Quarry Southern Africa November 2017 - Page 17

WINNING O ver the past nine decades, the global demand for cement has increased 50-fold, from 100 million tonnes in 1926 to around five billion tonnes in 2016, with the majority of this demand being from China (56%, or 2.8 billion tonnes). In comparison, estimated cement demand in Africa in 2016 was 240 million tonnes (4.8% of global demand), with South Africa accounting for 5.4% of that amount (13 million tonnes). However, according to AfriSam sales and marketing executive Richard Tomes, there is currently a massive oversupply of cement globally. Declining global cement demand has resulted in worsening capacity utilisation, lower EBITDA margins, and increased mergers and acquisitions (M&A) activity in the sector. Over the past five years, there has been notable M&A activity in China, India, Europe, Latin America and, to a lesser extent, in Africa. Tomes described the situation as being “pretty dire”, saying that there is a definite need for some form of consolidation in the market. AfriSam’s Ulco cement plant, situated about 80km outside of Kimberley, is one of the company’s two fully integrated South African cement plants. “Our on-site operations go right from the quarrying of limestone and shale through to raw materials preparation, manufacturing clinker, manufacturing cement, and then packing and dispatching to the customer,” explains cementitious executive Hannes Meyer. History AfriSam’s Ulco cement plant started operations in 1936 as the Union Lime Company, capitalising on massive high-quality limestone deposits in the area to produce high-quality industrial lime for the gold industry, and later on to the steel and ferrous industries. In the intervening 81 years, the plant has grown to become one of the company’s largest cement factories, and one of its two fully integrated plants located in South Africa. In addition to an increase of one million tonnes per year in production capacity — up to 1 250 000 tonnes from 250 000 when it first opened — the plant has undergone a number of capacity and efficiency upgrades. In 1949, 13 years after its establishment, the first two cement kilns were established, with a combined production capacity of 250 000 tpa. Both were wet process kilns, which are highly energy-intensive and inefficient in comparison to today’s technology. In 1964, two larger, more efficient kilns were built, increasing the plant’s capacity to 350 000 tpa. However, these kilns still made use of wet chemistry, which limited production capacity and resulted in significant energy consumption. Twenty years later, in 1984, the current kiln — Kiln 5, a pre-calciner dry process kiln — was built, QUARRY SA | NOVEMBER 2017 _ 15