Weekly cement market update

Bangladesh cuts taxes for imports of cement raw materials. The country has made the advance income tax (AIT) on cement raw materials imports non-adjustable, and reduced it from five to three percent. The president of the Bangladesh Cement Manufacturers Association, Md Alamgir Kabir, welcomed the tax cut, but demanded the complete withdrawal of the clause, saying that a three percent non-adjustable advance income tax is not realistic for the sector. ÔÇ£The imposition of non-adjustable minimum AIT before finalisation of profit and losses in a business goes against the tax laws in the world as well as in Bangladesh,ÔÇØ said Kabir.

Lucky Cement launches new production line in Pakistan. The company has inaugurated a new cement production line with a capacity of 2.8 million tons per year, which regained the company the title of largest cement manufacturing firm in Pakistan. ÔÇ£Construction and installation after slight design modification with respect to the brownfield expansion for the additional line of 2.8 million tonnes per annum at our north, Khyber-Pakhtunkhwa, plant has been successfully completed as per the given project completion timelines,ÔÇØ said the company. ÔÇ£The new line was made operational with the commencement of clinker production in December 2019; with the addition of this new line for 2.8 million tonnes, the total production capacity, including at both north and south plants of the company, has now increased from previous 9.35 million tonnes to 12.15 million tonnes per annum.ÔÇØ This is expected to add to the existing pressure on cement prices in northern Pakistan, which is being pushed downward amid depressed demand and an expansionary cycle.

Vietnam's cement exports to China surge in January-November. The country exported over USD 532.36 million worth of cement products to China during the first 11 months of the year. The exports also included clinker, with overall shipments to China surging by 65.5 percent from the January-November 2018 period. Year-to-date, the total import and export turnover of Vietnam's goods to China reached USD 105.75 billion.

Hanson invests in UK cement facility. The British cement production company has completed the first phase of a GBP 24 million investment program at the Padeswood cement works in Flintshire, in the UK. The upgrade included the installation of cement grinding mill with a production capacity of 650,000 tons of cement per year, and also allowed the company to use energy use by around 30 percent. Jim Claydon, Hanson UK cement managing director, said: "The nearly new Loesche vertical roller mill, housed in a 34-metre-high building, started its life at a grinding plant in Bilbao. It had only 7,000 operational hours on the clock and was in excellent condition. After dismantling it piece by piece, specialist contractors moved it to the UK where it was reassembled on site at Padeswood.ÔÇØ The company also installed three new rail cement silos alongside the existing railhead, as well as a new plastic packing machine, and also re-commissioned an existing paper packaging machine with an upgrade in the capability to use recycled paper and plastics as fuel.

Indonesian cement players ask government to suspend permits for new cement plants. The Indonesian cement industry has called the government to suspend the issuance of construction permits for new cement plants in the next five years, as the local market has an excess of 25 million tons of capacity. "This is a warning to the government, and here it refers to the Investment Co-ordination Agency (BKPM). By 2024, it's best not to A new construction permit will be issued to the new cement plant," said Widodo. In November 2019, the domestic cement consumption slugged, which worsened the local industry's condition at this time.

LEILAC develops new technology to reduce emissions of cement and lime industries. The LEILAC project, in the EU, has developed a new technology that aims to significantly reduce the emissions of the cement and lime industries in Europe. "For every kilogram of cement that is produced, 0.7 kg of CO2 is released into the air," said Material Economics on their Industrial Transformation 2050ÔÇöPathways to Net-Zero Emissions from EU Heavy Industry report. "In the case of cement, the calcination of limestone to produce calcium oxide releases large amounts of carbon contained in the rock." The design of LEILAC's new technology will allow all of the process CO2 emissions to be captured without significant energy or capital penalty. A pilot plant was already set up in Lixhe, Belgium. The system "enables pure CO2 to be captured, in the case of limestone (CaCO3), as it is released during calcination to lime (CaO), as the furnace exhaust gases are kept separate," as stated on the project website. "This elegant solution requires no additional chemicals or processes for a pure CO2 stream." Daniel Rennie from LEILAC project coordinator Calix explains the technology: "It's just a new type of kiln design which means that the CO2 just gets intrinsically separated. It's cold when it comes out and it's very pure." The news item adds: "That makes it a potentially valuable raw material for existing niche markets, such as carbonated drinks, greenhouses and mineralization in the cement industry." The operations, which started in May 2019, will run until the end of 2020 when the LEILAC (Low Emissions Intensity Lime and Cement) project is completed.

Bangladesh's cement consumption expected to rise as construction activity quickens pace. Cement consumption in Bangladesh is expected to increase over the coming years as urbanization rates expand and infrastructure projects and development grow on the back of government investment. ÔÇ£If implementation of these large infrastructure projects takes place as per plan, the cement sector will grow substantially,ÔÇØ said Md Alamgir Kabir, president of Bangladesh Cement Manufacturers Association (BCMA). ÔÇ£We hope per capita consumption of cement will touch the level of 250kg by 2024,ÔÇØ he said. Current rates place the per capita cement consumption rate at 195 kg. ÔÇ£We foresee a cement growth of 6 percent in 2019 and after that it may continue to grow at 8 percent for the next five years,ÔÇØ Kabir said. ÔÇ£It is predicted that the existing overcapacity may get further deteriorated with the implementation of expansion projects by large players in the next two to three years.ÔÇØ

Dangote Cement appoints new Group CEO. Michel Puchercos was appointed the new Group Managing Director and CEO of Dangote Cement as Engineer Joseph Makoju will retire, effective on January 31, 2020. Purchercos will step into the position officially on February 1. Before this, Puchercos was the Group Managing Director and Country CEO of Lafarge Africa.

Saudi Arabia's cement consumption rising on affordable housing segment demand. The cement sector in Saudi Arabia is growing positively when compared with 2018, in large part thanks to the government's push towards affordable housing. Volumes have been growing, and this has led to an improvement in the margins of domestic cement manufacturers, as price realizations have expanded. The projects also have an untapped potential of around SAR 500 billion in the country. ÔÇ£Our calculations show 1.22 million homes are likely to be constructed from 2020 to 2030 for achieving Vision 2030 penetration target of 70 per cent, with the current run rate of around 0.18 million homes in 2019 we estimate it to pick up to 0.19m a year for the next three years,ÔÇØ Al Rajhi Capital said in a report into the kingdom's industry. ÔÇ£However, in the near term, we see the majority of the cement demand coming from affordable housing scheme and therefore we feel selected cement companies with better valuation metrics to do well,ÔÇØ the report said.