Displaying items by tag: Votorantim Cimentos
India: Shree Digvijay’s income rose by 11% year-on-year to US$17m in the quarter to 30 June 2018 from US$15.4m in the same period in 2017. It profit for the period increased by nearly four times to US$0.86m from US$0.22m.
Trucker strike hits Votorantim in May 2018
12 June 2018Brazil: Votorantim Cimentos, Brazil's largest producer of cement and other construction materials, is still evaluating its production loss after a recent 11 day truck drivers' strike, as well as calculating the impact of minimum freight prices. Brazil’s cement sector is highly dependent on road transport, with 96% of total shipments leaving plants by road, around 54Mt/yr.
"(The strike) will certainly impact the company's annual production," Walter Dissinger, Votorantim Cimentos president said. He added that Votorantim’s cement sales fell nearly 20% in May.
Cemex sells Amazon terminal to Votorantim
29 May 2018Brazil: Cemex Latam has signed an agreement to sell its stake in Cimento Vencemos do Amazonas to Votorantim Cimentos for US$30m. Cimento Vencemos do Amazonas operates a river cement terminal in Manaus in Amazonas, according to the La Republica newspaper. The deal is subject to approval by the Brazilian and Colombian competition bodies and the Brazilian waterways transportation agency.
Votorantim shone a glimmer of hope for the Brazilian cement industry with the release of its first quarter financial results this week. Increased sales volumes in Brazil, Turkey, India and Latin America led to an 11% rise in revenue to US$682m in the period. Admittedly back home in Brazil, most of this came from concrete and mortar sales, but after the slump Brazil’s had they’ll take whatever they can get. This compares to a 14% drop in sales revenue in the same period in 2017 due to falling cement consumption.
Graph 1: Accumulated 12 months local cement sales in Brazil. Source: SNIC.
SNIC, Brazil's national cement industry association, preliminary figures for April 2018 show a similar trend. Cement sales for April 2018 rose by 8.9% year-on-year to 4.35Mt from 4Mt. Sales for the first four months of the year dipped slightly by 0.2% to 16.9Mt although this is an improvement on the first quarter figures showing the benefit a strong April has had. Improvements are driven by growth in the central and southern parts of the country. SNIC’s graph of accumulated sales (Graph 1) definitely shows a slowing trend of decreasing cement sales with April 2018 being the only the second month in over two years where sales have risen.
Paulo Camillo Penna, the president of SNIC, even went as far as to speculate that the three months from April to June 2018 might see the first sustained period of improvement since 2015 and that sales could even grow by 1% for the year as a whole. This is a far cry from Penna’s description of his industry at the start of 2017 as, “One of the worst moments in its history.”
Votorantim reported that some regions of Brazil were starting to show a positive trend in the second half of 2017. Unfortunately it wasn’t enough to stop the cement producer’s overall sales falling for the year. LafargeHolcim didn’t release specific figures for its Brazilian operations in 2017 but it did say that its cost savings programme had, ‘provided for material improvement versus prior year both in recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) and cash flow.’ It reckoned that despite the market contracting, it had managed to increase its market share. Meanwhile, on the supplier side RHI Magnesita said in a first quarter trading update that its cement and lime business was flat due to continuing low capacity utilisation rates in China and Brazil.
If this truly is the end of the Brazilian cement market slump then it seems surprising that there haven’t been more mergers or acquisitions. Mineração Belocal, a subsidiary of Belgium’s Lhoist, said this week that it had purchased L-Imerys, a lime producer that operates a plant at Doresópolis in Minas Gerais. Local refractory producer Magnesita merged with RHI in mid-2017.
The big deal that hasn’t happened is the sale of InterCement, the country’s second largest cement producer. Owner Camargo Corrêa was reportedly selling minority stakes in the company in 2015. Then in early 2017 local press said that it was aiming for a price of US$6.5bn for the whole company with Mexico’s Cemex as a potential bidder. Since then nothing has happened publicly although the initial public offering of InterCement’s Argentine subsidiary Loma Negra in November 2017 for US$954m may have bought Camargo Corrêa the time it needed to wait for the market to improve. Rumours of a public listing of InterCement’s European and African operations have followed.
In its World Economic Outlook in April 2018 the IMF forecast a 2.8% rise in gross domestic product (GDP) in Brazil in 2018. If SNIC’s forecast for 2018 is correct then Camargo Corrêa may have survived the worst of the slump to live to trade another day. The price for InterCement at this point can only rise, as should the prospects of the Brazilian industry.
Shree Digvijay Cement appoints Vikas Kumar
16 May 2018India: Shree Digvijay Cement has appointed Vikas Kumar as its chief financial officer with effect from 1 May 2018. He succeeds MV Ramaswamy who has resigned from the company.
Brazil: Votorantim’s sales from its cement business have grown due to increased sales volumes in Brail, Turkey, India and Latin America. Higher prices in North America and Europe, Asia and Africa also contributed to the result. Votorantim Cimentos’ sales revenue grew by 11% year-on-year to US$682m in the first half of 2018 from US$613m in the same period in 2017. Local sales in Brazil grew by 13% to US$417m due to concrete and mortar sales. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 28% to US$65.3m from US$50.8m.
Votorantim to sell Shree Digvijay Cement stake
25 April 2018India: Votorantim Cimentos is rumoured to be selling its 75% stake in Gujarat-based Shree Digvijay Cement as part of its strategy to prioritise assets and reduce debt, according to ‘sources close to the company.’
The news comes as the company struggles amid rising competition among mid-sized Indian cement producers. It made a net profit of US$2.0m in the 12 months to 31 March 2018 from a turnover of US$63.5m. In 2012, before Votorantim took over the company, it made a net profit of US$1.2m from a turnover of US$64.2m.
Brazil: Votorantim’s cement division’s sales fell by 7% year-on-year to US$3.24bn in 2017 from US$3.48bn in 2016. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 26% to US$515m from US$693m. The company blamed the continued decline on the poor market in Brazil. Outside of Brazil, Votorantim Cimentos reported positive markets in most territories, apart from Tunisia. Overall the group’s sales rose by 5% to US$7.95bn from US$7.59bn.
Global Cement & Concrete Association launches
31 January 2018UK: Nine cement and concrete companies have launched the Global Cement & Concrete Association (GCCA), a new association that intends to develop the sector’s role in sustainable construction. The association also wants to build innovation throughout the construction value chain, in collaboration with both industry associations and architects and engineers.
The GCCA will be led by international cement companies and headquartered in London, complementing and supporting the work done by existing associations at national and regional level. Membership of the GCCA is available for cement manufacturers from all over the world that share the organisation’s values, and partnerships will be developed with organisations that share its vision. GCCA’s founding members are Cemex, CNBM, CRH, Dangote, Eurocement, HeidelbergCement, LafargeHolcim, Taiheiyo and Votorantim. They represent 1046Mt of cement production capacity, according to the Global Cement Top 100 Report.
St Marys Cement suspends production at Dixon plant
22 December 2017US: St Marys Cement has suspended production at its Dixon plant in Illinois. The move will result in about two-thirds of the employees losing their jobs, according to the Sauk Valley Newspapers. The company, a subsidiary of Brazil’s Votorantim, plans to continue cement grinding at the site until the summer of 2018 when its inventory will be exhausted. Then the plant will be used as a distribution terminal only.
The company said that the decision was made to improve cost efficiencies and that the plant’s location was poor compared to other sites. However, it plans to review its decision on stopping production by the end of 2018.
The Dixon cement plant originally opened in 1914 before becoming idle in 2008. Production then resumed in 2015.