Good morning ladies and gentlemen, thank you Keith for a nice introduction. I'm very glad to be here again, those of you who remember my presentation in Istanbul, may remember that I reported about the cement plant in Russia which should replace its 55% of the raw material inlet by wholesale waste.
Since that time a lot has changed, this plant was acquired by Eurocement group and they suddenly discovered that using alternative raw materials under alternative fuels, might be very profitable. Nevertheless, there's a very big discrepancy between the opportunities, huge opportunities in Russia and the reality and this is the topic of my presentation here's a timeline of waste management and main milestones in 60s the quantity of waste become a global problem while in 70s the oil crisis triggered energy efficiency and savings in using of oil and in 80s the legal and technical measures were finally established.
Soviet Union at the time was not an exception. However in 90s the Soviet Union collapsed, and since that time, a significant amount of waste was accumulated in the environment every year approximately 5 billion tons of waste is generated in Russia and only 26% of this comes to utilisation.
On a diagram right side, we can see that the top curve, this is the amount of waste generated in Russia per year what we can see on the diagram, firstly that in the last decade the amount of the waste generation almost doubled then in post crisis and crisis period went a little bit down to rise up much more quickly afterwards.
Today the quantity of waste generated in Russia is approximately 5.1 billion tons per year. The orange curve below indicates the amount of the waste which is neutralized which is somehow treated and as I said 26% much lower is recycled, is secondary used, and what is important as well is that the curve of the utilisation or neutralisation is rather flat while the curve for waste generation is very steeply going up.
On this chart we can see the geographic distribution of waste generation and we can tell that the Kuzbass region is the most waste loaded area because of coal I don't know, mining and processing facilities. Pay your attention of the panel on the top, right top you can see that 99% of the waste generated in Russia comes from industry, it is of course typical for heavy natural resources exploitation in Russia and Russia of course is natural resources based economy.
Well on this diagram is presented the waste mission policy of the Russian Federation left side is the priority diagram is tipped over pyramid which emphasizes prevention and minimization over the disposal, I mean incineration waste to energy is considered far way of utilization of the vast in Russia and then right side we've a four fundamental principles of oppression environmental policy on the first place implementation of [xx] technologies, infrastructural development for waste removal, non treated waste disposal ban and transfer of responsibility for vast removal and treatment to produce producers.
On January 1st, the changes to the Federal law on production consumer rights came into force in Russia. It does mean that for almost 20 years this legal instruments is legal through of course absolutely inefficient ignored, neglected about two leave us this law, firstly the base match regulation efficiency enhancement and secondary the economical motivation.
This is represented of course by financial incentives and penalties. Our few words about your cement group excluding China is number four, this is because of huge acquisition at the end of 2014 when Eurocement acquired three brand new plants with total capacity over 10 million tonnes per year and with its 50 million tonnes of installed capacities number four while Russia with almost 70 tons yearly production capacity is number five.
On this slide we can then see that your cement group is dominating company dominating cement producer in Russia and 42.8% is the share of the production facilities of your cement. However the industry concentration in Russia is much less than in western countries like U. K or France will achieve upto 80% on Russia 56%.
Fuel assumptions are about possible impact of Russian cement industry and aggressive export policy which we expecting a 2016 on this frame you can see that the overall capacity of Russian cement plants is 180 million tones and the consumption recently is between 60 to 70 million tonnes per year.
It does mean that the utilization ration is still very low approximately for the moment 65%. Second issue is that, the production cost in Russia are very low because of low cost energy and fuel, the natural gas is very low price. The market in 2015 in comparison to 2014 dropped by 10% and this tendency will continue in the 2016 as well.
and there is very ex-foreignhancing exchange ratio between Ruble and Euro and I believe that Europe will be the export destination number one for Russian producers, I mean some kind of stronger competition on the European market could be expected next year. Here we have the geography of the Eurocement Group cement plants, 19 cement plants belong to a cement group as a typical, very, typical is approximately to the consumers.
These 19 cement plants are approximately 50 % wide process plants and total capacity is 50 million tonnes per year 14 ready-mix concrete plant belong to Eurocement with the 11 million cubic meters concrete per year and now were achieving the main topic of my presentation. Although the waste resources are very available and huge in Russia still less than 1% of the fuel is replaced by authentic fuel and natural gas as you can see by 88% is used by majority of cement producers, the sign we can say about the clinker substitute.
You know one hand there're no incentives for the cement produce to use alternative materials for clinkers substitution and on the other hand the consumers they consider using of an alternative of clinker substitute additives as cement illusion and consider the product as a fake.
Your cement group formulated a new concept of green production which includes a cement plant rationally into a newly formed waste collection and treatment system and filling field containing waste and technological details of recyclable materials into the cement production process.
The concept background of course is approximate to the waste locations using of incineration in cement and a none solid waste process well, Eurocement group and adopted all the preconditions for using cement kiln foreign considerations I will not stop here. Long time surely known facts, on this strap we have list of typically used waste materials in Russian cement industry.
They could be divided in two groups by origin of course minor ways and few complaining minerals are plus [xx] boxide, snigler,black sand, flue dust, coolant sludge and many others and a few complaining are coal waste, ash, oil salvage interesting material waste oil, wooden chip, textile and paper industry raised rubber Multiple solid waste, majority of the plant they use only mineral, I will explain later why, and the effect they get is of course increase of chunk capacity, production of specific heat and off course less production cost, from all the variety of the waste materials available Eurocement group plants use the materials which are listed on this chart we can say that all the Eurocement group bonds use one way or another a type of alternative fuel or alternative raw materials, so the most popular granulated slag, electrode cope, wooden chips from railway sleepers, RDF,flue dust sludge and [xx] and recently very popular is methylene slime I will stop on two slides on this because this is very unique material which perfectly fits for cement industry.
Here we have a very simplified diagram of aluminium production for aluminium production the raw materials are methylene and limestone and the final product is of course is alumina and there are two by product sodium carbonate and potassium carbonate the methylene and limestone they are burnt in the kiln and afterwards alkalies and residuals are removed using water, and we get so called b-light sludge, or methylime slime whatever, this is the only mass solid waste of Aluminium production of course it couldn't be used in Aluminium production but perfectly fits for cement production why? Because of the content of almost 80% of the b-light[sp] in a methyl lime slime, you can see right side the chemical composition and the proportion of Silica and Calcium Oxides at the indicates of confirms the appearance of the b-light in the methylime slime, methyllime slime is a sand of material which the particle size, up to two millimeters is very wet up to 22% of moisture but not sticky, and the handling is rather easy, the only disadvantage for the cement manufacturers might be highly concentration of alkalies.
What do you expect when using a methylene slime, of course reduction of heat consumption and the effect of replacing of 20% of limestone in the raw mix we get increasing gamma output by 10%, decreasing fuel consumption by 11% and decreasing specific power consumption by 8.2%.
Well, Russia cement industry is, for Russians cement industry still typical, it is still common to use the wet plants. While in 2005 the share of wet process in the cement industry in Russia was more than 80% up to now it is approximately 50%. Still from 19 cement plant of Eurocement 12 out of them 12 are still working wet process, and Eurocement invested 1.5 billion Euros for conversion them to dry process.
These are contracts these projects are realized and for the moment with Chinese contractors. And your cement continues or inclines to energy cost efficient and therefore concluded contract with finished company to supply equipment for captive power generation plants and so up to 2020, 400 megawatts of own generation will be available for Eurocement.
Eurocement holding was the first of domestic cement manufacturers who successfully completed voluntary environmental certification for compliance with Ecomatril standard which is the only accepted by state authorities and with this positive message the end of my presentation, thank you for your attention.