Displaying items by tag: Taiheiyo Cement

One news story to note recently has been Cemex’s decision to recommission a kiln in Mexico to address cement shortages in the southwest US. In early February 2021 the Mexico-based producer said it was spending US$15m to restart a 1Mt/yr kiln at its CPN cement plant in Hermosillo, Sonora. The unit is over 250km from the US border but Cemex said it was making the investment to cope with cement shortages and project delays in California, Arizona and Nevada. At present it supplies over 3Mt/yr to California, Arizona, and Nevada from its integrated plant in Victorville, California and via sea-borne imports. Efficiency improvements at Victorville and other unspecified supply chain changes are also planned.

Cemex isn’t the only company with an eye on the south-west US. Around the same time Japan-based Taiheiyo Cement concluded its deal with Semen Indonesia to buy a 15% stake in its subsidiary Solusi Bangun Indonesia (SBI) for around US$220m. It’s a long way from Arizona but the related statement mentioned plans to make SBI’s integrated Tuban plant in East Java more export focused, with the construction of a new jetty and silos. It intends to export 0.5Mt/yr of cement to Taiheiyo Cement’s business in the US. Its local subsidiary, CalPortland, runs two integrated plants in California and one in Arizona.

Chart 1: Annual change in US cement consumption by state, December 2019 – November 2020. Source: PCA & USGS.

In its recent winter forecasts the Portland Cement Association (PCA) reported that the Mountain region of the US recorded the highest growth in cement consumption in 2020, at 10%, due to underlying economic fundamentals and favourable demographic trends. Data from the United States Geological Survey (USGS) supports Cemex’s view too. Ordinary Portland Cement and blended cement shipments rose by 21% year-on-year to 2.74Mt in Arizona and New Mexico in the first 11 months of 2020 from 2.28Mt in the same period in 2019. This doesn’t quite tally in California where shipments fell slightly, by 0.8%, to 9.42Mt. However, it reported 12% growth to 2.38Mt in the first quarter of 2020, suggesting that the market could return sharply once the coronavirus epidemic is better under control. Overall, shipments in the US grew by 1.03% to 82.3Mt in the first 11 months of 2020, driven by growth in central regions. The PCA expects national cement consumption to grow by about 1% in 2021 with a ‘robust’ recovery driven by residential housing but slowed by uncertain coronavirus vaccination supplies and general market volatility.

In a world with too much clinker production capacity, it stands out to see two established producers so visibly chasing market share in a mature market. Rather than building new plants, both Cemex and Taiheiyo Cement are using or reviving existing production lines in other countries, and building import strategies as well as optimising their existing facilities in the regions. With the western building material multinationals now often looking to focus on ‘safe’ markets in Europe or North America the fight to grow market share in these regions is likely to become more intense. It also complicates decisions about when or if an existing plant should be mothballed or shut. After all, Cemex’s old production line in Hermosillo is about to become very useful indeed.

Japan: Taiheiyo Cement’s consolidated net profit in the nine-month period which ended on 31 December 2020 was US$355m, up by 22% year-on-year from US$292m in the same period in 2019. Sales fell by 2% to US$6.24bn from US$6.33bn.

The company said that domestic demand fell in the second quarter of the 2021 financial year due to the suspension of construction work during a local coronavirus lockdown. Cement sales volumes of Japanese producers were 29.6Mt, a decrease of 5% yet exports rose by 6% to 8.22Mt. Public and private sector demand remained sluggish into the third quarter of the financial year due to process delays and a shortage of construction workers. However, its cement business recorded a year-on-year price increase.

Japan/Indonesia: Taiheiyo Cement says that its board has approved and concluded its deal with Semen Indonesia to buy a 15% stake in its subsidiary Solusi Bangun Indonesia (SBI) for around US$220m. As part of the agreement, SBI’s Tuban plant will increase its export capacity by building a new jetty and silos. It will then export 0.5Mt/yr of cement to Taiheiyo Cement’s subsidiary in the US. The Japanese cement producer said that is focusing on markets in South-East Asia as part of its sustainable business development strategy in response to projected long term declining cement demand in Japan.

Japan: Taiheiyo Cement plans to establish a facility for processing waste produced by natural disasters in Saitama Prefecture. The company says that the facility will sort waste for recycling and sort non-recyclable materials suitable for use as cement additives for further processing. The plans received approval at a talk with Kumagaya City and Saitama Prefecture administrators in mid-January 2021.

The company said, “We have been accepting waste and by-products for cement production and promoting recycling, and we are now also working to contribute to the early recovery of disaster areas.”

Indonesia/Japan: Taiheiyo Cement and Semen Indonesia have finalised a collaboration agreement with the aim of building a comprehensive partnership, including consultations on promotion and sale of cement and clinker. Taiheiyo Cement said, “The business alliance is for business collaboration and research and development of cement, resources, environment, building materials and more.”

In accordance with the agreement Taiheiyo Cement will buy shares in Semen Indonesia’s subsidiary Solusi Bangun Indonesia, formerly Holcim Indonesia. The deal is expected to be completed in early 2021. In April 2020 Taiheiyo Cement agreed to buy a 15% stake in Solusi Bangun Indonesia for between US$186m and US$232m.

Philippines: Japan-based Taiheiyo Cement has approved plans for the installation of a new 3.0Mt/yr production line at its integrated San Fernando cement plant in Cebu. The project at subsidiary Taiheiyo Cement Philippines (TCPI) will cost around US$280m.

The company said that it decided to build the upgrade in response to four-year demand growth of 30% to 32Mt/yr in 2019 from 24Mt/yr in 2015, in line with economic growth in the Philippines. It said, “Despite demand shrinking in 2020 due to the effects of the coronavirus pandemic, it is expected to rise again with strong gross domestic product (GDP) recovery, estimated to be 5% in 2021, and the massive infrastructure investment programme ‘Build Build Build’.”

The company added, “The new line will offer significant advantages in terms of energy efficiency and will reduce CO₂ emissions from energy use in clinker production by more than 10% compared with the efficiency of the current line. Additionally, it is expected that the higher quality clinker produced with the new line will enable a reduction in the clinker factor and thereby realise a further CO₂ reduction per tonne of cement produced.” The line has the potential for expansion to 5.0Mt/yr production capacity.

In case you missed it, last week we covered a news story about Taiheiyo Cement’s plans to step up its lithium-ion battery recycling business at its integrated Tsuruga plant. It’s the latest step in the Japan-based cement producer’s collaboration with recycling company Matsuda Sangyo. The work is timely given that electric cars accounted for 2.6% of global car sales in 2019 and this share is growing. Many of these electric vehicles use lithium-ion batteries and moving away from fossil fuel powered transport creates new problems such as how to manage old batteries that can no longer be used.

Figure 1: Lithium-ion battery recycling process by Taiheiyo Cement and Matsuda Sangyo. Source: Translated from Taiheiyo Cement CEMS technical magazine.

Taiheiyo Cement and Matsuda Sangyo have been working on their process since 2011. First, they dismantle the batteries to extract base metals and plastics. They then heat the batteries in a dedicated ‘roaster’ using waste heat from the cement production process, before crushing and sorting them to remove cobalt, lithium, aluminium and scrap iron. Hydrogen fluoride produced in this stage is sent to the kiln where it is detoxified by calcium. Remaining elements from the battery that are not reclaimed are then used as an alternative fuel by the cement plant.

Taiheiyo Cement says that its roasting equipment can process up to 10t/day but it’s difficult at this stage to assess what demand for this service they might encounter. If, one estimate of 2m/yr used lithium-ion batteries by 2030 is correct and Taiheiyo Cement’s processing rate doesn’t get much higher, then 500 cement plants could possibly solve this problem. Yet, Taiheiyo Cement and Matsuda Sangyo have made no mention of the economics of their process. Other recycling methods also exist and research into new ones is ongoing. Cement plants recycling batteries might be economic compared to these alternatives or it might not, only time will tell.

The wider point here is that here is yet another industrial and logistical process that can potentially be linked to cement production. It follows well known ones, such as using alternatives fuels or captive power plants, or more novel ones, such as CO₂ or hydrogen networks. In each case the business of making cement changes as new methods are learned, new commodities are sought and new markets are connected. The cement company then has a choice about how involved it wants to become with each new process. The classic example here is the waste processing companies that surround co-processing, with some cement companies having their own dedicated subsidiaries, for example LafargeHolcim and Geocycle.

As it all becomes more complicated the role of a cement plant slowly becomes redefined. If a cement plant disposes of municipal waste and car batteries for its local community, generates electricity from its solar or wind plant for a nearby city and uses its CO₂ to either produce biofuels, plastics or baking soda is it still just a cement plant? The pivot by building materials manufacturers in recent years from a focus on cement to concrete suggests that once the societal or economic conditions are right it could change. For the time being cement plants remain cement plants but give it a thought next time you buy a new car.

Japan: Taiheiyo Cement recorded a net profit between 1 March 2020 and 30 June 2020, the first quarter of the 2021 financial year, of US$30.6m, down by 42% year-on-year from US$52.6m in the first quarter of the 2020 financial year. Sales fell by 3% to US$1.88bn from US$1.94bn. The company said that the coronavirus outbreak affected sales in all regions.

Japan: Taiheiyo Cement is starting large-scale recycling of large lithium-ion batteries at its integrated Tsuruga plant. It has been developing the process with Matsuda Sangyo since 2011 using exhaust gases from clinker production as part of dismantling, crushing and sorting processes to extract precious metals from the batteries. Taiheiyo Cement, its subsidiary Tsuruga Cement and Matsuda Sangyo started a recycling business in April 2020 following certification by the Japan Auto Recycling Partnership (JARP).

Japan: Taiheiyo Cement has installed three BWZ bucket elevators and a Louise TKF drag chain conveyor supplied by the Hong Kong-based subsidiary of Aumund at its new power plant at Ofunato. The cement producer uses both biomass and coal at the plant.

Two elevators and the drag chain conveyor are used to transport palm kernel shells (PKS) and palm empty fruit bunches (EFB), which are used as alternative fuels in the power plant. Each has a capacity of up to 150t/hr. The conveying concept is designed so that the different materials are kept apart and enter the silo buffer tanks separately. The third bucket elevator is used for coal handling. It is a gravity discharge type BWZ-S elevator with a capacity of up to 35t/hr.