India: JSW Group plans to build a US$7.83bn steel complex in Jagatsinghpur district, Odisha. The complex will include a cement grinding plant. The Business Standard newspaper has reported that JSW Group's expansion plans in Odisha also include an electric vehicle and battery plant, at a cost of US$4.82bn. The group said that the investments reflect its commitment to diversifying its capabilities and contributing to the economic growth of Odisha.

Canada: Heidelberg Materials North America has awarded Technip Energies a front-end engineering and design (FEED) contract for its carbon capture project at the Edmonton cement plant in Alberta. The project will deploy Shell’s Cansolv CO₂ capture system to remove 1Mt/yr from the plant’s flue gases. Carbon capture will commence in late 2026, subject to funding finalisation.

Heidelberg Materials North America’s Northwest regional vice president, cement operations, Joerg Nixdorf said “We are excited to take this latest step in our journey to produce the world’s first net-zero cement.” Nixdorf added “With each milestone we come closer to realising our vision of leading the decarbonisation of the cement industry.”

Technip Energies’ senior vice president of decarbonization solutions Christophe Malaurie said “We are pleased to have been selected by Heidelberg Materials North America to provide the FEED of this groundbreaking project in Canada. Leveraging our carbon capture solution powered by the Shell Cansolv CO₂ capture system, we are committed to supporting the decarbonisation of the cement industry and Heidelberg towards the production of net-zero cement.”

US: Buzzi Unicem USA is among industrial partners collaborating with Electrified Thermal Solutions in the development of its Joule Hive Thermal Battery for industrial heat decarbonisation. The partners plan to launch a commercial-scale pilot of the battery in San Antonio, Texas, in association with the Southwest Research Institute. The project is supported by US$171m in funding from the US Department of Energy. The battery delivers heat of up to 1800°C from energy from renewable sources.

Buzzi Unicem USA president and chief executive officer Massimo Toso said “Cement production is known as a hard to abate industrial sector in large part because of the high temperatures required. Electrified Thermal Solutions’ Joule Hive Thermal Battery is the first industrial heat decarbonisation solution we have identified that could potentially enable us to cost-effectively and completely eliminate the use of fossil fuels in our heating processes and achieve our corporate decarbonisation goals.”

Electrified Thermal Solutions chief executive officer Daniel Stack said “We believe the breadth and depth of involvement from our industrial partners like Buzzi Unicem USA was critical to demonstrate to the Department of Energy just how valuable the Joule Hive Thermal Battery will be for industrial decarbonisation, and we are grateful for their partnership.” Stack added “Southwest Research Institute’s engineering support and world-class industrial demonstration facilities signalled to the Department of Energy that our technology will be developed, built, operated, tested and evaluated to the highest standards.”

EU: The World Cement Association (WCA) has lent its voice to cross-industry support for the roll-out of the European Union's Carbon Border Adjustment Mechanism (CBAM). The mechanism taxes carbon-intensive imports, including cement, in order to prevent carbon leakage under the Emissions Trading Scheme. It first entered force on 1 October 2023, and will conclude its transitional period on 31 December 2025. Through its involvement, the WCA aims to inform and facilitate understanding of CBAM's reporting requirements, emission calculation methodologies and the workings of the CBAM Transitional Registry. WCA members and other stakeholders can access up-to-date CBAM information via a dedicated page on the association’s website.

WCA chief executive officer Ian Riley said "I'm pleased to announce our commitment to supporting our members in addressing the challenges and opportunities of this crucial initiative. The WCA is committed to supporting solutions that promote environmental responsibility and sustainability within the cement industry. We aim to work closely with our members and other stakeholders to navigate the challenges and opportunities presented by the CBAM regulation, ultimately contributing to a greener and more resilient global economy."

Peru: Cementos Pacasmayo recorded an 8% year-on-year drop in its full-year sales in 2023. Group sales volumes of cement and concrete fell by 14%. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) also dropped, by 2% to US$125m, influenced by a US$9.47m impairment due to the replacement of its former vertical kilns with a new kiln. The producer further attributed the decline to low construction activity in the private and public sectors, as well the effects of Cyclone Yaku in early 2023.

France: Hoffmann Green Cement Technologies recorded a turnover of Euro6m in 2023, more than double the figure for 2022. The company sold 21,378t of its clinker-free alternative cement, up by 78% year-on-year, but under its target of 24,000t. It strengthened its order book by 8% to 260,000t.

The company confirmed its existing financial objectives, namely: to achieve positive earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2024; an operating profit in 2025; and a turnover of Euro130m by 2026.

Norway: Aker Solutions has won a front-end engineering and design (FEED) contract to develop Hafslund Oslo Celsio’s Port of Oslo CO₂ terminal. The unit will facilitate the transport of CO₂ to the Øygarden Northern Lights site under the Longship carbon capture and storage (CCS) initiative. The initiative involves Heidelberg Materials Northern Europe’s Brevik cement plant.

Aker Solutions’ executive vice president, new energies, Henrik Inadomi said “At Aker Solutions, we have a growing track record in supporting our customers across the entire CCS value chain. From capture and transportation to permanent storage, we provide innovative solutions and work with leading partners to support CCS developments across the globe. We are committed to building on this expertise and further strengthening our relationship with Celsio. We are proud to have engineered a cost efficient and effective layout which enabled Celsio to proceed with the next phase of this landmark development.”

The upcoming Global CemCCUS conference on carbon capture, utilisation and storage in Oslo, Norway, will include a visit to the Brevik cement plant on 16 May 2024.

Mexico/Germany: Cemex and waste heat recovery (WHR) systems developer Orcan Energy plan to scale up WHR technologies supplied by Orcan Energy at multiple Cemex sites globally. This new multi-site portfolio approach extends an existing partnership, through which the companies trialled Orcan’s systems for electricity generation at Cemex Deutschland’s Rüdersdorf cement plant in Germany.

Cemex’s Europe, Middle East, Africa and Asia regional president Sergio Menéndez said “We already have an initial collaboration with Orcan. Based on the modularity of their solution, Orcan offers the flexibility of both installation and contracts. Thanks to this crucial flexibility, we can adapt to any upcoming changes in our plants. The approach enables us to reduce carbon emissions right now without limiting ourselves in implementing any future technologies such as carbon capture, utilisation and storage. This partnership will help us achieve our sustainability targets and contribute to our aim to use all available heat.”

Orcan Energy’s chief executive officer Andreas Sichert said “We are looking forward to entering this large-scale decarbonisation partnership with Cemex after our initial cooperation in Germany. This step is a testament to Cemex’s forward-looking strategy and the company’s commitment to achieving net zero. For Orcan Energy, this is another milestone in scaling the business internationally with global enterprises. We are proud to be the partner of choice for the cement industry. Our large footprint across the industry shows the economic capability and the technical excellence of our modular and flexible solution, especially in view of uncertain future economic and regulative developments.”

Uruguay: Uruguay produced 27% less cement in 2023 than in 2022. Prensa Latina News has reported that state-owned Ancap, which operates two of the country’s four cement plants, reported a year-on-year drop in production of 29%, to 21,700t, in December 2023. The company’s least productive month in terms of volumes was June 2023, when it recorded 8570t.

A few news stories from Chile give us the opportunity to take at look at the local cement market this week. Firstly, Freehill Mining was keen to promote a new order it has obtained from Cementos Melón. The Australia-based company operates magnetite mineral concessions at Yerbas Buenas, about 500km north of Santiago. The US$180,000 deal starts in March 2024 but the raw material supplier says it is currently negotiating a longer-term supply contract with Melón for larger volumes in the future.

A large order for raw materials is not unusual, although the public nature of the Freehill Mining one suggests that the mining company is promoting itself. The story also highlights the importance of the mining sector in Chile. However, a wider view of the Chilean cement sector could be glimpsed recently from the latest cement despatch data from La Cámara Chilena de la Construcción (CCHC). Despatches fell by 11% year-on-year to 5.2Mt in 2023 from 5.9Mt in 2022. As can be seen in Graph 1, despatches recovered in 2021 following the first year of the Covid-19 pandemic but they have declined since then.

Graph 1: Cement despatches in Chile, 2018 – 2023. Source: La Cámara Chilena de la Construcción.

Two of the three larger cement producers have reacted to these market conditions in the last couple of years by cutting costs. Cementos Melón started a restructuring process in late 2022 whereupon it closed down a concrete plant at Penalolen near Santiago and embarked on a spending review. Its income fell by 4% year-on-year to US$182m in the first nine months of 2023, from US$189m in the same period in 2022. Cemento Polpaico followed suit in November 2023 by closing two concrete plants in the Santiago Metropolitan Region and temporarily suspending operations at its Quilicura cement grinding plant with work shifted to the integrated Cerro Blanco plant instead. In June 2023 it reported that its income had risen slightly year-on-year for the first half of 2023, but it noted a loss compared to a profit previously. Cbb (formerly Cementos Bío Bío) managed to avoid the fate of its peers mainly through the performance of its lime division. Its cement and concrete shipments fell by 9% and 15% year-on-year to 775,000t and 750,000m3 respectively in the first nine months of 2023. It blamed the falling sales volumes on a decline in economic activity that dragged upon investment in infrastructure and housing. However, lime shipments grew by 2% following tough trading conditions in 2022 due to high fuel costs, amongst other reasons. Altogether this meant that the company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 54% to US$44.3m from US$28.8m.

Finally, a third news story this week illustrated one reaction to the poor construction market in Chile, when Unacem Chile announced that it was buying two concrete plants, at San Antonio and Talca. Once the US$1m deal completes, the subsidiary of Peru-based Unión Andina de Cementos (UNACEM) will hold 12 concrete plants in the country. This follows its entry into the market in 2018 when it acquired Hormigones Independencia from Cementos Polpaico. In December 2023 Grupo Gloria subsidiary Cal y Cementos Sur (Calcesur) said that it was preparing to strengthen its presence supplying lime to the mining sector both at home in Peru and in neighbouring countries including Chile. While this isn’t a cement story, Grupo Gloria does operate the integrated Yura plant near Arequipa in southern Peru and this resonates with both the mining and lime sectors.

Chile’s cement market is suffering as the general construction market contracts. Yet as the stories from Freehill Mining and Calcesur show, the mining sector remains a key part of the national economy and this links to the cement industry. Another related story, for example, is a US$39m deal that Denmark-based FLSmidth signed in mid-2023 to supply equipment for a copper mine. Chile’s northern neighbour Peru has a cement sector that is nearly twice as large based on production capacity and some of its producers look internationally for expansion opportunities, as in the example of Unacem Chile. The CHHC didn’t hold back in mid-January 2024 when it said that it forecast that 2024 would be the worst year for investment and construction spending since the late 2010s. Yet it also expects the decline in the construction sector to slow as gains from government infrastructure spending continue to almost counteract falls in the private sector. Until the situation improves, it continues to lobby for economic reforms.

For more information on cement markets in South America read the feature in the February 2024 issue of Global Cement Magazine