Displaying items by tag: Plant

Italy: Colacem’s Spoleto cement plant has been idled. The kiln has been shut down and quarrying work suspended, according to La Nazione newspaper. The integrated plant was acquired by Colacem from Cemitaly in early April 2019. Union representatives from the plant have asked Colacem what its business plans and staffing levels will be. Currently the plant employs 80 people.

Senegal: The Ministry of Commerce says that a shortage of cement should be averted by the end of April 2019. A breakdown in the clinker production line at the SOCOCIM plant in Rufisque has led to reduced supplies, according to Senegal Direct. The subsidiary of France’s Vicat is arranging imports of clinker in the meantime.

Saudi Arabia: Al Jouf Cement has signed a non-binding memorandum of understanding with China’s Riga Company to convert its second production line to produce white cement. The agreement will last six months.

Iraq: Al Shumookh Lucky Investments, a subsidiary of Pakistan’s Lucky Cement, has ordered a power pant from Finland’s Wärtsilä for its Najmat Al-Samawa cement plant. The equipment is scheduled for delivery towards the end of 2019, and the plant is expected to become fully operational during the third quarter of 2020. No price for the order has been disclosed.

The power plant will operate on two Wärtsilä 32 engines running on locally-available heavy fuel oil (HFO) with diesel as a back-up fuel. The engine is designed to operate with reduced fuel and water consumption in hot climates.

China: Germany’s Fuchs Petrolub has opened new plant in Wujiang, Suzhou. The Euro46m unit replaces a plant in Shanghai. Work on the plant started in 2017.

The new 80,000m² plant has a capacity of 100,000t/yr in phase one, almost double the capacity of the Shanghai plant. The automated high-bay warehouse has a capacity of 12,000 pallets. The production portfolio includes automotive oils, industrial oils, metalworking fluids, corrosion preventatives, rolling oils, coating materials and products for the forging industry. Expansion in phase two is at the development stage. Fuchs is also expanding its offices and laboratories at the site in Shanghai.

Russia: Eurocement has resumed the packaging line at its Oskolcement plant. It sells products in 50kg bags. The packaging line uses equipment from Germany’s Haver & Boecker and Beumer.

Nigeria: BUA Group has ordered a 48MW power plant from Finland’s Wärtsilä for a new production line at its Sokoto cement plant. The power plant will operate without connection to an electricity grid and it will operate on five Wärtsilä 34DF dual-fuel engines, running primarily on liquified natural gas (LNG) but with the capability to switch to low pour fuel oil (LPFO) if necessary. The site’s two existing power plants operate on heavy fuel oil (HFO).

The Wärtsilä equipment is scheduled for delivery at the end of 2019, and the new plant is expected to become operational in mid-2020. No price for the order has been disclosed.

Nigeria: David Umahi, the governor of Ebonyi state, has approved plans to set-up the Ebonyi Cement plant (Ebocem) at Ogboto in Ishielu. The local government will hold a 10% stake in the project, according to the Nigerian Tribune newspaper.

US: Lehigh Cement and Argos USA have agreed to pay a US$1.5m fine for alleged Clean Air Act violations at the Martinsburg cement plant in West Virginia. Argos has owned the plant since December 2016 and Lehigh Cement was the previous owner. The violations occurred from 2013 to 2016. Neither Lehigh Cement nor Argos USA admitted liability for the alleged violations as part of the settlement.

The Environmental Protection Agency (EPA) cited the companies for various Clean Air Act violations based on responses to EPA information requests and data collected and reported under the plant’s permit. These included exceeding particulate matter emissions, non-compliance with opacity testing, failing to comply with requirements for operating a kiln with dioxin/furan emission limits, failing to perform required stack testing on a kiln’s exhaust in a timely manner and other violations.

Good news for Cemex Colombia this week with an agreement reached to open its Maceo cement plant in Antioquia. Local media was reporting that the cement producer has struck a government-brokered deal with CI Calizas y Minerales to lease the land it built its plant on. Finally, the new(ish) US$350m integrated plant can start operation.

For those unfamiliar with the debacle, Cemex has been fighting the fallout publicly since 2016, following a dodgy land deal at the site. The 1Mt/yr integrated Maceo plant was originally announced in 2014 with full operation scheduled for late 2016. Then, in October 2016 Cemex fired several senior staff members in relation to the project and its subsidiary’s chief executive resigned. This followed an internal audit and investigation into payments worth around US$20m made to a non-government third party in connection with the acquisition of the land, mining rights and benefits of the tax free zone for the project. Other irregularities are also alleged to be linked to the project. As well as the Colombian authorities being involved, the US Department of Justice is also running its own investigation into the affair with wider implications for Cemex’s operations in other Latin American countries. Some of the sacked staff members and others have since been investigated on corruption charges.

Graph 1: Cement production in Colombia, 2010 – 2018. Source: DANE.

Looking at the wider Colombian market though, it does make one wonder whether the long-delayed plant is really necessary. As Graph 1 shows, cement production rose steadily year-on-year to 2015 before it hit a downturn. It reached a high of 13Mt in 2015 before declining. Production in 2018 grew slightly compared to 2017 but not at the same rate seen previously. In Antioquia specifically despatches increased by 1.3% in 2018, above the national average of 0.2%. Despatches now appear to have continued into January and February 2019.

Cemex Colombia started to benefit from an improved fourth quarter in 2018 as the general economy picked up. Despite this its overall net sales and operating earnings fell in 2018. However, it did flag its earnings margin as a concern with higher freight and energy costs in the fourth quarter of 2018, although it partially offset this with higher prices. Cementos Argos, the other big producer in Colombia, reported a similar picture to Cemex, although in a better position. Its cement volumes fell slightly for the year in 2018 but picked up fast in the fourth quarter. Annual revenue was down slightly, as were adjusted earnings. In its opinion the construction industry improved in the second half of 2018 due to an improved housing market and infrastructure projects.

Given the downturn in production since 2015 the thought does occur whether the opening of the Maceo plant being delayed accidentally helped Cemex or not. It has probably been losing money by not running the plant but if, for example, the company had some sort of insurance to protect it against unexpected delays it might still benefit. However, if evidence of serious wider misconduct in both Colombia and other Latin American countries are found by the US authorities, then things could get expensive. This would be unfortunate, particularly in Colombia, given that the market looks set to recover.