Displaying items by tag: Iran

Iraq: Iraq intends to remove a ban on import of Iranian cement according to Abdolreza Sheikhan, the secretary of Iran's Cement Industry Employers Association. In comments reported by the Fars News Agency, Sheikhan said that Iranian and Iraqi officials had held several meetings on the issue.

He added that Iraq had banned cement imports due to security problems in the country and the falling oil price. Iraq’s cement demand is currently met by its own domestic production. Previously, Iraq took 60% of Iran’s exports of cement. However, in the last year Iraq increased its import tax on Iranian cement to US$13/t from US$4/t.

Iran: Iran cement exports fell by 20% year-on-year to 18.5Mt in the financial year that ended on 20 March 2016 according to Abdolreza Sheikhan, secretary of Iran's Cement Industry Employers Association. In comments to the Islamic Republic News Agency Sheikhan blamed the fall in exports on security problems in the region including Iran’s main export market in Iraq. In the previous financial year Iraq represented 60% of Iran’s export market for cement.

Sheikhan noted that Iraq increased its tariffs on imports of cement to US$13/t from US$4/t in the previous year and raised tariffs to US$72/t in the latest financial year. He added that Azerbaijan had increased its cement production capacity that had also reduced its reliance on Iranian cement exports.

Iran/Pakistan: An Iranian cement producer has revealed plans that Pakistan will help Iran export cement to East Asian countries. Morteza Lotfi, head of the Fars & Khuzestan Cement Company, has said that Iran will supply cement to Pakistan and in return Pakistan will export the same amount of cement to its neighbouring countries under Iran’s name, the Islamic Republic of Iran Broadcasting (IRIB) has reported.

Lotfi said that Pakistan has the infrastructure to export cement to its neighbours but it doesn’t produce enough cement to meet its domestic consumption. Therefore the two countries agreed on a cement swap. He added that Iran’s annual capacity for producing cement is about 80Mt/yr. Pakistan produces about 40Mt/yr. According to the agreement, Iran will also launch a clinker grinding unit in Pakistan.

Twenty-four countries, including Iraq, Azerbaijan, Turkmenistan, Afghanistan, Russia, Kazakhstan, Kuwait, Pakistan, Qatar, Turkey, the United Arab Emirates, Georgia, Oman, India and China are among the main buyers of Iran’s cement. Tehran exported 19Mt of cement and clinker in 2014.

Iran: Jovein Cement has won an award for most environmentally conscious cement manufacturer in Iran.

Reasons for winning the award included: the cement producer's efforts to extend the lifetime of its kiln refractory bricks by optimising the rate of production and thereby the energy consumption of natural gas; the recycling of refractory materials; investing in installing an online pollution analyser on the plant's main exhaust; using electro-filter technology to reduce the amount of cement dust and other general pollution released to the neighbouring community.

Future plans by Jovein Cement include the installation of a waste heat recovery system to recycle up to 30% of the heat generated by the plant. As an ancillary benefit the plant will also be able to heat water used at the site.

Iran: Iran's Research Institute of Petroleum Industry (RIPI) has announced that it has broken a US monopoly in the production of deepwell cement plugs.

Previously, only American companies manufactured the plugs used for solving numerous deepwell problems like lost-circulation, sidetracking or directional drilling, according to RIPI. "The technology is of great significance in oil and gas drilling projects," said Talat Khalkhali, Director of a project to develop the technology at RIPI. She said that the plugs are used to inject wellbore fluids and slurries during cementing operations in order to prevent them from mixing together. "Sidetracking incurs serious costs on cementing operations and the new plugs help reduce the cost to a considerable proportion," said Khalkhali, while adding that properly placing the designed cement plug helps reduce non-productive rig time, minimises wasted material and mitigates the need for additional cementing services.

National Iranian South Oil Company tasked RIPI with carrying out studies for developing and formulating the plugs by employing domestic experts in 2010. RIPI reverse-engineered cement plugs produced by top producers in the US and could manufacture them after six years of consecutive work. The high pressure, high temperature (HPHT) plugs can be used for wells up to 4500m deep. According to Khalkhali, their American rivals can only be used for up to 2500m deep wells.

The Iranian plugs have been tested several times at numerous wells across the country at various depths and have proven successful.

We're going to start 2016 with a list of some of the worst things that could happen to the global cement industry this year. The idea is taken from Bloomberg Business who ran 'A Pessimist's Guide to the World in 2016' in mid-December 2015. For some of these suggestions there will be both winners and losers. Remember: forewarned is forearmed.

Continuing low oil prices hit Russia and other petro-propped economies
Cheaper fossil fuels should mean cheaper energy bills for cement producers. However, that saving must be compared to the overall cost to the global cement industry of poor construction markets in Russia and other economies that rely on oil. For example, Russian construction output fell by 4.5% to US$81bn in 2014 according to PMR. It is possible that the fuels bill saving worldwide is greater than the contraction of certain construction markets. If it is though, is this a price that the cement industry is willing to pay?

China enters a recession
The long-expected Chinese 'hard landing' seems closer than ever, as economic growth slows. It hasn't happened yet (according to official figures at least) but the 7% drop in Chinese markets on 4 January 2015 gives observers the jitters. The financial reverberations from a full Chinese financial crash would be felt around the world, derailing emerging economies due to reducing demand for exports and commodities. Naturally, construction markets would suffer. This would add to the woes currently being experienced by Brazil, Russia and South Africa. The other worry for the cement industry specifically might be the complications from a desperate Chinese industry trying to flood the outside world with even more of its products and services, including lots of cement.

Climate change impacts cement plants
Normally when it comes to climate change the cement industry worries about the effects of carbon taxation and pollution controls. However, media reporting about flooding in the UK in late December 2015 and strong El Niño effects elsewhere makes a pessimist wonder about the effects of hotter and wetter weather upon the infrastructure of the industry. The cost to repair the flooded Cemex UK South Ferriby cement plant in 2014 was rumoured to run to Euro14m and production stopped for a whole year. Costs like these are something the industry could do without.

International sanctions remain in place for Iran
Hoping that lifting economic sanctions from Iran will boost the fortunes of multinational cement producers and equipment manufacturers may be wishful thinking. Yet if the sanctions stay in place due to deteriorating relations between Iran and Saudi Arabia then nobody can discover what opportunities there might be in the world's fourth largest cement producing nation. Of course Iran's geographical neighbours across the Gulf (and in Pakistan) might be hoping that the sanctions stay in place for a very long time indeed.

Sub-Saharan Africa builds production capacity too fast
Multinationals and local cement producers alike are scrambling to build cement plants in sub-Saharan Africa. Demand for cement and low per capita consumption suggest that it is a clear investment opportunity as development kicks in. However, we have already reported on scraps between local cement associations and importers from other continents. If the cement producers build capacity faster than these countries develop, then a crash can't be too far fround the corner and everybody loses.

The UK leads an exodus from the European Union
For the cement industry a UK exit, to be voted on later in 2016, from the European Union (EU) isn't necessarily a bad things. What would be negative though is a badly handled exit process as vast swathes of trade legislation is renegotiated. What a 'Brexit' might initiate are further exits from the EU, leading to further trade disruption on a larger scale. None of this would aid Europe's economic recovery in the short term.

US Presidential elections slow the construction market
Irish bookmaker Paddy Power is currently placing odds of 9/2 for Donald Trump to be elected the next US president in late 2016. He's the second favourite candidate after Hillary Clinton despite not even having been nominated as the Republican party's presidential candidate yet. Whoever becomes the next president, the political uncertainty that occurs as the election progresses may impact upon the US construction market. It would be unfortunate to discover that the sector is weaker than expected if, say, the election rhetoric turns nasty.

Next week: reasons to be cheerful.

Happy New Year from Global Cement!

Iran: About 35% of Iran's cement kilns, or 30 – 35 of a total of 97 kilns at 71 cement plants, are not working due to the gas shortage and technical problems, reported Abdolreza Sheikhan, Secretary of Iran's Cement Industry Employers Association on 2 January 2016.

Iran's cement sector is suffering a gas shortage, according to Sheikhan. He said that the country's cement output has decreased by 10 – 12% in 21 March 2015 – 21 November 2015. Sheikhan has forecast that Iran's annual cement output will fall by some 12% compared to the preceding fiscal year, which ended on 21 March 2015. During the year, Iran produced over 61Mt of cement.

The National Iranian Gas Company has stopped supplying gas to a number of cement plants due to a wave of cold weather. However, the ongoing problem is not due to output shortage, but because of a delay in inaugurating a projected compressor station, according to Iranian media. It was already planned that the country's gas transmission capacity would increase by 80Mm3/day in 2016 by installing five compressor stations en route to the transmission pipeline, but the stations have not become fully operational yet.

Here are the major stories from the cement industry in 2015 as the year draws to a close. Remember this is just one view of the year's events. If you think we've missed anything important let us know via LinkedIn, Twitter or This email address is being protected from spambots. You need JavaScript enabled to view it..

Will the year of the mega-mergers pay off?
2015 showed a global cement industry that was consolidating. Amongst the multinational producers Lafarge and Holcim finished their merger and HeidelbergCement announced that it was buying Italcementi. Yet alongside this international trend the large Chinese cement producers, who represent over a quarter of the world's production capacity, have continued their own-government-favoured consolidation. The on-going boardroom scuffles at Shanshui have been a lively example of this.

Where this will leave the cement industry as a whole in 2016 is uncertain but mergers and consolidation are no 'magic bullet' for difficult market conditions. After the fanfare subsided from the launch of LafargeHolcim the first quarterly report emerged in late November 2015 reporting falling net sales, net volumes and profit markers.

BRICing it – growth stalls in Brazil, Russia, India and China
The economies of the BRIC nations – Brazil, Russia, India and China – have all suffered in 2015. Brazil and Russia are enduring recessions. Growth in China and India is slowing down. All of this has a knock on in their respective construction sectors.

Over in China, we report today that production capacity utilisation is estimated to be 65% and that cement companies lost US$2.63bn in the first nine months of 2015. The same source says that at least 500Mt/yr of production capacity needs to be eliminated. That represents nearly a third of Chinese total production capacity or about an eighth of global cement production capacity.

Multinationals African plans accelerate
One consequence of all these international mergers is the transformation of the situation in Africa. Suddenly LafargeHolcim has become the biggest cement producer on the continent, followed by HeidelbergCement, Dangote and PPC. Africa becomes the big hope for the multinationals as established markets continues to flounder and growth in Asian and South American markets slackens. Perversely though, should African development growth slow it may cast a poor light on the mega-mergers of 2015 in the coming years.

Dangote Cement is growing fast and it may overtake HeidlebergCement soon as the second largest cement producer in Africa. Yet it may not be plain sailing for the Nigerian company. As we report today, sources in Gambia say that Dangote's plans to open a cement plant are on hold in part to protect its domestic suppliers.

The Gambian government has denied a licence to Dangote to open a cement plant. Dangote has built its empire in recent years by forcing out cement importers from Nigeria. As it expands in other countries in Africa it may now be facing a backlash to playing the nationalist card at home as other countries too desire 'self-sufficiency' in cement production.

Iran shakes off the sanctions
In July 2015 Iran and the P5+1 countries agreed to lift trade sanctions from Iran. The implications for the local cement industry are immense given that the country was the joint-fourth largest producer in 2014, based on United States Geological Survey data. Remove the sanctions and, in theory, the local economy should boom leading to plenty of construction activity. Notably, at the launch of LafargeHolcim the new CEO Eric Olsen was asked for the new group's position on Iran. It didn't have one but this will change.

China expands along the Silk Road
China's cement industry may be suffering at home but it has been steadily expanding in Central Asia. Notably Huaxin Cement has plants in Kazakhstan and Tajikistan and it has new projects in the pipeline. Business may be down at home but steady advancement abroad may offer the Chinese cement industry the lifeline it needs.

Cop out at COP21?
And finally... The 2015 Paris Climate Conference announced a diplomatic coup d'etat in December 2015. However, it apparently forgot to include any binding targets. The Cement Sustainability Initiative (CSI) pre-empted the decision by announced its aim to reduce CO₂ emissions by clinker producers by 20 - 25% by 2030... Provided the entire cement industry follows its lead. Cement plants burning vast swathes of dirty fossil fuels may not have to worry quite yet.

For more a more detailed look at trends in the cement industry check out the Global Cement Top 100 Report in the December 2015 issue of Global Cement Magazine.

Global Cement Weekly will return on 6 January 2016. Enjoy the holidays if you have them.

Iran: The National Iranian Gas Company has stopped supplying gas to a number of cement plants due to a wave of cold sweeping the country.

As gas consumption has peaked in the recent cold days, some cement plants, including those in the west of the country, have stopped receiving gas, according to Abdolreza Sheikhan, Secretary of Iran's Cement Association. He complained that with the shortage of gas, the plants cannot use the heavy fuel oil mazut either because a government law to provide the factories with mazut at the same price as gas has not been implemented. Despite the fact that the cement plants store enough mazut to run for 7 - 10 days, they are not using their reserves because they are not sure if they will receive mazut as the law has stipulated. Sheikhan said that, when the plants stopped working for 20 days under similar circumstances in 2014, the Oil Ministry refused to pay them from the income it had made by economising on gas.

Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has said that the growth in the domestic economy has supported overall growth in the cement industry. However it added that the industry has had to approach various decision makers to stop the influx of Iranian cement into Pakistan from Iran via Balochistan. The APCMA said that the industry needs a safeguard mechanism to be put in place to stop the adverse effects of cement smuggling into the country. It stated that the government should impose a 20% Regulatory Duty for import of cement in addition to the current customs duty.

The APCMA spokesperson added that, due to the high cost of doing business in Pakistan, the country's cement industry is losing competitiveness to other countries such as Iran, the UAE and India. The industry has appealed for reduction in energy costs, removal of taxes imposed on gas, a reduction of custom duty on coal to zero and an additional incentive of 5% on export of cement by sea.

Statistics indicate that the cement sector is now almost completely dependent on domestic sales, the share of which has increased to over 80% of total cement sales compared to just 50% in 2008 - 2009, as domestic sales continue to increase, while exports are showing constant decline. Cement dispatches to domestic markets during the month of October 2015 were 2.6Mt compared with 2.1Mt during October 2014, an increase of 24% year-on-year.