Displaying items by tag: Italgen

Italy: Italian Prime Minister Matteo Renzi officially switched on the new kiln at the Italcementi cement plant in Rezzato on 5 November 2013. The 1Mt/yr plant has undergone an extensive production and environmental upgrade that cost Euro150m.

"The new Rezzato plant is the best expression of the Group's strategy: industrial development combined with a firm commitment to innovation and environmental performance," said Italcementi CEO Carlo Pesenti.

He added that the Rezzato upgrade was part of the Pact for the Environment signed by Italcementi and the Ministry in July 2009, which set out an investment programme for the renewal of our industrial network and attainment of ambitious environmental targets. Other targets include Italgen, the Italcementi Group company that produces energy entirely from renewable sources. The Italcementi investment plan has also seen a technical upgrade at the Matera cement plant.

Products manufactured in Rezzato include white cement and the basic material for a new biodynamic cement to be used to construct the external structure of Palazzo Italia at Expo 2015. The Rezzato production facility currently employs 118 people and provides work for an additional 160 people in ancillary industries.

Announcements this week have highlighted the situation in the Egyptian cement industry, which has been bearing the brunt of increasing fuel scarcity for a while now. At first glance this appears bizzare in what is an oil-rich country but a government drive to make revenue from exports has constricted supply and led to a massive increase in fuel costs. Since the middle of 2012 Egyptian cement producers have faced a gradual decline in supplies, massive hikes in price due to the curtailment of subsidiaries and a scramble for 'alternative fuels'.... like coal!

While heavy fuel oil prices were on the rise as early as 2012, it is in 2014 that the cement industry has really begun to feel the brunt of supply cuts. January and February saw the Egyptian Natural Gas Holding Company (EGAS) cut its allocation of gas to cement producers by 35%, enough to significantly raise competition for the remaining allocation. By May 2013 this has resulted in interruptions to gas supply that closed some plants and slowed down many more. Producers were trumpeting coal as the big new 'alternative' fuel and conversion projects were announced in quick succession. Worse was to come. In June 2014 saw EGAS cut its supply to cement producers by a further 61%.

This relatively rapid turn around in fortunes has been highlighted by two announcements from the industry this week, both from the Italcementi subsidiary Suez Cement. Firstly, Suez updated the industry on its coal conversion project at its Kattameya plant. Both the timescale (completion by September 2015) and the price tag (US$23m) demonstrate the scale of the upset caused by the strangling of the gas supply. The cost implications of this investment and similar investments at three other Suez Cement plants are significant.

Secondly, Suez has announced that ItalGen (another Italcementi subsidiary) has secured a loan to construct a 200MW wind farm at Gabel El Zeit, near Hurghada, to supply its production sites with electricity. With a future target to produce 400MW (40% of Suez's electrical energy needs), this project (mooted since 2008) is a huge departure from established electrical energy sources in Egypt. It is an even larger project, estimated at US$220m. Assuming a ~US$25m price-tag for each of the four coal conversion projects, this brings Italcementi's total current Egypt 'energy stability spend' to a whopping US$320m. It is betting that the oil price trend is not going to reverse any time soon. As prices continue to rise it will be interesting to see what other solutions Egpytian cement producers come up with. The conversion of plants to take alternative or waste-derived fuels and the use of solar installations for plant electrical needs are other ways forward.

All the while, it is important to remember that Suez's projects (and those of other producers) will not be ready for several months at least. It is also important to remember that the same cement producers that are 'suffering' now have enjoyed the subsidies for many years. This makes casualties as the producers adjust to the new market realities a distinct possibility.

Egypt: An official source in Egypt's Ministry of Electricity revealed that ItalGen, one of Italcementi Group affiliates, plans to build a 200MW wind power plant to increase its production capacity to 320MW. The plant will cost around US$220m. The project will be the first privately-built wind power plant to supply energy to plants of Suez Cement, an Italcementi subsidiary. Production capacity for the first phase would be 120MW, which would increase to 400MW in the future.

Egypt: The Egyptian Electricity Transmission Company has signed a contract with Italgen, a subsidiary of global cement producer Italcementi Group, to produce electricity from wind energy. The contract authorises Italgen, which has been studying the possibility of incorporating wind technology since 2008, to become the first private investor to enter the Egyptian National Grid and construct a wind energy park in the area of Gulf El-Zeit, according to a statement.

Electrical energy generated from the wind park will be transmitted to plants run by Suez Cement, another Italcementi subsidiary, and will help in the reduction of CO2 emissions. The first phase in the project will represent an investment of around Euro120-130m. It will equate an installed capacity of 120MW and is expected to cover around 40% of Suez Cement's power needs. After the completion of the second phase, electrical energy is estimated to reach a capacity of 400MW.