Displaying items by tag: Government
Vietnam: The General Statistics Office (GSO) recorded national cement production volumes of 69.9Mt during the first seven months of 2023. This corresponds to a decline of 5.8% from seven-month 2022 levels. Việt Nam News has reported that July production was 10Mt, down by 2.9% year-on-year.
Throughout 2022, Vietnam produced 116Mt of cement, and increased its production volumes by 5.8% year-on-year.
India: Local press has reported that a 'leading Indian conglomerate' may have concluded a deal to enter the cement industry in the union territory of Jammu and Kashmir. The Kashmir Monitor newspaper has reported the value of the deal as US$30.4m.
At present, the Jammu and Kashmiri cement sector is comprised of state-owned J&K Cements and five private companies. J&K Cements previously ceased production at its 400,000t/yr Khrew cement plant in Pulwama amid 'financial difficulties.' It has since sought a buyer for its business.
Vietnam government issues directive over management of state assets in the construction industry
28 July 2023Vietnam: The government has directed state-owned businesses, including Vietnam Cement Industry Corporation (Vicem), to take measures to mitigate potential losses of state assets in construction. The Vietnam Investment Review newspaper has reported that a recent audit concluded that companies' equitisation processes created scope for such losses within the sector.
Holcim Deutschland secures government funding for Höver cement plant carbon capture project
25 July 2023Germany: The Ministry for Economic Affairs and Climate Action has approved funding for Holcim Deutschland's Höver cement plant carbon capture project. The test phase of the project is scheduled to commence in early 2024. Holcim Deutschland, together with project partners Cool Planet Technologies and Helmholtz-Zentrum Hereon, carried out preliminary testing in 2022. They reported 'positive' results in May 2022.
Plant manager Stephan Hinrichs said "The funding commitment from the federal government is great news for Holcim and our partners. We are doing real pioneering work for the entire cement industry, and look forward to the next step on our way to becoming a climate-neutral company."
Imperial College London team secures government funding for carbon negative cement development
20 July 2023UK: A team at Imperial College London has won a US$1.27m grant for its research into developing carbon negative cement from silica. The research won the Department for Energy Security and Net Zero (DESNZ)’s Carbon Capture, Usage & Storage (CCUS) Innovation 2.0 competition. The Imperial team sources its silica from natural olivine. It says that the compound behaves in the same way as other supplementary cementitious materials. Meanwhile, magnesia from the decomposition of the olivine can serve as a carbon sink in the form of magnesium carbonate. It, in turn, could serve as a raw material for concrete block production.
The DESNZ’s Net Zero Innovation Portfolio, of which the CCUS Innovation 2.0 competition is a part, has a budget of US$1.29bn.
Update on Indonesia, July 2023
19 July 2023The government in Indonesia made building new cement capacity harder this week. The new rules are intended to strengthen the local sector in the face of a utilisation rate of only 53%. A moratorium policy and/or new investment arrangements have been placed on new cement plant projects. Instead, companies have been asked to focus on the regions of Papua, West Papua, Maluku and North Maluku instead, where demand for cement is higher than what the local production base can produce. Ignatius Warsito, the Director General of the Chemical, Pharmaceutical and Textile Industry at the Ministry of Industry, said that the new rules would be reconsidered once the capacity utilisation rate reaches 85%.
Other measures the government is also looking at include increasing exports of cement, changing regulations related to the coal Public Service Agency (BLU) and improving overland transport. On that last point the authorities and the cement producers are looking at how logistics costs can avoid rising in the face of the impending Zero Over Dimension Over Load (ODOL) policy. Proposals the sector has submitted include implementing a multi-axle policy for trucks and improving the quality of certain roads to allow for higher capacity vehicles.
As one of the government’s focus areas - coal - suggests, fuel prices have been a headache for the cement sector in recent years. Warsito noted that international coal prices started to rise in late 2020. This was likely due to the logistical mess that the coronavirus pandemic caused to the global economy. Higher coal prices caused a “significant” effect on the cement industry through both higher production costs and restrictions on supplies. One irony to note here is that Indonesia is one of the world’s leading coal producers. Donny Arsal, the head of Semen Indonesia, told the government in 2022 that the war in Ukraine had enticed local coal companies to export more coal due to the rising international price. At this time he lobbied the administration to use its local domestic market obligation (DMO) subsidy to better serve the cement sector by giving it more coal at a fixed price.
Graph 1: Cement demand and capacity in Indonesia. Source: Semen Indonesia and Indonesia Cement Association.
Overcapacity has been a recurring feature of the Indonesian cement market since at least the 1990s as the demand and capacity have grown sometimes out of step. The capacity utilisation rate reached 90% in the early 1990s only to fall to 50% by the end of that decade due to the Asian financial crisis. More recently Holcim left the market in 2019 when it sold its business to the Semen Indonesia. The state-owned company consolidated more than half of the country’s cement production capacity at the time. According to its data for the first quarter of 2023 it has a 51% market share and a 46% production capacity share. It also said that 92% of local demand was catered for from four of the country’s 14 producers, namely: Semen Indonesia; Indocement; Conch; and Merah Putih.
A recent study by the Jakarta Post newspaper suggested that after a poor first half in 2023, cement demand was expected to rebound and create modest overall annual growth by the end of the year. The key reasons for this outlook are increased government infrastructure spending, ongoing work on the new capital city Nusantara and anticipated price stability. The new city project, for example, is expected to require 1.6Mt of cement in the 2022 - 2024 period. Risk factors, of course, abound such as a global economic slowdown, financial problems at some of the government-owned construction companies like Waskita Karya and new capacity. A new 8Mt/yr (!) plant owned by local company Kobexindo and China-based Honshi Cement, for instance, is scheduled to start operation in the second half of 2023 in East Kalimantan. Even though the government says that the new unit will export 90% of its production, it will place pressure on other existing sites hoping to increase exports.
The country’s largest cement producer being majority owned by the government is a pertinent feature here given that the same government has also effectively banned new capacity. Semen Indonesia’s earnings before interest, taxation, depreciation and amortisation (EBITDA) have fallen each year consecutively since 2020. As mentioned above overcapacity has long been present in the local sector and recent events have made it worse. Yet, the companies that are likely to benefit the most from a block on newer, competitive cement plants are likely to be the established players. That said, though, with the utilisation just above 50% and new projects like the Kobexindo-Honshi plant on the way, the government likely feels it has to take some form of action. Other tools at its disposal include a national carbon exchange set to launch in September 2023. Power companies will participate from the start with cement producers anticipated to follow at a later stage. Despite the uncertain short-to-medium term outlook the cement sector in Indonesia remains one of the largest in the world with plenty of business to be done. Denmark-based FLSmidth was clearly mindful of this when it opened a new office in Jakarta in April 2023.
Tajikistan: The government ordered the immediate shutdown of Tajikcement’s Dushanbe cement plant ‘due to serious air pollution’ on 18 July 2023. Asia-PLUS News has reported that the suspension will likely last until the end of 2023. The government has indicated that an upgrade to the plant’s equipment would be necessary for it to be able to reopen. It previously stated that the plant would have to shut down altogether and relocate to a new site, to be replaced by a confectionary factory.
Malaysia: YTL Cement and Thailand-based SCG have signed a memorandum of understanding with Innocement, a joint venture between the Sarawak Economic Development Corporation (SEDC) and the Bintulu Development Authority (BDA). The agreement is intended to strengthen the cement supply chain, secure the reliability of supply and stabilise prices in the region, according to the Star newspaper. In January 2023 representatives of the SEDC and the BDA had visited SCG in Bangkok. At this time it was reported that a joint venture between the SEDC and the BDA wanted to import 0.5 – 1Mt/yr of cement from SCG.
Salonit Anhovo to become Alpacem Cement Slovenia
19 July 2023Slovenia: Salonit Anhovo has announced a planned name change to Alpacem Cement Slovenia. STAkrog News has reported that the inclusion of the word ‘Slovenia’ will require special government approval. The company said that Alpacem better reflects its ownership, while Cement reflects its core activity.
Salonit Anhovo is 75% owned by Austria-based Wietersdorfer Alpacem and 25% owned by Italy-based Buzzi.
Government to inspect Sinji-Pirim Cement's Sinji-Pirim cement plant over smoke emissions
18 July 2023Kyrgyzstan: The Ministry of Natural Resources, Environment and Technical Supervision has requested an inspection of Sinji-Pirim's Sinji-Pirim cement plant in Osh Region's Aravan District. Central Asia News has reported that a video emerged on social media showing smoke rising from pipes at the plant on 6 July 2023.
Sinji-Pirim Cement has operated the Sinji-Pirim cement plant since March 2018.