September 2024
Kenya: Lafarge has appointed two directors to the board of East African Portland Cement Company (EAPCC) following the exit of Titus Naikuni after eight years with the company. EAPCC said that the terms for ex-Capital Markets Authority chairman Kung'u Gatabaki and Sarone Sena, chairman of Eldoret University council, are effective immediately. Bill Lay was reappointed as EAPCC chairman for a three year period, effective from 7 November 2014, by president Uhuru Kenyatta.
Saudi Tabuk Cement appoints director general 07 January 2015
Saudi Arabia: The management board of Tabuk Cement Company has appointed Ali al-Asmari as director general, effective as of 1 January 2015. Al-Asmari, who joined Tabuk Cement in 1996, has held various positions within the company's management, including head of quarries, factory director and deputy director general.
Saudi Arabian Cement appoints board chairman 07 January 2015
Saudi Arabia: The boards of directors at the Arabian Cement Company has approved the appointment of Abdullah Mohammed al-Eissa as board chairman, with a three-year term starting from 1 January 2015.
In early December 2014, the company elected a new board of directors. The other newly-elected board members are Ghassan al-Souleiman, Saud al-Souleiman, Adel al-Zaid, Ibrahim al-Rajhi, Ibrahim Aba al-Khail, Sami Baroum, Mu'taz al-Azawi and Alwaleed al-Dareean
France/Switzerland: Holcim and Lafarge have announced the executive committee for the proposed merged company, LafargeHolcim, due to be formed in the first half of 2015. As previously announced, Lafarge's current CEO Bruno Lafont will become LafargeHolcim's first CEO and the chairman of the new board will be Wolfgang Reitzle, currently chairman of Holcim.
Lafont will lead a project team of 10 managers from both Holcim and Lafarge to handle the transition. Once the merger is finalised, the members of this project team will be officially appointed members of the Executive Committee.
The future executive committee is composed of:
- Finance: Thomas Aebischer, currently in charge of Finance at Holcim;
- Integration, Organisation and Human Resources: Jean-Jacques Gauthier, currently in charge of Finance at Lafarge;
- Europe: Roland Köhler, currently in charge of Europe at Holcim;
- Asia Pacific: Ian Thackwray, currently in charge of East Asia Pacific and Trading at Holcim;
- Middle-East Africa: Eric Olsen, currently in charge of Operations at Lafarge;
- North America: Alain Bourguignon, previously in charge of North America and UK at Holcim;
- Latin America: Saâd Sebbar, currently in charge of Morocco at Lafarge;
- Performance and Cost: Urs Bleisch, currently in charge of Corporate Functions at Holcim;
- Growth and Innovation: Gérard Kuperfarb, currently in charge of Innovation at Lafarge;
In India both companies are well on track in preparing the merger of Holcim and Lafarge, with the future structure for the subcontinent to be announced in due course upon clearance by the Competition Commission of India.
The current executive committees of Holcim and Lafarge remain in charge and accountable for the activity and operations of their respective groups until completion of the merger. Both groups continue to operate entirely separately as competitors until the merger is completed.
The selection and nomination process for the rest of the leadership team is also well underway. Apart from the future executive committee, the following direct reports of the future CEO have been selected under project mode:
- Strategy and M&A, Christof Haessig, currently in charge of Corporate Finance and Treasury at Holcim;
- Communication, Public Affairs and Sustainable Development, Alexandra Rocca, currently in charge of Communication, Public Affairs and Sustainable Development at Lafarge;
- Legal, Xavier Dedullen, currently in charge of Legal & Compliance at Holcim;
- Health and Safety, Sapna Sood, currently in charge of Health and Safety at Lafarge.
Back to business in 2015 07 January 2015
The end of 2014 proved a good time to tidy up outstanding business for various organisations with links to the cement industry. Lafarge and Holcim received clearance from the European Commission for their proposed merger and they announced their executive committee, Holcim and Cemex concluded their transactions in Europe, the US Environmental Protection Agency (EPA) announced regulations for coal ash, HeidelbergCement found a buyer for its Hanson Building Products business and even PPC managed to appoint a new CEO.
The HeidelbergCement sale is of interest because the company has said it is using the proceeds to pay off debt rather than to make purchases. CEO Bernd Scheifele said in the press release that the intention was to improve the company's 'credit-worthiness.' This isn't directly related to the cement industry because Hanson Building Products produces concrete gravity pipe, concrete and steel pressure pipe and clay bricks in the US, UK and eastern Canada. Yet the potential cash bonanza is relevant. Remember, this is happening at the same time that Lafarge and Holcim have been offloading lots of their own assets to meet competition regulations in various territories.
When the initial public offering was made for Hanson Building Products in September 2014, analysts assumed that HeidelbergCement was positioning itself for a spending spree. The purchase price for Hanson Building Products agreed with a private equity firm was US$1.4bn. This could be used to buy five 1 Mt/yr cement plants at an average price of US$250/t for cement production capacity!
Unfortunately for HeidelbergCement its net debt rose from Euro7bn in 2012 to Euro7.5bn in 2013. This was the first time it had risen since 2007 when it hit a peak of Euro14.6bn. That year was when it agreed to purchase Hanson. It also marked the start of the 2007 – 2008 financial crisis. Similarly, ratios such as net debt to operating income before depreciation (OIBD) also rose in 2013. Although it looks from interim financial reports that HeidelbergCement's debt may have decreased again in 2014, it is probably not doing so at any great speed. Hence the Hanson Building Products sale.
For comparison with debt held by the other European-based cement producers, Lafarge's net debt stood at Euro10.3bn at the end of 2013, Holcim's net debt was Euro7.9bn, Italcementi's net debt was Euro1.9bn and Mexico-based Cemex's net debt was Euro14.8bn. Compared to most of these their operating incomes these company's have net debt to earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratios (net debt/EBITDA) of between two and three-and-a half suggesting that they can pay back their debts within a few years if absolutely necessary. The outlier here is Cemex with a ratio of over six following previous acquisition bursts.
The implication here is that Lafarge and Holcim have chosen to sell their wares at a time when their European competitors are weakened. Meanwhile their Chinese competitors have only just started to directly expand outside of mainland China. Smart move.
NEMC builds road to court for Tanga Cement 06 January 2015
Tanzania: The National Environment Management Council (NEMC) has vowed to take Tanga Cement to task over allegations of importing thousands of tonnes of hazardous materials. The official environmental overseers allege that Tanga Cement Company Ltd (TCCL) has been importing thermal coal from South Africa in violation of a 10-year-old law that bans an individual or company from importing hazardous materials unless authorised by the NEMC. NEMC officials believe that TCCL's coal is an environmental hazard because it was imported from South Africa, not only without their knowledge, but also without their consent.
"We don't have anything personal, we just want them to abide by the law," said NEMC environment officer Magori Wambura. He added that TCCL had not only ignored the marine conservation laws, but also the government and the public it serves. "We'll take this issue seriously until we make sure they are punished," said Wambura. The NEMC has the power to revoke operational permits for the violating organisations, to settle environmental disputes and to file civil and criminal cases in the court of law.
Legal counsellor John Mnyele from the environmental monitoring council in Tanga said that they would also take TCCL to task for violating the agreement that it had signed with another State environmental monitoring offshoot, the Environment and Social Management Plan (ESMP) on the purchase of coal. Mnyele said that the agreement restricted TCCL's import of coal, limiting it to the use of thermal energy from Kiwira Coal Mines in Mbeya and other sources from Ruvuma region. Mining experts say there are about 1Bnt of coal reserves in southern Tanzania alone.
Holcim and Cemex close transactions in Europe 06 January 2015
Europe: Holcim and Cemex have announced the successful closure of a series of transactions in Europe.
Holcim has acquired Cemex's operations in western Germany and the Netherlands, while Cemex has taken over Holcim Czech Republic with all of its subsidiaries in that country. In Spain, Cemex has purchased Holcim's Gador cement plant and Yeles grinding station, while Holcim keeps its remaining operations.
As a result of the transactions, Cemex paid Holcim Euro45m in cash. Holcim expects sustainable additional operating earnings before interest, taxes, depreciation and amortisation (EBITDA) of at least Euro10m/yr.
Attock Cement and K-Electric sign MoU for coal-fired plant 05 January 2015
Pakistan: Attock Cement Limited and K-Electric have agreed to set up 40MW coal-fired plant, enough to power its cement plant. Surplus electricity will be sold back to the grid.
"Attock Cement has signed a Memorandum of Understanding (MoU) with K-Electric for the installation of 40MW coal-fired plant at its Hub plant for its own utilisation and sell surplus power to K-Electric," said Attock Cement.
Fed up with constant electricity cuts and soaring energy prices, Pakistani businesses are exploring options to generate electricity from coal-fired plants. Attock Cement has already discussed various aspects of its planned coal-fired project with suppliers of plants and machinery.
Tamil Nadu government launches 'Amma Cement' 05 January 2015
India: The Tamil Nadu government has rolled out 'Amma Cement,' a scheme that will see it sell cement at a subsidised rate. According to the scheme, the government will procure 200,000t of cement from the private sector and sell it at US$3/bag in all corporation, Municipalities and other local body limits.
The initiative was launched in Tiruchirappalli on 5 January 2015 and will be expanded in phases and implemented throughout Tamil Nadu by 10 January 2015. Beneficiaries can avail a minimum of 50 bags of cement for 100ft2 and a maximum of 750 bags for 1500ft2 at US$3/bag. They have to submit the approved building plan with the local authorities to use the scheme. Further, 10 - 100 bags will be provided for house repair work. The scheme will also be available to those constructing houses under the government's solar-powered green houses scheme.
Savannah Cement plans US$200m plant upgrade 02 January 2015
Kenya: Savannah Cement plans to spend US$200m in 2015 to increase its production capacity by building a new cement grinding plant. The project will be funded through internal cash reserves and is expected to start in early 2015. The new plant will be based in Kitengela, where its current cement plant stands. Savannah Cement management said that the investment would to help to meet growing demand for its products in the market.
"Once the two plants are installed, Savannah Cement will take pole position as a truly integrated and eco-friendly cement manufacturer," said Savannah Cement managing director, Ronald Ndegwa. "We shall also be expanding our product range to meet our customers' demands." Ndegwa said that the installation of the second grinding plant and the clinker production plant is part of the firm's strategy to operate a fully-integrated cement manufacturing business.