Displaying items by tag: Holcim
Holcim cement sales rise by 2.5% despite Europe
27 February 2013Switzerland: Swiss-based multinational building materials producer Holcim has reported a 2.5% rise in cement sales to 148Mt in 2012 from 144Mt in 2011. In its media release Holcim mentioned that the increase came, 'despite declines in the European businesses.'
Holcim's net sales rose by 6.4% to Euro17.9bn in 2012 from Euro16.8bn in 2011. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 3.1% to Euro3.30bn from Euro3.20bn. However, operating profit fell by 3.7% to Euro1.51bn from Euro1.57bn.
In cement deliveries were up in all major group regions except Europe, where only Russia and Azerbaijan posted significant increases in sales, partly also in connection with capacity expansion.
By region, Holcim singled out its Asia Pacific as its 'key growth' area. Sales of cement rose by 5% to 79.2Mt from 75.6Mt. Total net sales rose by 9% to Euro5.47bn from Euro5bn. Thailand and the Philippines were singled out as performing well, while Australia turned in a 'less dynamic performance than in 2011.'
In Latin America sales of cement increased by 3% to 24.9Mt from 24.2Mt. Total net sales rose by 9% to Euro2.29bn from Euro2.11bn. Amidst positive performance in most countries, Argentina witnessed a 'significant' downturn in 2012.
In Europe sales of cement fell by 2% to 2.3Mt from 2.4Mt. Total net sales fell by 3% to Euro2.16 from Euro2.23bn. As Holcim's annual report put it, 'the severe crisis dogging Southern Europe contaminated other countries, also affecting hitherto relatively stable economies such as France, the Benelux states and Germany, with repercussions for Switzerland'. Only Russia and Azerbaijan avoided this.
In North America sales of cement rose by 5% to 12Mt from 11.4Mt as the US economy recovered. Total net sales rose by 13% to Euro1.13bn from Euro1.01bn.
In Africa/Middle East sales of cement fell by 4.4% to 8.4Mt from 8.7Mt. Total net sales fell by 1% to Euro697m from Euro706m. Here, performance was impacted upon by the 'political uncertainties in North Africa and the civil war in Syria.'
In its outlook for 2013 Holcim anticipated an increase in sales of cement in 2013, led by its Asia Pacific, North America and Latin America regions. Margins are expected to improve as its cost saving programme, the 'Holcim Leadership Journey', continues.
Holcim (US) appoints Filiberto Ruiz president and CEO
13 February 2013US: The board of directors of Holcim (US) has appointed Filiberto Ruiz to serve as the company's president and chief executive officer. Ruiz's appointment also includes serving as president and chief executive officer of Aggregate Industries US, a Holcim Group Company.
Additionally, Bernard Terver, currently a member of the Holcim Ltd Executive Committee, formerly president and chief executive officer of Holcim (US) and Aggregate Industries US, has been named chairman of the board.
Ruiz has served as the company's deputy chief executive officer since August 2012 and has been with the company for more than 26 years, holding a range of general management, manufacturing and sales and marketing positions both within and outside of the US.
Terver has been president and chief executive officer of Holcim (US) since October 2008 and Aggregate Industries US since 2010. He has more than 30 years' experience in the cement and mineral components industry both in the US and internationally.
UNICEM to double cement capacity to 5Mt/yr by 2016
13 February 2013Nigeria: Flour Mills of Nigeria plans to borrow up to US$500m to finance a 2.5Mt/yr upgrade at its 2.5Mt/yr UNICEM joint venture cement plant in Calabar, according to its chief finance officer. Flour Mills operates in the Nigerian cement market as Burham Cement and it shares its joint venture with Holcim and Lafarge.
In an interview with Reuters, Jacques Vauthier announced that the conglomerate had appointed financial advisers and banks to raise a term loan from the local market for the construction of the plant. He said that the details of the loan were still being finalised. The new cement plant will be completed by the first quarter of 2016.
Vauthier acknowledged the cement glut in 2012 and blamed it on cheap imports from Asia. He added that sales were picking up again and he expected its cement subsidiary Unicem to end 2013 with a year-on-year growth rate that is in double-digits.
This news story was updated on 11 November 2013 with the exisiting capacity of the UNICEM cement plant
CRH confirms continued interest in India
04 January 2013Ireland: CRH chief executive Myles Lee has confirmed that the building materials group is interested in expanding its presence in India. The comment follows rumours from the Indian media that CRH and Holcim are both in separate talks with the Shriram Group to buy a stake in Sree Jayajothi Cements (SJJCL).
Lee said that CRH remained interested in expanding its presence in India, but declined to comment on Sree Jayajothi. CRH 'terminated' negotiations with Jaypee Cement Corporation in October 2012 because the parties were unable to agree terms.
"We have been on the lookout for a partner for quite some time and we keep having several discussions with different players both strategic and financial," said T Shivaraman, managing director and chief executive of Shriram Engineering and Procurement Company, which owns SJJCL. He refused to comment on the involvement of either CRH or Holcim. It has been reported that private equity giants Blackstone and KKR are also in separate preliminary talks with Shriram about its stake in the cement manufacturer. SJJCL owns a cement plant with a production capacity of 3.2Mt/yr based in Andhra Pradesh.
The rumours arrived at the same time that CRH announced it had made acquisitions and investments valued at Euro630m in 2012. The bulk of the money was spent in the US, where Euro256m was spent in the second half of the year. In Europe CRH spent Euro119m in the second half of 2012 in acquisitions in Finland and the UK. Lee confirmed that CRH holds between Euro1bn and Euro1.5bn to spend on deals.
Both CRH and Holcim have a combined capacity of around 61Mt/yr in India. Holcim controls ACC and Ambuja Cements while CRH has a venture with Hyderabad-based My Home Industries, which owns a 4.2Mt/yr plant.
Holcim’s Journey Continues
02 January 2013Just before the end of 2012 Holcim sold shares in companies it owned in Thailand and Guatemala. It reduced its stake in Siam City Cement Company (SCCC) in Thailand from 36.8% to 27.5% and it sold its entire 20% minority stake in Cementos Progreso in Guatemala. For the sale of these two share packages Holcim received approximately Euro310m.
This is interesting given that Asia-Pacific was the Switzerland-based multinational's biggest sales area in 2011 and because sales of cement rose by 6% in Latin America in 2011. Similarly in 2012 from January to September the two regions propped up the group's profits. Why would Holcim sell stakes into two of its most profitable regions?
In its third quarter report in 2012 Holcim repeatedly described Thailand as 'encouraging' following floods in 2011. It added that it had focused increasingly on the cement market in the country and strengthened its position in neighbouring countries that resulted in lower clinker exports.
According to the Global Cement Directory 2013 SCCC has a capacity of 31Mt/yr, 65% of Thailand's total capacity of 48Mt/yr. SCCC predicted in December 2012 that domestic cement demand would increase by 5-10% in 2013. The company is currently planning to build new plants in Indonesia and Cambodia and is considering investing in Myanmar. In Indoniesia Holcim is the third biggest producer after Semen Gresik and HeidelbergCement subsidiary Indocement.
Meanwhile in Central America, Cementos Progreso was the sole producer in Guatemala with 2.5Mt/yr from two plants. This was set to double with the commissioning of a third plant towards the end of 2012. However, Holcim retains seven plants in southern Mexico (12Mt/yr), both of El Salvador's plants (2Mt/yr) and a plant in Costa Rica (1Mt/yr).
With Holcim's strong presence in Central America and the North American market reviving leaving Guatemala makes sense with the group's debt reduction programme in mind. The situation in Thailand is more complex, so unsurprisingly Holcim has reduced its stake rather than leaving completely. SCCC's expansion plans outside of Thailand suggest, that although growing, the market is maturing. In one such potential expansion target, Indonesia, Holcim is already a major producer.
In its press release announcing the sales in Thailand and Guatemala, Holcim attributed the decision to its ongoing debt reduction programme. As part of its 'Leadership Journey' the group intends to save Euro1.25bn by the end of 2014. Other savings in 2012 included reducing management in Europe, layoffs and closures in Australia, a plant closure in Hungary, further delays on the decision to build a new plant in New Zealand and layoffs in Spain. The management changes in Europe alone contributed a Euro99m chunk of Holcim's target saving of Euro124m for 2012.
Yet it's worth considering that a week after the sales of its shares Holcim's subsidiary in India, Ambuja Cements, announced investments of Euro277m in India. Perhaps the best way to save money is to make more money.
Ambuja Cements unveils US$365m spending spree
02 January 2013India: Ambuja Cements has announced investments of US$365m in India, of which US$100m is targeted for Bengal. The Indian cement producer intends to try to maintain its market share at 10% until 2018.
The subsidiary of Holcim announced it would invest US$59.2m at a grinding unit in Sankrail to expand its capacity to 2.4Mt/yr from 1.5Mt/yr by 2015. It has also proposed to invest US$41m in another grinding unit in the state at Bandel, according to Bengal industries minister Partha Chatterjee.
"This plant (Sankrail) is working at a capacity of 1.5Mt/yr and we will go up to 2.4Mt/yr. We also have a unit in Farakka with a 1.25Mt/yr capacity. So, with this, we will be one of the largest cement players in Bengal," said Ajay Kapur, CEO of Ambuja Cements.
Ambua Cements also announced that it is yet to gain clearance for the construction of a 3Mt/yr greenfield integrated cement plant in Rajasthan. Ambuja Cements holds a total capacity of 27.25Mt/yr in Rajasthan. A 1.5Mt/yr grinding unit at Sanand, Gujarat, is also being considered.
Holcim sells stakes in Thailand and Guatemala
21 December 2012Thailand/Guatemala: Holcim Ltd has reduced its shareholding in Siam City Cement Company Ltd (SCCC) from 36.8% to 27.5%. The shares have been purchased by Bangkok Broadcasting and Television, a Ratanarak Group company, which will increase its shareholding in SCCC to 47%.
Elsewhere, Holcim has sold its 20% in Cementos Progreso SA to its majority shareholder, Grupo Cemcal SA Progreso, which owns a cement plant in San Miguel with an annual capacity of 3Mt/yr.
For the sale of these two share packages, which is part of the Holcim Leadership Journey, Holcim has received approximately US$410m.
Holcim slashes European management to save Euro99m
17 December 2012Switzerland: As part of its on-going 'Leadership Journey' Swiss multinational cement producer Holcim has announced that it will be reducing its management structure in Europe to cope with lower levels of construction activity in the region. The group says that proposed measures evaluated and existing ones will lead to annual cost savings of at least Euro99m, a better utilisation rate of capacity and a more efficient allocation of capital expenditure.
The additional cash costs for restructuring in the fourth quarter of 2012 will amount to approximately Euro83.8m including site restoration costs. Write-offs of property, plant and equipment will total Euro339m and will be charged in the fourth quarter of 2012. Consultation procedures with regards to impact on personnel have been initiated in some group companies.
The restructuring accelerates the implementation of the Holcim Leadership Journey. The major part of the anticipated cash costs of Euro166m to realise the Holcim Leadership Journey will be incurred in 2012. The group's payout potential for the 2012 financial year (pre-write-offs) remains. The board of directors will propose the level of the payout at the end of February 2013, as part of the year-end financial statement to be submitted to the annual general meeting.
Cement from a land down under?
12 December 2012As 2012 draws to a close the challenges posed by the Australian carbon tax to the Australian cement industry are starting to show. First, Holcim Australia announced it was to lay off 150 staff. Then Boral released the news that it was planning to cut 90 jobs at its Waurn Ponds cement plant.
Following years of debate the Gillard government introduced the Clean Energy Act in July 2012. Heavy polluters were initially charged US$23/t of CO2 emitted, more than twice the cost of similar schemes in Europe where it is US$10/t. A key criticism of the scheme was that it would damage the Australian domestic cement industry with cheap imports. However the Australian government cushioned the move with compensation packages for major polluters, including cement producers, currently set to last five years.
Although the Australian cement industry hasn't totally collapsed, with the loss of 1800 jobs as the Australian Federal Opposition warned of in 2011, imports have been favoured in recent months. Boral's suspension of clinker production at Waurn Ponds will increase imports. The change will result in 25-30% of Boral's clinker being imported. It's worth noting that Boral pointed out in its press release that this was 'in-line' with the Australian industry.
Adelaide Brighton, the country's third biggest producer after Holcim and Boral, may not have laid anybody off but it has secured a 10-year supply of foreign clinker. On 5 December 2012 the building materials producer announced that it was going to a buy a 30% stake in Malaysian white clinker and white cement producer, Aalborg Portland Malaysia. In the accompanying press statement the company's chief financial officer explicitly blamed the carbon tax as one of the reasons for the acquisition.
Whether the job losses at Boral and Holcim can be totally blamed on the carbon tax remains to be seen. Boral's second-half profit for the year ending 30 June 2012 suffered a fall of 59% to US$35.7m. Holcim noted weaker demand outside of mining regions for the third quarter of 2012. By contrast, Adelaide Brighton reported steady gains in its half-year report for 2012 although cement sales only increased 'marginally'. Elsewhere in its report Adelaide Brighton stated that it would cope with the impact of the carbon tax by reducing reliance on domestic manufacturing. These can hardly be comforting words for the Australian cement industry.
Brazilian cement demand rises 8.5% in first eight months of 2012
05 December 2012Brazil: Demand for cement rose by 8.5% year-on-year to 45.2Mt in the January to August 2012. The demand has been attributed to brickwork made from cement blocks and cement walls in booming social housing projects.
Cement demand in Brazil rose by 8% year-on-year in 2011 to 65Mt. Industry experts estimate that the use of cement systems may grow from its current level of 22% to 50%. Subsequently, cement producers are increasing their capacity. Brazil's cement capacity was estimated at 78Mt/yr at the end of 2011 and is forecast to rise by 40% to 111Mt/yr in 2016.
Meanwhile, Holcim is spending US$710m to increase its capacity from 1.2Mt/yr to 3.6Mt/yr. Queiroz Galvao is currently building a cement plant in São Luis in collaboration with the Cornelio Brennand group and is said to be planning five more plants.