The most read stories of 2018 on CemWeek reveal an industry immersed in a new reality, one that will require optimizing efficiency and reducing production costs, exploring alternative fuels, and preparing for a softer cement demand.
This article originally appeared in CemWeek 48. Click here or on the image to read the full article
With a trade war already wreaking havoc on markets across the world, and a far-from-promising world economic outlook devised by the IMF, the global cement industry is now faced with the challenge of adapting to a greener and stricter reality.
Cement plant equipment market to reach USD 9.0bn by 2022
According to CW Research’s World Cement Equipment Market and Forecast Report, the market for cement manufacturing related equipment and services is projected to reach USD 9.0 billion by 2022.
However, as greenfield cement plant projects remain scarce, upgrades to existing cement plants will become relatively more important; equipment relating to upgrades (i.e., excluding service-related spend) will move from representing a quarter of the total cement manufacturing equipment capital spend in 2017 to over 40% by 2022.
Consequently, notably what CW Research defines as “functional” equipment (i.e., conveying, automation, filtering, environmental control, etc.) will be a central growth driver of cement plant-related equipment sales over the next five years. Informed by extensive primary research conducted with both suppliers and end users across the cement equipment value chain, the CW Research study emphasizes that behind the growth remains an ever-expanding focus on automation, control, environmental, and testing throughout the production processes to deliver higher efficiency and performance.
Robert Madeira, CW Group Managing Director and Head of Research, notes: “decision making for cement manufacturers is becoming more and more complex as players aim at achieving higher efficiency and reducing operating costs. As a result, more technology-intensive functions such as automation, control and testing are becoming more prominent, and representing an ever-growing share of the cement plant equipment spend mix.”
LafargeHolcim announced overhaul plan
LafargeHolcim’s new CEO issues plan to refocus the company and slash costs.
Jan Jenisch, the CEO of LafargeHolcim, has announced his five-year plan to boost returns, decrease costs, and sell some of the company’s assets, writing off USD 4 billion.
According to the plan, LafargeHolcim will reach a sales growth of three to five percent in those five years, while posting a recurring EBITDA growth of at least five percent, and improving its free cash flow to over 40 percent of the EBITDA. Investment is expected to increase by more than eight percent in that period.
“The merger is now behind us… it was quite an exercise and not an easy one. Building materials is a market that is growing above GDP globally, so would we would expect building materials to grow 2 to 3 percent,” Jenisch said.
In the last quarter of 2017, the company posted a net loss of CHF 3.1 billion, as Jenisch cleared the slate for his overhaul plan.
Vicat prepares capacity expansion in India
The French cement maker Vicat will invest EUR 217 million to expand its operations in India. The investment will include an expansion of its cement plant in Kaburagi, Karnataka and a new plant in Vizianagaram, Andhra Pradesh.
The Kalaburagi cement plant will absorb EUR 153 million in investment, which will allow it to increase its production from 2.75 million to five million tons of cement per annum. Meanwhile, the new plant in Andhra Pradesh will have the capacity to produce 1.75 million tons once finished, for an investment of EUR 64 million,
Guy Sidos, chairperson of Vicat Group, accompanied French President Emmanuel Macron’s visit to India. During the trip, Sidos signed two memorandums of understanding over the new investments with the governments of Andhra Pradesh and Karnataka.
New cement projects emerge in India
New cement projects to come up as utilization rates rise in India.
A rise in demand, for now still partitioned over regional pockets, has been improving capacity utilization rates in the Indian cement sector. Those utilization rates are expected to peak by 2019-20, as new investments are prepared.
Dalmia Bharat has recently announced its plans for the construction of a new cement plant in Odisha that would add eight million tons of cement capacity to the eastern Indian market.
Ambuja Cements has also announced plans for a new clinker factory in Rajasthan, with the capacity to produce 3.1 million tons per annum, while JK Cement sets course for an increase of eight million tons per annum in capacity over the next five years.
At least six cement companies are preparing new greenfield investments on capacity at different stages of announcing and implementation, concentrated around the areas of East India, North India, Andhra Pradesh, and Telangana (...)
Read the full article in CemWeek 48