September 2024
China: Huaxin Cement’s sales revenue has fallen by 11% year-on-year to US$860m in the first half of 2016 from US$968m in the same period of 2015. Its net profit fell by 91% to US$1.21m from US$13.3m. The cement producer reported falling sales in most regions, with the exception of Tibet and Henan. Notable decreases in sales revenue occurred in Jiangsu, Jiangxi and Guangxi. The company blamed the result on falling prices caused by production overcapacity and ‘vicious’ market competition.
Outside of China the company has started operation at its 300t/day Gayur plant and it is building a 0.5Mt/yr grinding plant at Dangara in Tajikistan. Planning work has also been conducted at a 2800t/day cement plant at Narayani in Nepal and a 2500t/day cement plant at Aktobe in Kazakhstan.
Chzhungtsai Mohir Cement plant opens in Tajikistan 25 August 2016
Tajikistan: The Government of Tajikistan and the Chzhungtsai Mohir Cement company have started operation at their joint-run 1.2Mt/yr cement plant in Yovon district of Khatlon district. The president of Tajikistan Emomali Rakhmon inaugurated the plant. It will be the first cement plant in Central Asia to produce ‘400’, ‘500’ and ‘600’ branded cement, according to Asia Plus. The plant cost US$121m to build with 35% of the cost procured from local investors and 65% from foreign investment.
Boral’s profit rises by 8% to US$204m 25 August 2016
Australia: Boral’s profit after tax has risen by 8% year-on-year to US$204m in its financial year which ended on 30 June 2016 from US$190m in the previous year. Its sales revenue fell, by 2% to US$3.28bn, but revenue from continuing operations rose slightly. Revenue from continuing operations benefitted from stronger residential activity in Australia and the US, which offset the decline in resource-based and other major project activity. The company’s earnings before interest and tax (EBIT) also rose due to operational cost improvements, lower fuel costs and some pricing gains.
“We have continued to improve our performance across our businesses in line with our strategy, managing our portfolio more efficiently and maintaining a strong balance sheet,” said CEO and managing director Mike Kane. “The continued growth in Boral’s earnings demonstrates the great work that has been done to improve our cost base, grow margins, and efficiently supply market demand, which continues to be strong in Australia and Asia, and is growing in the US.”
The group’s revenue from its cement business grew by 3% to US$231m due to a 6% increase in cement volumes due to stronger activity in New South Wales and 2% higher average prices, partially offset by lower wholesale clinker volumes due to kiln availability. Earnings also grew with cost improvement initiatives, including improved utilisation of assets and sourcing of lower cost raw materials and energy.
CRH sales revenues rise following acquisitions 25 August 2016
Ireland: CRH’s sales revenue has risen by 35% year-on-year to Euro12.7bn in the first half of 2016 from Euro9.38bn in the same period of 2015. On a proforma basis - or adjusted for acquisitions, divestments and currency changes – sales revenue rose by 8%. CRH’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 20% to Euro1.12bn on a proforma basis. The company attributed the increases in sales, mainly to the Americas, with rises in Europe and Asia also.
"We have had a very satisfactory first half, with good performance from our heritage businesses and contributions from 2015 acquisitions delivering significant profit growth for CRH,” said chief executive Albert Manifold. “With continued positive momentum in the Americas and the modest impact of early-stage economic recovery in Europe, assuming normal weather conditions for the remainder of the season, we expect further progress in the second half with full year reported EBITDA in excess of Euro3bn."
North with Cementos Argos 23 August 2016
Cementos Argos’ deal to buy the Martinsburg cement plant in West Virginia from HeidelbergCement makes a lot of sense. After all, the Colombian-based cement producer has seen its US cement assets perform well so far in 2016 with a cement sales volumes increase of 29% year-on-year to 1.99Mt and an overall sales revenue boost of 19.7% to US$700m. Compare that to the challenges the company has faced so far this year on its home turf in Colombia. There, cement sales volumes fell by 15.5% to 2.47Mt and sales revenue fell slightly to US$465m.
Argos has picked up the Martinsburg cement plant and eight cement terminals in the surrounding states for US$660m. The sale was mandated by the US Federal Trade Commission as one of the conditions of HeidelbergCement’s purchase of Italcementi including its US subsidiary Essroc, the current owner of the plant.
Symbolically, the purchase takes Argos right up to the Mason–Dixon line, the old survey line sometimes used to describe the dividing line between the so-called ‘north’ and ‘south’ in the US. The cement plant is south of the line in West Virginia but some of the cement terminals are firmly in the north-east. Outside of the company’s home turf in Colombia it has a maritime presence around the Gulf of Mexico. Although Martinsburg is inland, the new terminals in Norfolk, Virginia and Baltimore push Argos’ distribution network up the east coast. This could potentially push Argos into conflict with the subject of last week’s column, McInnis Cement, a Canadian cement plant under construction with eventual aspirations to sell its cement to the US.
Back in the US specifically the new plant will bring Argos’ total of integrated cement plants to four, joining Roberta in Alabama, Newberry in Florida and Harleyville in South Carolina. All together the producer will have a production capacity of around 6Mt/yr in the US following the acquisition. Back in 2014 when Global Cement visited Martinsburg the plant was distributing its cement about 60:40 via truck and rail. At that time the plant was shifting cement in an area from central Ohio eastwards to western Pennsylvania and south to southern Virginia, as well as in North Carolina.
Argos has paid US$300/t for Martinsburg’s production capacity of 2.2Mt/yr. As ever determining the cost of the terminals proves difficult. This compares to the US$267t/yr that Grupo Cementos de Chihuahua (GCC) paid to pick up two plants from Cemex in May 2016 or the US$375/t that Summit Materials paid Lafarge for a cement plant and seven terminals in July 2015. Previous Argos purchases in the US were around US$220 – 250/t for deals with Lafarge and Vulcan in 2011 and 2014 respectively. It is also worth considering that Essroc upgraded Martinsburg significantly in 2010 to a dry-process kiln and that the site has a waste-to-solid-fuel plant from Entsorga due to become operational in 2017.
The purchase of Martinsburg by Argos seems like an obvious move. It predicts a compound annual growth rate of 5.4% for cement consumption in the American states it operates within between 2016 and 2020. However, this may be optimistic given that the Portland Cement Association’s chief economist Ed Sullivan has downgraded his consumption forecasts for the US as a whole to 3.4% from 5% as he waits for the recovery to really kick in. The southern US states have also recovered faster since a low in 2009 than the northeastern ones. The purchase marks a new chapter in Cementos Argos’ expansion strategy
BASF opens admixtures plant in Sri Lanka 23 August 2016
Sri Lanka: BASF has opened its first production plant for admixtures at Sapugaskande near Colombo. The plant will produce standard and custom-made performance-based construction chemicals under the Master Builders Solutions brand. These include concrete admixtures product ranges such as MasterGlenium, MasterPolyheed, MasterRheobuild and MasterPozzolith. The site is supported by an office, warehouse and testing laboratory.
“Asia Pacific is one of the fastest growing markets globally and South Asia is a strategic growth engine of this market. With the new admixture plant in Colombo, we will now be able to rapidly supply our customers with admixtures for all cement and aggregate types, whether their construction projects are located in the capital or in remote areas,” said Himanshu Kapadia, Vice President, Market Management, Construction Chemicals Asia Pacific, BASF, at the inauguration of the new plant on 19 August 2016.
India: Reliance Infrastructure has completed the sale of its 100% shareholding in Reliance Cement to Birla Corporation, part of MP Birla Group. The US$715m deal, valued at US$140/t of cement production capacity, was announced in February 2016. The transaction has now completed following the transfer of shares and receipt of sale consideration. Proceeds of the sale will be used by Reliance Infrastructure to pay off its debts.
Anhui Conch focuses on overseas markets as profits fall 23 August 2016
China: Anhui Conch’s net profit has fallen by 29% year-on-year to US$506m in the first half of 2016 from US$710m in the same period in 2015. Its revenue fell slightly to US$3.61bn from US$3.65bn. It sold 128Mt of cement in the period, a rise of 11% year-on-year, but falling prices reduced its revenue. By region the sales were up overseas and in Central China but they fell in East China and South China. The group blamed the fall in profit on an economic downturn and intense market competition.
During the reporting period three clinker production lines at PT Conch South Kalimantan Cement, Myanmar Conch Cement and Yingjiang Yunhan Cement and seven cement-grinding units at Ganzhou Conch Cement and Guangxi Sihegongmao were put into operation. The group’s clinker and cement production capacities have increased by 4.6Mt/yr to 240Mt/yr and by 8.1Mt/yr to 300Mt/yr respectively. Four waste heat recovery systems have also been commissioned, adding 25.5MW capacity.
International projects in Indonesia and Myanmar have completed construction and started operation during the reporting period. The group’s Merak grinding mill project in Indonesia is continuing as scheduled with trial operation planned for the second half of 2016. Preliminary work on projects in Laos and Cambodia and research for future projects in Russia and Turkey is also continuing.
CNBM and Sinoma start merger preparations 23 August 2016
China: The Assets Supervision and Administration Commission has announced the reorganisation of the China National Building Materials Group Corporation (CNBM) and China National Materials Group Corporation (Sinoma). The commission did not provide further details on the merger.
CNBM is the world's major non-metal materials manufacturer, and cement equipment and engineering service provider, with total assets over US$64.5bn. Sinoma is also an industry leader in the construction materials industry. China has started accelerating the reorganisation of its SOEs to improve their competitiveness.
Hanson Cement promotes Mark Hickingbottom and Andy Simpson 23 August 2016
UK: Hanson Cement has appointed Mark Hickingbottom as its national commercial director for bulk cement and Andy Simpson as its national commercial director – packed. The appointments follow the recent retirement of commercial director Keith Ellis.
Hickingbottom has sales and marketing experience within Hanson’s bulk cement team, as well as a degree in Business Management. He is an associate member of The Institute of Concrete Technology and has spent over 12 years at Hanson delivering strategic plans across its product range.
Simpson, previously responsible for sales of all Hanson’s packed products, will build on developing trading relations with merchant customers as well as working with internal teams. He has over 15 years’ experience with Hanson and holds a degree in Business Studies.