Global Cement News

India: Odisha has received its first cement-free road near Amanapada, Cuttack District. The Pioneer newspaper has reported that researchers from the Kalinga Institute of Industrial Technology (KIIT) developed the new material, made from 100% industrial waste, in order to cut the CO₂ emissions involved in cement production and in anticipation of an acute limestone shortage in India in 25 – 50 years. KIIT founder Achyuta Samanta thanked the students whose work brought this pilot project to fruition. “The new technology has the potential to bring about a revolution in engineering construction,” he said.

Switzerland: LafargeHolcim has announced its participation in a project aimed at increasing the height of wind turbine towers by producing larger bases on-site using 3D concrete printing technology. LafargeHolcim will supply concrete for use with Denmark-based COBOD’s 3D printing technology, while US-based GE Renewable Energy backs the project. The method enables bases to exceed the 4.5m maximum diameter necessitated by road transportation. This increases the maximum height of turbine towers by 100% to 200m from 100m, which in turn raises power generation by 33% to 20.2GWh/yr from 15.1GWh/yr.

LafargeHolcim research and development head Edelio Bermejo said, “Concrete 3D printing is a very promising technology for us, as its incredible design flexibility expands the realm of construction possibilities. Being both a user and promoter of clean energy, we are delighted to be putting our material and design expertise to work in this ground-breaking project, enabling cost efficient construction of tall wind turbine towers and accelerating access to renewable energy”

April 2020 data from the Japanese Cement Association (JCA) suggests that Japan has avoided the worst effects of the coronavirus outbreak. The industry’s total sales fell by 2.4% year-on-year to 16.4Mt in the first four months of 2020 from 16.8Mt in the same period in 2019. This is the kind of change associated with business as usual market trends, rather than the 20% declines seen elsewhere around the world in association to the coronavirus. In part this reflects the country’s case and mortality rate, which are far lower than other Group of Seven (G7) countries. The reasons for this may be due to lower levels of testing, less stringent lockdown measures and a more effective public health strategy. That last point is perhaps even more impressive given the population’s high median age (47.3). Whatever the reasons, the overall effect on the construction materials business seems low.

Graph 1: Cement production, sales, imports and exports in Japan. Source: Japanese Cement Association.

Graph 1 above shows the Japanese cement market in a historical context. Production peaked in the mid 1990s at a little below 100Mt/yr followed by a decline to above 40Mt/yr since 2010. This informs the current situation once one removes any effects from the health emergency. As Naoki Ono, the chairman of the JCA and the chief executive officer (CEO) of Mitsubishi Materials, described it in late May 2020, domestic demand for cement fell by 3.8% year-on-year to 41Mt in 2019. He blamed this on the completion of construction work for the 2020 Tokyo Olympic and Paralympic Games, the end of a period of rebuilding following natural disasters and a shortage of manpower.

All of this may explain why Taiheiyo Cement announced the acquisition of a 15% stake in state-owned Semen Indonesia subsidiary Solusi Bangun Indonesia in April 2020. At the time the producer said explicitly that the partnership with Semen Indonesia was part of Taiheiyo Cement’s response to a, “forecasted long-term decline in domestic cement demand in Japan.” Given the competiveness of the Indonesian market it seems like a brave move given the country’s overcapacity, the departure of LafargeHolcim and the arrival of China’s Anhui Conch. Meanwhile at home, Mitsubishi Materials and Ube Industries said in February 2020 that the companies were discussing a potential merger of their cement businesses. The letter of intent suggests a schedule of late September 2020 to sign a definitive agreement and a target of April 2022 to complete the integration. This follows the two companies working together since 1998 on a joint venture called Ube-Mitsubishi Cement, which integrated their cement sales and logistics operations. Mitsubishi Materials and Ube Industries are the third and fourth largest producers by production capacity in the country. A merger would potentially give the combined entity the same production base as the largest producer, Taiheiyo Cement.

Taiheiyo Cement’s experience in its 2020 financial year to 31 March 2020 was in line with Naoki Ono’s summary above, with both sales and profits down. Its domestic sales volumes decreased by 5% to 14.5Mt, although exports rose by 11% to 3.9Mt. In its financial report it highlighted its key foreign markets in the US, China, Vietnam and the Philippines. Despite increasing its sales in its 2020 financial year, Sumitomo Osaka Cement’s operating income and profits fell. It blamed this on energy costs, principally coal, and other raw material inputs. It has since published its next medium-term management plan. This includes a number of measures such as cutting costs and looking at overseas expansion. Both Mitsubishi Materials and Ube Industries reported similar reductions in their sales and profits. Mitsubishi Materials noted that it had observed a decrease in cement shipment due to the construction delay caused by the coronavirus.

Ratings company R&I is optimistic about the Japanese market following the start to 2020. In a recent news release it concluded that domestic cement demand is ‘solid’ for the next few years due to order backlog and anticipated infrastructure projects. In its assessment local producers have been improving their cost structures since 2010 in ways that should support ‘certain levels of profit’ provided domestic demand remains around 40Mt/yr. In the medium to longer term though it still expects domestic demand to decrease slowly. Hence, the overseas expansion, merger and acquisition activity and cost cutting plans of the larger producers. Long trends aside, the Japanese cement sector is coping well so far with the global health pandemic.

Australia: Boral has appointed Zlatko Todorcevski has been appointed its chief executive officer (CEO) and managing director with effect from 1 July 2020. Boral’s current CEO and managing director, Mike Kane, will retire in September 2020 allowing for a transition period.

Todorcevski has 30 years of experience in Australia and internationally in steel building products, oil and gas and logistics, working in finance, business planning and strategy roles, including as chief financial officer (CFO) of Brambles from 2012 to 2016 and Oil Search from 2009 to 2012. This followed a 23-year career at BHP in finance and business development roles across BHP’s steel building products and petroleum businesses, culminating in the role of CFO Energy at BHP based in the US.

Since March 2017, Todorcevski has been on the board of construction materials company, Adelaide Brighton, where he has served as chairman and since May 2019 as deputy chairman and Lead Independent Director. He has stepped down from the board of Adelaide Brighton with immediate effect. Todorcevski is also on the board of Coles Group, where he serves as chairman of the Audit and Risk Committee, and The Star Entertainment Group, where he is chair of the Audit Committee. He will leave these boards in an orderly manner over the coming months.

Born in Macedonia and raised in Australia, Todorcevski completed a Bachelor of Commerce from the University of Wollongong in 1991 and a Master of Business Administration from the University of Wollongong in 1994.

UK: Lafarge Cement, part of Aggregate Industries and LafargeHolcim, has appointed John Mulgrew as the new plant manager of its Cookstown integrated cement plant in County Tyrone, Northern Ireland. He succeeds Russell Larmour who is to retire after 40 years within the company. Mulgrew will report to Barry Hope, Head of Cement on the Executive Committee at Aggregate Industries.

Mulgrew joined the LafargeHolcim Group as a quality co-ordinator in 2001, holding almost 20 years of experience in the cement industry. He became production manager at the Cookstown plant in 2016. The company says that the plant achieved its best results to date in 2019 after being ranked in the top 10 of LafargeHolcim’s European cement plants when evaluated against industrial benchmarks.

Jason Bowman will succeed Mulgrew as the new production manager at the plant. He has been promoted from his current role as manufacturing manager at Cookstown.