Global Cement News

Greece: The Labour Inspectors' Corps has fined AGET Heracles cement industry, a subsidiary of Lafarge Group, Euro7500 for violating mass lay-offs legislation after ruling in favour of former employees recently laid off from its cement plant in Halkida and essentially shutting down the plant.

By closing the unit and laying-off 236 employees, the industry was found in violation of article 4 of Presidential Decree 240/2006 according to which, employees have to be notified and consulted in advance. The cement industry had said that it proceeded with the shutdown of its unit in Halkida due to financial reasons and as a result of the plunge in domestic construction activity and after failing to distribute its surplus production to international markets.

Egypt: Several Egyptian cement producers have reported how they are coping with gas shortages in the country. Production at South Valley Cement has stopped. The company has announced that the gas supply will resume on 28 June 2013. Alexandria Portland Cement has reported that its plant has not stopped production. Its subsidiary, Beni Suef Cement, has reported that it cannot yet assess the impact of the shortage on production.

The National Cement Company has announced that operations are ongoing on a normal basis and that there are no shortages in gas capacity. Misr Cement Qena has said that its cement plants are operating using Mazut and not natural gas. However, due to a shortage in the supply of Mazut, clinker production has been suspended more than once recently.

Philippines: The Cement Manufacturers' Association of the Philippines (CeMAP) is supporting major cement players in the Philippines to tap rainwater in a move that supports national and global water conservation efforts. CeMAP said that local cement producers have decided that the use of rainwater sits well with their water-management concepts. Water is mainly used to cool cement kilns and the hot gas streams used in cement production. Production of a tonne of clinker in modern cement plants consumes an average of about 100-200L of water. The cement plants use an average of 3.2BnL/yr of water.

"Sustainability has always been a major advocacy of all cement companies. A critical strategy for sustainable development includes implementation of effective water management systems in cement plants," said CeMAP president Ernesto Ordoñez. He added that the scheme reduces the dependence of cement plants on water coming from traditional sources such as waterways and commercial suppliers. Cement producers in the Philippines are also considering installing waterless urinals at their plants, which can save an average of 180,000L/yr of water.

Saudi Arabia: The Saudi Port Authority (SPA) has said that cement shipments have been arriving since King Abdullah decree for the country to import 10Mt was issued in April 2013. About 350,000t of cement have been shipped from the UAE and Egypt through various Saudi ports.

"Shipments have come through Dammam, Jeddah and Jazan ports, some through Yanbu and some others are scheduled to arrive through Jubail and Dammam ports," said Musaid Al-Darees, press spokesman for the SPA. Al-Darees added that incoming shipments from the UAE will help face the continuing cement crisis. Around 90% of cement comes from Al-Batha Port, which is witnessing a lot of incoming shipments from the UAE. Shipments from Egypt form only 10% of total imports coming through Jeddah Islamic Port.

A recent BBC television documentary explained the rise of low-cost airlines in the UK in the early 1990s. With news of an independent cement grinding plant in western France doing the rounds this week, we ask could the same revolution happen in the cement industry?

Back in the early 1990s following deregulation in the European aviation industry, smaller airlines took the opportunity to try a different model to the larger national carriers. Taking cost-cutting ideas from the US-based Southwest Airlines (deregulation had occurred earlier in the US) new companies like Ryanair and EasyJet burst into the short haul market, seizing market share and changing people's attitudes to air travel. For example, low to medium income males going on a 'British Gentlemen' stag (bachelor) party to a European destination such as Ayia Napa or Riga would have been unthinkable before the mid-1990s.

Flying passengers around Europe and producing cement are clearly radically different businesses. However, Kercim Cements' objective to produce 600,000t of cement and take a 10% share of the local market near Saint-Nazaire in Loire-Atlantique department of France stands out. With the European cement industry in decline and endless stories about cement exporting nations flooding developing markets, taking a grinding-led business model suddenly sounds considerably more competitive.

In addition, an independent company importing clinker from non-EU countries might also benefit from not being subject to quota allocations of CO₂. This issue was raised from a different angle earlier in 2013, when Irish company Ecocem complained about large cement producers making profits from the EU Emissions Trading Scheme (ETS) despite reduced production.

Thinking around grinding as the model for an industry step-change, one of the presenters at the Global CemTrader conference in May 2013 was Moisés Nunez of Cemengal. He spoke about 'Plug&Grind', his company's low-cost modular grinding plant technology. Essentially, the Spanish company can fit a grinding station into 15 shipping containers and assemble the grinding unit wherever the client can transport it to. Once again, this sounds perfect for a global cement industry that is making too much clinker.

As this column has reported previously, Africa is the ideal target for a low-cost grinding-led business model given its overall high level of demand for cement. Any cement business near the coast has been under intense competition from imports. So much so, that former PPC (Portland Pretoria Cement) head Paul Stuiver stated that any African facility built within 200km of a port was at risk. Could French and other EU-based coastal cement plants also be at risk? With the cost of production and transport on the rise, the low-cost grinding model may even work in Europe. The beauty of the Cemengal system is that it is mobile so that it can follow market opportunity.

As the Economist recently pointed out in a review of the global cement industry, it is an industry dominated by a small number of companies. High cost of entry, high transport costs by road and other factors mean that this is unlikely to change anytime soon. Yet, exports by sea provide some level of increased competition. Both of the grinding projects mentioned above rely on this fact. Let's wait and see what happens.