Global Cement News

Laos: Siam Cement Group (SCG) is carrying out a survey of available raw materials and possible locations with a view to setting up one of the largest cement factories in Laos. Vanthong Sitthikoun, president of the Lao Cement Producers' Association, said that the Laotian government had authorised SCG to conduct a survey in Boualapha district, Khammuan province, where the company proposes construction of the plant.

"There are now two surveys under way in Khammuan province for the construction of cement factories, by Thai and Chinese investors. When they have finished, they will submit their findings to the government before building the factories," said Vanthong.

SCG intends to build a plant in Laos to tap its growing demand for cement especially for dam construction. Laos currently has 10 operational cement factories, with a total production capacity of about 3.84Mt/yr according to local media. Two of the factories are in Vientiane, three are in Vientiane province, and there is one in each of the provinces of Luang Prabang, Xieng Khuang, Khammuan, Savannakhet and Saravan.

Denmark/US: FLSmidth has signed an engineering, procurement and construction (EPC) contract with Cemex for the supply of a new cement production line at its Odessa cement plant in Texas, US. Once the installation is finished, the cement production line is expected to have a capacity of approximately 2540t/day.

The expansion will focus on higher fuel efficiency and improved productivity. The equipment scope includes a five-stage ILC preheater with a Low NO_x Calciner, three-pier kiln, FLSmidth Cross-Bar cooler, Duoflex burner, Pfister weighing and dosing systems, gas analysers and three Fuller-Kinyon pumps. The line will also use an FLSmidth control system.

A couple of news stories this week from Myanmar present an opportunity to look at the country. Lafarge has opened a cement repacking plant in the Thilawa special economic zone (SEZ). Upcountry meanwhile, Anhui Conch has had a joint venture approved by the government for an upgrade to an existing cement plant in Kyaukse.

Towards the end of 2013 the government announced that 13 companies were to establish joint ventures with the local state-owned cement plants. In addition the Myanmar Investment Commission had approved the construction of nine new cement plants with an aim of a target cement production capacity of 10.53Mt/yr. Following this, Siam Cement Group's on-going investment in a 1.8Mt/yr plant is due for completion in 2016. Semen Indonesia have been pushing for a joint venture since mid-2014 although it was still trying to agree terms in September 2014, according to local media. Italcementi's chief executive Carlo Pesenti also expressed his company's interest in setting up a joint venture in early 2014.

Association of Southeast Asian Nations (ASEAN) investment bank CIMB placed cement demand in Myanmar at 4Mt in 2012 and a local cement production capacity of 3Mt/yr. Cement consumption was placed at 76kg/capita for the country's population of 52.8 million. In contrast, Thai cement engineering supplier LV Technology reported demand of 6Mt in 2012. CIMB recorded Myanmar's capacity utilisation rate at 60%. Cement sales were broken down as 95% by bag and 5% by bulk.

This kind of supply-demand gap excites foreign investors. Neighbouring Thailand has a consumption of 515kg/capita, Myanmar imports cement from Thailand, Indonesia and India and the country's GDP growth rate is currently estimated to be around 8%.

Yet what's notable about Myanmar's industry are the high number of small, low production capacity cement plants. Many of them are wet process plants. Only one plant is reported as being capable of producing over 0.5Mt/yr with the Siam Cement plant project due to significantly bust this record when it is commissioned in 2016. Limited limestone deposits in the country may also make plants larger than 1.5Mt/yr unviable. Fuel is also an issue, with LV Technology advocating a wholesale industry conversion from state-subsidised gas to coal due to power shortages and impending competition issues.

In 2015 Myanmar is set to enact free trade tariffs from its ASEAN membership. Without protection or preparation, its cement plants could face serious consequences from cheaper imports from Thailand, Indonesia and Vietnam. The move by the government to encourage joint ventures with foreign partners looks like one way to mitigate this. In a market report in 2013 CIMB described the situation for investors as 'high-growth, high-barrier.' This seems to be an apt description given the experiences of Semen Indonesia.

Germany: The IT logistic solution VAS, of FRITZ & MACZIOL, has become an integral part of the 'Logistic Efficiency Optimisation' (LEO) initiative initiative of HeidelbergCement.

Within the project, an integrated material-flow management will be introduced that will lead to a considerable cost reduction in the fields of logistics. Globally, several plants in the cement, aggregates as well as concrete businesses will be equipped with VAS. The implementation of VAS will lead to a significant optimisation of the dispatch and related logistical processes, as the increased level of automation will result in a much faster execution of many activities within the plants.

In this context, FRITZ & MACZIOL has also been announced as a 'preferred supplier' by HeidelbergCement. "FRITZ & MACZIOL reflects an ideal partner for us in the fields of IT logistics," said Tanja Hofmann, HeidelbergCement's group purchasing spokesperson.

HeidelbergCement currently runs the IT-Logistic solution VAS at four of its German cement plants. The solution will now be further implemented in its remaining German plants. At the same time both sides will work on the international roll-out.

Myanmar: Lafarge has opened a cement repacking and storing plant in Thilawa special economic zone (SEZ) in Myanmar. The plant cost an estimated US$10 - 20m. Lafarge owns 60% of the distribution depot, while two local firms own 20% each.

The depot, which is near Thilawa port, 20km outside Yangon, can store 20,000t of cement and will be able to expand capacity based on customer demand. The depot will mainly be used for repacking and storing cement, while the cement will be imported in bulk from Lafarge plants in the region, mainly from Malaysia and Vietnam. The company will primarily supply its cement to construction projects in the ongoing Japanese-backed Thilawa SEZ project and the rest to the local market.