Liveblog: COVID-19 & the Cement Industry

Coronavirus Liveblog - 2020

This Coronavirus Liveblog will feature updates from WCA members across the world, detailing the impacts of COVID-19 on their businesses and the cement industry, as well as the wider construction sector.

Please check back regularly for new input. 

27th May 2020

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Planning a Safe Return to Work Post-COVID-19

(Update from Mark Doyle, IntSaf)

 All organisations have a duty to provide a safe workplace. When preparing to re-open for work after lock-down, please consider the following recommendations. Occupational Health & Safety risk management plans should consider: 
 
Allowing workers to work from home whenever possible; Protecting workers who are at higher-risk, for example those with pre-existing health conditions; Self-isolation for anyone exhibiting symptoms; Training all workers on the risks of COVID-19 and how to effectively reduce transmission; Maintaining 2m social distancing wherever possible, including travel to and from work; Controls to reduce transmission when social distancing is not possible; Reducing the number of people each person/team interacts with; Keeping the workplace clean.

You can read the full blog post here

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WCA Webinar: "Life after COVID-19" - Energy Efficiency & New Technologies

(Update from WCA)

WCA's latest webinar, in collaboration with Sinoma International's Tianjin Research Institute, attracted over 350 participants across both sessions. Mr Nie Wenhai, assistant director of the research institute, spoke on new milling technologies, whilst Ms Ma Jiaomei, senior engineer, presented her research on new pyro technologies, energy efficiency and reducing energy consumption. The presentations were followed by an engaged and lively Q&A session.

The webinar's highlights were also reported by CemNet - read the article here

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 14th May 2020

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WCA Webinar: "COVID-19 & the Cement Industry" - Co-processing Medical Waste

(Update from WCA)

On 13th and 14th May 2020, WCA hosted its third webinar on the topic of co-processing medical waste in cement kilns, in collaboration with the Asian Development Bank and Huaxin Cement China. Over 300 participants, representing the cement industry and its supply chain, NGOs, environmental organisations and consultancies, among others, attended the two sessions. 

Ian Riley, WCA CEO, opened the webinar, stating that "the disposal of infectious medical waste in cement kilns during the pandemic highlights one of the ways that the cement industry can contribute positively to society".

Steve Peters and Guo Dongmei presented from the Asian Development Bank, on the topic of "Managing Infectious Waste Medical Waste During the Pandemic: Opportunities for disposal of waste in cement kilns". After introducing the organisation, their mission, and the importance of safe disposal of medical waste, they discussed the opportunities for cement producers to coprocess such waste and its impacts on sustainabilty. 

Wang Jiajun, of Huaxin Cement, China, then followed this by presenting the procedures that Huaxin has undertaken during the pandemic to dispose of infectious waste in their kilns in Hubei and Yunnan provinces. He discussed the necessary preparations, staff training required, the receiving and co-processing process and the key challenges the company faces. 

An in-depth Q&A followed these presentations, with good engagment and discussions from the participants and panellists. 

We hope to see you at one of our upcoming webinars, the details of which you can view here

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7th May 2020

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Indonesia

(Update from Cemindo Gemilang)

We started the crisis with 5.6 % or 6.8 mio unemployment rate in Indonesia. The latest forecast from the government is that there are 2.9 Mio daily workers impacted in short periods, rising to 5.6 mio depending on the exit situation of this pandemic.The government officially announced the emergency situation on 4th March 2020 and have continued to take several actions. There is no strict lockdown but people are only moving between locations only for essentials (daily groceries, medicine and etc). Public facilities and grocery shops are allowed to open, while restaurants only receive online orders. The government released regulations allowing industry to operate 100%, especially the crucial industries such as the cement, construction and food industries. However, even for the crucial industries it is strongly recommended that we work from home and limit movement where possible.

Strategies we are using to protect our employees include:

  • Temperature check-up on entry to premises, hand sanitisers in many locations on our premises, declaration from all employees for having personal/relatives ill-health, regular disinfection in employee working space;
  • Working in shifts and working from home policy;
  • Shifting to digital meetings with costumers, we created procedures / tools and new kpi during the business situation for our distributors; 
  • Limited person entry to our premises.

Since Indonesia is an oversupply market, import is forbidden for cement and clinker. Since the global pandemic, the government will focus on internal spending to move the economy. The latest news from the Indonesian government is to reopen all business by early July. The focus of our government now is on the development of infrastructure, hence our projection is that the cement demand will start going up after July. Our estimation is that demand in semester 2 will only reach around 75-80% of last year, however our forecast of 2021's demand is that it will be much stronger than 2020.

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5th May 2020

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Southern and Eastern Africa

(Update from PPC South Africa)

Rwanda: CIMERWA is continuing to operate with limited staff and maintaining strict adherence to preventative measures against COVID-19 infection. In-country restrictions remain in place.
 
Zimbabwe: Following receipt of the requisite Government clearances, PPC Zimbabwe has continued to conduct limited operations at all its sites in the country. These are being conducted under strict adherence to preventative measures against infection.
 
Democratic Republic of the Congo (DRC): PPC Barnet is continuing to operate with limited staff on site.
 
Ethiopia: Lockdown measures have not been instituted and Habesha Cement is operating.
 
South Africa: The South African Government has defined COVID-19 risk according to 5 Levels – from extremely strict (Level 5) to low yet cautious (Level 1). From 01 May 2020, the country moves from Level 5 to Level 4. At Level 4, players in the cement industry are permitted to operate at 50% employment capacity under strict health conditions to avoid infections. PPC South Africa is commencing operations in accordance with these new Government regulations. This will be in addition to its previously ongoing limited operations, which have been supporting essential sectors.
 
Botswana: In Botswana, lockdown restrictions remain in place, and PPC Botswana is only providing limited cement supply to essential construction projects in accordance with Government directives. Furthermore, the Government-imposed 28-day lockdown has been extended by one week to 07 May 2020.

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4th May 2020

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West Africa

(Social Media post by CIMAT/CIMAF)

[Original text in French] To support the efforts of the Burkina Faso government in their fight against the coronavirus pandemic, CIMAF (Ciments d'Afrique) group have donated over 20million CFA ($34,000) to the Ministry of Health as well as supplies of sanitising gels (read the full story here).

The company has also made similar donations to health organisations in Ghana and Guinea.

CIMAF liveblog pic.png

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28th April 2020

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Iraq

(Update from Cement Producers Association of Iraq)

With regards to the impact of the Coronavirus pandemic's effects in Iraq, a total lockdown was imposed on 17th March, during which most cement factories were closed and there was no marketing of cement. This caused an increase in prices in some areas of the country. On 21st April, the lockdown was eased, with only a partial curfew from 7am - 6pm remaining in place. Since then, there has been good cement production and marketing. 

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27th April 2020

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Southern and Eastern Africa

(Update from PPC South Africa)

Rwanda: CIMERWA is continuing to operate with limited staff and maintaining strict adherence to preventative measures against COVID-19 infection. In-country restrictions remain in place.
 
Zimbabwe: On 19 April 2020, the Zimbabwean Government announced that the lockdown, which was meant to end the following day, would be extended by a further 14 days until 03 May 2020. The Government further authorised full operations to commence in the mining sector, and limited operations in the wider manufacturing sector (aside from essential and critical industries which were previously determined). PPC Zimbabwe has initiated limited operations at all sites.
 
Democratic Republic of the Congo (DRC): The province of Kinshasa is still under lockdown with restrictions on the movement of people, though goods are still moving. PPC Barnet is continuing to operate with limited staff on site.
 
Ethiopia: The situation in Ethiopia remains tense as the state of emergency continues. Social distancing measures, which are in effect throughout the country (including at construction sites), coupled with restrictions on travel and logistics are contributing to a slowing down of business and trade. Lockdown measures have not been instituted and Habesha Cement is operating.
 
South Africa: On 21 April 2020, the President of the Republic of South Africa announced several additional measures to support the economy, which has been struggling under lockdown. Critically, he announced that the Government would ease some lockdown restrictions to enable industries to re-start, which were then confirmed on 23 April 2020. In partnership with The Concrete Institute (the local industry body), PPC South Africa is engaging with the relevant authorities to conduct a phased re-start of its operations, in line with Government directives.
 
Botswana: In Botswana, lockdown restrictions remain in place, and PPC Botswana is still not operating.
 

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23rd April 2020

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Ian Riley as Guest Speaker on Global Cement Live 

(Update from the WCA)

On 23rd April, WCA CEO Ian Riley was invited as a guest speaker on Global Cement Live, a weekly update from the cement industry, featuring in-depth news updates on the impacts of COVID-19 and presentations from industry experts. Ian's presentation covered the Chinese cement industry, including competition and national goals. He described the trends in the industry from 2009-18, showing how production has remained flat but capacity has continued to increase. In 2018, China produced 1.42bn tonnes of cement, approximately 51% of the world's total, with over 2bn tonnes of capacity across 1681 NSP lines. He also discussed how government policies have been key to pricing levels and the environmental pressures the industry faces. 

Ian Pres Header

To watch the whole webinar, please click here (free registration required).

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21st April 2020

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China

(Update from China Cement Net & CUCC - Text by Zhou Cheng)

2020 marks the end of the 13th Five-Year Plan, however, the sudden outbreak of the coronavirus has greatly impacted China's economy, society and people’s lives. Difficulties and challenges thus have arisen, which have hampered the realisation of economic and social development targets.

To cushion the blow, central and local governments have made efforts to implement various policies and measures to stabilise investment. The National Development and Reform Commission pointed out that it will accelerate the construction of major projects and infrastructure that have been confirmed in the national plan, expand the scale of special bonds issued by local governments, and support the construction of infrastructure and public service projects that are to generate profits. According to China Cement Net, 25 provinces and cities by 10th March had announced their future investment plans, with a total investment of RMB 49.6 trillion for 22,000 projects. Among these, investment of RMB 7.6 trillion is planned for 2020.

CUCC chairman, Cui Xingtai says that a series of infrastructure investment policies to stabilise growth and safeguard the well-being of people introduced by the central and local governments will bring new development opportunities to the cement industry. On the one hand, new infrastructure investment will generate new cement demand. More importantly the next few years will still see larger positive influence since this may extend the cement demand plateau by 3-5 years. Furthermore, the industry boom and the extension of the cement plateau period provide a good economic foundation and relatively sufficient time for supply-side structural reform, transformation and upgrade of the industry. CUCC Plant for Blog

On the other hand, we also see that behind the opportunities, the cement industry also faces multiple risks. First, the short-term prosperity of the industry masks the fact that the task of transformation and upgrade is arduous, and blind optimism may delay the work of supply-side structural reform. Moreover, some investors will take advantage of policy loopholes to add new capacity and thus add new surplus.

Second, high profitability will tempt more and more enterprise to prioritise immediate interests and to circumvent off-peak production by various means. What is at stake is the industry’s self-discipline. Furthermore, due to the need for growth and less efforts to limit production for the sake of environmental protection, the cement capacity may be released to a large extent. As a result, the balance between supply and demand in recent years is to be broken, and a new round of vicious competition may be sparked.

Read the full blog update here.

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17th April 2020

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Southern and Eastern Africa

(Update from PPC South Africa)

Rwanda: Following negotiations with the Rwandan Government, CIMERWA was granted permission to begin limited operations and we started our kiln on 12 April 2020. Working under strict measures to ensure health and safety, we are supporting ongoing key construction projects and exporting to clients in neighbouring DRC. However, in-country retail activities are still restricted.
 
Zimbabwe: The Zimbabwean Government allowed selected construction projects to continue despite the national lockdown, and PPC Zimbabwe was given provision for limited operations in order to supply these projects with products. One of our milling plants is running and we are looking to start a kiln shortly. The lockdown is set to end on 20 April 2020.
 
Democratic Republic of the Congo (DRC): On 06 April 2020, the DRC Government imposed a 14-day lockdown on the Gombe area in Kinshasa, which houses several company and Government offices. PPC Barnet is operational, albeit with limited staff.
 
Ethiopia: In Ethiopia, we are continuing with sales whilst the plant is under care and maintenance.
 
South Africa: The 21-day national lockdown in South Africa was extended by a further 2 weeks and will now continue until 30 April 2020.
 
Botswana: On 09 April 2020, the Botswana Parliament passed a motion extending the already declared state of emergency to 6 months. This paved the way for further lockdown restrictions within that 6-month window.

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16th April 2020

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WCA Webinar: The Impact of COVID-19 on the Global Cement Industry

(Update from WCA)

The COVID-19 outbreak poses an enormous challenge to global economies on an unprecedented scale and of profound complexity. To this effect, WCA hosted a Webinar on the impacts of COVID-19 on the world cement industry, the first in English, on 8th April, and the second, in Chinese on 10th April.

Over 700 participants representing cement producers, equipment manufacturers, regional cement associations and cement-related organisations attended across the two webinars, listening to in-depth research on the global situation by Arnaud Pinatel and Yassine Touahri of OnField Investment Research, followed by an informative talk on the situation in China by Mr Ma Weiping, CEO of West China Cement. In the Chinese webinar, Song Zhiping, WCA president and Cui Xingtai, WCA Joint Chairman and Chairman of China United Cement Corporation, also shared their views on the current situation and the future of the industry post-COVID-19. Both webinars were rounded off with a Q&A.

The webinar created an opportunity for cement companies and associated organisations to partake in in-depth discussions on the information, risks and opportunities for the global cement industry brought about by COVID-19. WCA will continue to act as a platform for contributing to the development of the world cement industry through knowledge exchange and sharing of practices and experiences.

WCA looks forward to hosting further webinars on topics relevant to both COVID-19 and preparing for the future after the pandemic is brought under control.

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15th April 2020

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China

(Update from China Cement Net and BBMG - Text by Zhou Cheng)

The first quarter of 2020 was unusual due to the sudden outbreak of Covid-19. The epidemic has had a huge impact on the national economy, the development of the industry and people's lives. In light of these events, China Cement Net asks, how will Covid-19 affect the cement industry? What will be the future trends? They interviewed Mr. Jiang Deyi, the chairman of BBMG Group Co. Detailed exchanges were conducted on the prevention and control of Covid-19 and the future development trend of the cement industry. 

The outbreak of Covid-19 has brought most of the national infrastructure investment projects to a standstill, disrupted the normal pace of economic operation, and affected various sectors, including the cement industry. Asked of the impact of Covid-19 on BBMG cement plants, Mr. Jiang said “90% of BBMG’s cement production capacity is located in northern China. When the outbreak occurred, northeast China was in the off-peak production season, thus had only a small impact on the cement industry. Normally in North China, some cement production lines still continue to operate since they are needed to co-process wastes, and even in wintertime, there is still demand in the region during the winter season.” However, this year's situation is different. The epidemic caused the cement demand to almost stagnate, especially in January and February, which led to a decline in BBMG's cement sector revenue. 

Jiang Deyi believes that due to the epidemic, the downstream market of the cement industry will start later in 2020 than in 2019. Currently, the downstream demand in Northern China has recovered to 60%. Due to differences in weather and geographical conditions in various provinces and cities, and different levels of epidemic prevention and control, COVID-19 has had a great impact on the return of labour and logistics. The pace of work resumption is different in different regions. It is not clear when normal production and living will fully restore nationwide. Due to the traditional off-season factors in the first quarter, and the delayed market demand because of the virus outbreak, the cement enterprises’ storage is relatively high. Based on this, Jiang Deyi emphasised that cement demand will recover gradually, and that enterprises should not panic and destroy market order with abnormally low prices.

This year is an important year for implementing the 13th Five-Year Plan, and also a decisive year for poverty alleviation. The unexpected outbreak of COVID-19 added to the already difficult task of meeting the target on time. Recently, China’s central and local governments issued a series of infrastructure investment policies to stabilise growth and protect people's livelihood. The policies will stabilise basic economic operation, minimise the impact of the epidemic on economic and social development, and will create new development opportunities for the cement industry. Jiang Deyi believes that cement, sand, concrete and other building materials industry will benefit from the economic recovery with China’s increase in infrastructure investment. "With the continuous implementation of infrastructure projects, the possibility of substantial increase in cement demand is very high," he said. In conversation between China Cement Net and other industry experts, most said that this year's cement market demand will be low at first but high later. Jiang Deyi agreed with this and pointed out that throughout 2019, the cement industry's overall profitability hit a record high, despite enterprises in certain regions operating in the red. If the overall market order remains stable in 2020 and there is no large-scale malicious competition, the cement market will be even better than 2019.

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14th April 2020

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Indonesia

(Update from Cemindo Gemilang)

For Indonesia, the situation hasn’t been so good. As of the 10th April, The Governor of Jakarta implemented a semi-lockdown and limited activities around Jakarta. The number of people suffering from Covid-19 has been increasing drastically and the mortality rate in Indonesia is one of the highest.

With regards to the cement industry, our national Association is predicting a 40-50% slow down, as not many activities are happening. The government are relocating some of the Infrastructure Budget to healthcare.

For 2020 Q1, Indonesian cement plant utilisation has been dropping to 61%, when quarterly installed capacity is at 27 million tons and utilisation is only at 16.5 million tons. 

We are hoping for this pandemic situation to end soon.

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7th April 2020

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Kenya

(Update from Savannah Cement)

The 1st case of Covid-19 in Kenya was reported on 13th March. Two weeks ago, international passenger flights were suspended for two weeks and all those who came in 3 days before the suspension (notice period) were quarantined for a mandatory 14 days. The thousands who were quarantined underwent testing for the disease and the exercise was completed this weekend. Due to the big number tested, our numbers have increased significantly to 142 as of today.

10 days ago, a 7pm to 5am curfew was ordered. All social places i.e. bars and restaurants were also closed.

This has had a significant impact on the cement industry in the country. From the onset, we at Savannah released 30-35% employees to work from home or alternate coming to the office. We also scaled down operations to match the reduced demand.

Many construction sites have closed or significantly scaled down their operations. This has led to demand nose diving and several casual workers who previously worked in construction sites being rendered jobless. Public transport vehicles which most of our employees use to and from work are only allowed to carry 50% capacity to enhance social distancing. Fares have subsequently shot up.

Overall, most industry players are still operating, the majority with reduced shifts to keep customers going. I am only aware of one player who closed operations three weeks ago. Total industry sales are approximately 50% of the expected sales.

Due to the economic slowdown, the government has suspended new projects and payment for “non essential services”. It has been estimated that the economy will grow at negative 2%. We are not certain how the situation will unfold. We could have a 2 to 3-week lockdown. 

On a more positive note, the government came up with interventions to ease pressure on businesses. These include the reduction of some taxes e.g. VAT from 16 to 14% and waiver of PAYE for lower cadre employees. Banks are also restructuring corporate loans.

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6th April 2020

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Southern and Eastern Africa

(Update from PPC South Africa)

PPC Africa operates in 6 countries, supplying quality products to several markets across the continent. Undoubtedly, the COVID-19 pandemic and consequent Government directives have affected our business.
 
Rwanda: The first confirmed case was on 14 March 2020. The Government of Rwanda imposed a national lockdown which began on 21 March, for an initial 2-week period. This period has since been extended by a further 2 weeks to 19 April. Only essential services are operational, such as supply of utilities and food. All employees were directed to work from home. Our cement factory was, accordingly, shut down.
 
Zimbabwe: First confirmed case was on 20 March 2020. The Zimbabwe Government imposed a lockdown on 30 March for an initial period of 21 days, allowing essential services to continue. Our cement factories were shut down and employees are working from home. However, we have applied for special consideration to be allowed to conduct limited operations to support specific construction projects of which the Government has permitted to proceed.
 
South Africa: First confirmed case was on 05 March 2020. South Africa’s Government declared a state of disaster on 15 March, closing several borders and imposing travel restrictions. Subsequently, the Government imposed a lockdown on 26 March for an initial period of 21 days, whilst allowing only essential services to continue. Our factories were shut down and employees are working from home. However, we have applied for special consideration to be allowed limited operations at one of our factories producing lime, as it supports essential services such as water distribution.

Democratic Republic of the Congo (DRC): DRC confirmed its first case on 10 March 2020. The Government imposed a 48 hour limited area lockdown in the Haut Katanga region on 22 March. A restriction on movement into and out of Kinshasa city was imposed on 24 March. A total lockdown of Kinshasa was supposed to start on 28 March but has since been postponed indefinitely. Nevertheless, our cement factory is open, though with limited dispatches and employees taking leave on a rotational basis.
 
Ethiopia: First confirmed case was on 13 March 2020. On 23 March, land borders were closed followed by a regional 15 day state of emergency in Tigray region. Nonetheless, the country has remained open for business and so has our factory for the time being.
 
Botswana: The first cases were confirmed on 30 March 2020. The Government declared a 28 day state of emergency from 02 April, which is likely to be extended in terms of duration. Movement is restricted, save for essential services. Our factory is shut down and almost all our employees are working from home, save for a few for whom we are seeking permits for them to conduct care and maintenance activities.

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2nd April 2020

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Denmark/Poland

(Social Media post from FLSmidth)

One of WCA's Associate Corporate Members, Danish engineering firm FLSmidth has been helping the local community in Elblag, Poland, to produce face shields needed to protect medical staff from the virus as they treat their patients.

 flsdmidth masks

Read the whole story here.

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30th March 2020

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South Korea

(Update from the Korea Cement Association)

How it is affecting KCA and other member companies: Due to the COVID-19 outbreak which occurred in South Korea in January, domestic cement companies and associations are having great difficulty in promoting industrial activities. As a result of the strong contagiousness of COVID-19, each company is undergoing two weeks of self-isolation of their employees who have overlapped with the main corona outbreak location, and is conducting remote working and telecommunications practices for employees to prevent the spread of COVID-19 in the cement industry. So far, there have been no confirmed cases of COVID-19 within the industry associations and member companies due to these efforts.

How it is affecting production and sales of cement: In the construction industry, the repatriation of overseas workers, postponement of new work and suspension of ongoing construction work is occurring, while disinfection procedures and temperature inspections of workers are being carried out at construction sites, and completion of buildings and infrastructure construction are being delayed. In addition to the existing sluggish construction investment, cement demand decreased by about 8~10% YoY as of the first quarter of 2020.

How it is affecting construction of infrastructure: The cement industry has high volatility in demand depending on the construction market and the real estate market. Recently, the Korean cement industry has been in decline due to sluggish construction investments that began in 2018. The government first allocated an additional budget (USD $9.6 billion) to overcome the domestic economic crisis caused by COVID-19. The KCA requested that the government allocate an additional budget into the public SOC project, which has a large economic ripple effect, and expects that the demand for cement will increase due to the expansion of the construction and infrastructure sector.

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Israel

(Update from Har Tuv Cement)

The state of Israel has declared an emergency and therefore the cement industry is working in a limited format. We are happy to have a healthy factory team. The cement factory is defined as an essential service that allows us to continue working. For the sake of continuity in production, we decided to put some staff on mandatory vacation, so if one of the employees gets infected with the virus, they will be replaced by a healthy employee until they are recovered.

In the last week sales have dropped and we are adjusting production and working in a limited format. We hope that reality will change and we will return to full activity soon.

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Spain

(Update from Universal Commodity Trade S.L.) 

As to how this coronavirus is affecting my business, I would answer "A lot". Lots of buyers are cancelling orders, as their own activity is impacted by the pandemic. Several contracts will be either cancelled or postponed and will probably oblige some exporters to either build up inventory or simply shut down kilns. Thankfully, we are not there yet, however this could occur in just a matter of weeks, depending upon the outcome of this pandemic. Some shipments are being held up at discharging ports as some crew members might be infected by COVID-19 and vessels are placed under quarantine. So charterers try to claim Force Majeure and shipowners now exclude COVID-19 from Force Majeure clause.

Consultancy jobs are also directly impacted because everybody is just standing by and any investment decision has been put on hold. We shall see the situation by mid of next month. 

The main issue now for all countries is how to make sure everybody gets paid by end of this month to make a living. The majority of people have very little or no savings, and live on their daily/weekly wage or monthly salary for small and medium size companies. The very bad thing of this pandemic is that it is impacting directly the real economy unlike for the financial crisis of 2008. Let's hope for the best.