Global Cement News

US: The Mexican multinational cement producer Cemex has announced that it plans to expand the production capacity at its Odessa, Texas cement plant by 0.345Mt/yr to nearly 0.9Mt/yr. The company will expand the plant in order to keep pace with rapidly growing demand in its West Texas market, which is led mainly by the oil and gas industry. By using existing assets and producing value-added products, the company expects to achieve strong returns on its investment.

"This expansion reinforces our longstanding history of serving West Texas and the oil and gas industry by providing superior products coupled with superior customer service," said Karl Watson, Jr, President of Cemex USA. "We look forward to remaining a top cement provider to the oil and gas industry as well as supporting the region's growth in infrastructure and residential construction."

The demand for specialty cement products used in well construction is growing as a result of the use of more efficient extraction technologies, such as horizontal drilling and hydraulic fracturing. Oil wells using this technology typically reach depths of thousands of meters. Specialty well cement is required for the complex application and extreme conditions to which the wells are exposed. The expansion will use state-of-the-art production technology to achieve higher fuel efficiency and improved productivity. The expansion will also include an improved higher capacity load out system, allowing for a more efficient truck loading process to accommodate the region's growing demand for cement.

Thailand: German steel and engineering group ThyssenKrupp has won a Euro150m contract to build a cement plant in Saraburi near Bangkok for TPI Polene. The plant will have a cement production capacity of 10,000t/day and is scheduled to start production in 2015.

"With domestic cement demand expected to reach 45Mt/yr by 2015, Thailand is an important market and production location in Southeast Asia," commented ThyssenKrupp.

Jordan: Local residents are protesting against the use of coal at Lafarge's Rashadiyeh cement plant in Jordan. Despite an agreement being reached on 27 May 2013 between the protesters and Tafileh Governor Hashem Suheim, the protesters blockaded the plant, leading police to intervene with tear gas.

According to the Jordan News Agency, Petra, protestors have demanded that an alternative fuel be used to operate the Rashadiyeh cement plant, as the coal or petcoke used has a serious impact on the health of workers and the surrounding environment.

The Rashadiyeh cement factory was established in 1983 by the Southern Cement Company. In 1985 this was merged with the Jordan Cement Factories Company, which was subsequently privatised and bought by Lafarge.

Egypt: Jose Maria Magrina, chief executive officer of Arabian Cement Company (ACC), has asked the Egyptian government to help cement producers move to using coal and alternative fuels. In an announcement Magrina explained that ACC is ready to substitute all the natural gas used at its 5Mt/yr cement plant in Ain Sokhna to coal and refuse derived fuel (RDF) and had applied for the necessary government permits to do so on 14 March 2013. However until late May 2013 no answer had been received from the government.

"The investment needed to substitute natural gas or mazot (heavy duty fuel oil) with coal ranges from US$6-8m/Mt, while converting to RDF costs around US$8-12m/Mt. However for private companies to be encouraged to commit to such a huge investment, the government should look into incentivising this initiative by putting together a solid policy that includes governmental support," commented Magrina.

Magrina added that the government should remove the operating license fee imposed on new companies, as this was intended to cover the cost of subsidised natural gas, and that it should be granted an environmental permit. ACC is still waiting for the permit to use coal, which will replace 70% of its gas supply. Once the company is granted the permit, it will be ready to make the conversion by the fourth quarter of 2013.

Since February 2013, energy shortages have caused the cement industry in Egypt a loss of 20% (3.7Mt) in production capacity, while ACC has lost 25% (350,000t) of its cement production capacity in the same period. Losses of over 50% are expected during the summer of 2013. Until late 2010, the Egyptian government encouraged cement producers to switch to using natural gas. However, the current energy crisis has seen the government promote the use of coal and alternative fuels instead.

Three stories this week from the Philippines build a complex picture of a booming cement industry. San Miguel purchased a 25% stake in Northern Cement, Lafarge Republic announced its capital expenditure budget for 2013 and the country's on-going price probe reported on its progress.

San Miguel's entry into the market should raise the most interest since its president stated that the company intends to spend US$750m on the construction of three cement plants. Each plant will have a cement production capacity of 2Mt/yr with construction timed to start in 2013 and finish by the end of 2015.

This level of investment, if it happens, surpasses the last major build announcement in the Philippines. In May 2013 Holcim released details of a US$550m plant in Bulacan with a capacity of 2.5Mt/yr. Some indication of the viability of San Miguel's plans may be gleaned from the comparative costs of the projects. San Miguel's plans will cost US$125/t of installed capacity, less than half of Holcim's US$220/t. Possible reasons for this difference may lie in San Miguel releasing the wrong figures or a reliance on lower build quality. However San Miguel's sheer size - its net income was US$2.25bn in 2011 - may itself herald the start of a major player in the domestic cement industry.

Meanwhile the Department of Trade and Industry (DTI) has continued to investigate why the price of cement has risen since 2012. Currently prices are about 5% above the suggested retail price for cement. Cement producers blamed the increases on a higher cost of coal.

The Philippines is currently experiencing massive cement sales increases. In 2012 sales rose by 17.5% to 18.4Mt from 15.6Mt in 2011. With a total capacity of 21Mt/yr and a capacity utilisation rate of 85% in 2012, this growth looks set to continue in 2013, as confirmed by more rises in sales in the first quarter.