Global Cement Newsletter

Issue: GCW520 / 25 August 2021

Headlines


Holcim Schweiz hit a milestone recently with the aerial drone programme at its Siggenthal cement plant. The project with Voliro, a Switzerland-based technology start-up, has started to use multi-rotor drones to conduct official measurement flights. They used them to take measurements to determine the steel wall thicknesses of the cement kiln and the cyclone preheater. The work has been part of Holcim’s ‘Plants of Tomorrow’ industrial automation plan with unmanned aerial vehicles (UAV). Key features of the particular drones being used are that they can be rotated around all axes by a special rotor system and can even fly upside down.

Holcim has been using drones in and around cement plants for a few years now. When it launched the Plants of Tomorrow plan in 2019, Switzerland-based drone supplier Flyability said that the cement company had chosen its Elios 2 model to perform confined space inspection. Earlier in 2017 another supplier, SenseFly, said that LafargeHolcim Tanzania had been using its fixed-wing products. Holcim is also far from alone in its use of drones. A few examples among many include Cemex USA’s work with Kespry earlier in 2021, HeidelbergCement’s work in North America and Germany in 2020 and 2021 and Votorantim’s testing at its Córdoba and Niebla plants in Spain back in late 2015. 

UAV usage by armed forces dates back to examples like unmanned incendiary balloons being deployed in the 19th century to Azerbaijan’s reported decisive use of drones in its war against Armenia in late 2020. The current era of industrial UAVs began after 2000 when governments starting issuing civilian permits, miniaturisation occurred and improvements in cameras, sensors and computing power followed. For the mineral processing sector the trend started with drones being used for stockpile management and quarry surveying. At present this is the main area that UAVs are used for by the sector, often coupled with photogrammetry techniques. CalPortland’s Adam Chapman’s paper at the 2021 IEEE-IAS/PCA Virtual Cement Conference described one company’s use of UAVs in the cement industry since 2016, looking at licensing, cost, quality of data, drone technology, fleet management and field experiences.

More recently though, tests of drones used to survey cement plant buildings and structures have started being publicised such as Holcim’s work at Siggenthal. A presentation by consultant John Kline and Chris Place of Exelon Clearsight summarised the use of drones for structural inspection at cement plants at the Global CemProducer 3 webinar in January 2021. The key benefits they promoted of using an UAV in this way were: improved safety because workers have reduced risk from climbing, working at height or in confined spaces; less time to conduct a survey; higher resolution photographs and video; better coverage through grid method surveying; and an overall lower cost. However, on that last point, other commentators have noted that market-leading drones for surveying are relatively expensive and easy to damage. Drones have since been used to start going inside structures at cement plants with Kline demonstrating their use to inspect the condition of refractory within the cooler, kiln, pre-heater and cyclone of a production line at the Global CemProducer 2 webinar in July 2020. HeidelbergCement has also been doing similar things, with an inspection trial using a drone of the kiln at the Schelklingen plant in Germany during the 2021 maintenance shutdown period at the site.

So far the use of drones by the cement industry has mostly been in a surveying or inspection capacity. Given the short time that UAVs have been used like this there is likely to be scope for lots more development both within existing fields and new ones as the sector works out how best the technology can be used. One application we couldn’t find in the research for this short article was the use of drones for security and surveillance tasks at cement plants and quarries although this may be happening already. However, there could be a more active role for drones if or when a company finds a way for them to start making basic repairs or carrying out simple maintenance in those hard to reach areas that drones excel at accessing. Research examples exist of UAVs being used to spray concrete or repair materials onto minor defects in concrete structures. Yet considerable challenges face these kinds of applications such as the weight of a loaded multi-rotor drone or damage from rebound. Before we all get too worried about drones replacing our jobs though it is worth considering that Amazon’s plan to deliver packages by UAV was first announced in 2013 and it still hasn’t happened yet. It may yet, but for now in most situations humans remain cheaper and more practical than robots or drones.


Turkey: Batıçim has appointed Akif Geçer as its general manager and as a member of its executive board. Arif Alp Dündar has also been appointed as chief financial officer and as a member of the executive board.

Geçer was the general manager of construction company Türkerler Holding from 2011 to 2015. Prior to this he held management positions at Çimko Cemento and Şanlıurfa Çimento and production roles at OYAK and Denizli Cement dating back to the early 1990s. He is a graduate in chemical engineering from the Middle East Technical University in Ankara.


France: Hoffmann Green Cement Technologies has appointed Stéphanie Bondoux as its director of certification and accreditation. In her new role, Bondoux will help the company to comply with France’s technical norms and standard practices. In order to ensure that it continues to meet the highest industry standards, she will assess the performance, the sustainability of solutions and the safety of the various applications while fostering Hoffmann Green Cement Technologies’s policy of innovation. This will involve close collaboration with both the producer’s testing segment and accreditation bodies.

Bondoux was previously head of accreditations and regulatory frameworks for Liechtenstein-based building materials producer Hilti's Western Europe business, having begun her career as a fastening product manager there. She holds a master's degree in marketing from Sorbonne University, Paris.


Saudi Arabia: Mansour Balghonaim has taken a seat on the board of Saudi Cement, effective retroactively from 30 June 2021. Blaghonaim has 16 years’ experience in banking and is head of business development wholesale banking at Gulf International Bank. He acquired his degree in finance from King Saud University, Riyadh.


Austria: Baumit has invested Euro5.6m in a new waste heat recovery (WHR) system at its Wopfing cement plant in Lower Austria. The producer claims that the installation will enable it to make energy savings of almost 20GWh/yr, corresponding to the energy consumption of 1000 households.

Commercial director Georg Bursik said “We have been using the waste heat for drying systems in the plant for decades. Thanks to this investment, the use of waste heat can be further increased – saving 4000t/yr of CO2.


Australia: Adbri’s first-half sales in 2021 were US$545m, up by 7% year-on-year from US$508m in the first half of 2020. The group’s cement and clinker volumes increased by 11%. It said that this was due to a rise in demand in the eastern states of Australia and the recommencement of regular supply to a customer in South Australia. The group increased its earnings before interest and tax (EBIT) to US$64.0m, up by 81% from US$35.3m. Its net profit increased by 95% to US$41.1m from US$21.1m.

CEO Nick Miller said “Adbri delivered a robust first half financial performance for 2021 recording solid growth in revenue and profits with improving margins as demand for construction materials rebounded, supported by increased residential housing activity and infrastructure spending.” He added that full-year 2021 earnings would increase less sharply year-on-year than first-half earnings have, due partly to the anticipated impacts of the opening of a rival cement terminal in New South Wales in the second half of the year.


Colombia: Cementos Argos has signed a contract with Klaveness Digital for the supply of the latter’s CargoValue cement terminal logistics platform throughout its supply chain. The move follows a successful trial project carried out by the parties during the second quarter of 2021. Cementos Argos says that it solidifies its digitisation agenda to preserve its strong market foothold in the Americas.

Trading and business intelligence senior director Gabriel Ballestas said “Our business model is focused on the customer and on creating added value for our stakeholders. CargoValue has enabled us to digitise existing processes to improve visibility and make better decisions throughout the supply chain towards that goal.” He added “This wider rollout will improve collaboration between stakeholders and allow us to identify and improve supply chain efficiencies between sites.”


Morocco: The government of Morocco has tightened cement and clinker quality standards. The Le Matin newspaper has reported that the new standards will see cement and clinker assessed on the basis of higher consistency and final product durability standards than previously.


Pakistan: The All Pakistan Cement Manufacturers Association (APCMA) has received a request from the Pakistan government to lower cement prices. The International News newspaper has reported that Finance and Revenue Minister Shaukat Tarin spoke with APCMA representatives about trends in cement pricing in the three years prior to August 2021 and the importance of cement in stimulating economic growth. Tarin encouraged the establishment of a consultative session between the association and relevant stakeholders, with the task of proposing a sustainable pricing mechanism.


Algeria: An Egypt-based investment company has initiated legal action against Algeria over issues relating to two cement plant projects. The Global Arbitration Review newspaper has reported that the company is seeking to claim US$900m in damages.


Nigeria: Lafarge Africa has ranked first on PWR Advisory’s Nigerian Exchange Top 20 companies for gender diversity. 46% of the group’s board seats are female-occupied, up from 40% in 2020.

Chair Adebode Adefioye said “Lafarge Africa's commitment to female representation at the board and management rank and file level is unwavering. Our diversity and inclusion targets, which align with our sustainability strategy, set us apart and are a clear indication of our resolve to continue on this trajectory for more extraordinary outcomes. We remain resolutely committed.”


Canada: Lafarge Canada has supplied the first EcoPact Zero near-zero net CO2 ready-mix concrete in Canada. The subsidiary of Switzerland-based Holcim supplied the concrete to a Habitat for Humanity housing development site in Kingston, Ontario.


Finland: Metso Outotec has launched the Xtreme forged crusher head. The supplier says that this completes the portfolio for Nordberg MP800, MP1000, MP1250, HP800, and HP900 crushers. It is made of one-piece forged material, with geometrical features to assure consistent bearing loading within machine design parameters.

Crushing products senior vice president Chad Smallwood said “Metso Outotec now has a complete range of crusher heads in the portfolio and our customers can choose the level of durability based on their application and needs. The new Xtreme forged head is the most reliable crusher head in the industry. The original equipment manufacturer (OEM) design ensures optimal crushing even where equipment may be pushed beyond design limits.”


US: Cemex USA has announced plans for an upcoming 600,000t/yr aggregates plant in Brierfield, Alabama. The Birmingham Business Journal newspaper has reported that, when operational, the plant will supply the company’s ready-mix concrete operations in the state. The subsidiary of Mexico-based Cemex operates 30 batching plants in Alabaster, Tuscaloosa and Vance.

Mid-South regional president Marc Tyson said “The Brierfield plant gives us a new opportunity to support our existing customers and earn the business of new ones by leveraging the wealth of experience of our team and providing them materials sourced from all parts of Cemex USA's supply chain.”


India: Holcim subsidiary Ambuja Cements has launched trial production at its new 3.0Mt/yr Marwar integrated cement plant in Rajasthan’s Nagaur district. The launch follows a total investment of US$316m in the plant’s construction. The plant is equipped with an additional 2.0Mt/yr of grinding of grinding capacity and a waste heat recovery (WHR) plant.

Managing director and chief executive officer Neeraj Akhoury said “It’s a proud moment for us at Ambuja Cements. Our endeavour shall always be to become a strong partner and a builder of progress for India."


China: China Tianrui Group has recorded first-half consolidated sales of US$883m in 2021, up by 9% year-on-year from US$809m in the first half of 2020. Cement sales volumes grew by 10.6% to 17.5Mt from 15.8Mt. Its profit attributable to owners was US$116m, up by 5% from US$111m. The group reported that the national cement industry recorded record production in the first half of 2021 however this slowed in May and June due to poor weather and increasing commodity prices.


Trinidad & Tobago: Barbados-based Rock Hard Cement has ended the operations of its Trinidad & Tobago-based subsidiary Rock Hard Distributors after losing a court case against the country’s Ministry of Trade and Industry in July 2021. The Barbados Today newspaper has reported that chief executive officer Mark Maloney said "Unfortunately, a limit on imports of 75,000t, combined with an import duty of 50%, means that Rock Hard Distributors simply cannot operate in Trinidad." He added, "it is with extreme sadness and disappointment, therefore, that we have closed our business in Trinidad and will now pursue opportunities in other Caribbean countries until such time as we are afforded equal treatment in our home country.”


Kenya: Cement producers recorded a 28% year-on-year increase in production in the first five months of 2021 to 3.35Mt from 2.65Mt in the first five months of 2020. The Business Daily newspaper has reported that the Kenya National Bureau of Statistics recorded a 27% increase in cement consumption to 3.35Mt from 2.64Mt. The increases follow a rise in infrastructure investment by the government, especially in the roads and dams segments. Increased credit requests by property developers also indicate a recovery in the private sector following the decline of the Covid-19 outbreak. Kenyan gross domestic product (GDP) growth is forecast at 6% in the 2021 full year.


Sri Lanka: Siam City Cement subsidiary Insee Cement says that it is operating at full capacity utilisation across its network, which includes a 3.6Mt/yr-integrated cement plant. The Daily News (Sri Lanka) newspaper has reported that the producer is responding to a shortage in the country due to the partial suspension of imports. It said that it has been able to do this thanks to the uninterrupted supply of raw materials by its parent company.

Chief executive officer Gustavo Navarro said, "Our consumers can be assured as always of full-capacity production and supply of Insee Cement to the market. We trust that we can curtail any unnecessary pressure on the Consumer Affairs Authority and government regulators who have been pressed for price hikes and hope to quell any disruptions to market supply across Sri Lanka."


Germany: A pilot program of climate protection agreements has been launched to help German companies convert to CO2-free production, starting in 2022. The Federal government declared that Euro900m would be available in the first instance. This is intended to assist companies in hard-to-abate sectors, with the government assuming that more than 50 companies in the cement, steel, lime and ammonia industries will be eligible to apply for climate protection agreements. These will off-set the difference between the additional costs resulting from the CO2-neutral operation of a company and the CO2 price in the EU Emissions Trading Scheme (ETS). The terms of the contract will likely run for 10 years, to provide the companies with sufficient time to adjust to considerably higher CO2 abatement costs in the future.

In addition to the funding of investment costs in EU-wide hydrogen infrastructure projects, the federal government sees the industry decarbonisation programme as an essential transformation instrument for energy-intensive industry in order to achieve the goal of greenhouse gas neutrality by 2045.


India: The Competition Commission of India (CCI) approved the acquisition of a 12.55% stake in JSW Cement Ltd by Singapore-based AP Asia Opportunistic Holdings Pte Ltd under the green channel route on 19 August 2021. Green channel is an automatic approval system, whereby a combination is deemed to have been approved by the CCI upon receiving the filing of the notice for the combination by the parties concerned.

The CCI stated that there were no overlaps between the parties to the proposed transaction and therefore it does not raise any risk of an appreciable adverse effect on competition in India, according to a notice filed with the regulator.


Mexico: Cemex has announced that it will join forces with the National Autonomous University of Mexico (UNAM) and Tecnológico de Monterrey (TEM) to promote Research and Development projects focused on ‘solving the company's current needs to offer more value to its customers, suppliers and stakeholders.’ Cemex has joined the Consortium for Research, Technology Transfer and Entrepreneurship UNAM - TEC through the signing of a ‘’ memorandum of understanding’ that took place on 19 August 2021.

"Cemex recognises the value and capacity of UNAM and TEM for the development of research,” said Ricardo Naya, President of Cemex Mexico. “We are convinced that by joining the Consortium we are taking an important step towards solving the real and current challenges we face as a company. This alliance will help us accelerate our innovation projects, such as the Future in Action program, with which we seek to achieve carbon neutrality, among many other projects that we hope to promote with both academic institutions.”


India: Authorities in Gwalior, Madhya Pradesh, have closed an unauthorised cement plant in connection with a crackdown on illegal production facilities in the state. The unit, reported to have been in operation for several years, was closed following a tip-off.

The investigating team confiscated more than 500 bags of adulterated cement bearing familiar brand logos, including Ambuja Cement, ACC, Birla and UltraTech Cement. In addition to mixing cement with inert materials, the authorities believe that the unit engaged in the re-sale of cement that had expired and thus could not be guaranteed to reach its designated strength in use.

Fake cement, produced by mixing genuine cement with cheaper inert materials like marble dust and artificial pigments before repacking and selling to an unsuspecting public, presents a major and growing risk to consumers of cement in India.


Romania: The Competition Council (CC) in Romania is analysing the deal involving the purchase of Euroagregate by Romcim, part of Irish building materials producer CRH. Romcim owns two cement plants in Hoghiz and Medgidia, a grinding plant in Targu-Jiu, as well as a network of quarries, cement and ballast terminals, aggregate warehouses, and precast goods production units.


India: UltraTech Cement, has announced plans to invest US$875m on a growth plan to increase its overall cement capacity by 19.8Mt/yr across the 2022 and 2023 financial years. Upon completion of the expansions, the company reports that its capacity would rise to 136.3Mt/yr, ‘reinforcing its position as the third-largest cement company in the world outside of China.’

Chairman Kumar Mangalam Birla said that the company recorded net revenues of US$6.0bn in the 2021 financial year, adding that the stage was set for rapid growth in the Indian cement sector. Birla said, “The fiscal stance clearly seems to be poised for an acceleration of government capital expenditure in the coming years, especially with the national infrastructure pipeline projects,” Birla said. “The three factors of cyclical upswing, conducive policy impulses and an improving global backdrop is likely to align themselves to position India for a virtuous cycle of growth and investments in the medium-term.”


Saudi Arabia: Southern Province Cement Company (SPCC) registered revenues of US$76.4m in the second quarter of 2021, a year-on-year fall of 15.3% compared to US$90.2m a year earlier. SPCC’s revenue was impacted by a 10.9% year-on-year fall in cement sales volumes, which came to 1.4Mt/yr for the quarter. SPCC’s gross and operating profits fell by 27.2% and 28.3% respectively year-on-year. The fall in profitability was at the back of lower volume and the resulting fall in operating leverage.

Cement volumes across the whole of Saudi Arabia fell grew by 21.3% year-on-year, while the Southern region saw sales fall by 5.1% year-on-year. Thus, SPCC underperformed relative to its peers by this metric.

Market Analyst Al Rajhi Capital said “Going forward, we expect cement volumes of SPCC to remain under pressure in the third quarter of 2021 on the back of lower construction activity due to uncertainties relating to the new building permit norms and shortage in labour.”


UK: The Mineral Products Association (MPA) has welcomed the government's UK Hydrogen Strategy but warned that the costs of production, transmission and distribution need to be shared by the whole UK economy. The state plan was published in mid-August 2021 and it sets out how progress will be made over the next decade to deliver 5GW of low carbon hydrogen production capacity by 2030, as part of the UK's drive to achieving its net zero targets. A consultation has also been launched to identify how the current cost gap between low carbon hydrogen and fossil fuels can be overcome.

Richard Leese, Director of Industrial Policy, Energy and Climate Change at the MPA said, "it's now critical that energy intensive industries, including the UK cement sector, which are essential for our economy and way of life, are not unduly penalised by additional policy costs for the production, transmission and distribution of hydrogen on top of already high electricity costs and carbon-related environmental taxes. Hydrogen development costs need to be shared by the wider economy to encourage acceleration of the technology and ensure industrial gas users and hydrogen generated power users are not placed at any further international competitive disadvantage.” Leese added that switching fuels away from fossil fuels, including the potential to adopt hydrogen technology, was already one of seven key levers in MPA UK Concrete's Roadmap to Beyond Net Zero.

The MPA is currently undertaking demonstrations of hydrogen as well as plasma technology, which are being partly funded by the Department for Business, Energy and Industrial Strategy (BEIS). The projects follow a BEIS-funded feasibility study in 2019 which found that a combination of 70% biomass, 20% hydrogen and 10% plasma energy could be used to eliminate fossil fuel CO₂ emissions from cement manufacturing.

The association has also welcomed the government's announcement of a Euro47m Red Diesel Replacement competition to help develop diesel alternatives as part of the Net Zero Innovation Portfolio. However, it renewed its call for a delay in the removal of the red diesel rebate, scheduled for April 2022, and estimated to cost the mineral products sector alone nearly Euro120m/yr.


Nigeria: Lafarge Africa’s revenue grew by 20% year-on-year to US$352m in the first half of 2021 from US$293m in the same period in 2020. Its profit after tax increased by 21% to US$68.8m from US$56.6m.


Switzerland: Holcim Schweiz and Voliro have conducted the first official measurement drone flights at the Siggenthal integrated cement plant. The drone used took measurements to determine the steel wall thicknesses of the cement kiln and the cyclone preheater.

The companies have been testing using aerial drones to conduct inspection and maintenance work as part of Holcim’s ‘Plants of Tomorrow’ initiative. The drones developed by ETH Zürich spin-off company Voliro can be rotated around all axes by a special rotor system and can fly upside down. They are being tested in areas that are difficult for human employees to reach, such as the steel walls and casings of production facilities and silos.

Voliro was founded in 2019 and it is developing a new generation of flying drones for the inspection and maintenance of industrial plants. The drones can be equipped with a variety of sensors that perform visual, thermal and contact-based measurements. The drone's 360° design allows sensors to take measurements even on curved and inclined surfaces. This potentially allows hard-to-reach areas in a cement plant to be assessed without shutting down production. Holcim has been supporting Voliro's product development since 2019 and is providing the technology start-up with the infrastructure in Siggenthal for test flights. The building materials producer has also been supporting the project with its own knowledge about non-destructive testing.


Vietnam: SSI Securities says that the local cement sector faces a ‘huge’ risk due to its over-dependence on export markets, particularly its reliance on China. The securities company reports that cement shipments have risen due to China’s current investment policies on limiting the output of its own cement plants and increasing imports from foreign countries, according to the Viet Nam News newspaper. China was the largest buyer of Vietnamese cement from 2017 to 2019. In 2020 China scooped up 57% of Vietnam’s combined cement and clinker exports. This represented 22% of the country’s total sales.

However, SSI Securities has warned that exports to China are unlikely to grow as demand stabilises. It expects a fall of 20 – 25% in the short to medium term as China stops its infrastructure stimulus packages. The brokerage company also noted that the sector’s second biggest export destination, the Philippines, has accused Vietnam of dumping cement.


Philippines: Eagle Cement’s net sales grew by 87% year-on-year to US$220m in the first half of 2021 from US$117m in the same period of 2020. Its earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubled to US$94.1m, according to the Manila Bulletin newspaper. The company attributed the result to higher sales volumes despite a decrease in price due to competition. Bagged cement represented 83% of its sales with the remainder from bulk cement. Domestic demand was mainly driven by the private sector.