Displaying items by tag: LafargeHolcim
Germany/Switzerland: LafargeHolcim has reportedly placed a bid for BASF Construction Chemicals, according to sources quoted by Bloomberg. The cement producer has reached the second round of the bidding processing, along with companies including Bain Capital, Cinven and Standard Industries. The auction of the subsidiary of BASF that produces admixtures, mortars and grouts is expected to reach as much as Euro3bn. LafargeHolcim chief executive officer (CEO Jan Jenisch said in May 2019 that the company is considering at least 10 bolt-on assets purchases for 2019.
South Africa: PPC has appointed Roland van Wijnen as its chief executive officer (CEO). He succeeds Johan Claassen, who announced his retirement in November 2018. Van Wijnen has signed a four-year contract and is expected to take up the position as soon as he secures a work permit.
Van Wijnen has worked for Holcim and LafargeHolcim for 17 years in various leadership positions across the group including the CEO of Holcim Philippines. He also worked in South Africa for the business before it left the territory. He is an Industrial Engineering graduate from the University of Twente in the Netherlands.
Update on Malaysia
26 June 2019The Malaysian Competition Commission took the rather ominous step this week of saying it was taking extra care to watch the cement industry. Ouch! It said that had taken note of recent price rises by both cement and concrete producers and that it was working with the Ministry of Domestic Trade and Consumer Affairs as it met with the sector. It also said it was well aware of the recent merger between YTL and Lafarge, “...which had led to the market being more concentrated at the upstream and downstream level.”
The background here is that at least one unnamed cement producer announced a price hike of 40% in mid-June 2019. End-users panicked and the local press took up the story. The Cement and Concrete Association of Malaysia then defended price rises in general, when it was asked for comment, due to all sorts of mounting input costs. Although, to be fair, to the association the Malaysian Competition Commission acknowledged the price pressures the industry was under due to input costs in a report it issued in 2017.
Back in the present, the government became involved and Saifuddin Nasution Ismai, the head of the Domestic Trade and Consumer Affairs Ministry, calmed the situation down by saying that producers had agreed not to raise their prices after all and that any future planned price adjustments would be ‘discussed’ with the authorities first. Finance Minister Lim Guan Eng then followed this up with calls for an investigation into prices in Sarawak state in Eastern Malaysia. In response, Suhadi Sulaiman, the chief executive officer (CEO) of CMS Cement, batted this straight back by blaming industry mergers in Peninsular Malaysia and saying the company had no plans ‘anytime soon’ to raise its prices.
As the Malaysian Competition Commission kindly pointed out, this entire furore took place about a month on from the competition of LafargeHolcim’s divestment of its local subsidiary to YTL. The commission agreed to the acquisition of Lafarge Malaysia by YTL knowing that it was giving YTL ownership of over half of the country’s production capacity. With this in mind it is unsurprising that the commission might have wanted to look tough in the face of even a whiff of market impropriety, whether it was real or not.
The problem, as the Malaysian Competition Commission alluded to in its statement, is that the local industry suffers from production overcapacity. On top of this local demand has been contracting since 2015. The country has 11 integrated cement plants with a production capacity of 27.1Mt/yr, according to Global Cement Directory 2019 data. Production hit a high of 24.7Mt in 2015 and then fell year-on-year to 18.8Mt in 2017. Data from the Cement and Concrete Association of Malaysia painted a worse picture taking into account both integrated and grinding capacity reporting an estimated production capacity utilisation rate of just 59% in 2016. Lafarge Malaysia reported a loss before tax of US$97.7m at the end of 2018 as well as declining revenue. Shortly thereafter it announced it was leaving the country, as well as neighbouring Singapore.
In theory the buyout by YTL should have been one step closer to solving Malaysia’s overcapacity woes as either it gained synergies through merging the companies or shut down some of its plants. Certainly, the system appears to be working at some level, as the proposed 40% price rise hasn’t happened. Yet, if the government is reacting to voters rather than the market it could prolong the capacity-demand gap indefinitely. Under these conditions LafargeHolcim’s decision to exit South-East Asia may prove prescient.
LafargeHolcim Ivory Coast launches online sales
24 June 2019Ivory Coast: LafargeHolcim Ivory Coast has launched online sales of its products on the Jumia e-commerce platform. The online store is aimed at individual and small business customers, according to the Agence Ivoirienne de Presse. The project is starting in a pilot phase in Abidjan and Bingerville. Deliveries of orders made online are coordinated with the company’s Binastore network around the country.
France/Syria: The Court of Appeal in Paris will decide on 24 October 2019 whether charges of financing terrorism and crimes against humanity will be upheld. Lafarge and its former executives Bruno Lafont, former chief executive officer (CEO) of Lafarge, former safety director Jean-Claude Veillard, and one of the former directors of its Syrian subsidiary, Frédéric Jolibois have challenged the indictments, according to the Agence France-Presse. The legal case is investigating Lafarge’s conduct in Syria between 2011 and 2014. It has been accused of financing terrorism through indirect payments to extremist groups to keep its Jalabiya cement plant operational after the outbreak of war in Syria.
Thomas Schmidheiny reduces stake in LafargeHolcim
12 June 2019Switzerland: Thomas Schmidheiny says he has reduced his share in LafargeHolcim to 7.2% from 10.9% to diversify his investment portfolio. He said that the decision was part of his ‘retirement and heritage’ planning, according to Reuters. He has no plans to minimise his stake any further.
Schmidheiny was made honorary chairman of LafargeHolcim in 2018 when he stepped down from the board. He began his career at Holcim in 1970. He became a member of the executive committee six years later and served as chief executive officer (CEO) between 1978 and 2001. After joining the board of directors in 1978 he was chairman of the board of directors from 1984 until 2003. Later, he was a key part of the merger between Holcim and Lafarge that completed in 2015.
France/Syria: Lafarge SA and three of its former executives are appealing against accusations of crimes against humanity. The Court of Appeal is expected to address the indictment in late June 2019, according to the Agence France Press. The former executives involved include Bruno Lafont, former chief executive offcier (CEO) of Lafarge, former safety director Jean-Claude Veillard, and one of the former directors of its Syrian subsidiary, Frédéric Jolibois. The Presecutor General has supported some arguments of the defence team.
If the appeal is succesful the legal case will focus instead on the financial aspects of Lafarge’s conduct in Syria between 2011 and 2014. It has been accussed of financing terrorism through indirect payments to extremist groups to keep its Jalabiya cement plant operational after the outbreak of war in Syria.
Dal Machinery & Design wins kiln shell order from LafargeHolcim Algeria’s Oggaz cement plant
12 June 2019Algeria/Iraq: Dal Machinery & Design (DMD), part of Turkey’s Dal Engineering Group, has been awarded a contract to supply a kiln shell to LafargeHolcim Algeria’s Oggaz cement plant. The shell has an internal diameter of 5mm. The shell will be manufactured from a single part, with one single welding in the axial direction. It is expected to be delivered by September 2019. No value for the order has been disclosed.
Other recent orders for DMD include the supply of two kiln shells for LafargeHolcim’s Bazian cement plant at Sulaimani in the Kurdistan region of Iraq. The kiln shells were manufactured with a diameter of 5.2m. Delivery was made at the beginning of March 2019. DMD’s other kiln shell clients in Iraq included the Gasin cement plant in 2018. It also supplied a mill tunnion to LafargeHolcim’s Kerbala cement plant.
Simon Marriott appointed as managing director of Concrete Products by Aggregate Industries
05 June 2019UK: Aggregate Industries has appointed Simon Marriott as the managing director of its Concrete Products division. He has also been promoted to the executive committee of the company as part of a strategic decision to raise the profile of the division. The new role will give him responsibility for all hard landscaping aspects of the business including Charcon, Bradstone, Masterblock, Charcon Construction Solutions and Simply Paving. He will also lead the marketing communications function.
Marriott started his career as a plant manager before moving to Bardon Aggregates in 1996. When it merged with Camas to become Aggregate Industries, he become general manager of the Express Asphalt division and later became director of the mainstream asphalt division’s southern region. He then ran Bardon Concrete and Aggregate Industries’ cement importing function, before becoming director of Concrete Products in late 2015.
EAPCC to cut workforce by September 2019
05 June 2019Kenya: The East African Portland Cement Company (EAPCC) plans to reduce its costs by making 220 workers redundant. It says it needs US$170m to return to profitability, according to the Business Daily newspaper. Other plans to reduce its debts include raising money through land sales and reducing its energy costs. It is considering selling over 2400 hectares of land in Athi River. It has already sold around 360 hectares to Kenya Railways for around US$50m.
The company currently has 821 contracted and permanent and pensionable employees. It intends to reduce its workforce by September 2019.