Displaying items by tag: US

Once again Ecocem has shone the torch this week for a rare thing within Europe these days: a growing cement company. Its latest project is an import terminal in Sweden, as part of a deal with Bolidan, which launched on 22 September 2016. This supports an arrangement to supply cement for the Boliden Garpenberg mine. The agreement also includes supply for the Boliden Tara Mines in Ireland.

This follows the announcement to build a new slag grinding plant in Dunkirk, France in early September 2016 and the opening of a new terminal in Runcorn, UK earlier in the year. The 1.4Mt/yr Dunkirk plant is a joint-venture with the steelmaker ArcelorMittal, intended to target markets in north of France and in the UK. Once complete it will join Ecocem’s growing collection of grinding units in Ireland, France and the Netherlands. The slag-cement producer operates a 0.35Mt/yr plant at Dublin, a 0.7Mt/yr plant at Fos in the south of France and a 0.35Mt/yr plant at Moerdijk under its subsidiary Orcem Netherlands.

The focus on the UK makes sense given that Ecocem said that it had made commitments to sell more product in the UK in its first year than its total domestic sales in 2016. This followed the situation where, prior to entering the British market, Ecocem had to stop taking orders in the short term due to demand. If this is actually the case then it is unsurprising to note that Ecocem is also building a second UK terminal at Sheerness at the mouth of the River Thames near to London. As an aside, Francis Flower bought the Scunthorpe ground granulated blast furnace slag (GGBS) plant from Hanson Cement in mid-2015 after the local market regulator requested the sale.

As Charlie Zeynel, ZAG International, says in an interview to be published in the October 2016 issues of Global Cement Magazine, that supplementary cementitous materials, including slags, in cement blends has grown worldwide, particularly in Europe and Japan, where GGBS cement represents around 25% and 30% of cement sales respectively. Zeynel goes on to say that GGBS usage is set to rise in other parts of the world, particularly the US, but this helps to explain the market Ecocem is operating in within northern Europe.

Ecocem seems well aware of the potential for slag cements in the US because it is attempting to build a Euro45m grinding plant Vallejo, California under its Orcem Americas subsidiary. The process has so far been dogged by planning problems at the proposed site as well as organised local opposition, which does not want a new industrial plant in the neighbourhood and issues such as the increased traffic it would bring. The irony here is that Ecocem bills itself as an environmentally friendly cement producer. Yet even environmentally-friendly cement needs to be manufactured and taken to site.

To misquote Kermit the Frog: it’s not easy selling green cement. However, Ecocem’s progress in Europe is encouraging both in the UK and the wider area. Roll on the opening of the Sheerness terminal.

Find out more about Ecocem's operations here: www.ecocem.fr/en/

US: Eagle Materials has appointed George Damiris to its board of directors. Damiris is the chief executive officer and president of HollyFrontier Corporation. He also serves as a director at HollyFrontier and Holly Logistics Services.

Congratulations are in order for CalPortland. It celebrates its 125th anniversary or quasquicentennial today. According to the company blurb on the website, a cement plant was established in 1891 in Colton, California. This was the first plant west of the Rockies and it went on to supply building materials towards the development of Los Angeles. However, the website doesn’t exactly shout about its purchase in 1990 by one of the Japanese companies that eventually became Taiheiyo Cement. Its earliest constituent company, the Cement Manufacturing Company, was established 10 years earlier than CalPortland in 1881. So perhaps CalPortland could celebrate the 135th anniversary of its Japanese owners at some point this year too.

Table 1: Age of leading cement companies by production capacity: Source: The Top 100 Report 2016, Global Cement Directory 2016, company websites, Wikipedia

As can be seen from Table 1, a list of major cement producers by production capacity in 2016, most of the European or non-Chinese multinationals are old. They have roots in various predecessor companies going back at least a century. By contrast most of the Chinese producers on this list are far younger having been established since the 1980s.

Table 2: Age of selected older cement companies still in business: Source: Company websites.

Table 2 adds an international perspective from the cement industry to CalPortland’s achievement. It’s an arbitrary list chosen from larger, mostly multinational cement producers that still operate today. As such it may well be missing some key names. However, they all follow the first industrial revolution innovators in cement such as John Smeaton, Joseph Aspdin or Louis Vicat. A generation later the first cement companies that have endured to the present in some form or another such as Lafarge, Vicat or Dyckerhoff started to appear. As impressive as the longevity of these companies are though, they pale in comparison to Saint-Gobain, the French construction materials company that was first established in 1665.

A BBC News article on company lifespans found that the average lifespan of a company listed in the S&P 500 index of leading US companies had decreased from 67 years in the 1920s to 15 years in 2012, according to research by Professor Richard Foster of Yale University [LINK]. By this measure most of the cement companies examined here are doing well. Yet, most of the older ones have endured such a tangle of mergers, acquisitions and changes that it is debatable whether any of them could be considered the same company as their originator. Joseph-Auguste Pavin de Lafarge may have started his operations at Teil in the Ardèche region of France in 1833 but LafargeHolcim, its modern day successor, is only one year old following its creation from Lafarge and Holcim in 2015.

This leads to the Ship of Theseus' paradox or the thought experiment regarding whether an object that has all of its parts replaced is still the same object. Just as humans gradually have most of their constituent parts (or cells) replaced over time so too do long-lasting companies. One superficial response is to point out that memory or heritage can have a lasting effect for individual, national and corporate entities. Just compare, for example, the different outlook of western European national states with millennia of continuation to much newer nations in the Americas. European countries, like the UK, are often seen as being old and stuffy compared to new world dynamism despite all the citizens in both regions being younger than their countries.

To end on a cementitious note, perhaps this dilemma should be renamed the Kiln of Theseus paradox for the cement industry. If a cement plant’s engineers replace all the parts of a cement kiln is it still the same kiln? The suspicion is that the staff at CalPortland would definitely think it is!

If any readers have a suggested name for a 135th anniversary This email address is being protected from spambots. You need JavaScript enabled to view it.

US: Ash Grove Cement has appointed Chengqing (Cheng) Qi as its technical centre director at the company’s headquarters in Overland Park, Kansas. In his new role, Qi will oversee operations of the company’s technical centre. Greg Barger, an American Concrete Institute (ACI) Fellow and Ash Grove’s long-time technical centre director, will retire in 2017. Barger will continue in this role and work alongside Qi until the transition is complete.

Most recently Qi served as technical manager for a cement manufacturer where he was responsible for troubleshooting cement, concrete and aggregate performance, testing materials and evaluating new material sources. Prior to that, he was with Professional Service Industries in Fairfax, Virginia, as a materials engineer and petrographer.

Qi has authored or contributed to more than 20 technical papers in peer-reviewed journals and conference proceedings. He is a member of multiple technical committees for the ACI and ASTM International.

Qi holds a doctorate in civil engineering, with an emphasis on cement and concrete materials, from Purdue University’s School of Civil Engineering in West Lafayette, Indiana, and bachelor’s and master’s degrees in materials science and engineering from Southeast University in Nanjing, China.

Cementos Argos’ deal to buy the Martinsburg cement plant in West Virginia from HeidelbergCement makes a lot of sense. After all, the Colombian-based cement producer has seen its US cement assets perform well so far in 2016 with a cement sales volumes increase of 29% year-on-year to 1.99Mt and an overall sales revenue boost of 19.7% to US$700m. Compare that to the challenges the company has faced so far this year on its home turf in Colombia. There, cement sales volumes fell by 15.5% to 2.47Mt and sales revenue fell slightly to US$465m.

Argos has picked up the Martinsburg cement plant and eight cement terminals in the surrounding states for US$660m. The sale was mandated by the US Federal Trade Commission as one of the conditions of HeidelbergCement’s purchase of Italcementi including its US subsidiary Essroc, the current owner of the plant.

Symbolically, the purchase takes Argos right up to the Mason–Dixon line, the old survey line sometimes used to describe the dividing line between the so-called ‘north’ and ‘south’ in the US. The cement plant is south of the line in West Virginia but some of the cement terminals are firmly in the north-east. Outside of the company’s home turf in Colombia it has a maritime presence around the Gulf of Mexico. Although Martinsburg is inland, the new terminals in Norfolk, Virginia and Baltimore push Argos’ distribution network up the east coast. This could potentially push Argos into conflict with the subject of last week’s column, McInnis Cement, a Canadian cement plant under construction with eventual aspirations to sell its cement to the US.

Back in the US specifically the new plant will bring Argos’ total of integrated cement plants to four, joining Roberta in Alabama, Newberry in Florida and Harleyville in South Carolina. All together the producer will have a production capacity of around 6Mt/yr in the US following the acquisition. Back in 2014 when Global Cement visited Martinsburg the plant was distributing its cement about 60:40 via truck and rail. At that time the plant was shifting cement in an area from central Ohio eastwards to western Pennsylvania and south to southern Virginia, as well as in North Carolina.

Argos has paid US$300/t for Martinsburg’s production capacity of 2.2Mt/yr. As ever determining the cost of the terminals proves difficult. This compares to the US$267t/yr that Grupo Cementos de Chihuahua (GCC) paid to pick up two plants from Cemex in May 2016 or the US$375/t that Summit Materials paid Lafarge for a cement plant and seven terminals in July 2015. Previous Argos purchases in the US were around US$220 – 250/t for deals with Lafarge and Vulcan in 2011 and 2014 respectively. It is also worth considering that Essroc upgraded Martinsburg significantly in 2010 to a dry-process kiln and that the site has a waste-to-solid-fuel plant from Entsorga due to become operational in 2017.

The purchase of Martinsburg by Argos seems like an obvious move. It predicts a compound annual growth rate of 5.4% for cement consumption in the American states it operates within between 2016 and 2020. However, this may be optimistic given that the Portland Cement Association’s chief economist Ed Sullivan has downgraded his consumption forecasts for the US as a whole to 3.4% from 5% as he waits for the recovery to really kick in. The southern US states have also recovered faster since a low in 2009 than the northeastern ones. The purchase marks a new chapter in Cementos Argos’ expansion strategy

US: Martin Marietta Materials has elected two new directors to its board. John J Koraleski, former Chairman of the Board of Directors and CEO of Union Pacific Corporation, was elected to Martin Marietta's Board of Directors on 15 August 2016. Koraleski, aged 65 years, also served as Executive Chairman of the Board of Directors for Union Pacific from February 2015 until his retirement in September 2015. Koraleski will serve on Martin Marietta's Audit Committee, Management Development and Compensation Committee, and Executive Committee.

At its Annual Meeting of Shareholders in May 2016, Donald W Slager was elected to Martin Marietta's Board of Directors. Slager, aged 54 years, is President and CEO of Republic Services, as well as a member of its Board of Directors. Slager will serve on Martin Marietta's Finance Committee and Ethics, Environment, Safety and Health Committee.

The two new directors fill the seats previously held by Frank H Menaker, Jr and Richard A Vinroot, both of whom reached the mandatory retirement age provided in Martin Marietta's bylaws. They were not eligible for election at the 2016 Annual Meeting of Shareholders and retired from the Board after 23 and 20 years of service to the company, respectively.

Martin Marietta's 10-member Board of Directors now consists of nine outside directors.

US: Dust Control Technology (DCT) has appointed Laura Stiverson as its president. She joined the firm in 2008 and has been the general manager for five years. Stiverson has been cited as instrumental in developing a number of the company’s products, including the OdorBoss family of machines and the Fusion equipment design.

Incorporated in 2004, DCT supplies open-area dust suppression equipment for applications in recycling, demolition, waste and scrap handling, mining, slag and ash management, coal processing, landfills and other industries. Headquartered in Peoria, Illinois, the company supplies its dust and odour control products to customers around the world.

Back in the May 2016 issue of Global Cement Magazine we asked key people at the Portland Cement Association how they thought the US presidential election might affect the local cement industry. Wisely, for an advocacy organisation with offices in Washington DC, no one would be drawn, citing a lack of information. At that point it was still unclear who was going to be on the final ticket. However, we all missed a trick because one candidate, Donald Trump, had been talking about building ‘a border fence like you have never seen before’ since at least mid-2014. And that fence could potentially require a lot of cement.

Researchers at market analysts Bernstein’s sent a note to clients last week ahead of the Republican National Convention looking at the implications of if Donald Trump became president of the US and actually set out to build his 40ft high concrete wall between the US and Mexico. The result would be a 2.4Mt boost in demand for cement from cement producers near to the border. In terms of market demand Bernstein concluded that this would add over 1% to cement demand in both 2018 and 2019, a healthy ‘shot in the arm’ to the already pepped-up US cement industry, which is currently growing at around 5%/yr.

Map 1: Map of cement and ready-mix concrete plants near to the US - Mexico border. Source: Bernstein Materials Blast. Note – Bernstein does not show the Capitol Cement plant in San Antonio.

Needless to say, Bernstein’s calculations pile-drive assumptions into assumptions, atop of Trump’s political rhetoric. It bases its calculations on a border wall similar to the Israeli West Bank barrier built out of precast concrete panels. It also tries to model how much concrete and cement would be required depending on the differing height’s Trump has trumpeted at his rallies.

The kicker to this tongue-in-cheek analysis is that the construction company that stands to benefit the most from this infrastructure project is Mexican!

Cemex has significantly more cement plants and ready-mix concrete plants than any other company within a 200-mile zone either side of the border. Looking at integrated cement plants alone, it has six plants in the regions near to the proposed wall from the east and west coasts. Its nearest competitors, CalPortland with four plants and Grupo Cementos de Chihuahua with three plants, are more regionally based in the western US and Chihuahua state in Mexico. Clearly Cemex didn’t rate the chances of Donald Trump’s wall actually happening when it agreed to sell its Odessa cement plant to Grupo Cementos de Chihuahua in May 2016.

All of this goes to show that, wherever you stand on the Donald Trump presidency bid, if you manufacture cement near the US-Mexican border you might be working overtime if he (a) actually becomes president, (b) actually manages to start building his wall and (c) actually decides to make it using cement. Yet before anybody starts popping champagne corks consider this: there might also be unintended consequences for the cement sector. Restricting current legal and illegal migration trends from Mexico to the US might have a greater negative effect on the US cement industry, and the overall economy, than ordering one large infrastructure project. Working that one out is harder than a guesstimate of how much cement a border wall might consume. Probably best not to ask at this stage who might actually pay for the Great Wall of Donald Trump.

The Federal Trade Commission (FTC) gave HeidelbergCement permission to complete its acquisition of Italcementi assets in the US on 17 June 2016. This was the second and final major competition body that could have challenged the purchase, following approval by the European Commission in late May 2016. Although the FTC consent now faces a month for comment the deal is looking likely to complete towards the end of the summer.

HeidelbergCement and Italcementi have gotten away with having to sell just one cement plant and 11 terminals in the US. The Lafarge-Holcim merger in 2015 had it tougher. Those companies were forced to sell two cement plants, two slag grinding plant and a host of terminals. Admittedly LafargeHolcim is now the biggest cement producer in the US (and the world) but HeidelbergCement will hold more integrated cement plants in the US following its acquisition.

As predicted the FTC took exception with the proximity of the company’s assets in West Virginia and Pennsylvania following the acquisition. So the parties have agreed to sell the Essroc Martinsburg integrated cement plant in West Virginia. When Global Cement visited the plant in late 2013 the staff told us that cement from the plant was distributed from central Ohio eastwards to western Pennsylvania and south to southern Virginia. The plant also switched over to a FLSmidth dry production line in 2010 giving it a clinker production capacity of 1.6Mt/yr, making it one of the newer plants in the Essroc stable.

The FTC also flagged up competition concerns in five metropolitan areas: Baltimore-Washington, DC; Richmond, Virginia; Virginia Beach-Norfolk-Newport News, Virginia; Syracuse, New York; and Indianapolis, Indiana. In light of this the proposed consent agreement requires the merged company to divest seven Essroc terminals in Maryland, Virginia and Pennsylvania and a Lehigh terminal in Solvay, New York. Two additional Essroc terminals in Columbus and Middlebranch, Ohio are to be sold at the option of the buyer and subject to FTC approval. Finally, Essroc’s terminal in Indianapolis is to be sold to Cemex.

Funnily enough, the FTC took about a year to approve both the merger of Lafarge and Holcim and HeidelbergCement’s purchase of Italcementi. This compares to the European Commission which took nine months to approve the Lafarge-Holcim deal but which took 11 months to clear the HeidelbergCement-Italcementi one. Given the greater overlap of assets of the Lafarge-Holcim merger in both Europe and the US one might have thought that the approval process would have taken longer. Or maybe bureaucracy moves at a speed all of its own. Read into this what you will. The creation of the world’s second largest multinational cement producer draws closer.

US: Adriano Greco will become the CEO of FCT Inc from 1 August 2016. Greco became the company’s US-based sales director in early 2016. Greco has previously acted as managing director of Greco and as sales director for Gebr. Pfeiffer.

Other staff movements at FCT Inc include the appointment of Ricardo Costa as a technical director based in Brazil. The company will also open a new office in Florida to support its development in the Latin American market. Elsewhere in the group, Joel Maia has joined FCT as the technical director of its European subsidiary, FCT GmbH.