Displaying items by tag: Sampyo Cement

South Korea: Sampyo Group has announced a planned investment of US$171m before 2030 to reduce Scope 1 and 2 CO₂ emissions by 35% over the period from an August 2021 baseline. The parent company of Sampyo Cement plans to achieve this in the first phase by increased its use of alternative fuels, improving energy efficiency, introducing low-carbon raw materials such as fly ash and developing sustainable products. The company is targeting net zero CO₂ production by 2050.

South Korea: All nine domestic cement producers and the Ministry of Environment have agreed on measures to reduce NO_x emissions. Asia Cement, Halla Cement, Hanil Cement Manufacturing, Hyundai Cement, Korea Cement, Sampyo Cement, Ssangyong Cement Industrial, SungShin Cement and Union Corporation have agreed to invest in upgrades to filters or new high-efficiency filters and process improvements, according to the Korea Times newspaper. There was also an agreement to set NO_x emissions reduction targets for the allocation of funding. The Korea Environmental Industry Technology Institute is investing US$2.93m in research towards developing methods of selective catalytic NO_x emissions reduction and selective non-catalytic NO_x emissions reduction.

The government aims to reduce national NO_x emissions by 20% to 155,000t/yr from 195,000t/yr through subsidies to emissions reduction technologies development and uptake. The cement sector presently emits 62,500t, 32% of the domestic total.

South Korea: Tongyang Networks plans to sell its stake in Sampyo Cement for US$12.7m, according to Reuters. The sale covers 3,000,000 shares. Tongyang Cement & Energy changed its name to Sampyo Cement in 2017 following its purchase by Sampyo Corporation in 2015.

Further shifts in the South Korean cement industry this week as Ssangyong Cement purchased Daehan Cement. Private equity firm Hahn & Company owns both producers so this looked like a realignment exercise. Yet it follows a corporate version of pass-the-parcel within the local cement industry. Hyundai Cement was acquired by Hanil Cement in the first half of 2017, Halla Cement was bought by investment firms from LafargeHolcim in mid-2016 and Tongyang Cement was bought by Sampyo Group in 2015.

Ssangyong Cement’s purchase is seen in the local media as an attempt to reaffirm its market dominance. Before the Hyundai Cement auction, Ssangyong Cement was the market leader with a cement production capacity of 15Mt/yr and a market share of around 20%. Hanil Cement’s on-going purchase of Hyundai Cement will see it increase its production capacity from 7Mt/yr to over 15Mt/yr. Ssangyong Cement’s transaction for Daehan Cement puts it back in the lead again.

The local industry is notable for the high ratio of cement grinding plants to integrated plants. The Korean Cement Association (KCA) reported that the country had 12 integrated plants to 23 grinding plants in 2015. This compares to other developed countries in relatively remote places such as Australia and Chile that also have high numbers of grinding plants. South Korea doesn’t import that much clinker though. One difference is its prominent steel industry that has hovered around 70Mt/yr since 2014 and which puts it in the top ten of world producers. Subsequently, as POSCO’s Sunghee Han explained at the Global Slag Conference 2016, 13.9Mt of granulated blast furnace slag (GBFS) was produced in 2015 and the majority of this ended up being used as supplementary cementitious materials (SCM) either to grind cement or to make concrete. The size of this slag market underlines the value of the Daehan Cement sale, as it is a major slag cement producer.

Other notable point about the local cement industry includes the presence of a few extremely large multi-kiln plants with production capacities in excess of 7Mt/yr. The country also has a relative scarcity of limestone. South Korea is the fifth biggest importer of limestone in the world at US$34m. It brings limestone in principally from the UAE, Japan, India, Malaysia, and Vietnam. Notably it also has one of the world’s longest single conveyors, with a length of 12.8km, connecting a quarry to Ssangyong Cement’s Donghae plant.

Graph 1: Cement production and consumption in South Korea, 2010 – 2015. Source: Korean Cement Association.

Unlike the European cement-producing nations that this column has covered in recent weeks, fundamental market structural changes do not appear to be driving the merger and acquisition activity in South Korea. As Graph 1 shows, production and consumption fell from 2010 onwards but has started to pick up since 2013. Instead, a general slowing of the economy from 2010 and a relaxation of the rules triggered merger and acquisition activity. Unsurprisingly then, perhaps, given the potential opportunities for market manipulation, that the Fair Trade Commission fined six of the seven major producers a total of US$168m in early 2016 for alleged price fixing. With the private equity firms widely expected to exit the market after a relative short time, the cement industry looks set to remain volatile for the next few years. Doubtless the market regulators will be watching very carefully indeed to see how it all plays out.

South Korea: Tongyang Cement & Energy has changed its name to Sampyo Cement following a shareholders meeting. The cement producer was purchased by Sampyo Corporation in September 2015, according to the Maeil Business Newspaper. Officials said that the change was made to bring Tongyang into the parent company’s corporate identity.