Displaying items by tag: costs
Singaporean parliament enacts tightened carbon credit scheme
17 November 2022Singapore: Parliament passed the Carbon Pricing (Amendment) Bill earlier in November 2022. Under the act, Singapore will raise the price of carbon credits to US$18.17/t from 2024, and to US$32.71/t from 2026. CNA News has reported that the government said that the new legislation will provide the basis for the realisation of carbon credit prices of over US$36.31/t by 2030, in line with the country's 2050 net zero CO2 emissions commitment.
Polluters which emit over 25,000t/yr of CO2 currently pay US$3.65/t for carbon credits.
India: Grasim Industries recorded US$6.86bn in consolidated sales during the first half of the 2023 financial year, which ended on 30 September 2022. The figure corresponds to a 31% increase from US$5.25bn in the first half of the 2022 financial year. Cement and allied products contributed US$3.59bn in sales, up by 22% from US$2.95bn. 36% costs growth caused the producer's net profit to fall by 3.3% in the period, to US$527m from US$545m.
JK Cement increases income as profit drops during first half of 2023 financial year
14 November 2022India: JK Cement recorded US$536m in standalone income during the first half of its 2023 financial year, up by 26% year-on-year from US$427m. Throughout the period, the producer's profit after tax declined by 19%, to US$37.7m from US$46.4m. Also on a standalone basis, the company reported total expenses of US$482m, up by 31% year-on-year from US$368m. JK Cement's consolidated income rose by 23% to US$558m, while the group's expenses rose by 30% to US$509m, resulting in a 20% consolidated net profit drop to US$33.5m.
Sri Lanka: Tokyo Cement's consolidated sales rose by 34% year-on-year to US$82.8m during the first half of its 2023 financial year. Its cost of sales rose by less than 1% to US$50.8m. As such, the company recorded a profit for the period of US$10.1m, up by more than a factor of eight from first-half 2022 financial year levels.
Bangladesh: Crown Cement has estimated the total cost of cement capacity currently unused in Bangladesh at US$1.46bn. The figure is even higher when maintenance costs are included, according to Crown Cement's chief advisor Masud Khan. Over the past 15 years, national cement capacity has nearly quadrupled to 83.3Mt/yr from 22.4Mt/yr, while demand has merely doubled to 46.7Mt/yr from 22.8Mt/yr. Khan estimated the cost per 1Mt/yr of new Bangladeshi cement capacity over the period at US$40m.
Khan said that producers continue to anticipate an acceleration in local cement consumption growth in the medium-term future. Reflecting on the situation up to the end of 2022, he said "They thought if they were not prepared for the growing demand, they would lose their market share. That was why they continued expansion, bearing the burden of excess capacity." Khan forecast a further decline in the industry's capacity utilisation if gross domestic product undergoes a forecast drop during the 2023 financial year, impacting on producers' results for the year.
Heidelberg Materials ‘weathering’ high costs
07 November 2022Germany: Heidelberg Materials has reported that it has increased its revenue by 13% year-on-year to Euro15.8bn during the first nine months of 2022. It said that high energy and raw material costs seen during the third quarter were only partly offset. The group’s net result for the nine-month period showed a 6.1% decline to Euro2.72bn. The decline was also due to significantly higher energy prices and increased raw material costs, which Heidelberg Materials said could only be offset partially by energy savings, cost discipline and price increases.
In the first nine months of 2022, sales volumes in all business lines declined due to consolidation and the economic impact from the Russian-Ukraine war on the European economy. Cement and clinker sales reduced by 6% to 90.0Mt, compared to 95.7Mt in the first nine months of 2021. Heidelberg Materials cited capacity reduction in North America, specifically its Western US operations, and the economic downturn in Europe as factors. Excluding consolidation effects, cement and clinker sales were down by 3.8%.
Heidelberg Materials said that it forecasts increased revenue for 2022, which will be adversely affected by increased outgoings. It expects global demand for building materials to weaken slightly on the back of higher costs and inflationary pressures.
Italy: Cementir Holding sold 8.2Mt of cement and clinker during the first nine months of 2022, down by 1.7% year-on-year from nine-month 2021 levels. China, Denmark, Egypt and Türkiye all contributed to the decline. Group nine-month revenues were Euro1.26bn, up by 25% year-on-year. Third-quarter 2022 revenues rose most sharply, by 45%, in Türkiye, followed by the US (38%), the Nordic and Baltic region (20%) and Belgium (17%). During the third quarter of the year, operating costs increased by 36% to Euro365m from Euro268m. Raw materials, fuels and transport costs all contributed to the rise.
In the first nine months of 2022, the group recorded earnings before interest, taxation, depreciation and amortisation (EBITDA) of Euro238m, up by 11% from Euro215m during the first nine months of 2021.
Costs growth lowers JK Lakshmi Cement's profit in first half of 2023 financial year
04 November 2022India: JK Lakshmi Cement recorded consolidated sales of US$367m during the first half of its 2023 financial year. The figure corresponds to 19% year-on-year sales growth from US$307m in the first half of the 2022 financial year. Nonetheless, costs growth of 23% to US$338m from US$275m caused the company's net profit to drop by 21% to US$21.5m from US$27.1m.
Dalmia Bharat increases income as earnings drop in first half of 2023 financial year
03 November 2022India: Dalmia Bharat sold 12Mt of cement during the first half of its 2023 financial year, up by 20% year-on-year from 10Mt in the first half of the 2022 financial year. Its income was US$757m, up by 21% year-on-year from US$624m. Meanwhile, the company's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 28% to US$116m from US$161m. The company noted the growth effects of 'fuel price corrections' during the second quarter of 2022, which it expects to increase its profitability during the second half of year.
Managing director and CEO Punit Dalmia said “We are pleased with the performance of the first half of this year despite the intense inflationary environment, and are confident that we will be among the best in the industry, leaving the bad times behind. While the geopolitical turmoil continues, we are confident in the resilience of the Indian economy, which is further cementing its position at the centre of global growth and consumption.” Dalmia continued “In view of the government's continued momentum in the infrastructure sector, driven by the revitalisation of the housing sector, we expect the demand for cement to grow rapidly. Looking ahead, we will remain focused on our capacity expansion progress.”
Dalmia Bharat's 14 integrated cement and grinding plants span 10 Indian states and have a capacity of 37Mt/yr, India's fourth largest.
Slashing cement's CO2 emissions Down Under
02 November 2022In Australia and New Zealand, four producers operate a total of six integrated cement plants, with another 13 grinding plants situated in Australia. This relatively small regional cement industry has been on a decades-long trajectory towards ever-greater sustainability – hastened by some notable developments in recent weeks.
Oceania is among the regions most exposed to the impacts of climate change. In Australia, which ranked 16th on the GermanWatch Global Climate Risk Index 2021, destructive changes are already playing out in diverse ways.1 Boral reported 'significant disruption' to its operations in New South Wales and southeast Queensland due to wet weather earlier in 2022. This time, the operational impact was US$17.1m; in future, such events are expected to come more often and at a higher cost.
Both the Australian cement industry and the sole New Zealand cement producer, Golden Bay Cement, have strategies aimed at restricting climate change to below the 2° scenario. Golden Bay Cement, which reduced its total CO2 emissions by 12% over the four-year period between its 2018 and 2022 financial years, aims to achieve a 30% reduction by 2030 from the same baseline. The Australian Cement Industry Federation (CIF)'s 2050 net zero cement and concrete production roadmap consists of the following pathways: alternative cements – 7%; green hydrogen and alternative fuels substitution – 6%; carbon capture – 33%; renewable energy, transport and construction innovations – 35% and alternative concretes – 13%, with the remaining 6% accounted for by the recarbonation of set concrete.
Australia produces 5.2Mt/yr of clinker, with specific CO2 emissions of 791kg/t of clinker, 4% below the global average of 824kg/t.2 Calcination generates 55% of cement’s CO2 emissions in the country, and fuel combustion 26%. Of the remainder, electricity (comprising 21% renewables) accounted for 12%, and distribution 7%. Australian cement production has a clinker factor of 84%, which the industry aims to reduce to 70% by 2030 and 60% by 2050. In New Zealand, Golden Bay Cement's main cement, EverSure general-purpose cement, generates CO2 at 732kg/t of product.3 It has a clinker factor of 91%, and also contains 4% gypsum and 5% added limestone.
Alternative raw materials
Currently, Australian cement grinding mills process 3.3Mt/yr of fly ash and ground granulated blast furnace slag (GGBFS). In Southern Australia, Hallett Group plans to commission its upcoming US$13.4m Port Augusta slag cement grinding plant in 2023. The plant will use local GGBFS from refineries in nearby Port Pirie and Whyalla, and fly ash from the site of the former Port Augusta power plant, as well as being 100% renewably powered. Upon commissioning, the facility will eliminate regional CO2 emissions of 300,000t/yr, subsequently rising to 1Mt/yr following planned expansions. Elsewhere, an Australian importer holds an exclusive licencing agreement for UK-based Innovative Ash Solutions' novel air pollution control residue (APCR)-based supplementary cementitious material, an alternative to pulverised fly ash (PFA), while Australian Graphene producer First Graphene is involved in a UK project to develop reduced-CO2 graphene-enhanced cement.
Golden Bay Cement is investigating the introduction of New Zealand's abundant volcanic ash in its cement production.
Fuels and more
Alternative fuel (AF) substitution in Australian cement production surpassed 18% in 2020, and is set to rise to 30% by 2030 and 50% by 2050, or 60% including 10% green hydrogen. In its recent report on Australian cement industry decarbonisation, the German Cement Works Association (VDZ) noted the difficulty that Australia's cement plants face in competing against landfill sites for waste streams. It described current policy as inadequate to incentivise AF use.
Cement producer Adbri is among eight members of an all-Australian consortium currently building a green hydrogen plant at AGL Energy’s Torrens Island gas-fired power plant in South Australia.
Across the Tasman Sea, Golden Bay Cement expects to attain a 60% AF substitution rate through on-going developments in its use of waste tyres and construction wood waste at its Portland cement plant in Northland. The producer will launch its new EcoSure reduced-CO2 (699kg/t) general-purpose cement in November 2022. In developing EcoSure cement, it co-processed 80,000t of waste, including 3m waste tyres. The company says that this has helped in its efforts to manage its costs amid high coal prices.
Carbon capture
As the largest single contributor in Australia's cement decarbonisation pathway, carbon capture is now beginning to realise its potential. Boral and carbon capture specialist Calix are due to complete a feasibility study for a commercial-scale carbon capture pilot at the Berrima, New South Wales, cement plant in June 2023.
At Cement Australia's Gladstone, Queensland, cement plant, carbon capture is set to combine with green hydrocarbon production in a US$150m circular carbon methanol production facility supplied by Mitsubishi Gas Chemical Company. From its commissioning in mid-2028, the installation will use the Gladstone plant's captured CO2 emissions and locally sourced green hydrogen to produce 100,000t/yr of methanol.
More Australian cement plant carbon capture installations may be in the offing. Heidelberg Materials, joint parent company of Cement Australia, obtained an indefinite global licence to Calix's LEILAC technology on 28 October 2022. The Germany-based group said that the method offers effective capture with minimal operational impact.
Cement Australia said “The Gladstone region is the ideal location for growing a diverse green hydrogen sector, with abundant renewable energy sources, existing infrastructure, including port facilities, and a highly skilled workforce." It added "The green hydrogen economy is a priority for the Queensland government under the Queensland Hydrogen Industry Strategy.”
Logistics
Australian and New Zealand cement facilities' remoteness makes logistics an important area of CO2 emissions reduction. In Australia, cement production uses a 60:40 mix of Australian and imported clinker, while imported cement accounts for 5 – 10% of local cement sales of 11.7Mt/yr.
Fremantle Ports recently broke ground on construction of its US$35.1m Kwinana, Western Australia, clinker terminal. It will supply clinker to grinding plants in the state from its commissioning in 2024. Besides increasing the speed and safety of cement production, the state government said that the facility presents 'very significant environmental benefits.'
Conclusion
Antipodean cement production is undergoing a sustainability transformation, characterised by international collaboration and alliances across industries. The current structure of industrial and energy policy makes it an uphill journey, but for Australia and New Zealand's innovating cement industries, clear goals are in sight and ever nearer within reach.
References
1. Eckstein, Künzel and Schäfer, 'Global Climate Risk Index 2021,' 25 January 2021, https://www.germanwatch.org/en/19777
2. VDZ, 'Decarbonisation Pathways for the Australian Cement and Concrete Sector,' November 2021, https://cement.org.au/wp-content/uploads/2021/11/Full_Report_Decarbonisation_Pathways_web_single_page.pdf
3. Golden Bay Cement, 'Environmental Product Declaration,' 12 May 2019, https://www.goldenbay.co.nz/assets/Uploads/d310c4f72a/GoldenBayCement_EPD_2019_HighRes.pdf