have enough time? Existential threats certainly add a sense of jeopardy.

References
1. Mineral Products Association, ‘Weak start to 2025 for building materials sales amid growing economic headwinds,’ 6 May 2025, www.mineralproducts.org/News/2025/release16.aspx

2. HM Government, ‘UK overseas trade in goods statistics November 2024,’ 16 January 2025, www.gov.uk/government/statistics/uk-overseas-trade-in-goods-statistics-november-2024/uk-overseas-trade-in-goods-statistics-november-2024-commentary

3. UK Steel, ‘US 25% tariffs on UK steel imports come into effect,’ 12 March 2025, www.uksteel.org/steel-news-2025/us-25-tariffs-on-uk-steel-imports-come-into-effect

4. United States Geological Survey, ‘Cement in December 2024,’ January 2025, https://d9-wret.s3.us-west-2.amazonaws.com/assets/palladium/production/s3fs-public/media/files/mis-202412-cemen.pdf

5. Welsh Liberal Democrats, ‘UK-Indian Trade Deal: Government Refuses to Answer Whether it Has Conceded on Cheap Indian Steel Imports,’ 6 May 2025, www.libdems.wales/news/article/uk-indian-trade-deal-government-refuses-to-answer-whether-it-has-conceded-on-cheap-indian-steel-imports

Switzerland: Holcim shareholders have elected Kim Fausing as the Chair of the group’s board of directors, succeeding Jan Jenisch, who will become chair and CEO of the group’s North American spin-off, Amrize. Other appointments include the election of Adolfo Orive and Sven Schneider as new Holcim board members.

Fausing has served on Holcim’s board since 2020. He is CEO of Danfoss, a Denmark-based supplier of heating and cooling, motor and electronics technology, and Deputy Chair of Germany-based SMA Solar Technologies, and previously held senior roles at Liechtenstein-based tooling company Hilti and Denmark-based windows producer VELUX. He holds an Executive Master’s of Business Administration from Henley Business School in the UK and a master’s degree in Mechanical Engineering from Aarhus Tech, Denmark.

Holcim's spin-off of its North American business, Amrize, is scheduled to be completed by the end of June 2025. Amrize shares are due to list on the SIX Swiss Exchange the New York Stock Exchange as AMRZ.

Fausing said “As Chair and CEO of Holcim for over seven years, Jan has made Holcim a leading company in its financial performance, sustainability, innovation and culture. I extend our deep thanks to Jan for his outstanding accomplishments.”

Taiwan: Taiwan Cement Corporation parent TCC Group Holdings has appointed its Chief Financial Officer, Randy Yu, to its board of directors. In a filing to the Taiwan Stock Exchange, the group said that Yu succeeds Senior Vice President Guo-Hong Yeh, who has resigned from the board.

India: Sagar Cements will appoint Rekha Onteddu as non-executive independent director with effect from 30 June 2025. People in Business News has reported that Rekha currently serves as an independent director at parent company Andhra Cements.

Switzerland/US: Holcim’s shareholders have approved all proposals at the group’s annual general meeting in Zug, Switzerland. A key proposal was the planned spin-off of the producer’s North American business as US-based Amrize. Holcim will now make a special distribution of one Amrize share for every Holcim share. Amrize shares are due to list on the SIX Swiss Exchange the New York Stock Exchange as AMRZ from June 2025.

Holcim says that over 99% of voters favoured the spin-off proposal.

Brazil: Votorantim Cimentos recorded sales of 7.7Mt of cement in the first quarter of 2025, up by 2% year-on-year. Revenues rose by 1% year-on-year in local currency terms, to US$998m. The producer partly attributed the growth to its on-going geographical diversification. Nonetheless, its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 14% year-on-year to US$107m, resulting in a net loss of US$58m. Votorantim Cimentos invested US$97.6m in capital expenditure during the quarter, including commencing kiln upgrades at its Alconera and Málaga plants in Spain, up by 35% year-on-year. It expects to commission its newly expanded Salto de Pirapora and Edealina cement plants in Brazil later in 2025 and in early 2026 respectively.

CEO Osvaldo Ayres said “Our financial strength and discipline in capital allocation have enabled us to navigate this volatile global environment. At the same time, we continued to maintain our focus on the long term through our programme of investments in capacity expansion, structural competitiveness and acceleration of new businesses.”

Iraq: Lucky Cement has expanded its clinker production at its joint venture Najmat Al-Samawah plant in Samawah with a new 1.82Mt/yr line, with the kiln successfully firing on 13 May 2025, according to a company announcement published on 14 May 2025. Lucky Cement said that it is also building a 0.65Mt/yr cement grinding plant at the site, due for commissioning in early 2026.

The producer said that the new capacity will enable it to supply more cement to the local market, with surplus marketed and sold domestically. These additions will bring Lucky Cement’s total consolidated production capacity to 21.48Mt/yr, across operations in Pakistan, Iraq and the Democratic Republic of Congo.

Tanzania: Cement production reached 10.9Mt in 2024 against domestic demand of 8.5Mt/yr, according to Industry and Trade Minister Seleman Jafo. The Guardian newspaper reports that the resulting surplus of 2.43Mt was exported to Rwanda, Malawi, Mozambique, Burundi, Uganda, the Democratic Republic of Congo and Zambia. Key exporters included Dangote Industries, Tanzania Portland Cement, Lake Cement, Mbeya Cement and Tanga Cement. The sector reportedly created 12,500 jobs, comprising 5220 direct and 17,280 indirect roles.

UK: John King Chains has been honoured with a prestigious King’s Award for Enterprise in International Trade - its first King’s Award, following a Queen’s Award in 2020.

The award was officially announced on Tuesday 6 May 2025, and John King Chains is delighted to be one of just 197 organisations nationally recognised this year for outstanding achievement.

Founded in 1926 and headquartered in Sherburn-in-Elmet, North Yorkshire, John King Chains has built a proud legacy of engineering excellence. Now a fifth-generation family-owned manufacturer, the company continues to experience strong international growth, supported by ongoing investment in its people and British manufacturing facilities.

Managing Director William Wadsworth commented:

"Receiving the King’s Award is a truly proud moment for everyone at John King Chains, and we are honoured to receive this prestigious accolade, particularly as the company approaches its 100-year anniversary next year of British manufacturing. It reflects the incredible effort our team puts in every day to deliver world-class products and services to our international customer base."

International markets have been a key driver of growth for John King Chains group, with the company continuing to achieve year-on-year expansion. Today, operations span four continents, enabling the business to better serve customers worldwide.

Continued investment in people, technology and UK manufacturing facilities has been fundamental to John King Chains' international success. As the company prepares to celebrate its centenary, winning the King’s Award marks a powerful milestone that highlights what can be achieved through hard work, innovation and dedication.

Now in its 59th year, the King’s Awards for Enterprise are the United Kingdom’s most prestigious business accolades and a globally recognised mark of excellence, making this achievement a proud moment in John King Chains' history and a testament to the commitment and passion of its entire team.

Brazil: Cement sales fell by 3% year-on-year in April 2025 to 5.2Mt, according to preliminary data from the National Cement Industry Union (SNIC). However, sales for the first four months of 2025 rose by 4% year-on-year. Sales per business day averaged 237,000t in April 2025, down by 4% from March 2025 but up by 6% from April 2024. In the period of January - April 2025, sales-per-day grew by 6.5% year-on-year.

Confidence in construction fell to its lowest level since March 2022 amid high interest rates, rising defaults and household debt. Construction firms have also reportedly cited concerns over labour shortages and reduced real estate inventories. The sector remains moderately optimistic, supported by housing and infrastructure projects.