September 2024
India: Orient Cement is to buy three cement plants from Jaiprakash Associates for US$292m. The cement producer will acquire a 74% stake in Bhilai Jaypee Cement for US$217m from Jaiprakash Associates and the Nigrie cement grinding plant from Jaiprakash Power Ventures for US$75m, according to the Press Trust of India.
Bhilai Jaypee Cement, a joint venture between Jaiprakash Associates and the Steel Authority of India Limited (SAIL), has a 2.2Mt/yr integrated Portland slag cement plant in Satna Madhya, Madhya Pradesh and a grinding plant in Bhilai, Chhattisgarh. The acquisition will also give Orient Cement access to limestone reserves and other raw materials including slag. The Nigrie cement grinding plant in Singrauli, Madhya Pradesh, has a capacity of 2Mt/yr.
"The current proposal to acquire BJCL from JAL is a significant step towards accomplishing our current mission of reaching a capacity of 15Mt/yr by 2020," said CK Birla Group chairman CK Birla, owner of Orient Cement. At present, the cement producer has 8Mt/yr from three plants in Telangana, Maharashtra and Karnataka.
RHI and Magnesita to merge to form RHI Magnesita 06 October 2016
Austria/Brazil: RHI and Magnesita are to merge to create a new refractory company called RHI Magnesita. RHI’s management board has agreed to sign a share purchase agreement with Magnesita’s controlling shareholders regarding the acquisition of a controlling stake of at least 46%, but no more than 50% plus one share of the total share capital of Magnesita, pending RHI’s supervisory board approval. The purchase price for the 46% stake will be paid in cash amounting to Euro118m and 4.6 million new shares to be issued by RHI Magnesita. The new company will be established in the Netherlands and listed on the London Stock Exchange.
As pat of the agreement, GP Investments (GP) will become a relevant shareholder of RHI Magnesita. The combined company’s corporate governance will consist of on a one-tier board structure while GP will be represented on the board of directors.
The deal is dependent on approvals by the relevant competition authorities, the migration of RHI to the Netherlands, the listing of RHI Magnesita’s shares in the premium segment of the Official List on the Main Market of the London Stock Exchange and RHI’s shareholders not having exceeded statutory withdrawal rights in an amount of more than Euro70m in connection with organisational changes preceding RHI’s migration from Austria. The migration and the preceding organisational changes in Austria require qualified approval by RHI’s shareholders’ meeting. If the deal is terminated for reasons not under the control of Magnesita’s controlling shareholders, an aggregate break fee of up to Euro20m is payable by RHI to Magnesita’s controlling shareholders.
The merger transaction is expected to complete in 2017. Until then, the two companies will remain completely separate and independent. Therefore customers, suppliers, employees and other stakeholders should expect no change in management teams, commercial relationships, supply chains and product offerings during this period.
RHI and Magnesita say that the new refractory company will bring together complementary businesses, both in terms of products and geographical footprint. Magnesita have a presence in South America and the US compared to RHI’s presence in Europe and Asia. The merger is also expected to aid the company’s position against the growing Chinese refractory industry. In addition, Magnesita’s position in dolomite-based products is complementary to RHI’s asset portfolio, which traditionally has a strong focus and an excellent market reputation for high-quality magnesite products.
Synergies from the merger are expected to deliver at least Euro36m in earnings before tax (EBIT) by 2020. However, if RHI Magnesita’s stake in Magnesita significantly exceed 46%, RHI expects substantially higher synergies of approximately Euro72m, especially in the areas of enhanced production efficiency and cost benefits in research and development, marketing and administrative functions. In addition, capital expenditure synergies are expected to amount to be Euro2 – 7m/yr and aggregate working capital savings of Euro40m are expected in the coming years.
Cemengal introduces Plug&Grind X-treme to product range 06 October 2016
Spain: Cemengal has introduced a new model to its range of modular and potable grinding stations, the Plug&Grind X-treme, the fourth generation in the series. The new addition has a production capacity of 50t/hr or 0.4Mt/yr. The concept still remains the same, with only eight containers and six modules. It includes a XP4 I classifier from Magotteaux.
Star Cement order mill upgrades from KHD 06 October 2016
India: Star Cement has ordered upgrades for the 70t/hour ball mill, with a diameter of 3.6m and length of 11.9m, at its plant in Meghalaya from KHD. The equipment manufacturer will supply a roller press RP7-170/90 along with an SKS VC 3000 separator, which will increase the grinding capacity of the current ball mill by more than 100%. This will achieve a total guaranteed production capacity of 150t/hour for Pozzolanic Portland Cement at 3600 Blaine. The upgraded circuit is to be commissioned by 31 March 2017.
India: Bharatiya Janata Party (BJP) leader and Rajya Sabha MP Subramanian Swamy has urged Prime Minister Narendra Modi to ban imports of cement from Pakistan in the interest of domestic industry and national security. He said that imports of cement without levy of customs duty were introduced in 2007 to augment supply in view of high demand, according to the Press Trust of India. However, he added that the situation has since changed, with the local industry now facing capacity utilisation of below 70%.
"I request you to ban import of cement into the country not only in the interest of growth and sustenance of domestic cement industry but also in keeping with the imperatives of national security. Ban of import from Pakistan will be in the interest of the country's security in the present juncture," Swamy said in a letter to Modi. He added that imports from Pakistan also carried the risk of smuggling of contraband materials like drugs and weapons.
Canada: The board of directors of Italcementi have met in Milan, Italy and have decided on integrate its operations in the Canadian market with the operations of HeidelbergCement, which from 1 July 2016 has been holding the majority stake in Italcementi and will take over the entire company following a mandatory takeover bid. The transaction involves the acquisition by Canadian Lehigh Hanson Materials (LHM), indirectly owned by HeidelbergCement, of the entire share capital, including ordinary and preference shares, of US-based Essroc Canada, which is indirectly owned by Italcementi, through vehicle company Essroc Netherlands. The price which Essroc will receive for the sale of Essroc Canada to LHM, equal to some US$281m, will be paid by assigning to Essroc 42,288 LHM shares of the new issue, or 15.5% in LHM share capital, and for the remainder - in cash US$151,000.
Cemex makes management changes in Cemex LatAm and Cemex Colombia following Maceo scandal 06 October 2016
Colombia: Cemex has made organisational changes at Cemex LatAm and Cemex Colombia following senior management dismissals and the resignation of the unit’s chief executive officer in connection to investigations into a land deal in Maceo. The cement producer said the changes would ‘enhance the level of leadership, administration and corporate governance practices.’
The board of directors of Cemex LatAm has decided to split the roles of chairman of the board of directors of Cemex LatAm, chief executive officer of Cemex LatAm and director of Cemex Colombia. Additionally, a new chairman of the board of directors of Cemex LatAm, director of Cemex Colombia, and director of planning of Cemex LatAm have been appointed. The new appointments are effective immediately.
Juan Pablo San Agustin has been appointed chairman of the board of directors of Cemex LatAm. He will also remain as executive vice president of strategic planning and new business development of Cemex. He is a member of Cemex’s executive committee.
Jaime Muguiro Domínguez has been confirmed as chief executive officer of Cemex LatAm. He will also remain as president of Cemex South, Central America and the Caribbean and is also a member of Cemex’s executive committee.
Ricardo Naya Barba has been appointed director of Cemex Colombia.
Francisco Aguilera Mendoza has been appointed director of planning of Cemex LatAm, and will be appointed director of planning of Cemex Colombia in the coming days.
Cemex added that all of the newly appointed executives have ‘significant’ international operating management experience and on average have each close to 20 years of working experience within Cemex.
Competition in the Democratic Republic of the Congo 05 October 2016
News from the Democratic Republic of the Congo (DRC) this week: Lucky Cement has nearly finished its new 1.2Mt/yr cement plant. The US$270m project is due to start commercial operation in October 2016, according to a report by Bloomberg. The news is fascinating because it marks the opening up of central sub-Saharan Africa to the cement industry and it puts the boots of Pakistan’s Lucky Cement on the African continent in a big way.
The Nyumba Ya Akiba plant is a 50:50 joint venture between Lucky Cement and a local conglomerate Groupe Rawji, with financing supplied from a group of international development agencies. Originally proposed in 2013 the plant is located in Kongo Central province in the far west of the country between Kinshasa and the port of Matadi near to the connecting main road and railway line. The kit for the plant was ordered from FLSmidth in 2014 for Euro68m, including crushers, pyro processing equipment and vertical mills for raw meal, coal and cement grinding. An overview from the International Finance Corporation also added that the plant intended to cut a deal to import South African coal via the railway from the coast. Limestone and clay will come from a captive quarry. Incidentally, FLSmidth reckoned in 2015 that the project was the first new cement plant in the country in 40 years.
From Lucky Cement’s perspective the project makes sense given the bad reaction it has had trying to import its cement into western and southern Africa. Local producers recoiled from cheap imports along the coast and then lobbied their governments to block them. So, putting down manufacturing roots in a target country with a local partner makes it that much harder to block additional imports. It may or may not be importing its own clinker from somewhere else to supplement local demand but it is definitely providing local jobs and supporting local development. Lucky Cement’s previous international adventure of this kind was the opening of a cement grinding plant in Iraq in 2014.
Naturally, like buses, one waits ages for a cement plant to be built and then two turn up at the same time. South Africa’s PPC is also building an integrated cement plant in the DRC at Kimpese, in the same province as Lucky Cement’s plant. PPC’s half year report to March 2016, released in September 2016, mentioned that its 1Mt/yr plant was 83% complete with all civic and structural work complete. Commissioning was intended for the end of 2016 with cement ready for sale in early 2017. It is being built by Sinoma. The cement producer already has a sales depot in Kinshasa and it exports 32.5N and 42.5N cement from South Africa to the territory. Given PPC’s falling revenues from cement in South Africa and growing revenue elsewhere in Africa the opening of this plant will be keenly awaited.
The local demographics may answer whether the DRC can support two new cement plants. The country’s cement consumption was just 24kg/capita with a gross domestic product (GDP) per capita of US$490 in 2015. These are some of the smallest figures in the world. A feasibility study ahead of the Nyumba Ya Akiba plant estimated that the country would have a demand of 1.8Mt/yr by 2015 compared to a local production capacity of under 1Mt/yr. Nature, and markets, abhor a vacuum. Lucky Cement and PPC are about to fill it.
Hanson Permanente Cement files for bankruptcy 05 October 2016
US: Hanson Permanente Cement has filed for Chapter 11 bankruptcy with the US Bankruptcy Court in the Western District of North Carolina. The cement producer based in California has blamed the move on liabilities related to the sale of products containing asbestos since 1978. As of 31 August 2016, the debtors were defendants in approximately 14,000 pending asbestos-related bodily injury lawsuits filed in state courts across the country, according to New Generation Research. Hanson Permanente Cement’s Chapter 11 petition indicates total assets greater than US$100m.
Eurocement Group mulls upgrade at Savinskiy Cement Plant 05 October 2016
Russia: Eurocement Group is considering implementing upgrades at its Savinskiy cement plant in the Arkhangelsk region. Production at the plant was stopped in 2010, according to the Rossiyskaya Gazeta newspaper. The plans were discussed at a forum in Sochi.