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December 2008 (Robert McCaffrey)

One of the best things about the AUCBM conference in Cairo was that it gave me a chance to talk to a wide variety of industry experts on not just technical matters but also on how the industry is shaping up going into 2009. The news is not entirely comforting. What follows is my own view on what will happen, coloured or informed by views from around the world.
The big cement companies are in trouble. Once they start issuing denials that they are in trouble, you know that things are not going well for them (denials usually come after someone has looked very carefully through their books and found out something worrying). They borrowed billions when money was cheap, to finance their takeovers. In several cases, their takeovers now look like terrible deals, bought at the most expensive part of the cycle, and whose markets are now suffering from huge demand collapses. The multinationals are now saddled with huge debts, which are becoming more expensive to service (in both real and relative terms). Ordinarily they would have the option to refinance the debts (either at a lower interest rate or with a later maturity date), but the credit markets are just not interested: banks are presently fighting for their own survival. A limited number of options are open to the industry behemoths – sell off equity (to those with oil money or to sovereign wealth funds, but no longer to the battered hedge fund industry or to suffering pension funds); sell off some of the family jewels or non-core assets (but at fire-sale prices), or undertake some mega-mergers at zero net cost, and then cut, Cut, CUT. The other major option for the cement producers is to reduce their costs (production costs, capex costs, manpower costs, overheads etc). We have already seen and heard about plant closures that we had previously thought unthinkable – big, previously profitable plants that have had tens of millions of Euros spent on them over the last decade, closed practically overnight. Already, and in the future, cement companies are looking at every possible way of spending less money. Without doubt, we will see all options explored over the next year or two.
As outlined in the review of Arnaud Pinatel’s paper at the AUCBM (page 55), the world is set to suffer a major downturn, but some regions will be worse than others. From conversations with shippers and traders, it seems that the Middle East will largely be okay, bolstered as it is with oil money, with the exception of Egypt and Turkey, which are both looking at major surpluses. The situation in Spain is ‘particularly bad’ and it is apparent that a ‘wave’ of Chinese cement is coming our way (I have never believed that the Chinese consume as much as they say they do, or that their economy is as robust as it had appeared: now with a downturn, it seems that what goes up can quickly come back down again).
The word from many equipment suppliers is that postponements and cancellations of new projects and contracts are rife. In Russia, contractors have been told to ‘drop everything – spend nothing.’ A list of postponed Indian projects makes for sober reading. Chinese orders once kept European factories on overtime: soon they will be wondering where the orders went. ‘Big ticket’ items, new mills, pyro-system upgrades, even whole new plants; many will be postponed or cancelled. Equipment suppliers will be existing on their order backlogs for the next year or two – and in the meantime we can expect to see more competition on equipment prices (to the possible detriment of Chinese suppliers). The one bright spot for the equipment suppliers is expertise in and the production of anything that can decrease costs – especially through the use of alternative fuels. Despite imminent falls in the cost of energy, every cement producer has seen the light – cut energy costs and use more alternative fuels. Maintenance of course is unavoidable, but even this will fall in line with production cuts – and competition for the remaining maintenance work will intensify, with obvious pricing and margin implications for maintenance and spare parts suppliers.
Of course, increased cement prices would be the panacea for all the industry’s problems. However, prices are not going to go up in the near future. There is too much capacity chasing too little demand. In the past we have seen two scenarios: cartels and price wars. All European producers know that forming a cartel will lead (maybe in a year, maybe in a decade, but sometime, for sure) to a fine of up to 10% of annual turnover for the period of the operation of the cartel. Since this is almost certainly equal to all profit for the period in question, it is without doubt not worth undertaking any cartel activity. The other side of the coin, price wars, seems already to be in operation in various markets. Unfortunately, an agreement not to undertake a price war is by definition an anti-competitive agreement. Everyone should just calm down (easier said than done).
One big question is how long this turmoil is going to last. If it lasts only three months, then it is no problem; at six months it’s a small problem; if it lasts over a year it’s a problem and if it’s over two years it’s going to be a big problem for a lot of people.
We are looking then at a period of instability and possibly radical change in the industry. We are likely to see rationalisation in a number of areas in the industry; among the cement producers, among equipment producers and among the service providers (consultants, contractors and others). Looking at the equipment providers, their marketing efforts, including advertising, may ameliorate the effects of the downturn and shorten the crunch for them. Interesting times!

November 2008 (Robert McCaffrey)

Now we know, finally, the outcome of the American presidential election, we can start to look forward to the changes that Barack Obama has promised (although election promises are hardly worth the paper they are written upon). However, whatever promises have been made up to now will be like ashes in the wind when the harsh realities of the new global (and particularly American) economic outlook come into focus.
Even prior to the Credit Crunch, the US budget deficit was set to top US$482bn – several hundred billion dollars of which has been spent on the war in Iraq. The slumping economy – and huge falls in stock markets and dividends – is set to eat into government tax income, while the out-going Bush administration managed to give away some US$150bn in tax rebates while trying (some would say to no avail) to fend off a recession. As Rahm Emanuel, the No 3 Democratic leader in the House of Representatives, commented of Mr Bush, “Mr President, we will be forever in your debt.”
On the morning after the election, president-elect Obama will be waking up to an almighty hangover. Not only was more money spent than by any other candidates in history (McCain spent over US$400m, Obama more like US$650m: ridiculous and obscene amounts), but the incoming president will be looking out onto a financial wasteland. The big American and international banks that have been driving the bust-free economy for the last dozen years are cowed and feeble shadows of their former selves. The free-spending consumers who have provided the insatiable demand for products (including cement for new houses, renovations and new factories and offices), have banked their tax rebates and are reigning in their more frivolous expenditure. Who would build a house, after all, when there are a million unsold units out there, and when you have completed your house, its value continues to sink until you crystalise your losses when you sell it. It’s a very brave person or company that embarks on a cement-intensive house-building programme at a time like this.
However, the (US) government might yet do it. For example, in the UK Gordon Brown has promised to fast-track government-financed infrastructure projects, including the UK£17bn CrossRail project, and other ‘big-ticket’ cement-intensive projects in order to boost the economy (the cement producers must be heaving a huge sigh of relief). It is relatively easy for Gordon to do this, since he is officially a socialist, and it is therefore part of his political make-up to tax and spend. Questions are starting to be asked about where the money will come from, but in times like these, no-one seems particularly concerned (of which more, later).
In the US, we could yet see a new New Deal. President Frankin D Roosevelt set up a series of programmes through the 1930s that looked in many ways like socialism (government-financed infrastructure projects, central planning, federal control of banks and financial institutions) which came to be called the New Deal. Economists have argued ever since about whether the programmes helped or hindered the economic recovery from the Great Depression (when unemployment went from 4% to 25% from 1929 to 1932), but as I mentioned in last month’s issue, it is extremely difficult, when you are elected to do something, to do nothing.
My guess is that we may yet see something of the same ilk from president Obama. Of course it won’t be called ‘socialism’ – that concept is dangerously close to communism in the American political lexicon – but if it acts like socialism, and costs like socialism (and spends like socialism)...need I say more? America’s crumbling infrastructure could be a worthy recipient of a TEA-21-like bill that pours billions (or more likely hundreds of billions, with a dose of pork added for good measure) into roads and bridges. Federally-funded make-work programmes could yet spring up (maybe to demolish all those sub-prime-bought houses that are now surplus to requirements), to undertake all sorts of good works, perhaps including renovations to schools, hospitals and military bases.
All of this is going to cost, of course, but somehow, the economy (or more pertinently the perception of the economy) must be turned round, supertanker-like, and steered away from the rocks. It’s going to cost many billions to do it – maybe past a trillion. All that money is going to have to come from somewhere and – you guessed it – it’s likely to come from Joe Sixpack’s wages via increased taxes for the next decade or so (that’s quite a hangover for a decade of partying). The cement companies may be among the early beneficiaries of any new New Deal. The new president Obama is probably going to have to be a socialist whether he wants to be one or not – and one who gets the country deeper into debt before it gets better.

October 2008 (Robert McCaffrey)

Bizarrely, the current economic dark clouds could have a silver lining for the cement industry and for other construction industries. It seems incredible that I - ‘the Doomsayer’ as some would have it - should be saying this, but let’s have a look to see why.
As we now know, the sub-prime mortgage disaster in the US was just the catalyst for the current credit crunch. Banks then decided that they would not lend to each other, since they did not trust each other to still be in business when the loans were due to be paid back, and with good reason in some cases. The most outrageous occurrence of all happened last week – money put into Icelandic banks has just ‘disappeared.’ It turns out that the Icelandic banks took savers’ money, and then, when they went bust, the Icelandic savings guarantee scheme was not able to pay back the money. That’s pretty bad. So it’s no wonder that the banks have not been in the mood to trust each other.
The problem has been that, as global stockmarkets have contracted in the face of a global (real economy) recession, the banks have been hammered the most. With these toxic loans still on their books, default rates climbing, and their businesses contracting (and the business model collapsing in some cases, where they have been too dependent on wholesale money markets for their finance), the banks have been left with massive liabilities and reducing assets. Where assets are less than liabilities, they would be bust, but of course they are too large to be allowed to fail (apart from Lehman Brothers, which seems to have been allowed to go bust ‘pour encourager les autres’). Governments worldwide have been making large loans available to the banks to try to get money markets going again, to no avail – the banks have just been sitting on the money. So now, the governments have decided that they can do a better job themselves, and have decided to buy up big stakes in the banks. Personally, I think that it’s a great bet – they are buying at a low price, and they should be able to sell in a few years time when the banks’ share prices are much higher. Governments will also now be able to direct the banks into more public-spirited lending, and can curtail the disgusting bonus structures that have caught the piggies with their noses in the trough.
I know that many on the right of the political spectrum have felt that the whole thing smacks of Socialism. Well, they are completely correct. What we are seeing is nothing less that the humiliation and discrediting of Capitalism. As Lenin said, ‘The capitalists will sell us the rope we use to hang them.’
Another interesting effect of the Credit Crunch has been the contagion from purely financial companies to the real world (affecting, on the way, some companies that are quasi-financial/quasi-real world in particular). Any company that has unwisely hedged its currency dealings (and the multinationals all have to do it - or be burned when the Dollar/Euro/£/¥ exchange rate fluctuates) will be out of pocket. Some companies have even been so bold as to become involved in the field of derivatives, which Warren Buffett, the reknowned ‘Sage of Omaha’ has dubbed ‘weapons of financial mass destruction.’ It will only be when all positions are unwound, and the dust finally settles after the crisis is over, that we know whether these WfMD were real or not.
Where will it all end? Well, we have had a few pointers already. The UK has essentially nationalised a number of banks, and the US now seems likely to do the same. The EuroZone is set to spend well over Euro1
trillion to do the same, and one has to ask if some of the Asian banks might be forced along the same course of action. These measures are similar to those undertaken by the Swedish government in the early 1990s. This seems to have steadied a few nerves already. But after the banks have been bought up, then what happens?
Well, if the Japanese response to its ‘lost decade’ of stagflation and financial crisis and the American response to the Great Depression are anything to go by, we shall soon start to see governments start to spend very large sums on (cement-intensive) infrastructure projects, including canals, roads, bridges, hospitals, schools, houses and so on. This is because in the coming global recession unemployment is set to skyrocket, and governments will be desperate to get workers back to work, and industry back into gear. When private companies don’t have the confidence to invest, government will be obliged to step in and take the lead. Of course, they’ll be using our tax revenues to pay for it all, and it ‘smells’ more and more like Socialism, but, when we are staring into a hole, what are the options?

September 2008 (Nino Mancino)

It was only a few weeks ago that Beijing said goodbye to the Olympic Games, the world’s great sporting jamboree, but I’m already missing it. China’s capital offered us a spectacular games, packed full of drama, sporting greatness, plus the remarkable sight of Great Britain coming fourth in the medals table with a mighty 19 gold medals. From a personal point of view it was about time we punched our weight in terms of sport. And without wanting to ‘name’ any particular countries, it was extremely satisfying to finish above certain nations that have for too long finished above us. You know who you are!
So now, as Beijing 2008 recedes into memory, attention now turns to the next host city: London in 2012. What kind of games will London produce? Can it match the grandeur and spectacle of its predecessor? According to Lord Sebastian Coe, chair of the London 2012 Organising Committee Board, (LOCOG), Beijing will be the last
Olympics of its kind; it was an awe-inspiring spectacle but also mightily expensive. Such expense is not sustainable.
If Lord Coe is right – and the noises coming out of the IOC seem to back him up – then London will be smaller, less extravagant but hopefully a more fun, exuberant and open affair. As awesome as the Birds Nest stadium is, don’t expect the same thing in 2012. The keystone upon which London’s successful bid was built was legacy. An important legacy that the organisers hope will come to fruition is the re-awakening of the importance of sport in the consciousness of the British public, especially its youth. No doubt the success of Team GB in Beijing will have helped this cause already.
The other main legacy item for London 2012 is the overdue transformation of Stratford, the site of the
Olympic Park in the east end of London. The regeneration project will create numerous job opportunities, affordable housing, leisure facilities plus a new sense of pride.
It goes without saying (but it’s my job to say it anyway) that all this building and regeneration brings great opportunities for cement and construction firms. Consider for a moment the scale of the project: The Olympic Park will be the site of the major venues, including the main Olympic Stadium, the Aquatics Centre, the Velodrome and BMX circuit, plus arenas for fencing, hockey, handball and basketball and an international broadcast and media centre. The Park will also contain the Olympic Village that will accommodate 17,000 athletes and will feature shops, leisure and medical facilities. Once the Games are over, the Village will become part of the Stratford City regeneration scheme that will be made up of additional leisure, office and residential amenities, including up to 3300 affordable new homes for sale and rent.
This gargantuan project needs to be supported by a comprehensive upgrade of the surrounding transport and utilities infrastructures. The new Speed 1 Javelin® shuttle train service will ensure that athletes and visitors can reach central London in just seven minutes for example.
The overall project is split into three phases: Stage 1 involved agreeing the timetable for delivery, and submitting one of the largest planning applications in European history. Stage 2, termed ‘demolish, dig, design’, requires getting the site ready for construction work, including decontaminating 2.5km2 of derelict land. Stage 3 – the ‘big build’ – began three months early, when work started on the Olympic Stadium in May 2008.
Another key aspect of the ‘big build’ phase is the commitment to re-use 90% of construction waste. Any waste created during construction of the venues and infrastructure will be collected and taken to a dedicated area on site before being separated and sorted for re-use or recycled. Materials not able to be re-used will be taken away to external sites by sustainable transport methods, including by barge on the River Thames, so they can be used elsewhere. This new integrated system has been externally audited as being of an international standard – a first for a major project of this size according to LOCOG.
As a fan of sport I cannot wait for London 2012. The
Olympic Games – as well as the Paralympic Games a month later – could turn to be the UK’s single most important cultural event in the first half of the 21st century. It is also a fantastic opportunity for the cement and construction industry to play a part in this global event. On your marks, get set, go!

July 2008 (Robert McCaffrey)

We recently had an email in from an industry expert which had me scratching my bald head. The suggestion was that the expert write us an article on the huge advances being made in the Chinese cement industry, backed up with the latest industry statistics. To quote the expert exactly, “In 2003 the total output of the Chinese cement industry was around 900Mt. In 2007 it was up to 1.35bnt and is increasing at an annual rate of 13.5%. Demand has increased much more rapidly in the less developed provinces of the northwest (e.g. Gansu) and southwest (e.g. Yunan) where the government has recently focused its efforts on economic development leading to a boom in the construction industry. That said, eastern (e.g. Shanghai) and south-eastern (e.g. Guangzhou/Canton) areas remain the largest regional markets for cement in China. With the eyes of the world on China’s attitude towards its environment, the government has implemented legislation which prohibits on-site concrete production in over 200 cities across the country. Other environmental legislation is also being implemented. Notwithstanding China’s political hostility towards neighbouring Taiwan, a number of Taiwanese companies are preparing to take advantage of China’s thirst for cement. The chances are that with China’s national economy continuing to expand at over 10% per annum, output rates in China for cement are set to remain at 13.5% and possibly even increase.”
I’m afraid that I had to differ in my opinion, and suggested that the situation was in reality rather different. I suggested that the output of international standard cement in China is probably not more than 600Mt/year (from a careful count of cement plants and cement plant capacities), and that the output of other types of cement is unknowable (and is not included in international comparisons anyway). I didn’t support the suggestion that the annual rate of increase is 13.5%, and I said that I felt that it was unlikely that it will increase past this level. Much more interesting (and more likely, after speaking with insiders in the industry) is the prospect that capacity utilisation rates will fall dramatically over the next five years. A hard landing of China’s economy after the bursting of its bubble economy may be just around the corner. I have started to see more and more signs of this possibility in the last few months.
Forget the Olympics. Yes, they have cost a few tens of billions of dollars (“A billion here, a billion there, pretty soon it adds up to real money:” Senator Everett Dirksen), but this is a drop in the ocean compared to China’s GDP of more than US$10.17tr (or US$10,170bn).
“Clouds are now forming over China’s economy,” warns Stephen Green, chief economist at Standard Chartered Bank in Shanghai, while Chinese prime minister Wen Jiabao has prophesied that the year of 2008 might become the “most difficult one” for the Chinese economy. Inflation has been growing steadily for years, with consumer price inflation around 8% and food price inflation at closer to 20% (if you believe the statistics). In common with the rest of the world, fuel and energy prices have compounded the inflationary trend. The weakening trend in western demand for Chinese exports of consumer goods is certain to impact the manufacturing sector in China (despite growing wealth and domestic consumer demand within China).
A hard landing (where growth in the economy screeches to a halt - like the US economy in 2007-08) may yet be avoidable, but now only with the prospect of producing a soft landing - reducing growth to low single-digit figures. Raising interest rates would certainly rein-in the overheating Chinese economy: If economies in the west had the current Chinese level of inflation, the interest rate would already be in double digits. There is also the suggestion that the current commodity boom (the extremely high prices for commodities from wheat and coal to tungsten and uranium) is just the last of the bubbles inflated by cheap credit through the early Noughties (2000-2007). If the commodity ‘bubble’ was to burst, and we saw falling prices/values for everything from steel to cement, and molybdenum to rice, although inflation would simultaneously reduce, we might also see the central ‘growth’ pillar of many business models knocked away, and the whole house of cards could come catastrophically falling down.
I know I’ve tended to look on the pessimistic side of things over the years (9-11, bird flu etc), but it is better to be forewarned and forearmed.
In any case, as we’ve been seeing recently in the US, everything is possible, every scenario has a corollary, and things can be worse than you can imagine.

June 2008 (Craig Warren)

The most common forms of freight transport including aeroplane, train, truck and cargo ship have not changed significantly in decades. With factors such as record fossil fuel prices and the threat of climate change, could a non-traditional form of freight transport become a viable alternative?
Generally, the distance a cargo of cement can travel is limited by the location of the raw materials relative to the market, and by the infrastructure linking the two. Often already hampered by the remote location of raw materials, the product will usually go through several stages on its way to market. Bulk materials and fuels are often delivered multi-modally, i.e. via a combination of sea, road and rail, experiencing expensive bottleneck situations along the way. This has been epitomised recently by the near 40 ships queuing for coal at Newcastle, Australia, the world’s biggest fuel export harbour. Bottlenecks and flooding in Queensland have pushed coal prices to record highs.
A surprising technology that could eliminate the need for multi-modal transport, developed infrastructure, slow delivery and high prices was invented over 200 years ago. It was on board a hot air balloon in 1784 that Jean-Pierre Blanchard made the very first powered flight using a hand-powered propeller to propel the craft through the air. (Later Blanchard crossed the English Channel and replaced the rotor with flapping wings). This rudimentary powered flight gave birth to airships.
After 100 years of global experimentation it was Germany which, in the early 1900s, developed the largest flying vessels ever made: the mighty cigar-shaped Zeppelins. These ethereal machines were very different from the newly-invented aeroplane. Rather than using an aerofoil passing through the air to create lift as planes and helicopters do, an airship derives its lift from a lighter-than-air gas such as hydrogen. Because such gases are less dense than air, they do not require heating to provide lift as a hot air balloon does. Altitude was controlled by taking on and dispelling air (to adjust weight) in a similar way to how submarines transfer water to control their depth.
It is important to mention here that an airship is quite different to a blimp. The distinction between the two is primarily dependent on the design of the envelope that gives the airship its unique shape and contains the lifting gas; this, in turn, defines the size of the craft. Airships are built with a light internal framework able to support the large bulk of the vessel, whereas a blimp, having no internal framework, is unable to support large masses and therefore has a natural maximum size.
Following successful round-the-world flights by airship, the Hindenburg, a huge ridged craft measuring over 800ft long (the length of three Airbus A380s) and able to travel across the Atlantic and back in less than six days, was completed in 1936. It boasted facilities similar to an ocean liner and was seen as the height of fast, luxurious travel. The airships’ size was met with awe from onlookers and was even greeted in New York by ticker-tape parades, the pioneers themselves becoming heroes overnight.
However, the Zeppelin company’s 100% human safety record was smashed when, under the direction of the Nazi party in 1937, design flaws and a rushed landing led to the destruction of the Hindenburg, killing just over a third of those on board. With the massive flames from the flammable hydrogen caught on film and aeroplane development gaining momentum it is not surprising that the public lost interest in Zeppelins. Safety fears and dashed public opinion led to the scrapping of the last surviving airships and only the tiny, non-ridged blimp survived.
Over 70 years on, designs from around the world could lead to a buoyant resurrection. Plans have been put forward for passenger transport, high-altitude communications platforms, radar and even telescopes that could be used as a cheap alternative to satellites. The new designs have replaced hydrogen gas with non-flammable helium to make the new breed of craft far safer.
A small company based in Cardingdon, UK, has put forward a design it calls the SkyCat. Their aircraft, which could be used for a variety of purposes, are called hybrids because they utilise the principals of buoyancy and design the envelope, which contains the gas, to produce lift in a similar way to the wing of an aeroplane. SkyCat claims that its larger models could offer air freight at sea freight prices and can avoid the transport bottlenecks by bypassing ports and delivering straight to the destination. With a range approaching 3000 miles and speeds over 70mph, the hybrids could fill the gap between high-speed, high-cost transport and low-speed, low-cost freight.
By exploiting buoyancy, vertical takeoffs and landings are possible, making airships even more attractive in areas without highly-developed infrastructure, such as the Polar regions, Alaska, Siberia and Africa. Without the need of roads and runways a single airship would be far cheaper than building the infrastructure necessary for trucks or aeroplanes to operate.
Airships are also particularly fuel-efficient; a growing concern with rising fossil fuel prices. As the engines do not need to burn fuel to provide lift and – as has been suggested by many of the hopeful airship manufacturers – the large surface of the envelope, which limits the airship’s velocity, can also provide sufficient area for solar panels which could provide the craft with a source of renewable energy to propel it through the sky.
The reduced fuel consumption could offer a green alternative to conventional aircraft. It may not be long before airborne cement carriers are as common as ships, trucks, planes and trains are today...

May 2008 (Robert McCaffrey)

“Do you feel lucky, punk?” These immortal words, spoken by Clint Eastwood in the seminal 1970s bad-cop flick Dirty Harry, might usefully be recalled every day, to remind us of our good fortune. After all, despite soaring global food, fuel and energy prices, environmental melt-down, geopolitical instability and financial turmoil, we are all very lucky indeed.
Electric light and electricity have only been around for the last 130 years or so. Imagine the world without them. Industrial fertiliser production boomed after the First World War, when explosives factories were converted to manufacture something more useful for peacetime. TV started in the 1930 (although we are still waiting for something worth watching). Antibiotics really only became widespread in the 1940s—and the world would be a radically worse place in their absence. The amount of computer power that you have on your desktop dwarfs the amount available to the Apollo missions of the 1960s and 1970s (the on-board Apollo Guidance Computer weighed 70lbs, worked at 2Mhz and had 38k of memory). As for the web, well, as of April 2008, there were more than 166 million separate web sites (including, of course, the newly-reinvigorated GlobalCement.com).
For the most part, wars, famines, plagues, pestilence and other general unpleasantnesses are largely absent from our lives—something that could not be said for the vast majority of human history. My point is that we are lucky. Very lucky indeed.
The question is, do you feel lucky? A good answer to this question can be had each time you put on an article of clothing the wrong way round. In my family, it is traditional that if you were to change the clothing from back to front to the right way around, then you would be changing your luck. Whenever this happens to me, I think to myself of the last few days and weeks, and try to work out if I have been lucky or unlucky. Partly due to a habit of trying to make the best of a bad situation, I invariably conclude that I have been lucky (but then I turn my clothing to face the right way around anyway, since I’m not very superstitious). Would you change your luck?
A few examples might serve to illustrate my meaning. I heard on the radio yesterday that a soldier who had one of his legs blown off in Afghanistan is returning to the front line, ‘proud to serve once again with his comrades.’ That’s making the most of a bad lot. Remember Lance Armstrong, who – on the verge of his first Tour de France win – was diagnosed with testicular cancer which metastasised and which nearly killed him. He fought through radio- and chemo-therapy back to full health, and went on to win seven consecutive Tours de France. And finally, I’d like to tell you about a Chinese gentleman called Chang who I saw on a TV documentary a few weeks ago (a screen shot of which is below). He suffers from a condition called neurofibromatosis, which causes tumours to grow on nerve tissue throughout the body. Chang’s tumours had taken over his face, causing extreme discomfort and difficulties in speaking, eating and breathing. In the documentary, he was shown undergoing surgery, which left him scarred, bleeding and still with a hugely misshapen head. Chang – despite his deformities – enjoyed playing cards with other men in his village in rural Sechuan Province, and one of them commented that he was a very good card player. “No no,” said Chang, “Maybe I’m just lucky.”

April 2008 (Robert McCaffrey)

As a young boy, one of my favourite pastimes was to read a comic called 2000AD. Way back in the late 1970s and early 1990s, 2000AD seemed to be impossibly far away and futuristic. Now, of course, it seems all so ‘last century.’ Amusingly, the comic is still called 2000AD. Why they didn’t rename it 3000AD is beyond me. (As an aside, today we took delivery in the office of a 1Terabyte remote backup unit – an Apple ‘Time Capsule’ which can be used to wirelessly back-up multiple computers, while connecting to the internet as well. Verily, we are living in the future).
Anyway, one of the greatest joys of reading 2000AD was a story called Judge Dredd, which told of a 25th century policeman, judge and executioner – since made into a film starring Sylvester Stallone. I recall one series of Dredd stories where he was sent into the Cursed Earth (the radioactive desert between Megacity 1 (on the US east coast) and Megacity 2 (on the west) which had been caused by some nuclear war or other, and which was inhabited by mutants and assorted miscreants). At one point in his journey, Dredd comes across an outfit that was making huge riches for itself by mining landfills – largely for antiques from the 20th century. These ‘antiques’ included bicycles, cathode-ray tube TVs and oddly enough, saucepans. The boss of the outfit was the self-styled ‘Sultan of Trash, the Pharaoh of Garbage, King of Memphis.’ Why it was Memphis, I don’t know. Is there a lot of garbage in Memphis? Sad to say, I can’t remember the upshot of this story (Dredd probably either locked him up for being mad, or killed him. That was Dredd’s way – hard but fair).
However, as much as you might doubt my sanity, once again, this does still have a resonance with today, not just for me, but also – possibly – for you.
I recently listened with great interest to all the presentations at the Global Alternative Fuels for cement and lime Conference. It came out quite strongly that the cement industry is now in competition with many other industries for quality alternative fuels. It seems that the power, chemical and paper industries are now willing to pay for high-specification alternative fuels that the cement and lime industries might relatively recently have been able to levy a gate-fee for using. Now we have to fight for the right to use them – or pay. The other industries need to have higher-specification fuels than are required by the cement and lime industries, so we will be left with the lower specification fuels.
Now, one factor that came out of the conference was that fuel costs are likely to rise inexorably. As a geologist, I have believed in the Peak Oil Hypothesis for many years – I think that the easy oil has been found, and that it is only going to get more scarce and more expensive to produce from now on. Coal will remain as the lowest-cost fossil fuel, but fossil fuel taxes are also inevitable, and may make coal prohibitive in due course.
If cement and lime are priced out of the higher and medium-quality alternative fuels (since a power station can out-bid a cement plant for tyre-chips, diaper off-cuts and animal meal), what will be left?
Back to the Pharaoh of Garbage. I believe that it is only a matter of time before we start to dig up our landfills again – not for their antiques, but for their calorific value (and also for the valuable commodities that they also contain: I recently heard a speaker at our Global Gold Forum who was quite delighted to report that substantial quantities of gold – in computer circuit boards – were being ‘taken out of the loop’ by being landfilled. After all, non-recycled gold equals future demand).
There are certainly technical challenges to the use of previously-landfilled waste, but the economic drivers are unstoppable, and I believe that the cement industry – and the technology suppliers to the cement industry – will be among the new pioneers. To that end, we will organise the first Global Landfill Mining conference on 17 September 2008, in London. It should be fascinating, and it will hopefully lead to the attendees making or saving millions of dollars each year.
Perhaps my days of comic book reading were not wasted after all.

March 2008 (Joe Kellam)

Coal has long been thought of as the world’s ‘fuel of last resort.’ With rising oil prices, coal is often seen as a vast resource just waiting to be called upon when the oil runs out or becomes too expensive. China, for example, is obviously confident in its coal reserves. 94% of its fossil fuel needs are met by coal, and the country is looking to coal to reduce its dependency on oil further still (with coal-to-diesel plants, for instance, some of which claim they will be capable of converting 50Mt/year of coal into 10Mt of diesel by 2020).
In 2000-2006, global coal consumption increased 35%. In 2007, China, the world’s largest producer of coal, went from being a net exporter to a net importer. Added to India’s escalating fuel consumption, one wonders just where it’s all coming from in the first place.
It seems that many countries have begun to ask the same question. In recent years, many official coal reserve figures have been revised downwards. Figures in the UK and Germany, for example, have plummeted 90% and Poland’s have halved. Since 1990, declared reserves of high-quality ‘hard coal’ have fallen by 25%, from ~640bn t to less than 480bn t, and global production (estimated at 6bn t in 2007) doesn’t come close to accounting for such a dramatic drop.
The European Commission’s Institute for Energy has recorded a drop in reserves-to-production ratio (the number of years reserves would last at the current rate of production) from 277 years in 2000 to 155 years in 2005, and warned: “The world could run out of economically-recoverable reserves of coal much earlier than widely anticipated.” In 2006, the BP Statistical Review of World Energy cut the ratio further, to 144 years. A 2007 report by Energy Watch, a group of scientists and energy consultants, predicts a global coal output peak as early as 2025. Jörg Schindler, from German renewable energy consultancy Ludwig Bölkow Systemtechnik, commented: “The perception that coal is the fossil resource of last resort – that you can come back to it when you run into problems – is probably an illusion.”
These concerns seem well founded when you consider that the ‘official’ reserves statistics often quoted are – according to a recent article in New Scientist – compiled by a husband-and-wife consultancy in Dorset, UK, that sends questionnaires to 100 coal-producing countries, resulting in a mixed response described by the firm itself as “a bit of a ragbag.” Of 100 questionnaires sent out, only 50 replies are useable. China, it says, has failed to update its figures since 1990, and Russia since 1996.
If this is true, the surprisingly unreliable nature of ‘official’ figures does leave the question of actual coal reserves unanswered. The traditional view that ‘it’s there if the price is high enough’ is starting to wear thin; since 2002, reserves have continually fallen despite the price of coal quintupling. According to geologist and energy consultant Graham Chapman, much of the readily-accessible coal has already been mined, with complex geology in the way of China and South Africa’s remaining coal resources.
In an attempt to gain a less skewed perspective on the world’s coal reserves, David Rutledge, of the California Institute of Technology in Pasadena, has employed a technique known as ‘Hubbert linearisation,’ which works by plotting annual production as a percentage of total production since mining began, against total production. The resulting graph generally settles into a straight line that can be extrapolated to the point of zero production, thereby deducing the total amount that will ever be produced.
This method – which has been shown to work for historical data such as that of the UK coal industry (pictured here) – predicted future coal production to be 450bn t – slightly over half of the current ‘official’ reserves. Current forecasts, based on the official figures, suggest that there is at least a century’s worth of coal up for grabs. If Rutledge is correct, supplies could be falling short a lot earlier than expected.
According to the International Energy Agency’s most recent long-term forecast, global coal production needs to rise by more than 70% by 2030 to feed economic growth. Cutting out the spiralling costs and ever-increasing uncertainty of supply by moving away from fossil fuels could climb the agenda of many industries faster than we may have anticipated.

February 2008 (Robert McCaffrey)

I’m continuing this month with my New Year’s resolutions: sometimes you can capture a year’s action in a single word (‘decisiveness,’ ‘relax,’ ‘strive’) and sometimes it takes a few words more.
As I mentioned last month, our company is trying to be greener in its operations. In fact, the magazine you hold in your hands (if you haven’t printed it yourself from the digital edition) is the first result of this new environmental policy. It’s printed on Forest Stewardship Council certified stock, a change from our usual paper. I challenge our readers to spot the difference in quality, although it does cost us a little extra. I also mentioned briefly our internal communications policy, ‘The PRo Way,’ which includes such gems as ‘be polite to your fellow workers,’ and ‘be generous with your skills and knowledge.’ It remains to be seen whether having such a policy actually encourages changes in behaviour in the real world.
In addition, however, we have also finally written down our company business ethos and we might call this ‘The PRo Way of Business.’ It’s an interesting exercise, since it immediately makes you think about some of the decisions that have to be made every day: it is also very widely applicable, and should be of interest to you in your every day business.

The PRo Way of Business

We will act in an ethical fashion in our business dealings

We will not pay bribes

We will not act in an anti-competitive fashion under any circumstance

We will always pay our bills

Employees at PRo will not criticise the competition - we will allow our products and services to speak for themselves

Our first edict is that ‘PRo will act in an ethical fashion in its business dealings.’ It should go without saying, but actually it does need to be said. As the saying goes in cricket, ‘we are going to play it with a straight bat.’
Secondly, ‘PRo will not pay bribes.’ We do occasionally come across circumstances where a little grease might lubricate the wheels, and it’s a tough line to call, but if we think it’s a bribe, then we will turn our backs and walk away. Business that requires a bribe is not worth doing.
Our third self-imposed rule is that ‘PRo will not act in an anti-competitive fashion under any circumstance.’ Partly this is – for sure – self-preservation, since companies that indulge in anti-competitive practices can be fined up to 10% of their annual turnover during the period of the behaviour. That would not be good. However, colluding with competitors (in our case, I’m not sure who that might be) to artificially hike-up prices is not intrinsically a good thing anyway: It’s best avoided.
Rule number four is that ‘PRo will always pay its bills.’ When we have ordered something and it is delivered, we pay for it. I’m glad to say that we have been able to follow with this edict ever since we started in business a dozen years ago. We try to pay our bills in a timely fashion, and we encourage our customers to pay in a timely manner as well. Please note that ‘timely’ means within 30 days(!).
Our final internal rule for doing business with the outside world is that ‘employees at PRo will not criticise the competition;’ we will allow our products and services to speak for themselves. There are some funny stories to be told about the deeds of participants in the industry, but outright criticism is not polite and it’s not helpful. We’ve decided not to do it, and – pointing no fingers and naming no names – it would be a better world if everyone did the same.
I hope that I haven’t come across as being a pedantic old bore. However, I do think that if you are going to go into business, you had better do it in a way that allows you to sleep at night. As everyone who knows me will agree, I need and value my beauty sleep: We will play the game with a straight bat – right down the crease.

February 2008 (Robert McCaffrey)

I don’t know if they have the same custom where you are, but here it’s traditional to make resolutions at the start of the year, showing how you are going to change your ways. Apparently 85% of gym memberships are taken out in January (only to be allowed to lapse within a few months), and adverts for smoking ‘cures’ are also concentrated on TV in January. New Year, new you!
Two years ago I had a one-word resolution: ‘delegate.’ We have ended up with twice as many people working for the company (and twice the wage bill), but has totally changed the way we do business - for the better.
On a Christmas trip to my brother’s place, I saw his company’s communication strategy, and thought ‘we should have one of those.’ We have also been prompted to put into place specific corporate social responsibility policies by an award we have entered, so this year, I have resolved to move ahead with our CSR and environmental policies. Some people might say that our company is too small to have to bother with this stuff, but I reckon that everyone - small and large - should have an eye on their own conduct. Let me tell you a few things about our new CSR and environmental policies...
Environmental policy
The first thing that we recognised was that the most effective form of environmental impact abatement for PRo Publications is to continue to organise conferences (Global Slag, Ash, Fuels, Environmental, Insulation, etc) and to publish magazines (Global Cement, Global Fuels, etc) that promote environmental impact abatement in heavy industry. In addition, the company has already made enormous strides in reducing its environmental impact by allowing all of its magazines to be downloaded for free from the Internet. This reduces the number of copies printed and distributed, and further disseminates each magazine’s environmental messages to a much wider audience - each of these magazines has the largest distribution in its sector.
However, we also recognised that we could do a little more to reduce our environmental impact, and these are some of the things that we will do in 2008:
• Aim to reduce the environmental impact of how our employees get to work, and encourage use of walking/cycling, public transport and/or car sharing. We will also promote cycling through the ‘Free bicycles’ scheme, and through the subsidised provision of cycling safety and wet weather gear.
• In the office, we will turn off our computers whenever practical, and always at weekends; Switch off lights whenever possible; Turn down the heating in the office (and bring in a jumper for occasional use); Only print when necessary, and then only print what is required; Continue our paper recycling scheme; Aim towards recycling more non-paper waste; We will buy consumables with regard to reducing environmental impacts.
• When we print our magazines, we will ensure that our suppliers are EMS/ISO9000/ISO140001 accredited; We will change the paper that our magazines are printed upon to one that is FSC accredited and/or has substantial recycled content; We will ensure that the inks that are used in printing the magazine have low environmental impact. You can expect to see some slight changes from the February issue of the magazine.
• At our events, we will try to offer on-line registration (reducing the need for fax and fax paper); We will recycle delegate badge holders; We will encourage delegates to offset their transport-related carbon emissions; We will maximise recycling of waste at our conferences; We will aim to maximise the proportion of materials that are sourced locally; We will use recycled or recyclable materials whenever possible at our events.
Corporate Social Responsibility
Our CSR motto is ‘Do some good,’ which is at least one step up from Google’s ‘Don’t be evil.’ In short, we will encourage our staff to volunteeer for local community projects for at least one day per year on company time; We will designate and work towards helping a specific charity, we will carry out our environmental policy, and we will keep to ‘the PRo Way.’ The PRo Way is an ethos for our employees and for the company, and includes stipulations on behaviour within the company (including the suggestion that employees should get up from their desks and go and talk to colleagues, rather than emailing or phoning them).
You can see a lot more on this at www.propubs.com, and feel free to use it in your own place of work. Now we just have to carry it all out. Wish us luck!

December 2007 (Joe Kellam)

The environment, it seems, is jealous of the favouritism we’ve been showing its mortal enemy – the world economy – and is threatening to crank up the thermostat unless we start treating them more equally. The economy – which, for the last 100 years or so we have been feeding up on a diet of fossil fuels and population growth – has been stomping all over the environment like it owns the place, and the environment has finally got to the end of its tether.
Dr Rajendra Pachauri, the chairman of the Intergovernmental Panel on Climate Change (IPCC), has estimated that a 2°C rise by 2100 is “inevitable,” due to the CO2 we’ve already emitted. In 2006, Sir Nicholas Stern’s report for the Institute of Public Policy Research predicted that such a temperature rise would leave more than two billion people affected by drought and some of the world’s most diverse ecosystems severely damaged. The controversial 600-page Stern report, which warned of a 20% hit to the global economy and a new Great Depression, shunted the climate change debate up the global public agenda, but was at the same time widely criticised for inconsistency and scare-mongering.
With all the uncertainty about the consequences of ‘business as usual,’ it is no surprise that the first steps to combat global warming have been hesitant. The risk of a country losing its competitive edge by imposing limits on its industry is all too real, and cement production is a prime example of how concern for the environment can leave producers vulnerable to being walked all over.
Cement associations in EU countries have complained that their allocated quotas of CO2 need to be increased if demand is to be met. When I was at the ICCC (International Congress on the Chemistry of Cement) in Montreal in July 2007, representatives of the Canadian Cement Association voiced their concerns that restrictions on their production will only serve to force a gap in the market that foreign producers such as China, free from such stringent restrictions, are only too happy to fill. After taking into account the extra emissions associated with less regulated cement production, along with freight-related CO2, the regulations will have in fact left the world worse off
than it was without any emissions limits.
The situation is reminiscent of ‘the prisoner’s dilemma,’ a hypothetical situation in game theory in which two prisoners, held on suspicion of a crime, have the option to either cooperate (to minimise their collective jail time; a few months, say) or betray their partner in crime to get off scot-free (while the implicated prisoner takes the full brunt of the sentence, say 10 years’ jail time). However, if both prisoners implicate each other, they share the sentence (five years each).
Selfishly speaking, the best outcome (going free) is available to each prisoner if he betrays his partner in crime. Thus, the ‘rational’ outcome is that both prisoners implicate each other and serve five years each, in spite of the fact that, had they cooperated, they would both have served just six months. The dilemma is that simply by acting rationally to get themselves the best deal, they end up with the second-worst deal. Had they cooperated, they would each only serve six months, instead of five years.
Obviously, there are many differences between this and the climate change scenario, not least the huge amount of unknowns (and of course the world powers are able to communicate freely with each other). But the prisoner’s dilemma illustrates the difficulty of getting rational, self-interested agents to cooperate for their common good – even when fully aware of the consequences.
The US continues to reject a low-carbon economy, waiting instead to be bailed out by super-efficient technology from the future. IPCC chairman Dr Pachauri agrees (to a point) that “science and technology are going to assume a dominant role in defining solutions to climate change on a large scale.” I recently attended the 6th Arab International Conference on ‘environmental protection in cement and building materials industries’ in Tunis, a showcase for environmental impact abatement technologies, with an abundance of exhibitors and papers focusing on the use of alternative fuels. This is interesting to note simply because in Europe, the Middle East and many other areas, waste-derived fuels are hailed as a triumph for the environment, killing several birds with one stone (waste disposal, fuel, lower CO2, NOx and SO2 emissions). In the US however, alternative fuel use is on the rise for financial reasons, and environmentalists are instead lobbying against their use, arguing that this one stone risks literally killing a few too many birds (critics claim that the combustion of tyres, for example, releases unnecessarily high levels of carcinogens).
When even the environmental factions – who, it might be assumed, share the common goal of saving the planet – cannot agree, it leaves little hope that the UN climate change conference in Bali will do any better. Only time will tell...

November 2007 (Robert McCaffrey)

In my last cheerful column, I wrote about the potential ‘downsides’ to the world economy, and mentioned briefly the current credit crunch as one of the potential risks for all our livelihoods. Reading more about the situation has made me even more nervous about our collective prospects.
But first, a little history. In the 1920s, the US economy had grown strongly, but share prices had grown faster still, increasing in ‘value’ fivefold in the five years to September 1929. Millions of Americans had invested in shares, with many borrowing money in order to be able to do so. They had bet on the continued rise of share prices, a sure sign of a bubble. Some commentators suggested that share prices had plateaued, and that they would continue to trade at these elevated prices from that point onwards. However, during September and October 1929, the market saw record numbers of shares being traded, and erratic price movements. On ‘Black Thursday,’ October 24, the market dived in value, only to rebound the next day. Five days later, on ‘Black Tuesday,’ the bottom dropped out of the market, with it losing 13% of its value on a single day, (and around $30bn for the week, more than the US had spent in World War 1), and heralding a two year slide that saw the market lose 89% of its value. Some plateau! The stock market did not regain its 1929 peak level again until 1954, a quarter of a century later.
Wind forward the clock to the late 1980s. Following a spectacular computer-driven crash in 1987, the world markets were already spooked. In the background though, between 1955 and 1990, land prices in Japan appreciated by 70 times and stocks increased 100 times over. Companies began to use the apparent value of their land assets to raise loans to buy real companies abroad. When the land-bubble burst, the Nikkei stock index lost over 60% of its value, dropping 30,000 points, and tipping Japan into a decade-long recession from which it is only just emerging.
Forward again just seven years, and stay in Asia. The Asian Crisis began when Thailand devalued its currency, which had a knock-on effect throughout southeast Asia. Stock markets crashed, asset values plummeted, and corporate debts (often denominated in US dollars or Japanese Yen) went through the roof. I remember very well visiting Thailand soon after the crisis hit. I looked out of the window of a cement plant manager, at the unfinished third enormous pyroprocessing line at the site. I asked the manager why no one was working on the new plant. “Ah:,” he replied, “workers’ holiday.” That holiday was to last several years. A lot of ordinary people lost a lot of money, and buying cement was of lower priority than putting bread (or rice) on the table. At the time, I did a simple calculation that looked at the level of oversupply, and the rate of cement demand, and suggested that many economies would not be back in supply/demand balance for another decade. Unfortunately, this simple calculation turned out to be more or less correct, and only now are cement plant plants being built again in the affected countries.
Skip forward to 2007. Ignoring the stock market bubble in China (which will certainly burst at some point, taking much of Asia down with it), the huge losses sustained by US banks in the current credit crisis are only just beginning to become apparent. They bought up poor quality sub-prime mortgages, repackaged them, and sold them on, levying fees as they went. Most banks loved these financial packages, and especially the money they could earn from them, and banks have tens of billions of dollars-worth of these low-quality assets on their books. They have only just started to confess to how much they have lost (since, because US house prices are falling, and because the interest rate on a lot of the loans is resetting to a higher rate, the people who took out the original mortgages have started to not pay back their debts). Citigroup has lost $11bn, Merrill Lynch $8bn and Morgan Stanley $3.7bn (so far). It sounds like a lot, but in reality, it is just the tip of the iceberg. Up-to-date projections suggest that the total ‘hit’ that may have to be taken by the banks is somewhere between US$300bn and up to US$600m (and beyond, if interest rates were to be increased).
Observers suggest that we will see a multi-year economic downturn (banks generated 30% of the profits of all US companies in 2006), led by a collapse in the US housing market. We’ve already seen the ‘postponement’ of new cement plants in the US (another workers’ holiday, perhaps?), but when you look back at history, you have to start to wonder, ‘Just how bad can this get?

October 2007 (Tom Day)

Many of my fellow students revered our Politics Professor. Harry, as he insisted on being called, was a handsome academic in his mid-forties, with a permanent tan and immaculately coiffured, silver hair. Harry was a champion of the poor and a class warrior, whose penetrating insights and sharp wit could effortlessly demolish the intellectual foundations of the New Right. It was with some surprise, then, that I bumped into Harry in a shopping centre car park one weekend, heaving a new set of golf clubs into the boot of a Saab. He reddened when he saw me and I was unable to stifle a guffaw. “Socialist?” I asked rhetorically. “Champagne socialist more like!”
Now I have to admit to having held, until recently, a lifelong prejudice against golf. When I was young and idealistic, golf’s historic elitism was enough to turn me against it. All those privileged old boys in their exclusive private members’ clubs offended my egalitarian streak. And I could never fathom their clubs’ arcane and petty rules, more often than not enforced with relish by a pompous club secretary, permanently embittered by the fact that he was never promoted from Colonel to Brigadier.
OK, so that’s a bit of a caricature and, in any case, times are changing. For sure, golf is still mainly the preserve of well-off men in the world’s richer countries. Slowly but surely, however, it is reaching more and more people as incomes rise and new courses open at a rapid rate. According to the Golf Research Group (www.golf-research-group.com), thousands of new courses have opened around the world in the past decade. There are now over 30,000 golf courses worldwide, with over 57 million people teeing off in 119 countries. The global market for golf clubs and accessories exceeds US$2bn. Golf is on the march.
However, as my idealism has waned with age and experience, I’ve acquired another objection to golf that has helped sustain my prejudice. Whenever I meet corporate executives – particularly ones from Britain and America, but increasingly from other parts of the world too – it is not long before they are boring me silly with soporific golfing stories. This problem afflicts all rungs of the corporate ladder, from aspiring juniors to big chiefs. Like driving certain brands of luxury car and having a Blackberry, playing golf has become another badge – an indicator that you have arrived, that you are now somebody. Except that you are, in fact, just like everybody else. Corporate clone…me? No thanks.
My third and most important objection to golf, however, has always been that it is…well, pointless. Think about it: Your time on this planet is finite and is mostly spent working, sleeping and keeping your family happy. The time you have to dedicate to yourself is limited and therefore precious. So why spend it hitting small, white balls around a field – all while dressed in attire so embarrassing you wouldn’t dare wear it to a fancy dress party? How about improving your mind instead, by reading some history? Why not explore your creative potential by learning to paint? If it’s real exercise you are looking for, how about taking up jogging or going to the gym? And if you’re after a proper sport then there’s only one: Soccer.
Problem is, I’m putting up a fight but my defences are crumbling. My boss has dumped on me again. No matter how hard I try, my inbox just doesn’t get any smaller. And as soon as I get home my ears are assaulted by my wife’s woes and my kid’s demands. I go to bed and the next day the routine is the same. I think I’m cracking up. I need a break and some peace and quiet. Fresh air in my lungs would do me a world of good and some gentle, green vistas and sunshine on my shoulders could work wonders. A bit of gentle exercise to get my cramped muscles working again wouldn’t go amiss either. And what I could really do with is something to take my mind off my troubles: something that’s absorbing without being too taxing on my frazzled brain. I need…well, how about a game of golf? Now what was I saying about the club secretary? That’s right. Splendid chap!

September 2007 (Robert McCaffrey)

Now, I don’t want to bring you down, but the topic for my column will be war, pestilence and a global financial meltdown – and what it means to you. It’s not necessarily all bad news*.
At a major conference in London in March 2006, Rob Carnell, chief economist at ING Bank told the assembled delegates that the world had been through an unusually quiescent period, with no great events to shock the global economy (apart from 9-11). He pointed out that, rather than going through a boom-bust cycle, economies (including America’s US$13trillion economy) had ‘missed’ a bust, and had just kept right on going. Rob pointed out that a number of factors had conspired to either eliminate or mute the normal downturn at the end of the economic boom, resulting in a steadily rising consumer demand throughout the world which continues to this day. GDP growth worldwide has been steadily upwards for the last decade (apart from in a couple of basket-case economies such as Zimbabwe and North Korea).
Rob Carnell pointed out though that there were more troubled times ahead. I’d like to update some of the ‘blips’ that may be coming our way.
As is well known, the US has been gorging on cheap consumer goods – largely made in China – for a dozen years or more. Its external debt is around US$10trillion – US$10,000,000,000 – and this continues to rise daily. The country is also buried under domestic debt of around US$9trillion, which does not include another US$10trillion or so of mortgage debt. It is this last chunk of borrowing which is currently destablising world markets. Mortgage lenders in the US have been doling out pots of money to borrowers with very few checks on whether they could ever pay it back - and often, they can’t. Those mortgages have been sold on to banks worldwide, ‘contaminating’ their balance sheets with near-unquantifiable losses. Bank confidence is at a 20-year low, with financial institutions unwilling to lend to each other or to the man (or business) in the street. Mortgages are much tougher to get, house prices in the US are dropping for the first time in decades, housing starts are down (hitting building materials demand), consumers are curbing their spending, and at the very least it looks like this is the end of boom. Certainly, to savers at the UK’s Northern Rock ‘bank’ it certainly looks like the end of the road. Economists are now asking if 2007 will see the start of a recession in the US – and if we do, it will certainly impact China’s export-led economy, and have a major knock on effect worldwide.
But enough of these cheery thoughts. On to nuclear war. The Doomsday Clock (above) stands at five minutes to midnight, having been advanced by two minutes in January 2007. At midnight it goes ‘boom’. Iran’s continued enrichment of uranium is part of the reason for the current nuclear tension. America continues to assert that ‘all options are on the table’ when it comes to Iran, potentially including the use of nuclear weapons. Iran’s nuclear facilities are ‘hardened,’ or buried, making them extremely difficult to destroy with conventional weapons. Certainly, there are precedents for an international strike on atomic facilities – Israel destroyed the Osirak nuclear reactor in Iraq in 1981. Many commentators now believe that something similar may happen again, this time in Iran. The US has around 500 ‘tactical’ or ‘battlefield’ nuclear weapons (out of 5735 total active warheads). Israel is believed to have around 200 nuclear weapons. Personally, I don’t think that - after Hiroshima - it is possible for any ‘responsible’ country to use a nuclear weapon, but we shall see. Let us all hope not.
And finally, deep joy, on to pestilence. Experts at WHO and elsewhere believe that the world is now closer to another influenza pandemic than at any time since 1968, when the last of the previous century’s three pandemics occurred. The WHO uses a series of six phases of pandemic alert, and we are currently at three (where six is very, very bad). I note that flesh-eating mega-virus Ebola has reemerged, and that international air travel is currently growing at around 5.5% per year. As Rob Carnell noted, global pestilence has a major ‘downside.’
*It’s not all bad news, but it’s mostly bad news.

July 2007 (Robert McCaffrey)

I recently spent the weekend of my 40th birthday in the corner of a field with some of my friends and family, and endured two days of torrential rain. One of my friends was kind enough to buy me an interesting book for my birthday: Alain de Botton’s ‘The consolations of philosophy.’ This thought-provoking book – through examining the lives and philosophies of six eminent philosophers - provides consolation for unpopularity, not having enough money, frustration, inadequacy, a broken heart and ‘other difficulties.’
Socrates was born in Athens in 469BC. He grew to become a well-known figure, dressed in the same cloak throughout the year, and walking barefoot. He was short, bearded and bald, and was not a good-looking man. His wife had a famously foul temper. When asked why he married her, he is said to have replied “because horse trainers need to practice on the most spiritied animals.” He challenged his countrymen to examine their beliefs extremely closely, and to apply reason to every situation. This apparently made a number of them rather uncomfortable, so much so that they charged him with corrupting the social fabric of Athens, found him guilty and ordered him to drink hemlock. He accepted his fate with famous stoicism, realising that unpopularity is not synonymous with error (nor truth with popularity), and that reason must prevail.
Epicurus, born in 341BC, has become the poster-boy for opulent living, but he espoused a subtly different approach to a rich lifestyle. Although he did say that ‘The beginning and root of every good is the pleasure of the stomach,’ he was a man who drank water in preference to wine, who was happy to each bread, vegetables and olives, and who regarded a cheese as a feast. He regarded the pursuit of happiness as paramount, but suggested that the finest ingredients for happiness were not the exclusive preserve of the rich man. Quite the opposite. Friendship, freedom and thought were the three main essentials (after food, shelter and clothes). The pursuit of grand houses, banquets, servants, rich food, fame and power were, said Epicurus, not necessary.
Seneca’s demise is reminiscent of Socrates (the emperor Nero decreed his death, which he faced with admirable sang froid), but his philosophy was different. He suggested that we are better able to withstand frustrations that we have prepared ourselves for, and most hurt by circumstances we are unprepared for, or do not understand. His life’s work might be summed up by saying ‘Don’t expect too much, and you won’t be disappointed. Don’t get angry with the world: it’s nothing personal.’ Or alternatively, ‘That which cannot be changed must be endured.’
To console the reader for their inadequacies, de Botton recommends the robust philosophy of Michael de Montaigne, a 15th century French nobleman. Montaigne suggested that we are all-too-fallible, being part mad, part wise, with bodies that rarely fail to embarrass us. He suggested that if we fail to recognise the baseness of our own bodies, and the limitations of even the most intelligent men, we are getting too big for our boots. However, he also suggested that there is richness in even a commonplace private life, and that “we are richer than we think, each one of us.”
Arthur Schopenhauer was born in Germany in 1788, and throughout his life was not lucky in love. He came to believe that a ‘will to life’ or subconscious reproductive urge, dictated our choices of partners, and that our conscious minds could do little to disobey. Such choices do not always appear wise to the waking mind, and nor are they always convenient. A person who is highly suitable to sire and raise a child with is almost never very suitable for us. Schopenhauer asks us not to be too surprised by the misery (see Seneca). ‘We pursue our love affairs and have our children with as much choice in the matter as moles or ants – and are rarely any happier.’ However, such misery is the human lot when it comes to love. Schopenhauer might have said “Get used to it.”
Friedrich Nietzsche would have added “...and learn from it.” In fact, Nietzsche started out as an admirer of Schopenhauer, but came to regard his world view as just too passive. Nietzsche, while not having the farmer’s constitution he wished for, was an Alpinist, and he recognised in the Alps an analogy for life which was later to be echoed in a famous song by AC/DC: ‘It’s a long way to the top if you want to rock’n’roll.’ Those seeking fulfillment should not eschew difficulties, but should embrace them and learn from them. “That which does not kill us,” Nietzsche is reputed to have said, “makes us stronger.” Like two rainy days in a field? Happy days!

June 2007 (Robert McCaffrey)

This will be a column of two halves. Sorry, but it’s not a cheery or funny column, just for a change.
A story in yesterday’s paper suggested that in 2006, 8000 people per day died of AIDS around the world – that’s 2.9 million people. Looking into it, I find that the UN AIDS programme agrees with the numbers. Appallingly, 2.1 million of the total deaths come from sub-Saharan Africa (compared with ‘only,’ for example, 12,000 in western and central Europe). In 2006 there were 2.8 million new infections in Sub-Saharan Africa (of 4.3 million new infections worldwide) and there were 24.7 million people in sub-Saharan Africa living with HIV (of 39.5 million worldwide). To put this into context, 39.5 million people is approximately the same as the total population of Shanghai, Los Angeles, Paris and Cape Town. The world’s largest soccer stadium, the Maracanã in Rio de Janiero, holds around 100,000, so that’s nearly 400 giant soccer stadiums full of people living with HIV. And for the vast majority of them, that means dying of AIDS: less than one in four of those infected in low and middle income countries had access to anti-retroviral therapies.
Although the epidemic touches populations across the world, high risk behaviour (intravenous drug use, unprotected high-risk sex) means that the risk of infection is concentrated in specific population groups. You may suggest that some of the infected bring the infection upon themselves with their behaviour, and for some that is undoubtedly true. But the lack of education in these groups is also marked. Who wants to get HIV? No-one. Who would rather avoid it? Everyone.
The global AIDS epidemic is growing, and is increasingly becoming a major factor in business planning. Any company operating in sub-Saharan Africa ought to have a programme in place to treat infected workers, and to prevent non-infected workers from becoming infected if they wish to secure a sustainable business. You can’t have a business without workers. Thankfully, the cement and minerals sector has a reasonable record in this regard.
According to the UN AIDS programme, scaling up prevention strategies in 125 low and middle-income countries would avert an estimated 28 million new infections between 2005 and 2015 (the total population of Jakarta, London, Chicago and Sydney) – that’s more than half of the new infections projected to take place without scaling up prevention strategies. Doing so would save US$24 billion in associated treatment costs. AIDS funding of around US$8.9 billion was available in 2006, although around US$14.9 billion was actually needed, with 55% of resources needed in Africa.
Here we come to the second half of this column. World military spending rose to US$1118 billion in 2005. The US accounts for 48% of the world total, with China, Russia, the UK, Japan and France making up another 25% of global military spending. There is no need to single out military spending as not necessarily a smart way to spend money when there might be more useful things to spend it on. For example, Europeans spend in the order of US$50 billion each year on cigarettes, and US$11bn on ice cream. Europe and the US combined spend around US$17bn on pet food. There are many other examples of big money being spent on fripperies. Has the world gone mad?
“A billion here, a billion there, pretty soon you’re talking about real money”*
As with HIV/AIDS prevention and treatment, relatively small amounts would make a huge difference to a lot of people (providing basic education for all in developing nations – US$6 billion, providing basic health and nutrition – US13bn).
I’m not asking you to put your hand to your pocket (unless you are Carlos Slim or Ingvar Kamprad and you happen to have stumbled on a copy of Global Cement Magazine; Bill Gates and Warren Buffet are already doing the only sensible thing by giving it all away). However, it’s useful to note these odd spending priorities, and to make your views known to your elected representatives next time you might be asked.
http://www.globalissues.org/
http://www.unaids.org/
http://www.infoplease.com/ipa/A0763098.html
http://worldatlas.com/citypops.htm
http://en.wikipedia.org/wiki/List_of_billionaires
*(US Senator Everett Dirksen)

May 2007 (Robert McCaffrey)

A decade ago, I visited the Japanese cement industry in the company of a representative (Nat Kubota) of the ever-helpful Japanese Cement Association. I was impressed with what I saw: gleaming cement plants, futuristic trains and carefully-preserved traditions. I also came back with the feeling that a number of trends that I had witnessed in Japan would eventually be taken up by the cement industry around the world, largely because, in a mature cement market like Japan, the potential for volume growth in the cement market is practically nil, but also because the Japanese have a well-known tendency to take ideas, radically improve them, and then export them to the world.
The five ‘Mega-Trends’ that I found in Japan 10 years ago were gigantism, increased captive power generation, energy efficiency, increasing exports and rationalisation. It did not take a genius to spot these trends, but it is interesting to see how long it has taken for cement producers worldwide to adopt them - or not.
‘Gigantism’ is perhaps an odd term, but it essentially suggested that cement plants would get bigger, not just in terms of individual lines, but also in the number of lines located at any one plant. Individual pyro-processing lines have undoubtedly become larger (if not in physical terms, then in production capacity terms), with 8000 or 10,000t/day lines pushing the limits of technology and engineering ten years ago, but with 12,000t/day lines now being planned and built. Holcim’s new 12,000t/day (clinker) St. Genevieve plant will feature a pyro-process system consisting of an ILC 5 stage preheater (over 130m high) and a 6.6m-diameter, 93m-long kiln. Two vertical roller mills will be used for raw grinding and four OK vertical roller mills will be provided for cement grinding. When will we see the first 14,000t/day single pyro-processing line? With the economies of scale on offer - and the increasing urbanisation of the world providing ever-denser concentrations of cement-consumers - we might see it before the end of the decade.
Increased captive power generation has been taken up only patchily by the cement industry outside of Japan, but it has been embraced in India. Such is the unreliable nature of the supply - and the high cost due to the fact that the majority of the rural population does not pay for its electricity, hence driving up prices for easily-billed large industrial users - that building your own power station is what the Americans call a ‘no-brainer.’ Bizarrely, the same situation - of unreliable supply and (intermittently) high cost - has also taken place in California, and with increasing electrical cost and over-demand/under-supply, I can see this trend continuing to roll out around the world.
Energy-efficiency has of course been pursued around the world (except in countries like Iran where energy is either plentiful or subsidised or both), with an ever-increasing emphasis on not just using less energy, but on buying fuels for less. To my knowledge, the first cement plant to achieve a negative fuel cost was the Rüdersdorfer Zement plant (now owned by Cemex) east of Berlin, largely through the use of an unusual fluidised bed combustion chamber. Nowadays, every cement plant in the world can use alternative fuels, particularly with the help of devices like the FLS Hotdisk, through modelling of combustion conditions using CFD, and - often - by the use of plenty of strategically-placed air-blasters. This is a trend that has been going for 20 years or more, and has at least as much time again to run to its full course.
Exports - and world cement and clinker trade - have increased past the 100Mt/year mark, but not necessarily as fast as I had expected: sky-high freight rates have edged out lower-margin commodities like cement over the last few years.
Rationalisation, of course, continues apace. Even though new companies continue to burst onto the scene like mushrooms on dead wood when times are good - as they are now - there are smaller deals being done every month to rationalise national cement industries around the world. With Cemex’s impending takeover of Rinker, the company will become the world’s largest construction material manufacturer. The big companies are making money, and they like to spend it to grow yet larger still. Reading the financial pages though, I’m always struck by how small the cement industry’s deals look when compared to other industries. I think that the next ‘Mega-trend’ may yet turn out to be ‘Mega-deals,’ where the unthinkable may happen - a Holcim, a Lafarge or a Cemex gets taken over by another company. Think it can’t happen? That’s what they thought at Blue Circle, Southdown, ACC, RMC and at Rinker.

April 2007 (Robert McCaffrey)

More on happiness this month. Forgive me for going on about it over the years, but happiness is central to everything we do. We eat not only to live, but also to make ourselves happy. Imagine how unhappy you would be if you didn’t get enough sleep (fact for the day: babies prevent their parents from sleeping for the equivalent of 2 months in the first year of the baby’s life). Apparently, to most workers job satisfaction is the most important thing about a job, not wages. Even activities that appear to be unpleasant have a happiness-seeking side (contrary to my column in the May 2006 issue of Global Cement, I will be doing the London Marathon again this year. I will beat three hours: I will, I will!).
Some Western societies have the pursuit of happiness as an inalienable right, either explicity stated, or implicitly suggested by the national way of life. Other societies around the world pursue happiness in their own ways, though thankfully not (yet) through consumerism. My point is that happiness is an important topic, and that if we seek it, we should seek it effectively.
Which brings me on to a book that I have recently been lent by a colleague. The book is called ‘Stumbling on happiness,’ by Daniel Gilbert. It makes two main points: Our imaginations trick us all the time; and we are not good at directing ourselves towards our highest potential state of happiness.
Gilbert first points out that we are the only animal which can imagine the future and act now to affect the far future. However, he says that our imagination works so quickly and effectively that we are insufficiently sceptical of the future outcomes that we can invent. He also suggests that our future imagination is not particularly imaginative, which is why the imagined future looks so much like the present. Finally he shows that our imaginations have a hard time in showing us how we will feel when our imagined future happens. (I imagine that I will be delighted if I managed to break three hours in the marathon. I’ll probably just be tired). He even displays a graph (below left) which will dismay the newly-engaged to be wed, but which will give rise to sage nods from all those who are near the bottom of the curve.
Gilbert agrees with none other than Adam Smith when he says ‘economies can blossom and grow only if people are deluded into believing that the production of wealth will make them happy,’ and quotes Smith as saying “The pleasures of wealth and greatness strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety and effort which we are so apt to bestow upon it. It is this deception which rouses and keeps in continual motion the industry of mankind.”
Gilbert espouses a formula for maximising happiness that was originated by the Dutch polymath Daniel Bernouli in 1738. He suggested that we should seek happiness by multiplying the probability that our action will give us what we want, by the ‘utility’ of getting what we want. He uses ‘utility’ because wealth is not what everyone is after: if you have gone beyond consumerism, perhaps a day of prayer, or an extra hour of sleep is your ultimate goal. Thus, if more chocolate cookies is your ultimate goal, then sitting on the couch is not likely to bring you happiness. Going to the cupboard and getting some will probably bring you more happiness. It’s a trivial example, but you get the point.
Gilbert’s overarching point though is that (sticking with the cookie analogy) although you imagined that you would be happy to have more chocolate cookies, and you were effective in getting up from the couch to get them, when you ate them, you actually felt sick, and wished you hadn’t bothered. What should we have done then? Gone without extra cookies? Switched to lettuce leaves? Annoyingly, Gilbert does not give the reader any useful alternative action plans, although he does point out that we more regret actions not taken, than taken.
So, at the end of the day, I think that the message is, carefully imagine what will make you happy in the future, and go for it.

March 2007 (Rob McCaffrey)

I was bought a very interesting book for Christmas: ‘How to get rich,’ by a Felix Dennis. He’s an engaging writer, and well qualified to write on this subject, since he is worth over UK£700m (US$1.4bn). I’d like to share with you a few of the main points of the book: you may be inspired to read the whole thing (it is worth the purchase price, for sure). For starters, he points out that anyone with assets up to UK£2m is one of the ‘comfortable poor.’ He suggests that the ‘lesser rich’ have assets of at least UK£15m, and that to be one of ‘the rich’ you would have to have at least UK£75m in assets (or at least UK£15m of cash in hand, realiseable within a couple of weeks). The ‘filthy rich’ he classifies as those with over UK£400m in assets, and the ‘super rich’ as those with over UK£999m. I’m not on his radar.
Total Assets (UK£m) ‘Richness’
£1-2m Comfortably poor
£2-5m Comfortably off
£5-15m Comfortably wealthy
£15-40m Lesser rich
£40-75m Comfortably rich
£75-100m Rich
£100-200m Seriously rich
£200-400m Truly rich
£400-999m Filthy rich
£999m+ Super rich
Felix Dennis suggests that it is very unlikely that anyone reading his book will actually get rich. The odds are just too stacked against them. The odds, and the various factors that prevent people from making themselves rich: fear of failure, the fear of not having a ‘Great Idea,’ believing that they do not have enough capital, and giving up on their business before they have given it enough of a chance. He points out that none of these is an insurmountable obstacle to becoming rich (apart from just giving up). He suggests that there are a number of useful qualities to have to be able to become rich: having tunnel vision to some extent, having a thick skin, being a bit of a ‘sh*t,’ a bit of luck, massive stamina and an appetite for hard work, and bags of determination. He says, several times, ‘Never Give In. Never. Never. Never. Never give in. NEVER.’ Thank you, Felix. I think that we get the point.
He points out that in negotiations, it helps to know your own strengths and weaknesses, as much as those of your ‘opponent.’ He suggests that luck will come your way more often than might be expected, but it will never come your way if you seek it. He is very keen indeed about owning 100% (or as much as possible) of any business. He believes in delegation. He doesn’t believe in giving away equity, or if he sells the company, he doesn’t disburse the proceeds. He strongly believes that whatever you do, you should stay focused on it, and do it as well as humanly possible. You should undertake business wherever money is being made. (I was greatly amused a few years ago when a Malaysian cement production holding company sold all its cement-related assets, and became a telecoms company. Maybe they had the right idea?).
On the human-resources side, he has some interesting points: Only hire winners – fire losers and whiners as fast as you can; ignore your prejudices, likes and dislikes; Pay well, bonus better.
Having spent some time in jail after the famous ‘Oz’ obscenity trial in the 1970s, he has no desire to return to incarceration. He says, and he means it, ‘Pay Your Taxes.’ The inside front and back covers of the book feature mammoth cheques he has paid in tax (the largest of them for over UK£7m in a year). ‘Pay the least tax that is lawful, but pay it.’
He says that being rich gives you only two things: the luxury of choices (‘should I fly to the Caribbean this weekend in my jet, or to Monaco?’); and the luxury of time. He values time the more highly.
Throughout the book, he cautions, again and again, becoming rich will not make you happy or even happier. He says that he would give all of his money away to the person who could make him 21 again. He suggests that the two cardinal rules of getting rich are treat the whole thing as a game, and once you have made your pile, give it all away. All the same, I’d settle for being just comfortably poor.

February 2007 (Robert McCaffrey)

As you may have realised, over the years of reading this column, I am fascinated by the turns that you take through life, to arrive at where you are today. Not just the voluntary turns, but most especially the turns that you make in error. I recall a time when I had been working on a farm in Winnipeg, first helping to bring in the harvest, and then (under the Northern Lights, listening to the baseball World Series on the radio) helping to plough the fields with what is still, to this day, the largest tractor I have ever seen. I had a very attractive local girlfriend, and not a care in the world. As the farmer said to me, ‘You’ll look back on these days as the happiest of your life.’ In November though, the ground froze, and they told me that for the next four months at least, no rivers would flow in Manitoba. The farm work was at an end. In perhaps the seminal decision of my life, I left my girlfriend and Canada, and went back to Britain. I always wonder, ‘What if…?’
An accidental turn that I took some time afterwards led me into the cement industry, and eventually led to me becoming the editorial director of Global Cement Magazine. As for accidental turns, our decision in 2004 to try out digital editions was as the result of an error at our mailing-house, and it turns out to have been one of the better turns that we have made as a company (leading to Global Cement gaining the largest distribution of any cement magazine). An example of good from bad.
Watching a nature documentary the other night, I was intrigued to hear how Hurricane Hugo had nearly obliterated a chain of islands in the Caribbean but how some ‘good’ had come of it. Apparently, a number of green salamanders were washed or blown off one of the islands, but managed to survive by clambering aboard driftwood. The currents and tides washed more than one to Anguila, and before too long, the first colony of green salamanders was established on the island, where – pre-Hugo – none had existed before. Good from bad.
The reason that I am writing about consequences this month is because I have recently been sent a copy of an excellent book called ‘Crossing new frontiers – FLSmidth 125 years.’ If you can get a copy, do so: it is a great read. As well as laying out the one and a quarter centuries of the company’s history, the book details some of the accidents and errors – as well as hard work, diligence and technical ability - which led to FLSmidth becoming the largest cement engineering company.
Soon after FLS built the Aalborg Portland cement factory in 1889, the plant’s vertical shaft kilns became clogged, and the company developed a new kiln that solved the problem and which became a successful export product. Then, when cement market competition from Germany became too great, Aalborg developed a new, cheaper and better sand cement. Through this development, the company started to produce and sell the earliest tube mills. (More competition: more innovation. Good coming from bad).
Another reverse was also eventually put to good use. When oil prices increased in the US, the country’s cement producers – which had previously injected cheap oil to fuel their kilns – started to grind coal and inject it into their kilns instead. FLS spotted the trend and imported two kilns from the US, modifying them, (and in an early case of cement industry reverse-engineering) improving them and then offering an improved model for sale and export. In the 1920, recession hit, and as the book says, ‘the company therefore turned to development and new ideas, and several of FLSmidth’s most important innovations stem from this period.’ The company repeated its trick of turning bad times to good in the Second World War, and when devastated Europe needed new cement plants for infrastructure rebuilding, FLSmidth was waiting. As they say in Spain, ‘When they bring you the donkey, be ready with the rope.’
What I like best about the FLS book though, is that it reveals one starting fact about the early history of the company started by Frederik Laessoe Smidth. His initial capital to build the firm was meagre, but he managed to double it with a win on the Danish lottery, netting him 2000 kroner – around a year’s wages. He ‘invested’ the win in travelling around Europe, gaining contacts and making deals. For a century afterwards – so I’m told – it was written into the company’s articles of association that it was to hold at least one ticket in every Danish lottery draw.
Now what would have happened if Frederik had chosen different numbers that week. What if…?

January 2007 (Robert McCaffrey)

Please forgive me for taking a full two pages for my last word this month, but the subject that I am about to cover is absolutely huge, and I have been thinking about this column for the last six months or so. My topic for this, the first copy of our newly-redesigned Global Cement magazine, is the Internet, emails and spam.
Of course, all of this is relatively new. When we started our first publication, with the 100-page January 1997 issue of Asian Cement and Construction Materials Magazine, the Internet was still in its infancy. Very few people had email addresses, and everyone still relied on faxes and couriers to move documents and photographs from one place to another. In our archives, we have hundreds of courier documents from companies who kindly sent us information on and images of the Asian cement industry.
Then, in 1997, my bother Lewis came to work for us, and asked us why we didn’t have a web site, and why we were still using old-fashioned faxes. Being busy trying to start a business, we gave him the job of developing our cyber-strategy (such as it was). He quickly got our first web site up and running, at www.propubs.com. This is still our main web site, and people are still asking us if we have anything to do with pubs. The answer, for the record, is that we do not have anything to do with pubs, except on Friday lunchtimes, but that’s another story.
Www.Propubs.com is really a portal into our world, where you can find out details of our magazines, and about up-coming and past conferences. It is quite an extensive site, with around 800 pages in total, with some of them updated daily. If you want to know anything about what we are doing, go to that address: it’s where we go if we want to know something ourselves! The fact is, a number of staff members here at PRo have the ability to change the site, so that the latest, and most reliable source of information is always the web site, even for me, and I am the (nominal) webmaster.
Quite soon after we set up our home page, we also - at my bother’s behest - set up www.theDealZone.com, in an attempt to corner the world’s cement trade. This classic dot-com boom-era scheme would have levied a measly US$1 on each tonne of cement traded through the site. We had the modest plan to corner only half of the world’s cement trade, netting us - or so we thought - a cool US$50million each year. We even planned to sell shares in the scheme at a cool US$50,000 per one percent share. Ahh, those were the days!
As you can tell, the scheme didn’t quite work out like we thought. Apart from being offered US$25,000 for
www.theDealZone.com (we didn’t take it but maybe we should have), the plot to corner the world’s cement trade was doomed to failure.
We were not, however, alone. During those early years of Internet hysteria, there were other wild plans afoot. E-Cement.com was, for a year or so, one of the biggest advertisers in this magazine (and in several other magazines). The company, backed by cash from what was Blue Circle Industries, aimed to revolutionise the cement industry by taking many of its activites online, utilising Ebay-like auction processes. Indeed, it seemed to bring off a successful US$400m procurement process in its early days, but as the dot-com bubble burst, nothing else was heard from it. Call up the registered address for E-cement.com now, and the line goes dead. Cue images of tumbleweed blowing through deserted offices, and the sound of the wind, and a single, lonely bell.
So now, we have all wised up, and there shall be no irrational optimism about what the Internet can do for us all. No-one will pay double-digit multiples of the revenue totals of internet companies. Wasn’t it proved that to succeed on the internet, you have to sell something, and you have to make more money than you spend? Surely there will be no second dot-com boom, with companies changing hands for billions of shares (and no cash)? Isn’t a company with no obvious cash source an obvious money-pit? Have we wised up? For the answer, just look up YouTube.com.

Email madness
The monstrous offspring of the Internet, of course, is email. Why do I call it ‘monstrous’? Well, put it like this: in 2006, I received 368,039 emails, and at least 331,419 of them were junk. According to my system’s email application (Eudora), its junk identification accuracy was 91% last year: It let through 32,929 email messages that I later scored as junk. The system also junked 29 messages that that were good messages. This is easily the most annoying thing about email: People spend time on putting together an article, or they want to present a paper at one of our conferences, and my spam system sends it to the junk bin. As you can tell from the numbers, I typically received around 1000 emails per day. Most of them went to the junk box. I would scan this ‘junk’ every week for references to cement, but then the contents of the junk box would go in the trash. Hopefully, I would either catch the email before it was trashed, or the sender would be savvy enough to contact me by another route, either by fax or phone.
1000 emails a day? That’s crazy! Well, my email address was on our web site for every participant in the global cement industry to see, and I guess that a lot of spam robots saw it too. However, as of the start of this year, I have passed over to another person here at PRo the onerous task of delving through the spam, to try to salvage the good from the bad. I spent 407 hours in 2006 dealing with emails, 38% of the time reading mails (and dealing with spam). Now I can read all my emails in a few minutes each morning. Passing on the spam problem to someone else has given me another hour each day. I should have done it years ago.

The curse of spam
Now, I guess that there will be those amongst you who are saying to yourselves, ‘That’s rich, complaining about spam. They send enough emails to sink a battleship!’ It’s true, I have sent a lot of emails and 2006 was no different: I sent a total of 9168 messages, many of them with multiple recipients. In my book, any message with only one recipient is absolutely not spam. It’s the messages that have multiple recipients that could be spam. And no-one wants spam.
Before going down that avenue, however, let me just ask one question: ‘What is spam?’ It’s an unsolicited email on a subject that is not remotely of interest to you, and which is a real time-waster. I get hundreds: Viagra; Cialis; Hot stocks; Extensions of one sort or another. None of it is of any interest to me. However, if someone was to send me an email on cement, or slag, or gypsum, or insulation or minerals or fuels, then it is potentially of interest to me. I’ll decide when I read it if it really is of interest to me. I may throw it out. I may just read it and keep it. I may read it and act upon it. But it’s my decision. In the same way that I was annoyed that my junk filter threw away some good emails, I’d be annoyed if these emails of potential interest were blocked from arriving in my in-box.
Around a quarter of the delegates at our conferences decide to attend after receiving a direct email from us, and of course over 4000 cement industry participants per month receive notifications from us that the latest issue of the magazine is available for download (in one of those multiple-recipient emails). I also send out news about new products that we have developed for the industry (such as our Global Cement Directory, a listing of the world’s cement plants), and about events that may (or may not) be of interest to people in the cement industry (such as the forthcoming Global Fuels Conference, which is all about the use of alternative fuels in the cement and basic minerals industries).
I’m also interested to gather information from our thousands of readers (we have around 20,000 names and addresses of participants in the global cement industry on our database), on a variety of subjects. Our salespeople are (of course) interested in selling some ads in the magazine, and in encouraging exhibitors to attend.
The problem is when you are contacted and you have no interest whatsover in what we contact you about. For example, if you are a lime producer, and we ask you if you want to advertise in Global Cement Magazine. Really, then it is spam. Well, I can only apologise for that, and ask you to help us: we always honour removal (or clarification) requests, and our database is sophisticated enough to be able to pinpoint the preferences of our readers to an astonishing degree (for example, you might be on our database as being a subscriber to Global Cement, a registered (free) digital reader of Global Slag, but as having no interest in Global Minerals).
My New Year’s Resolutions for 2007 include increasing the professionalism of the services that we provide for our readers. I hope that with your help - letting us know your subject preferences for example - that 2007 will be a great year for us all.

December 2006 (Robert McCaffrey)

After last month’s cheery column on death, this month’s cheery column is on stress. In fact, researchers have worked out the relative stressfulness of a variety of common events, to help us to gauge how stressed we are. As the researchers state, ‘The most stressful life event was assigned a value of 100, and other events were assigned lower values in proportion to their effects on stress. Divorce, for example, caused stress in 73% as many individuals that experience this event as was true for the death of a spouse. Notice that change is a common factor in many of these events, often in either direction (e.g. marriage as well as divorce). To calculate an index of the amount of stress in your life, list all the life events from this table that have affected you in the last year and add up their total scores. Persons with higher scores are much more prone to experiencing major illness or other stress-related conditions in the coming year.’
Death of spouse 100
Divorce 73
Marital separation 65
Jail term 63
Death of close family member (except spouse) 63
Major personal injury or illness 53
Marriage 50
Being fired from work 47
Marital reconciliation 45
Retirement 45
Change in health of family member (not self) 44
Pregnancy 40
Sex difficulties 39
Gain of new family member 39
Business readjustment 39
Change in financial state 38
Death of close friend 37
Change to different occupation 36
Change in number of arguments with spouse 35
Mortgage over $40,000 31
Foreclosure of mortgage or loan 30
Change in responsibilities at work 29
Son or daughter leaving home 29
Trouble with in-laws 29
Outstanding personal achievement 28
Spouse begins or stops work 26
Begin or end school 26
Change in living conditions 25
Change in personal habits (self or family) 24
Trouble with boss 23
Change in work hours or conditions 20
Change in residence 20
Change in schools 20
Change in recreation 19
Change in church activities 19
Change in social activities 18
Mortgage or loan less than $40,000 17
Change in sleeping habits 16
Change in number of family get-togethers 15
Change in eating habits 13
Vacation 13
Christmas 12
Minor violations of the law. 11
And what a lot of lovely stress-related conditions there are to choose from! For example, among the problems that you may enounter from living with too much stress are trouble sleeping, headaches, constipation, diarrhea, irritability, lack of energy, lack of concentration, eating too much or not at all, anger, sadness, higher risk of asthma and arthritis flare-ups, tension, stomach cramping, stomach bloating, skin problems, depression, anxiety, weight gain or loss, heart problems, high blood pressure, irritable bowel syndrome, diabetes, neck and/or back pain, less sexual desire and increased difficulty of becoming pregnant (not a problem I have suffered, I’ll admit).
I admit to feeling rather stressed at the moment, since here at Global Cement there are a lot of changes. For example, tomorrow we will be moving offices for the first time in nine years (I remember when we moved the first time, nine years ago, we had to move two computers and a shoe box full of paperwork - Ahh, the Good Old Days), we have recently taken on several more staff. we are preparing our new re-design of the magazine, and we are preparing for our busiest year ever in 2007. Added to that the fact that I haven’t slept right since returning from a recent trip to the Far East, and that I have started training for next year’s London Marathon (again), and my total stress, as given by the stress factors in the table below totals somewhere in the region of 238. I need a holiday (add 13 stress points).
Mind you, let’s put this into perspective. There is no civil war here, the water is clean, the government is not corrupt (allegedly), there are no earthquakes, floods or fires, and the air is clean. Perhaps I should be thankful for small mercies.

October 2006 (Robert McCaffrey)

We live in a virtual world. It’s virtual not just because we can wear fancy headsets and play computer games in realistic fantasy worlds, but also because the very substance of life is a form of virtual reality. Hold tight - this could get weird.
Here at Global Cement, we have been building our database of names in the global cement industry for many years. Our database, even though it is huge, cannot possibly cope with the complexity of the world out there. Cement plants start up and close down. People die. People change jobs. Some people even change sex. They come in on Friday as a Freddy, and return on a Monday as a Mandy. Our database, even with six or seven different people inputting data into it, cannot possibly reflect the madness that is Life - that is, unless you guys tell us what’s happening. So, if you want to be called Mandy from now on, please let us know!
It’s the substance of life that is virtual though. As a teenager, I often thought that I was experiencing life at arm’s length - although I now know that it was the fact that reality was being filtered through a fog of adolescent hormones. I recall being bewildered that life wasn’t, how can I put it, more real. Everything seemed to be one dimensional, and largely without interest. Perhaps this was a reflection of the small town I grew up in, but I think that it is more likely to be as a result of an underdeveloped real world-mind interaction database. Let me explain.
It is often said that ‘to be interesting, one must be interested.’ As you pass through life, you pick up information on everything. Absolutely everything. For example, somewhere in your brain, you have a section given over to the sensations pertaining to car doors. You know that they are dangerous, and that you must keep your fingers clear - probably due to an accident or accidents years ago, but long forgotten about, or perhaps due to the admonishments of a parent. You may be able to recall the sound of different car doors closing - maybe from your first car, or your favourite car, or perhaps from one whose door wouldn’t close at all. You may have tactile memories of car door handles - warm, metallic, matt or sleek. You may even have memories of smells from car doors, or even - who knows - the taste of one or more car doors. And the bizarre thing is that you have thousands or millions of cubbyholes in your brain, just like a huge database, given over to storing knowledge about the amazing world around us - car doors, bottle openers, cakes, cement plants, magazines: everything.
As a teenager, my experience of the world was pretty slim, and my interest in it was shallow - in fact it was largely given over to chasing girls. In my teens, wild horses would not have been able to drag me to look at an interesting bottle opener. I had other things on my mind. Nowadays, well, things are different. I’m married, so that the preoccupation will chasing girls is a moot point. However, if there is the prospect of an interesting bottle opener - or better still, an interesting cement plant - well, now you’ve got my attention!
My point - I’m getting to it - is that all of the learning and all of the experiences that we have gathered allow us to shape - inside our heads, in a 1.3kg ball of cells apparently composed 78% of water and 12% fat and losing cells at a rate of one per second or 85,000 each day - a rather interesting virtual model of the world. Just as our database here allows us to model the cement world outside our office door, your brain includes a virtual model of the entire world. Such is the level of detail in there, that even unexpected variations in the texture of the finish on a car door handle might be interesting. Life, in its infinite variety, is 3-D once again. I told you it could get weird!

A pat on the back
Before I go, I want to give a pat on the back to the British Cement Association, which has just sent me a very nice, credit-card-sized explanation of the cement industry, with a number of indispensable facts and figures. Now I need never be at a loss for cement-based statistics. The BCA is obviously trying to make the public relate to cement as something that brings benefits, rather than just seeing it as a dusty nuisance. With increasing perceived value, actual value should increase too. Cement producers around the world could take a leaf out of the BCA’s book.

May 2006 (Robert McCaffrey)

I started training for my first London Marathon three years ago. Back then, the first run I completed was a bit of a shock. It was 20 minutes long, and I was in pain from practically the first step. I was in pain for four days afterwards. This was not going to be fun. As the weeks and months went by, new aches started as the first aches faded away. I wondered if I would even start the race. I shouldn’t have worried - my own stupidity was nearly my downfall in that race.
I had decided to gain a psychological boost from passing people, and decided to start the London Marathon at the back, with the guy running it on ice skates. It took 25 minutes to get over the start line, and I probably ran nearer 28 miles, weaving around the 26,000 people I passed. I finished in 3:50 that time, and I knew that I could do it faster. Although I had said I would only run one marathon, I was back the next year....
In 2004 I did the marathon again and ran for all I was worth. I finished in 3:14:53, absolutely on target, but I said to myself then that I should aim for three hours the next time. I couldn’t run in 2005 due to work commitments, so 2006 was my next good chance.
I had a good preparation (including a terrific training run at the IEEE-IAS/PCA conference in Phoenix, and a canter along the rim of the Grand Canyon, at 7000 feet altitude), and this was just about as good a chance as I will get to do a good time. At 9.45am on race-day, the gun goes off, and you have to run the race, ready or not! The first mile is really just a warm up for the rest of the race, since it is so packed, but I was surprised to run it 10 seconds under my target pace of 6:51/mile. I did the same again in the second mile, and did the same for every mile until I was a minute up at 6 miles. I tried to slow down, and then ran the next ten miles at exactly my target pace, give or take about 5 seconds per mile: Nice! I went through half way at exactly 1:30, and still just about on time for my three hour target - or so I thought.
‘The wheels came off my bus’ at around 20 miles, going through the skyscrapers of Canary Wharf. I had pain shooting down the outside of my thighs with every footfall, and a painful achilles tendon that had been bothering me from the start. The truth is, by 20 miles, everybody hurts. I tried to gain ground on some runners just ahead of me, but my legs wouldn’t do it. I noticed quite a lot of people moving past me (and at the same time a lot of people either walking or stopped completely). I started to lose time in a big way. By 21 miles, my goal of sub-3 hours was history, and it was time to adjust - sub-3:05 would be a worthy target, after all.
Emerging from the Blackfriars underpass on the Thames Embankment, you can see the tower of Big Ben on your far left, a long way away, at about 26 miles. It seemed an eternity to make it appear larger, and I was aware that my legs seemed to be turning to stone. I ran slower and slower. At Big Ben, I tried to put on a spurt of speed, since I usually have a good finish, but there was no finishing spurt for me: I had nothing left to give.
I stumbled down Birdcage Walk towards Buckingham Palace, scanning the crowds for my wife, children and venerable parents. I found them, kissed my wife, briefly hugged my kids and then - with some difficulty - started running again for the last 400 metres to the finish. It was a huge relief to get over the line and to be able to stop running. Walking was immediately painful, and I don’t think that I have ever walked half a mile more slowly. It hurt.
If I was a genetically-gifted athlete, able to train everyday with professional assistance, proper diet, and focused on the event to the exclusion of everything else, I might have run the London Marathon a lot quicker. As it is, I have the same reasons as most other runners in the marathon to go a bit slower: job, family, short and stubby and hairy legs, age. With all of that taken into account, I’m rather pleased with myself, since I ran the race in my fastest time yet: 3:07:40, over seven minutes faster than previously. I came 1793rd over all (1656th man). A man wearing armour came last, around 36,000th place, in just over eight days. For myself, I don’t think that I can run the race faster without a huge change in lifestyle (divorce, redundancy etc), so - since I wouldn’t wish those upon myself - I’ll have to be content with this time as a lifetime best. That’s fine with me!

April 2006 (Robert McCaffrey)

In this complicated world, it’s difficult to know right from wrong. In my job, it’s a challenge to write what is right. The struggle continues to this day. What should we include in the magazine, and what should we leave out? As editor of an international magazine, which actively seeks to put itself in front of its readers, we do get a lot of feedback, not just about GCL magazine, but about GCL’s conferences, about other conferences, about other magazines, about products, equipment and services and about cement companies.
As editor, my main ethos is ‘If in doubt, chuck it out.’ Since my email address is up on our web site, and has been for years, I typically get over 1000 emails per day, with around 90% of them being junk. Mercifully, my computer bins the vast majority (including - annoyingly - some non junk mails), leaving me with ‘only’ 100 or so emails to deal with each day. (Tip: if you want to get an email through to me, include ‘GCL’ in the subject line). I receive a lot of press releases, from all sorts of companies, usually trying to promote equipment to the cement industry, or sending me news of industry developments. Press releases on industry news and developments go straight into the magazine, usually after some editing: you deserve to know all the facts. Very few of the press releases promoting equipment make it into the magazine, unless they tell us something new or interesting. If they really want to promote their equipment or services, it’s my view that they should really take an ad!
With only 68 pages to play with every month (76 this month), articles have to fight pretty hard to make it in to GCL. We try to include around 15 pages of news, a couple of juicy feature articles, a smattering of technical articles, some comment columns and plenty of adverts. Hopefully, the magazine is not too large to read right through, but is large enough to include useful information (you can tell us what you think on the reader survey on pages 13-14).
The greatest trouble though, is not what to include: it is what to leave out. As I mentioned, we receive a lot of feedback from readers, about practically every aspect of the global cement and lime industry. Although we work in a professional industry, not all of the feedback is good. And we have our own opinions about the industry as well. The question is, should all, any or none of it be published?
The fact is, bad reviews make good reading. A film reviewer who always says the films are great will rapidly lose his audience’s respect once they’ve been to see a couple of stinkers. To be taken seriously, you have to tell it like it is, and not beat around the bush. Truth has value.
I recall the moment at a (German) cement conference years ago when one of the presenters not only described an awful piece of equipment that had had to be replaced in his new cement plant, but also named the supplier. There was an audible gasp from the audience. I cannot remember any of the other presentations from the meeting, but I remember that one. There is so much cant and hyperbole around in the modern world, that when someone cuts through the coccooning fug that sounds many subjects, and gets to the heart of the situation, it is a rare thing indeed, and worth paying attention to.
On the other hand....While searching for a race to enter the other day, I came across one that was co-organised by a branch of Rotary International. On the front page of the race web site (www.rotary-royalforestofdean.org.uk), it had a section entitled ‘The Four Way Test of the things we say and do.’ Apparently, Rotary International (an international voluntary organisation) promotes these tests to its members, as a guide to what they say in their business lives. These are the ‘Four Tests:’
• Is it the truth?
• Is it fair to all concerned?
• Will it build goodwill and better friendships?
• Is it beneficial to all concerned?
While I’m strongly in favour of trying to stick to the first two points, I do know that to produce an interesting and worthwhile magazine, sometimes you have to acknowledge that the last two points will be difficult or impossible to follow. I certainly try to build goodwill and better friendships, and of course in an ideal world I’d like it to be beneficial to all concerned, but the fact is, sometimes, the truth hurts.

March 2006 (Rob McCaffrey)

In all previous issues of GCL, our advertisers have gone almost unpraised, but in this issue, I would like to draw your attention to several of them directly - unfortunately, I don’t have room to mention them all. I know of several people who firstly skim through the magazine to see who is advertising, and only then settle down to read the editorial. Fair enough: the advertisers have something that they want you to know about, whereas, as Lord Beaverbrook once put it, ‘News is something no-one can be bothered to suppress.’
Our front cover this month has been taken by WTW Americas, and the company wants to point out that it is still a separate and independent company (WTW in Germany was recently taken over by the Aumund Group), providing silo and handling solutions. Calderys Refractory Solutions is on the inside front cover (page 2), this time pointing out that the company has been formed due to a merger between Plibrico and Lafarge Refractories. The company is a specialist in sprayed refractories for a number of industries, including cement.
We are very pleased to welcome IBAU Hamburg as an advertiser, to this issue and to GCL. The well-known German company is a specialist in providing silo and terminal facilities: It’s an area of huge growth, particularly with growing imbalances between domestic demand and domestic supply in Egypt, Saudi Arabia, Iran, Vietnam, China, Greece, India and many other places.
Fritz & Macziol (inside back cover) is perhaps not as well known as it deserves to be. The company is one of Germany’s most successful (it won an award from IBM in January 2006), and as part of its business of providing shipping automation for bulk goods, it provides a niche area in the cement industry. The company is pleased to announce (via its ad) that it has received a new order for its VAS shipping automation system in Saudi Arabia.
Schenck’s Multidos feeding system is featured on page 25, and will be a system that is familiar to many of those who have toured the world’s state-of-the-art cement plants. The modular MechaTronic-based feed system is a basic but vital part of the production process, and the company has engineered the units to have particularly low-maintenance requirements.
With the recent (and ongoing) increases in energy costs, every plant around the world is anxious to decrease its energy costs. Particularly attractive then, may be the QDK retro-fittable high performance separator advertised on page 31 by Christian Pfeiffer. If you want to know more, then you should contact the company (and if you are reading the electronic version of the magazine, you can do that by simply clicking on the advert - it will take you straight to the company’s web site - welcome to the 21st century).
Walter & Bai AG has a small ad on page 35 for machines that play a big role in quality control: compression, bending and combined testing machines for cement and concrete testing, as well as other machines and services. On page 45 we have a trio of advertisers; Densit provides ceramic wear protection materials; Teutrine is a global supplier of kiln services and maintenance and Thorwesten Vent, which provides vitally important explosion protection systems for coal grinding systems.
Cardox seems to be a system that - once you’ve used it once, you’ll swear by it. Certainly, the cement plant managers that I have spoken with have a kind of missionary zeal when recounting its effectiveness at dealing with repeating occasional process blockages. You can see the company’s ad on pages 40 and 41. Claudius Peters is advertising its abilities in grinding, silo technology and in cooling, including its Eta Cooler, which has seen successful service in Holcim’s Siggenthal plant, and which is in operation at a number of other plants around the world. Eta is the Greek symbol which is used for ‘efficiency,’ so the cooler is particularly well-named.
Scantech (page 51) is advertising its Geoscan elemental through belt analyser, which has recently been completely redesigned ‘from the ground up’ to improve every aspect of the detector’s performance, and to decrease the size of the overall detector. Page 55 features two products that every cement plant must have: Renold is well-known for its chain technology, while Fuchs Lubritech supplies special lubricants (and services) for the cement industry. As I am often moved to mutter to myself, ‘Neglectful lubrication is truly a false economy.’

February 2006 (Rob McCaffrey)

OK, let’s face it, I am rapidly balding. The photograph that has graced this page for the last few years shows a younger gentleman with at least a thin ‘thatch.’ That thatch is now largely gone. There is no denying it. In the Battle of the Forehead, the hair has lost, and the skin has won.
My 6 year old daughter Elizabeth asked me this morning at the breakfast table, ‘Daddy, why haven’t you got any hair on the top of your head?’ I launched into a complicated explanation about Xs and Ys, and conception, and genetics and DNA and about the inevitability of male pattern baldness. In retrospect, she would probably have been happier if I had just said that it blew away when I was in a fast car with the roof down.
To be frank, I do miss my hair. Hair keeps your head warm, and I don’t particularly enjoy having a cold head. In contrast, without hair, one’s pate burns rather easily, and care must be taken in the sun. More obscurely, I was standing on a windy cliff recently when I felt a delightful feeling I had almost forgotten – the feeling of hair blowing against my forehead. It was a comforting feeling until I realised that it was in fact my eyebrows. With age, my hair is transferring from my head to other parts of my body, most notably my nose and my ears. Don’t laugh: it will come to us all.
Of course, I could wear a wig, comb my remaining hair over the top of my head, or even take the new range of drugs which promise to regrow the lost hair. However, I do not and will not do any of these things – ever. And the reason for this goes to the very heart of my own personal philosophy for life: ‘Be and know yourself.’ Knowing yourself (for example, knowing your mental and physical strengths and weaknesses – and playing to your strengths) I’ll come on to later. But firstly I want to look at the other side – being yourself, or more correctly being true to yourself.
Let me ask you a personal question. Do you want to be something you are not? For example, do you want to wear a Rolex watch when you cannot afford (a real) one? Do you want to run faster than you are actually able? Do you want more hair on your head than you have? Do you want to appear to be more sexy, clever, slim, successful, rich, educated and influential than you are in real life? My own take on this is that the very people that you may be seeking to impress are usually pretty canny, and will be able to spot a fake from 50 paces. The payback for trying to fake it is that your credibility actually reduces, rather than being boosted as you might have wished. If I was to wear a wig to cover up my advancing baldness, I would not be known as Hairy McCaffrey, but as Wiggy McCaffrey.
There are no fancy labels on my clothes: I only drive a car I can afford: My three-year old watch cost US$30 – it tells the time: I hope I recognise my minor place in the world: My head is bald. All other viewpoints would be self-delusional. If you start to lie to yourself, and to those around you, it’s time to try and find the truth, even if it hurts, and even if it reveals a shiny dome as smooth as a baby’s bottom.
‘Know thyself’ is an excellent exhortation. I would contend that self knowledge is one of the most useful things that you can possess. My children often ask me what my favourite colour/food/drink might be: often I have never previously thought about the answer. The sum of your personal preferences in many ways defines who you are as a person: Quiet or busy life? Company or solitude? Activity or quiescence? Fame or anonymity? Compromise or having your own way? Leading or following? Thinking or doing? You might find it useful to go through the preceding list, underline your preference in each case, and then decide if your current situation (life, job) matches your preferences. If not, perhaps it’s time for a change.
As well as knowing your preferences, it is useful to know your physical strengths, weaknesses and limitations. One way to find out about these aspects of yourself is to stand outside naked in the cold; or keep running until you drop; or stay awake until you hallucinate; or drink youself into oblivion; or shout until you are hoarse, or eat and drink nothing; or go hiking with a 100 pound pack. You will very soon find out what kind of person you are: In circumstances like these, there is no possibility of hiding from yourself.

December 2005 (Rob McCaffrey)

Climate change and emissions trading: what every business needs to know’ is a recently published ‘manual’ which delivers the basics and the details on the European Union Emissions Trading Scheme in CO2 (EU ETS), as well as taking in some of the background science. The start of trading in the EU ETS in January 2005 and the ratification of the Kyoto Protocol in February 2005 have meant that the cement and lime industries now have a heavy burden of reporting: If and when national allocations are tightened, the industry will see its costs rise, and there are serious plans afoot to shift production outside of the EU, to areas not covered by the ETS, even though the CO2 liberated in fuel burning and through calcination knows no borders. The authors of the book make the point that Kyoto is just the start of mankind’s efforts to address climate change, and that action will soon be taken to achieve bigger cuts in a broader range of industries, and in a larger number of countries.
The Kyoto Protocol proposed legally-binding reductions in greenhouse gases (GHGs) of at least 5.2% compared with 1990 levels (including a cut of 7% from the US). As well as international emissions trading, and the clean development mechanism (CDM), Kyoto also proposed Removal Units (RUs), where countries can earn credits by planting or expanding forests. My own view, as a geologist, is that a forest is only a temporary storage device for CO2, even if it lasts for a thousand years: when it decays or burns, it will release its carbon back into the atmosphere: I don’t see the point of RUs.
Interestingly, the report does mention those bodies of opinion that diverge from the mainstream. The Copenhagen Consensus group suggests that prioritising action on HIV/AIDS or clean water would be more sensible/give a great payback than action/expenditure on climate change. Yet others deny that climate change is happening or suggest that it is a man-made phenomenon. Piers Corbyn of Weather Action suggests that increased solar radiation has meant that the seas have warmed and that they are less able to absorb carbon dioxide. The consensus is that the cause and effect are exactly the opposite of this view. Whatever the physical reality, the political reality is that emissions trading is now here, and we all have to deal with it.
The book reviews in detail some of the concepts of the ETS, such as cap and trade schemes (where a central body sets the overall amount of permitted emissions, doles out permits and then allows sectors, companies or factories to buy and sell allowances); and ‘additionality’ (for example a new ‘clean’ source of power should not be in addition to a dirty source – there should be an overall reduction in emissions), and in addition, the book has a large glossary of new technical terms and acronyms that have sprung up to describe emissions allowances markets. If you have been tasked by your company to manage its allowances, then the book would make a good practical start.
In looking at the future, the report’s authors point out that, although the US is opposed to the Kyoto Protocol, the US and Australia have pledged to protect the climate system, take precautionary measures against climate change, and not to use a lack of full scientific certainty to postpone such measures. A series of meetings around the globe will take place over the next two years to try to set out a framework for what happens next (after Kyoto). However, what is already known of the second phase of the EU ETS is that it will include all six main GHGs, will involve fines of Euro100/t (compared to Euro40/t) for emitting CO2 without an allowance, and issue not more than 90% of allowances free of charge, compared with 95% in the first phase. The screw is tightening.
The authors of the report state in conclusion, ‘The Kyoto Protocol is a feeble weapon, with its insubstantial cuts and its tortuous bureaucratic processes. But it may be regarded as only a preliminary and pragmatic laying down of the battle lines: the real fight has begun with attempts to bring countries such as the US and Australia into the fold and to agree more meaningful cuts to a wider range of sectors, including transport, for the post-2012 period.’

August 2005 (Rob McCaffrey)

It’s a funny old world. After finishing the London Marathon two and a half years ago I decided to do a triathlon, just to keep my fitness up over the summer. I headed to my local swimming pool and started a modest 400m session.
About 12 lengths into the 16 length swim, I caught a mouthful of water, which went down the wrong way, and which led to me clinging on to the side of the pool, coughing and spluttering.
I remember thinking at the time that swimming was not the sport for me.
Imagine my thoughts then, if you like, when on a recent morning I lined up at the UK Ironman triathlon with nearly 1300 other wetsuit-clad swimmers in a misty lake in Sherbourne, Dorset, UK, to begin a swim of 3.8km - the equivalent of 152 lenths of my local swimming pool. In the intervening two and a half years, I have completed a number of triathlons that have included long swims in choppy seas, as well as the chaotic thrashing that characterises the start of the swim at the London Triathlon. I was nearly ready - apart from the fact that in all of my pool-based training, I had never actually swum 3.8km. I had swum 120 lengths in a session - 3km - but not the full distance.
It was a leap into the unknown for me.
I was therefore absolutely delighted to emerge from the water one hour and twenty minutes later, a full twenty minutes ahead of schedule and unexpectedly with a couple of hundred people behind me. I really don’t know how that happened. I think I just got into my rhythm.
We all then mounted our bikes, and headed out onto the notoriously hilly course. When I ride on shorter routes, I like to average about 18 miles per hour, but friends of mine had suggested that it was more sensible to aim for 16mph - and I’m glad I did. It turned into a hot day, and we had to ride for 180km, through the narrow lanes of the English countryside, up and down endless small but not insignificant hills. Amazingly, I kept passing lots of people.
I found that when they got to the top of the hills, they would have a bit of a rest and ease off. I kept on pedalling as hard as I could (I figure going down hill can’t be hard work, right?) and I fairly whizzed past them: About 250 of them over the course of the ride, which eventually took me a full seven hours. And yes, I was sore.
After nearly eight and a half hours on the go, I then changed into my running shoes and Union Jack running shorts (really), and set out on the 42km of the final marathon. My stomach troubled me during the first half of the marathon, and I had to keep stopping: there was also the infamous Babylon Hill halfway through the run course, which even the elite athletes either shuffled or walked up. The turnaround point was in the grounds of the fabulous stately home of Montacute Court, and after this point, I seemed to get my ‘mojo’ back - I got my head down, and just kept on going.
People around me were starting to suffer now, with many of them just walking, even on the down-hills. Mainly on the second half of the marathon, which took a total of four hours and 20 minutes, I passed another 250 or so. It was a far cry from my first 20 minute run nearly three years ago, which left me hobbling for four days. This time there was no pain: only a satisfying glow in the legs.
At 9pm, just after the sun had set, I finally ran into the finishing area, where my venerable parents were patiently waiting for me. There was no final sprint - the time for speed had long since passed. There was time only for a moment of exultation, that after three years of training, I had finally completed the Ironman, as it happens in 12 hours and 52 minutes, eight minutes under my target. I came 547th out of 1228 starters, and 133rd out of 288 in my age group, with which I am perfectly satisfied. I am glad I did it, but I don’t think I will do it again. I’ve ticked that box, and now it’s time to move on.
You may fairly ask what this has to do with cement and lime. Well, my many friends and contacts in the cement and lime industry were extremely generous, and donated over US$2000 to my nominated race charity, the Cystic Fibrosis Trust (see the list at www.justgiving.com/robironman - you may recognise some names).

My final point is this: If I can do it, so can you.

June 2005 (Rob McCaffrey)

Before I get going, here’s an appeal: I’m doing the UK Ironman (3.8km swim, 190km bike, full marathon) on 21 August, and I’m looking for sponsorship. Please sponsor me (for Cystic Fibrosis research) at www.justgiving.com/rob-ironman. Thanks!

I’ve just been reading the latest issue of ‘Red,’ Castle Cement’s excellent in-house magazine (see it at www.castlecement.co.uk). In the magazine, I came across a tale of an assistant electrical engineer, Frank Carrano, who makes people faint - by telling them in graphic detail and by showing them pictures of an injury he sustained while moving some large steel plates that had been propped up against a hopper. While removing the plates, one of them fell on him, fracturing and dislocating his right hip socket. It led to him being off work for 314 days. The tale sent a chill up my spine - and I think that in future I would tend to think twice when confronted with such a task. Frank certainly hopes that by telling people about his incident, that they will think twice as well.

The House of Horrors
And this got me thinking. Perhaps what we should do is to compile a gallery of pictures and descriptions of accidents in the cement industry for the GCL web site, so that you can be warned about what can and does happen (and how you can avoid it). To this end, I invite all readers to send me photos and a description of their accidents (it doesn’t need to have been a recent accident). Ideally, there should be two photos - one of the accident site (showing how the accident occurred) and another of the injury sustained (and the more graphic and gruesome the photo, the better the lesson for everyone else). Additionally, a short description (100 words) should be included of how the accident happened, including a description of the injuries sustained. Up to another 50 words should be given over to a description of how the accident could have been avoided. All of the photos and descriptions will be published anonymously on our web site. You can send the text and photos to ChamberOfHorrors@GCLmagazine.com. Thanks for your contribution!
Shout it from the rooftops
At the other end of the scale are those cement companies that have done something noteworthy, and really want to shout it from the roof-tops. One example of this is the PCA’s awards in North America for exemplary safety records, with the awards given out annually at the IEEE-IAS/PCA cement conference. Many companies also take part in blind benchmarking, whereby they send in data to a company, and the company will tell them how they compare to others in the industry in a variety of categories. These benchmarking surveys are anonymous, with the data being held securely. If you are the worst in your category, no one else will know who you are. But likewise, if you are the best, no one will know either.
We all like to be acknowledged for having achieved a good job. To this end, if you and your team have done a good job, then may I suggest that you enter the Global Cement Awards 2006? The inaugural awards include 16 separate categories (see pages 7 & 8 in this issue of GCL), covering most aspects of cement manufacture, as well as safety, refractory use and maintenance. After an earlier emailed announcement, the entry form for the Global Cement Awards was downloaded over 100 times from the award web site (www.propubs.com/GCA) in the space of a few days, so that competition for the awards is expected to be fierce. The top three applicants in each category will be invited to attend the European Cement Conference in London in March 2006, with the winners being awarded the Global Cement Awards Cup, and a monetary gift. More important than this though, is to be recognised by your peers as being among the best in the world.
We know that a number of companies are already working on their applications. My question is this: are you going to let those guys have a free shot at the target, or are you going to enter as well, and see how you measure up? As they say about the lottery, ‘You have to be in it to win it.’ (They also say that the world is run by the people who can be bothered to show up). I will not be making out your application form for you - only you can do that.
Could you be a winner?

May 2005 (Rob McCaffrey)

It is interesting the way something innocuous from your past can come back and bite you when you least expect it. This month, I want to tell you a story, which will explain my absence from this year’s IEEE-IAS/PCA conference.
Picture the scene, 18 years ago, when I was a student, with hair. My friends and I were in my room on the fourth floor of the student halls of residence in Dundee, Scotland, taking a break from revision. I looked out of my window, which was opposite a bank, and saw a queue of people at the cashpoint. Next to them was a dog which was defecating on the pavement. Having trodden in enough of the stuff during my time in Dundee, I shouted down to them that they ought to do something about this dog. However, there was no response from any of them.
As students we used to have frequent water fights, and among the instruments we had in our possession was a water pistol in the shape of a rifle. In those more innocent days, I stuck it out the window and gave the trigger a squeeze, to give the mutt a soaking and to encourage it to move along. It ignored me, finished its business and moved on.
Five minutes later, we heard a call from along the corridor, that the police were coming. Bless them all, my friends all ran away, locking themselves in their rooms. A large policeman entered my room and asked where was the gun. I answered that I had no gun, only a water pistol. He radioed through to his colleagues to stand down - it seemed as if the centre of Dundee had been closed on account of what the police believed to be an attempted bank robbery from the fourth floor of the student residence opposite the bank.
I was arrested and marched out of the halls of residence by two large policemen, who then put me into the back of a police car. One of them stepped into the pile of excrement left by the dog, and he used the water pistol to wash off the bottom of his shoe.
I was taken to a police station, and had my belt and shoe laces taken away, and was put into a cell, where I stayed overnight. I was not allowed a telephone call, to see my friends or to see a lawyer until the next morning. The duty lawyer advised me to plead guilty to a charge of breach of the peace, but I disagreed, and pled not guilty, and a trial was arranged.
On the day of the trial in May 1987, I recall coming down to breakfast in the student halls of residence, to see a large banner created by my so-called friends, saying in red yard-high letters, ‘Hang the b*stard.’ How I laughed.
At the trial, the police were commended by the Sheriff (as the magistrate is called in Scotland) for their bravery in attending to a scene where they believed there may have been a gunman. The police did not produce any member of the public who had been alarmed that day (as technically they ought to have done). They were also censured by the Sheriff for keeping me overnight in the cells without contact. I was given an absolute discharge (no penalty, and no criminal record), which implies that the process of prosecution and finding of guilt is punishment enough. As the Sheriff said, ‘I don’t want to ruin this promising young man’s future career.’
Despite my brush with the law, I look back on my days in Dundee with great fondness. Since then, I have finished my degree, been awarded a PhD, started a business, got married and had children. In the intervening time, I have visited the US well over 50 times, for business and pleasure. I like America. However, the new US Department of Homeland Security has tightened their rules. On a trip to Kansas City in February, the immigration officer asked me ‘Have you ever been arrested or convicted for any offense or crime...have you ever unlawfully distributed or sold a controlled substance (drug), or been a prostitute or procurer for prostitutes?’ to which I had to truthfully answer ‘Yes,’ on account of a misunderstanding on the part of the Dundee Constabulary in 1987. The immigration officer revoked my visa, and now I have to jump through the hoops to get another one - and it won’t be ready until after the IEEE-IAS/PCA event in Kansas City. Oh brother.
However, whenever I think that the US is being a bit silly with its new rules, I just replay the mental images that I have in my head of the events of Monday 11 September 2001. Sometimes, it is better to be safe than sorry.

April 2005 (Robert McCaffrey)

There is a saying that suggests that in polite conversation, one should not mention, sex, religion or politics. With the UK general election campaign underway, we seem to be hearing nothing but politics, so I will not touch on that subject any further, nor upon the delicate subject of sex. Maybe I’ll leave that for another time.
However, religion is another matter. I recently had a conversation with a gentleman whose identity must remain anonymous, for reasons that will become clear. He told me that he was a member of Religious Group X, which made up about 20% of the population of country A. He was the boss in a large department. However, around 97% of the workers in his department were members of Religious Group Y. A vacancy came up in his department, and he was asked by his superiors to name a replacement. When he suggested one particular worker, who was very able and who got on well with everyone (but who also happened to be of Religious Group X), his bosses told him that the candidate was not suitable. Instead, they chose another worker (from Religious Group Y) for the job. According to the gentleman I spoke to, the latter candidate was less able than the one that he had suggested.
I was, frankly, flabbergasted. Are we in 2005 - or are we back in the Middle Ages? And anyway, isn’t this kind of thing illegal? Certainly in the developed world, if you favour one religious group over another in the workplace, you are guilty of discrimination, and could be fined or even imprisoned. One could just sigh and ignore it, but the company that does that will lose out. After all, a business exists to make money, and not to promote the interests of one religious group over another. If I was choosing between companies, I hope and believe that I would chose the one that had the most able workers, not the one with the right mix of religious beliefs. Only through meritocracy can we advance beyond our dismal past.
Okay, that’s enough of religion - or religious discrimination in the cement industry at least. Let’s move on.

The power of advertising
As you may know, I took up running about two and a half years ago, and I have since run a few marathons and half marathons. I have already started to organise my own races, with such fruity titles as the Knacker Cracker, the Midsummer Munro and The Picnic. The Picnic is a full marathon, with more than 6000 feet (1826m) of climbing and descent, with a time limit of five hours. If you finish within the time limit, you get a medal. If you finish outside the time limit - even having run the hardest marathon in the UK, and possibly the world - you get a china mug with ‘Failure’ on it. Obviously, the race is no ‘picnic.’
I know that no-one would come to run the race if they had not heard of it. Fortunately, I believe in the power of advertising. I paid for a couple of adverts in a running magazine, and on its web site, and - hey presto - the race registrations started to flood in. It now looks likely that the races between them will make very useful money for my chosen causes - cancer and cycstic fibrosis. I had to pay for the ads, but they have more than recouped the money I spent on them. Speculate to accumulate, as they say.
You will see our 2005 Reader Survey at the front of the magazine (I urge you to fill it out and send it in!). In previous years, the respondents to the survey have told us what advice we should give to prospective advertisers. It seems obvious....be clear in what you are selling; make it eye-catching; if you are going to advertise in consequent issues then change your advert; tell us something we didn’t know.
You will know from your own lives that there are really just three categories of purchases that you make: firstly there are the things that you really need and can’t do without; secondly there are the things that you could do without, but which will bring added benefit to your life all the same; and thirdly, there are the things that you really do not need at all. A good advertisement will start the process that will convert the second category into a purchaser. That was the case with my races. Now, go back and look at all the adverts in this issue. Have they sold you on their product or service? Do you want to buy? That’s the power of advertising!

March 2005 (Robert McCaffrey)

It strikes me that many of the readers of GCL will have spent some time ‘on the road.’ Looking through our database, I notice that a high proportion are cement producers, but also that many are from the equipment-producing sector, and that a fair number of these (almost invariably male) are salesmen or ‘field service operatives.’
It is certainly a lonely life on the road. This morning I am looking out of my motel room window towards the great Missouri River, while on a visit to Kansas City ahead of the IEEE-IAS/PCA cement conference in May. An interstate highway lies between me and the river, and big trucks continually thunder by. A haunting, melancholic train siren is sounding far away off, over the tracks. I miss my wife and children, who said goodbye to me only yesterday, waving from an upstairs window as the taxi took me to the airport.
Still, it is not all doom and gloom on the road. This morning, for example, I started off the day with a classic gaffe. Coming down to breakfast, I noticed two large waffle cookers in the hotel breakfast room. Next to them, I notice a large vat of gooey yellow stuff, with a ladle sticking out of it. I assumed that it was waffle batter, so I ladled a big spoonful into the waffle maker, where it started to bubble. It didn’t smell quite right. I mentioned it to one of the servers, and he rolled his eyes skywards: “That is the gravy for the biscuits...’ (‘...dumb-ass’ he might have been thinking, but he didn’t say it). It made a real mess. I apologised. He mentioned that it was the third time it had happened in a month. I wondered why he didn’t put a big sign on the vat saying ‘BISCUIT GRAVY - NOT FOR WAFFLES’ after the first time. Verily, he who does not learn from history is bound to repeat it. Note to self: avoid staying at the Comfort Suites Inn in Kansas City next time.
Scanning down the visitor books of the cement plants I get to visit is almost like running through a list of old friends these days. Some of the names I recognise, some I do not. Of course, it’s always annoying when you see your competitors’ names on these lists, and it is important to remember not to tear out the offending sheet and immediately set fire to it. This action could cause offence to your hosts.
A feeling that I often get - particularly towards the end of a trip - is of a ‘red mist’ descending: a combination of tiredness, jet-lag and sheer humanity-overload can make everything a bit much to take. In situations like this, it is best to apply ear plugs and a sleep mask, and let it all wash over you. Remember: take off the sleep mask before driving home from the airport.
Of course, it is always tough to persuade your colleagues that a road trip is real work. A two week trip to Thailand and the Philippines does indeed sound enticing, but it has to be realised that the beaches and fleshpots of these countries - and many others - are remotely situated from any cement and lime plants. And in any case, it hardly matters if you do get to visit some tourist spots. After a while all those tourist places begin to look the same. I am always amazed at the indifference of my own father to seeing new places, but he likes to remind me that he flew around the world with the Royal Air Force, and has already been pretty much everywhere. He’s much happier to stay at home, and to attend to the chores that my mother assigns to him.
The fact is that when you are travelling on business, you are not at liberty to do as you wish. You can’t (easily) go into the kitchen and make your favourite dish, you can’t play with your kids, you can’t go over and visit your friends or tidy up the yard or do the DIY or dig the allotment. In terms of loss of personal liberty, it’s a lot like being in prison really - I guess.
And finally, I am constantly amazed when talking to salesmen in the cement and lime industry to find out how much time they spend on the road. For research and conference trips, I am usually away five days a month on average, which seems to be at the low end of the spectrum. I often meet people who are on the road for approximately half the time - it would seem to be the industry norm - but I have met one or two guys who seem to be at the very far end of the spectrum. One guy I met - of Asian persuasion - spent around 300 days a year on the road. I was shocked, and asked him what his wife thought about that. “Wife?” he said, “No wife. I am divorced, of course.”

February 2005 (Robert McCaffrey)

I like to know what is around the corner, as much as is possible, and one of the best books that I’ve read recently was called ‘The Next Fifty Years - Science in the first half of the twenty-first century.’ edited by John Brock. It is a controversial collection of 25 essays about the likely progress of science in the next 50 years, and it has some startling conclusions. In general, the scientists who have looked into the crystal ball suggest that computers will continue to get faster but that software will continue to be a major stumbling block and that biotechnology has the potential to change nearly every aspect of our lives.
It is in the detail though that the book provides its most interesting pointers. Even in the first essay, the author suggests that quantum computers - which will use quantum effects like superposition and entanglement to produce huge computing power - will almost certainly exist in 50 years. These computers could break all the codes now used by the government and military. One essay suggests that in 50 year’s time, we will know the nature of ‘dark matter’ and ‘dark energy,’ the most fundamental mysteries confronting science today. We should also be able to explain many of the features of the early universe (back to less than a second after the Big Bang), and there may be testable theories about what came before the Big Bang.
In fifty years, we should have a better idea about whether life exists or ever existed elsewhere in our own solar system. We should also understand if life was created just once - maybe not even on our own planet - or more than once and with fundamentally different origins. It would be quite a moment if science were to discover a living organism which is not based on DNA/RNA. Imagine finding a fossil on Mars. It will be a turning point for the entire human race - for ever.
One author suggests that scientists will master the problem of how we learn: which will also open the door to us on the subject of why we turn out the way we do. A number of authors touch on human happiness: is it desirable, how does it happen, and should everyone be happy? In one of the most prescient passages in the book, M. Csikszentmihalyi says that when parents are asked for what they hope for their children, they most often say that they hope that they will be happy in whatever path they have chosen for themselves. According to behavioural geneticists studying twins, at least 50% of your happiness is genetically inherited. Having more money is also related to happiness, but apparently only up to the average income of, say, Portugal or South Korea. After that, additional money does not correspond to more happiness. If, in the future, we can change our genes or take drugs to be more happy, will that lead to less driven, lazier, less creative people? Is that a bad thing?
Richard Dawkins forecasts that by 2050, we will be able to sequence the entire human genome for around US$160. Everyone will know his own personal genome. Your doctor will give you a prescription based on your responses to a drug, based on your specific genes. You may know your risk factors for most of the diseases known to man. Will you want to know?
One author suggests that we will use radical alterations of human bodies through genetic manipulation, not just for medical reasons, or for extending life, but also for recreation and for lifestyle reasons: “The human menagerie will expand in ways unimaginable to us today.” In the final essay, Paul Ewald suggests that infection will come to be regarded as the main cause of a number of diseases that have currently unknown causes, among them leukemia, atherosclerosis and schizophrenia.
Nowhere in the book is cement or lime mentioned. I wonder if it will continue to exist in its current form. My guess is that it will, but that it will be a lot more expensive, and that cheaper alternatives will be gaining in market share. If you don’t believe that things could change that much in 50 years, just take a look at how computing has changed in the last half century. At least they got the steering wheel right!

December 2004 (Robert McCaffrey)

I don’t know if you’ve ever heard of the phrase ‘Just count your blessings,’ but it’s one that I recently took literally, in a rare idle moment. With a large sheet of paper in front of me, I asked my wife and two young daughters if they could list the good things in our life. The result rather surprised me. The piece of paper was eventually filled with three columns of writing, and I’ve since thought of a few more that would have to go on the other side of the paper. When I counted my blessings, I actually had 81.
The list of our blessings actually starts off ‘Our eyes work.’ This is another way, really, of saying that our health is good, and that we are not ill. In fact, phrased differently, this theme recurred seven times on the list of our blessings (including ‘good mental health,’ which is a blessing not to be overlooked).
Second on the list was ‘lots of toys.’ My children do seem to have a lot of toys, but many of them have been bought by my wife second hand, so they did not cost a lot of money. If you take ‘toys’ in its widest sense, then you might include our other possessions which give us pleasure. These include ‘camping gear,’ our two modest cars, our bubble machine, our TV and radio, a doll’s house, our telephone and the washing machine.
Third on the list was ‘We laugh a lot.’ I’m not sure about your home life, but top of my list for a happy home life is laughter, closely followed by lots of singing. References to aspects of home life, including ‘playing with sisters,’ and ‘bed-times stories,’ occur 14 times on this list. Many of these blessings stem from the fact that my wife and I are still together, after six and a half years of marriage. How anyone can be married for 50 years (like my parents) or even longer, is beyond my comprehension. Those 14 ‘home life’ blessings don’t include the factors that give rise to comfort or ease in our corporeal bodies, such as ‘clean water in the taps’ (which actually occurred twice on the list), ‘the house is nice and warm,’ ‘we have enough food,’ ‘we have nice beds to sleep in,’ and ‘we have pleasant sanitary facilities.’ We take for granted all these last items, but if any of them were absent, we would suffer.
Going down the list a little, I start to recognise a category that might be termed ‘the things we do.’ For my children, the list includes things like ‘colouring, sticking and cutting,’ ‘skipping, bike-riding and scootering,’ ‘gym club and ballet,’ ‘happy family holidays,’ and ‘other children to play with.’
For my own part, the blessings on this list that I might include under ‘things we do’ would include running, swimming and cycling (particularly in triathlons), as well as singing and digging at my allotment, and a bit of sailing. Included under this heading would be the existence of my local clubs for running (Dorking and Mole Valley Athletics Club), and for singing (Dorking Choral Society). Among my blessings I count my experience in runnng marathons and other races, and my sailing experiences.
Nearing the end of my list of blessings, are those blessings that stem from where we live. It’s a nice part of the country (just on the edge of the south west of London, near Epsom, where they run the famous Derby horse-race), and from here it is fairly easy to travel everywhere, not just in the UK, but in the world. The schools are good, and the crime rate is very low.
We are lucky to have many of our relatives still alive, even though we wished that they lived nearer to us (although they wish that we lived nearer to them). We are lucky to have our friends all around the world.
My job has given me very many blessings, including having been able to travel around the world and meet a lot of people - many of the blessings on our list stem from my job as editor of this magazine. And that stems, in part, from my education, which I also count as a blessing.
There are many other things on the list that don’t fit into any particular category (‘we are allowed to eat chocolate,’ ‘we are free to do as we wish,’ ‘the National Health Service’). The odd thing is that there is only one word on the list in capital letters, written half way down the second column, so it’s right in the middle of the page. It was absent in Europe for much of the first half of the last century, and we have been blessed with it for the last 60 years or so. Nearly all blessings stem from it. What is it?
‘PEACE.’

November 2004 (Robert McCaffrey)

As I was editing an article for inclusion in GCL: Global Cement and Lime magazine, I saw that the authors expounded - at some length - the very many advantages of using slag in the cement (and concrete) manufacturing process.
That set me to wondering about the size of the slag industry (or problem or opportunity, depending on your standpoint). As it turns out, the global slag industry is enormous. Germany alone produces in the order of 13Mt per year of slag, and the US even has two separate slag associations (one formed in 1918, and another - the Slag Cement Association - formed in 2001). Every iron plant, and every steel plant around the world produces slag, whether it wants to or not.
You may ask yourself, ‘Can you really call it a ‘global industry’?’ Well, I believe that you can. It may be an global industry which is in its formative stages, but it has all the characteristics of a global industry: large numbers of producers, large numbers of shippers, and a very large number of potential consumers. Add in a few national and regional associations and you have the makings of a global industry by anyone’s measure. What it has lacked up to now is a global magazine to spread industry news and technology, and a physical place where those interested in slag can gather from around the world to make contacts and catch up on the latest developments and gossip.
So, I’m pleased to announce the forthcoming publication of the first issue of Global Slag Magazine, and the first Global Slag Conference, which will take place 17-18 November 2005 in Düsseldorf. The magazine will be available for free download to all participants in the global slag industry. Just navigate to www.GlobalSlag.com. Easy!

What’s it all about?
On the other hand, if you ask me what the global cement and lime industry is all about, then I’ll give you my opinion: ‘It’s about people.’ You might think that it is about getting your fuel costs down (OK - that might also be of importance), or increasing your production capacity (it is - and especially if your boss is breathing down your neck), but I really think that this whole business is about people.
For instance, at the Asian Cement Conference, we discussed cement a lot, but it will be the contacts with other people that we made, and the fun that we had that we will remember in 10 years’ time, rather than the presentations (for those, we can look in the proceedings).
When you think about safety at work, don’t think about statistics, or tables of numbers: think about people. If you think of one additional lost-time accident, or a fatality, make sure that you think about the person behind the number. A number is not going to move you to increased safety consciousness: a fatherless child or widow might.
When I think of the dusty environs of some of the plants I have visited, I always try to remember the great benefits that cement brings to people’s lives: a simple shack built of blocks and mortar would be a huge advance for many people in the developing world. Cement would be of more use than gold dust to these people.
In all the places I’ve been to - Cuba, Syria, Ecuador, Uganda, Iran, China and so on, I have noticed one main thing. Despite their differences, people around the world are essentially the same. They want a quiet life. They like to laugh. They want to be able to enjoy the company of their friends and their family. They are interested in new things - gadgets, news, strangers. They prefer the roof not to leak, and the temperature to be about 22°C, wherever they live. They like to eat well, and to drink. They like company. After all, solitary confinement is the worst punishment available to humans - worse than death.
If you ask me, our industry is all about people.

October 2004 (Robert McCaffrey)

To me it is amazing that I have now been writing about the global cement and lime industry for over ten years, eight of them working for PRo Publications International, publishers of firstly Asian Cement Magazine and now GCL. When I first started, I really thought that it would be a short-term position, perhaps six months, before I found a ‘real’ job. My friends and family laughed when they heard what I was writing about. They couldn’t believe there was enough of interest for a single issue of a magazine, let alone a monthly.
As things turned out, I have greatly enjoyed the last decade, and one thing that has made it so pleasant for me has been gradually getting to know so many of the participants in the industry. I remember when I first went to interview an industry ‘bigwig,’ that I was so nervous that my hands were shaking, even while using the silver cutlery at the restaurant he had kindly taken us to. I met him again recently and mentioned the episode, and we had a good laugh about it.
I’ve been lucky to learn a lot from people that I’ve met through my job. A gentleman named Kassem Razawi, who worked for Siemens, was another one of my favourite characters. He tried to teach me how to bargain - and he was a master at every trick in the book. He had no shame, and when he had already extracted the best possible price out of a dazzled stall-holder, he would bring out another ace from his sleeve, and try to get the price down even further. He was a kind man, who deserves a good retirement.
I remember going to a cement conference in China, where I had been asked to give a full day’s lecture on the global cement industry. Using some of the tips I had learned from Kassem Razawi, I negotiated my lecture down to half a day, and later took the opportunity to get out into the Chinese countryside with the editor of a German cement magazine. We both hired bicycles, and cycled out among the amazing limestone towers of Guilin, rising vertically from the rice paddies. There we made the acquaintance of a local lady who took us both back to her modest house, and who prepared for us a delicious meal of fresh vegatable, noodles and local beer. My German friend, perhaps with the beer taking effect, proceeded to sing to this Chinese lady a number of beautiful German songs in a tenor voice so clear and melodious that I can recall it to this day.
On another occasion when I was in China, I was in a bar with another German cement industry participant, and we drank so much beer and schnapps and danced so vigorously that he felt ill and had to sit down for a rest. He flew home the next day, as planned, and when he arrived back in Germany, he visited his doctor who told him that he had suffered a heart attack: he was whisked into hospital for immediate surgery. Happily, he has survived and has made dramatic changes to his lifestyle so that maybe, one day, we can have another (small) beer together. I hope so.
At one of our other conferences, I recall bumping into a delegate who looked very morose. He explained that it was the first time that he had left his own country, and that he was missing his wife and children a great deal. Although we soon cheered him up, because I had no children at the time, I just couldn’t understand the depth of his feeling. Now I have my own children, I can empathise more.
One of my fondest memories is of the US PCA’s Bill Toal, who spoke - eventually - at the second American Cement Conference in Miami. Somehow, between checking in at Chicago and arrving at the departure gate, he managed to loose his photo ID, and was denied a seat on the plane (although his bags still flew, even post-9/11). He managed to get a new driving license in 45 minutes, but still arrived a day late at the conference, just in time to give a well-received paper. It was a shock to me when he died just a few months later. He was another gentleman.
Although it’s sometimes hard work to meet new people at an industry event, it is worth the effort. Every time I go to a cement or lime industry conference, I somehow manage to see more and more familiar faces, old contacts who I met at some previous event for the first time, or someone whose factory I have visited. The odd thing is that I see some of these people more regularly and with greater frequency than I see some members of my own family or old friends from school. I hope that I will still be meeting these cement and lime industry ‘contacts’ in another decade’s time, and maybe beyond.
It’s a friendly industry, and I am proud to call some of these contacts my friends.

July 2004 (Robert McCaffrey)

One of my favourite phrases goes as follows: ‘The man who never made any mistakes never made anything.’ I am fond of the saying because it seems to imply that the more mistakes you make, the more you can actually accomplish. While that may not be strictly true, you certainly have to break a few eggs before you can make an omelette.
As I have mentioned in the column before, it is sometimes failure - or the unexpected, unplanned, unwished-for - that can steer you onto the true path. Certainly, when we started to publish Asian Cement and Construction Materials Magazine (the far-distant antecedent to GCL Magazine) back in 1996, we didn’t expect it to be quite such hard work. Our competitors have not stayed still in the intervening years. World Cement, ICR and ZKG are worthy magazines in their own way, but other publications including Cemento Hormigon and Ciments Betons Plâtres Chaux have all improved over the years. Other magazines, such as Cement Americas, Indian Cement Review, Ferrumen (a new Turkish cement magazine), the AUCBM’s Cement and Building Materials Review and Cement International have made the field even more crowded. We are pleased to acknowledge that GCL can stand among the best magazines in the field, and that its readers (according to our Reader Survey 2004) rate it as the best source for news, features, interviews and information on trends in the industry.
When we launched Asian Cement back in the booming days of 1996, we did not know what the magazine was later to become, or that GCL would be the sponsoring magazine for a series of well-known and regionally-based cement conferences. It just wasn’t in the plan.
In the same way, we now find ourselves at another crossroads. Technology has moved on so much that it is now possible to create a digital magazine entirely within a computer, without recourse to pieces of paper, press releases, photographs or even paper proofs. Whereas a decade ago I might be found late in the evening or even at weekends developing pieces of film that would be sent off to another company to make into plates that would be sent off to the printer, today I send a simple pdf file by email, and a few days later the magazine arrives back on my desk.
Advertising also comes to us in a completely different format: where it used to arrive as pieces of film or as arcanely-formatted software files, it now arrives as a foolproof pdf file, ready for use. I do not miss the old days!
Things have also changed in the information technology set-up of the cement industry. When we started Asian Cement, email was yet to appear on the radar, and only a select few academics and early-adopters even had an email address. Everyone was on a ‘dial-up’ connection, and a download speed of 50kb/s was thought of as fast. Nowadays, practically everyone has an email address (even the Queen has one - I wonder if she gets spam), and it is common for businesses and even home users to have an always-on broadband connection.
When we first thought about making GCL available on-line, we thought that readers would only want to see a very high-quality version, so I uploaded a copy to the web that was 80Mb in size. Some brave souls did download it, but not so many. Obviously, making the file so large was a mistake. As I have also noted, the old Chinese proverb says ‘The man who does not learn from his mistakes is bound to repeat them.’
Last month, I made a lower-quality 17Mb version available, and I emailed prospective readers to let them know about it. Well, I have been pleasantly surprised by the response: Until this moment - and now I am just checking with my activity files - the full version of the June-July issue of GCL has been downloaded over 2000 times. This is good news for everybody. The readers get to see the news even more promptly and to read the excellent feature articles, and the advertisers get ‘live’ versions of their adverts under the readers’ noses (with the prospect of immediate click-throughs to their web sites, or even a direct sales enquiry via a one-click email). The subscribers, of course, still receive their beautifully-printed magazine for reading at their leisure and for archiving.
While there are still some issues to sort out, I am convinced that this will be a growing trend, and that in ten years time, we will all be comfortable downloading our monthly magazines.
Now, if only we could download cement and lime straight to the customer!

May 2004 (Robert McCaffrey)

So, our representations have gone un-heeded. Two major regional cement conferences will take place on the same dates in November. What a pity. It’s on occasions like this that one regrets the absence of a proper Global Cement Association, which could arbitrate on the dates (or at least act as a central repository for proposed ‘official’ meetings so that there was no clash), and then knock some sense into the parties. Although GCL will (somehow) be at both events, we would also like to point out that the Asian Cement Conference in India (11-13 October 2004, www.AsianCement.com, see page 55) will cover the markets of the Middle East and of the Far East, and that it does not coincide with any other conferences. How convenient...

Unionised or not?
Among many interesting encounters at the excellent IEEE meeting in Chattanooga, one sticks out in my mind. I met two cement plant maintenance supervisors who were having a chat about their respective plants. We got on to the subject of unions, and their experiences could not have been more different. One from a unionised, and one from a non-unionised plant. The supervisor from the unionised plant told us that if you rise through the unionised ranks, and eventually go from being a paid-by-the-hour worker to being a salaried employee, then you must give in your union card. (He made it sound like crossing over to the enemy).
Once you are a salaried employee, you are not allowed to touch the equipment. Even if you see that the bolts need tightening on a piece of equipment, or it is going to fail, you are still not allowed to, by the union rules of the plant. If you do touch it - and someone sees you do it - then it is likely that the union will file a grievance against you. This means that the union formally protests that you have done work that was rightfully the preserve of a union member (thus depriving him of his livelihood). The union will then often claim compensation for the worker whose work you have wrongfully done.
Apparently there are three stages of grievance procedure, of which this is only the first level. At the third level, for really serious matters, such as dismissals and disorderly conduct, arbitrators will be brought in to decide in a Solomon-like fashion between the petitioners; the salaried non-unionised workers on one side, versed against the hourly unionised workers on the other.
The maintenance supervisor from the non-unionised cement plant just laughed and shook his head. “That,” he said, “is why we fight to keep the unions from organising in our cement plant.”

Keep on running!
Aside from editing GCL (‘the greatest cement and lime magazine ever published’), I also make time to run a little. I find running quite a strain, so that whenever I am in a race, I try and get it over with as quickly as possible (which reminds me of the old joke about the man who was caught speeding and when questioned by the policemen said that he was trying to get home before his petrol ran out). Anyway, I ran the London Marathon again in April, and finished in just under 3:15. To all of those in the cement industry who were kind enough to sponsor me - I raised around Euro2500 for a cancer charity - ‘Thanks!’

Never judge a book...
I have been sent a copy of ‘Air pollution control in Industries, Volume II,’ authored by T.K. Ray. Unfortunately, according to the dedication in the front of the book, Mr Ray ‘departed for his heavenly abode before the publication of the book,’ which is a pity, since it is a fine tome. Ray covers more than just the cement industry, but he includes a great deal of the basic theory behind air pollution control, as well as many worked examples of calculations. Further information can be had from abitechbooks@vsnl.net.
One other book worth purchasing (although it will set you back a ‘pretty penny’) is Cembureau’s monumental World Cement Directory, which lists all of the world’s cement factories and their staff. ‘The Black Book,’ as we call it, is invaluable. Cembureau has also just made available the entire contents of the directory (but only to those who have already purchased the book) on CD-Rom. You can order it from via Tel (+32) 2 234 1011.

November 2003 (Robert McCaffrey)

It’s a funny old world. I have been meaning to compile a list of the top 10 cement producers for several years, and never quite got round to it. Then out of the blue a couple of months ago, one of the major equipment manufacturers called me up and asked me if I had the data to hand. I told him that I didn’t but that I would try to get my hands on the list. As it turns out, the list didn’t exist in the format I needed, so I decided to compile it from scratch. The results can be seen at www.propubs.com/topten/index.html.
Before we get on to discussing the list itself, there are a number of caveats that have to be emphasised. First of all, it has to be realised that the numbers that I have used have been calculated on an entirely different basis for each company. I have tried to give values for gross and net cement production capacity, and gross and net cement sales. In both cases, I include (as do many of the companies) clinker as being equivalent to cement - but we all know that one tonne of clinker makes more than one tonne of cement. However, there is no way of splitting off cement production from clinker production in the statistics (and it would largely be pointless since the majority of the clinker is immediately made into cement anyway).
The gross and net values for both cement capacity and sales also require some explanation. For example, if the Big Grey Cement Company owns 100% of 10Mt of capacity, and 50% of another 5Mt, it would only be fair to say that BGCC has a net capacity of 12.5Mt, right? Some of the companies reporting their production capacity are explicit in saying that their capacities are proportionally consolidated - that is, calculated on the above basis. Others give a figure for the total cement capacity, and include all of the capacity of even only partially-held companies. This is like saying that BGCC has a capacity of 15Mt. Other companies are not explicit in their language, and we are left to guess how they have compiled their figures.
In addition, the figures apply to a variety of dates, although I have always used the most up-to-date figures, generally referring to 2003 capacity and 2002 sales.
As expected, Lafarge is at the top of the listing, with 148Mt of cement production capacity, but Holcim is close behind with 141Mt. Cemex gives a net cement production capacity of 78Mt, but no gross figure, although it is likely to be considerably higher. HeidelbergCement has a net figure of 64Mt (more properly around 73Mt once their participations in Indocement and in China are added in), and a gross figure of 83Mt. Cemex and HeidelbergCement are very close, therefore in capacity terms, but HC’s recent acquisitions in Germany may yet narrowly take it back to third place. Now that regulators have barred HC from buying RMC’s German cement capacity, the two companies will still be ‘neck and neck.’
Italcementi comes in at 5th place, with a total production capacity of 70Mt, while Taiheiyo rounds out the top six with a gross cement production capacity of 53.2Mt.
It is in the final places in the top 10 that the controversy may really start. In at number 7 is BuzziUnicem, in this listing at least incorporating 100% of the production capacity of Dyckerhoff. Even though the two entities may not yet have formally merged, their destinies certainly lie together, and their capacities are here treated as one block. Indeed, the same approach is taken with the ‘combines’ at the eighth and ninth positions in this top 10 - Grasim-L&T, and ACC-Gujarat Ambuja. After all, Chichibu-Onoda was a ‘combine’ until someone had the bright idea of renaming it ‘Taiheiyo,’ and now no-one would question its unity as a cement producer. Votorantim takes tenth place with a net capacity of 28Mt.
Surprises? Well, Cimpor, Anhui Conch and RMC all fail to make it on to the list, even though they all claim to be among the ten largest cement producers in the world.
When I went back to the equipment producer, he mentioned that it has a major impact on his mode of business. He explained that the progressive rationalisation of the industry - where Lafarge controls around 10% of global capacity, and the top 10 between them control around 40%, is bringing him nothing but problems. The major groups have such huge buying power that they can put heavy pressure on their suppliers to cut costs and therefore margins. The pressure is then transmitted down through the supply chain to the tiniest manufacturers, supplying components of components of components.
Food for thought indeed.

October 2003 (Robert McCaffrey)

In this, GCL’s environmental special issue 2003, I would like to ask you to ponder upon a philosophical question: Should cement and lime companies be a force for good in the world? It is certainly within their power to have a positive impact on the world, through their investment decisions, and also through the way that they treat their employees. The two go hand in hand in some cases, but they can also be mutually exclusive.
Let me give you an example. I recently visited a cement plant where two gentlemen were involved in manually loading two tonnes per hour of tyres into an elevator, and then of loading them, again manually, into a kiln dosing cage. It was plainly an uncomfortable job, with a lot of lifting and throwing of tyres. It was also boring, dirty, cold and wet (since the tyres sometimes contained water). The plant engineer explained that it was just not economic to invest in a mechanical system to do this job, since local wages were so low: it was cheaper to get six burly guys to do it, two on each eight hour shift, round the clock, 365 days a year.
Let me digress a moment, before I return to these guys in their unpleasant job. I remember when I studied economics for a couple of years, being taught about supply and demand in the jobs market. It was suggested that superstar footballers and rock stars have talents that are in very short supply, and so they can charge what the market can bear (which in the case of some footballers in the English Premiership is more than UK£100,000 per week). In the case of toilet cleaners and streetsweepers (and I presume, of cement plant tyre loaders), the supply base of people with the requisite low skill level was very large, and the laws of supply and demand meant that they could not expect to be paid very much. What these economic formulae do not take into account is the relative level of comfort involved in- or pleasure derived from- each of these kinds of jobs. For all of their complaints, being a superstar footballer has got to be a better job than to be a tyre-loader at a cement plant.
Digressing again, there is a TV show in the UK called ‘Back to the floor,’ where the CEOs and managing directors of various companies (Burger King, the Ritz etc) are given the most menial jobs in the company for a week. The premise of the show is that they invariably screw things up, find out that the job is extremely hard work for little pay, discover that the resources they assume are being provided for their workers are not in reality available and they end up returning to the board room determined to improve the lot of their workers. I would love to see this TV show featuring a cement company executive.
So, to return to the burly guys loading tyres round the clock in sub-zero temperatures, I really want to ask the question ‘should people in cement or lime plants that do particularly unpleasant jobs be paid a bonus?’ Indeed, if the job is so unpleasant, should the company just say, ‘This is a task which should not be done by anyone, and we will therefore invest in equipment to mechanise the task, eliminating the jobs.’? If it was raining very heavily, and you didn’t want to go outside, you might make the point by saying ‘I wouldn’t even send my dog out in this weather.’ By analogy, if the CEO or managing director of a cement or lime plant could not bring himself to do a particular job for more than, say, a month, perhaps he should invest to eliminate the job.
However, here lies the dilemma. Are these burly guys in their tough job going to be happier in an unpleasant, low-paid job, or are they going to be happier if their job is taken by a machine and they are unemployed? By the same token, are the guys that you see standing on the back of a flat-bed lorry manually loading 50kg cement bags (almost invariably in Africa), completely covered in cement dust, except where the rivers of sweat from their brows wash it off into their smarting eyes, better off unemployed, their subhuman jobs having been eliminated by a machine?
Both of these jobs (tyre loading, bag loading) have very large potential health and safety risks, and any Europe-based company should not tolerate such health risks being taken by any of its employees, anywhere in the world. Food for thought?