Displaying items by tag: coronavirus
Spain’s cement producers unite against coronavirus waste
26 March 2020Spain: Members of the Spanish cement association Oficemen have offered help to the government in the disposal of medical waste contaminated with the coronavirus, for which any kiln line with the right alternative fuel processing capabilities will be made available. Minister for Industry Reyes Maroto said that the plants will be used for waste’s elimination ‘only insofar as companies can continue operating.’
Cement industry reactions to coronavirus
25 March 2020Cement producers and suppliers are now reacting to the coronavirus pandemic at scale. The biggest obvious development has been the lockdown in India that began on 24 March 2020. The implications for the cement industry are profound given the country’s population (1.3Bn) and massive cement consumption under normal conditions. It is the country with the world’s second largest cement production capacity.
UltraTech Cement, the biggest producer, said that it was suspending production at ‘various’ locations although it added that the situation was ‘dynamic’ and that it was monitoring it from time to time. Ambuja Cement and JK Lakshmi Cement have done likewise. The latter has suspended cement production at an integrated plant in Rajasthan and three grinding plants in Gujarat. Some Indian states have moved faster than others towards shutting down movement of people so JK Lakshmi’s decision may merely be based on legal necessity. However, a difference may arise in producer strategies between keeping integrated and grinding plants open. Building up inventory is one strategy seen in poor market conditions previously around the world. Alternatively, moving to more of a grinding model might make sense in some territories if, as is happening, countries implement lockdowns at different periods. However, some Indian states have moved faster than others towards shutting down movement of people and JK Lakshmi Cement’s closure pattern may simply reflect this.
At the international scale HeidelbergCement gave an idea to Reuters of the challenge facing the multinationals. Chief executive officer (CEO) Dominik von Achten described the start of 2020 as being strong but that construction projects were being delayed in the US and that activity in France and Spain was starting to weaken. Unsurprisingly, the company has shut down three of its plants in Lombardy at the centre of the Italian epidemic. He added that the group was holding a daily crisis call to assess the effect of the virus upon staff. He also said that the group was stockpiling cement amid the disruption. The clear warning sign was of an existential threat like that faced by the airlines whereby sales could simply stop for a three or four week period… or longer.
On the supplier side, Denmark’s FLSmidth has issued a robust plan on how it is aiming to maintain service and support for its customers. Past all the now-usual stuff such as remote working it included detail on how to support clients on site where absolutely necessary on a case-by-case basis. With regards to its supply chain it pointed out that it was confident, “that any local interruptions to our suppliers can be minimised, even when the agility of some suppliers is put to the test. We have redundancy built into the system.” To this end it emphasised the global nature of its business to ensure that it could deliver parts and equipment to its customers. It claimed that it coped with coronavirus in China due to its ‘very flexible’ supply chain but did admit to some supply chain impacts. Yet it says that production is back to approaching full capacity with workshops in Qingdao and Shanghai above 90% as they work their way through accumulated backlogs. Finally, it is also offering advice on how the company can support its customers on reducing or shutting down operations.
Other supplier comments on the situation have mainly been about protecting staff, working remotely and supporting customers through continued supply of equipment and services. Back in India, Sameer Nagpal, the CEO of refractory manufacturer Dalmia-OCL told Business Standard that the company was coping so far with the crisis with little major impact seen so far. Its raw material supply chain was dependent on China but after some minor disruption it was secure. Most of its customers are domestic, where it hadn’t reported problems so far, although this may change with the Indian lockdown. Exports were a different story as it sends around 10% of its production abroad and it has a plant in Germany. In Europe it was seeing a challenge due to supply chain disruption.
The experiences above are a snapshot of some of what is happening in parts of the industry as coronavirus disruption hits home. China’s restrictions are easing, most of Europe is in lockdown, India has started its quarantine and the US has restricted movement in about a third of its states. The current restrictions in the UK, for example, allow for construction work to continue but local media is debating the associated risks for workers. Other territories have different rules. All of this is affecting demand for cement and concrete. This in turn feeds through to producers and their suppliers. Global Cement continues to monitor the situation and wishes readers a safe passage through the pandemic.
Indian producers pull plug on operations
24 March 2020India: Several cement producers have responded to the coronavirus pandemic with plant closures. Reuters has reported that India Cements has temporarily closed all of its plants. JK Lakshmi Cement has suspended cement production at its 4.2Mt/yr integrated plant in Jaykaypuram, Rajasthan and at three grinding plants. JK Lakshmi subsidiary Udaipur Cement Works has shut its 1.6Mt/yr integrated Udaipur plant, also in Rajasthan.
Dalmia Bharat refractory production subsidiary Dalmia-OCL’s CEO Sameer Dagpaal told the Business Standard newspaper that he expected the virus’ impact on the company to be ‘relatively limited,’ with a slowdown in demand from the cement sector lasting at most ‘a couple of months.’ He noted that there had been ‘some minor supply-side disruptions relating to a shortage of raw materials from China.’
On 24 March 2020 the all-India total number of coronavirus cases crossed 500, with nine dead, according to Al Jazeera. 200 cases are in the western states of Maharashtra and Kerala.
FLSmidth reports coronavirus disruptions
24 March 2020Denmark: FLSmidth has reported ‘increasing disruptions to customers’ and its own operations’ and higher costs due to ‘more complex logistics and a weaker fixed cost absorption’ following the coronavirus outbreak. It says that around half of employees are working remotely.
FLSmidth continues its business improvement initiatives launched in 2019 and has implemented a capital expenditure (CAPEX) reduction, salary adjustment postponement and hiring freezes.
Simotix Connect 400 forms basis of Currax and Siemens joint Industry 4.0 pilot project
24 March 2020Germany: Currax and Siemens have announced their collaboration on a mill operations digitisation pilot project involving the Simotics Connect 400 motor data collector and transmitter. They hope that analysis of data processed via the Simotics 400 will better enable the remote operating of mills ‘to increase efficiency and component life’ and speeding the shift towards automation and production that is resilient to crises such as the coronavirus outbreak.
HeidelbergCement boosted in ‘bizarre’ start to 2020
23 March 2020Germany: HeidelbergCement started the new year better than ever before, according to chief executive officer (CEO) Dominik von Achten. He reported that this had been mainly due to good weather before the onset of the coronavirus outbreak. Von Achten warned that the situation had already changed beyond recognition since mid-February 2020 for the multinational.
He said that the coronavirus outbreak had not only caused plants to be closed, either by enforcement or due to a lack of demand, but because migrant workers are unable to travel to construction sites. For example, workers from Eastern Europe are increasingly lacking in Western Europe. In Indonesia, a market that is important for HeidelbergCement, the lack of Chinese construction workers is stark, as they remain confined to their home country.
According to Von Achten, HeidelbergCement is now paying particular attention to its costs, has deferred all unnecessary investments and has considerable liquidity leeway. He added that the group is likely to benefit significantly from lower fuel costs as conditions improve over the course of 2020. HeidelbergCement is currently particularly affected in Lombardy, where its Italcementi subsidiary has its headquarters. HeidelbergCement has shut down its factories in Italy and imposed a freeze on hiring and non-essential spending. "You can see it's hitting the world like a wave," says Von Achten. "It's a tough test."
EU ETS prices fall to lowest level since 1 November 2018
20 March 2020EU: The coronavirus has caused emissions credits sold under the Emissions Trading Scheme to take a price dive to Euro16.31/t of CO2 on 19 March 2020, down by 36% month-on-month from Euro25.66/t on 19 February 2020 and 22% year-on-year from Euro21.01/t on 19 March 2020. Environmental consultancy firm Energy Aspects said, “As the COVID-19 outbreak is now spreading rapidly in Europe, it will start to reduce emissions as lockdowns are put in place in multiple countries,” according to Reuters. The European Commission has forecasted a 1.0% contraction in the EU economy in 2020, revising its February estimate of 1.4% growth year-on-year. This would correspond to a reduction in industrial CO2 emissions of between 10.0Mt and 20.0Mt by the end of year.
Suppliers reaffirm the importance of cement in crisis
20 March 2020World: Suppliers are taking all necessary measures to ensure the continued supply of equipment and services to cement industry customers the world over during the coronavirus crisis. US-based Webster and Germany-based Starlinger have both cut travel and limited face-to-face meetings to reduce the virus’ impact on the supply chain. Austria-based RHI Magnesita has established regional task forces consisting of members of various departments to monitor and react to the spread of coronavirus. FLSmidth, which is using its remote monitoring, maintenance and support software to avoid all but essential on-site work, said, “Cement is a vital, basic component in keeping societies functioning as normally as possible.”
World: Cement producers are mobilising human and material resources and implementing strategies to keep operations going with the minimum possible impact from the coronavirus. Germany-based HeidelbergCement subsidiary Lehigh Hanson has closed a minority of its facilities and prepared a contingency plan for further reduced operations ‘if conditions worsen.’ Brazil-based Votorantim Cimentos has established a Special Coronavirus Crisis Management Commission to aid communications and emergency response implementation across its facilities. UK-based Quinn has suspended all non-essential travel for employees.
Germany: HeidelbergCement’s profit was Euro1.24bn in 2019, down by 3.4% from Euro1.23bn in 2018. Its revenue grew by 4.3% to Euro18.9bn from Euro18.1bn. HeidelbergCement says that it reduced its specific net CO2 emissions by 1.5% year-on-year to 590kg/t from 599kg/t in 2018 and ‘intensified its research and development (R&D) efforts on carbon capture and utilisation/storage (CCU/S)’ in every operating region globally.
The group announced a year-on-year increase in volumes in the first two months of 2020, with all but three of its plants (HeidelbergCement subsidiary Italcementi’s 2.8Mt/yr Calusco plant, 2.5Mt/yr Rezzato plant and 0.6Mt/yr Tavernola plant in Lombardy region, Italy) still operating through the coronavirus pandemic, though it noted that construction is slowing in the US, Australia and Western Europe due to the outbreak.
HeidelbergCement cancelled its 7 May 2020 annual general meeting (AGM) ‘due to the spread of the coronavirus.’