a Saudi Cement Company

More documents

Recommendations

Info

January 2012 KMEFIC Research Equity Analysis Report One of the company's key strategies is to continually improve its information systems and to keep up with the rapid pace of development in the industry. As a result, the company contracted with a private consulting firm in 2010 to study and implement an integrated information system named “YES” with the goal of improving efficiency by reducing time and costs. The system will help the company organize various information as well as speed up the information sharing process between different departments. Industry: Overview & Outlook Cement Introduction The term "cement" most commonly refers to hydraulic cement. A fine grey powder made of a combination of calcined limestone and clay, cement is mixed with water and sand to make mortar or with water, sand, and aggregate to make concrete. The most common type of cement around the world is Portland cement and was first created by bricklayer Joseph Aspdin in 1824. Portland cement, the fundamental ingredient of concrete, is a closely monitored chemical combination of calcium, silicon, aluminum, iron, and small amounts of other ingredients. Gypsum, a very soft mineral composed of calcium sulfate dihydrate, is added in the final grinding process to regulate the setting time of the concrete. Uses of Cement The most common use for Portland cement is in the production of concrete. In its simplest form, concrete is a mixture of paste and aggregates (sand, gravel, and crushed stone). The paste, composed of Portland cement and water, coats the surface of the fine (sand) and coarse (gravel or crushed stone) aggregates. Through a chemical reaction called hydration, the paste hardens and gains strength to form the rock-like mass known as concrete. Concrete is composed of 6% air, 11% Portland cement, 41% gravel or crushed stone (coarse aggregate), 26% sand (fine aggregate), and 16% water. (Source: Portland Cement Association). Cement is of vital importance to the construction industry as it is the main ingredient in the production of concrete. Typically, concrete is the essential material used in all types of construction (residential housing, non-residential offices, roads, bridges, etc.), making cement the most significant input to the construction industry. In the long term, cement consumption has increased and will continue to increase due to the rise in construction brought on by population growth. Cement around the World According to the 9th edition of the Global Cement Report, global cement consumption grew 9.9% in 2010 to reach 3,294 million tons. There are about 149 cement producing nations with China and India crowning the top producers’ as well as the top consumers’ lists. Due to the large costs associated with transporting cement across nations, traded cement amounted for only 5% of the total cement produced worldwide in 2010. Lastly, Bangladesh was the largest importer of cement and Turkey was the largest exporter. Transportation & Costs Cement, being a bulk commodity, is freight intensive and transporting it over long distances can prove to be uneconomical. Every ton of cement manufactured involves the transportation of 1.6 tons of limestone, 0.25 tons of coal, 0.05 tons of gypsum, and 1 ton of the finished product. It is Yamama Saudi Cement Co. P a g e | 6
January 2012 KMEFIC Research Equity Analysis Report estimated that freight expenses account for about 18% of the total cost. This has resulted in cement being largely a regional play. Furthermore, the cement industry is power intensive and it is estimated that about 120 kWh of power is required to produce one ton of cement. Cement Manufacturing Process Put simply, cement is manufactured by combining a uniform blend of carefully proportioned raw materials (chalk and clay/shale) at a very high temperature (1400 °C) in a rotary kiln. The raw materials fuse together to form “clinker,” a hard granular material. Clinker is ground to a powder along with gypsum to make cement. By altering the chemistry of the raw material and selecting specific materials for grinding alongside the clinker and gypsum, different types of cement can be made with properties suited to their intended use. (Source: CEMEX) A more detailed & technical explanation of the cement manufacturing process is presented in the following figure. Quarry • Cement is made from raw materials containing four essential minerals: calcium, silicon, aluminum, and iron. The most common combination of raw materials is limestone (for calcium) coupled with much smaller quantities of clay and sand (as sources of silica, aluminum, and iron). • Limstone and clay are blasted from rock quarries by boring the rock and setting off explosives. • Rock blasted from the quarry is transported to the crushers, where it is reduced by crushing or pounding to chunks approzimately 1 1/ /2 inches in size. Prportioning , Blending & Grinding • The raw materials are analyzed in the labortory and blended in the proper proportion. • Plants grind the raw materials with heavy, wheel-type rollers that crush the materials into powder against a rotating table. The grinded material is now ready for the kiln or preheater, depending on plant type. Preheater Tower • The preheater tower supports a series of vertical cyclone chambers through which the raw materials pass on their way to the kiln. • To save engery, modern cement plants preheat the materials before they enter the kiln. Hot exit gases from the kiln heat the raw materials as they swirl in the cyclones. Kiln • Raw materials enter a huge rotating furnance called a kiln. It's the heart of the cement making process - a horizontally sloped steel cylinder, lined with firebrick, turning about one to three revolutions per minute. The kiln is the world's largest piece of moving industrial equipment. • Inside the kiln, temperatures of about 1500°C transform the raw materials into clinker: small, dark grey nodules that are about 3-4 cemtimeters in diameter. Clinker Cooling & Grinding • The clinker is cooled on a grate and is then ground in a ball mill - a horizontal steel tube filled with steel balls. As the tube rotates, the steel balls tubble and crush the clinker into super-fine powder known as Portland cement. • A small amount of gypsum is added during the final grinding to extend the cement's setting time. Bagging & Shipping • From the grinding mills, the cement is conveyed to silos where it awaits shipment. Most cement is shipped in bulk by trucks, rail, or bage. However, a small percentage of the cement is bagged for customers who need only small amounts or for special uses such as mortar. Source: Portland Cement Association (PCA) Yamama Saudi Cement Co. P a g e | 7
Page 1 and 2: KMEFIC Research Equity Analysis Rep
Page 3 and 4: January 2012 KMEFIC Research Equity
Page 5: January 2012 Business Profile Yamam
Page 15 and 16: January 2012 Valuation KMEFIC Resea
Page 17 and 18: January 2012 Appendices KMEFIC Rese

a Saudi Cement Company

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?