Displaying items by tag: Government

US: Holcim US has become the first cement producer member of the Great Plains Institute’s Carbon Capture Coalition. The coalition’s 78 participating members and 23 observer organisations collaborate to build federal policy support for economy-wide, commercial-scale deployment of carbon capture and related technologies. Holcim US is currently assessing the viability of commercial-scale carbon capture, with two studies underway, at its Portland cement plant in Colorado and its Ste. Genevieve cement plant in Missouri.

Region head North America Toufic Tabbara said “Being at the forefront of developing low carbon solutions requires continuous innovative thinking and partnerships. Our efforts are most effective when we can align and join forces with other companies and organisations across industries who share this same commitment. We are proud to be part of an organisation that is similarly focused toward more efficient, innovative and sustainable practices.”

Middle East/North Africa: The World Cement Association (WCA) has called on its members in the Middle East and North African cement sectors to take new actions towards industry decarbonisation. UAE-based consultant and WCA member A3 & Co has said that companies in the region have the potential to cut their carbon footprints by up to 30% with no new capital expenditure required. The Middle East and North Africa accounted for 15% of global cement production in 2021. In the region, only the UAE and Saudi Arabia have committed to national net zero carbon targets, for 2050 and 2060 respectively.

WCA CEO Ian Riley said “There has been a lot of discussion in Europe and North America about decarbonisation roadmaps for the cement industry and good work has been done to start on this journey. However, 90% of the world’s cement is produced and used in developing countries; to impact overall industry emissions we must include these stakeholders. Cement companies in the Middle East have some low hanging fruit to take advantage of, which will lower costs at the same time as reducing CO2 emissions. At WCA we have a number of programmes that can help them realise this opportunity."

Tajikistan: The government plans to increase exports of cement to 2Mt/yr by 2024. Exports are expected to grow at 0.2Mt/yr from 1.5Mt in 2021. Local production capacity was estimated at 5.6Mt/yr in 2021 from 16 plants. Over 4.2Mt of cement was produced in 2021.

UK: UK construction recorded its highest ever quarterly total value at Euro27.5bn in the first quarter of 2022. Participants in the industry agreed Euro10.4bn-worth of construction contracts in March 2022. Analyst Barbour ABI has reported that residential construction contracts rose by 50% month-on-month to Euro4.22bn, their highest level since the Covid-19 outbreak arrived in the UK in March 2020. Chief economist Tom Hall noted a year-on-year and month-on-month increase in office construction activity as indicative of a reversal of the home-working trend of the past two years.

Hall said “While the current state of the industry is positive with lots of activity and record-breaking levels of contracts awards and planning approvals in some areas, the horizon is more concerning. Overall, the level of planning applications received in March was low and raises questions about the delivery of the government’s commitment to raise the standard of healthcare across the country and its flagship levelling up agenda.”

Indonesia: Donny Arsal, the chief executive officer of Semen Indonesia, has told the government that the ongoing war in Ukraine has negatively affected supplies of coal and kraft paper to the cement industry.

The head of the state-owned company said that the international price of coal had driven local mines to export it rather than sell it locally at capped prices, according to the Jakarta Post newspaper. This had made it more difficult for cement producers to buy coal at the lower price. The Indonesian coal index (HBA) price rose to high of US$288/t in April 2022 following the introduction of international economic sanctions but the local domestic market obligation (DMO) price is US$70/t. Around 160Mt of coal is sold at the capped price. The majority of this goes to power generation and the remaining quarter of this is made available to cement and other industries.

Arsal lobbied the government to clarify its supply policy for DMO. He said that the cement sector needs 16Mt/yr of coal. Semen Indonesia needs about half of this. However, at present, it is only receiving about 63% of its coal requirements at the DMO price.

Arsal also mentioned that imports of kraft paper from Russia had stopped since the war started. Semen Indonesia uses the paper to make cement bags. Most of its kraft is sourced from Russia. The company spends around US$68m/yr on paper. It is now switching to using a woven material instead.

Vicat’s plans to buy another 42% stake in Sinai Cement became public this week. Once completed, the France-based company should own 98% of the Egyptian company, based on previously published ownership figures. The announcement heralds a rapprochement in the relationship between the cement producer and the Egyptian government.

Last year Vicat raised a case against the government with the International Centre for Settlement of Investment Disputes (ICSID) over an argument about how it could invest in Sinai Cement as a foreign company. All seems forgiven and forgotten now with a settlement agreement signed in March 2022 between Rania el Mashat, the Minister of International Cooperation on behalf of the Egyptian government, and Guy Sidos, the chairman and chief executive officer of Vicat Group. Local press reported that the government is trying to attract more direct foreign investment. Sinai Cement reported a loss attributable to its parent company of around US$19.1m in 2021, down from a loss of US$30.3m in 2020. However, its sales rose by 63% year-on-year to US$78m.

Sinai Cement has some specific operating issues related to its geographic position in the Sinai Peninsula and ongoing security concerns. Yet its mixed fortunes also sum up some of the continuing challenges the Egyptian cement industry is facing. After years of overcapacity, the government introduced reduced cement production quotas in July 2021 and this is mostly perceived to have improved prices in the second half of the year. Vicat described the arrangement as having capped the local market at 65% of its production capacity and it said that prices recovered ‘significantly’ as a result in the second half of 2021. Cemex’s regional chief Carlos Gonzalez told local press that the move had given plants “A glimmer of hope for the return of balance to the cement market.” The company has also announced a US$20m local investment backing up this view. Not all the foreign multinational companies entirely agreed, with HeidelbergCement reporting a ‘sharp’ decline in sales volumes although chief executive officer Dominik von Achten did describe the country as ‘coming back’ in an earnings call about his company’s financial results in 2021. Solomon Baumgartner Aviles, the chief executive officer of Lafarge Egypt, was also cooler about the production cap in a press interview in October 2021, describing it as too early to assess how well the cap was working and noting that the gap between supply and demand was still large.

Vicat said in its annual report for 2021 that, “Provided no further adverse geopolitical, health or security developments occur, the current climate is unlikely to jeopardise the prospects of an improvement in the subsidiary’s profitability, which should begin to gradually occur.” The geopolitical bit was timely given that Russia’s war in Ukraine started on 24 February 2022. It also targets the latest problem hitting Egyptian cement producers: energy costs. The head of Arabian Cement told Enterprise Press that initially some producers had opted to temporarily stop production and use stocks instead to attempt to try and wait until the energy price volatility ended. However, it stayed high so the cost of cement has gone up generally. Producers are now trying to switch to using a high ratio of natural gas, such as 10%, but this is dependent on the government letting them.

The Egyptian government, for its part, is facing a decision whether to supply subsidised gas for domestic industry or to export to Europe. The backstory here is that Egyptian cement producers are facing yet another step change in fuel supply. In the mid-2010s lots of plants switched from heavy fuel oil and gas to coal. High international coal prices could be heralding another change.

Alongside this the value of Egypt’s cement exports rose by 151% year-on-year to US$456m in 2021 from US$182m in 2020. The Cement Division of the Federation of Egyptian Industries has attributed this to growth mainly on the African market. This trend continued in January and February 2022 with cement exports up by 141% year-on-year to US$104m from US$43m. The main destinations were Ghana, Cameroon, Ivory Coast and Libya.

HeidelbergCement summed up the current state of the Egyptian cement market in its 2021 annual report as follows “The development of the Egyptian cement market continues to be determined by government intervention.” What happens next is very much in the hands of the state as it decides whether to extend the production cap, which fuels to subsidise, whether to allow exports and where to invest in infrastructure projects. One variation on this theme may be local decarbonisation targets. At the end of March 2022 the Global Cement and Concrete Association (GCCA) launched a series of Net Zero Accelerator initiatives, including one in Egypt. How a country that produces more cement than it needs reduces its CO₂ emissions presents another challenge for manufacturers and the government to grapple with.

Russia: Akkermann Cement, a subsidiary of USM Holding, has acquired Kaluzhsky Tsementny Zavod (Kaluga Cement Plant) for US$111m from state development corporation VEB.RF. VEB.RF provided a loan for construction of the plant in 2011 but the borrower was acknowledged bankrupt in 2018, according to Prime News. The plant is not yet fully built, but it is anticipated that the 3.5Mt/yr facility will create 400 jobs when commissioned.

“The asset is good,” said Akkermann Cement’s managing director Alexander Ivanov. “The dry process is one of the most efficient and budget-friendly technologies for production of cement, but the conclusion of the plant’s construction will need additional investment.”

India: UltraTech Cement says it has been declared as the preferred bidder for a limestone block in an electronic auction conducted by the Karnataka government. The block is situated in Tehsil Chittapur of Kalburgi district in Karnataka next to the company’s integrated Rajashree plant. It has a total cement grade geological resource of 530Mt of limestone over an area of 7.86km².

India: A shortage of limestone in the Jammu and Kashmir union territory since December 2021 has resulted in cement plant workers being laid off in Udhampur district. The local sector has lobbied the regional government to supply limestone from state-controlled quarries to fix the situation, according to Asian News International. One cement plant employee interviewed by the news agency said that his plant had laid off around 80 workers from a total of 200 due to the shortage.

Iran: Mehdi Dosti, the governor of Hormozgan Province, says that a new 3000t/day cement plant will be built in the region. Dosti met with the head of Cement Investment Holding to discuss the project, according to the Islamic Republic News Agency (IRNA). The project is intended to increase cement production and create jobs in the province. Currently, Hormozgan Province has a 6000t/day cement plant at the Port of Khamir but cement is also imported into the region.