Displaying items by tag: Production

Uzbekistan: Cement production reached 14.74Mt between January and November 2024, up 32% year-on-year from 11.17Mt during the same period in 2023, according to the Statistics Agency.

Vietnam: Cement production rose by 3.5% year-on-year to 184.2Mt in 2024, according to the latest data from the General Statistics Office.

In December 2024, cement output reached 17.2Mt, up by 10% year-on-year. The revised figure for 2023 shows production reached 120Mt, down 4.5% year-on-year.

South Korea: The cement industry in South Korea faces rising costs due to a rising won-to-dollar exchange rate following the attempted impeachment of the president, and transportation disruptions from a railroad strike. This is likely to lead to an increase in coal import costs, according to Chosun Biz news.

The ongoing strike by the National Railroad Workers Union has disrupted cement transportation, though stockpiles in metropolitan areas have mitigated immediate effects. However, prolonged strikes could force production halts.

Kim Seung-jun, researcher at capital market company Hana Securities, said “In the fourth quarter, cement production is expected to decrease by 14% compared to the same period in 2023.”

India: Adani Group has announced a US$750m investment in Rajasthan, with US$375m allocated over the next five years to green energy, cement production and infrastructure development. The group plans to add four cement units, increasing its total capacity by 6Mt/yr, according to BusinessWorld magazine.

Vietnam: Vietnam produced 167Mt of cement in the first 11 months of 2024, up by 3% year-on-year, according to the latest data from the General Statistics Office (GSO). In November 2024, the country’s cement output increased by 12% year-on-year to 17.2Mt, according to the GSO. In 2023, Vietnam produced 120.1Mt of cement, down by 5% year-on-year.

Azerbaijan: The State Customs Committee (SCC) reports that cement production in Azerbaijan reached 3.42Mt in the first 10 months of 2024, an increase of 11.2% compared to the same period in 2023.

The SCC also reported that Azerbaijan exported 695,656t of cement and clinker in the first 10 months of 2024, a 2.4% decline compared to the same period of 2023. However, the value of exports rose by 5.8% to reach US$43.1m, reflecting stronger pricing dynamics in international markets.

Azerbaijan’s cement capacity is approximately 5.2Mt/yr, which provides a solid foundation to meet both domestic and export demand.

North Korea: South Korea-based news outlet Daily NK has reported that an explosion took place in the kiln at North Korea’s Mt Purae cement plant in the early hours of 14 November 2024. It reports that the plant was ‘straining’ to meet ‘aggressive production targets’ after being pushed above its rated capacity.

Speaking anonymously, a source with knowledge of the event said “The explosion was caused by overloading the kiln, as factory management sought to raise production targets under pressure from the provincial party committee, which was responding to the central government’s appeal to demonstrate a spirit of self-sufficiency.”

Plant technicians who analysed the explosion said that management had been too focused on boosting productivity and output cement to properly maintain the kiln. Its managers acknowledged that the accident would not have occurred if they had stuck to the plant’s design capacity.

The factory has since announced that it will adjust its production schedule and resume normal operations after swiftly repairing the damage. No workers were injured.

Armenia: The Armenian government has extended restrictions on the import of cement and clinker from Iran and ‘other countries’ for another six months on 28 November 2024.

The restrictions were first adopted on 13 January 2022 and have been repeatedly extended since then. The latest decision takes effect on 20 January 2025 and is valid until 20 July 2025.

As a result, domestic cement production increased to 1.14Mt in 2023, a rise of 13% year-on-year, while clinker imports rose by 125,200t (19%) and cement imports increased to approximately 270,000t. During the first eight months of 2024, cement imports rose to 305,100t, a 260% increase compared to the same period in 2023, due to lower Iranian cement prices. Concurrently, local cement production declined by 31% to 485,900t in the first half of 2024.

China: Shandong Province will curb cement production from 15 November 2024 to 15 March 2025 to reduce air pollution. The measure, similar to last winter's, was announced by the Province's industry and environment ministries. Shandong's reliance on inefficient captive coal-fired power plants means the measure could reduce coal demand significantly.

When we think about ‘up and coming’ regions for the global cement sector, Africa is high on many people’s lists. This is unsurprising given that Africa is the youngest continent on Earth, with a population set to boom to 2.5 billion by 2050 – or 1 in 4 of the global population for that year, according to the UN. This population, 1 billion higher than today, will drive rapid urbanisation. Cement capacities, currently around 350Mt/yr across the continent, will have to rise substantially to meet demand.

Filling part of this rise will be Amsons Group. This week it announced plans for a US$320m investment in a 1.6Mt/yr greenfield cement plant in Tanzania. It also promised a whopping US$400m to revamp Bamburi Cement in Kenya, should its existing US$180m bid for the Holcim subsidiary be accepted. Based on the numbers for Tanzania, this investment might be enough to take Bamburi Cement from 1.1Mt/yr to around 3Mt/yr, assuming similar project scope and equipment suppliers.

So, what is Amsons Group? Founded in 2000, Amsons is a Tanzania-based conglomerate with interests in construction, transport, flour, container depots, cement and concrete. It already operates Camel Cement, a grinding plant, in the Mbagala suburb of Dar es Salaam and it owns a 65% stake in the 1.1Mt/yr integrated Mbeya Cement plant, which it bought from Holcim in September 2023. The group’s website states that it emphasises local production of materials to reduce the nation’s reliance on imports. A greenfield cement plant fits right into that philosophy.

Looking at recent market trends, we see some positive news for Amsons. In Tanzania, cement production rose by 6.2% to 8Mt in 2023, according to the country’s Ministry of Industry. This followed a 9.7% rise in the prior year. Data is so far lacking for 2024. To the north, cement consumption ramped up strongly in Kenya in the second half of 2023, following a less than stellar start to the year. Thanks to a particularly strong June to September period, consumption finally ended 2023 around 0.8% higher than the previous year, at 9.6Mt. However, consumption tailed off in the final quarter. Worse, the first four months of 2024 - the most recent data available from the Kenya National Bureau of Statistics - saw a 10% decline in cement consumption relative to the same period of 2023, falling to 2.6Mt/yr.

As Africa lacks cement capacity compared to other regions, it is important to highlight that Amsons’ new plants will have to take on not just existing capacity in East Africa, but countries that export to the continent too. Indeed, this week Pakistan, a long-time agitator of South African cement producers, reported a year-on-year rise in exports for October 2024. Exports rose to 4.36Mt, a 9% increase compared to 4Mt in October 2023. This news comes amid precipitously falling domestic demand within Pakistan, with September 2024 shipments down by 22% year-on-year. It is also worth noting that Tanzania itself exported around 1.1Mt of cement to Rwanda, Burundi, Malawi, the DRC and Zambia in 2023. This figure will likely be higher in 2024, given the February 2024 launch of Huaxin Cement Tanzania Maweni Company’s 1.3Mt/yr plant in Mavini, which has a focus on exports.

This apparent abundance of existing capacity, plus exposure to imports, would appear to give an investor like Amsons Group pause for thought. However, it has committed to a total investment of US$900m. This is not small change. If we add in the money it paid for Mbeya Cement in September 2023 – the amount was not disclosed – Amsons will likely shell out more than US$1bn in just a few years. It is going ‘all in’ to become, in the words of its Managing Director Edha Nahdi, “one of the largest cement manufacturers in Kenya and Tanzania by 2030.” It will be very interesting to follow it on its journey.