Global Cement Newsletter

Issue: GCW461 / 24 June 2020

Headlines


Spain: Votorantim Cimentos España has appointed Juan Aguilera as the new Industrial Director of Cementos Cosmos. He will supervise the management of the four integrated and two grinding plants the company operates in Spain, according to the Diario de León newspaper. Aguilera has worked for Votorantim and related companies for nearly 20 years spending time managing plants at Córdoba, Niebla and Malaga. He has also worked as the Director of Operations for Votorantim Cimentos in Brazil. Aguilera started his career at the Eduardo Torroja Institute for Construction Sciences and he holds a doctorate in chemical sciences.


Many people have been adapting to home working over the last few months due to the coronavirus pandemic and the resulting lockdowns. The digital tools have been present for years but current events were all that was needed to force everyone to try it out en masse, moving much of the back office, supporting and managerial functions to the homes of staff. Some of this communal clerical working may never come back in the views of some commentators. Other functions related to networking, such as sales or knowledge transfer, have moved to different channels like webinars and social networking or have resorted to older methods like using the telephone more. The balance between real world and remote networking may change but a return to some level in favour of the former seems likely.

The core processes of cement manufacture are resistant to this trend as workers need to be on site to mine limestone and maintain production lines. Although, that said, Global Cement Magazine has covered examples of remote commissioning and maintenance of equipment at plants in recent issues. Prior to this there has been steady work on remote monitoring of equipment and plants by both suppliers and producers and moves by cement companies to focus on digital operation such as LafargeHolcim’s ‘Plants of Tomorrow’ Industry 4.0 from 2019 or Cemex’s work on autonomous cement plant operations with Petuum.

Some ways in which cement companies have coped with social distancing recently have been revealed as they have published their best practice guides. Last week, for example, Holcim Philippines was promoting its various online customer interaction tools including its existing sales platform and a new online customer engagement program to ‘provide updates on the company’s directions, share knowledge and best practices on Health and Safety and to bond with business partners while quarantines are in place.’ Other companies have done similar things like the Cemex Go platform. On the supplier side there have been various announcements as companies have pushed their digital offerings. Meanwhile, the companies offering automation or remote operation products have been handed a unique stage to promote their wares.

Another example of cement companies trying something new in digital is the pilot that was announced this week by Siam Cement Group with the Bank of Thailand to test out payment systems using a central bank digital currency (CBDC). This likely has very little to do with the cement industry and much more to do with the sheer size of that conglomerate in Thailand. As the second largest company in the country, it’s an obvious target to try out something new like this at scale. The project will run from July 2020 until the end of the year. It will build on work that the central bank has carried out on Project Inthanon, a project between the bank and the eight financial institutions to study and develop a method for domestic wholesale funds transfer using wholesale CBDC. Any benefits using a CBDC eventually bring to Siam Cement Group and other producers in the country are likely to be limited to finance departments but savings are always welcome wherever they arise.

One cautionary note to consider though is that introducing changes to national currency systems can have impacts upon cement companies through general effects to the economy as a whole. The classic example of this in recent years is that of banknote demonetisation in India in late 2016. Cement production growth declined for about half a year at the time due to the disruption it caused.

The downside of this increased reliance on digital products and platforms is increased exposure to cybercrime. There was a rare good-news story in this area recently when Schmersal Group revealed that it had intercepted a network attack in progress in May 2020. It promptly took its IT network offline and disconnected its various systems, from the telephones, to its business software, to its production processes and automated storage systems, at all of its locations. Systems were then gradually cleansed and restored over the next two weeks. Schmersal’s response is commendable but chillingly it ended its press release by saying that, “the attack demonstrated that standard protection from antivirus programs and a firewall is powerless in the event of a targeted attack with previously unknown malware.” Companies had the same vulnerabilities before the pandemic but the increased reliance on digital platforms has heightened the potential risk. As we mentioned last time we covered this topic companies that admit to large scale malware attacks are hard to find most likely because it looks bad. Although since that article was published, Buzzi Unicem admitted that a ransonware attack on its information systems originating from its Ukrainian operations were delaying its financial disclosures in mid-2017.

In the longer term it will be interesting to see how much of the altered working patterns or methods created by the coronavirus lockdowns remain afterwards. The current situation isn’t quite like the ‘disruptive innovation’ business theory pedalled by Clayton M Christensen that has led in-part to established companies setting up start-up incubators to try and spot the next big new thing. Yet, existing trends are being sped up and this may lead to some surprises that were coming down the road anyway. For example, buying someone shares in video networking tool Zoom would have made a nice Christmas present this year! Hindsight is a wonderful thing.


Mexico: Elementia has appointed Jaime Rocha Font as its new chief executive officer (CEO) with effect from 2 September 2020. He succeeds Fernando Ruiz Jacques, who will focus on, “new business and development opportunities.” Rocha and Ruiz will work together over the transition process.

Rocha is currently the CEO of Elementia’s Cement Division, including Cementos Fortaleza in Mexico and Costa Rica, as well as Giant Cement Holding in the US. He holds 29 years of experience in the cement industry, and prior to Elementia he held a number of senior positions at Holcim. He has a degree in Civil Engineering from Universidad Católica de Chile and an MBA and postgraduate studies from the IMD in Switzerland, the Free University of Brussels in Belgium and IPADE in Mexico.


Philippines: Holcim Philippines has appointed Edwin Villas as Senior Vice President Logistics, Bobby Garza as plant manager at its integrated Norzagaray cement plant and Arnold Pepino as Vice President of Operations of its integrated Lugait plant.

Villas was appointed as the Senior Vice President Logistics after serving as officer-in-charge of the department since 2019 concurrent to his role as Vice President for Sales for Greater Manila Region and South Luzon. He previously held senior sales leadership roles and served in procurement and internal audit. Villas is a certified professional for supply management, a certified information system auditor and holds a degree in computer science. He also completed a leadership program at the International Institute of Management Development (IMD) Switzerland.

Garza, Vice President for Operations of the Holcim’s Lugait, Misamis Oriental plant, will lead the Norzagaray, Bulacan plant. Garza is a licensed mining engineer and has attended leadership programs in IMD Switzerland.

Pepino, who was previously the Production Manager at Lugait, succeeds Garza as Vice President of Operations at the site. He started his career in Holcim Philippines as a cadet engineer in 1996. Over the years, he moved to different roles and projects in production, process and manufacturing excellence. In 2017, he was sent by LafargeHolcim Group to plants in Romania and Austria to learn best practices under its ‘Learning Across Borders’ program. Pepino holds a master’s degree in business administration and a computer engineering degree.


Spain: LafargeHolcim has appointed Verónica Martín Martínez as its new director of human resources and communication in Spain. She has nearly 20 years of experience in human resources working in both Spain and Latin America for a diverse range of companies in various sectors including chemical and automotive sectors. She will also join the management committee of LafargeHolcim Spain. Martín holds a degree in Law and Business Administration from the University of Deusto and a Master of Business Administration (MBA) from the Instituto de Empresa.


Netherlands: Malvern Panalytical has appointed Mark Fleiner as its new president. Fleiner, who was previously Business Group Director of the Industrial Solutions Division of Spectris, moved into his new role at Malvern Panalytical on 1 May 2020. He succeeds Paolo Carmassi who spent over three years in the position. Carmassi has left the company to take up an external role. Malvern Panalytical is an analytical instrumentation and automation solutions provider that offers products to a variety of sectors including cement.


France: Vicat says that group business activity increased month-on-month between April and May 2020. In a special update on business in the context of the coronavirus, the company said that the outbreak’s impacts varied across the 12 countries in which it operates, all of which locked down due to the pandemic.

In France, the level of business is “slightly lower” than in May 2019 following a steady recovery from a “strong slowdown in mid-March 2020.” Macroeconomic and competition issues continue in Egypt and Turkey, not however due to the coronavirus outbreak, while volumes and prices have generally increased in Switzerland, the US, Brazil and Western Africa, except in Senegal, where the government has cancelled infrastructure projects. Following the pan-Indian lockdown between 24 March 2020 and 17 April 2020, business in India has resumed, albeit at a “level significantly below that of the same period of 2019.”

The group says that it is planning cost-cutting measures and has postponed a planned US price rise to late 2020.


Spain: LafargeHolcim España has announced the launch of a range of mortars specially suited to use in 3D printing. EN News has reported that the range, called Tector 3D build, includes cement and natural hydraulic lime mortars. The company says that the products can sustain pressures of up to 90MPa for high-speed application. It is collaborating with construction companies to apply the products to 3D printing in large residential and energy infrastructure projects


Sweden: Germany-based BHS-Sonthofen has announced its supply of a twin-shaft DKXS 4.0 batch mixer for Tecwill as part of the 1100-turbine Markbygden Wind Farm in Norrbotten County. The mixer produces 4m3 of fibre concrete per batch and allows for casting up to three windmill bases per day. Tecwill has supplied a mobile concrete batching plant to the project consisting of five aggregate bins, four cement silos, a fibre dosing module and turbo-heating container including a buffer tank for cold water.


Turkmenistan: President Gurbanguly Berdimuhamedov has signed a degree announcing the start of phase two of construction of the Baharden and Lebap cement plants in July 2020. Turkmenistan Today State News Agency has announced that the decree permits the Ministry of Industry and Construction to conclude contracts with Beyik-Bina for construction of the Baharden plant and with Turkmen Enjam for construction of the Lebap plant, each with a 1.0Mt/yr integrated capacity. Both projects are scheduled for completion in 2020.


Australia: James Hardie has revised its guidance for the quarter ending 30 June 2020, the fourth quarter of the Australian fiscal year 2020, following “improved housing market activity, particularly in North America.” Australian Associated Press – Financial News has reported that James Hardie has revised its North American fibre cement boards volumes growth estimate to 1% year-on-year from a 3% drop previously. It expects Australian volumes to remain constant year-on-year, as previously predicted, and European volumes in the quarter to fall by 13%, rather than by 16%.


India: Retail investor Radhakishan Damani has announced plans to acquire a majority stake in The India Cements. The deal is subject to the approval of competition authorities.


Thailand: Siam Cement Group (SCG) will participate in a pilot run a of prototype payments system developed by Siam Commercial Bank (SCB) that integrates central bank digital currency (CBDC) into the group’s procurement and financial management systems. CoinDesk News has reported that the Bank of Thailand will launch the project in July 2020 and conclude it by January 2021. The bank said, “The project marks an important step in broadening CBDC’s scope and adoption to wider audiences, starting with large corporates.”


China: Cement companies produced 249Mt of cement in May 2020, up by 8.6% year-on-year from 229Mt in May 2019. Xinhua News Agency has reported that cement production in the first four months of 2020 was 520Mt, down by 18% from 637Mt over the corresponding period of 2019. Four-month sales revenue fell by 13% year-on-year to US$32.9bn from US$37.8bn. Net profit fell by 18% to US$4.99bn from US$6.01bn. April 2020 was the first month of the year in which sales and profit grew, by 4.4% and 0.6% respectively.


Uzbekistan: The government has announced the sale of shares in UzAssets, an investment company founded to privatise its 36% stake in Qizilqumsement. The Information Agency of the Ministry of Foreign Affairs of the Republic of Uzbekistan (DUNYO) has reported that Qizilqumsement is a 51% subsidiary of Uzpromstroymaterialy, with the remainder held by private minority shareholders. Qizilqumsement operates the 3.8Mt/yr Qizilqumsement cement plant in Navoi, Navoiy Region.


Bangladesh: The Bangladesh Cement Manufacturers Association (BCMA) has suggested the removal a 3% non-refundable advance income tax (AIT) and a 3% import duty on raw materials, as well as the reduction of a US$5.88/t import duty on clinker by 40% to US$3.53/t. The Dhaka Tribune newspaper has reported that BCMA members are struggling to pay their dues due to the impacts of the coronavirus lockdown, which caused the sector a loss of US$353m between 21 March 2020 and 21 June 2020.

BCMA President Mohammed Kabir said, “To generate taxes and revenue from this sector, the government should save our businesses and meet our logical demands in the final budget. We are really frustrated that our demands were unaddressed in the proposed budget. Our working capital will dwindle if the government keeps charging the AIT.” He added, “If the government does not remove the 3% non-adjustable AIT, then at least it should be declared as adjustable tax.”


Sri Lanka: Siam City Cement subsidiary Insee Cement says it is ramping up production at its 0.4Mt/yr Galle grinding plant. The unit in Southern Province opened in 2018. The Daily FT newspaper has reported that the grinding plant, along with Insee’s Puttalam integrated plant, will have the production capacity to serve 100% of domestic demand. The producer added that production and supply of its products had returned to normal following disruption caused by coronavirus-related lockdown measures.

Insee Cement sales, marketing and innovation executive vice president Jan Kunigk said, “Our contribution to uplifting the nation’s economy is of immense value in rebuilding Sri Lanka during post-pandemic recovery. Insee Cement’s ability to efficiently deliver our full capacity of high-quality cement needed by individual house builders and concrete business partners has always been ensured.”


US: Hawaiian Cement has announced the relocation of its Kahului Harbour cement terminal to an adjacent facility, previously occupied by a sugar company. The Maui News newspaper has reported the reason for the relocation as a disruption caused by operations at the terminal to a neighbouring company’s unloading operations, which caused “a significant constraint to operations and safety at Pier 2.” The new terminal, adjoining Pier 3, will have two cement silos with a joint capacity of 6000t, up by 88% from 3200t. Hawaiian Cement says that this will enable it to meet 100% of demand on the island of Maui.


Germany: Schwenk Zement has announced plans for the production of sustainable aviation fuel (SAF) from cement kiln CO2 emissions. The World Ethanol and Biofuels Report has reported that Schwenk Zement’s integrated 1.0Mt/yr Allmendingen, Baden-Württemberg plant will receive a pilot SAF plant in late 2020.


Russia: Sibtsem Holding Company subsidiary Timlyuy Cement has announced the completion of essential upkeep on raw material mills five and ten at its Timlyuy Cement plant. Improvements included the replacement of exhausted plate feeders with bucket feeders for accurate dosing, “improving the quality of the finished product while lowering cost,” according to Timlyuy Cement process control chief expert Vladislav Zarubin. A new conveyor belt with an electric drive, strain gauges and control system was also included under the US$57,500 upgrades.

Timlyuy Cement says that per unit productivity has increased by 37% to 55t/hr from 41t/hr. Managing director Vladimir Klichko said, “For the Timlyuy Cement plant, improving the reliability of process equipment is traditionally one of the primary tasks. The modernisation of raw materials grinding, performed at the proper level, is the key to stable and efficient operation of the enterprise - a guarantee that even at the peak of the construction season, consumers will receive high-quality products on time, and in the right amount.”


Russia: The International Standards Organisation (ISO) has granted Eurocement subsidiary Akhangarantsement ISO 9001:2015 quality management systems certification for its Akhangarantsement integrated cement plant. A TÜV audit concluded that the plant’s production, distribution and management systems conform to international quality standards.

Akhangarantsement general director Gennady Kulikov said, “The introduction of a modern management system allows us to flexibly respond to changes in demand and implement an active investment program. The development strategy of the enterprise involves increasing production capabilities through the construction of a new high-tech dry process plant with a capacity of 3Mt/yr. A number of measures are aimed at sustainable development and increasing efficiency: introduction of energy-saving technologies, automation of production, development of new types of products, professional development of employees and the creation of high-tech jobs and the introduction of green technologies and advanced environmental solutions.”


France: CRH subsidiary EQIOM has announced a 9000t/yr reduction in its transport-related CO2 emissions, down by 5% to 171,000t/yr for the past three years from 180,000t in 2017. It achieved the reduction through its commitment to the FRET21 initiative, a sustainable development strategy of the Agence de l’Environnement et de la Maîtrise de l’Énergie (ADEME) and Association des Utilisateurs de Transport de Fret (AFAT).

The initiative is based on CO2 reduction around four key activities: loading rate; distance travelled; means of transport; and responsible purchasing. EQIOM launched five initiatives, including increasing laden returns of trucks to reduce empty transport to 28%, commissioning four new natural gas and bioethanol-powered vehicles and increasing rail freight to 89%.

EQIOM logistics manager Jérôme Becamel said, "As in the rest of the country, our transport activity has been impacted by the social situation, particularly strikes on the roads and in the railways. However, we are delighted with the results obtained for this first challenge even if we were unable to reach our ambitions 100%. We are only more motivated and we will be stepping up our efforts over the next three years.”


US: Bulk materials handling specialist Conveyor Components has announced the launch of the Tripper Position Switch (TPS), a control unit consisting of two SP/DT micro switches rated for 20A at 120V, 240V or 480V. The unit indicates when the tripper of a shuttle conveyor is located on a multiple discharge point and will activate the dumper when signalled. Conveyor Components says that the device is housed in a “cast aluminium enclosure rated for NEMA 4 weather-proof or NEMA 7/9 explosion proof.”


Germany: Schmersal says it is once more connected to the internet and fully operational following a cyber attack on 20 May 2020 that forced it to shut down its local networks and go offline. During the incident the engineering company reacted to a malware injection in progress and stopped the criminals from completing the attack. Systems were gradually restored over the following two weeks.

Managing director Philip Schmersal said, “Situations like these really highlight how dependent companies now are on IT. Making telephone calls, e-mails, accepting orders – we had to find alternative channels for every process. We worked extremely hard to keep in contact with our customers in every conceivable way and to keep them up to date.” Schmersal thanked “customers for their understanding and all employees for their tremendous dedication in this testing time.”


Uzbekistan: JV Pro Euro Cement has announced the start of construction of an integrated cement plant in Namangan Region. Trend News Agency has reported that Czech Republic-based PSP Engineering will oversee procurement, construction and installation of the plant, with the support of Netherlands-based Arona International. The plant’s scheduled completion date is in mid-2023.


India: JK Cement’s sales rose by 10% year-on-year to US$763m in the financial year to 31 March 2020 from US$691m in the same period in 2019. Its sales volumes of cement decreased slightly to 9.8Mt and its profit after tax nearly doubled to US$63.5m. However, its sales fell slightly in the fourth quarter, sales volumes of cement dropped by 7% year-on-year to 2.9Mt and it reported a significantly reduced standalone net profit.

The cement producer said that its operations had gradually stabilising since coronavirus lockdown measures were relaxed. All of its integrated and cement grinding plants had resumed production and despatch. It noted that due to lower power demands less fly ash was available so it is sourcing this from other locations. Labour shortages are also affecting bag supplies and the availability of drivers. As part of cash conservation measures it has restricted capital expenditure to US$66m in the current financial year.


India: Odisha has received its first cement-free road near Amanapada, Cuttack District. The Pioneer newspaper has reported that researchers from the Kalinga Institute of Industrial Technology (KIIT) developed the new material, made from 100% industrial waste, in order to cut the CO2 emissions involved in cement production and in anticipation of an acute limestone shortage in India in 25 – 50 years. KIIT founder Achyuta Samanta thanked the students whose work brought this pilot project to fruition. “The new technology has the potential to bring about a revolution in engineering construction,” he said.


Switzerland: LafargeHolcim has announced its participation in a project aimed at increasing the height of wind turbine towers by producing larger bases on-site using 3D concrete printing technology. LafargeHolcim will supply concrete for use with Denmark-based COBOD’s 3D printing technology, while US-based GE Renewable Energy backs the project. The method enables bases to exceed the 4.5m maximum diameter necessitated by road transportation. This increases the maximum height of turbine towers by 100% to 200m from 100m, which in turn raises power generation by 33% to 20.2GWh/yr from 15.1GWh/yr.

LafargeHolcim research and development head Edelio Bermejo said, “Concrete 3D printing is a very promising technology for us, as its incredible design flexibility expands the realm of construction possibilities. Being both a user and promoter of clean energy, we are delighted to be putting our material and design expertise to work in this ground-breaking project, enabling cost efficient construction of tall wind turbine towers and accelerating access to renewable energy”