Spain: Cemex is supplying cement to the site of the upcoming Santolea Canyon dam in Aragon. The 59m-high structure will hold a 105hm³ reservoir, which will provide water to 2000 surrounding farms. Concrete pouring began at the site in March 2020 and is scheduled to reach completion in mid-2021.

Europe, the Middle East, Africa, and Asia regional president Sergio Menendez said, "We are very proud of our participation in the construction of the Santolea Canyon dam, a key project requiring materials and solutions of the highest technical and environmental specifications. The new Santolea dam will greatly contribute to support sustainable growth in the region”.

Pakistan: Bestway Cement claimed three awards at the Corporate Social Responsibility Awards 2021. The company won the Corporate Social Responsibility in Times of Covid-19 Pandemic award, the Education and Scholarships award and the Green Energy Initiatives award.

It said, “Bestway appreciates its responsibility towards local communities, thus playing a vital role in their socio-economic development such as improving access to health services and education, taking part in the urban development and environmental conservation programs and helping generate employment.

Mexico: Cemex has partnered with reintroduction specialist Ovis to release bighorn sheep at a site in Sierra El Viejo, Sonora state. The UMA El Plomito ranch supplied nine sheep. Four more sheep were born in the open pre-release pen which the sheep currently inhabit. The partners will support the animals with supplementary food and water while they adapt to their new environment.

Head of sustainability Vicente Saiso said, "The reintroduction of the bighorn sheep in Sonora represents one more example of our commitment to the conservation of biodiversity. It is a successful example of joint work between companies and conservation organisations to create a better future for our planet."

Ireland: CRH’s consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 5% year-on-year on a like-for-like basis to US$4.6bn in 2020 from US$4.5bn in 2019. Sales fell by 2% to US$27.6bn from US$28.1bn. The group reported a net debt/EBITDA ratio of 1.3x, its lowest since 2010.

Chief executive officer Albert Manifold said, "Our 2020 performance is testament to the commitment of our people and the strength and resilience of our business model. Through the repositioning of our business in recent years and our relentless focus on continuous business improvement, we have delivered record levels of profitability, margins and cash generation. Although the near-term outlook remains uncertain, our unique portfolio of businesses together with the strength of our balance sheet leaves us well positioned to capitalise on the growth opportunities that lie ahead."

By division the group reported growth in its US cement sales volumes in 2020 on a like-for-like basis due to demand in the west, surpassing the negative effects of the coronavirus pandemic elsewhere. However, volumes fell in Canada, particularly in the first half of the year. In 2020, CRH adopted the Ash Grove brand for all its North American cement businesses, unifying 12 cement plants and 42 cement terminals under one brand. In Europe sales and earnings fell due to poor markets in the west despite better conditions on the east. The group noted that it grew its profit in the Philippines due to a strong recovery in the second half and cost savings despite plant shutdowns.

US: Germany-based HeidelbergCement subsidiary Lehigh Cement has taken legal action against the Santa Clara county planning and development director over processing delays to the company’s planning applications. The Los Altos Town Crier newspaper has reported that the producer plans to fill in an open-pit aggregates mine, to open a second mine and to cut through a natural ridge near to its integrated Permanente cement plant near Cupertino in California. The plans constitute an amendment to a plan previously approved in 2012 .

The company says that it has ‘exhausted available administrative remedies’ against the local government office. It said that the rights it seeks to exercise are not subject to permits. It added that the director deemed the application complete in 2019, before requiring additional processing steps.

Israel: Seebo has announced an extended Series B funding round for a total of US$24m. Vertex Ventures is leading the round, in which10D, The Phoenix and Leumi Partners participate. Seebo will use the funding for a further expansion to its global reach, as well as enhancement of its process-based artificial intelligence product.

The company says that its product enables cement producers to identify process-driven inefficiencies in their operations in order to predict and prevent production losses. It can target losses including those involving kiln throughputs, emissions, clinker quality and ammonia usage. General partner Yanai Oron claimed that Seebo is the only supplier providing a productised solution based on artificial intelligence across the full product line.

China: Starlinger says that its Ad*Star bag has received designation as one of three types of national standard cement bag type specifications by the Chinese government. The supplier developed the block bottom valve bags made of woven polypropylene tape fabric in 1995. Global production was 15.7bn in 2020.

The new Chinese standard for cement packaging was released in October 2020. It applies to cement bags holding up to 50kg and lists laminated woven plastic bags (made of one layer of laminated plastic fabric or with additional paper liner), paper bags (three-layer, three-layer with PE liner, four-layer bags), as well as paper-plastic composite bags (paper bags with plastic liner) as possible packaging options. All three types of bags must be designed as block bottom valve bags.

The standard specifies the dimensions as well as physical and mechanical requirements of the cement bags. Regarding break resistance, for example, a cement bag has to survive a drop from 1m height a minimum of six times before it breaks. Furthermore, printing and marking, general bag appearance, testing methods, and rules for quality inspection during bag manufacture are established in the standard. It also stipulates that each bag must be provided with a certificate before selling.

Local cement companies have been given a transition period until 31 March 2022 to adapt to the new standard. Starlinger expects to deliver and install machines for an additional production capacity of more than 2 billion Ad*Star bags on the Chinese market in 2021 and 2022.

UK: Mexico-based Cemex subsidiary Cemex UK has announced the launch of Supaflo Rapide, a calcium sulphate binder-based screed for all domestic and commercial floor applications. The company said that the product achieved a moisture condition of below 75% relative humidity at between 10 and 15 days under controlled conditions.

West Europe regional quality and product technology director Steve Crompton said, “Our technical expertise has enabled us to develop a new, more sustainable, premium quality screed that will help increase the efficiency of the job site, allow effective use of labour and improve the climate impact of projects. Supaflo Rapide uses an enhanced calcium sulphate binder and the latest admixture technology to cut down on drying time while maintaining the speed of installation associated with these types of screeds.” He added, “This will greatly benefit construction companies as they juggle the on-going challenges of site working requirements alongside increasing demand for fast and safe completion of jobs with a lower environmental impact.”

LafargeHolcim’s financial results for 2020 arrived this week, giving us data on many of the larger multinational cement producers. The Chinese ones are yet to release their results and some of the larger other ones such as CRH, Votorantim and InterCement are pending too. Yet, what we have so far gives a selective view on an unusual year. Revenue was down for most producers year-on-year in 2020 due to the effects of the coronavirus pandemic upon construction activity and demand for building materials. There were large regional differences between how countries implemented different lockdowns, how markets responded and how they bounced back afterwards. Generally, the financial effects of this were felt in the first half of 2020 with recovery in the second.

Graph 1: Sales revenue from selected cement producers in 2019 and 2020. Source: Company reports. Note: Figures calculated for Indian producers.

Graph 2: Cement sales volumes from selected cement producers in 2019 and 2020. Source: Company reports. Note: Figures calculated for Indian producers.

LafargeHolcim’s figure in Graph 1 above is a little misleading given that it has divested assets. Its like-for-like reduction in net sales was more like 6%, a similar figure to HeidelbergCement’s. Both experienced mixed results in North America and Europe but not terribly so. LafargeHolcim did relatively well in Latin America. HeidelbergCement found growth in its Africa-Eastern Mediterranean Basin region. It’s also worth noting the comparative leverage of each company: 1.4x for LafargeHolcim and 1.86x for HeidelbergCement. Both are slimming down but the latter’s ongoing divestment plan (see GCW 494) can be seen in the context of its debt to earnings ratio and the cash crisis that coronavirus threw up in 2020.

The contrast between these companies and Cemex and Buzzi Unicem is striking. Both of these benefitted from operations in the North America and parts of Europe. In Cemex’s case sales in Mexico and the US, made the difference despite falling sales elsewhere. Buzzi Unicem’s sales also held up in the US especially in the second half of the year. Europe was more mixed for both producers with growth reported in Germany but losses elsewhere.

The Indian producers tell a different story but one no less notable. Despite a near complete shutdown of production for around a month from late March 2020, the regional market largely recovered. As UltraTech Cement told it in January 2021, “Recovery from the Covid-19 led disruption of the economy has been rapid. This has been fuelled by quicker demand stabilisation, supply side restoration and greater cost efficiencies.” It added that rural residential housing had driven growth and that government-infrastructure projects had helped too. It expects pent-up urban demand to improve with the gradual return of the migrant workforce.

Unfortunately, Semen Indonesia, the leading Indonesian producer, suffered as the country’s production overcapacity was further hit by scaling back of government-based infrastructure projects as it tackled the health situation instead. Its solution has been to focus on export markets instead with new countries including Myanmar, Brunei Darussalam and Taiwan added in 2020 joining existing ones such as China, Australia and Bangladesh. The company’s total sales volumes may have fallen by 8% year-on-year to 40Mt in 2020 but sales outside of Indonesia, including exports, grew by 23% to 6.3Mt.

On a final note it’s sobering to see that the third largest seller of cement in this line-up was UltraTech Cement, a mainly regional producer. Regional in this sense though refers to India, the world’s second largest cement market. By installed production capacity it’s the fifth largest company in the world after CNBM, Anhui Conch, LafargeHolcim and HeidelbergCement. This move towards regionalisation among the large cement producers can also be seen in the large western-based multinationals as they are heading towards fewer but more selective locations. More on the world’s largest producer, China, when the producers start to releases their financial results towards the end of March 2021. Whatever 2021 brings, let’s hope it’s better than 2020.

India: Birla Corporation has appointed Arvind Pathak as its managing director and chief executive director (CEO). He will succeed Pracheta Majumdar from 31 March 2021.
Pathak holds 36 years of experience in the cement industry. He has held CEO or equivalent positions for over 14 years in various large organisations which include ACC, Dangote Cement, Adani and Reliance Group. He holds a degree in Electrical Engineering from Indian Institute of Technology (Banaras Hindu University), Varanasi and a postgraduate degree in Industrial Engineering and Management. He has also been trained in a number of international management institutions.