Guam: Hanson Cement overhauls shipping line to boost capacity

Guam: Hanson Cement overhauls shipping line to boost capacity
Published: 07 July 2011

Hanson Permanente Cement, Guam’s largest bulk cement supplier, has raised its capacity by 50% by overhauling its shipping method to help meet the projected boost in demand for cement in the Guam military build-up, according to Derek Sadler, Hanson general manager.

"The biggest thing we’ve done is we’ve changed our carrier," Mr Sadler said in an interview with In January, the company initiated an agreement with Weltrans Marine Services Inc of Taiwan to use a dedicated Weltrans cement vessel between Japan and the company’s cement terminals on Guam and Saipan. The agreement includes the option on a second vessel if needed. The Weltrans vessel can carry about 50% more than Hanson’s previous carrier.

Plans to transfer at least 8600 marines and their families and dependants to Guam from Okinawa in coming years is expected to boost demand for cement on the island as the US Navy awards billions of dollars in construction contracts to prepare their new base. Shipping is a major issue in the military build-up due to the island’s remote location. More than 90% of the goods consumed on the island are imported and rising demand has prompted the Port Authority of Guam to start a 30-year, US$260m upgrade to increase cargo-handling capacity by 150%.

"The biggest reason we switched to the new carrier is the size of the vessel," Mr Sadler said. "That was on the assumption that (demand for) cement was going to increase. The smaller vessel would not be able to keep pace if, say, the cement increased to 200,000tpa. This carrier gives us the option to use one or two vessels, which would allow us to bring cement in here once a week."

The increased capacity will help mitigate the impact of weather delays or breakdowns. "With the bigger vessels, if we go empty, I can rebuild the inventory in maybe one voyage, two at the most, instead of three or four as it was with the old carrier," Mr Sadler said.

A third advantage is increased storage in extreme circumstances. "We can bring in the bigger vessel and just let it sit out there as floating storage," Mr Sadler said. "You don’t want to do that all the time, though, because of cost."

Guam’s cement market remains cyclic, Sadler said. "One year your numbers are up, say around 100,000t," he said. "The next year you could do 80,000t, then the next year you could be up to 120,000t."
Hanson has put other expansion plans on hold as the timeline for build-up construction has shifted. "It’s all dependent on the build-up," said Mr Sadler. "All we’re waiting for is to see if the demand dictates (expansion). The plans are in place, so it would just take us to say, ’get the permits and do it.’ We’re at that stage; we’ve done all the research."

If the plans are implemented, the company would likely increase its storage and add two truck loading stations, Mr Sadler said. Hanson operates a 161ft, 9000t capacity cement silo on the 1.6 acre site it leases from the Port Authority of Guam.

"The Navy really hasn’t said what the demand’s going to be, so that makes our planning a little tough," Mr Sadler said. "Do we plan to support 500,000tpa or do we plan to support 200,000tpa? That’s why our plan is to do what the demand dictates."

Hanson has been operating on Guam since 1959 and until recently, was the island’s only supplier of bulk cement. In 2009, Cementon Micronesia began importing cement in containers and is building a cement silo at Apra Harbor. Hanson Permanente Cement of Guam is a part of Lehigh Hanson Inc of Texas, which was acquired by the HeidelbergCement Group in 2007.