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News ASI ASEAN Ferrous Slag SCMs Health & Safety Project Trends Packing & Palletising
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APRIL 2018 MAGAZINE
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GLOBAL CEMENT MAGAZINE: DEAR READERS
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News ASI ASEAN Ferrous Slag SCMs Health & Safety Project Trends Packing & Palletising
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April 2018
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This issue’s front cover...
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APRIL 2018 MAGAZINE
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KIMA Echtzeitsysteme GmbH
Packing & Palletising
Project Trends
For 20 years KIMA Echtzeitsysteme has been working in the field
MAGAZINE
Health & Safety
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systems and databases for processing industries. With SmartFill,
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KIMA ‘E’ sets new worldwide standards regarding the precision and www.globalcement.com
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Contact: Mr Dirk Schmidt, Director
Tel: +49 2463 9967 – 0
Fax: +49 2463 9967 – 99
Email: info@kimaE.de Editorial Director
Web: www.kimaE.de Dr Robert McCaffrey
rob@propubs.com
(+44) (0) 1372 840951
Editor
Peter Edwards
peter.edwards@propubs.com
(+44) (0) 1372 840967
Welcome to the April 2018 issue of Global Cement Magazine - the world’s most widely- Web Editor
read cement magazine - which will be distributed to delegates at two industry events. David Perilli
First up is the 25th AFCM Technical Symposium & Exhibition on 4-6 April 2018 in david.perilli@propubs.com
(+44) (0) 1372 840952
Bandung, Indonesia. The event only takes place every four years, last being held in
Vietnam in 2014. There have been quite a few changes to the situation in Indonesia
since then, which are summarised by the Indonesian Cement Association on Page 52. Commercial Director
We also carry a review of the headlines from the past 12 months in the ASEAN cement Paul Brown
paul.brown@propubs.com
sector to provide context to the event (Page 56). Global Cement will once again be in Mobile: (+44) (0) 7767 475998
attendance as event media partner, and we look forward to meeting all delegates.
Second is our own Global Slag Conference, which takes place in Prague, Czechia on Business Development Executive
24-25 April 2018. The event is the largest of its kind dedicated to the beneficiation Sören Rothfahl
and use of slags in the cement sector and elsewhere. To coincide with the event, we soeren.rothfahl@propubs.com
Mobile: (+44) (0) 7850 669169
have an in-depth interview with ZAG International’s Charlie Zeynel (Page 19) and
a look at the key findings of Smithers Apex’s report on ferrous slag markets to 2027
(Page 22). If you have not yet registered for the conference, there is still plenty of time. Company manager
Head to www.GlobalSlag.com. Sally Hope
sally.hope@propubs.com
Elsewhere in the issue we have a look at how best practice in other industries could be
used to help improve health and safety performance in the cement sector (Page 10) and
Subscriptions
a very interesting summary of OneStone Consulting’s new report on how expansions, Amanda Crow
greenfield projects and standalone grinding projects will affect global cement capacity amanda.crow@propubs.com
in the future (Page 16).
April 2018 will certainly be a busy month. We hope that you enjoy this issue of Global Office administration
Cement Magazine - wherever you are! Jane Coley
jane.coley@propubs.com
The views expressed in feature articles are those of the named
author or authors. For full details on article submission, please
see: www.GlobalCement.com
Peter Edwards
Editor
ISSN: 1753-6812
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GLOBAL CEMENT MAGAZINE: CONTENTS Subscribe Ad Index
Global Cement articles
10 The missing piece of the puzzle...
10 Andreas Halbleib of TEMAS AG investigates the apparent pla-
teau in cement producer health and safety performance and
looks to other industries for the missing piece of the puzzle.
16 Cement project trends to 2022
16
We speak to OneStone Consulting’s Joe Harder about the
company’s recent report Cement Projects Focus 2022 and find
out why production capacity keeps outpacing demand.
19 SCM supplies under pressure from rising demand
Charlie Zeynel of supplementary cementitious material
(SCM) trading firm ZAG International, talks about current
19
and future trends.
22 Ferrous slag markets to 2027
Smithers Apex shares the executive summary of its recent
report The Future of Ferrous-Slag: Market Forecasts to 2027.
22 28 Review: BEUMER Pressdays 2018
Global Cement attended the BEUMER Group Pressdays 2018 on
31 January - 1 February 2018. Here we review the event and
interview Markus Peitzmeier, Senior Sales Manager.
32 Product and Contract news
28 Algerian order for FLSmidth; Claudius Peters reports on Hope
upgrade; Vicem order for Loesche.
European cement
34 European cement news
HeidelbergCement continues to benefit in 2017; Spanish ce-
32
ment consumption up; LafargeHolcim launches 2022 strategy.
39 First KHD K-Tube installed in Albania
A report on the installation and experiences of the first K-Tube.
40 Global GypSupply Conference - Reviewed
39 Robert McCaffrey reviews the Global GypSupply Conference.
6 Global Cement Magazine April 2018 www.GlobalCement.com
GLOBAL CEMENT MAGAZINE: CONTENTS
Cement in the Americas
44 American cement news 44
Cemex raises prospect of acquisitions; US cement shipments
rise in 2017; New plant proposed by Fancesa.
Asian cement
48 Asian cement news
ICRA says Indian demand will rise 4.5% in 2018-2019; Adelaide
48
Brighton revenue up 12%; Protests in Pakistan and Taiwan.
52 An update on Indonesia from the ASI
We speak to the management of the Indonesian Cement
52
Association (ASI), to tie in with the 25th AFCM Technical
Symposium & Exhibition in Bandung, Indonesia.
56 ASEAN news round-up
We look at the big stories in the ASEAN cement sector over the
past 12 months.
Middle East and African cement 56
60 Middle East and African cement news
Overcapacity hits in Algeria; President of Mozambique
opens Limak plant; New 6000t/day plant in Saudi Arabia.
Regulars and comment
60
63 Global Cement prices
Cement prices from around the world: Subscribers to Global
Cement Magazine receive additional information.
64 Subscription form for Global Cement Magazine 63
Use this form to subscribe to Global Cement Magazine.
65 The Last Word
Is urbanisation good for the cement sector... and humanity?
66 Advertiser Index & Forthcoming issue features
A list of advertisers and editorial preview for next two issues.
65
www.GlobalCement.com Global Cement Magazine April 2018 7
GLOBAL CEMENT
25th AFCM Technical Symposium & Exhibition
INTER-
4-6 April 2018, Bandung, Indonesia
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NATIONAL 13th Global Slag Conference & Exhibition
24-25 April 2018, Prague, Czechia
VDZ www.GlobalSlag.com
CONGRESS 60th IEEE-IAS/PCA Cement
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September Duesseldorf 2nd Global CemProcess Conference
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Hillhead Quarrying & Recycling Show 2018
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8th International VDZ Congress
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4th Global CemPower Conference & Exhibition
January 2019, London, UK
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3th Global CemFuels Conference
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February 2019, Amsterdam, Netherlands
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The VDZ Congress is an international scientific forum
of the cement industry and its suppliers.
Delegates from all over the world will come together
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www.vdz-congress.org 8 Global CementMagazine April 2018
Cemengal April 2018.indd 1 21/03/2018 16:35
GLOBAL CEMENT: KEYNOTE Contents Subscribe Ad Index
Andreas Halbleib, TEMAS AG, a partner of Vision Zero of the European Union
The missing piece of the puzzle...
A lot of money has been spent on attempts to improve health and safety provision in the
cement sector, with great success. However, the sector appears to have reached a plateau
of diminishing returns on additional investment. A piece of the puzzle seems to be missing.
Andreas Halbleib from TEMAS AG may have found it...
A lot of money has been spent and will continue
to be spent to avoid injury to employees, to
eliminate fatalities from work in direct and indirect
On 9 April 2017 the European Agency for Safety
and Health at Work (EU-OSHA) released the report
‘An international comparison of the cost of work-related
connection with cement production. Despite the accidents and illnesses.’ 1 It shows that the economic case
continued and increased investment, however, the for safety and health at work has never been clearer.
gap between visions for zero harm to people and New estimates show that work-related injuries and
key performance indicators (KPIs) such as lost time illnesses cost the European Union (EU-28) around
injury frequency (LTIF), near misses and deaths, has Euro476bn/yr. The global costs are Euro2.68tn. The
remained fairly constant for a number of years. The EU-28 amount is 3.3% of GDP where the global
Above: Andreas Halbleib additional substantial efforts do not seem to yield the amount is 3.9% of GDP. Interestingly, the split of the
worked in the cement sector desired results. Something is missing, but what? cost between fatal and non-fatal cases globally and in
for 25 years before leaving to
the EU-28 is almost the same: each category accounts
become owner of TEMAS AG
in 2017.
Help from other sectors for about half of the total cost.
By looking into other areas of occupantional health Going into more detail, the report shows the re-
and safety (OH&S), it has been possible to identify sults according to the WHO classification. The costs
the missing piece of the puzzle that can help the ce- of work-related accidents and illnesses as a percent-
ment industry to bridge the gap between the current age of the GDP of the WHO regions are shown in
situation and zero harm. The key lies in the extensive Figure 1. There is a positive correlation between safe
OH&S research findings of high-risk industries like and healthy working conditions and the prosperity
aviation, fire and rescue and emergency medicine. and competitiveness of a region.
We have discovered why some teams work safer than However, this is only half of the truth, as Figure
other teams, although both have the same training 2 shows. The lower number of fatal workplace acci-
and experiences. Based on these insights, a concept dents in industrial countries as a proportion of total
has been developed toward an effective and easy-to- fatalities can be seen in the analysis of the WHO re-
use programme for the cement industry, taking us gions. The high-income and EU-28 regions have the
another important step closer to zero harm. lowest rates. However, it is striking that the numbers
of fatal work-related incidents in the high-income
Some perspective and EU-28 regions are higher than in most other
Before looking at the key figures of the cement in- global regions.
dustry in detail, it is very important to look at a few
basic figures of work-related accident and medical Cement focus
expenses. Let’s take a look at the cement industry. Based on the
KPIs of the Cement Sustainability Initiative (CSI),
there were 13 fatalities of directly employed person-
nel out of the 20 CSI members in 2015. There were
54 fatalities of contractors and subcontractors and an
additional 28 third party deaths both on- and off-site.
This equates to 95 people killed in the direct and in-
Right: Aircrews are an example
of multi-team systems (MTS). direct production of cement in a single year between
The way they work can be used 20 of the largest global cement producers. This is far
to help cement plant operatives away from the Vision Zero of the European Union.
stay safe. Let’s have a closer look: In its 2015 business report
LafargeHolcim reported that five of its own employ-
ees had died and 45 (sub-)contractors and third party
employees were killed. Even though it then reduced
the number of its own employee fatalities from five
10 Global Cement Magazine April 2018 www.GlobalCement.comGLOBAL CEMENT: KEYNOTE
“One is tempted to summarise
simply as ‘Talk to each other!
However, this is an
over-simplification...
to three in 2016, the total amount of all fatalities rose provide sad proof of what happen when MTSs fail. Above: Paramedics
attending an emergency
to 86! This increase might be the result of different A detailed trial was conducted using 84 six-member present another example of an
calculations due to the merger, but is still far from MTS-aircrews in identical simulations of an inflight MTS. Such structures succeed in
zero harm to people. emergency. Leadership was coded by three trained time-critical situations despite
HeidelbergCement says in its 2016 Annual Report observers using a structured observation system. their hierachical structure,
not because of it.
that the fatality rate based on 10,000 of its own em- Team goal attainment was assessed by two subject-
ployees was 0.5 in 2012, 1.1 in 2013, 1.0 in 2014, 1.7 matter experts using a checklist-based rating tool.
in 2015 and 0.7 in 2016. This clearly shows that there MTS goal attainment was measured objectively based
is no trend to zero harm. Continued expenditure has on the outcome of the simulations.
not led to any improvement in this case. In the same
report, HeidelbergCement states that ‘Occupational Findings
safety and health have top priority at HeidelbergCe- 1. High levels of leadership: In successful MTS-air-
ment and are among the key corporate values.’ If that’s crews, higher levels of leadership were found in both
truly the case, then the sector should be very inter- formal leaders and team members. Bienefeld states
ested in how to close this gap to zero harm. that the traditional bias towards favouring strong and Below left - Figure 1:
autocratic leadership in time-critical decisions should The cost of work-related
Air accident investigations be tempered by the findings of more recent studies accidents and illnesses in
various WHO regions and EU28
In such a situation, it is advisable not to simply do that show that ‘at a certain level of complexity and as a percentage of GDP.
‘more of the same,’ but to search for solutions outside time pressure, hierarchical structures of leadership can
of the industry. Due to its expertise within OH&S in break down simply because even the most competent HIGH = High income regions.
the field of nano-technology, TEMAS is in a position leader cannot cope with the multitude of leadership AFRO = Africa.
to help. Through its very close relationship with the functions required on his or her own.’ She notes that in AMRO = The Americas.
EMRO = Eastern Mediterranean.
ETH in Zurich, it has discovered an important PhD near-miss events during fire-fighting, leadership was
EURO = Europe.
Thesis on aviation safety2-3 by Nadine Bienefeld, most effective when shared between formal leaders SEARO = South East Asia.
which offers many pointers for the cement sector. and team members. The best teams operated despite WPRO = Western Pacific.
Bienefeld looked at safe practices and behaviour their hierarchical structure, representing leadership
of real-world aircrews during simulated emergencies. as a group activity, rather than an individual task. Below right - Figure 2:
Incidence of fatal work-related
During safety-critical situations on board an aircraft, In today’s more and more complex leadership
accidents and illnesses in
cockpit and cabin crews - despite their diversity in situation, the pressure on the individual leader rises. various WHO regions and EU28.
tasks, skills and backgrounds - need to collaborate Unfortunately, it is a rare leader that can fully ac-
Fatal injuries
as a multi-team system (MTS). Aviation accidents cept their limitations. This is compounded by our Fatal illnesses
HIGH
HIGH
AFRO
AFRO
AMRO
AMRO
EMRO
EMRO
EURO
EURO
SEARO
SEARO
WPRO
WPRO
EU28
EU28
0 1 2 3 4 5 0 20 40 60 80 100 120
%
www.GlobalCement.com Global Cement Magazine April 2018 11GLOBAL CEMENT: KEYNOTE
culture, which looks for the ‘hero.’ Such individuals care or firefighting, such errors can obviously have
are lauded for managing the team to a victory and far reaching consequences. The most effective teams
then blamed the following day for a defeat. This is in had people that spoke out.
total opposition to the required higher level of group
leadership skills shared by the team. 5. Psychological safety: Bienefeld says that the deci-
sion on whether or not to speak out often involves a
2. In successful MTS-aircrews, shared leadership ‘certain level of ambiguity as to whether a concern is
by pursers and flight attendants could predict team justified, an idea is valuable, or a question reasonable.’
goal attainment: The captain has the hierarchical It is therefore important to generate an environment
command on an aircraft, but is most often sat behind in which individuals feel able to speak out. ‘Team
a closed door, totally dependent on the purser and members believe that they can take interpersonal risk
the cabin crew. Those on the cabin side of the door - such as voicing their questions and concerns, or ad-
need to be able to lead in the absence of direct contact mitting mistakes - without having to fear punishment,
from the captain in emergency situations. Bienefeld rejection or embarrassment.’
states that shared leadership complements, rather
than replaces traditional leadership roles and the tri- Understanding and transferring to the
als clearly showed that the safer teams enjoyed high cement sector
levels of shared leadership. One is tempted to summarise the above simply as,
‘Talk to each other!’ However, this is an over-sim-
3. Boundary-spanning: The boundary-spanner’s plification. Talking to each other is easier said than
dual-leadership role within and across teams was key done. Edgar H Schein (Humble Inquiry)4 states that
to MTS success in that it predicted goal attainment in a range of disasters, including air crashes, nuclear
in both teams as well as the MTS’ success. Bienefeld accidents and the Gulf of Mexico oil spill in 2010,
states that effective boundary-spanning, in this case there is a common failing. ‘Clerical information that
by pursers, is related to positive outcome measures could have prevented or reduced the consequences of
such as team performance, learning, innovation and the accident was either not passed on to higher levels
goal attainment. In critical situations, the purser or was ignored. When I talk to divisional leaders, they
manages the interactions between the cabin crew always assure me that they are open, that they want to
and the captain. She/he is not officially endorsed for hear from their subordinates and that they take their
this role, but safer teams in the trial clearly demon- information seriously. However, when I talk to the
strated the power of this practice. The question for subordinates in those organisations, they tell me that
the cement sector is: ‘Who will take on this role of they do not feel safe when they bring bad news to their
boundary-spanning in a cement plant?’ bosses. Shockingly common, they preferred to be con-
tent with risky alternatives, than to annoy their bosses
4. Speak up! More importantly still, speaking up with potential bad news.’
when something looks wrong is a central element Whether we like it or not, it is a reality that we
in the detection and correction of errors that could absolutely must face. Another hurdle in open com-
otherwise lead to incidents and accidents. Employees munication is the challenge of diversity. It is an
at all organisational levels often possess important uncomfortable reality that most people prefer to
information about problems or issues, to which oth- communicate openly in an environment with like-
ers higher up in the hierarchy do not have access. In minded people. Both Bienefeld and Schein have
safety critical domains, such as in aviation, health shown that differences in gender, culture, language
Right: Speak up! Cement plants
should cultivate an environment
in which workers feel psycho-
logically secure that their ideas,
questions and mistakes will not
be met with punishment.
12 Global Cement Magazine April 2018 www.GlobalCement.comkorfez-eng.de
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Korfez April 2018.indd 1 21/03/2018 16:48GLOBAL CEMENT: KEYNOTE
and hierarchy can severely hinder communication in The programme is structured in such a way that
time-critical situations. it needs only a minimum of consultation. The goal
To help improve the teams that were not oper- of introducing the programme is to train so-called
ating as well as the best in the large aircrew study, transfer agents, who then implement this programme
Bienefeld suggested team training. This was later within the client company.
discontinued because of new problems. One exam- To prevent any misunderstanding,
ple being that the teams had become so confident in does not represent any substitute for existing health
their abilities that they started to completely ignore and safety programmes. On the contrary, without
the rules. Simple team building may not be as helpful the efforts of the past decades, one could not use the
as anticipated. programme at all. Without the ‘homework’ that has
been diligently and effectively implemented by the
The House of Safety is at risk of storms cement industry in recent years, this missing piece of
The House of Safety can be used as a tool to develop the puzzle could not fully develop its power.
health and safety programmes in the cement sector. is just the small but important difference
It has foundations, walls, windows and a roof. How- between today’s KPIs and the Vision Zero Harm.
ever, looking at the individual points, one realises Zero Harm is possible.
that the House of Safety is quite static and promotes In summary, all efforts and existing programmes
individualism. By contrast, health and safety prob- are important ingredients to protect people at work
lems are dynamic and unpredictable, like a storm. from harm to health. But to fully exploit the full
The only question is the degree of devastation that power of these existing concepts and programs,
is left behind. it needs a link that realises shared leadership,
Therefore back to the original question: What boundary-spanning culture of speaking up through
is missing? The key to communication and leader- psychological safety within the teams. The TEMAS
ship is to provide the right culture. Such culture has programme offers a very practical way to place these
something to do with relationships that create a so- elements sustainably in your company and thus make
called ‘safe harbour,’ discussed by Bienefeld, in which them safer.
everyone is ready to speak up and point out risks.
Indeed, Schein says that good relationships and reli- References
able communication across hierarchical boundaries 1.https://osha.europa.eu/en/tools-and-publications/publications/
are crucial to safety in high-risk sectors like cement. international-comparison-cost-work-related-accidents-and/view.
This is why TEMAS AG has developed all of its 2. ‘Leadership, boundary-spanning, and voice in high-risk
expertise and knowledge into an easy-to-implement multi-team systems,’ Bienefeld, N, PhD Thesis, 2012, ETH
programme for high-risk industries such as the ce- Zurich, Switzerland. 3. ‘Shared Leadership in multi-team sys-
ment industry. It includes all the insights from the tems: How cockpit and cabin crews lead each other to safety,’
high-risk sectors already mentioned. It is known as Bienefeld, N. & Grote, G. ETH Zurich, Switzerland. 4. Schein, E.H.
Secure People Execute Adequate Communication ‘HUMBLE INQUIRY: Vorurteilsloses Fragen als Methode effektiver
( ). Kommunikation.’
Zero Harm
House of Safety
Plant People Process Performance
Risk and Hazard Analysis Training & Development Guidelines KPI / Reports
Right - Figure 4: The House of Mechanical Integrity Contractor Safety Procedures Audits / Reviews
Safety presents a static view of
health and safety manage-
ment. However, high-pressure Process safety specialists Follow-up / Feedback
Pre-start-up Reviews Standards
industries show that dynamic
solutions offer better safety
outcomes than static ones.
Change management Motivation and SOPS Continuous improvement
Consequence management
Policies, Targets, Strategy
Management / Culture / Awareness / Commitment
14 Global Cement Magazine April 2018 www.GlobalCement.comProducing
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Global Cement Magazine 04_18.indd 1 25.01.18 10:42GLOBAL CEMENT: PROJECT TRENDS Contents Subscribe Ad Index
Interview by Peter Edwards, Global Cement Magazine
Cement project trends to 2022
It seems that new plants, grinding stations and capacity upgrades are announced almost
daily in the cement sector, often in the face of chronic overcapacity. This intriguing situation
piqued the interest of OneStone Consulting’s Joachim Harder and led to the development of
Cement Projects Focus 2022, OneStone’s latest multi-client report for the cement sector. Here
we ask him about the report’s contents...
Global Cement (GC): What led you to publish the Known capacity reductions and plant closures
new report Cement Projects Focus 2022? were taken into account. For the outlook of cement
production in 2018, our independent research mainly
Joachim Harder (JH): In the cement industry there used data from the leading cement producers and
is no other issue subject to as much misinformation correlated this with per capita consumption rates,
as cement capacity utilisation outlined globally, by economic growth rates and construction forecasts.
region and by country. We studied several reports
from sources like Exane BNP Paribas, Deutsche Bank GC: What are the major findings?
Markets Research and HSBC Global Research. Such
Above: Joachim Harder is the studies from 2006 to 2017 came to very different con- JH: Globally (excluding China), almost 420 cement
founder of OneStone Consulting clusions, with very different projections. For us the capacity expansion projects with a combined new
SL, an industrial consulting firm
question was: ‘How can this be?’ and more interest- cement capacity of 580Mt/yr have been identified as
based in Barcelona, Spain.
ingly, ‘How was the data generated?’ due to be commissioned between 2017 and 2022. The
As the data was very surprising to us, we carried projects were mainly derived from project announce-
out an independent research based on data from ments of cement companies and third parties as well
cement associations, cement producers, country as the reference lists and the achievement records of
analysts and other relevant third-party sources. We major suppliers. In cases where information from
backed up this information with our own research company records was not comprehensive enough, an
about capacity additions from project information intensive research, including expert interviews, was
of cement producers and investors, reference lists of
suppliers and others.
Our research comprises cement production
figures, operational cement capacity figures and “Almost 420 expansion projects
the related capacity utilisation from 2005 to 2016,
country by country for all countries with cement with 580Mt/yr of new capacity
capacities larger than 1Mt/yr in 2016. This was com- have been identified as due for
bined with the data from cement capacity expansion commissioning by 2022...”
projects 2017 to 2022 for a projection of the capacity
utilisation rates in 2018.
All projects 2017 to 2022 (units)
Upgrades
Mod./Upgrades
25
25
New lines
Integrated
New lines 114
114
Left - Figure 1: Number of pro-
jects to be undertaken in 2018
- 2022 period by project type. Greenfield
Greenfield 150
150
Source: Cement Project Focus Integrated
2022, OneStone Consulting SL.
Grinding
Grinding
131
131
0 20 40 60 80 100 120 140 160
0 20 40 60 80 100 120 140 160
Number of Projects
16 Global Cement Magazine April 2018 www.GlobalCement.comGLOBAL CEMENT: PROJECT TRENDS
Open units 2018-2022 by kiln size
>>10,000
10000 tpd 2
8000-10,000
> 8000 - 10000 tpd 2
7000-8000
> 7000 - 8000 tpd 2
6000-7000
> 6000 - 7000 tpd 3
Left - Figure 2: Integrated
open projects due to be
Kiln size (t/day)
5000-6000
> 5000 - 6000 tpd 14 commissioned in 2018-2022
by kiln size (t/day).
4000-5000
> 4000 - 5000 tpd 7 Source: Cement Project Focus
2022, OneStone Consulting SL.
3000-4000
> 3000 - 4000 tpd 23
2000-3000
> 2000 - 3000 tpd 22
1000-2000
> 1000 - 2000 tpd 6
0 5 10 15
0 5 10 15 20 20 25
25
Number of Projects
carried out to verify such data. All kinds of projects JH: Instead of just new greenfield plants and new
are being implemented: new greenfield plants, new kiln lines, more separate grinding plants are being
lines, separate grinding plants and modernisation/ installed. Such grinding plants have capacities of
upgrades of existing kiln lines. 0.1-2.0Mt/yr and offer new cement capacities for
Figure 1 shows a breakdown of these projects. a fraction of the cost of new integrated plants. The
Greenfield projects are leading by the number of pro- average costs for medium-sized grinding plants are
jects (150) and by new capacity (250Mt/yr). There are in the range of US$60/t of capacity.
also 131 new grinding projects, although the com- The trend of decreasing clinker factor is a strong
bined capacity of these projects is less than 100Mt/ driver of this, as is the option of installing grinding
yr. Furthermore, 114 new production lines at exist- plants close to the markets.
ing sites, with 220Mt/yr of new capacity are in the Disciplined investment has become one of the
pipeline, as well as some 25 modernisation projects. major trends in the cement industry. Today, invested
There are only relatively few ‘announced’ modernisa- capital is measured by comparing a company’s return
tion/upgrade projects, because these typically have a on invested capital (ROIC) with its weighted average
much shorter lead time from the order to commis- costs of capital (WACC). If in the cement industry
sioning. For the same reason, it can be expected that the ROIC > WACC by the third to fifth year of opera-
the real number of separate grinding projects will be tion, then the business is regarded to generate value.
much higher during the period under review. Global cement majors have installed these criteria
and thus created the disciplined capital expenditure
GC: What is changing in terms of cement approach. An outcome of disciplined investments,
sector projects? as shown by our analysis of the kiln capacities of
the projected new integrated plants
(Figure 2), is that the trend to ever
larger kiln lines is obviously coming
to an end. The highest numbers are
for kiln sizes up to 3000t/day, 4000t/
day and 6000t/day. Only a few kilns
with capacities larger than 8000t/
day are in the pipeline. We expect Left: Capacity additions at
existing plants will not be as
that large over-capacities and lim-
popular as new integrated lines
ited export opportunities are behind or new grinding plants in the
this trend. period to 2022.
GC: Where are projects set to come
online the most?
JH: Your readers will appreciate that
www.GlobalCement.com Global Cement Magazine April 2018 17GLOBAL CEMENT: PROJECT TRENDS
I don’t want to go into too much detail here, but I like Disciplined investment is also not always an issue.
to explain the example of so-called ‘open’ projects. For example, after China’s investment-driven cement
Projects are classified as open as long as no supplier economy was recently replaced by a consumption-
is named or allocated. In total, there are 123 open driven economy, Chinese investors are continuing
projects with a combined capacity of about 170Mt/yr their investment-driven approach outside China in
to be commissioned/delivered from 2018 to 2022, of combination with the ‘One Belt, One Road’ strategy.
which 53 are greenfield projects. The large number of new plants being projected by
Figure 3 gives an example of the capacity break- Chinese cement companies and investors in the Far
down of the greenfield projects by region. Most of East, in Central Asia and Africa is alarming for many
these projects are in Africa/Oceania, followed by local players. There are also many other illogical fac-
South Asia and Latin America, while only a few tors in decision making. If one company announces
projects are in Western Europe (including Turkey), an investment, often the main competitor also in-
North America and the Middle East. The Far East vests, to ‘keep market share’ or to stay as Number 1
and Eastern Europe are in between. Africa/Oceania in a country. This can be seen in several countries.
will also dominate the new capacity expansion by
greenfield projects, with about 30Mt/yr. GC: Will all of the capacity you identify actually be
realised or will feedback help slow things down?
GC: Where will project numbers decline?
GC: We allocated probability categories to all projects
JH: Obviously in China, but that market was not the in order to enable further analysis. It was also taken
subject of our market report. If we compare the five into account whether the projects are still open or
year period from 2018 to 2022 with the five years closed, depending on whether there is a supplier in
period from 2013 to 2017 definitely there are less place. We grouped the projects into four categories
projects in Europe, the Middle East, Latin America from 40 to 100%. 40% is when the project are still in a
and North America. feasibility stage, 60% covers projects in the planning
stage, 80% denotes under construction and 100%
GC: Why are projects continuing to come online is when the project is delivered. However, there are
despite the overcapacity? individual aspects which can upgrade or downgrade
the probability.
JH: Our report shows the development of the ca- When we applied the probability rates just to
pacity utilisation rates for the period 2005 to 2018, the 2018 projects, we found that of the total of 107
country by county, together with the cement produc- projects planned to be commissioned this year only
tion and capacity development. Often companies do 95 have a 80-100% probability for becoming opera-
not have accurate data like this available when invest- tional. The interesting fact is that projects identified
ment decisions are made. Furthermore investment in by us have a higher probability than those identified
new capacity is often still based on excessive market by third parties.
demand and export expectations. Projects are also
carried out in the anticipation that new and modern GC: Thank you for your time today.
technology will be more efficient than the older exist-
ing technology. JH: You are very welcome!
50 100
45 90
40 80
Number of Projects (Cumulative %)
35 70
Number of Projects
30 60
Left - Figure 3: Number of pro-
jects to be undertaken in 2018 25 50
- 2022 period by location.
Source: Cement Project Focus 20 40
2022, OneStone Consulting SL. 15 30
10 20
20
5 9 10
7 6 2 1 1
4 3
0 0
Africa & South Latin Far Eastern Central Middle North West
Oceania America America East Europe Asia East America Europe
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GLOBAL CEMENT: SLAG
Interview by Peter Edwards, Global Cement Magazine
SCM supplies under pressure from rising demand
Global Cement recently caught up with Charlie Zeynel, of supplementary cementitious
material (SCM) trading firm ZAG International, to talk about current and future trends in
granulated blast furnace slag (GBFS), fly ash and potential SCMs of the future...
Global Cement (GC): How has demand for granu- CZ: There has been a wholesale constriction in GBFS
lated blast furnace slag (GBFS) changed in the past supplies. In Japan, which was sold out already in early
12 months? 2017, supplies are even more restricted than before.
This is partly due to the build up to the 2020 Sum-
Charlie Zeynel (CZ): The trend towards using GBFS mer Olympic Games in Tokyo. However, there were
as a supplementary cementitous material (SCM) has also three significant outages at major Japanese steel
really come on since we last spoke in October 2016. producers that forced production down by around
The demand side has continued to increase and, on a 10% in 2017. Of course, domestic use has been given
macro-level, is outpacing supply almost everywhere priority, so most of the reduction in GBFS supplies
around the world. from Japan has been on the export side.
In Europe, Arcellor Mittal is sold out, due to
GC: Where is demand increasing the most? European demand and falling SCM supplies. Europe Above: Charles Zeynel, President
is kind of a closed box in that it consumes its own of ZAG International.
CZ: Africa is becoming a hot-spot very rapidly and GBFS. Before 2017, it would export to outside of the
shows a lot of potential. It has received well over 2Mt continent, but not any more.
in the past 12 months and demand is much higher China has also drastically reduced GBFS exports
than that. Africa is taking GBFS from anywhere and due to the winter closures of steel and cement plants
everywhere. on environmental grounds. 5Mt of GBFS was ex-
ported from China in 2016 but export volumes are
GC: How have these changes affected GBFS prices?
CZ: I know that a major steel producer’s price has
more than doubled since the start of 2017 as a result
of these and other factors. The major Japanese ex-
porters have also doubled their prices.
“These ‘very cheap’ materials
are no longer very cheap...”
GC: How have supplies changed over the past year?
Left: Air-cooled slag is a lower
value product than granulated
blast-furnace slag.
www.GlobalCement.com Global Cement Magazine April 2018 19GLOBAL CEMENT: SLAG
Right: In developed markets
coal-fired power stations are
closing, or being switched to
using gas or biomass.
unpredictable and could be lower in 2018. The do- GC: Last time we spoke you mentioned a strong
mestic consumption of GBFS is strong in China right up-tick in GBFS demand in the Middle East. Has
now. Prices have also doubled on the back of these this continued?
changes. There are only spot prices and the cash must
be paid up front. It’s almost like an auction! CZ: Demand for GBFS cements in the Middle East
will remain strong, certainly over the timeframe
GC: Is anywhere ‘stepping up to the plate’ and re- to 2022. This is due to ongoing projects such as the
placing this lost supply? Dubai EXPO 2020 and the FIFA World Cup 2022 in
Qatar. What we termed the ‘silly price wars’ that were
CZ: We have seen the first exports of GBFS out of going on seem to be over now, as companies realise
Brazil, which was unheard of 12 months ago. This is that GBFS is a valuable resource.
the first new source of GBFS in 10 years. Along side
this, we are beginning to see a resumption of sup- GC: Which region is ‘up next’ with regards to the
plies from Ukraine following the political upheaval use of GBFS in cement?
there in recent years. However there are concerns still
about quality and reliability of supply. These new sup- CZ: I think we are beginning to run out of regions!
plies are quite important due to the constrictions in Seriously though, the region with the biggest scope
supplies from Japan and elsewhere. for growth is Africa, but not everywhere. The
countries taking the lead at the moment are in the
GC: Is there anywhere left where supply is higher west of Africa, in Ivory Coast, Senegal, Mauritania
than demand? and Ghana.
There is also a cluster of countries over in the east,
CZ: There used to be a few ‘stockpiles’ around the for example in Kenya and Tanzania. Algeria is also
world but now there is only one major location, in switching on to the possibilities of GBFS use. Egypt
the upper Mid West / Great Lakes area in the US and is also taking in GBFS but it is still a price-conscious
Canada. The GBFS is far from the markets. market. It is not being used to make better material
The use of GBFS is developing in the United States, but to lower clinker costs. The cost of fuel to make
based on 3-5%/yr growth in cement consumption clinker is pretty important in Egypt at the moment.
anticipated for 2018. On top of this, the knowledge
of using GBFS in cement products is becoming more GC: Will further suppliers come to the fore?
widespread in the country, which will drive demand
in the future. The growth in demand is primarily in CZ: It is possible that Iran will step up supplies of
the coastal regions where it is still easier and more GBFS in the future. However, currently at around
cost effective to import slag than bring it by rail from 1Mt/yr, this will hardly make a drop in the ocean,
the upper Mid West. There are also few GBFS grind- especially as western companies won’t touch it due
ing facilities, which mean you have to either build a to the sanctions. We do know that Iranian GBFS is
new mill or import pre-ground GBFS powder. making it as far as the Middle East. As far as the four
20 Global Cement Magazine April 2018 www.GlobalCement.comGLOBAL CEMENT: SLAG
“For many cement
producers both GBFS
and fly ash are getting Left: Could the location of
hard to secure...” volcanoes become a major
factor in the trade of SCMs
in the future?
major GBFS supplying regions - China, Japan,
Brazil and Europe - are concerned, they still
are the main players, and will be for some time
to come.
GC: Let’s move onto fly ash. How have the supply fly ash. There will, of course, be other examples where
and demand trends changed recently? the opposite is true.
However, for many cement producers, both
CZ: Supply has fallen and demand is on the rise, just materials are proving hard to secure. Essentially these
like with GBFS. Countries are switching from coal ‘very cheap’ materials are no longer very cheap. It is
to natural gas or biomass and fly ash supplies are no longer the case that a local plant can just contract
falling as a direct result. This is the case in much of some local GBFS or fly ash. It is a major strategic
Europe and the US. The Netherlands for example has headache for multinationals and local producers
switched from being a net exporter of fly ash to a net alike. A lot of senior management time is being in-
importer in just under a year. vested in the search for these materials.
GC: Are there any major new sources? GC: In the face of reducing GBFS and fly ash
supplies, what other material(s) can be used?
CZ: There are no major new sources but rather point
sources. Wherever anyone builds a coal-fired power CZ: The major replacement could be natural poz-
plant, the fly ash is being contracted right off the bat. zolans, which are formed in volcanic regions. There
There was a recent new build in Morocco and a major have been increasing amounts traded locally in places
cement international came in and contracted all of like Indonesia, the Philippines and Italy of late. They
the material in one go. Such cases highlight the issues are being looked at but it is too early to tell how they
of scarcity and reliability of supply. will be used and to what degree.
Aside from new material, people are also looking
GC: Which material, fly ash or slag, are cement at fly ash dumps, with 15-20Mt in landfills in the US
producers more ‘worried’ about securing? alone. I should point out that they are being looked
at but face many unknowns. What is really in there
CZ: I don’t think there is a one-size fits all answer to after all these years? How usable might the material
that question. It is dependent on the specifics of the be? What are the environmental regulations? Finally,
cement producer in question. The UK for example how much it will cost and is it viable?
was a major user of fly ash. When the major power
plant switched to biomass, a lot of cement and con- GC: Thanks for your time today Charlie.
crete producers switched to using GBFS. This is an
example of GBFS solving a problem made by a lack of CZ: You are very welcome indeed!
Left: Shipments of slag and fly
ash are increasingly arranged
on the spot markets, with long-
term contracts hard to come by.
www.GlobalCement.com Global Cement Magazine April 2018 21GLOBAL CEMENT: SLAG Contents Subscribe Ad Index
Smithers Apex
Ferrous slag trends to 2027
Smithers Apex shares the executive summary of its recent report The Future of Ferrous-Slag:
Market Forecasts to 2027...1
w
G lobal ferrous slag production in 2016 was es-
timated at nearly 524Mt, with a growth of less
than 1% in volume compared to 2015. Global pro-
slag production market value by 2027, as ground
granulated blast furnace slag (GGFBS) and granu-
lated blast furnace slag (GBFS) prices are expected
duction of ferrous slag in 2017 is estimated to have to continue to rise in the next 5–10 years, as demand
been more than 531Mt, of which nearly 67% is of exceeds supply.
blast furnace slag. The value of global ferrous slag
production in 2017 is estimated at US$20.3bn, of Ferrous slag market by region
which more than 91% is blast furnace slag. Nearly three-quarters of all ferrous slag in 2017 is es-
The global ferrous slag market is forecast to grow timated to be produced in Asia. Europe accounts for
by under 1% in volume over the next 5–10 years, nearly 10%, followed by CIS with nearly 8%. These
reaching nearly 564Mt by 2027. However, its value proportions are directly related to its steel produc-
growth is forecast to be significantly higher, tion shares. The value share of Asia in global
with an average growth of up to 6% ferrous slag production is estimated
over the next 5–10 years, reaching to be over 84% for 2017, fol-
Other 2.4%
nearly US$35bn by 2027. EAF lowed by a 12% value share
In general, the growth of slag by Europe.
the ferrous slag market is 7.9% Asia is forecast to
directly related to trends continue to gain more
in the steel market. The volume and value
Right - Figure 1: Share of fundamental driver BOF slag Blast share in the global
ferrous slag production by slag for the market for fer- furnace ferrous slag market
category by volume, 2017 (%). rous slag is the search 23.0% over the next 5–10
slag
to extend the list of years, driven by the
payable uses for an 66.8% possible impact of
industry by-product. mergers in the steel
The spread of regula- industry leading to a
tions and charges aimed at reduction in pig iron ca-
protecting the environment pacity, mainly in Europe,
provides an added incentive, and as a consequence mostly
but there has always been a motive blast furnace (BF) slag volumes
to seek to transform what is poten- would be lower. The US is expected
tially a cost source (because it has to be stored to continue with closures or continued slow
securely before being disposed of at a cost) into a running of active US blast furnaces, and no invest-
revenue-earning by-product in all industries. ment in increasing capacity in BF and basic oxygen
furnaces (BOFs). South America and the Middle
Use by application in 2017 East are forecast to gain share in global ferrous slag
The largest application for ferrous slag is cement production over the next 5–10 years, mainly driven
manufacture. Ground slag cement by end use and by local demand from construction markets, but
Portland clinker replacement are forecast to have shares will remain minor compared to Asia.
used over 49% of total global ferrous slag produc-
tion volume in 2017. The second largest application Drivers to 2027
is road aggregates, forecast to use up to nearly one- The most important possible drivers in the ferrous
third, followed by internal recycling, using up to slag market in the next 5–10 years are:
nearly 10% of global ferrous slag production in 2017.
The value share of cement manufacture is fore- Strong construction markets: Growth in the con-
cast to have been over 86% of total global ferrous struction sector in the Middle East is forecast to
slag production value in 2017, due to its high value/ continue with peak delivery date in Qatar hosting
tonne. Value share of cement manufacture is forecast the FIFA soccer championship in 2022. Construc-
to continue to increase to over 91% of total ferrous tion remains a growth market in the US, with the
22 Global Cement Magazine April 2018 www.GlobalCement.comALL MILL TYPES
FROM A SINGLE SOURCE
SLAG
NACE
RIAL
T FUR
MATE
BLAS
W
S
NT RA
FUEL
NT &
SOLID
CEME
CEME
1x LM 41.4 D 2 x LM 56.6 3 x LM 56.3+3 CS
Silifke, Turkey Silifke, Turkey Silifke, Turkey
www.loesche.com
xxxx_LOE_ANZ_All_Mill_Types__A4_02_18_Silifke_ZKG.indd 1 20.03.18 14:04GLOBAL CEMENT: SLAG
0
0 10
10 20
20 30
30 40
40 50
50 60
60
Cement 1 49.4
manufacturing
Road Aggregates 2
32.1
Right - Figure 2: Ferrous slag
market by volume and end use
in global production (%) in Other uses 3 9.8
2017, excluding landfilling.
Internal recycling 4 4.2
Embankments 5 3.0
Mineral wool 6 1.5
population forecast to have grown by 11% by 2030 new construction towards maintenance, so recycling
compared to 2016. This means a higher demand will be more important. This benefits ferrous slag
for roads, houses, offices, schools and other public and the further development of electric arc furnaces
buildings, In China, there are still large construction (EAFs).
plans, including making provisions for the movement
of 250 million people to its megacities over the next Technical benefits: GGBFS’s technical benefits, in-
10 years. cluding high resistance to chemical attack and lower
heat of hydration, make it highly suitable for special-
CO2 benefits: Ground granulated blast furnace ist concretes. The demand for specialist concretes is
slag (GGBFS) usage reduces the CO2 emissions of driven by market demand for design and detailing.
concrete compared to using Portland clinker alone. Processes that are capable of mitigating the free lime
The Paris Climate Agreement signed in August 2017 expansion issue may become more economically vi-
by 195 countries is a major driver to reduce CO2 able, as construction standards and environmental
emissions, leading to higher demand for slags in an legislation restrict the use of chemically unaltered
increasing number of countries. basic oxygen furnace (BOF) slag. The choice of pro-
cess here depends on local product market values,
Recycled product/secondary material: The US energy costs, operational costs, and physical and
Environmental Protection Agency (EPA) recognises legislation constraints.
the economic benefit of using slag in cements for
concrete. It has classified slag cement as a recovered Barriers to 2027
product. High freight rates make it less attractive to ship
In Europe it is increasingly difficult to open a ferrous slag over large distances. Freight rates are cur-
quarry for natural aggregates as the focus is now on rently rising again, as a significant amount of freight
secondary materials. Ferrous slag is seen as a slag use capacity was discontinued during the economic
as a secondary material in Europe that can replace downturn, as well as the fact that the recent rise in
natural aggregates such as limestone. Meanwhile, economic activity has increased prices.
China and South East Asia are growing away from
Right: Slag being poured
at a steel plant.
24 Global Cement Magazine April 2018 www.GlobalCement.comNo issues – I have a CEMTEC !
GLOBAL CEMENT: SLAG
Mergers: Arcelor Mittal took over Ilva in June 2017 New equipment costs: Financial cost of new tech-
and the ThyssenKrupp / TATA Steel merger is pend- nology installation is the critical barrier.
ing. If the latter goes ahead, it is likely that some blast
furnaces will be closed, reducing GGBS supplies, Overall trends
especially in Europe. Possible further mergers in the Blast furnace slag will continue to count for the
steel industry are likely to reduce pig iron capacity. overall majority of ferrous slag produced over the
next 5–10 years, but EAF slag is forecast to have
Trump effects: President Trump appears to apply the strongest production volume growth of all fer-
significantly less importance than the preceding rous slags, at around 2% for the next 5–10 years.
Obama Administration to the US EPA, evidenced The reason for this is that the continuous mergers
by budget cuts and promises to annul some Federal that are likely to happen in the steel industry in
regulations. This may impede the advocacy for use of the coming years will lead to a reduction in blast
recycled products, including ferrous slag. furnace capacity.
Also, steel industries in Asia will slowly move
Reduced capacity/investments: An example is seen more to EAF, which was the same trend experienced
in the US, where the closure or continued slow run- in North America and Europe two decades ago. De-
ning of blast furnaces continues. Slag dumps are also veloping steel markets in Africa and the Middle East
becoming more scarce. are likely to opt in many cases for EAF steel produc-
tion, as this generally requires lower investment than
European stagnation: The EU economy continues BF or BOF steel routes.
to be fragile, especially given the as-yet-unresolved Blast furnace slag production is forecast to have
issues around Brexit. the strongest value growth of around 6% in the com-
ing 5–10 years, as in many places around the globe
Competition: There is increased competition from demand will exceed production volumes. EAF slag
crushed stone, sand and gravel in the construction production is forecast to have a value growth of over
sector. GGBS mainly competes with fly ash, metakao- 2% in the next 5–10 years, mainly driven by increas-
lin and volcanic ash pozzolans and, to a lesser degree, ing EAF steel capacity.
with silica fume. BOF slag production is forecast to be rather flat in
volume and value over the next 5–10 years, as BOF
Technical problems: BOF and EAF slag have leach- steel capacity may reduce because of continuous
ing and expansion issues and cannot therefore be mergers in the steel industry, as well as there being a
easily used without further processing. Environmen- shift in Asia to more EAF steel production.
tal authorities are often cautious about its usage for
embankments or sub base due to this. Reference
1. ‘The Future of Ferrous-Slag: Market Forecasts to 2027,’ available for
Better steel production: Economic drivers to purchase now: https://www.smithersapex.com/market-reports/the-
decrease slag volume (e.g. from 300kg per tonne of future-of-ferrous-slag-market-forecasts-to-202.
iron to 200kg/t) could decrease slag availability for
all markets, but could have greatest impact on GGBS.
Percentage %
00 10
10 20
20 30
30 40
40 50
50 60
60 70
70 80
80
Asia 1 75.3
CIS 2 8.4
Right - Figure 3: Ferrous slag
supply by volume by region (%)
in 2017. Europe 3 7.7
C + S America 4 3.3
N America 5 2.9
Rest of the World 6 1.9
Australasia 7 0.5
26 Global Cement Magazine April 2018 www.GlobalCement.comYou can also read
