Global Cement Newsletter

Issue: GCW574 / 14 September 2022

Headlines


Argos Honduras revealed this week that it has been testing the injection of hydrogen into the kiln of its integrated Piedras Azules cement plant. It has completed a pilot with Portugal-based company UTIS. As part of the process it has been trialling, it has split water by electrolysis and then injected the hydrogen and oxygen directly into the kiln via the main burner. The pilot has reportedly increased clinker production and reduced petcoke consumption at the plant.

Argos is far from alone in using hydrogen in this way. At the end of August 2022 Cemex said that it was also starting to use hydrogen at its San Pedro de Macorís cement plant in the Dominican Republic. CRH UK-subsidiary Tarmac completed a trial in July 2022 using hydrogen as an alternative to natural gas at its Tunstead lime plant. HeidelbergCement UK-subsidiary Hanson also ran a successful trial using hydrogen as part of the fuel mix at its Ribblesdale cement plant in 2021. The government-funded trial used a combination of hydrogen (39%), meat and bone meal (12%) and glycerine (49%) to reach a 100% alternative fuels substitution rate. In 2021 Hanson reported that fuel switching to hydrogen could help it reduce its 2050 CO2 emissions by about 3%, or by -35kg CO2/t of cement product.

Cemex appears to be a leader in using hydrogen in this way. The Mexico-based company started injecting hydrogen in 2019 and retrofitted all of its European cement plants with the technology to do so in 2020. It then said it wanted to roll this out to the rest of its operations. The project in the Dominican Republic is an example of this. In February 2022 it announced an investment in HiiROC, a UK-based company that has developed a method using thermal plasma electrolysis to convert biomethane, flare gas, or natural gas into hydrogen. The stated aim of this investment was to increase Cemex's hydrogen injection capacity in its cement kilns and to increase its alternative fuel substitution rate. Back in 2020 Cemex said that it planned to use hydrogen injection to contribute 5% of its progress towards its 2030 CO2 emissions reduction target along with other measures such as increasing its thermal substitution rate and reducing its clinker factor.

As can be seen above there are a number of examples of hydrogen injection being used in cement plants in Europe and the Americas. However, there is very little actual data available publicly at this stage on how much hydrogen that the plants are actually using. For example, Cemex may have hydrogen injection equipment installed at all of its plants in Europe but it is unclear how many plants are actually using it. This is understandable though, given how commercially sensitive the fuel mix of a cement plant is and in Cemex’s case if it wishes to maintain a leader’s advantage in using a new technology.

It is interesting to see, in what has been released so far, the focus on doing deals with companies that supply electrolysis technology such as HiiROC and UTIS. A feasibility study ahead of the Hanson trial at Ribblesdale by the MPA, Cinar and the VDZ suggested that upgrading a kiln burner and adding all the necessary hydrogen storage and pipework could cost at least Euro400,000. However, this study also pointed out that the cost of hydrogen made a big difference to the cost of the CO2 saving from using it as an alternative fuel. Hence the focus on the technology partners. It will be interesting to see how many more hydrogen injection projects are announced in the coming months and years and, crucially, who is providing the technology to supply the hydrogen.

For more information on the use of hydrogen in cement production see the proceedings from the 15th Global CemFuels Conference & Exhibition where presentations on the topic were given by Cemex and the VDZ


India: Gautam Adani, his son Karan Adani and his nephew Pranav Adani are all expected to join the boards of ACC and Ambuja Cement. Sources quoted by the Mint newspaper anticipated changes to the boards of both companies to start happening in mid-September 2022. At the same time, a number of existing board members of the subsidiaries of Switzerland-based Holcim are expected to resign. Adani Group’s US$10.5bn acquisition of the subsidiaries of Switzerland-based Holcim has been gathering pace, with the latter having completed its due diligence process and the mandatory open offers for the public shareholders finished.


Pakistan: DG Khan’s revenue grew by 29% year-on-year to US$248m in the financial year to 30 June 2022 from US$193m a year earlier. Its profit for the year fell by 20% to US$12.7m from US15.9m. The main reason for the fall in profit was due to higher taxation in the reporting y


Zimbabwe: Government capital controls are delaying the handover of a new vertical cement mill ordered from China-based CBMI to Lafarge Zimbabwe. The cement producer still owes the supplier US$5.2m but has been unable to make the payment due to economic measures the government has taken to avoid depreciation of the local currency, according to the The Insider newspaper. The subsidiary of Switzerland-based Holcim is unable to obtain a certificate of completion from the supplier until the transaction has been completed. CBMI handled the order and Germany-based Gebr. Pfeiffer supplied the mill. The outstanding debt to CBMI may also delay Holcim’s deal to sell Lafarge Zimbabwe to Fossil Mining, which was announced in June 2022.


Greece: Titan Cement has launched CemAI, a subsidiary company that will supply predictive maintenance products based on artificial intelligence for the cement industry. It will use a mixture of a proprietary licensed software and a continuous monitoring and incident resolution service for entire cement manufacturing lines across the world.

Titan Cement has already used the service that CemAI supplies at several of its own plants around the world. It is intended to help cement companies maximise the operational efficiency and reliability of their plants while making their processes more efficient and cost effective. It uses machine learning technology that processes the operating data of entire cement plants in real time. This generates alerts that are analysed by a team of experts in cement operations, working in close collaboration with plant’s operational teams, to resolve issues before they affect operations. CemAI works through remote monitoring centres that collect and analyse the data stream from plant sensors continuously


Chile: Cbb has reported a profit of US$2m for the period January - June 2022, which represents a decrease of 74% year-on-year compared US$7.9m during the same period in 2021. The decrease came despite a 15.3% increase in revenues, which rose to US$169m. The company said that the difference could be mainly explained by lower margins from increased distribution costs and administration expenses.


UK: Hoffmann Green Cement Technologies, a French company that manufactures and distributes low-CO2 clinker-free cement, has announced that it has signed its first partnership agreement in the UK with Cemblend, a supplier of customised cement powder mixes.

Hoffmann Green will supply Cemblend with its H-IONA, H-UKR and H-EVA clinker-free decarbonated cements for distribution to its customers in the UK and Ireland. This exclusive distribution agreement with volume commitments initially runs until the end of 2023 and is a first step towards the signature of a licensing agreement which could see Cemblend build and operate a production unit similar to Hoffmann Green's French production facilities.
Julien Blanchard and David Hoffmann, co-founders of Hoffmann Green Cement Technologies said, "We are pursuing the milestones of our international development with the signing of this structuring partnership in a strategic market in Europe. This first distribution contract in the UK is further proof of the attractiveness of our low-carbon solutions outside our borders. It is a first step in our cooperation process with Cemblend to build eco-responsible buildings across the Channel."


Egypt: Private investor Sadiq Ahmed Sadiq El Sewedy has enlarged their stake in Arabian Cement to 11% from 9.5%. The investor paid US$1.6m for the additional shares. Al Ahly Pharos and EFG Hermes Holding provided brokerage services for the deal.

Arabian Cement recorded a profit of US$6.17m in the first half of 2022, compared to a US$1.2m loss in the first half of 2021.


Zimbabwe: Part of Lafarge Zimbabwe’s approved US$25m capital expenditure investments will go towards further expanding the company’s cement capacity in order to meet local demand. The company also plans to establish a new dry mortars plant. Lafarge Zimbabwe is on track to commission a new vertical roller mill at its Manresa grinding plant in early 2023. Lafarge Zimbabwe’s chief executive officer Geoffrey Ndugwa said, “The overall market demand continues to grow, driven by the segment of individual home builders as well as the ongoing major government infrastructure development projects. The company is confident that volumes will recover and grow as the availability of cement stabilises.”


Cyprus: Cyprus Cement has informed the Cyprus Stock Exchange that it has reduced its issued share capital by 14% to Euro50.9m from Euro59.2m. The company will return Euro8.26m in cash to investors.


India: Gujarat Sidhee Cement again closed its Sidheegram cement plant on 11 September 2022. The producer says that the temporary suspension of production will last until 1 October 2022.


Philippines: Holcim Philippines has signed a deal to receive 6.5t/yr of shredded waste from Bunawan municipality’s Panacan barangay for co-processing as alternative fuel (AF) in its cement production. SeeNews has reported that Holcim’s waste management subsidiary GeoCycle will process the AF. The partners aim to increase the volume of deliveries in future.

Davao cement plant manager Sam Manlosa said, “We are proud to provide our host barangay Panacan a sustainable waste management solution and thankful for their trust. We hope this partnership will further expand to other communities and the entire city of Davao so we can be a stronger partner in its sustainable progress.”

Panacan is the 28th community throughout the Philippines to enter into a waste management partnership with Holcim Philippines, and its 18th new partner in 2022. In August 2022, the company secured deliveries of waste collected in Bulacan province’s Binangonan, Cainta and Taytay municipalities in Rizal province for co-processing at its Bulacan cement plant.


India: ACC and Ambuja Cements shareholders tendered some of their shares under a US$3.8bn open offer by Adani Group for a further 26% stake in each company. The offer closed on 9 September 2022, and the group secured ownership of a further 2.2% stake in ACC and a further 0.4% stake in Ambuja Cements.

Adani Group agreed to acquire Switzerland-based Holcim’s 50% ACC stake and 63% Ambuja Cements stake for US$10.5bn in May 2022.


Pakistan: Cherat Cement expects cement consumption in Pakistan to fall by 3 – 4% year-on-year in the 2023 financial year, which will end on 30 June 2023. Amid the general decline, the company foresees a slight rise in areas devastated by recent flooding with the onset of repair and rebuilding works during the second half of the financial year. Exports are expected to fall by 20%, with prices remaining level while costs increase due to the high price of imported coal.

Pakistan Business News has reported that Cherat Cement is reappraising the investment cost and planned commercial operation date of its upcoming 8000 – 9000t/day new cement plant. It previously valued the project at US$158 – 173m.


Vietnam: Cement producers and exporters will pay an additional 5 – 10% tariff on their exports of cement and clinker from 1 January 2023. Viet Nam News has reported that the move aims to bring down local cement prices by increasing supply in the country. These have risen over the past six months, while export prices have remained level.

The Vietnam National Cement Association (VNCA) says that its members are struggling to increase exports in a highly competitive export market. In the six months up to the end of August 2022, China, the Philippines, Bangladesh, Malaysia and Taiwan all reduced their imports of Vietnamese cement. The decline included a ‘substantial’ reduction of imports by China and the Philippines. Exporters faced logistical difficulties in shipping cement to the Philippines, while China’s consumption dropped due to new Covid-19 restrictions and low residential construction activity there.

The VNCA forecasts cement production of 108Mt in 2022, against a national demand of 65Mt. It projected that a series of infrastructure projects will bolster domestic consumption between 2022 and 2025.


Armenia: The tariff on cement imports has been reduced by 35% to US$22/t, from US$34/t previously, following changes to import rules by the government. Imports of clinker will be subject to no tariffs.

News.am has reported that seven-month cement imports to Armenia rose by 1.7% year-on-year in the period up to 31 August 2022, to 84.7Mt from 83Mt. The cause of the growth is variously the cancellation of an income tax refund on mortgages from 1 July 2022, the increased immigration of Russian citizens into Armenia and the growth of tourism.


UK: Cemex UK has invested in a new Canning Conveyor conveyor system at its Swinderby sand and gravel quarry in Lincolnshire. The 1.6km-long system will convey extracted materials to a new processing plant. The new plant will double the quarry’s aggregates production capacity. The system includes a 20t hopper feeder and a radial stockpile, also supplied by Canning Conveyor. The company producer says that the new equipment will cut 50% of the operations’ CO2 emissions by eliminating diesel-powered dumpster use and saving 300,000l/yr of fuel, in line with Cemex’s Future in Action sustainability programme. It will also reduce dust and noise at the quarry. The investment is due for completion in early 2023.


Uruguay: The Administación Nacional de Combustibles, Alcohol y Portland (ANCAP) has announced plans to find a partner for its cement and lime business. The state-owned company is attempting to restore competiveness to the national market, according to La República newspaper. It will first call for expressions of interest and then take selected offers forward.

ANCAP operates two integrated cement plants, a lime plant and an associated packing and distribution unit. It reportedly made a loss of US$15m in 2021.


Argentina: Total despatches of cement grew by 11% year-on-year to 8.54Mt in the first eight months of 2022 from 7.67Mt in the same period of 2021. Data from the Asociación de Fabricantes de Cemento Portland (AFCP) shows that local despatches increased by 11.5% to 8.47Mt but exports fell by 10% to 67,800t.


Chile: Despatches of cement fell by 10% year-on-year to 2.25Mt in the first seven months of 2022 from 2.51Mt in the same period in 2021. Data from the Cámara Chilena de la Construcción (CCHC) shows that cumulative annual despatches have been falling month-on-month since January 2022.


Senegal: SOCOCIM Industries, a subsidiary of France-based Vicat, has reportedly stopped producing cement at its integrated plant at Rufisque. The move has been blamed on the high price of coal and other raw materials, according to local media. In August 2022 Dangote Cement placed all of the staff from its integrated plant at Thiés on leave for the month. The government previously set a so-called ceiling price of cement in 2019 in responses to high prices.


UK: US-based Mississippi Lime Company (MLC) has completed its acquisition of Singleton Birch, a supplier of lime products. The move is part of MLC’s strategy to expand both geographically and with new products and technologies. No value for the transaction has been disclosed.

Singleton Birch is based in North Lincolnshire, where it employs more than 150 staff. It will continue to operate under its existing brand and the management team, led by chief executive officer Richard Stansfield, who will remain in place. Singleton Birch has a number of business lines, including a chemicals division, which provides specialty calcium products to the rubber and plastics markets. It also provides services and solutions to the renewable energy, water treatment and waste management industries.


US: Total US cement shipments grew by 4% to 52.4Mt in the first half of 2022 from 50.4Mt in the same period in 2021. Data from the United States Geological Survey (USGS) shows that local shipments and imports rose by 3.5% to 44.1Mt and 7% to 8.31Mt respectively. The largest sources of imports of cement and clinker were Turkey at 4.57Mt, Canada at 2.19Mt, Mexico at 1.28Mt, Greece at 1.23Mt and Vietnam at 0.94Mt. The largest cement producing states in the reporting period, in descending order, were Texas, California and Missouri.


Dominican Republic: The President of the Dominican Republic, Luis Abinader, has inaugurated the kiln of a restarted production line at the San Pedro de Macorís cement plant. The US$34m upgrade project was started in 2021. The line has a clinker production capacity of 0.5Mt/yr and it has been restarted to support the local market. The announcement follows the start of a project to use hydrogen at the unit that began in late August 2022. The plant also plans to increase its use of alternative fuels, move to using more CO2-free materials and increase its use of additives over the next five years.


Honduras: Argos Honduras is set to start a new hydrogen injection process at its integrated Piedras Azules cement plant. During the process, water molecules are split using electricity into hydrogen and oxygen and then injected into the kiln through the main burner. The main objective of this technology is to reduce the use of fossil fuels, CO₂ emissions levels and energy consumption at the plant.

Luis Eduardo Tovar, the manager of Argos Honduras, said “We are proud to be committed to innovation and new technologies that allow us to keep our operation at the forefront of the industry. This project has allowed us to reduce our C0₂ emissions and optimise our processes to become increasingly efficient."

A pilot was previously conducted in conjunction with Portugal-based UTIS. It showed that by using the technology the plant could increase its clinker production and reduce petcoke consumption.


Denmark: FLSmidth says it will lead CO2Valorize, a new consortium intended to develop and deploy carbonation technologies in the cement industry. The group will receive Euro2m from the Marie Skłodowska-Curie Doctoral Networks and is supported by the European Commission’s Horizon Europe initiative. The expected commercial and technical outcomes of the consortium include a full flow sheet of the carbonation process line, the techno-economic analysis of various technology and materials options, and the optimisation of FLSmidth's proprietary reactors. The project is also intended to be a key part of FLSmidth MissionZero programme.

Burcin Temel McKenna, Head of Green Cement Solutions Development at FLSmidth, said “We have been granted a unique opportunity to revolutionise the cement industry at a time of extreme urgency”. He added, “On-site carbon capture and utilisation projects will be a quicker and more economically viable way forward for in cement plants.”

The consortium includes the following partners: Norwegian University of Science and Technology; Karlsruhe Institute of Technology; HZDR Innovation with Helmholtz-Zentrum Dresden-Rossendorf and Technische Universität Dresden; Technical University of Denmark; University of Padova; Siemens Process Systems Engineering; and the Slovakia-based cement producer Cemmac. The partners will support eight fully funded PhD students conducting research into the characterisation and kinetics of carbonated materials and optimisation of the carbonation process. They will also explore the commercial opportunities for mineral carbonation. The focus will be on the carbonation of calcium-, aluminium-, and magnesium-silicates as well as cement derivatives, slag, fly ash, recycled concrete fines and mine tailings.


Philippines: Cemex Philippines says that it was the sole supplier of cement for the construction of the Cordova Link Expressway, the longest bridge in the country. It supplied nearly 70,000t of cement for the project. It connects Cebu City to the municipality of Cordova on Mactan Island and spans a total of 8.9km standing on twin tower pylons reaching 145m in height. The bridge opened to road traffic in 2022.


Pakistan: Bestway Cement’s turnover grew by 21% year-on-year to US$460m in the financial year to 30 June 2022 from US$380m in the same period in 2021. Its operating profit rose by 32% to US$85.4m from US$64.4m. Its cost of sales increases by 23% to US$221m from US$180m.