The World's White Cement

Yearly: 2019


ACC counteracts modest cement sales with earnings boost in first half of 2019

ACC’s net sales grew by 8% year-on-year to US$1.15bn in the first half of 2019 from US$1.06bn in the same period in 2018. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 18% to US$191m from US$162m. Its cement sales volumes rose by 2% to 14.7Mt from 14.4Mt and its ready-mixed concrete (RMX) sales volumes jumped by 15% to 1.79Mm3 from 1.56Mm3.

“I am pleased that EBITDA improved significantly on account of better realisations, operational efficiencies and supply chain efficiency improvement. Despite subdued cement demand, our strong customer relationships, loyal channel network and range of innovative products have helped us deliver a robust quarter,” said Neeraj Akhoury, the managing director and chief executive officer (CEO) of ACC. He added that the company’s concrete business grew ‘strongly’ due to eight new RMX plants it added in the second quarter. Altogether the company operates 82 operational.


Belarus introduces licences for cement imports outside of Eurasian Economic Union

Belarus: The Council of Ministers has required companies to obtain a special license for importing Ordinary Portland Cement (OPC) from outside the Eurasian Economic Union (EEU). The requirement will take effect later this month and will be in effect for six months, according to the Belapan news agency. The new regulations have been introduced to support the local sector.

In January to April 2019, Belarus imported 0.13Mt of cement including 65,000t from other EEU countries, according to the National Statistical Committee. In the same period, Belarus’ companies made 1.25Mt of cement, an increase of nearly 12% year-on-year, and exported 0.44Mt.


Cement production doubles to 1.84Mt in 2018 in the Democratic Republic of Congo

Democratic Republic of Congo: Data from the Central Bank of the Congo shows that cement production more than doubled to 1.84Mt in 2018 from 0.90Mt in 2017. Consumption showed a similar trend rising to 1.83Mt from 0.88Mt. Production during the first quarter of 2019 grew by 13% year-on-year to 0.30Mt. The growth in production and consumption has been attributed to new plants, a ban on imports and a strong housing market in Kinshasa.


Xuan Khiem Group seeking government approval to build US$214m cement plant in Vietnam

Vietnam: Xuan Khiem Group is seeking government approval to build a US$214m cement plant in Hoa Binh province. The Xuan Son plant will have a production capacity of 2.3Mt/yr and it is scheduled to be completed in 2020, according to the Viet Nam News newspaper. The People’s Committee of Hoa Binh province and Xuan Khiem Group signed a memorandum of understanding to build the plant in late 2018.


Malaysian cement producers agree not to raise prices

Malaysia: Cement producers have agreed not to raise their prices after a meeting with the Domestic Trade and Consumer Affairs Ministry, despite mounting raw material costs and negative currency exchange issues. Minister Saifuddin Nasution Ismail said that the producers were also asked to ‘discuss’ any future prices rises with the ministry first, according to the Malaysian National News Agency (BERNAMA). He added that cement is a controlled item and action under the Control Of Supplies Act could be taken against producers found to increase the price without the government’s approval. The government is also working on a target-based petrol subsidy, although further work is required on this.

Earlier in June 2019 the Cement and Concrete Association of Malaysia has defended a reported 40% rise in the price of cement due to unsustainable mounting input costs. It said that over the last few years the cement industry had suffered from increased costs for electricity, packing materials, imported fuels, raw materials and equipment.


June Cement Industry waiting for permission to use coal-powered electricity

Myanmar: June Cement Industry’s new 5000t/day plant is waiting for permission from the government to use 15MW of electricity generated from two coal power plants. The US$471m unit is based at PyarTaung, KawPaNaw Village, Kyaikmayaw Township in Mon State, according to the Mon News Agency. The plant will extract limestone from the Pyartaung Mountain area. Coal for the plant is expected to be delivered via the River Attran. Local residents have expressed concern that barges may cause flood damage along the river’s banks.


Philippine Cement Importers Association refutes claims that imports are damaging local industry

The Philippine Cement Importers Association (PCIA) has refuted the claims of local cement manufacturers that an increase in cement imports has caused ‘serious injury’ to their operations. In a position paper submitted to the Tariff Commission on the imposition of safeguard measures on imported cement, the PCIA said that some local producers were reporting continued profits despite the level of imports, according to the Manila Bulletin newspaper. It also denied accusations that cement imports were absorbing 17.2% of local production and 14.2% of total market demand.

“We have a domestic cement industry that is robust and resilient amid the import surge, and already competitive against imports,” said the PCIA. “The 2013 to 2017 results of operations of the domestic cement industry showed its ability to compete with cement imports. Despite the surge of imports during the period of investigation (2013 – 2017), the domestic industry continued to exhibit improving revenues and continuing profitability.” It finished by saying that the Philippine cement industry was globally competitive and did not require any structural adjustment.


Cement Production in Egypt

Cement consumption and production in Egypt. Sources: Industrial Development Agency, Global Cement Directory 2019, Cement division of the Building Materials Chamber of the Federation of Egyptian Industries.

As Graph 1 shows that the backdrop here is of a local cement sector rife with overcapacity. Capacity utilisation rates have hovered around 70% in recent years. The sector breaks down into about a quarter of production capacity under state control and the remainder owned by private companies. Overall, about half of the production capacity is run by multinational companies like Greece’s Titan, France’s Vicat and Germany’s HeidelbergCement.

The country hosts some of the largest cement plants in the world as well as several very big plants by European or North American standards anyway. The whopping 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened fully in 2018. It seemed likely that there were going to be losers in the industry following that kind of disruption from a state-owned player. Indeed, Medhat Istvanos, head of the cement division of the Building Materials Chamber of the Federation of Egyptian Industries, explicitly blamed the El-Arish Cement plant for making the situation worse in September 2018. He said that the decision to build the plant was ‘not based on precise information’ and that it had harmed local production.

In the wider picture, the cement sector started to move away from subsidised natural gas and heavy fuel oil to coal instead in the mid-2010s. Tourah Cement mentioned this in its statement about halting production. The government has supported the cement industry through large-scale infrastructure projects and a state-sponsored compensation system under the Contractors Compensation Act that offset the loss prompted by the Egyptian pound’s floatation in 2017.

However, overcapacity has consistently been a problem and this was clear when the El-Arish Cement plant was approved. Exports of cement crept up to 1Mt/yr in 2017 from 0.1Mt/yr in 2015. Yet, as the Low-Carbon Roadmap for the Egyptian Cement Industry pointed out, Egyptian FOB exports of cement cost US$20/t higher than regional competitors such as Turkey. At this kind of disadvantage Egypt lacks the traditional escape route for an overproducing cement sector.

In these kinds of conditions, consolidation appears to be crucial while organic or government-backed demand plays catch-up with the production base. Certainly Egypt has the population and the development potential as its economy grows in the medium to long term. The government stabilising the economy after recent troubles is crucial for the construction industry. In the meantime all is not lost as the focus is on efficiency gains and cost cutting. The growth of alternative fuels as the sector’s fuel mix continues to adjust to the new normal following the abolition of subsidies on natural gas is one example of this.


Rockwell Automation standardises process for cement producers

According to Rockwell Automation, lack of standardisation in cement operations can limit productivity and put a strain on project budgets. To improve productivity, operator consistency, and maintenance efficiency, the company has enhanced its process functions for cement plants. The new functionality includes pre-engineered and tested process instructions and operator face plates developed with leading cement companies to standardize equipment and system configuration, and optimize operations across cement plants.

The customised functions have been added to the Rockwell Automation PlanPAx DCS, allowing them to be integrated and utilised across various plant operations. The modern DCS uses a common automation platform for integration between critical areas of a cement plant, including process, power, information, and safety control.

The enhanced and new functions include processes, such as motor and drives control, valve operations, and sequencing group controls, among others. These functions can help cement producers get one step further on their journey to achieve a fully connected cement plant – offering opportunities to improve plantwide efficiencies, reduce safety risks, and drive better decision making to be more competitive.

Included as part of this launch are additional features, including support for larger systems, improved library instructions, Windows Server 2016 support, and an Asset Centre 9.0 backup agent. These enhancements, as well as the additional functionality, can improve control in all industries.

“Merger and acquisition activity has intensified standardisation challenges across cement operations,” said Fabio Mielli, Market Development Manager, Mining, Minerals, and Cement, at Rockwell Automation. “These new functions allow cement producers to follow a standard approach for all control areas of their plant and among different plants. This helps reduce engineering and deployment risks and helps simplify operation and maintenance activity. Consistency can offer a critical performance advantage, making it easier for plants to expand and add new functions as operations evolve or grow.”


Saudi Cement’s profit falls on weak local demand

Saudi Cement’s revenue for the first quarter of 2019 rose 18% higher year-on-year to US$103.9m, driven by higher export sales volume of cement and clinker. It said that its prices had risen, but that the price rise was not as great as that achieved by some other producers. Its profit for the quarter was US$35.2m, a 7% fall year-on-year. However its profit was 6% higher compared to the fourth quarter of 2018.

Saudi Cement’s cement export volumes increased to 0.25Mt for the quarter, while clinker sales volumes (mainly exports) jumped to 0.41Mt. In contrast, local cement sales volumes declined by 16.5% year-on-year to 1.19Mt. Going forward, the company says it will continue to focus on exports in light of weak domestic demand.