Nigeria: The National Association of Block Moulders of Nigeria (NABMON) has warned that its members are struggling to continue their trade due to the high price of cement. The Daily Independent newspaper has attributed the price rise to post-coronavirus shutdown maintenance challenges in the cement industry, increased exports, logistical disruptions and an unseasonably high demand for cement. The association is lobbying government to put in place and enforce competition laws to help return the price to a more ‘stable’ level.

Brazil: Votorantim Cimentos has built a new distribution centre in Campos Novos, Santa Catarina. When it opens in January 2021, the facility will supply a ‘complete portfolio for the civil construction market’ in Santa Catarina, Paraná and Rio Grande do Sul. It will receive goods from six cement and building materials plants in the company’s South Brazil region.

Regional commercial general manager Tony Noritake said, “We invested in this distribution centre to better meet customer demand in the South, expand our presence and optimise costs."

Iceland: HeildelbergCement subsidiary Sementsverksmidjan has apologised for an incident which caused cement dust to be released from a silo at its terminal in Akranes. An overflow during loading caused the dust to settle on nearby houses. The company collaborated with fire services, utilities companies and residents to tidy up.

The company said, “The incident yesterday was an accident which did not comply with the policy and will of the company or its owners. The company therefore apologises to all those who suffered inconvenience and will do everything in its power to ensure that accidents of this kind do not recur.”

Libya: Tripoli residents whose homes have been damaged during fighting between government and Libyan National Army forces will receive priority access to cement. The Libya Herald has reported that the Libyan Interior Ministry has established a committee to coordinate between state-owned Ahlia Cement Company and citizens involved in reconstruction. It said that the committee will update people who have ordered cement on their scheduled deliveries. The initiative is intended to overcome allegations of corruption connected to obtaining cement from the producer.

China: Huaxin Cement has ignited the kiln and started production at a new integrated 2.9Mt/yr cement plant near Huangshi City in Hubei Province. The company said that the plant will combine second-generation intelligent dry kilns, alternative fuel (AF) co-processing and a waste heat recovery (WHR) power plant, at a total investment cost of around US$465m. The group expressed its commitment to digital innovation and the promotion of Internet and industry. An artificial sand and gravel unit has also been started at the same site.

Cameroon: Aumund France has won a contract to supply three BWZ type bucket elevators with central chain, three BWG type belt bucket elevators and three Samson material feeders to Oyak Çimento’s upcoming plant near Kribi. When commissioned in September 2022, the plant will grind 100t/day of cement and 720t/day of calcined clay. ThyssenKrupp Industrial Solutions (France) is responsible for the overall design, supply and installation of equipment to the plant.

India: The government of India has granted licences to JSW Cement subsidiary Shiva Cement for the expansion of its cement plants in the state. The New Indian Express newspaper has reported that the company has received approval for an integrated capacity expansion of 1.1Mt/yr and a clinker capacity expansion of 1.3Mt/yr.

The state government approved a total of US$730m-worth of planned investments in various industries on 6 January 2020.

India: Meghalaya Cement, Star Cement and Amrit Cement have been accused of illegally mining 1.8Mt of limestone in Meghalaya between 2013 and 2018. The Northeast Now newspaper has reported that the companies mined the limestone in a tribal area of the state without environmental, forest or wildlife clearance or No Objection Certificates (NOCs). Local cement producers also allegedly owe the state government around US$40m in related limestone mining licence fees. All three cement producers reportedly made donations to a local political party.

The state government is also investigating allegations that two of the cement producers have polluted two local rivers, Wah Lukha and Wah Lunar. The former river allegedly turned ‘deep blue’ due to pollution.

Pakistan: Cement dispatches in the first half of the 2021 financial year were 29Mt, up by 16% year-on-year from 25Mt in the first half of the 2020 financial year. The Pakistan Observer has reported that the All Pakistan Cement Manufacturing Association (APCMA) recorded an 11% year-on-year rise in December 2020 dispatches to 4.8Mt from 4.3Mt. Exports for the half were 5.0Mt, up by 15% from 4.4Mt.

One of the last news stories we covered before the Christmas break was that Lafarge Poland had selected China-based Nanjing Kisen International Engineering as the general contractor for a Euro100m-plus upgrade to its Małogoszcz cement plant. This appears to be the first major European cement plant upgrade project to be publicly run by a Chinese contractor. There may be other European projects in the sector run by Chinese companies ‘on the down-low.’

If it is the first then this is a significant milestone for the growth of the Chinese industry. It is a noteworthy first for Nanjing Kisen in the European Union. Europe is the home, after all, of a number of locally-based contractors and companies that can build or upgrade cement plants including FLSmidth, Fives, ThyssenKrupp, IKN and others. Indeed, all of the work on this project might actually be conducted by local companies, selected by the general contractor. For example, Lafarge Poland says that the general contractor will select a subcontractor on the Polish market.

It’s easy to fall into jingoistic nostalgia but should we really be surprised that China can competitively build cement plants given the ferocious growth of its own industry over the last few decades? Arguments by Western critics against growing Chinese dominance in industry have tended to home in on excuses why they might be ‘cheating’ such as intellectual property theft, unfair state aid or the use of low-cost infrastructure loans to countries along its Belt and Road Initiative. That last one carries some irony given that not so long ago discussions about developing world debt were framed in the context of the Cold War and the oil crisis in the 1970s. Western countries were seen as the bogeymen depending on one’s political outlook. With this in mind, the Financial Times recently reported on data released in December 2020 that suggested that China might be heading into its own overseas debt crisis. The takeaway message here is that attempting to apply China’s whopping infrastructure boom elsewhere might not work so well without the same level of control. Exporting production overcapacity abroad may simply turn out to be something like a giant Ponzi scheme! For the cement industry this may mean a pause or wind-down in the number of new plants backed by Chinese money, often with Chinese contractors tied in, and that the rise of Chinese engineering firms might not seem as unassailable as all that after all.

This leads into another noteworthy story that we also published before Christmas on China’s latest proposal to further reduce production capacity at home. The Ministry of Industry and Information Technology (MIIT) wants to tighten the ratio of production capacity that has to be closed before new capacity can be built from 1.25:1 to 1.5:1. The kicker is that the new rules also include a clause intended to restrict the use of so-called ‘zombie’ capacity in the swapping process by limiting eligibility to productions lines that have been operated for two or more consecutive years since 2013. These rules seem targeted at the present day but they could potentially push Chinese cement production capacity per capita to rates more similar to those found in developed economies elsewhere (i.e. halve existing Chinese production capacity). Many of the country’s kilns were built in the early 2000s and the average lifespan of a clinker kiln is 50 years. This suggests that the ministry is thinking seriously about culling capacity by the administration’s carbon neutrality target of 2060.

Chinese penetration in the European cement plant market is more of an after-thought given the pace of projects in Asia and Africa over the last decade and the maturity of the sector. It can also be misleading given that some very-European-sounding engineering companies are actually owned by Chinese concerns. Yet no doubt local contractors and suppliers would like to keep any business they can. On the other hand, more market share may be found in Europe over the coming decades from retrofitting CO₂ mitigating equipment or building the anticipated hydrogen revolution once the regulatory and financial framework starts to favour it. Or maybe shifts to service and/or machine intelligence-style packages are the way forward. Nanjing Kisen may be the first Chinese company to upgrade a European cement plant but the market focus may quickly move on. Time will tell.

Answers by email for when readers think the first cement plant or production line in the US will be built by a Chinese company.

Happy New Year from Global Cement