Displaying items by tag: Production

South Africa: PPC is operating at 75 - 80% of its active production capacity despite rising demand for cement. Njombo Lekula, the managing director of Southern Africa - PPC, told the Cape Times newspaper the company’s latest strategy and adaptation to the coronavirus pandemic had improved its operational flexibility. He said that it can ‘switch on’ plants to respond to demand, that its ‘Three Mega Plant’ strategy allows it to cope for periods when supply outstrips demand and that the company has mothballed plants at present. He added that PPC is not using 35% of its own capacity at the moment. Lekula also estimated that the local sector as a whole it not using 40% of its production capacity.

There has been a significant investment in the South Korean cement industry this week with the news that Hanil Hyundai Cement has ordered a steam-based waste heat recovery (WHR) system from Japan-based Kawasaki Heavy Industries. The 22.6MW system will be used on two of the production lines at the Yeongwol plant in Gangwon Province. The supplier says that installation is expected to generate about 30% of the energy the plant needs and save around 10,000t/yr of CO₂ in the process. Delivery is scheduled for late 2022.

This order may be the first investment following the announcement in late June 2021 that the state-owned Korea Development Bank had pledged around US$870m towards supporting the cement sector in making carbon reduction upgrades by 2025. These are intended to include moving away from burning fossil fuels in cement production and increasing the use of recycling materials. At the time of the agreement between the bank and the Korea Cement Association (KCA), Hanil Hyundai Cement noted that the local alternative fuels substitution rate was 24% compared to 46% in the European Union and 68% in Germany.

Graph 1: Cement production in South Korea, 2010 – 2020. Source: Korea Cement Association

By European or American standards South Korea kept its coronavirus cases under control in 2020. A robust testing and contract tracing regime (K-Quarantine) managed to prevent the country enforcing stricter measures until late in 2020. A fourth wave of infections, currently underway in July 2021, due to the more contagious Delta variant, has started to change this. Despite being able to keep its economy open though, the construction sector still took a hit although not as bad as initially feared.

Cement production fell by 6% year-on-year to 47.5Mt in 2020 from 50.6Mt in 2019 following a downward trend since 2017. The KCA expected worse after a poor third quarter in 2020 when it was preparing for shipments to fall below the level last seen in the midst of the International Monetary Fund (IMF) crisis in the late 1990s. On top of this the industry was also potentially facing a new tax on production towards the end of 2020. One large local producer, Ssangyong C&E, reported a 5% year-on-year drop in sales to US$864m in 2020 from US$910m in 2019. However, it managed to increase its operating profit over the same period. So far in 2021 the sector faced supply shortages in the spring. The KSA blamed the winter plant maintenance schedule and a lack of railway wagons and trucks.

The timing of the Korea Development Bank investment in the cement sector is interesting given the movement on the European Union carbon border adjustment mechanism. Cement exports seem unlikely to be affected but business lobbyists like the Federation of Korean Industries are well aware of the effects schemes like this might have upon commodities like steel and aluminium in the first phase and then the implications for car production later on. Target markets for cement exports such as the US, Peru, Chile and the Philippines might all become vulnerable should carbon-based trade restrictions become more prevalent. Of course export markets remain vulnerable to more usual hindrances. For example, in March 2021 the Philippines extended its safeguard measures on cement imports to various countries including South Korea.

Following a round of market consolidation in the late 2010s, the South Korean cement sector now appears to be entering a phase of sustainable realignment. In late May 2021 Prime Minister Moon Jae-in announced plans to hasten the country’s carbon reduction targets ahead of the United Nations Climate Change Conference scheduled for November 2021, including a carbon tax. With cement production on a downward trend since 2017 and the coronavirus crisis far from gone it will be instructive to see how far the intervention of the Korea Development Bank will go.

Peru: Cement production in the 12 months ending on 30 June 2021 was 12.2Mt, up by 43% year-on-year from 8.54Mt in the previous 12 months. Data from the Association of Cement Producers (ASOCEM) shows that local dispatches totalled 11.9Mt, up by 42% from 8.41Mt.

Cement exports recorded a drop, down by 7% to 0.16Mt from 0.17Mt, while clinker exports rose by 44% to 0.52Mt from 0.36Mt. High demand led to an increase in imports to 0.94Mt of cement, up by 59% from 0.59Mt, and 1.41Mt of clinker, almost triple the previous year’s volume of 0.48Mt.

Vietnam: State-owned Vicem’s cement and clinker sales grew by 8% year-on-year to 12.7Mt in the first half of 2021. The Viet Nam News newspaper has reported that the company recorded cement and clinker production volumes of 14.8Mt, up by 7%. Its 2021 full-year production targets are 30Mt of cement and clinker sales, up by 5%, and production of 26Mt of cement, up by 8%, and 22Mt of clinker, up by 1%. The producer recorded sales of US$709m in the first half of 2021, up by 5%. Its profit before tax rose by 23% to US$54.4m.

US: Colombia-based Cementos Argos subsidiary Argos USA’s Newberry, Florida cement plant produced 140,000t of cement in June 2021. The plant shipped 129,000t of cement. The company says that the production figure beats its previous production record of 128,000t in June 2019 by 9%. The figure for shipments beats the previous shipment record, also from June 2019, of 121,000t by 7%.

Plant production manager Daniel Ball said, “Everyone at the Newberry Plant is excited and proud to see these records being set. With the current sales climate, we are able to show the untapped potential Newberry has. This sustained sales commitment would not be possible if it wasn’t for all the hard work and dedication of everyone at the plant as well as from Argos plant support staff and Argos Corporate. But with the new record set, we strive to set new records going forward.”

Bolivia: Empresa Publica Productiva Cementos de Bolivia’s (ECEBOL) integrated Oruro plant is operating at 80% capacity following its reopening in mid-June 2021. The unit is selling cement to La Paz, Oruro and Cochabamba, according to the La Razón newspaper. Restarting the plant cost around US$8m.

Iran: Cement and steel producers have been ordered to stop production for up to three weeks due to insufficient electricity supplies. A spokesman for the electricity industry said that the cut in supply was now necessary after heavy industrial customers had failed to observer a voluntary request, according to the Fars News Agency. Electricity supplies will be reduced to 10% of normal levels during the period.

Argentina: Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that cement shipments grew by 44% year-on-year to 5.52Mt in the first half of 2021 from 3.83Mt in the same period in 2020. Local consumption of cement increased at a similar rate. The association has forecast the local market to grow by 15% year-on-year to 11.4Mt in 2021 from 9.87Mt in 2020.

Vietnam: Vietnamese first-half cement production is estimated to have risen by 8% year-on-year to 51.1Mt in the first half of 2021 compared to the same period in 2020. The Viet Nam News newspaper has reported that June 2021 cement production was 10% higher than that in June 2020, at 9.1Mt. Vietnam’s full-year cement production in 2020 was 100Mt.

Vietnam: State-owned Vicem produced 10.5Mt of cement in the first five months of 2021, an increase of 9% year-on-year. Total cement and clinker sales rose in the period by 8% to 12.8Mt, according to the Viet Nam News newspaper. The company is targeting 26Mt-worth of cement production in 2021, up by 8% year-on-year.