September 2024
US/Canada: Lafarge and Holcim have received final approval for their proposed merger from the competition authorities in the US and Canada. All competition approvals necessary for closing the transaction have now been obtained ahead of the expected closing in July 2015.
Following the regulatory assessment in all key jurisdictions, Holcim and Lafarge can now present a final list of divestments to satisfy regulatory requirements. These divestments remain subject to the completion of the merger, including a successful public exchange offering to Lafarge's shareholders and approval by Holcim's shareholders.
Eurocement supports LafargeHolcim merger 01 May 2015
Russia: Eurocement has publically supported the merger between Lafarge and Holcim. In a statement the Russian producer and minority shareholder in Holcim said that it found the development potential of the merged company 'very positive'.
In late March 2015 Eurocement announced that it planned to vote against the LafargeHolcim merger unless the financial terms of the deal were altered. Subsequently in mid-April 2015, it then proposed its chairman Filaret Galchev to the board of directors of LafargeHoclim but Holcim said the proposal was submitted too late to be considered. Eurocement owns a 10.82% stake in Holcim.
Philippines: Holcim Philippines has targeted an investment of US$40m over a three-year period to increase cement production capacity. Despite strong domestic demand for cement, revenue fell by 10% in the first quarter of 2015 due to rising costs.
The investment will mainly finance the 'debottlenecking' of existing facilities by bringing production capacity up to 10Mt/yr by 2017, according to Eduardo A Sahagun, president and chief executive officer of Holcim Philippines, in a briefing to local press. At present the cement producer has a production capacity of 8.2Mt/yr. Around 65% of the investment will go towards maintenance of existing facilities. Holcim Philippines remains committed to developing a brownfield cement plant in Norzagaray, Bulacan subject to the approval of the company's head office in Switzerland.
Sahagun blamed the fall in revenue on expensive clinker imports from Vietnam intended to support the market. Despite this the company expects annual profits for 2015 to exceed those in 2014.
Puerto Rico: Cementos Argos has purchased a 60% stake for US$18m in Wetvan Overseas, a company that controls a cement terminal in Puerto Rico. The remaining 40% belongs to Grupo Vicini, a Dominican business group holding investments in the Caribbean and Central America. The acquisition will give Argos a 15% market share in Puerto Rica.
"With this transaction, we are entering a new market that is closely tied to the US economy, that currently consumes close to 650,000t/yr and whose growth perspectives are being driven by the latent recovery and the new programs aimed at stimulating investment in Puerto Rico. The acquisition strengthens our position as leader in the region," said Jorge Mario Velásquez, CEO of Argos.
With the new purchase Argos increases its presence in the Americas with operations in Antigua, Colombia, Curacao, Dominica, the US, Haiti, Honduras, French Guiana, Panama, Puerto Rico, the Dominican Republic, Saint Martin, Saint Thomas and Suriname.
Holcim Lanka launches Ready Flow Plus cement 30 April 2015
Sri Lanka: Holcim Lanka has launched Ready Flow Plus, a blended ordinary Portland cement product. The cement producer says it offers high performance with strength, consistency and workability.
"In developing Ready Flow Plus, Holcim (Lanka) has gone one step further in shifting, from ordinary Portland cement that requires inputs such as clinker, to blended cement which scores high on sustainability and leaves a smaller environmental foot print," said Sanka Senaviratne, manager of industrial sales at Holcim (Lanka). The product is being targeted for the construction of high-rise buildings. Ready Flow Plus cement is already sold in other Asian countries.
CSN Cimentos to build two new cement plants in Brazil 30 April 2015
Brazil: CSN Cimentos plans to invest US$608m towards building two new cement plants in Arcos and Romaria in Minas Gerais. The next step is for a letter of intention to be signed by state and municipal authorities, according to local media. Additionally, CSN's existing cement plant in Volta Redonda will be upgraded with a new clinker kiln and three mills. The plants cement production capacity will be increased by 2.4Mt/yr to 5.4Mt/yr.
Switzerland: Holcim's net income has more than doubled to Euro360m for the first quarter of 2015 due to its sale of its minority stake in Siam City Cement. Sales of cement volumes fell by 5.5% to 31.2Mt from 33Mt in the same period. Net sales fell by 2.8% to Euro3.78bn.
"Holcim reported robust development in the first quarter 2015, with an increase in financial performance despite a different weather pattern and some volume declines compared to a very strong previous year's quarter. Holcim also generated higher cash flow from operating activities and increased net income significantly supported by the gain from the divestment of the Group's minority shareholding in Siam City Cement," said Bernard Fontana, CEO of Holcim.
Cement deliveries declined in the period as all group regions except North America and Latin America sold less volume. However, in markets including Mexico, the US and the Philippines, more cement was sold. Holcim expects that its key construction markets in 2015 will be the US, India, Indonesia, Mexico, Colombia, the UK and the Philippines. Flat development and market uncertainty is expected in Europe and Latin America respectively.
Lafarge reports loss in first quarter of 2015 30 April 2015
France: Lafarge has reported a loss for its net income of Euro96m for the first quarter of 2015, an improvement from a loss of Euro135m for the same period in 2014. The multinational building products manufacturer blamed the loss on seasonal factors and noted that it had been 'significantly' reduced due to operational performance and cost cuts. Otherwise, sales rose by 6% year-on-year to Euro2.78bn from Euro2.63bn. Volume of cement sold fell by 4% to 25Mt from 25.9Mt.
"Our markets are developing in line with our expectations and growth shall accelerate gradually in the coming quarters. We reaffirm our expectation of cement volume growth of 2 to 5% in our markets in 2015. We also confirm our target to significantly grow our operational results with an expected underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA), excluding the impact of the planned merger with Holcim, of between Euro3bn and Euro3.2bn in 2015," commented Bruno Lafont, chairman and chief executive officer of Lafarge.
Regional sales were affected both positively and negatively by currency exchange variations and divestments of assets. Notably, cement sales volumes fell by 8% to 2.4Mt and sales revenue fell by 9% to Euro457m in Western Europe, principally due to lower volumes in France. Cement sales volumes fell by 6% to 9.9Mt but sales revenue rose by 9% to Euro972m in Middle East and Africa. Volumes in this region were affected by transport limitation in Iraq and the suspension of operations in Syria. Asia continued to show both improving sales volumes and revenue in the quarter.
Mind the gap: cement news shortcuts 29 April 2015
Striking news from Libya this week with the announcement that an investor with international backing wants to buy the majority stake in the Libyan Cement Company.
Libya holdings owner Ahmed Ben Halim is in the process of buying out the Austrian Group Asamer that originally bought a majority share for US$145m back in 2008. Most of the remaining share was owned by the Economic and Social Development Fund. Taking over the company now seems bold from a European perspective or Ahmed Ben Halim got a very good price. No financial information regarding the deal has been made public.
Libya has remained politically unstable since the civil war in 2011. According to the Libyan Herald, following the war a strike at the Libyan Cement Company's plants for lost wages stopped production. Since then two of the three cement plants the company runs in east Libya near Benghazi have remained shut due to their proximity to fighting with the Ansar Al-Sharia militia. Before the civil war in 2011 the Libyan Cement Company had a combined cement production capacity of 6Mt/yr almost half the USGS estimated production for the entire country in that year.
The Libyan Cement Company's plants are all located in the east of the country under the nominal control of the Council of Deputies based in Tobruk. Its two plants in Benghazi have remained shut due to their proximity to fighting with the Ansar Al-Sharia militia. A third plant near Derna has also had security issues. Halim told the Financial Times that he was not 'crazy' to be investing at this time. "We have a long-term strategic plan" he said, "that Libya's going to rebuild its infrastructure. And a key element of this is cement." If he can hold out until the rebuilding starts then he may just be right.
Meanwhile across the border in Egypt, Minister of Supply Khaled Hanafy announced this week that cement prices had remained 'stable' for the fifth month in row. Some commentators placed improved energy supply security at the heart of this situation allowing producers to build up inventory. However, given the situation in Libya, it is worth considering what will happen once Libyan demand for cement does pick up both in competition for energy supplies like coal and a keener export market.
Finally, our editorial director Dr Robert McCaffrey was at the IEEE-IAS/PCA Cement Conference in Toronto, Canada this week. Here's his snapshot of PCA economist Ed Sullivan's forecast for future US cement supply and demand.
Ed Sullivan's forecast for future US cement supply and demand, at IEEE in Toronto. pic.twitter.com/RUoT7uHGtg
— Robert McCaffrey (@DrRobMcCaffrey) April 28, 2015
The UK London Underground has 'mind the gap' as its well-known warning phrase to prevent passengers falling between the platform and the trains when boarding. The favourable supply gap Ed Sullivan is talking about in US will be one cement producers will definitely not want to miss.
Bolivia: Itacamba Cemento has announced that it is currently importing large amounts of cement from Brazil to meet local demand in Santa Cruz. The Bolivian cement company will continue to import cement from Brazil until the second half of 2016 when it expects to start its new US$220m cement plant in Yacuses. It estimates to import some 5400t/month of cement, or around 107,000 bags, dependent on market demand.