Global Cement News

US: Ash Grove Cement Company has announced that James P Sunderland, former company chairman and president, died on 27 May 2015. Sunderland joined Ash Grove Lime and Portland Cement Company in 1957 as its corporate secretary in Kansas City. In his 43-year career at Ash Grove Cement, Sunderland held several leadership positions, including serving as the company's chairman and president. During Sunderland's tenure, Ash Grove Cement became one of the largest Portland cement producers in the US.

Encouraging news from Egypt with the announcement that Lafarge Ecocem has taken on two refuse-derived fuels (RDF) contracts in Suez and Qalyubeya. The RDF plants will have production capacities of 42,000t/yr and 280,000t/yr respectively, after upgrades are built.

The move follows a deal Lafarge struck with Orascom in March 2015 to develop a waste management framework of municipal and agricultural waste. The plan is to achieve an average fuel substitution rate of 25% by the end of 2015. Around the same time Ecocem also signed a cooperation agreement with the German Development Cooperation (GIZ) and the Qalyubeya Governorate to upgrade a recycling plant in Qalyubeya to produce RDF. Part of the deal was intended to reinvest some of the revenue from RDF sales back into the region's waste collection infrastructure.

These production levels compare to SITA UK's new RDF plants in the UK, which has a more mature RDF market. There, the newly opened Malpass Farm plant is planned to produce 200,000t/yr and the Tilbury plant will have an output capacity of 500,000t/yr when it opens. However, the Malpass Farm plant mainly feeds one cement plant, the 1.3Mt/yr Cemex Rugby plant with a mean substitution rate of 61% in 2013. By contrast, Lafarge Cement Egypt runs the massive 10.6Mt/yr El Sokhna plant.

Co-processing at El Sokhna by Lafarge is of particular interest given the links with Egypt's unofficial household waste collectors, the Zabbaleen. Lafarge Egypt recruited and trained 140 Zabbaleen to gather waste material for RDF production. The strategy enabled Lafarge to gather continuous supplies of RDF and strengthen local stakeholder relations, as Lafarge's 2013 sustainability report puts it. Lafarge Egypt's substitution rate was 2.2% in 2012 with significant improvements made since then. The current target of 25% for the end of 2015 shows how much progress Lafarge has made.

Hisham Sherif of the Egyptian Company for Solid Waste Recycling (Ecaru) placed Egypt's municipal solid waste level at 20Mt/yr at a presentation given at the Global CemFuels Conference earlier in 2015. From this 4Mt/yr of RDF could be produced. Together with biomass derived fuel (BDF) Sherif reckoned that the country's cement plants could reach substitution rates of 30 – 40%. Problems though with increasing RDF rates in Egypt include legal complexities, institutional issues, poor services and monitoring and centralised planning with little regard for the country's unofficial waste pickers, such as the Zabaleen.

Lafarge Ecocem appears to be tackling each of these problems in turn as the deals with Orascom and the Qalyubeya Governorate show. However, spare a thought for Egypt's unofficial waste sector workers who are likely to lose their livelihoods as waste management becomes more formalised and personnel rates per tonne of waste collected tumble.

For more information on the Zabaleen, check out the documentary made about them in 2009, called 'Garbage Dreams'.

Thailand: Siam Cement Group (SCG) has confirmed that it is preparing to appoint Roongrote Rangsiyopash as its next president. The SCG board has agreed to maintain Roongrote's position as executive vice-president and end his top position at SCG Paper as well as announce the promotion of two other SCG executives to replace Roongrote, according to the Bangkok Post. Roongrote will end his tenure as president of SCG Paper on 1 July 2015.

"It is a process that we've been planning for several years, and it's clear the company wants Roongrote to replace me, as he is one of the company's more competent resources," said Kan Trakulhoon, SCG's current chief executive and president, who will retire at the end of 2015. "Roongrote is expected to oversee all SCG businesses from now on."

Roongrote joined SCG after graduating from university in 1985. He ran several of the company's businesses before being officially promoted to the latest position of SCG Paper president. He was also a director of Thai-German Industry and PTT Chemical.

Portugal: João Castello Branco will replace Pedro Queiroz Pereira as the CEO of Semapa. In a company statement, Pedro Queiroz Pereira announced that he would propose João Castello Branco to the board of directors in July 2015 for the post as well as for appointment to the post of chairman of the executive committee. Pedro Queiroz Pereira intends to remain as chairman of the board of directors. João Castello Branco works currently as a senior director at McKinsey Iberia.

There was a lot of news out of Lafarge and Holcim this week regarding preparations towards their merger. Just this morning we heard that the partners have entered into a binding agreement with Ireland's CRH regarding the sale of the assets that must be divested. Meanwhile, Lafarge and Holcim have also completed the appointments for the future LafargeHolcim executive committee. Its nine members will be responsible for such tasks as finance, integration, performance and costs, growth and innovation, as well as regional activities in Europe, Asia Pacific, the Middle East and Africa, North America and Latin America.

However, it was other types of personnel that featured in Lafarge and Holcim's earlier press releases. On 19 May 2015 Lafarge came out and announced the first (pre-merger) job losses that will result from the merger. It will cut 380 positions in central and regional corporate roles, with 166 going in its native France. For its part Holcim will make 120 pre-merger job losses, all in Switzerland. Ignoring the clear discrepancy in scale between the different sides, Lafarge and Holcim will have lost at least 500 jobs out of their combined ~130,000. This is just a scratch on the surface, but it does raise an interesting question: How many more jobs will go at LafargeHolcim?

First up are the staff that will go to work for CRH. This probably represents the largest number of staff that will come of LafargeHolcim's books relative to Lafarge and Holcim's current staff levels. According to their 2014 Annual Reports, Lafarge and Holcim employ a combined 81,000 staff in cement roles. Given that they have a combined 425Mt/yr of cement capacity (give or take) this equates to around 190 staff for each 1Mt/yr of capacity.

As the new LafargeHolcim will have control over around 340Mt/yr of cement capacity, we can crudely scale the 190 staff up to 64,600 cement sector staff. This indicates that around 16,400 staff that are currently employed by Lafarge and Holcim will be 'off' to CRH (and others). This leaves 48,100 staff in non-cement roles at LafargeHolcim.

Will more jobs be lost post-merger? Lafarge and Holcim have stated that the new entity will have 115,000 staff. However, with around 42% of future employees employed in non-cement roles - compared to 41% and 34% for Lafarge and Holcim respectively in 2014 - it certainly seems that there could be scope for at least some reduction in overall numbers from LafargeHolcim's non-cement functions. Future job losses could therefore be a possibility, but the exact scale of future consolidations and 'synergies' (if any) will only become apparent post-merger. Maybe LafargeHolcim could end up with around 105,000 to 110,000 staff.

A key time may well be early 2016, when LafargeHolcim will launch a new 'corporate structure.' This term was also used by Lafarge and Holcim in their most recent releases, so further job losses could be on the cards.

One member of LafargeHolcim staff with nothing to worry about now will be Bruno Lafont, current CEO of Lafarge. He received a Euro2.5m bonus this week for his 'key role' in conducting the merger. How LafargeHolcim staff who could be nervous about their jobs will take this remains to be seen.

The Lafarge-Holcim Report from Global Cement is available to order now