September 2024
Cement antitrust case ‘not conclusive’ 05 August 2015
Europe: The European Commission has decided to close an antitrust investigation opened in December 2010 against a number of European cement manufacturers including Cemex, Holcim and HeidelbergCement, according to Construction Europe.
Originally the cement companies were suspected by the EC of colluding with rivals to fix prices in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK. The commission said that there had been indications suggesting possible import/export restrictions, market sharing, price co-ordination and information exchanges in the markets for cement and related products. It said that inspections had been carried out in November 2008 and September 2009 at the premises of companies in Germany, France, the UK, Belgium, the Netherlands, Italy, Luxembourg and Spain.
The EC has now said that the evidence obtained in its investigation 'was not sufficiently conclusive to confirm these initial concerns,' adding 'the commission will continue to monitor closely developments in the European cement markets.'
The alleged cartel was said to have colluded in market sharing and price fixing in the markets for cement and cement-based materials such as ready-mix concrete, clinker, aggregates, blast-furnace slag, granulated blast-furnace slag, ground granulated blast-furnace slag and fly ash.
Perella Weinberg Partners hires LafargeHolcim co-chairman Wolfgang Reitzle in advisory role 05 August 2015
UK: Investment boutique Perella Weinberg Partners has hired LafargeHolcim co-chairman Wolfgang Reitzle as an advisory partner.
Reitzle, also a former chief executive of the German gas maker Linde and chairman of the supervisory board of German car supplier Continental, will provide counsel in a senior role to the investment firm and its clients, especially in Europe, according to Perella Weinberg. He will continue in his role at LafargeHolcim.
Reitzle has had previous dealings with Perella Weinberg Partners; Holcim appointed Perella Weinberg banker Dietrich Becker to renegotiate the terms of its merger with Lafarge. "Reitzle has an exceptional track record of successfully managing growth across a variety of industries," said Joseph Perella, co-founder and chairman of Perella Weinberg Partners.
US: Summit Materials has reported increased net revenue, operating income and gross profit in the second quarter of 2015, which ended on 30 June 2015.
"During the second quarter of 2015, we produced significant growth in net revenues and margins across all of our lines of business. This strong improvement reflects the steady demand improvement in all of our regions, despite some weather-related challenges, mainly in Texas and Kansas, and our disciplined focus on price optimisation across our vertically integrated lines of businesses. We achieved this while also expanding our adjusted EBITDA margin by 300 basis points and generating incremental margins in excess of 50%. The success of our acquisition strategy was also evident in our results, with more than half of our profit growth contributed by our accretive acquisitions," said Tom Hill, president and CEO of Summit. "We believe our sustained progress is a direct result of the steps we have taken to expand our business into attractive markets and establish leadership positions throughout our diversified footprint. Our completion of the Davenport assets acquisition was an exciting milestone for our company and significantly advanced our position as a leading cement producer in the Midwest. We are now better positioned to continue enhancing our materials earnings exposure and overall profitability as we integrate these assets onto our platform. As we look to the back half of 2015, we plan to capitalise on the improving demand environment to improve our profitability while also remaining opportunistic with our capital to further expand our businesses in select target markets."
In the second quarter 2015, net revenue increased by 12.5% to US$329m. The increase in net revenue was primarily attributable to an increase in volumes across all lines of business, led by the West and Central regions. Net revenue grew organically by 3.2% to US$9.3m. Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by 28.4% to US$78.1m, with growth in all regions. As a percentage of net revenue, adjusted EBITDA improved to 23.8%, compared to 20.8% in the prior year quarter.
Adjusted EBITDA in the west region grew by 28.4% to US$8.7m, primarily driven by a higher mix of net revenue from aggregates, organic volume and price growth and the impact of acquisitions, mainly in the Houston and Midland / Odessa, Texas and British Columbia, Canada markets. In the central region, adjusted EBITDA increased by 23.2% to US$6.7m, largely attributable to price growth across all lines of business, stronger volume in aggregates and ready-mixed concrete and the favourable impact of acquisition activity. Adjusted EBITDA in the east region improved by 20.8% to US$1.6m, primarily as a result of higher volume in aggregates leading to a larger mix of net revenue derived from materials.
Gross profit increased by 25.1% to US$116m. As a percentage of net revenue, gross profit improved to 35.2%, compared to 31.6% in the prior year quarter, primarily attributable to a higher mix of net revenue from materials and products as a result of organic improvement and acquisition activity. Net revenue from materials increased by 29.6% to US$88.1m. Cement volumes and prices increased by 0.7% and 9.1%, respectively, both driven by additional market demand. Gross profit from materials grew by 34.7% to US$52.7m.
On 17 July 2015, Summit Materials completed the acquisition of the Davenports Assets, including a 1.2Mt/yr cement plant, a quarry and seven cement distribution terminals, from Lafarge for US$450m in cash and a cement distribution terminal in Bettendorf, Iowa. The Davenport Assets are being integrated with and will operate as Continental Cement Company, an existing wholly-owned subsidiary of Summit.
HeidelbergCement to develop Volga limestone deposit 04 August 2015
Russia: HeidelbergCement has won the right to develop a 37.5km2 plot at the Novo-Shikhanskaya area in Volga. According to the Geolnerud Central Research Institute, the limestone resources for the cement industry in the area amount to 168Mt. The contract costs Euro14,284 with an initial payment of Euro11,644. The license in valid for 25 years.
Francis Flower acquires Scunthorpe ground granulated blast furnace slag plant from Hanson 04 August 2015
UK: Mineral resources company Francis Flower has announced the acquisition of the Scunthorpe ground granulated blast furnace slag (GGBS) plant from Hanson Cement.
The business is capable of producing more than 500,000t/yr of GGBS and supplies customers in the Midlands and north of England. GGBS complements Francis Flower's existing range of high quality powdered minerals, which originate as by-products from various industries. This reduces the need for mineral extraction and landfill, delivering sustainable environmental solutions for its customers. The acquisition reflects both Francis Flower's commitment to developing its range of products and services in this sector and the credibility it has for making the most of mineral resources.
"We are absolutely delighted and very excited to announce this new acquisition. GGBS is an excellent fit to our existing product range and will help further our longstanding relationships in this sector," said Adrian Willmott, Chairman and CEO of Francis Flower. "We have a proven track record of making the most of mineral resources, reducing the need for mineral extraction as well as landfill and delivering sustainable solutions for our customers. We are very much looking forward to working with the team in Scunthorpe and developing the opportunities in the GGBS market as the UK construction sector continues to grow."
Sinoma considers investment in Pecem Port 04 August 2015
Brazil: Sinoma Group has announced plans to invest in the Brazilian State of Ceara after visiting the Pecem Port industrial complex on 31 July 2015. The group will not necessarily install a cement plant at the complex and could instead supply machinery and equipment to the cement sector. The group is likely to continue to evaluate the market and economic conditions of the state before determining the level of investment to be made.
Cemex completes refinancing of bank debt 04 August 2015
Mexico: Cemex has completed the refinancing of a bank loan agreement, paying off the remnants of what was originally a US$15bn debt refinancing at the height of the 2009 global crisis, according to Dow Jones.
Cemex said that it paid ahead of time the remaining US$1.94bn of a 2012 accord, using funds from 17 financial institutions that joined others in a refinancing deal reached about a year ago. The amount owed under the new credit agreement now stands at around US$3.79bn, including Euro620m (US$681m) and the rest in US Dollars.
"We have now consolidated our syndicated bank debt in a single agreement under improved conditions that better reflect our financial metrics. We are pleased with the interest shown by the bank market in this transaction and the continued support of our lenders," said CFO José Antonio González. With the latest refinancing, Cemex's only significant debt payments in the next two years are US$352m in convertible notes due in March 2016 and a US$373m principal payment in September 2017 on the existing bank loan agreement.
Cemex refinanced around US$15bn in bank debt during the 2009 global crisis, when the company's earnings fell and put payment of its heavy debt load at risk. In 2012, with about half of the amount left to pay, Cemex rescheduled around US$6bn and has since carried out further refinancings to lower the cost and extend the maturity of its debt. Cemex's total debt at the end of June 2015 stood at US$15.9bn, down from US$17.1bn a year earlier.
India: Pollution caused by seven cement plants in the Khrew area of South Kashmir is adversely affecting wildlife, saffron production, human and livestock wellbeing, according to local media.
The local people said that the worst affected villages of Khrew include Pakhribal Nagadore and Botthen. The lives of people living in these villages have been 'turned into hell.' Locals have demanded that the government strictly enforce pollution control norms at the cement plants.
Environmental science expert Ghulam Ahmad Bhat, who has studied the effects of cement plants in Khrew on the human lives, flora, fauna and wildlife, said that their presence is harmful in the short- and long-term. He said that mercury emissions have already affected saffron production, while dust pollution has affected both Khrew woods and the neighbouring village of Harwan. Bhat added that the area also has more respiratory problems among locals.
A meeting between the civil society Khrew Auqaf Committee, deputy commissioner Pulwama Neeraj Kumar and the cement plant owners was held to discuss pollution and monitoring. A resolution is expected to be presented at a second meeting within a month.
US: Eagle Materials has reported that in the first quarter of its 2016 fiscal year, which ended on 30 June 2015, its revenues grew by 7% to US$285m, its earnings before interest and income taxes grew by 1% to US$60.4m, its earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 10% toUS$84.6m and its net earnings grew marginally to US$37.8m.
First quarter net sales prices improved across nearly all businesses, with the most notable increases in the cement and concrete businesses. Extraordinarily wet weather in many of itscement markets, including Texas, Oklahoma and Colorado, adversely impacted the timing of cement sales volumes during the first quarter. However, Eagle Materials reported that its underlying demand for its cement continues to remain strong. In addition, all of its cement facilities completed their planned annual outages during the first quarter and cement maintenance costs were approximately US$3m higher than the prior year's first quarter.
Its cement revenues for the first quarter, including joint venture and intersegment revenues, totalled US$128.2m, which was slightly higher than the same quarter last year. The average net sales price grew by 9% year-on-year. Cement sales volumes fell by 7% to 1.2Mt. The most significant decline in cement sales volumes occurred in Texas, primarily associated with well-above average rainfall during the period. Operating earnings from cement for the first quarter of 2016 grew by 25% to US$25.7m. The earnings improvement was driven primarily by improved average net cement sales prices, lower energy, raw materials and purchased cement costs, partially offset by lower cement sales volumes and US$3m of increased costs associated with a shift in the timing of all the annual maintenance outages at cement plants to the first quarter.
Europe: LafargeHolcim has decided to initiate a squeeze-out process for all issued and outstanding shares of Lafarge. After surpassing the necessary 95% threshold in the share capital and voting rights and following a decision by the board of directors, LafargeHolcim plans to request that the AMF implement a squeeze-out procedure pursuant to their general regulations for Lafarge shares not tendered to the Public Exchange Offer. LafargeHolcim will publish further details on the squeeze-out upon filing with the AMF.