Displaying items by tag: Government

Cement producers in Bangladesh received a surprise at the start of June 2023 when the government budget proposed increasing the duty on imported clinker. The Bangladesh Cement Manufacturers Association (BCMA) reacted this week by calling for the duty on clinker to be reduced, while also calling for the same for a non-adjustable advance income tax (AIT) applied to associated imports and sales.

During a press conference, reported upon by the Financial Express newspaper and other media, BCMA president Alamgir Kabir said that the customs duty on key raw materials for the sector had previously been around 5% of the import value. However, he argued that the new suggested increased tariff was “disproportionate” because it placed the burden at 12 - 13%. He urged the government to treat the cement sector as a "priority sector" given that it was facing higher prices generally due to the aftermath of the Covid-19 pandemic, the energy shocks from the Russian invasion of Ukraine and negative currency exchange effects.

The BCMA’s latest lobbying call may sound familiar because it follows a similar battle against import charges from late 2022. A supplementary duty was introduced in November 2022 when the National Board of Revenue (NBR) changed the way limestone was coded in response to a significant increase in imports from 2020. At the time, the price of limestone imports reportedly nearly doubled. The BCMA may have won this battle because in March 2023 the NBR withdrew its supplementary duty. It did require that importers submit to further scrutiny including an updated Import Registration Certificate and various tax related requirements.

The timing of the NBR’s decision to relax the limestone duty is telling given that the previous month or so six of the country’s seven publicly listed cement producers reported either falling profits or losses for the second half of 2022 or the year as a whole. Only LafargeHolcim Bangladesh bucked the trend with an increase year-on-year in its annual profit after tax in 2022, although it attributed this to 95% volume growth in its aggregates business.

As discussed previously a characteristic of the cement sector in Bangladesh is that the country has no domestic limestone reserves. It all has to be imported. Arusha Ahmed Khan, Shun Shing Group presented a summary of the national industry at the Global Slag Conference that took place in early June 2023 in Düsseldorf. The country has two integrated cement plants and 36 grinding mills operated by 31 companies with a total capacity of 84Mt/yr. At present around 14Mt/yr of new cement grinding production capacity is planned by UK Bangla Cement, MI Cement, Confidence Cement and Dubai Bangla with commissioning dates expected from mid-2023 to mid-2025. Khan revealed that the government switched from British to European standards in the early 2000s leading to a high level (95%) of blended cements on the market. Use of slag cements has grown as more producers commission vertical roller mills and more uptake of slag and other blended cements using secondary cementitious materials (SCM) is expected in the future.

A key vulnerability for a grinding-heavy cement sector, like the one in Bangladesh, is any burden on imports such as logistic costs, currency exchange effects and government tariffs. Sure enough each of these examples has been reported locally. The government says that its proposed higher import tariff on clinker is the first such change in a decade. Cement producers have reacted, predictably, in a negative manner. Whether the authorities go ahead with the planned increase and how well the cement sector could absorb it remains to be seen. There may never be a good time for a tax rise but the BCMA has been able to present the current period as being especially bad.

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Switzerland: The UN Secretary General, António Guterres, addressed a meeting of the Global Cement and Concrete Association (GCCA) in Zürich, Switzerland, on 13 June 2023. Guterres reiterated the role of cement as 'fundamental to building a better world.' He called on GCCA members to realise the association's 2050 Net Zero Roadmap in order to limit the rise in global temperatures to 1.5°C.

Guterres said “Science tells us that requires cutting global greenhouse emissions by almost half by 2030. That means taking a quantum leap in climate action – and slashing global emissions. Starting now.”

GCCA Thomas Guillot said “We applaud all the action our members are taking to implement carbon-cutting measures, and the latest data show emissions are coming down. But many challenges remain, which we must overcome, if we are to achieve net zero, including enabling polices and regulations from governments across the world which often don’t yet exist.” He added "I urge every manufacturer across the world who has not yet done so to join our pledge to eliminate emissions by 2050, But I also implore all governments to work with our essential industry, to deliver the policy framework that can create the favourable conditions to unlock the transition.”

Bangladesh: The Bangladesh Cement Manufacturers Association (BCMA) has called for a 60% cut to duties on clinker imports, to US$1.84/t from US$4.61/t. The Financial Express newspaper has reported that BCMA members are struggling with high shipping costs and supply issues due to Russia’s war in Ukraine.

The Bangladesh government published plans to raise the duty on imports of clinker by 40% to US$6.46/t in its 2023 budget on 13 June 2023.

India: Dalmia Bharat has announced a capacity target of 120Mt/yr by the end of 2031. The Business Standard newspaper has reported that the producer will make total investments of US$2.31bn in its on-going growth drive. The sum includes US$723m invested in the acquisition of Jaypee Group's 9.4Mt/yr cement business in December 2022. Dalmia Bharat's eventual investments in erecting new capacity are estimated at US$1.09bn, US$485m (44%) of it in its North Indian cement business.

CEO Puneet Dalmia said “We are executing the largest capital expenditure in our history.” Regarding the Jaypee Group deal, Dalmia said "The acquisition will give us access to Central India’s and North India’s markets and we would look for more acquisition opportunities in the mid segment. We expect the industry to consolidate further in the coming years. India will invest US$1Tn in infrastructure in the next decade, and that will create a sizeable demand growth for cement.”

Sweden: Nordkalk has produced lime at its Koping lime plant using 30% biofuel as alternative fuel (AF). The producer now aims to increase the substitution rate to 50%. Nordkalk subsidiary Kalkproduktion Storugns recently began trialling 100% liquid biofuel substitution in continuous operations at its Larbro lime plant. ENP Newswire has reported that both projects are part of a CO₂ emissions reduction initiative in partnership with the Swedish Energy Agency and Umea University.

US: Ash Grove Cement has won funding for a US$15.2m front-end engineering design (FEED) study for a carbon capture installation at its 2Mt/yr Foreman cement plant in Arkansas. Parent company CRH said that the study will run for 24 months from its date of commencement. The project team also includes consultancy and research firms Advanced Resources International and Crescent Resource Information, as well as non-profit interstate policy organisation Southern States Energy Board. Equipment suppliers will include France-based industrial gases company Air Liquide and energy company Sargent & Lundy, while electricity provider Talos will participate as an energy sector stakeholder.

The Foreman cement plant carbon capture FEED study is one of eight projects selected by the US Department of Energy to receive part of a US$189m funding pot for carbon capture demonstrations across US industry.

Türkiye: Marmara Çimento has secured environmental clearance to build a new cement plant at Çiftalan in Istanbul Region. PortsEurope News has reported that the plant is associated with a US$3.08m port construction project called the Çiftalan Marmara Cement Port project. Marmara Çimento submitted plans for the project in December 2021. The planned port will have sufficient berth for two 200m vessels to dock.

Marmara Çimento says that the upcoming Çiftalan plant will supply cement for use in the Kanal Istanbul Black Sea-Marmara shipping canal project.

Romania: Holcim Romania says that it has received Euro15.7m-worth of funding from the Romanian government. Romania Insiders News has reported that the company declined comment on its intended use of the funds.

Holcim Romania controls 3.5Mt/yr-worth of integrated production capacity across three cement plants in Argeș, Bihor and Cluj counties.

India: Shree Cement has won an auction for the Chandrapur limestone mine in Maharashtra. The mine has reserves of 50Mt of limestone, and is equipped to meet the raw materials consumption of a 1.5Mt/yr integrated cement plant. The mine occupies a 105 hectare site close to the Chandrapur and Warora railheads, 200km from Nagpur. Shree Cement will reportedly consider building new sidings to connect the quarry to the national rail network.

The Economic Times newspaper has reported that Shree Cement bid to pay taxes of 27% of the value of limestone extracted from the quarry, in addition to mining royalties. The local price of cement-grade limestone was US$5.76/t in May 2023.

India: Local people have launched a protest outside Wonder Cement's Kherwas grinding plant in Madhya Pradesh. The Free Press Journal has reported that the protestors are requesting that the company provide more jobs to people from the plant's host community. They stated their intent in memoranda submitted to the plant management and the local government. Local rules require companies operating plants in the area to appoint applicants from the local community to 75% of plant jobs.

Wonder Cement is a subsidiary of Rajasthan-based RK Group.