Displaying items by tag: Holcim Argentina
Argentina: The National Commission for the Defence of Competition (CNDC) has concluded an investigation into the cement industry with the finding that all four Argentinian cement producers colluded to maintain high prices between 2013 and 2018. Cementera Avellaneda, Holcim Argentina, Loma Negra and Petroquímica Comodoro Rivadavia (PCR) reportedly increased their sales by US$178m between 1 July 2017 and 30 June 2018 through cost overruns generated by their control of local markets.
The CNDC ordered the Portland Cement Manufacturers Association (AFCP) to refrain from distributing competitively sensitive information production, dispatches and imports information between its member companies.
Argentina: Holcim Argentina has appointed Julio Asnal as its Director of Sales and Integral Solutions. He will lead the company’s sales strategy.
Asnal’s prior professional experience includes working as a regional director for Danone and as a commercial director for Coca-Cola FEMSA, where he also held marketing and strategic planning roles. Most recently he has worked in management positions for Promedon over the last decade. He holds a bachelor’s degree in Business Administration from the National University of Córdoba and a master's degree in Business Administration from IAE in Buenos Aires.
Argentina: Holcim Argentina has published its 10th Sustainable Development Report, detailing its sustainability progress in 2021. That year, it reduced its CO2 emissions per tonne of cementitious material by 4.2% compared to 2017, to 505kg/t from 527kg/t. It sourced 43% of all electricity used in its operations renewably and achieved 8.4% alternative fuel (AF) substitution in its cement production. During the year, Holcim implemented ECO-labels to designate products with at least 30% CO2 emissions reduction.
Holcim Argentina’s CEO Christian Dedeu said “This decade of reports demonstrates our strong commitment to sustainability and governance that considers economic, social and environmental impacts. The conviction of the importance of reviewing performance and being accountable for our impacts made it possible.”
Holcim Argentina launches gender inclusivity hackathon
07 April 2022Argentina: Holcim Argentina has launched a hackathon for project proposals aimed at boosting gender inclusivity in the Argentinian construction sector. Projects may fall along one or more target axes: awareness, education and training, enterprise or public policy. Two winning projects will claim US$300,000 each in prize money, and the contest is open to anyone over 18. The company says that the hackathon is an invite to open a conversation about the presence and appreciation of women in cement and construction.
Argentina: Christian Dedeu, the chief executive officer of Holcim Argentina, has warned that there is no guarantee that there will be gas available for his company’s cement plants in the winter of 2022. In an interview with the El Cronista newspaper, Dedeu said that energy prices had risen due to the war in Ukraine and that importing liquefied gas by ship was becoming both harder and more expensive.
He also expressed concern about the government system of price controls on bagged cement, which had made it cheaper to buy bagged instead of bulk cement. Smaller companies are already reportedly buying large consignments of bagged cement and breaking it up to save money.
Argentina: Holcim Argentina has appointed Sergio Vaimberg as its Chief Marketing Officer. He joined Holcim in mid-2020 with roles in Argentina and Mexico, according to the Norte en Linea newspaper. Prior to this he worked mostly for Coca-Cola in Argentina. Vaimberg is a certified public accountant, holds a Master of Business Administration (MBA) and has a postgraduate degree in leadership from the Harvard Business School.
Update on South America, August 2021
18 August 2021Our latest look at South America starts by posing the question: how far can the market in Brazil keep growing? As Graph 1 shows below, cement sales skyrocketed through the coronavirus pandemic, due to a general recovery locally that started in 2018 and relatively weak lockdown measures compared to other countries. Rolling annual totals on a monthly basis from the National Cement Industry Association (SNIC) suggest that this growth period tailed off from May 2021. SNIC was also keen to point out that, despite nearly hitting nearly a 20% growth rate at one point, the sector was still 11% behind where it was before the lull that lasted from 2015 to 2018. As ever the association has an eye on potential risks. At present these include legislative reforms, price inflation and carbon pricing. It noted that Mexico, Colombia, Chile and Argentina all price carbon already but said that the country ‘has a great ally in the Brazilian cement industry’ on the issue.
Elsewhere the big story in Brazil has been the ongoing sale of Holcim’s local assets. The latest news at the start of August 2021 was that the bidders included CSN Cimentos, Cimentos Mizu, Cimento Apodi, InterCement and Votorantim. The first three companies were reportedly working in a consortium in an attempt to buy 10 production plants while InterCement and Votorantim were focusing on smaller bids to avoid the ire of the competition regulators. Aside from this, CSN Cimentos agreed to buy Cimento Elizabeth for US$220m in July 2021 and Companhia Nacional de Cimento (CNC), part of Italy-based Buzzi Unicem’s 50% subsidiary BCPAR, acquired CRH Brasil following approval by the regulators. Of note on the production side, Votorantim Cimentos started operation of a new production line at its Pecém grinding plant in Ceará in July 2021.
Graph 1: Cement sales in selected South American countries in first half of year, 2019 – 2021. Source: Local cement associations and national statistics offices.
Over in Peru the now familiar gap-tooth pattern of stunted growth in 2020 can be seen in the sector’s cement sales, but sales rebounded far stronger than comparable sized markets in Argentina and Colombia. Sales nearly doubled to 6.42Mt in the first half of 2021 from 3.33Mt in the same period in 2020 and were significantly higher than the 4.94Mt recorded in the first half of 2020. Imports are also worth watching. Combined cement and clinker importers nearly doubled from 0.76Mt in the first half of 2019 to 1.4Mt in the first half of 2021. Clinker imports made up about two thirds of this figure and the Association of Cement Producers (ASOCEM) noted in June 2021 that 88% of the imported cement came from Vietnam while about two thirds of the clinker came from Japan and Indonesia.
Away from the market data, both Cementos Pacasmayo’s and Unión Andina de Cementos’ (UNACEM) financial results bounced back in the first half of 2021. Cementos Pacasmayo attributed the rebound to sales of bagged cement to the self-construction sector and public sector reconstruction demand. UNACEM also noted the effect of the self-construction sector and said it expected its ‘solid’ cement despatches to continue for the rest of the year despite the risk of a third wave of coronavirus in the country and the messy presidential elections. Other stories of note so far in 2021 include new developments in Cementos Interoceanicos long-held plans to build a 1.0Mt/yr cement plant in Puno and a major upgrade planned to Yura’s integrated plant in Arequipa.
In Colombia local cement despatches grew by 34% year-on-year to 6.20Mt in the first half of 2021 from 4.61Mt in the same period in 2020. Cementos Argos reported major improvements in sales, sales volumes of cement and earnings due to the lockdown in 2020. However, a national wave of protests calling for social reform that started in the spring of 2012 forced the company to shut down its integrated Yumbo plant for over a month. This represented 18% of its national sales. The output of other plants in the country was also negatively affected by roadblocks created by the unrest. Cemex reported the same problems in the country.
Finally, Argentina’s cement despatches rose by 44% to 5.52Mt in the first half of 2021 from 3.83Mt in the same period in 2020. Loma Negra reported that its sales, sales volumes and earnings were all up by a similar rate. The subsidiary of Brazil-based InterCement started up the kiln on its new 2.7Mt/yr production line at the L’Amalí cement plant in Olavarría in June 2021 and commissioning of the new mill and despatch centre on the line were reportedly coming soon in early August 2021. Earlier in the year, in May 2021, Holcim Argentina inaugurated a new 0.5Mt/yr clinker production line at its Malagueño cement plant in Cordoba. These expansion projects were ordered long before coronavirus appeared so it will take a while to see their effects upon the local market. However, the government intervened in June 2021 when it persuaded some building materials producers to agree to reference prices in a bid to curb mounting inflation.
This is what recovery looks like so far in 2021 in the larger cement producing countries in South America. The Brazilian market’s growth phase may be waning after a furious period that even coronavirus wasn’t allowed to slow. Peru’s potential seems set to take off, Colombia’s rebound should have been greater (but it was dented by social unrest) and Argentina seems to be resetting to its usual level. Whatever else happens in the coming months the story to watch going forward will be which company picks up Holcim’s assets in Brazil.
Update on Argentina
23 June 2021Two news stories merit a closer look at Argentina this week. Firstly, Loma Negra fired up the kiln on its new 2.7Mt/yr production line at the L’Amalí cement plant in Olavarría. Work on the US$350m started in 2017 but was delayed due to the coronavirus pandemic. Notably, engineers from China-based Sinoma International Engineering, who built the plant, caused a stir when they arrived in Argentina in full personal protective equipment in late 2020 to continue work on the project. Full commissioning of the second line at the plant is scheduled for July or August 2021.
Almost at the same time, the Argentine government announced it had persuaded local building materials producers to stick to reference prices for construction materials, including cement, in order to control inflation. Loma Negra, Cemento Avellaneda and Petroquímica Comodoro Rivadavia (PCR) were said to be on board with the ‘voluntary’ plan. Building materials prices generally were reported to have risen 85% year-on-year in May 2021 compared to a national inflation rate of 49%. The new arrangement is planned to last until the end of 2021 with revisions to the reference prices every two months.
Graph 1: Cement sales in Argentina including imports and exports, 2016 – 2021. Note that the 2021 figure is an estimate. Source: Asociación de Fabricantes de Cemento Portland (AFCP).
Data from the Asociación de Fabricantes de Cemento Portland (AFCP) doesn’t show any obvious signs of disruption from inflation so far in 2021. Cement sales grew by 50.5% year-on-year to 4.55Mt in the five months to May 2021 from 3.02Mt in the same period in 2020. The cement market in Argentina didn’t shut down but it hit a low of 0.41Mt in April 2020 before compensating with a strong second half of the year, most likely due to pent-up demand as the economy reopened following local coronavirus-related lockdowns. At the time of writing the AFCP has forecast that cement sales will reach 11.3Mt in 2021, a slight rise over the 11.1Mt reported in 2019, when the market was more stable. However, cumulative sales to May 2021 are slightly behind similar sales in 2019.
Loma Negra’s upgrade at its L’Amalí plant follows Holcim Argentina’s inauguration of a new 0.5Mt/yr clinker production line at its Malagueño cement plant in Cordoba in May 2021. This project also added a 0.63Mt/yr cement grinding unit at the site as well as a new 120,000 bag/day despatch unit. Altogether it had a price of US$120m. This followed the announcement in late April 2021 that the subsidiary of LafargeHolcim was planning to open 1000 new branches of its Disensa retail chain in the country by 2024.
Loma Negra reported a 13% drop in sales to US$436m in 2020 from US$500m in 2019. However, its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 3% to US$139m from US$136m. This was partly aided by the sales of its Paraguayan operations during 2020. At face value, Cemento Avellaneda had a tougher time of its in 2020 with its sales down by 22% to Euro111m and EBITDA down by 9% to Euro37m. However, once adjusted on a like-for-like basis with constant currencies and without a hyperinflation adjustment, its sales and earnings actually rose by 22% and 45% respectively.
Holcim Argentina’s director Christian Dedeu was interviewed by national news agency Télam in May 2021 around the time of the upgrade at the Malagueño cement plant was officially completed. When asked by the company had made the investment he said that the country had potential for both the residential and infrastructure sectors. He also pointed out that the subsidiary of Switzerland-based LafargeHolcim had been forced to import clinker at times of high demand previously. The announcements for both the Loma Negra and Holcim Argentina new lines were made at the end of 2017 when the market hit a high in sales volumes. Since then the country has faced rocketing inflation, further delays to it debt repayment programme to the International Monetary Fund (IMF) and the coronavirus pandemic. Producing more commodities, such as clinker, domestically certainly seems enticing with high inflation and unfavourable foreign currency exchange rates. So, the new production lines from Loma Negra and Holcim Argentina are well timed in this sense unless they get hit by any mounting input costs, from imported raw materials for example. On the other hand the government’s measures to curb inflation such as reference prices for cement may constrain the cement producers’ flexibility. As the local construction industry slowly recovers after 2020, continued uncertainty lies ahead.
Holcim Argentina inaugurates new clinker line and grinding plant at Malagueño cement plant
20 May 2021Argentina: Holcim Argentina, part of Switzerland-based LafargeHolcim, has inaugurated a new 0.5Mt/yr clinker production line at its Malagueño cement plant in Cordoba. The new line increases the plant’s clinker production capacity by 45%. Additionally, a new 630,000t/yr grinding plant will increase the plant’s cement capacity to 4.7Mt/yr.
Chief executive officer Christian Dedeu said, "With this expansion of our capacity, more than 450km of road and more than 7.2Mm2 of housing can be built - equivalent to more than 72,000 houses." He added, "The new line is a big bet on the domestic market and responds to the growing national demand for materials for residential construction, private investment and infrastructure works."
Argentina: Holcim Argentina, part of Switzerland-based LafargeHolcim, has completed a US$120m upgrade at its integrated Malagueño cement plant in Córdoba province. In a meeting with the Minister of Productive Development, Matías Kulfas, the cement producer said it was planning in inaugurate a newly refurbished 0.51Mt/yr production line at the site later in May 2021. The work also included adding a vertical roller mill and new bagging area with a capacity of 120,000bags/day. The project was originally announced in late 2017 and Germany-based KHD was awarded a related contract in early 2018.