Displaying items by tag: Project

Nigeria: BUA Group has announced that it will commence core drilling in Ebonyi State, prior to establishing a greenfield cement plant there. Speaking in the state capital Abakalik on 5 September 2018, BUA’s Managing Director Kabiru Rabiu said that he was surprised there was no cement plant already in the state, despite there being enormous limestone deposits. Ibeto Cement is in the process of setting up two integrated cement plants in the state.

"We are here because the state is blessed,” said Rabiu. “It has a huge deposit of limestone that is very high in quality. The state also has coal, which is necessary for cement production. The state is strategically located; it is close to Enugu, close to Cross River State and close to the Middle Belt.”

Vietnam: The Vietnamese cement sector exported 2.01Mt of cement in August 2018, a 44% year-on-year increase but 90,000t less than in July 2018. During the first eight months of 2018, cement exports reached 20.1Mt, exceeding the whole year target of 18-19Mt, according to the Ministry of Construction’s Building Material Department (BMD).

Total production stood at 63.9Mt in the first eight months, a year-on-year increase of 30%. The domestic market consumed 43.8Mt. According to the BMD, the industry is likely to reach its consumption target of 65-66Mt in the domestic market for the whole of 2018.

On top of Vietnam’s current large cement capacity, the list of cement projects that are expected to come into operation after 2018 include some very large capacity projects. These include Sông Lam Cement’s production lines 3 and 4 with a total capacity of 3.8Mt/yr, Thái Nguyên Group’s Hà Tiên Cement Project in Bình Phước with an annual capacity of 4.5Mt/yr and the Tân Thắng Cement Project in Nghệ An Province with an annual capacity of 1.8Mt/yr.

Egypt: Egyptian President Abdel-Fattah al-Sisi inaugurated a cement and marble production complex worth US$1.1bn to the south of Cairo on 15 August 2018. The 500-hectare industrial complex is located 12km north of the Upper Egyptian governorate of Beni Suef.

It took 21 months to complete the complex, which includes three cement plants with a combined annual production capacity of 12Mt/yr. Egypt, through the Armed Forces Engineering Authority, worked together with 20 local and international companies on the project.
During the unveiling ceremony, Sisi said that such industrial projects would help reduce imports, while saving foreign currency and offering thousands of job opportunities to local people.

There have been quite a few new cement plant project announcements in the past week, with expansions announced in Mexico, Nigeria, Bangladesh, Indonesia, India and Uzbekistan. 11.8Mt/yr of new capacity has been announced in just a week, mostly from a whopping 9.0Mt/yr project in Central Sulawesi, Indonesia, the first in that Province. Notable in this project, as well as two of the others, is the involvement, once again, of large Chinese-based cement plant manufacturers and / or finance and associated influence from Chinese parties.

Of course, this trend is nothing new. The rise of Chinese cement plant manufacturers, particularly into Africa and other developing cement markets, has been covered in previous Global Cement Weekly columns. However, it does appear to be stepping up a notch in 2018 compared to previous years. So far this year we have reported on 21 confirmed Chinese cement plants being built in 15 countries other than China, from the planning stage to ‘up-and-running.’ A total of 37.2Mt/yr, more than the capacity of Germany, is being built across Algeria, Cambodia, Cameroon, Indonesia, Kyrgyzstan, Namibia, Nepal, Nigeria, Pakistan, Russia, Tajikistan, Turkey, Ukraine, Uzbekistan and Zambia. That’s not including a similarly large number of news stories where the supplier is not explicitly stated. This is seen a lot in Indian projects, as well as in Vietnam, where the cement sector appears to still be expanding, despite the government’s pronouncements. In many of these cases, and elsewhere, these unidentified suppliers are likely to be Chinese.

The driver for this increase in Chinese-led cement sector investment is, of course, the severe overcapacity in China’s domestic cement sector. The government is currently undertaking its most drastic capacity reduction measures so far. The ongoing integration of Sinoma and CNBM is one example of the lengths it will go to to reduce the current inefficiencies in the sector. This week the Chinese government reiterated its strict prohibition on new greenfield cement plants. It also warned that any producer that wants to upgrade its plant with a new line must only install the same capacity as the line that will be replaced, amid concerns that some were flouting this rule. This comes as the profits of major producers have been rising. Presumably the government would like them to climb further still.

So where does this leave the more established (read ‘European’) cement plant manufacturers such as Fives, FLSmidth, KHD and thyssenkrupp Industrial Solutions, some of which are fully or partly-owned by Chinese companies? Well, with fewer full-line projects available in developing regions due to the rise of the Chinese, they have become increasingly specialised in specific areas. Those that want European equipment will increasingly specify a pyro-line from Supplier A, a mill or two from Supplier B, conveyors and storage from supplier C, and so on. Arranging this, as it turns out, is something that Chinese plant manufacturers are quite keen to do. Take, for example, FLSmidth working for Sinoma (China) alongside Atlas Copco (Sweden) and Kawasaki Heavy Industries (Japan) on a cement plant in Indonesia. Indeed, FLSmidth signed a framework with CNBM on future collaborations in July 2018. FLSmidth and CNBM already have an extensive ‘back catalogue’ of joint projects. FLSmidth has valuable expertise that Chinese firms need to complete these kinds of projects.

Of course, another European supplier, Germany’s KHD, is mostly owned by China’s AVIC. In a forthcoming interview in the September 2018 issue of Global Cement Magazine, KHD’s CEO Gerold Keune states that the Engineering, Procurement and Construction (EPC) scene is now ‘completely dominated’ by Chinese suppliers. KHD fits in by providing a wide range of equipment but, crucially, great expertise in pyroprocessing and crushing solutions. It itself relies on smaller firms to provide their knowledge to specific parts of a larger project, be it conveyors, feeding systems or silos. Everyone is getting better and better, but in a smaller and smaller area.

Also in the September 2018 issue of Global Cement Magazine will be a report from the VDMA’s Large Industrial Plant Manufacturer’s group (AGAB) in Germany, which highlights another advantage for the Europeans: Digitisation. According to a VDMA survey, the industry anticipates a positive influence from digitisation activities on sales and earnings and expects to see margins improve by up to 10% as a result of the efficiencies it offers over the next three years. In this regard they are ahead of the Chinese mega-suppliers.

The conclusion from this wide-ranging column? The integration of Chinese weight and European know-how is stepping up a notch and will only accelerate from here. Can everyone be ‘winners?’ The next few years may reveal some of the answers.

Indonesia: A Chinese company, in cooperation with PT Banggai Citra Lestari, has announced that it will build a cement factory in the district of Banggai, Central Sulawesi. It will be the first cement factory in the Province.

"We already carried out a survey for a location in the sub-district of Balantak and we already have the mining license," said Budi Kurniadi, CEO of PT Banggai Citra Lestari at a meeting with Central Sulawesi Governor Longki Djanggola. He was speaking alongside the project manager Wang Yong.

Kurniadi announced that his company and the unnamed Chinese partner would build a factory with a production capacity of 9.0Mt/yr of cement. Governor Longki Djanggola said he appreciated the plan and pledged to facilitate implementation of the project.

India: Gujarat Sidhee Cement has commissioned a 5.5MW waste heat recovery plant at its Sidheegram plant in Gujarat. The project has a budget of US$10m. Power generated from the unit is expected save the plant US$2.6m/yr .

Qatar: Qatar National Cement Company (QNCC) plans to open its fifth cement plant in the first half of 2018. The move will increase its cement production capacity of 5500t/day, according to the Qatar Tribune newspaper. However, its sales of cement fell slightly to 3.4Mt in 2017 from 3.7Mt in 2016.

The cement producer’s sales revenue fell by 9.6% year-on-year to US$283m in 2017 from US$313m in 2016. Its net profit decreased by 31% to US$90m from US$130m. The company blamed the falling profit on a poor local economy causing poor demand and a reduced selling price since April 2017.

Paraguay: Industria Nacional del Cemento (INC) expects to begin March 2018 with a 30% production rise, following the opening of a new mill, according to its president Jorge Mendez. Production will increase to 1.4 million bags per month, from 1.1 million bags per month at present. Its market share will increase to 70%-75%, from 51% at present. This is anticipated to add an extra US$50m to the company’s turnover. The new mill is currently 90% complete and has cost the company US$11.5m.

India: The proposed UltraTech Cement plant at Khamarnuagaon in Cuttack District's Athagarh Block has witnessed protests by locals after it obtained the required 90 acres from the government to start building the plant.

Addressing a press conference, villagers of Gurudijhatia and Khamarnuagaon alleged that they would lose almost all grazing fields for cattle when the land is given to the plant. They also alleged that elephants from the Kapilash and Chandaka jungles would be forced into the villages and destroy crops after a fence is erected around the plant. UltraTech told the media that the plant would be ‘people-friendly.’

Kazakhstan: Gezhouba Shieli Cement Company LLC is now inviting international banks and financial institutions to support the construction of its planned cement production plant in Kyzylorda region, Kazakhstan, according to Li Jinqing, the company's general manager. Gezhouba Shieli is a thee-party joint venture (JV) between China Gezhouba Group Corporation Limited (CGGC) (50%), China Gezhouba Group Overseas Investment Co., Ltd (20%), a subsidiary of CGGC, and a local cement company (30%).

The cement production line will require a total investment of around US$200m, of which 70% will be funded through bank loans. At present, CGGC is actively in communication with some Chinese banks and financial institutions, including Export-Import Bank of China (EIBC) and China Development Bank Corporation (CDB). The plant is designed to have a production capacity of 2500t/day. It is expected to be operational by the end of 2018.

China Triumph International Engineering Co Ltd (CTIEC) won the engineering, procurement and construction (EPC) contract in April 2017, while its subsidiary Beijing Triumph International Engineering Co., Ltd will take responsibility for design work, according to Qian Yingchun, the project leader at CTIEC. More equipment will be required as construction progresses.