Displaying items by tag: HeidelbergCement
Capturing the cement carbon capture market
12 November 2014One highlight from the cement industry news over the last month was Skyonic's announcement that it has opened a commercial-scale carbon capture unit at the Capitol Aggregates cement plant in Texas, US. Details were light, but the press release promised that the unit was expected to generate US$48m/yr in revenue for an outlay of US$125m. Potentially, the implications for the process are profound, so it is worth considering some of the issues here.
Firstly, it is unclear from the public information released whether the process will actually make a profit. The revenue figures for the Skyonic unit are predictions and are dependent on the markets that the products (sodium biocarbonate, hydrogen and chlorine) will be sold into. Skyonic CEO and founder, Joe Jones, has said in interview that the sodium-based product market by itself could only support 200 - 250 plants worldwide using this process. Worldwide there are over 2000 integrated cement plants. Since Jones is selling his technology his market prediction might well be optimistic. It is also uncertain how existing sodium biocarbonate producers will react to this new source of competition.
Secondly, Skyonic is hoping to push the cost of carbon capture down to US$20/t. Carbon dioxide (CO2) capture and transportation varies between industries depending on the purity and concentration of the by-product. For example, in 2011 the US Energy Information Administration estimated the cost for CO2 capture to range from US$36.10/t for coal and biomass-to-liquids conversion up to US$81.08/t for cement plants. The difference being that capturing CO2 from cement plant flue gas emissions requires more cleaning or scrubbing of other unwanted chemicals such as mercury.
With these limitations in mind, Skyonic is placing itself in competition with the existing flue gas scrubbing market rather than the carbon capture market, since the level of CO2 removal can be scaled to local legislation. Plus, SOx, NO2, mercury and other heavy metals can be removed in the process.
Back on carbon capture, Skyonic is securing finance for a process it calls Skycycle, which will produce calcium-based products from CO2, with a pilot plant planned at Capitol Aggregates for late 2015. This puts Skyonic back amongst several other pilot projects that are running around the world.
Taiwan Cement and the Industrial Technology Research Institute inaugurated their calcium looping project pilot in mid-2013. It was last reported to have a CO2 capture rate of 1t/hr.
The Norcem cement plant in Brevik, Norway started in early 2014 to test and compare four different types of post-combustion carbon capture technologies at its pilot unit. These are Aker Solutions Amine Technology, RTI Solid Sorbent Technology, DNV GL/ NTNU/ Yodfat Engineers Membrane Technology and Alstom Power Regenerative Calcium Cycle. The project in conjunction with HeidelbergCement and the European Cement Research Academy (ECRA) is scheduled to run until 2017.
St Marys Cement in St Marys, Canada started its bioreactor pilot project in July 2014. This process uses flue gas to grow algae that can then be used for bio-oil, food, fertiliser and sewage treatment.
If Skyonic is correct then its sodium biocarbonate process in Texas is a strong step towards cutting CO2 emissions in the cement industry. Unfortunately, it looks like it can only be a step since the market won't support large-scale adoption of this technology. Other pilots are in progress but they are unlikely to gather momentum until legislation forces cement producers to adopt these technologies or someone devises a method that pays for the capture cost.
HeidelbergCement operating income rises by 10% to Euro866m in Q3
12 November 2014Germany: HeidelbergCement has reported that its operating income before depreciation (OIBD) increased by 10% to Euro866m in the third quarter of 2014 from Euro789m in the same period in 2013. It attributed the rise to price increases, declining energy prices and improvement in the performance of the building products business in North America and the UK.
"In the third quarter, we generated the best operating income since the financial crisis started in 2008," said chairman of the managing board Bernd Scheifele.
The Germany-based construction materials producer's revenue rose by 4% to Euro3.81bn. Cement and clinker sales rose by 3.3% to 23.1Mt for the quarter. For the year to date increases in profit, revenue and cement sales volumes have been broadly similar to the third quarter. However, net profit fell by 40% to Euro368m in the third quarter of 2014 due to a one-off effect related to tax expenses.
HeidelbergCement Sierra Leone cuts output due to Ebola
03 November 2014Sierra Leone: Sierra Leone Cement Corp (Leocem), a subsidiary of HeidelbergCement, has cut its cement production as the growing number of Ebola cases halts construction work across the West African country.
"Ebola has brought the economy down on its knees," said head of marketing, Modupe Taylor-Pearce. "We have seen a reduction in our overall volumes from what it was in the first half of 2014." The rate of new Ebola cases hasn't slowed in Sierra Leone, according to Bruce Aylward, the World Health Organisation's (WHO) assistant director general in charge of the response to the deadly virus. He confirmed that cases had reached 3562 and that 1037 people had died by 26 October 2014. The other two most affected countries are Liberia and Guinea.
Monthly cement production in the West African country fell to 20,890t in August 2014 from 35,280t in May 2014, according to data from the Bank of Sierra Leone. Leocem is the only cement-producer based in the country, although Dangote Cement plans to set up a production plant there.
"Demand in the second half of 2014 has been lower than the first half," said Taylor-Pearce. "Road construction seems to have stopped. Many of the roads that were in the process of being done seem to have come to a halt." Raw materials, including limestone clinker, are in short supply in Sierra Leone as importers have reduced shipments. Transportation costs have increased as five of the 14 political districts in Sierra Leone are quarantined.
It won't surprise anyone to know that cement sales have fallen in the west African countries that are suffering from the on-going Ebola outbreak. However the scale may yet be instructive for this and other crises that may affect the cement industry in the future. The local data that follows mostly comes from a report by the World Bank published in early October 2014 looking at short and medium term economic impacts, as well as Global Cement research conducted towards the Global Cement Directory 2015.
All three of the principal countries involved – Liberia, Sierra Leone and Guinea – have low gross domestic products (GDP). They do not have cement kilns but they do have grinding plants and cement import infrastructure run by both local and international firms. They also lack readily accessible limestone deposits. In the short term (in 2014) a health crisis is expected to hit manufacturing through transportation and market disruptions stemming from both direct health implications and behavioural responses.
Liberia's cement sales fell by 60% in the third quarter of 2014, a drop the World Bank attributed to causes other than the rainy season. Quarterly cement sales more than tripled in 2013 from around 10,000t to over 25,000t marking the commissioning of a new mill at the Liberia Cement Corporation (HeidelbergCement) grinding plant. Dangote also has an import terminal in the country and is building its own grinding plant. The drop in cement sales since June 2014 has nearly undone all this production growth.
Neighbouring Sierra Leone has seen a steady fall in weekly cement sales since June 2014. Similar to Liberia, it has a HeidelbergCement-run grinding plant with Dangote planning expansion soon. Guinea, which had about a sixth of the notified cases of Ebola in mid-October 2014, has seen its cement imports fall by 50% in the year so far compared to 2013.
Before readers become too depressed though, it should be considered that Nigeria has been declared Ebola free by the World Health Organisation after six weeks with no new cases. It may have been relatively expensive to contain Ebola through public health measures but the alternatives for the regional economies could have been worse. More cases are expected to arrive in Nigeria but the country has shown that Ebola can be stopped.
Immediate cement operators threatened by the epidemic include HeidelbergCement with its five grinding plants in west Africa. How an uncontrolled or high case Ebola epidemic affects Dangote's expansion plans in its 'backyard' will also be hard to predict. West Africa is the obvious place for the Nigerian cement giant to build itself up before it tackles other markets in sub-Saharan Africa that have stronger competition like South Africa's PPC. Take this market stability away and Dangote faces a direct economic threat to its growth beyond the humanitarian horror of the epidemic. What also has implications for the cement industry in Senegal, the second biggest cement producer in the region, where there are two integrated plants.
The World Bank report concludes that Liberia, Sierra Leone and Guinea could lose US$129m in GDP in a low case scenario or up to US$815m in a high case scenario. To give this some context, Sierra Leone's GDP was US$2.7bn in 2013. In a high case situation it could lose US$439m or an amount equivalent to 16% of its GDP in 2013. If and when the fight against Ebola turns, this still leaves a severe economic recession for the survivors in what is already one of the poorest countries in Africa. Cement, one of the indicators of a country's economic and industrial development, is intricately bound up in this.
Aditya Birla Group bids for LafargeHolcim assets
21 October 2014India: The Aditya Birla Group has submitted bids to purchase global assets being divested from the LafargeHolcim merger. UltraTech and other companies that belong to Birla have put in bids for cement units of Lafarge and Holcim in Brazil and the Philippines at an enterprise value of US$1.4bn. The group had identified Brazil as a major place for expansion three years ago. The Philippines was among the overseas countries where the group started operations several years ago.
Birla is competing with rival cement companies and private equity funds for the units. Germany's HeidelbergCement has teamed up with Votorantim Cimentos of Brazil while Cemex has joined hands with CRH plc. Eurocement is also in the race. Birla's move is part of its overall plan to increase its cement capacity to 70Mt/yr by early 2016 from 63Mt/yr currently.
Over 50% of Birla's revenues come from its overseas operations. According to a consultant involved with the deal, Birla will be unable to bid for LafargeHolcim assets in some of the market, including India, as a purchase will lead to monopoly in those markets.
HeidelbergCement India’s director Bernd Scheifele resigns
17 September 2014India: HeidelbergCement has announced that Bernd Scheifele has tendered his resignation from the position of director of HeidelbergCement India with effect from 10 September 2014. Scheifele remains chairman of HeidlerbergCement's managing board.
HeidelbergCement’s Hanson Building Products files for IPO
16 September 2014UK/US: Hanson Building Products Ltd, which is owned by HeidelbergCement AG, filed with US regulators for an initial public offering of ordinary shares. BofA Merrill Lynch, BNP Paribas and Deutsche Bank Securities are underwriting the IPO, Hanson told the US Securities and Exchange Commission in a preliminary prospectus on 15 September 2014.
HeidelbergCement agreed to buy Hanson plc, which includes Hanson Building, for Euro10Bn in 2007 to create the world's second-largest construction materials company. Hanson Building produces concrete gravity pipe, concrete and steel pressure pipe and clay bricks in the US, eastern Canada and the UK. However, HeidelbergCement has been aiming to offload its US and UK building products business in 2014 to have the best chance of buying cement assets that Lafarge and Holcim must sell when they merge, according to Reuters.
Hanson Building's filing included a nominal fundraising target of about Euro77.3m. The filing did not reveal how many shares the company planned to sell or their expected price. Hanson Building intends to list its common stock on the New York Stock Exchange but did not specify the symbol. HeidelbergCement, the wholly-owned subsidiary of the German cement manufacturer, is selling all the shares in the offering and Hanson Building will not receive any of the proceeds.
Hanson Building reported net income of Euro11.5m for the first six months of 2014, compared with a loss of Euro195m during the same period of 2013. Net sales, however, dropped by 47% year-on-year to Euro462m.
Germany: HeidelbergCement has reported that its profit for the second quarter of 2014 declined to Euro233m from Euro368m in the same period of 2013. However, earnings before interest and income taxes (EBIT) grew to Euro527m from Euro511m in 2013. Revenues for the quarter were Euro3.57bn, down from Euro3.59bn in 2013. HeidelbergCement's cement and clinker sales volumes rose by 4% to 22.3Mt compared to 21.4Mt during the second quarter of 2014.
HeidelbergCement announced that it plans to start a process to divest its building materials unit in September 2014 and expects to conclude the sale quickly. Potential buyers include private equity funds, not industrial enterprises, according to Bernd Scheifele, HeidelbergCement's CEO. Scheifele added that HeidlerbergCement would consider buying assets to be sold by Lafarge and Holcim, except for assets located in the UK and Germany.
UK: The construction industry slow-down that started in 2008 led to Hanson Cement, HeidelbergCement's UK subsidiary, laying off 70 employees at its cement plant in Padeswood, Flintshire, Wales. At the time, Hanson considered closing the plant, but instead ran at half capacity in the hope the situation would improve. It has now submitted plans to Flintshire council for a new production line, which the company said would create 35 new jobs, following a building industry upturn.
"It's a good news story considering we've gone through such a depressed period," said Hanson's David Weeks. "We have three plants in the UK; one in Padeswood, one in Lancashire and one in Lincolnshire. We only really needed two and Padeswood would probably have been the one to go. But we decided to hang on in and now we're confident that we'll get Padeswood up to full capacity once again." Hanson Cement said that work will start immediately if it gets the go-ahead.
Bosnia and Herzegovina: Bosnian cement factory Tvornica Cementa Kakanj (TCK) plans to invest Euro10.2m in the 2013 - 2018 period towards environmental upgrades. In 2014 TCK plans to invest Euro2.55m on modernising its cement mills and dust collecting system. The company is majority-owned by Dutch-based CEEM Investment, a subsidiary of HeidelbergCement.