Displaying items by tag: Investment
Jamaica: Caribbean Cement is allocating US$8m, 20% of its planned US$40m investment in 2024, to increase sustainability efforts at its Rockfort plant. The company is aiming to become net-zero by increasing its use of alternative fuels and repurposing materials like tyres, which will also help to save on operational expenses and fuel costs, according to the company.
The repurposing of tyres, which commenced following a Government of Jamaica partnership, will remove a ‘significant’ portion of the estimated 1.5m tyres at the country’s Riverton dump, along with other materials such as pallets, which Caribbean Cement now uses as alternative fuel sources in the cement manufacturing process. With the help of its XRC3000c shredder obtained from Austria-based company UNTHA, Caribbean Cement said it has shredded more than 9000 tyres to date.
Managing director Jorge Martínez said “At the moment our first goal for the end of 2024 is to at least reach 10% alternative fuels. We will remove some of those fuels that are not renewable, substituting it with ones that are. This is part of our future in action programme. Some of these actions are also related to the reuse of some materials in the plant as we take waste materials from other industries and beach clean-ups for repurposing. We try to reuse them in any way we can.”
Ukraine: The cost to rebuild Ukraine post-war is projected at US$487bn, according to a report commissioned by the United States Agency for International Development. The report states that to support the reconstruction, Ukraine must produce 15-16Mt/yr of cement for three years, a significant increase from current capacities. Protectionist measures in place since 2019 have restricted cement imports and a decline in production and a shrinking market could lead to an increase in construction costs, according to the Kyiv Independent.
Amid these projections, CRH, which operates three plants in Ukraine, announced in summer 2023 that it aims to purchase two more from Buzzi's subsidiary Dyckerhoff. This deal is valued at €100m, with the company stressing the importance of its investments in Ukrainian cement plants to boost the country’s domestic production to 15Mt/yr, according to Forbes Ukraine. The deal is reportedly under scrutiny by Ukraine's Anti-Monopoly Committee due to market concentration concerns, which could drive up cement prices and overall reconstruction costs.
Serhiy Pylypenko, CEO of the Ukrainian building supplies firm Kovalska, Ukraine’s largest cement user, said “We need more players and to diversify the market instead of making it more compact because the competition is very weak. Market concentration allows uncontrolled pricing and the cost of construction and the cost of recovery to skyrocket."
Ukraine: CRH has invested €465m in Ukraine since entering the country in 1999, €74.5m of it since the start of Russia’s invasion in February 2022. CRH Central and Eastern Europe president Guillaume Cavalier noted the double role of locally-produced cement in generating employment and state revenues.
Cavalier said "Investing in the expansion of production now is crucial to ensure the potential growth of the Ukrainian cement market following its integration into the EU."
US$100m investment in new cement plant near Juba
03 May 2024South Sudan: B Smart, an investment company owned by son of a former Malaysian Prime Minister, plans to invest US$100m in constructing a cement plant near the capital city of Juba. The plant is targeted to be operational within 24 months pending necessary approvals, and will use limestone from Kapoeta, 275km east of Juba.
Deputy Secretary for Commerce and Industry, Kuol Daniel Ayulo, said "The plant will reduce the country's reliance on costly cement imports and accelerate infrastructure development."
Cemex sells in the Philippines
01 May 2024Cemex announced this week that it is preparing to sells its operations in the Philippines to a consortium comprising Dacon, DMCI Holdings and Semirara Mining & Power. Rumours of the divestment first started to appear in the media in February 2024.
The main part of the deal covers Cemex’s cement subsidiaries, APO Cement and Solid Cement, which have been valued at an enterprise value of US$660m. However, this becomes confusing because the actual selling price is the enterprise value minus the net debt and adjusted for the minority shareholding of one of the parent companies, Cement Holdings Philippines (CHP). The deal also includes the sale of a 40% stake in APO Land & Quarry and Island Quarry and Aggregates. Based on a press release issued by CHP to the Philippine Stock Exchange, the actual cost of the divestment appears to be around US$305m. It is hoped that the divestment will complete by the end of 2024 subject to regulatory approval from the Philippines Competition Commission and other bodies.
Cemex entered the market in 1997 when it acquired a minority stake in Rizal Cement. It then built the business up to a cement production capacity of 5.7Mt/yr from its two main integrated plants, the Solid Cement plant in Antipolo City, Rizal and the APO Cement plant in Naga, Cebu. However, CHP has endured a hard time of late, with falling annual operating earnings before interest, taxation, depreciation and amortisation (EBITDA) since 2019 and falling net sales in 2022 and 2020. The bad news continued into 2023, with net sales falling by 17% year-on-year to US$300m in 2023 from US$356m in 2022. It reported a loss of US$35m in 2023, double that of 2022. The company blamed the fall in sales on lower volumes. It noted that prices were also down and energy costs had grown.
The three companies buying CHP are all controlled by the Consunji family so effectively DMCI Holdings is acquiring Cemex’s operations in the Philippines. The group focuses on construction, real state, energy, mining and water distribution. It previously announced in the late 2010s plans to build one integrated cement plant on Semirara and three cement grinding plants at Batangas, Iloilo and Zamboanga but these plans didn’t seem to go anywhere. Later it was linked to the proposed Holcim Philippines sale in 2019, although the subsidiary of Holcim eventually gave up on the idea.
This latest attempt to enter the cement business underlines DMCI Holdings’ intent and the group has immediately started saying what it plans to do next. In a statement chair and president Isidro A Consunji admitted that cement demand in the country was ‘soft’ but that it is expected to rebound due to the Build Better More national infrastructure program and an anticipated fall in internet rates. Consunji added, “We recognise CHP's operational and financial issues, but we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group.” He was also keen to play up that CHP is currently building a new 1.5Mt/yr production line at its Solid Cement plant with commissioning scheduled by September 2024. DMCI plans to reduce CHP’s costs through various synergies including supplying it coal, electricity and fly ash from Semirara Mining & Power.
The acquisition of CHP by DMCI Holdings is the biggest shake-up in the local cement sector in a while. DMCI has long harboured ambitions in heavy building materials and now it’s close to becoming a reality. As evidenced by its statements following the official announcement of the deal it is already thinking ahead publicly to soothe shareholder concerns. What will be interesting to watch here is whether it can actually pull it off and whether it will face trouble from imports. Readers may recall that the Philippines cement sector has long battled overseas imports, particularly from Vietnam. Despite anti-dumping tariffs though the Cement Manufacturers Association of the Philippines (CEMAP) warned in January 2024 that workers could be laid off due to continued competition from imports. Good luck to DMCI.
JK Cement expands Panna cement plant
01 May 2024India: JK Cement has inaugurated a US$341m new line at its Panna cement plant in Madhya Pradesh. The new line doubles the plant's capacity from 3.3Mt/yr to 6.6Mt/yr. Press Trust of India News has reported that the line is equipped with optimised kiln systems, energy-saving technologies and a waste heat recovery plant. The expanded Panna plant will help serve ‘growing demand’ in Central India, Uttar Pradesh and Bihar.
Managing director Raghavpat Singhania said "Our new Panna plant production line is a key pillar in our comprehensive business expansion plan, propelling us towards our vision of becoming a leading player in the cement industry. This strategic expansion allows us to meet the rising demand for high-quality cement, ultimately enhancing our ability to serve our customers.”
Conch International Holdings and Zhejiang Shangfeng Building Materials inaugurate US$250m Andijan cement plant
29 April 2024Uzbekistan: China-based Conch International Holdings and Zhejiang Shangfeng Building Materials have successfully inaugurated their new 2.5Mt/yr Andijan cement plant, near Nayman on the border with Kyrgyzstan. Trend News has reported the cost of the plant as US$250m.
Malaysia: The state government of Sabah broke ground on the construction of the Kampung Kawayoi Pinangah cement plant in Tongod on 27 April 2024. Bernama Daily Malaysian News has reported the value of investment in the plant’s construction as US$252m. Chief Minister Datuk Seri Hajiji Noor said that it will enrich the local economy with 1000 new job opportunities.
Adbri secures funding towards grinding and blending systems upgrade at Birkenhead cement plant
24 April 2024Australia: The Australian federal government has granted Adbri US$32.5m for a new front-end engineering and design study at its Birkenhead cement plant. The study will assess the possible installation of a new vertical roller mill and post-production blending system at the plant. InDaily News has reported that the proposed upgrade will increase the plant’s production capacity and help to expand its range of reduced-CO2 cements. The funding falls under the government’s US$260m Critical Inputs to Clean Energy programme, which aims to help decarbonise the Australian economy by 2050.
CEO Mark Irwin said “With the Commonwealth’s support we have the potential to further accelerate the decarbonisation of our operations and products.”
Adani Group further raises Ambuja Cements stake to 70%
22 April 2024India: Adani Group has enlarged its stake in Ambuja Cements from 67% to 70%. The Telegraph newspaper has reported that the group converted warrants into shares in the producer. As a result, it will invest an additional US$1bn in funding for Ambuja Cements, having previously infused funding worth US$2.4bn.
Ambuja Cements director and CEO Ajay Kapur said “This infusion of funds provides Ambuja flexibility for fast-track growth, capital management initiatives and best-in-class balance sheet strength.”