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Specialty cements:
oil-well and white cement February 11, 2016
Webinar presentation
CW Group LLC | T: +1-702-866-9474 | F: +1-928-832-4762 | Connecticut, USA
Client Confidential Information
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Agenda
Introduction
– About the CW Group and Research services
– About the presenters
– CW Middle East & Africa Summit: Dubai workshop Apr 2016
Specialty Cements:
– Oil Well Cement
– White Cement
Final remarks
– Questions
Client Confidential Information
About CW
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Advisory Research Media
Strategy and M&A advisory advisory.cwgrp.com
Business decision support research.cwgrp.com
Media & meetings Various platforms
Strategic advisory
Management consulting
M&A advice
Transaction support
Due diligence
Syndicated market /
industry study reports
Reference forecasts
Data and chart-books
Commodity price
assessments
News services
Newsletters
Online data access
Publications
Meetings
Seasoned experts Business & technical Network & access Proprietary data
Cement, Building
Materials &
Construction
Steel, Metals & Mining Chemicals Dry bulk cargo, ports
and infrastructure
Power, energy and solid
fuels
Client Confidential Information
Presenters
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Robert Madeira Managing Director &
Head of Research
M: +1-646-894-4762
Prashant Singh Associate Director
M: +91 8879607047
Founder and Managing Director of the CW Group
MBA from the Harvard Business School and a triple-
major from Brown University
Extensive functional experience in management
consulting, corporate development / M&A and
investment management
Manages the global CW Group team out of
Greenwich, CT USA
Associate Director of CW Group, Mumbai, India
MSIB from Seton Hall University, USA
Extensive experience in management consulting
and market research
Manages CW Advisory queries for the India
operations
Client Confidential Information
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WHY ATTEND?
• Interact with CW: Gain first hand access to senior CW consultants and analysts.
• Receive Data: Leave with actual, systematic information – not just talk.
• Obtain Insights: Obtain the latest industry data and statistics from the CW Research team
• Discuss, not just listen: Discuss not just presentations, but review actual data in a multi-client consulting setting.
Client Confidential Information
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Highlights: World Oil Well
Cement Market Report
Client Confidential Information
Analyzes in detail developments in the world oil well cement market from a regional
perspective with a focus on key markets
– Offshore oil and gas well counts with trajectory, depth, and well type to help
ascertain oil well cement usage
– Rig counts and dynamics affecting the industry with its drivers
Global scope with details on 33 most important oil well cement markets
Addresses important market dynamics about API certified oil well cements including:
– Market size (USD and tons)
– Volumes demand, imports, exports
– Global capacity overview (market and major producers)
– Regional market shares
– Types of oil well cement used (by geography)
– Price trends
For key countries, the CW Research team gives detailed and specific demand by main
types of oil well cement
Developed through broad set of primary research with stakeholders across the value
chain
World Oil Well Cement Report
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For a complete listing of focus countries as well as more details visit:
http://www.cwgrp.com/research-a-analysis/global-monitor-
reports/306145-world-oil-well-cements-2020.html
Release – February 2016
Price – Individual: US$5,900 + S&H
(hard copy)
– Multi-User & Group:
(licenses available upon
request)
– Electronic data available
(Excel tables) as an add-on
Client Confidential Information
Oil & Gas sector severely hit in 2015; Bright spots exist but oil glut,
high inventory and growth uncertainty spell caution in the short term
Oil & Gas sector in a downturn – the worst contraction in decades
– Crude demand growth slows down
– Emerging markets like China, India see downward revision in economy growth
– Crude prices at lowest levels in 15 Years
– Drilling sees huge drop as companies cut back on costs
– Middle East the only bright spot right now
– Russia relatively stable despite EU sanctions
Historical and Future outlook
– Oil well cement consumption growth
– Supply highly fragmented – a buyers market
– Recovery to be gradual but elongated and linked to crude prices
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Client Confidential Information
Oil & Gas well completions declined by 30%+ worldwide in 2015 –
largest drop since the financial economic crisis
$0
$20
$40
$60
$80
$100
$120
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
Onshore Offshore Shale Avg. WTI Oil Price (USD/Bbl)
Central & South American market worst affected after North America, seeing a YoY drop of 32
percent and 44 percent in 2015, respectively
Drilling activities in Russia least affected: low cost of production (Capex + Opex), currency
devaluation, exclusion of gas industry from sanctions imposed by EU, national politics
Large Middle Eastern oil producers like Saudi Arabia, Kuwait, UAE continue to drill but slowdown
expected
World OWC consumption (OWC ‘000 tons)
Client Confidential Information
The decline is seen in the 50% fall in rig count, with daily news of
more rigs being pulled offline and cancelled drilling contracts
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0
1,000
2,000
3,000
4,000
Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15
North America Middle East C&S America Asia-Pacific Europe
North America accounted for the bulk of rigs deployed around the world nearly 65% in 2014,
declining to ~50% in 2015
US and Canada rig counts halved in 2015 – oil fields in the US seeing drastic drop in drilling
Permian basin with the largest number of active rigs in 2014 has seen more than 60
percent drop in rig count, similar trend seen in other basins like Eagle Ford
Horizontal drilling rigs (shale) witness over 58% of drop in 2015
Client Confidential Information
World OWC demand peaked in 2012-2013 as US shale drilling
activity peaked; 2015 volumes plunged along with crude prices
Although well depths vary by basins in the region, the general
trend is towards drilling more linear footage per well to extract
oil & gas
Offshore and shale formations require more drilling than
conventional onshore wells but they constitute a smaller
percentage of the aggregate drilled footage
OWC Regional Consumption
North America Asia Pacific CISC&S America MENA EuropeSSA
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0
10,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
Total Cementitious Demand Global Avg. OWC/Mtr
World OWC consumption (OWC ‘000 tons)
Client Confidential Information
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# of OWC plants by certification type
The large cement producers participate in the segment; while
number of units gives a hint, volume market share is notably different
API certified (active license)
59%
API certified (license not
active) 20%
Other 21% 0
80API active API non-active Other
# of OWC plants by Group
0
60
America(C&S)
America(North)
AsiaPacific
CIS Europe MENA
API active API non-active Other
# of OWC plants by region
Client Confidential Information
Depressed crude prices to reduce drilling activity in 2016 – much
debate about ability to work through supply glut
> Oil & Gas well drilling dependent on short – medium term crude prices
> Global prices have crashed more than 70% in last 20 months
> Shale drilling growth severely impacted due to higher costs of production
> Middle East and Russia resilient to the decline in oil prices – driving OWC consumption in the near term
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Client Confidential Information
Decline in OWC demand tightly linked to oil prices; recovery
expected to be slow and gradual, even in best case
Downward growth revision by institutions like IMF has a negative impact on markets
Concerns of further oversupply by Iran and other nations causing much volatility in prices
Slowdown in Chinese economic growth is having a negative impact on crude consumption
OPEC decision on production quotas will likely determine the crude price outlook.
0
5,000
10,000
World OWC consumption (‘000 tons)
Client Confidential Information
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Highlights: Global White Cement
Market and Trade Report
Client Confidential Information
Global Cement White Cement Report (GCWCR)
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Examines the worldwide white cement industry and
presents the latest market data
Covers consumption and production figures, import
and export data as well as pricing trends and white
cement capacity developments
– 5-year projection of global white cement
consumption and production through 2020
– Worldwide white cement plant production
facilities
Extensive quantitative information on consumption,
usage segments, production, local prices, regional
benchmark trade prices, trading facilities and trade-
flows, by region and major country
For a complete listing of focus countries as well as more details visit:
http://www.cwgrp.com/research-a-analysis/global-monitor-
reports/306146-global-white-cement-market-and-trade-report.html
Release – February 2016
Price – Individual: US$4,150 + S&H
(hard copy)
– Multi-user and Group
(licenses available upon
request)
– Electronic data available
(Excel tables)
Client Confidential Information
2015 witnessed a global decline in demand; North America was the
standout performer
Regional transition in consumption: new centers driving growth
– US demand for white cement has seen robust growth since
2010 at a low double-digit CAGR on the back of a resurgent
housing market
– Demand in the Middle East catered to within region
– India a major driver in the Asia ex-China region, but usage is
different
Historical and Future outlook: What are the emerging trends in
white cement consumption
– 2005 – 2015 supply and demand
– 2015 – 2020 what are the main drivers for growth
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Client Confidential Information
CAGR: 1.1%
White cement consumption (2005-15)
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Regional consumption (mm tons)
0
20
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Western Europe
North America
Middle East
Latin America
E Europe & CIS
China
Asia ex-China
Africa
Client Confidential Information
Principal white cement trade flows; traded volumes represent a
quarter of total global consumption
19 Map not to scale
US
28% Turkey
23%
KSA
10%
10% Denmark
Client Confidential Information
Consumption share: Growing clout of North America and Middle East
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0%
50%
100%
2010 2015E 2020E
Western Europe
North America
Middle East
Latin America
E Europe & CIS
China
Asia ex-China
Africa
Client Confidential Information
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Asia ex-China and the Middle East are
expected to account for almost majority
percent of the additional consumption
from 2015 to 2020
– China growth to moderate
– Middle East consumption is expected
to increase; outlook has moderated
due to the fall in oil prices and its
impact on budget allocations for
construction projects.
– Iran has emerged as the second
largest market for white cement after
China.
North America is expected to show strong
growth with recovery in the US economy.
– The US is expected to remain a major
importer from Canada and Turkey
Select take-aways Worldwide demand (mm tons)
Global white cement demand outlook
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2015 2016 2017 2018 2019 2020
Client Confidential Information
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Final remarks
CW Advisory is a global consultancy
specializing in M&A and transaction advisory,
strategic advisory, management and operations
consulting. Our deep sector expertise covers
industrial, cyclical, utility and infrastructure.
CW Advisory works with boards and senior
management addressing the most complex
issues, including those in functional areas
spanning the value chain, including fuels &
energy, logistics, organizational, operational due
diligence, feasibility assessments, among
others.
CW Advisory is part of the CW Group, a leading
advisory, research and media boutique aligned
along three pillars: Advisory, Research and
Media, with headquarters in Greenwich,
Connecticut, USA.
advisory.cwgrp.com
CW Group LLC | USA | India | Brazil | Romania | Portugal
CW Research is a leader in syndicated and
data-driven market research solutions. The
company offers independent perspectives on
multiple industrial market segments (e.g.,
cement, metals & minerals, and specialty
chemicals) and deep functional expertise in
market intelligence, sourcing intelligence,
commodity pricing intelligence.
CW Research also provides custom industry
and competitive research programs for
operating companies, financial analysts,
consultants, governments, suppliers and many
others as well as tailored studies together with
CW Advisory.
CW Research is part of the CW Group, a
leading, research and business intelligence
boutique aligned along three pillars: Advisory,
Research and Media, headquartered in
Greenwich (CT), USA.
research.cwgrp.com.
