Global Cement Newsletter

Issue: GCW403 / 08 May 2019

Headlines


Bangladesh: Alamgir Kabir has been appointed as the president of the Bangladesh Cement Manufacturers Association (BCMA). His term covers the 2019 – 2020 and the 2020 – 2021 period, according to the Financial Express newspaper. Md Shahidullah, managing director of Metrocem Cement and chairman of Metrocem Group, and Zahir Uddin Ahmed, managing director of Confidence Cement, were elected the first and second vice-presidents of the BCMA respectively.


Romania: The Competition Council says it has found irregularities in the cement market. Following an investigation started in the autumn of 2018 it has revealed that the country’s three major producers – Holcim, CRH and HeidelbergCement – were operating with high profit margins and similar market share, according to Business News Europe. It noted that geographic distribution of customers around the three companies’ production facilities might support a hypothesis of market collusion. It also reported similar production capacity utilisation rates between the main producers despite different production capacities.

The Competition Council has not drawn any conclusions from the report. Previously, it said that if it does find any evidence of cartel-like behaviour it could apply a fine of up to 10% of company turnover.


Ukraine: Podilsky Cement’s revenue rose by 2.5% year-on-year to Euro92.3m in 2018. It reduced its loss by 25% to Euro16.2m, according to the Ukrainian News Agency. It produced 1.35Mt of cement. The company is a subsidiary of Ireland’s CRH.


Malaysia: Lafarge Malaysia has resumed supplying cement to the East Coast Rail Link project. The cement producer has been asked to continue supplying the project until the end of 2019, according to the Star newspaper. The US$65m contract was originally agreed in March 2018 but then suspended in July 2018 when the government reviewed the project.


Argentina: Loma Negra is planning to make 100 staff redundant at its Barker cement plant in Buenos Aires. It employs 230 direct employees and 90 others at the site, according to Infobae. The cement producer says it is reducing staffing levels in order to adjust the plant’s production capacity to the local market. It has also threatened to close the plant entirely if it is unable to reach an agreement over the redundancies with the union.


India: Customers of Ambuja Cement have been deceived by a fake website pretending to take orders for the company. Victims of the fraud have notified the police in Mumbai, according to the Times of India newspaper. The fraudulent website obtained orders, raised invoices and promised delivery following the receipt of advance payment. When the customers failed to receive the goods they approached Ambuja Cement and the deception was revealed. So far around US$2500 has been reported lost.


Denmark: FLSmidth has launched ECS/UptimeGo, a downtime analysis product designed to increase plant uptime by identifying the causes of plant and equipment failures. Real-time dashboards and key performance indicators (KPIs) enable the measurement of the real impact of machine failures interrupting the production. In addition, ECS/UptimeGo provides Pareto charts and the ability to monitor maintenance and reliability KPIs to give operators a picture of a downtime event and its causes.

ECS/UptimeGo can be integrated with existing process control systems and can be paired with FLSmidth ECS/ControlCenter for an automated process to gather all production stoppages. It also features a graphic interface that allows operators to document and analyse stoppages.


Russia: ExxonMobil says it has saved a limestone quarry Euro7900/yr by switching Hitachi excavators to its Mobil DTE 10 Excel46 hydraulic oil. The product extended oil drain intervals by 25% to 5000 hours. It also reduced filter replacements.

“Our field engineering services team worked with the customer to identify the most suitable lubricant. As a result of this, they suggested a switch to Mobil DTE 10 Excel 46 hydraulic oil, which was developed to provide a long oil life and minimise deposit formation, even in hydraulic systems operating in severe conditions,” said Sarp Degirmenci, EAME Offer Advisor at ExxonMobil.


Germany: Flender has increased the torque of its N-Arpex coupling product range with two new designs featuring eight and ten bolting points. N-Arpex now covers a diameter up to 988mm and a torque up to 2MNm. The compact design and enhanced bore capacities also enable a leap in size. A smaller coupling transmits a higher torque compared to the predecessor model. The steel disc coupling is suitable for use in drive applications including pumps, fans, compressors, generators, turbines, and paper and printing machines.

Other improvements include a more compact Flender conical bolt connection for the plate packs. With the two new N-Arpex couplings, Flender has introduced a modular system that increases the number of available types as well as reducing the number of components required. The three standard series of the predecessor Arpex merge into one N-Arpex series. The new series of couplings has also been designed for use in potentially explosive environments as defined in directive 2014/34/EU and fulfil the requirements of API610/ISO13709 and API671/ISO10441.


France: Vicat’s sales have risen due to its acquisition of Ciplan in Brazil. Its sales rose by 4.7% year-on-year to Euro600m in the first quarter of 2019 from Euro573m in the same period in 2018. However, adjusted for the acquisition, its sales remain stable. The group’s cement sales revenue fell by 1.4% to Euro302m when similarly adjusted. Its concrete and aggregate sales rose by 6.6% to Euro225m.

“The rise in prices across all zones has resulted in stable consolidated sales at constant scope and perimeter, despite strong volume erosions in Turkey as a result of the 2018 lira devaluation and of the consequences of highly adverse weather conditions in California. The integration of Ciplan in Brazil is on track amid conditions that are stabilising after several years of major consumption falls,” said chairman and chief executive officer (CEO) Guy Sidos.

By region sales were strong in France, stable in the rest of Europe and Africa and poor in the Americas, Asia and Turkey. Poor weather in California dragged down sales in the US, competition was reported in India and an economic slowdown was reported in Turkey.


Oman: Raysut Cement has confirmed its plans to buy a 1.7Mt/yr grinding plant owned by Sohar Cement based in Sohar. The acquisition also includes purchasing the company’s distribution network, according to the Oman Daily Observer newspaper. Sohar Cement holds a 70% stake in the business, with UAE-based Fujairah Cement Company owning the remaining share.


Iran/Iraq: Hamid Hosseini, the secretary general of Iran-Iraq Joint Chamber of Commerce, says that exports of cement from Iran to Iraq and the Kurdistan region of Iraq have been suspended for the last year. Tariffs were added first before a ban, according to Tejarat News. At present exports of clinker are allowed.


India: Birla Corporation’s revenue rose by 10% year-on-year to US$944m in the financial year to 31 March 2019 from US$856m in the same period in 2018. Its profit for the period rose by 66% to US$36.9m from US$22.2m. Notably, its power and fuel costs increased by 14% to US$214m from US$188m.


India: Sagar Cement has completed its acquisition of Jajpur Cements at Jajpur in Odisha at a cost of US$16m. It now plans to build a new 1.5Mt/yr cement grinding plant at the site for US$44m. The project is subject to regulatory approval but it is scheduled for completion by March 2021.


Bangladesh: Sayem Sobhan Anvir, the managing director of Bashundhara Group, has signed a cement supply agreement with Tao Jun, the project manager of the Padma Bridge Rail Link for China Railway Group. Bashundhara Group will supply over 0.7Mt of cement for the project, according to Daily Sun newspaper. The US$3bn train line will run for 225km between Dhaka and Jessore.


Nepal: The government plans to prioritise cement as a major export. It made the announcement as part of a presentation to parliament for the 2019 – 2020 financial year, according to the Himalayan Times newspaper. However, Dhruva Thapa, president the Nepal Cement Producers' Association said that the government needs to cut taxes on the cement industry to make exports competitive.


Pakistan: The gas supply to Lucky Cement’s Pezu plant has been disrupted by an investigation by Suit Northern Gas Pipelines (SNGP) into unaccounted-for gas. An initial short shutdown to the supply has been extended to over a month, according to the news International newspaper. The gas supplier is investigating widespread theft of its gas via illegal connections.


North Korea: The state-owned Sangwon Cement plant plans to increase its production output by upgrading a speed reducer in a raw material crusher. The plant launched a seawater-resistant cement product in 2018, according to the Pyongyang Times newspaper. It has been supplying this product to projects in the Wonsan-Kalma coastal tourist area.


Kenya/Tanzania: The governments of Kenya and Tanzania are working together to resume exports of cement. A delegation of Tanzanian officials are due to inspect cement plants in Kenya to verify the source of the raw materials used in their manufacture, according to the East African newspaper. This could then lead to exports of cement from Kenya to Tanzania to be re-allowed.

The two countries recently held bilateral trade talks in Arusha on non-tariff barriers. They agreed to speed up the verification missions recommended for confirmation of product origin as provided for in the East African Community rules of origin. Tanzania blocked cement despatches from Kenya in 2018 due to the use of imported clinker.


Zimbabwe: Switzerland’s LafargeHolcim has lent US$30m in the form of a long-term loan to Lafarge Zimbabwe. The company has taken out a short-term loan of US$4.4m from a local bank, according to the Zimbabwe Independent newspaper. In its financial results for the 2018 the cement producer reported that its revenue grew by 24% year-on-year to US$72m in 2018 and that its profit before tax grew strongly to US$4.4m.


India/China/UAE: UltraTech Cement is looking for buyers for the cement production assets of Binani Cement in China and the UAE. It purchased Binani Cement’s share in joint-ventures in these countries, according to the Hindu newspaper. In China it runs a 3Mt/yr integrated plant and in the UAE it operates a 2.5Mt/yr grinding plant. However, before it was acquired by UltraTech Cement, Binani Cement was unable to sell its stake in its Chinese unit. Attempts to sell the plant in UAE are also expected to be difficult due to market overcapacity.


Senegal: The government plans to introduce a new tax on cement to support a house-building campaign. President Macky Sall said that the tariff would increase the cost of bags of cement, according to the Agence de Presse Sénégalaise. He added that the country has the cheapest cement in the region.


Gabon: Cement production rose by 42% year-on-year to 0.49Mt in 2018 from 0.34Mt in 2017. Sales rose at a similar rate to 0.49Mt, according to Infos Gabon. The Ministry of Economy attributed the growth in production and sales to the government’s decision to suspend imports of cement in mid-2017.


Algeria: Ciment Lafarge Souakri (CILAS) has started exporting a consignment of 30,000t of cement to Cameroon. The operation was handled via the port of Annaba, according to Radio Algeria. It is the cement producer’s sixth large-scale export operation to another Africa country. The subsidiary of LafargeHolcim is using Lafarge Trading to supply logistical support.


Colombia: Ordinary Portland Cement production grew by 4% year-on-year to 3.05Mt in the first quarter of 2019 from 2.93Mt in the same period in 2018. Data from DANE, the Colombian statistics authority, shows that deliveries to the local market increased slightly, by 3%, to 2.94Mt.


Philippines: Republic Cement has held a rally assembling over one thousand construction workers at its Norzagaray Plant to aim for five million safe man hours. The cement producer has reached 4.5 million man hours at its expansion projects at Bulacan, Batangas and Iligan. This includes no lost-time injuries or fatalities.

“Safety is not a punishment. It’s not a punishment to wear your helmet, boots, or harness. It’s a gift of life - the life of your fellow workers and of your family,” said
Roy Ruedas, Project Lead at Aboitiz Construction.


Malaysia/Singapore: Switzerland’s LafargeHolcim has signed a deal to sell its 51% stake in Lafarge Malaysia to YTL Cement for US$396m. Lafarge Malaysia operates three integrated cement and two grinding plants. With the divestment, LafargeHolcim will fully exit the Malaysian market. LafargeHolcim has also signed an agreement with YTL Cement Singapore for the divestment of its entire 91% share in Holcim Singapore.

YTL Cement is part of YTL Corporation, a Malaysian infrastructure conglomerate, which is active in cement production, construction, property development and utilities. The deal is expected to be completed within the second quarter of 2019. It is subject to approval by regulatory bodies.


Uzbekistan: President Shavkat Mirziyoyev has approved a list of companies with state-owned shares to be sold to foreign investors. It includes the country’s 35.9% stake in Kyzylkumcement. Other sectors the government is divesting its shares in include insurance, banking, power generation, oil & gas and soft drinks.


India: Shree Digvijay Cement’s income rose by 2.5% year-on-year to US$63.6m in the year to 31 March 2019 from US$62.1m in the same period in 2018. Its profit fell to US$0.3m from US$1.93m. Notably, its power and fuel costs grew by 29% to US$22.3m during the year. For the last quarter of the reporting year its income fell by 11%. Private equity company True North purchased a majority stake in the cement producer from Brazil’s Votorantim Cimentos in April 2019.


Vietnam: SCG Vietnam has launched its SCG Super Cement product. The product is intended as a ‘premium’ multi-purpose cement for home owners, developers, contractors and architects, according to the Vietnam Economic Times newspaper. It can be used in a variety of applications including brick-laying, plastering and concrete work for structure and foundations.


US: Charah Solutions has opened a terminal for fly ash in Hopedale, Massachusetts. The unit has railway access and is connected to local road networks. It is intended to serve customers in New England.

Charah Solutions says that the terminal will increase the availability of fly ash from its MultiSource materials network locations in the South, New England, the Midwest, the Rocky Mountains and California. These locations supply Class C and Class F fly ash for ready mix concrete producers and other customers.


Bulgaria: OneStone Consulting has moved its headquarters to Varna. The business-to-business consultancy company was previously based in Barcelona in Spain.