Displaying items by tag: Government

India: Dalmia Bharat has suspended operations across its entire integrated cement production apparatus, equalling 26.5Mt/yr capacity, as of 26 March 2020. The move is a response to a government ordnance of 25 March 2020 imposing a 21-day lockdown on the whole of India due to the coronavirus. The company will implement the closure ‘until further notice,’ according to Mint News.

Dalmia Bharat CEO and managing director Mahendra Singhi said, “While cement production is continuous in nature and the plants have requisite permission from both the state and the central governments to operate with minimum employees during the lockdown, Dalmia Bharat will only carry out mandatory activities required for safety and security of the plants in the larger interest of its staff.”

Coronavirus had claimed 13 lives in India on 27 March 2020.

China: Jiangxi Wannianqing Cement’s net profit in 2019 was US$197m, representing a 20% year-on-year increase from US$164m. Reuters has reported that on 15 November 2019 Jiangxi Wannianqing Cement paid US$82.6m for a lease and limestone exploration rights for land in De’an County, Jiangxi Province, previously held by Fushan Cement. On 25 June 2019 the company received US$23.3m in government compensation for the relocation of its Wannian cement plant.

Spain: Members of the Spanish cement association Oficemen have offered help to the government in the disposal of medical waste contaminated with the coronavirus, for which any kiln line with the right alternative fuel processing capabilities will be made available. Minister for Industry Reyes Maroto said that the plants will be used for waste’s elimination ‘only insofar as companies can continue operating.’

UK: Mineral Products Association (MPA) chief executive Nigel Jackson has written to the Chancellor, Rishi Sunak, welcoming his deferment of value added tax (VAT) and urging the extension of this deferment to Employer National Insurance (ENI), Corporation Tax and Business Rates. “What business needs now are fast and simple solutions that enable them to keep cash in their businesses and their employees in their jobs,” said Jackson. “Fixed costs are very high. Once the recovery starts the pent-up demand will be immense.”

Cement producers and suppliers are now reacting to the coronavirus pandemic at scale. The biggest obvious development has been the lockdown in India that began on 24 March 2020. The implications for the cement industry are profound given the country’s population (1.3Bn) and massive cement consumption under normal conditions. It is the country with the world’s second largest cement production capacity.

UltraTech Cement, the biggest producer, said that it was suspending production at ‘various’ locations although it added that the situation was ‘dynamic’ and that it was monitoring it from time to time. Ambuja Cement and JK Lakshmi Cement have done likewise. The latter has suspended cement production at an integrated plant in Rajasthan and three grinding plants in Gujarat. Some Indian states have moved faster than others towards shutting down movement of people so JK Lakshmi’s decision may merely be based on legal necessity. However, a difference may arise in producer strategies between keeping integrated and grinding plants open. Building up inventory is one strategy seen in poor market conditions previously around the world. Alternatively, moving to more of a grinding model might make sense in some territories if, as is happening, countries implement lockdowns at different periods. However, some Indian states have moved faster than others towards shutting down movement of people and JK Lakshmi Cement’s closure pattern may simply reflect this.

At the international scale HeidelbergCement gave an idea to Reuters of the challenge facing the multinationals. Chief executive officer (CEO) Dominik von Achten described the start of 2020 as being strong but that construction projects were being delayed in the US and that activity in France and Spain was starting to weaken. Unsurprisingly, the company has shut down three of its plants in Lombardy at the centre of the Italian epidemic. He added that the group was holding a daily crisis call to assess the effect of the virus upon staff. He also said that the group was stockpiling cement amid the disruption. The clear warning sign was of an existential threat like that faced by the airlines whereby sales could simply stop for a three or four week period… or longer.

On the supplier side, Denmark’s FLSmidth has issued a robust plan on how it is aiming to maintain service and support for its customers. Past all the now-usual stuff such as remote working it included detail on how to support clients on site where absolutely necessary on a case-by-case basis. With regards to its supply chain it pointed out that it was confident, “that any local interruptions to our suppliers can be minimised, even when the agility of some suppliers is put to the test. We have redundancy built into the system.” To this end it emphasised the global nature of its business to ensure that it could deliver parts and equipment to its customers. It claimed that it coped with coronavirus in China due to its ‘very flexible’ supply chain but did admit to some supply chain impacts. Yet it says that production is back to approaching full capacity with workshops in Qingdao and Shanghai above 90% as they work their way through accumulated backlogs. Finally, it is also offering advice on how the company can support its customers on reducing or shutting down operations.

Other supplier comments on the situation have mainly been about protecting staff, working remotely and supporting customers through continued supply of equipment and services. Back in India, Sameer Nagpal, the CEO of refractory manufacturer Dalmia-OCL told Business Standard that the company was coping so far with the crisis with little major impact seen so far. Its raw material supply chain was dependent on China but after some minor disruption it was secure. Most of its customers are domestic, where it hadn’t reported problems so far, although this may change with the Indian lockdown. Exports were a different story as it sends around 10% of its production abroad and it has a plant in Germany. In Europe it was seeing a challenge due to supply chain disruption.

The experiences above are a snapshot of some of what is happening in parts of the industry as coronavirus disruption hits home. China’s restrictions are easing, most of Europe is in lockdown, India has started its quarantine and the US has restricted movement in about a third of its states. The current restrictions in the UK, for example, allow for construction work to continue but local media is debating the associated risks for workers. Other territories have different rules. All of this is affecting demand for cement and concrete. This in turn feeds through to producers and their suppliers. Global Cement continues to monitor the situation and wishes readers a safe passage through the pandemic.

Armenia: The Armenian government has announced that it plans to extend the duration of state duties on cement imported from Iran and several other countries until 1 July 2020. The decision was made on the basis of analysis that confirmed an extension of the customs duties was appropriate. The government said that it would continue to monitor the situation.

According to the RA Statistical Committee Armenia produced 0.59Mt of cement in 2019, 8.1% more than in 2018. The RA Customs Service reported that the country imported 0.31Mt in 2019, a year-on-year increase of 70.5%.

US: Titan America subsidiary Roanoke Cement has settled on a fine of US$3640 with the Virginia Department of Environment Quality (DEQ) for the breach of emissions regulations after a kiln gas outlet at its 1.5Mt/yr Troutville plant in Botetourt County, Virginia, recorded an average temperature of 121°C over a nine-hour period on 26 June 2019. Virginia DEQ enforcer Marvin Booth said there was ‘no documented harm to public health or the environment’ resulting from the violation.

India: Representatives from Aditya Birla subsidiary UltraTech, Ramco Cements, India Cements, JSW Cement and KCP have met with Andhra Pradesh Chief Minister Jaganmohan Reddy and other state officials to negotiate the sale of their products to construction companies working on public projects ‘at lower prices.’ The Hindu newspaper has reported that the state forecasts a year-on-year rise in its annual cement consumption of 67%, to 30Mt in 2020 from 18Mt in 2019. India Cements’ vice chair and managing director Narendra Srinavasan said that all planned infrastructure projects ‘ought to be implemented in order to bail out the industry from the turmoil it has been undergoing.’

India: The Competition Commission of India (CCI) has fined Aditya Birla flagship company Grasim Industries US40.6m for anti-competitive practices, specifically for failing to disclose its discount policy as instructed by the CCI. Accord Fintech News has reported that cement accounts for almost 50% of Grasim Industries’ profit.

UK: Parliament has voted to grant Her Majesty's Treasury powers to implement a UK emissions trading scheme (ETS) in line with the Climate Change Act (2008). Accountancy Daily News has reported that the ETS will be linked to the EU ETS ‘if such is suited to both sides’ interests,’ but, if not, will be subject to an alternative pricing mechanism. The Treasury said that “in a standalone UK ETS, additional market stability mechanisms can be implemented.”