September 2024
Martin Brydon appointed Managing Director at Adelaide Brighton 25 November 2015
Australia: Martin Brydon has been appointed the Managing Director of Adelaide Brighton. He is currently the Chief Executive Office of the Australian construction materials company.
Brydon, aged 60, trained in electrical and electronic engineering with BHP before completing a Masters Degree in Business Administration and the Stanford Executive Program in the USA in 1998.
Brydon joined Cockburn Cement Limited as an Electrical Engineer in 1981. In 1998 he was appointed Cockburn Cement Limited's Chief Executive Officer. Following Cockburn Cement's merger into Adelaide Brighton in 1999, Brydon became the Group General Manager for the Western Division.
In 2001, Martin was appointed to the position of General Manager, Strategy and Business Development for the Adelaide Brighton group of companies. In 2005, Martin was appointed to the position of Executive General Manager, Cement and Lime at Adelaide Brighton and in 2014 in became its Chief Executive Officer.
Brazil hits the brakes 25 November 2015
Nine-month financial results from the major Brazilian cement producers have been reported this week and they are not looking good. The local construction market is weak and cement sales volumes are down. This has been blamed on a 30% shrinkage of real estate financing and a 20% decrease in infrastructure works.
Votorantim has seen its cement sales volumes drop by 4% year-on-year to 26.7Mt for the first nine months of 2015. InterCement has seen its cement and clinker sales volumes drop by 7.2% to 21.1Mt. LafargeHolcim has reported unspecified declines in its cement sector in its disappointing third quarter results.
Overall, the Sindicato Nacional Da Indústria Do Cimento (SNIC) - Brazil's cement industry body, has reported that domestic cement sales fell by 7.7% to 49.2Mt for the period. Particular sales drops by region have been observed in the Midwest (5.8Mt, -11.2%) and the Southeast (22.8Mt, -9.4%). That last region, Southeast, is pertinent given that it contains the country's biggest cement producing state, Minas Gerais.
Votorantim has been pointing out all year that its costs are soaring due to issues in Brazil. Maintenance costs, energy-related costs and the impact of the depreciation of the Brazilian Real on petcoke were all hitting costs. Net revenue has grown so far in 2015, with a growth of 5% to US$2.75bn, mainly due to the company's geographic spread outside of Brazil.
InterCement has noted that new cement production capacity in north-eastern and southern markets have reduced its sales volumes and prices by 1.7%. It too has experienced a rise in energy costs, pegged to the US Dollar. To act against this InterCement is implementing adjustment measures including suspending production at two grinding units and the closure of concrete units.
Alongside this Camargo Corrêa, the Brazilian construction group that owns InterCement, has been planning to sell a stake in InterCement to pay off debt since at least mid-2015. At the time local media reported that Camargo Corrêa planned to sell 10 – 18% of Intercement for between US$648m and US$1.17bn. CEO Vitor Hallack confirmed this week that Camargo Corrêa is still looking for a buyer. In the meantime it has extended US$536m of its short-term debt.
All of this is mirrored by wider economic woes in the country. In October 2015 the International Monetary Fund projected a 3% drop in real Gross Domestic Product (GDP) in 2015. The situation has been blamed on a wider world economy, the slowing Chinese economy and internal factors.
Back on cement, in July 2015, SNIC announced that domestic cement demand could contract by 10 - 15% in 2015 and that consumption could fall to around 60Mt in 2016. Brazil's cement production capacity currently stands at 70.75Mt/yr. Perhaps not coincidentally LafargeHolcim announced a 'portfolio optimisation' in its third quarter results with asset sales of US$3.5bn in 2016. Brazil may be on that list.
For more information on the Brazilian cement industry look out for our report in the December 2015 issue of Global Cement Magazine
Tank-Weld and Caribbean Cement confirm distribution deal 24 November 2015
Jamaica: Caribbean Cement Company (CCC) and Tank-Weld Metals have come to an agreement for Tank-Weld Metals to distribute locally-produced Carib Cement to the Jamaican market.
The companies said that, while the agreement is aimed at maximising the resources of both companies, it will also 'enhance efficiencies, create local jobs and be beneficial to customers, the travelling public and the environment.' The value of the deal was not shared. It is estimated, however, that through this partnership, CCC now has near 100% of the local market for cement.
The release further said that, to enhance efficiencies in a logistics-driven economy, both companies have identified an opportunity to pioneer domestic maritime transport of a locally manufactured product. Carib Cement will be transported by sea from the CCC Rockfort Pier to the TW Metals Rio Bueno Port in Trelawny for further distribution to the northern-based construction market using Tank-Weld's distribution capabilities.
The companies have said that the agreement will 'have social and environmental benefits as the use of maritime freight will see less wear and tear on the roads, less frustration for the travelling public and less pollution in the air, through the reduction in traversing across the island by road of bulky and heavy cargo.'
The companies also believe that this agreement will benefit the Jamaican consumer, as well as the local economy, as it increases domestic cement production, yielding greater production efficiencies, increasing the use of assets, boosting the local market and using more indigenous resources.
Camargo Corrêa offers InterCement assets in debt recovery plan 24 November 2015
Brazil: Brazilian construction group Camargo Corrêa is prepared to sell assets to help reduce its US$6.38bn debt, according to CEO Vitor Hallack.
"We put up US$2.41bn to acquire cement manufacturer Cimpor in 2012, which became InterCement. It was a strategic option to double our size in Brazil and increase our international presence," said Hallack. Brazil's economy, however, has negatively impacted the company's plans.
To resolve matters, Camargo Corrêa has extended US$536m of its short-term debt. After negotiating with banks, its obligations have been extended to 66 months from 12 months. Moreover, assets in two companies could be sold off if the price is right and the opportunities arise. The company could sell off textile group São Paulo Alpargatas and seek partners for InterCement, according to Hallack, who reiterated that the company's energy firm CPFL Energia and transportation infrastructure arm CCR will not be sold.
Votorantim posts a US$22m net loss in the third quarter of 2015 24 November 2015
Brazil: Votorantim Industrial, Brazil's largest industrial conglomerate, has posted a net loss for the third quarter of 2015 due to the impact of a deep economic recession and rising US Dollar debt-servicing costs after a currency plunge, according to Reuters.
Votorantim posted a net loss of US$22m, down sharply from a profit of US$155m a year earlier. Earnings before interest, taxes, depreciation and amortisation fell by a third to US$429m from a year ago, when Votorantim booked one-time earnings from an energy auction. The Brazilian Real fell to an all-time low in the third quarter of 2015, driving up Votorantim's gross debt by US$1.88bn to US$8.06bn at the end of September 2015.
Chief Executive Officer João Miranda highlighted investments outside of Brazil as the country suffers its sharpest economic contraction in 25 years. "In the face of Brazil's economic recession, our diversified business and international presence become even more important in delivering consistent results," said Miranda. Votorantim's capital spending rose by 55% to US$246m in the quarter, half of which was intended to expand capacity, particularly at cement plants outside of Brazil.
Sindh to establish ‘zero-pollution’ cement plants 23 November 2015
Pakistan: Sindh, a Province of Pakistan, has claimed that it will establish cement plants based on new technology with 0% pollution and low energy consumption.
The Sindh government has signed Memorandum of Understanding (MoU) with Sinohydro Corporation and Deer International Group. It will bring US$250m of foreign direct investment, create 2500 new job opportunities, generate tax revenue of US$28.4m/yr, improve peripheral economic investment and offer top quality and cheaper cements to fulfil the demand of infrastructure projects. Chairman of Deer International Group, Qaim Ali Shah, said that since Sinohydro Corporation was the world's largest water conservancy and Hydro Power Construction Company, it could efficiently exploit the indigenous resources available at Sindh.
Caribbean Cement shareholder demands probe of operating lease to TCL 23 November 2015
Caribbean: Michael Subratie, a minority shareholder of Caribbean Cement Company (CCC), has asked the Jamaica Stock Exchange (JSE) to investigate whether the operating lease paid to parent Trinidad Cement Limited breaches accounting rules.
Subratie is contending that the operating lease over the cement plant's assets, which are owned by TCL, distorts its profits and stifles shareholder value, that it appears to contravene Generally Accepted Accounting Principles - GAAP - and should be replaced with a finance lease arrangement.
Caribbean Cement last paid a dividend in 2005, amounting to a total distribution of around US$9.34m at US$0.01/share. Subratie holds just over four million CCC shares in his own name and is now the tenth-largest shareholder of the operation with a 0.48% stake.
In 2014, Caribbean Cement paid US$377m to TCL as an operating lease. For 2015, it is projecting payments of US$364m. In 2015 – 2018, the plant expects to pay US$87m to TCL under the lease agreement. New rates will be negotiated for January 2019 to December 2028.
"The operating lease arrangement seems completely unfair to the minority shareholders as the true situation seems to be that of a finance lease as the equipment leased are permanent structures and equipment located at CCC in Jamaica," said Subratie. He is also contending that amounts already paid by Caribbean Cement, combined with the payments scheduled to 2018, more than equal the cost of equipment and structures.
Under operating lease contracts, the owner permits use of an asset for a particular period, which is shorter than the economic life of the asset, without any transfer of ownership rights. A finance lease is a commercial arrangement where the lessee pays a series of rentals or instalments for the use of the asset and has the option to acquire ownership.
Caribbean Cement has two operating lease agreements with TCL, covering kiln 5 and cement mill 5. Those structures were part of an expansion programme financed by TCL from external sources. The operating lease charge is accounted for on Caribbean Cement's financial statements as an expense. Without that expense, Caribbean Cement's earnings before interest, taxes, depreciation and amortisation (EBITDA) would be boosted by around US$31,386/yr.
TCL owns 74% of Caribbean Cement and, as the situation now stands, it is the only shareholder benefiting from payouts from the Rockfort plant, said Subratie.
thyssenkrupp launches new brand identity 23 November 2015
Germany: In the future, thyssenkrupp will use one common brand the world over. The redevelopment of the brand reflects the transformation of the technology company to a diversified industrial group.
"thyssenkrupp has changed in recent years. We are a different company today. We have become more diversified and, as a result, more stable," said Heinrich Hiesinger, CEO of thyssenkrupp. "However, we are not yet perceived everywhere as the high-performance industrial group we are and want to become even more. That's why we decided to redevelop the brand," said Communications Chief Alexander Wilke.
The new brand puts a stronger focus on customers. It communicates the company's positioning as a diversified industrial group and its aspiration to work in an integrated way, leveraging internal synergies and creating added value for customers, employees and shareholders. The new branding is based on a survey of more than 6000 customers, employees, applicants, investors, works council members, public figures and consumers.
The new brand condenses what thyssenkrupp stands for in a logo, a slogan and new colours. "But these are only the visible elements of our brand. At its core is our brand promise – because it places the focus on customers and says how we want to advance them," said Wilke. "The new brand does not mean that we have reached the end of our transformation. But it is designed to give a further boost to our change process both inside and outside the company," said Hiesinger.
Over 180 different brand identities currently exist side-by-side within the group. The single brand will create a unified image among customers and employees. thyssenkrupp will introduce the new brand gradually and in accordance with the company's financial situation. Service vehicles, trucks used by the logistics unit, office stationery, work clothes, among others, will only appear in the new brand look when they would normally have been replaced at the end of their service lives.
Lafarge Malaysia buys Holcim 23 November 2015
Malaysia: Lafarge Malaysia Bhd has bought Holcim Sdn Bhd from PT Holcim Indonesia in a deal worth US$71.2m.
"With this merger, our installed cement capacity will rise to 14.1Mt/yr from 12.9Mt/yr through the combined strength of three integrated cement plants, two grinding stations, over 40 ready-mix concrete batching plants and six aggregate quarries," said Lafarge in a statement. Lafarge Malaysia has now become part of LafargeHolcim.
ASEC Cement finalises sale of two units for US$127m 23 November 2015
Egypt: ASEC Cement, part of Egypt-based Qalaa Holdings, has finalised the sale of ASEC Minya Cement and ASEC Ready Mix to Misr Cement Qena for a total of US$128m.
ASEC Minya Cement is located in Upper Egypt. It began commercial operations in August 2013, with a capacity of 2Mt/yr. ASEC Ready Mix is a producer and distributor of ready-mix concrete. The company operates six batch plants in Upper Egypt with 382,000m3 of production in 2014.
At the time of sale, ASEC Cement held 46.5% of ASEC Minya Cement and 55% of ASEC Ready Mix. Qalaa and its subsidiary National Development and Trading Company (NDT) together own 70% of ASEC Cement.
"We are pleased to announce that the sale process closed today, putting in place another cornerstone in our strategy to deleverage at both the holding and platform company levels," said Ahmed Heikal, Chairman and Founder of Qalaa Holdings. "Both ASEC Minya and ASEC Ready Mix have established themselves as critical players in the vital Upper Egyptian market and we are honoured to have worked with an exceptional management team at each of them to build them into the companies they are today."