Andy Burnham has set out his mission to “back British industry”, bringing “growth in every postcode”. For cement makers, this should herald a golden age.
Cement is a foundational industry, the product needed for infrastructure, including housing, roads, schools and hospitals.
But industry leaders say high energy prices, carbon policy, imports and planning delays are tying their hands.
Craig Williamson, commercial director at Cemex, warned: “It’s a very challenging time at the moment for the cement industry. We need more than just words. We need firm policies and action.”
A source with knowledge of the wider industry is blunter: “If the sector is not quite at crisis point yet, it’s well on the way to the cliff edge.”
Cemex is one of the largest cement producers on the planet. Its huge West Midlands facility operates 365 days a year.
It boasts the largest cement kiln in the country and has helped build airports, motorways and football stadiums.
But Britain’s industrial power, with carbon charges affecting the wholesale price, is among the most expensive in the developed world.
Cemex is one of the largest cement producers on the planet – producing product 365 days a year
|
PA
For Cemex, this means a bill of more than £1million a month, just to run the mammoth machinery.
Carbon charges, linked to the amount of CO2 it releases, see the price ticking up.
The chemical process of producing cement releases carbon before energy is even factored in.
Many rivals abroad do not face these costs. Little wonder it can be cheaper to manufacture overseas – with huge transportation costs and often with lower climate standards.
“We are seeing a growth of imports into the country,” says Mr Williamson.
Craig Williamson, commercial director at Cemex, told GB News: ‘We need more than just words. We need firm policies and action’
|
GB NEWS
“Imports, since about 2010, have tripled, so 32 per cent of cement sold in the UK today is not produced in the UK and is shipped from overseas.
“We have green taxes around decarbonisation that countries outside of Europe don’t face. We have some of the highest electricity prices in the world.
“We take decarbonisation very seriously. But we are calling for a level playing field.
“We have to be treated by policy-makers fairly, to allow us to compete with international traders that possibly operate to lower environmental standards and who certainly don’t have the level of energy and carbon taxes that we face here in the UK.”
These problems aren’t unique to Cemex.
Cemex sees a bill of more than £1million a month, just to run the mammoth machinery
|
GB NEWS
All energy-intensive industries face rising costs – Ineos’s Sir Jim Ratcliffe mothballed three plants this week because of gas prices.
But a sluggish economy has also hit demand. Without a fully firing aggregates sector, warns Mr Williamson, Mr Burnham’s grand designs may be stuck on the drawing board.
“This country is not building enough infrastructure – we have a shortage of housing, we need new schools, hospitals, prisons,” Mr Williamson says.
“If we don’t protect the UK cement industry, we lose one of our critical national infrastructure components, and we will not be able to build the infrastructure that this country needs, whether that be housing, schools, defence, bases for our armed forces or nuclear power stations.
“Cement goes into every modern sector of society and without that, we won’t be able to meet these commitments for the future.”
He reminds ministers that Cemex is an international company.
Headquartered in Mexico, it operates across more than 50 countries around the world – and each one is clamouring for investment.
It remains committed to the UK, says Mr Williamson. But there is no room for sentiment in international finance.
Without a fully firing aggregates sector, Andy Burnham’s grand designs may be stuck on the drawing board
|
GB NEWS
“There has been cement produced here for 160 years and I hope there is cement produced here for the next 160 years.
“But the reality is we are part of an international business that needs returns on investment and we are in competition for global investment from our parent company.
“They are looking for certainty from our policy-makers that there’s a sustainable long-term future in the UK.
“We are not asking for special treatment – we are just asking for the British Government to back the cement industry and to give us some clear policy decision-making.
“This will allow us to continue to make the huge investments that a facility like this needs to carry on generating the employment and value for the local community for years to come.”
Plenty has been spent on the site. It is cutting-edge, says Mary-Ann MacInnes as she shows us around the control centre.
A planned new mill for the plant, which would have lowered carbon emissions, was postponed after delays for approval
|
GB NEWS
She is in charge of health and safety at the plant, and her near 30 years in the business have touched on every aspect of manufacturing.
“It operates 24 hours a day, 7 days a week, 365 days a year,” she explains, pointing to an array of monitors. “We monitor temperatures and pressures – it’s quite an intense job to keep the system going.”
Behind her, a huge robotic arm swings to take a sample from the kiln.
Cement, she explains, is a complex and expensive business.
“When you pick up a bag of cement, it looks really simple. It’s a grey powder that you mix up,” she said.
“But the technology and skills that goes into making a bag is incredible. The chemistry is incredibly comprehensive and if you get it slightly wrong, strength changes.
“We need mechanical and electrical skills. We also have innovation where we use robots to carry out some of the work.
“It takes a lot of time, money and energy. People, as well – to develop their skills and keep them current with what’s going on. It’s not something you can build overnight.”
The rotating kiln at the plant reaches temperatures in excess of 1,000C
|
GB NEWS
More than 300 feet above the control room, Stephen Redwood, land development director for Europe, surveys the facility and the town beyond.
He points out the concrete, which is everywhere. Without its key binding ingredient of cement, he says, our modern world would look very different. He wishes its role was better understood.
“Making the link between a quarry, a cement plant like this and the society that we live in is something that people need to work on and the politicians need to help us with,” he explains. “We all use these products, and if you want to live in the society that we live in, you need these products.”
Mr Redwood’s job is wide-ranging, stretching from quarries to site development. It is also getting more difficult.
He points to a silo far below – the final destination for a 57-mile pipeline that pumps up chalk from a Bedfordshire quarry.
It’s perfect for cement, and the novel delivery method saves a fleet of HGVs from making daily trips up the M1. But it wouldn’t be so straightforward now, he believes.
“It is an amazing operation. It allows us to produce the chalk to keep this plant going. It allows us to continue operations here. “But I think to try and do that today would be extremely difficult. It’s something we are very grateful for.”
‘We really would like to see less regulation, because otherwise, we could never build another factory like this in the UK,’ says Stephen Redwood
|
GB NEWS
Modern planning rules and regulations have been tightened so much it can be hard to get things through, he said.
A planned new mill for the plant, which would have lowered carbon emissions, was postponed after delays for approval.
“I’ve been in the industry for many, many decades,” he says. “The planning system is very slow, and the delays that are caused by all that regulation mean that investment is very difficult.
“We really would like to see less regulation, because otherwise, we could never build another factory like this in the UK.”
Trade body, the Minerals Product Association, has been working hard to get ministers to listen.
In one of his first acts as new chief executive, Paul Adeleke wrote to the Chancellor to warn that production was at 1950s levels.
Plants were mothballed and skilled workers laid off, he said, warning John Healey: “There is currently zero confidence to invest in people, sites or equipment for the future. This has to change.”
When he joined GB News at the plant, he was still waiting for a reply.
Paul Adeleke wrote to the Chancellor to warn that production was at 1950s levels
|
GB NEWS
“We are at a 75-year low,” he tells us. “There are two reasons for that – one is imports. The other is just a lack of demand – we are just not building the things that we need.”
Explaining the increase in imports, he said: “There are extra burdens on UK cement production, by way of heavy taxes but also by way of additional carbon taxes. “We are not asking for bailouts, we are not asking for special subsidies, just a level playing field, so the UK industry can be best supported and help build things that the UK needs.”
A thriving cement sector would lead to a thriving economy, he says. But Britain needs to start building.
He warns: “The big, big numbers that do cause us concern are the lack of demand and the lack of growth.
“For four years on the bounce we have seen huge reductions in concrete, in sand and gravel, in mortar, all of these things are needed for house building and for infrastructure.
“We are just not building enough. Growth is anaemic at best, so four years of decline across the sector.
“If the Government wants to have any chance of achieving its housing targets, or delivering on the infrastructure that we need as an economy and a country we need a buoyant aggregates sector here in the UK.”
Mr Adeleke explains: ‘There are two reasons for that [the low production levels] – one is imports. The other is just a lack of demand – we are just not building the things that we need’
|
GB NEWS
Corin Crane, chief executive of the Coventry & Warwickshire Chamber of Commerce, pauses by an immaculate memorial garden.
It is here to remember workers who have lost their lives in more than a century of production.
Skyscrapers and data centres may get the headlines, he says. But look after plants like Rugby, and the economy will follow.
“You look at things like aggregates and cement being the unsexy side of growth,” says Mr Crane.
“Often, when you talk about growth in local areas, you see big pictures of city centres or digital businesses.
“But actually, this is what growth is all about.
“There is not one single industry in this country that doesn’t depend upon cement within it.
“Generations of families will have worked here. Their children will have worked here. Their mortgages will have been paid through this company.
“We want it to be successful and grow, and anything we can do to support that is great for us.
“It’s a great British industry, isn’t it? Some people look at the West Midlands and areas like ours and they talk about manufacturing in the past tense. But it’s definitely our future.”
A Government spokesman said that Cemex, like other energy intensive industries, was in its Supercharger scheme, aimed at helping manufacturers.
This gives an exemption to green levies on the electricity bill, reducing it significantly, although it does not reduce the wholesale energy portion on bills.
It said that its Carbon Border Adjustment Mechanism, or CBAM, which is coming into force in the New Year, would impose a carbon levy on imports.
This is intended to create a more level playing field between the UK and countries with laxer carbon charges.
They added: “We recognise the cement sector faces challenges which is why our Supercharger scheme is cutting electricity costs for hundreds of our most electricity-intensive businesses, including Cemex.
“The Carbon Border Adjustment Mechanism will help level the playing field by ensuring carbon-intensive imports do not have an unfair advantage over goods made by British manufacturers.”