2015: year in review
As the final week of 2015 approaches, we take a look back at some of the most talked-about topics of the year across the global cement arena.
In terms of worldwide cement consumption trends, demand is expected to have contracted in 2015 in the low-single digit range, marking the first reduction since 1990. Excluding China, which accounts for over 70 per cent of global consumption, demand is anticipated to have risen by 2.1 per cent, according to forecasts by HSBC soon to be presented in the forthcoming issue of ICR January 2016.
Some of the most important developments witnessed through 2015 include a slowdown in China's economy and its first pending fall in cement consumption since 1991. Elsewhere negligible growth has been seen in emerging markets, and commodity and oil exporters in some Latin America and MEA markets have suffered volume contractions. Last year also marked continued cement market recovery in the US, but there were further reductions in western Europe, while eastern Europe delivered a mixed picture.
Moving into 2016, global cement demand (excluding China) is expected to see a modest recovery, with weak growth in Europe and overall in EMs, including contractions in commodity-dependent Brazil, Chile, Russia and Malaysia. However, there are strong growth expectations for India and Indonesia and robust growth is forecast for the US, while volume increases are expected in the MEA, Latin America and Western Europe. However, central and eastern Europe volumes are forecast to slip due to a further contraction in Russia.
Movers and shakers
The most significant event on the global cement industry corporate landscape last year was the completion of the Lafarge and Holcim mega-merger. As a combined entity, the building materials giant now controls 387Mta of capacity worldwide comprising 181 integrated cement works, and 70 grinding centres, as well as 621 aggregates operations and 1640 batching plants under its newly-formed wing.
The deal also catapulted CRH into the top tier of cement producing companies as it acquired a package of assets from Lafarge and Holcim. The subsequent EUR6.5bn investment by CRH added 35.9Mta of capacity to its cement portfolio, lifting the group's total cement capacity to 51.8Mta, excluding the share of joint ventures and associates.
Hot on the heels of the LafargeHolcim merger came the proposed acquisition of Italcementi by HeidelbergCement – a deal which is supported by the complementary asset portfolios and triggered by the LafargeHolcim merger. The question now remains as to whether the cement sector could be open to further M&A activity and if so, which companies will be in line for the next phase of consolidation.
In terms of the emerging cement majors, Dangote Cement's new operations have made strong starts right across Africa. During the year, the company commissioned its 3Mta Mtwara cement plant in Tanzania and inaugurated integrated plants in Ethiopia (2.5Mta) and Zambia (1.5Mta), as well as a 1.5Mta grinding facility in Cameroon. Meanwhile, Latin American major Votorantim Cimentos' US$1.6bn investment programme foresees the construction of five new cement works in Brazil, two cases of additional capacity in Turkey and one in Bolivia, with investments also being planned for the USA and Morocco.
Tackling climate change
Global efforts to tackle climate change have gained momentum with an international plan to reduce greenhouse gas emissions worldwide reached in Paris at the COP21 summit earlier this month. Ready to embrace such efforts, the Cement Sustainability Initiative (CSI) announced its aim to reduce CO2 emissions by clinker producers by 20-25 per cent by 2030 as part of a new action plan launched at COP21. For the wider cement industry, the talks have assessed the imperative for CO2 reduction and could usher in a new era of cutting edge technologies and innovations.
ICR and Cemtech around the world
Tracking all these developments and many more, ICR has travelled extensively across the world this year, attending all the major cement industry events as well as hosting its leading series of Cemtech Conferences & Exhibitions to cover the MEA, Asia, Europe and Americas regions. This year, Cemtech events have been in held in Dubai, Bangkok, Vienna and most-recently Orlando. Each meeting has provided valuable coverage of both cement market trends and the latest developments in production expertise to optimise plant operations, enhance energy efficiency efforts and promote sustainability endeavours. We invite you to view our journey of memories through the year and look forward to seeing you in 2016 as we get set to celebrate Cemtech's 25th anniversary year in style.
