Global Cement speaks to Mehmet Ali Ceylan, CEO of Medcem, about his company’s global cement operations...
Global Cement (GC): Please could you introduce Medcem to our readers?
Mehmet Ali Ceylan (MAC): Medcem Cement Group currently consists of one integrated cement plant, two grinding facilities, one cement import facility, one port and one ready-mix concrete company with eight batching plants. Aside from the production of clinker and cement, the group is also engaged in the trading of cement, supplementary cementitious materials - around 1.5Mt/yr of fly ash and GBFS - and various other materials including, but not limited to, bauxite, flue gas desulphurisation gypsum and bottom ash. The group’s 2024 trading volume is expected to exceed 10Mt. The majority of companies within the Medcem Cement Group are privately owned by the Eren family, as with other Eren Holding companies.
GC: Please could you introduce Medcem’s integrated cement factory?
MAC: We commissioned our integrated cement factory in Mersin, Türkiye, and a dedicated port, Medcem Port, in 2015. We initially had one kiln with a clinker production capacity of 11,000t/day (3.5Mt/yr). However, in December 2023, we commissioned a second kiln with a clinker production capacity of 9000t/day (2.9Mt/yr), predominantly to serve export markets. The two lines now provide a combined clinker capacity of 20,000t/day (6.6Mt/yr).
GC: What products are made?
MAC: We produce ASTM I/II and ASTM IL type cement for the US market, which constitutes around 40% of our sales. We export around 10% of our production as clinker and the remaining 50% of the products are mostly CEM I 42.5 and CEM II 52.5. These are exported to the UK, the EU and the Middle East, but are also sold in Türkiye.
GC: What fuels are used at the plant?
MAC: Our plant uses solid fuels, mainly coal and petcoke, as well as some refuse-derived fuel (RDF), biomass and liquid fuels. Our new kiln will enable us to use more alternative fuels, gradually replacing 50% of coal with alternative fuel by 2028. This will substantially reduce our CO2 emissions. We perceive it as a critical milestone in Medcem’s sustainability initiatives. We expect to start operating a waste incineration unit in the second quarter of 2024 and are working on the supply of organic and inorganic wastes as alternative fuels.
GC: What are some ongoing or planned projects at the plant?
MAC: As Medcem Cement Group, we approach our sustainability activities not only in terms of reducing our CO2 footprint, but also from an holistic viewpoint, taking into account water usage footprints and hazardous gases too, with action plans for each. We are concentrating on green energy and want to generate some of the electricity required from renewable sources. Closely related to this, energy efficiency is another important objective. We evaluate every opportunity to save energy within the company.
To this end, Medcem operates a solar energy plant with a capacity of 40MW. We are on the verge of investing in a wind power plant, also with a planned output of 40MW.
In addition, we have an 8.5MW waste heat recovery (WHR) system. A second WHR system with a capacity of 9.54MW will be installed shortly. This system uses Organic Rankine Cycle (ORC) technology to generate power from waste heat coming out of the clinker cooler’s exhaust gas. The ORC is projected to be operational in 2024. It represents a substantial advancement in energy efficiency, as it can generate 23% of the electricity consumption of the second line. Our aim is to derive 55% of the plant's energy consumption from renewable sources by 2030.
Another project that we will complete in 2024 is the construction of a state-of-the-art research and development centre. This will primarily be used to develop more sustainable low-CO2 cement blends so that we can diversify our blended cement product line while also reducing our environmental impact. We’re also working on logistics and have started negotiations with a company about electrifying the construction machinery and trucks used in our plant.
Finally, we are following emerging technologies, particularly those in the area of CO2 capture and storage, with a view to investing in these technologies once we feel confident. The technology to be implemented needs to be economically and environmentally feasible in terms of its installation and operation.
GC: Which markets are most important to Medcem Cement Group?
MAC: We are an export-oriented company with a unique position among most Turkish and foreign cement manufacturers. We try to diversify our export volumes as much as possible to different regions of the world. However, the US, the Middle East and the UK have become our main markets from a cement export standpoint. Meanwhile, our clinker sales are mostly to the EU.
Medcem Port plays a crucial role in our operation. It is located only 13km from our plant and was constructed to serve the Medcem plant exclusively. At our port, we currently have three berths with the ability to accommodate vessels up to 60,000dwt, while giving minimum 12,000t/day of daily bulk loading guarantee. Aside from some other developments currently going on at our port (such as increasing our cement and clinker storage silos), we are going to extend our berth and add a fourth quay by the end of 2024. This will be an important milestone as we will be able to load even larger vessels. Aside from export sales, around 15% of our production is sold to the domestic market. Around 30% of this is to our concrete division, Medcem Beton.
All of our exports are conducted via sea transportation and around 80% in bulk form. The remaining 20% is shipped either through big bags or sling bags. As for the domestic market, we haul our cement by truck.
GC: How have raised fossil fuel prices affected the plant?
MAC: We mostly fire imported coal, so coal prices on the international markets play an important role in our finances. We are a big cement producer and hence a big coal consumer. Therefore, considering the risk exposure that we are under, we try to limit our risk by using a hedging mechanism. High and volatile coal prices are also another reason behind our move towards alternative fuels in the coming years.
GC: Has the plant been affected by the EU Carbon Border Adjustment Mechanism (CBAM)?
MAC: By the commencement of the CBAM in 2026, the cement sector will be significantly transformed. As Türkiye’s biggest cement exporter, Medcem feels the pressure and responsibility to be at the forefront of all relevant green initiatives. In this respect, the company generated a sustainability action plan in 2023. This will enable the company to comply with the CBAM regulations. We are also one of the very few companies in Türkiye that has already issued EPD certificates for multiple products.
GC: How has the business been affected since the start of the Ukraine war and Middle East conflict?
MAC: Before commenting, I want to express my deepest sympathies for all people from all of the nations that have been affected by these wars. I feel uneasy making business-related comments when peoples’ lives are at stake, but the former impacted us in terms of high energy costs associated with the scarcity of coal and the latter has had an adverse impact in terms of sales.
GC: How would you describe Medcem Cement Group’s global strategy and how do you envision Medcem Cement Group’s position in 2030?
MAC: In 2023, we consolidated the cement companies under Eren Holding into the Medcem Cement Group. We have developed short, medium, and long-term strategic growth and transformation plans for the Medcem Cement Group. Our primary objective is to transform the Medcem Cement Group into a prominent global brand with an international production and sales network in the field of building materials. We aim to establish an extensive terminal network abroad and sell at least 25% of our international exports through terminals we have set up ourselves.
By acquiring ships or chartering vessels, we intend to manage the logistics operations of sales conducted through our own terminals. Additionally, we aspire to achieve a balanced portfolio structure in the long term by acquiring factories abroad. Recognising that evaluating our group solely as a cement producer may be limiting, we are exploring investment possibilities in different construction product areas. While pursuing quantitative growth, we are also strengthening the qualitative infrastructure of our group to enhance corporate governance. Sustainability, digitalisation and efficiency will be at the forefront of our agenda as we grow both quantitatively and qualitatively.
In line with our global growth strategy, we have a grinding mill in Cameroon and another one in Tunisia, along with an import storage facility in Cyprus. We currently have two ongoing import storage facilities under construction in the UK. The one in London is expected to be commissioned in the third quarter of 2024, while the one in Glasgow is planned to become operational by the end of 2024. We are on the verge of signing some further agreements to set up new import facilities with some terminal operators in Europe and in the US, which will help us to further increase our global footprint.
In summary, our global vision for 2030 is to become a recognised brand in the world not only for cement but for construction materials in general.
GC: Mehmet Ali Ceylan, thank you for your time today...
MAC: You are very welcome indeed!
About Mehmet Ali Ceylan
Mehmet Ali Ceylan has acted as the executive board member at Eren Holding’s cement group companies for over nine years. In May 2023, he was additionally appointed as the CEO of the newly-formed Medcem Cement Group. The company operates cement assets in Türkiye, Cameroon, Tunisia and Cyprus along with soon-to-be operational facilities in multiple locations in the UK and in Europe.
