September 2024
Philippines: Eagle Cement plans to build its production capacity with an investment of US$1.2bn. Owner Ramon S Ang revealed to local media that he intends to build two new 2Mt/yr cement plants at Cebu and Davao in 2015. In addition the company is also adding one more line with a 2Mt/yr production capacity to its existing cement facility in San Ildefonso, Bulacan.
"We are now finishing the second line and preparing to put up a third line. With the third Eagle line, it will be even bigger than the asset being sold by Lafarge," said Ang. Upon completion of the third line, the Bulacan plant will have a production capacity of 6Mt/yr. According to Ang, each cement line with a 2Mt/yr capacity costs US$400m.
Eagle Cement produces and distributes cement under the brands Eagle Cement Advance and Eagle Cement Strongcem.
San Miguel Corp, the Manilla based multinational for which Ang serves as president, formally entered the cement business in 2013 when it paid US$78.6m for a 35% stake in Northern Cement. The cement company with a production facility in Pangasinan has a capacity of 2Mt/yr.
India: Anjani Portland Cement has reported a net profit of US$2.48m in the quarter that ended on 31 March 2015 compared to a net loss of US$2.21m during the same quarter of 2015. Sales rose by 12.3% year-on-year to US$12.9m.
For the full year that ended on 31 March 2015, its net profit was US$2.62m compared to a net loss of US$3.04m during the previous year. Sales declined by 6.25% to US$4.06m in the 2015 financial year.
Ghana: The Ghana Cement Manufacturers Association (GCMA), which comprises Ghacem Ltd, Diamond Cement Company Ltd and Savannah Diamond Company Ltd, has appealed to the Ministry of Finance to urgently commence investigation into what it described as the tax liabilities of certain importers of bagged cement into the country.
In a letter dated 26 May 2015 and addressed to the director of taxes at the Finance Ministry, the GCMA said that it had gathered that two importers, SOL Ghana Ltd and Fujiman Sentuo, had allegedly declared cost, insurance, freight (CIF) values of about US$27/t and US$30/t respectively. The letter, jointly signed by George Dawson-Ahmoah, chairman and N Venketash, vice chairman / secretary, stated, 'The alleged values to us as seasoned manufacturers in the cement industry are unbelievable and call for the attention of the tax authorities. Such values, when confirmed, are under-valued leading to huge financial loss to the nation."
Egypt: Lafarge Industrial Ecology (Ecocem) has signed two major contracts to manage and operate existing refuse-derived fuel (RDF) platforms in Suez and Qalyubeya in Egypt.
In an effort to continue its efficient waste management processes, the company has signed a year agreement to renovate and upgrade the platforms in Suez and another separate 10-year agreement to manage and operate the existing platforms in Qalyubeya. Lafarge Ecocem has already added a new production line to the Suez platform and plans an additional line within one year of signing its contract with the governorate. The plant will produce 42,000t/yr of RDF and the investment will total US$1.66m.
Ecocem has also already added an extra line to the Qalyubea plant, in addition to renovating one production line. The company's future investments in the governorate will increase the RDF production capacity by 32,000t/yr to 280,000t/yr. Both investments at the Qalyubeya plant were funded by GIZ and the Bill and Melinda Gates Foundation with a total Investment of US$1m.
"In line with our 'Building Egypt 2030' campaign, Lafarge is committed to help solve the issue of waste in Egypt and to continue taking the necessary steps towards sustainable development," said Hussein Mansi, CEO of Lafarge Egypt. "At Lafarge Egypt, we feel it is our responsibility as a leader in building solutions to be the major proponents in waste management and plan to continue finding many opportunities to make a difference."
Building on its waste management strategy, Lafarge Ecocem is committing to several additional long-term contracts with different governorates to help convert municipal solid wastes to alternative fuels. In addition, in March 2015, Lafarge Egypt and Orascom Telecom Media and Technology Holding S A E signed a memorandum of understanding to develop a waste management framework of municipal and agricultural waste.
Lafarge Egypt and Ecocem have implemented many projects over the past three years in order to increase the use of alternative fuels and aim to achieve an average fuel substitution rate of 25% by the end of 2015. More than 260,000t of waste have been processed and fired in Lafarge's Sokhna plant since 2013, an equivalent of 100,000t of fossil fuels.
Turkey: Votorantim Cimentos has announced a Euro140m investment in the expansion of its cement plant in Sivas, Turkey. The investment is the largest carried out in Sivas' history and will increase the plant's current production capacity by three times, from 0.6Mt/yr to 1.8Mt/yr.
The investment will allow Votorantim Cimentos, which currently operates in the country at full capacity, to increase its market share in Turkey. The Sivas plant currently accounts for about 19% of Votorantim Cimentos' 3Mt/yr production capacity in Turkey. After the expansion, it will account for 42% of the company's total production capacity in the country.
"Votorantim Cimentos sees the potential of Turkey's construction sector and this investment shows our commitment to reinforcing our presence in Turkey. Sivas' expansion will bring a crucial dynamism and competitiveness to the company in the Turkish cement market," said Mustafa Şefik Tüzün, CEO of Votorantim Cimentos in Turkey.
Groundbreaking at the plant will take place in June 2015 and construction work will employ around 700 people. Cement production will begin in 2017. The plant will supply the market with CEM I and CEM II, the most in-demand products in the Turkish cement market.
Votorantim Cimentos recently announced a Euro1.61bn investment package for 2015 - 2018. The company will invest in five new plants in Brazil, one in Bolivia, as well as in the expansion and modernisation of existing units, such as the one in Sivas.
Morgan Stanley buys 0.62% stake in Prism Cement 28 May 2015
India: Morgan Stanley Asia Singapore has bought a 0.62% stake in Prism Cement for US$4.98m. The 3.14m shares were purchased at a price of US$1.58/share.
Vietnam: Vietnam is estimated to have produced 26.6Mt of cement in the first five months of 2015, up by 9% year-on-year. The total includes 6.3Mt in May 2015, according to the government-run General Statistics Office.
Estonia: HeidelbergCement's Kunda Nordic Tsement has reduced its output and made 30 employees redundant, citing a decline in clinker exports to Russia. CEO Meelis Einstein said that the need to cut expenditures has had a negative impact on suppliers of support services to Kunda Nordic Tsement.
Colombia: Cementos Argos' net profit rose by 3.3% year-on-year to US$29m in the first quarter of 2015, which ended on 31 March 2015, due to increased sales in the US. The company posted an increase in income despite higher sales costs.
Its consolidated income rose by 28% to US$630m, while earnings before interest, taxes, depreciation and amortisation (EBITDA) jumped by 18% to US$121m, the highest in the company's history. The increases were due principally to growth in the US, where cement income rose by 31% to US$264m.
"Today, 60% of Cementos Argos' income is generated outside of Colombia," said chief executive Jorge Mario Velasquez. "Added to the solid results in all our operations, dispatched volumes and generated EBITDA, we can be optimistic about 2015."
Costs for the company rose by 33.3% year-on-year to US$469m in the first quarter because of bad weather in the US and increased transportation costs in Colombia caused by a brief truckers' strike.
Meanwhile, Jaime Hill Tinoco, president of Holcim Colombia, has confirmed the company's upcoming projects, which include the second stage of the connection between Puente Aereo (Terminal 2) and the new terminal at El Dorado airport in Bogota, La Felicidad shopping centre and a residential development in Madrid (Cundimarca). Hill said that Holcim will install plants at the building sites and added that it will also supply cement for the construction of a Grupo Carso mall in Bogota.
With regards to infrastructure projects, Hill said that Holcim is participating in the construction of the Bogota-Villavicencio road and in the second section of the Ruta del Sol road project. He added that the expansion of infrastructure initiatives would benefit the cement sector, improving the transport of material.
In January - March 2015, Holcim Colombia posted a sales increase of 5%, below the national industry's average growth rate of 7.5%. Hill said that the difference was due to the truckers' strike, which forced distribution to be halted for a week. The company has forecast a 5% sales rise by the end of 2015, representing 15% of the 12.5Mt tonnes of cement that the industry expects to produce during the year. By 2020, it is expected that Colombia will produce 15Mt/yr of cement.
How many staff will LafargeHolcim need? 27 May 2015
There was a lot of news out of Lafarge and Holcim this week regarding preparations towards their merger. Just this morning we heard that the partners have entered into a binding agreement with Ireland's CRH regarding the sale of the assets that must be divested. Meanwhile, Lafarge and Holcim have also completed the appointments for the future LafargeHolcim executive committee. Its nine members will be responsible for such tasks as finance, integration, performance and costs, growth and innovation, as well as regional activities in Europe, Asia Pacific, the Middle East and Africa, North America and Latin America.
However, it was other types of personnel that featured in Lafarge and Holcim's earlier press releases. On 19 May 2015 Lafarge came out and announced the first (pre-merger) job losses that will result from the merger. It will cut 380 positions in central and regional corporate roles, with 166 going in its native France. For its part Holcim will make 120 pre-merger job losses, all in Switzerland. Ignoring the clear discrepancy in scale between the different sides, Lafarge and Holcim will have lost at least 500 jobs out of their combined ~130,000. This is just a scratch on the surface, but it does raise an interesting question: How many more jobs will go at LafargeHolcim?
First up are the staff that will go to work for CRH. This probably represents the largest number of staff that will come of LafargeHolcim's books relative to Lafarge and Holcim's current staff levels. According to their 2014 Annual Reports, Lafarge and Holcim employ a combined 81,000 staff in cement roles. Given that they have a combined 425Mt/yr of cement capacity (give or take) this equates to around 190 staff for each 1Mt/yr of capacity.
As the new LafargeHolcim will have control over around 340Mt/yr of cement capacity, we can crudely scale the 190 staff up to 64,600 cement sector staff. This indicates that around 16,400 staff that are currently employed by Lafarge and Holcim will be 'off' to CRH (and others). This leaves 48,100 staff in non-cement roles at LafargeHolcim.
Will more jobs be lost post-merger? Lafarge and Holcim have stated that the new entity will have 115,000 staff. However, with around 42% of future employees employed in non-cement roles - compared to 41% and 34% for Lafarge and Holcim respectively in 2014 - it certainly seems that there could be scope for at least some reduction in overall numbers from LafargeHolcim's non-cement functions. Future job losses could therefore be a possibility, but the exact scale of future consolidations and 'synergies' (if any) will only become apparent post-merger. Maybe LafargeHolcim could end up with around 105,000 to 110,000 staff.
A key time may well be early 2016, when LafargeHolcim will launch a new 'corporate structure.' This term was also used by Lafarge and Holcim in their most recent releases, so further job losses could be on the cards.
One member of LafargeHolcim staff with nothing to worry about now will be Bruno Lafont, current CEO of Lafarge. He received a Euro2.5m bonus this week for his 'key role' in conducting the merger. How LafargeHolcim staff who could be nervous about their jobs will take this remains to be seen.
The Lafarge-Holcim Report from Global Cement is available to order now