Global Cement Newsletter

Issue: GCW584 / 23 November 2022

Headlines


CRH released its third quarter trading statement this week and the results were rosy, especially when compared to its peers in the cement business. Double digit growth in both sales revenue and earnings was reported for the nine month period so far in 2022. The company’s figures mainly attributed this to growth in its Americas Materials and Building Products divisions, although the presentation in its trading update took care to point out that the Europe Materials division had reported growth in the first half of 2022 only for it to run into a slowdown in the third quarter as energy prices increased. Even this wasn’t as bad on a like-for-like basis, with only earnings down in the third quarter in Europe. Chief executive officer Albert Manifold summed it up as follows: “This performance reflects the resilience of our business and the benefits of our integrated and sustainable solutions strategy.”

Manifold’s focus on integrated products was unsurprising given that the group has spent US$3bn in the year to date on businesses that make these kinds of things. These acquisitions have been added to its Building Products division adding to its already strong growth so far in 2022. The big one was the US$1.9bn deal to buy Barrette Outdoor Living, a US-based retailer and distributor of residential fencing and railing products. This was completed in July 2022. Other so-called bolt-on investments in 2022 have reached a total of US$1.1bn for 20 companies including Calstone, Hinkle, Rinker and Normandy in outdoor living, road and critical utility infrastructure sectors.

At the same time the group divested its architectural glass Building Envelope business for an enterprise value of US$3.8bn to private equity company KPS Capital Partners. That deal was completed in May 2022. On a smaller scale, it is also worth noting that Thomas Gruppe announced in early November 2022 that it had signed a purchase agreement to buy Opterra Zement and Opterra Beton. This includes the integrated Karsdorf cement plant, the decommissioned Sötenich grinding plant and the Neufahrn ready-mix concrete plant. However, there was no mention by Thomas Gruppe of the integrated Wössingen plant operated by Opterra Wössingen. Neither Opterra or CRH appears to have commented on this publicly yet though.

How CRH tweaks its business portfolio is interesting in comparison to the other cement companies. As Global Cement Magazine has covered recently, Holcim is bulking up a fourth business in light building materials and Cemex, Heidelberg Materials and others are similarly diversifying away from cement production to various degrees. CRH has generally held a more mixed portfolio away from the heavy materials trio of cement-concrete-aggregates over the last decade. However, it concentrated more on heavy materials when it picked up assets divested in the merger of Lafarge and Holcim in 2015. Since then it has been steadily pulling out of developing markets and focusing on North America and Europe. So, to see CRH moving out of the building envelope sector at the same time as Holcim and others dive in is a clear difference in approach.

The other point to highlight is that Manifold links sustainability to the group’s integrated products plan in his quote above. Earlier in 2022 the company revealed a new 25% reduction target in absolute CO2 emissions by 2030, that has been certified by the Science Based Targets initiative (SBTi), and a continued goal of becoming net-zero by 2050. It clearly takes sustainability seriously as Manifold was also previously the president of the Global Cement and Concrete Association when it was set up in 2018. Other indicators include the company’s use of an internal carbon price as indicated in its 2021 sustainability report. It also mentioned here that 43% of its direct CO2 emissions were covered under an emissions trading scheme. One implication here is that focusing on doing business in developed markets means that the group has to take its CO2 emissions seriously, as legislators in these places do too.

CRH is one of the largest building materials companies in the world and its cement business has grown and shrunk a little over the last decade. Despite this it remains in the top 10 of cement producers globally based on production capacity. Its purview of multiple markets in building materials continues to make it a company to watch as the more traditional heavy materials cement companies adjust their own product portfolios.


UK: The Mineral Products Association (MPA) has appointed Jon Flitney, Michael Conroy, Liam Forde, Steve Callow and Mike Haynes to new roles at the organisation. This follows the appointment of Jon Prichard as the MPA’s chief executive officer in October 2022, succeeding Nigel Jackson.

Jon Flitney has joined MPA Cement as Energy and Climate Change Manager. He will be working with the MPA Cement Climate Change and CO2 Reduction group providing support to sector decarbonisation and associated policies. Flitney joins from the British Ceramic Confederation (BCC) where he has worked across energy, environment, climate change and decarbonisation policy areas for over six years. He also previously worked on air quality and environmental protection for local authorities and the Environment Agency, covering a variety of manufacturing industries.

Michael Conroy joins as Manager - Environment, Safety & Regulatory Affairs for MPA Cement. He has over 20 years’ experience in the mineral products industry and ,since 2016, this has been focussed on environmental management, compliance, permitting and regulation across various sectors within the industry. His role at MPA involves working with members in the cement sector and liaising with the environmental regulators and relevant government departments on behalf of the members to ensure the sector is recognised in a positive and beneficial way. He is secretariat for the Cement Regulatory Interface Group (RIG), which meets regularly to discuss environmental regulatory matters that affect and impact the UK cement sector.

Liam Forde has joined BRMCA/MPA Ready-mixed Concrete as Construction Manager. His main responsibilities will be working with MPA members, the Concrete Centre and UK Concrete to promote safety, best practice, and ready-mixed concrete as the best solution for sustainable and resilient construction. Forde is a chartered civil engineer and joins from BAM Nuttall having had a background in both design and site environments.

Steve Callow has joined as Manager, Masonry and Concrete Products. He joins from Marshalls where he was Specification Manager. He also has sector experience gained from roles in FP McCann, CPM, Milbury Systems and Carillion.
Mike Haynes has joined MPA as British Lime Association Director. He joins MPA after 18 years in the lime industry working in the sales and customer services teams responsible for Construction and Civil Engineering markets and progressing to managing the customer services team. Prior to this, Haynes worked for contractors and consultants in those markets, as an engineer and project manager.


France: Ecocem has appointed Christian Clergue as its European Standardisation Manager. He started his career in the late 1980s working for Vicat, according to AC Presse. During his time with the group he led its SigmaBeton engineering subsidiary and worked as a project manager in fibre concrete and high performance materials. He later worked as a research and development director for Serge Ferrari and then as a department director for Eiffage Genie Civil.


Switzerland: Holcim has appointed Steffen Kindler to the role of chief financial officer (CFO), effective from 1 May 2023. Kindler joins the cement producer from Nestlé Deutschland, where he is currently CFO, having held various key business roles in Europe and North America throughout his 25-year career at Nestlé. These included roles of global responsibility for key corporate functions such as investor relations and mergers and acquisitions. Kindler holds a diploma in business administration and computer science from the University of Mannheim and attended Nestlé's leadership programme at London Business School.

Holcim CEO Jan Jenisch said “I am excited to welcome Steffen Kindler to the team. With his vast financial expertise and geographic experience, I am confident he will fit in well with Holcim’s performance-driven culture. Steffen is an ideal partner to contribute to our continued success as we become the global leader in innovative and sustainable building solutions, with a focus on superior value creation for all our stakeholders.”

Current CFO Géraldine Picaud will oversee the completion of the group’s full-year 2022 results and conduct a thorough handover, before continuing her career outside of the company.

Jenisch said “I personally thank Géraldine for her commitment and contributions to Holcim over the past five years. The solid foundations you see today – especially Holcim’s strong balance sheet, solid credit ratings and integration of sustainable finance – are all testimony to her leadership. I wish her much continued success in her future endeavors."


Chile: UNACEM Chile and its ready-mix concrete partner UNICON Chile are set to acquire aggregates company Constructora de Obras y Viales Limitada (Conovia). Peru-based UNACEM Group concluded an agreement to buy Conovia's parent companies Inversiones Befeld Limitada and Inversiones Majas Limitada for US$3.7m on 21 November 2021. Gestión News has reported that Conovia has 180,000t/yr of aggregates production capacity in Valparaíso Region. At present, UNACEM Chile has 600,000t/yr in cement grinding capacity, while UNICON Chile has 1.2Mm3/yr in ready-mix concrete capacity.

UNACEM Group aims to grow its Chilean cement market share to 10 - 15% in 2025, from 8% during 2021. The market is reportedly valued at US$350m/yr.


US: Cemex USA and RTI International have secured US$3.7m in funding from the US Department of Energy for their Balcones cement plant amine technology carbon capture study. The plant in New Braunfels, Texas, will trial RTI International's non-aqueous solvent (NAS) system, licensed by energy and technology company SLB. Resources News has reported that the system will have a CO2 capture capacity of 670,000t/yr. RTI International's principal project investigator Vijay Gupta said that NAS capture has a 30 - 40% lower energy penalty than preceding solvent-based technologies.

Cemex USA president Jaime Muguiro said "We remain committed to exploring technologies that can help us meet our targets as we build a more sustainable future. We are striving to cut emissions across all our operations, and this study with RTI International is one of the many steps Cemex is taking to achieve our objectives."


Türkiye: Adocim says that it has successfully commissioned a new four-silo cement terminal at the Port of Samsun, Samsun Province. The producer says that the terminal has a storage capacity of 45,000t. The facility will serve the producer's Portland limestone cement (PLC) export operations to countries including the US.

Parent company Titan Cement Group said "This new investment will enable us to further increase our sales of lower carbon cement, contributing to our group’s Net Zero goal towards a greener and more sustainable future."


Türkiye: OYAK Cement has ordered a 5000t/day Pendulum Cooler from Germany-based IKN for its integrated plant at Ünye. The contract was signed at the 16th Türkçimento Technical Seminar that was held in Antalya in late October 2022. No price for the order has been disclosed.


China: China Resources Cement subsidiary Shangsi Cement has successfully commissioned its new 5Mt/yr Shangsi aggregates site in Guangxi Province. The cement company developed the site in collaboration with CNBM Design and Research Institute, beginning in February 2022.

CNBM Design and Research Institute general manager Xie Xiaoning that both parties could take this project as an opportunity to further cooperate in-depth in fields such as new building materials, waste co-processing and automation, so as to help China Resources Cement to achieve diversified development and extension along value chains.

China Resources Cement expects to exceed 30Mt/yr in 2022. Earlier in the year, it won an auction for 1.5BnT of limestone reserves in Guangxi Province.


Mexico: Cemex has recorded a total of 50,000 users of its Cemex Go online sales platform since its launch in 2017. Exchanges via the platform account for 93% of the group's global cement customers and 85% of concrete customers. Cemex Go's net promoter score (NPS) customer satisfaction rating rose by 50% between November 2018 and November 2022.

Chief executive officer González Olivieri said "Cemex Go is an important enabler in our transition to a lower carbon industry by improving supply chain logistics, moving to a paperless industry and increasing efficiency throughout the construction sector."


India: Germany-based Gebr. Pfeiffer and its subsidiary Gebr. Pfeiffer (India) say they have received a follow-up order from Ultratech Cement for additional mills for new clinker production lines at its Kotputli plant in Madhya Pradesh and its Maihar plant in Rajasthan.

At the Kotputli plant it is planning to supply a MVR 5000 R-4 type mill to grind raw material. This mill can grind approximately 740t/hr to a product fineness of 1.0 % R 212µm with a 4800kW drive. At the Maihar plant a MVR 6000 R-6 type mill will also be supplied to grind raw material. In addition, several MPS 3550 BK type mills will be provided to grind fuel. These mills can grind approximately 45t/hr of pet coke, 90t/hr of coal, or any blend of the two materials. These are equipped with a 1300kW gearbox.

The plant design and the entire customer support will be handled by Gebr. Pfeiffer (India). The core components, such as gearboxes, grinding bowls, the grinding roller suspension system and the grinding rollers, will be supplied from Europe by Gebr. Pfeiffer. The remaining components, such as the foundation parts, the housings, the classifiers and most of the plant components will be provided by Gebr. Pfeiffer (India).


Germany: Zementwerk Lübeck is reportedly only operating its grinding plant at night and at the weekend due to high electricity prices. Norddeutscher Rundfunk (NDR) reports that the cement producer has also been forced to suspend production at times. However, government support is expected to help the plant to continue operation into 2023. NDR also reports that 80% of industrial plants in Schleswig-Holstein are threatened by energy costs. Zementwerk Lübeck operates a 0.3Mt/yr cement grinding plant at Lübeck.


India: RHI Magnesita has agreed to buy the India-based refractory business of Dalmia Bharat Refractories (DBR). The acquisition will take place via a share swap agreement in exchange for 27m shares in RHI Magnesita India. The Austria-based refractory manufacturer hopes to grow its presence in the Indian market and benefit from market synergies. DBR employs approximately 1200 people in India. It has a production capacity of over 300,000t/yr of refractory and operates five refractory plants and raw material sites. The acquisition will add production capacities in industrial regions in the south and west of India where RHI Magnesita currently has no assets. No completion date for the transaction has been disclosed.

Stefan Borgas, the chief executive officer of RHI Magnesita, said, “We see material financial and operational benefits from the addition of the Dalmia Bharat Refractories business to our existing network, which will enable us to increasingly serve our customers with a ‘local for local’ approach in India and offer a broader range of products, in particular in the Industrial segment, in which RHI Magnesita is currently under-represented. This transaction demonstrates our ability to continue to grow our business in India where the outlook for the refractory industry is strong, at a time when demand in other geographies is weakening.”


Tajikistan: The Tajik parliament has ratified an agreement for the construction of a 1.8Mt/yr integrated cement plant at Qubodiyon in Khatlon Province. ASIPLU News has reported that the government signed an agreement with Orien Invest for the plant's construction on 7 September 2022. Orien Invest said that it hopes to attract US$160m-worth of foreign investment in the project. When commissioned, the Qubodiyon cement plant will be Tajikistan's largest and create 1300 new jobs locally.

During the first nine months of 2022, Tajikistan produced 3.2Mt of cement, down by 0.7% year-on-year from nine-month 2021 volumes. Full-year production was 4.2Mt in 2021, in line with the two previous years.


UK: Hanson has announced a 'carbon capture breakthrough' in its use of recycled concrete paste (RCP) in the wet scrubber of its Ribblesdale cement plant in Lancashire. In under 30 minutes, 15t of RCP was able to capture 1.5t of CO2 from the plant's flue emissions. Carbonated RCP is suitable to replace limestone in cement production.

Hanson's sustainability director Marian Garfield said “The trial was carried out with our parent company Heidelberg Materials’ research and development team, and marks another important milestone in our carbon capture journey."


Mexico: Cemex has announced a raft of new carbon capture projects in Europe and North America. When commissioned, they will bring its total installed CO2 capture capacity to over 3Mt/yr. The projects consist of three front-end engineering (FEED) studies to scale installations of Australia-based Leilac’s direct separation technology at Cemex cement plants in Germany, Poland and the US; a fourth FEED study for 95% capture installation at the Balcones, Texas, cement plant using RTI International's solvent capture technology and a development partnership for the cement industry's most comprehensive carbon capture, utilisation and storage (CCUS) studies at eight further cement plants in Europe, Mexico and the US.

Chief executive officer Fernando González said “CCUS brings together the essence of our strategic priorities: sustainability and innovation. Our Future in Action programme to achieve sustainable excellence and become a net-zero company is all about measurable, verified progress towards the most ambitious decarbonisation pathway in the industry. Although CCUS technologies are not ready to be scaled quite yet, it will take relentless work and innovation to ensure their viability in time to avoid the most damaging effects of climate change.”


Ireland: CRH's consolidated sales were US$24.4bn during the first nine months of 2022, up by 13% year-on-year from nine-month 2021 levels. Regional sales grew by 18% in the group's America's Materials business, with a 12% rise in cement sales there, despite a drop in volumes. Elsewhere, for the Europe Materials business, sales remained level year-on-year, and higher pricing offset costs growths in all key markets except Asia and Europe West. The producer's consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 14% to US$4.2bn.

For the full year 2022, CRH expects to record a profit before tax greater than that of US$3.1bn recorded in 2021.

Chief executive officer Albert Manifold said ‘‘Notwithstanding a challenging and volatile cost environment, I am pleased to report further growth in sales, EBITDA and margin during the first nine months of the year. This performance reflects the resilience of our business and the benefits of our integrated and sustainable solutions strategy. The strength of our balance sheet, combined with our relentless focus on disciplined capital allocation, provides further opportunities to create value for all our stakeholders." Manifold added "Looking ahead to the remainder of 2022, we expect to deliver full-year EBITDA of approximately US$5.5bn."


Pakistan: The Association of Builders and Developers (ABAD) has accused cement producers of cartelisation and called on the government to take 'stern action' following a rise in cement prices. The Business Recorder newspaper has reported that builders believe that the rise does not reflect trends in local raw materials and imported coal prices. Additionally, it comes in spite of a drop in cement demand.


Türkiye: Safi Holding subsidiary Safi Çimento has acquired former Aşkale Group subsidiary Sancim Bilecik Çimento. The TR Monitor newspaper has reported that Sancim Bilecik Çimento's Bilecik plant commands 1.2Mt/yr-worth of integrated cement capacity, with an additional 300,000t/yr in grinding capacity. It serves the Central Anatolia, North Aegean and South Marmara markets, as well as export markets. Safi Holding indicated that export sales and marketing operations will continue at its newly acquired subsidiary.


India: Wonder Cement has completed a successful kiln ignition in its Chittorgarh cement plant's new Line 4. The three pre-existing lines gave the plant a former capacity of 8Mt/yr. Wonder Cement additionally operates grinding plants in Haryana, Madhya Pradesh and Maharashtra, with a total capacity of 5Mt/yr.

Vice chair Vimal Patni's technical assistant Lokesh Lohar congratulated the entire Chittorgarh cement plant team on its work on the latest expansion.


Australia: Cockburn Cement has awarded US$1.65m-worth of increased work scope to construction company SIMPEC on an existing contract with the producer. Business News Australia has reported that SIMPEC is carrying out work on Cockburn Cement's Kwinana grinding plant upgrade. The cement company is in the process of consolidating its Western Australian cement production at an expanded 1.5Mt/yr facility at the site, at a cost of US$152m. A new US$35.1m clinker terminal at Kwinana Bulk Terminal will receive up to 40,000t/yr of clinker for use at the plant and in fellow cement producer BGC's local operations.


France/Switzerland: Holcim plans to delist all shares from the Euronext Paris exchange. Shares in the Switzerland-based group will continue to trade on the SIX Swiss Exchange. The cement producer explained its decision in terms of its need to simplify its trading structure. It expects thereby to further reduce its administrative costs and requirements.


US: The Alabama Department of Environmental Management (ADEM) has ordered Holcim US to pay a US$100,000 fine for alleged fugitive dust emissions from its Theodore cement plant in Mobile. Between February and August 2022, witnesses reported multiple dust plumes sighted above the plant, which is situated on the Theodore canal. AL.Com News has reported that, while neither admitting or denying the contentions, Holcim US said that it has taken actions affecting its raw materials unloading processes to ensure compliance.

Plant manager Clay Copeland said “We have worked closely with the ADEM to address concerns raised earlier this year."


US: Lehigh Hanson has announced the upcoming permanent closure of its Glens Falls cement plant in northeastern New York. Times Union News has reported that the producer has extended an offer of financial and job-hunting support to the plant's 85 employees. A phased closure will commence in 2023. The company said that 'changes to the competitive landscape within the context of a global cement industry' partly informed its decision, in addition to the 'small, aging and inefficient' condition of operations at the plant. Lehigh Hanson's Mitchell, Indiana, cement plant will cover the plant's market in future.

Lehigh Hanson Northeast regional president Alex Car said "We are committed to continuing to supply our customers in the New England region. We have the available capacity to meet the current and future needs of our customers, even after the Glens Falls plant halts production." Car added "We are thankful for the dedication and efforts of our Glens Falls workforce over the years and we will work to minimise the impacts to our employees and the community as much as possible."


Colombia: Grupo Argos announced its purchase of US$2.49m-worth of shares in Cementos Argos. The purchase accounts for 0.3% of the subsidiary's share capital. At the start of 2022, Grupo Argos held a 59% majority stake in the cement producer. The next biggest single shareholders were investment services company AFP y Cesantías Protección, with 8%, and pension fund management company SAFP Porvenir, with 6.3%.


India: Aditya Birla subsidiary UltraTech Cement has commissioned a new 400,000t/yr putty plant in Rajasthan. The facility will produce the company's WallCare white cement-based putty. Reuters News has reported the cost of its construction as US$22.9m.


Indonesia: Thyssenkrupp Polysius Indonesia has inaugurated its new offices in Jakarta's Tempo Scan Tower. The supplier said that the new headquarters will bring a stronger business focus to its decades-long presence in Indonesia by providing a broader scope of local service-driven solutions. Thyssenkrupp Polysius Indonesia country manager Ridwan Setiawan will head the new office.

Asia Pacific Regional head of cement Lukas Schoeneck said “With this new office, we are celebrating the return of the name and brand Polysius in one of the most important and energetic markets in the Asia Pacific region. We look forward to reshaping our focus in the cement industry and on building a sustainable future together with our clients, especially in transforming the cement industry with our #grey2green initiative."


Sweden: Germany-based KIMA Process Control has secured a contract for the supply of a kiln shell cooling system for Cementa's Slite cement plant in Gotland. 88 water jets will deliver centimetre-precision cooling for the 55m-long kiln, while IR pyrometers measure temperatures over areas of 10cm2. According to KIMA Process Control, the equipment can avoid unnecessary cooling of the kiln shell, conserving the heat energy supplied by the main burner.

The new cooling system will eliminate the use of energy intensive electric fans, slashing 1700t/yr in CO2 emissions, according to the supplier. It said that noise emissions will also 'drastically' decline as a result of the upgrade. The system's operating costs are reportedly 98% less than those of the plant's existing fan system.

The supplier said that the new equipment will 'bring the cement plant in Slite an economic benefit in the shortest possible time.' It said "For the cement industry, this project represents a new milestone in terms of best available technology in the operation of rotary kilns."


Singapore: Parliament passed the Carbon Pricing (Amendment) Bill earlier in November 2022. Under the act, Singapore will raise the price of carbon credits to US$18.17/t from 2024, and to US$32.71/t from 2026. CNA News has reported that the government said that the new legislation will provide the basis for the realisation of carbon credit prices of over US$36.31/t by 2030, in line with the country's 2050 net zero CO2 emissions commitment.

Polluters which emit over 25,000t/yr of CO2 currently pay US$3.65/t for carbon credits.


Thailand: Siam Cement Group (SCG) recorded total national cement consumption growth of 6% year-on-year throughout the first nine months of 2022. The producer partly attributed the comparatively high figure to nationwide building site closures during the first nine months of 2021. In its management discussion and analysis of its third quarter 2022 results, the group noted commercial construction as the main driver of demand growth. Its cement consumption rose by 8% year-on-year, cement use by infrastructure projects grew by 6% and cement demand for residential projects rose by 5%.

Public construction supplies 40% of Thai domestic cement demand, with commercial and residential construction together accounting for the remaining 60%.

SCG previously reported that Thai cement demand had dropped by 5% year-on-year during the first half of 2022.


India: A court has dismissed Shraddha Binani's petition against summons by the Ministry of Corporate Affairs' Serious Fraud Investigation Office in its investigation of alleged related party transactions by the former Binani Cement. Mint News has reported that 'huge funds' from the company's related parties entered Binani's bank account, beginning in 2010.

Under corporate insolvency resolution proceedings, Binani Cement underwent acquisition by Aditya Birla subsidiary UltraTech Cement, becoming UltraTech Nathdwara Cement, in 2018.


Azerbaijan: Azeri cement producers recorded 2.98Mt in total cement production volumes during the first 10 months of 2022. The figure represents growth by a factor of more than two from 1.46Mt in the corresponding period of 2021. As of 1 November 2022, producers had stores of 96,400t of cement in reserve.

During the same period, ready-mix concrete production also more than doubled to 1.15Mm3, while precast concrete elements production rose by 63% year-on-year to 40,800m3.