September 2024
Mykolaivcement reports US$5.47m loss in 2013 30 April 2014
Ukraine: Mykolaivcement has reported a loss of US$5.47m in 2013. Its revenue fell by 10% to US$46.6m from US$5.28m in 2012. In 2012 Mykolaivcement reported a loss of US$5.79m according to the Ukranian News agency.
The cement producer based in Mykolaiv, Lviv region also makes paving slabs and facade tiles, concrete, pavestone and other construction materials. In April 2013 Cement Roadstone Holdings held talks with Lafarge on the acquisition of the company. Lafarge Ukraine Holding owns 99.26% of shares in the factory.
Holcim Belgium to cut 48 jobs at Obourg cement plant 30 April 2014
Belgium: Holcim Belgium has announced plans to cut 48 out of 200 jobs at its cement plant in Obourg to restore profitability. By enhancing efficiency the management hopes to attract important investments.
Although cement demand in Belgium has remained stable in France and the Netherlands, which are supplied by the factory in Obourg, demand fell by 30%. In addition the plant at Obourg faces high fixed costs from taxes and an old production fleet.
The management believes the factory in Obourg may continue operating with 152 workers by improving flexibility and simplifying the organisation. Talks with trade unions will be started as soon as possible, the company added.
Vicat sales up 14% year-on-year in first quarter of 2014 29 April 2014
France: Vicat Group has announced its results for the first quarter of 2014, which show a 14% improvement to sales compared to the first quarter of 2013. The group highlighted improved conditions in Egypt, the United States, West Africa and Turkey, increasing sales in India and favourable weather conditions in its native France as among the reasons for the improvement.
Sales for the three months to 31 March 2014 were Euro536m, an increase of 9.2% (14% after adjusting for constant scope and exchange rates). Vicat's cement sector saw sales of Euro275m for the quarter, up from Euro256m in the first quarter of 2013, a year-on-year improvement of 7.4%(15.2% at constant scope and exchange rates). Cement sales volumes were up by 6% across Vicat's global operations.
"Vicat achieved strong sales growth in the first quarter of 2014. Our businesses benefited from mild weather conditions in France and were able to capture positive momentum in the Swiss, US and Turkish construction sectors," said Vicat's CEO Guy Sidos. "The return to growth in Egypt is a positive sign for our full-year performance and we are continuing to ramp-up our business in India, although prices are likely to remain volatile. The group is still gradually reaping the benefits of its investments over the last few years, using its strong market positions to maximise cash flow and continue reducing debt."
In Europe (excluding France) consolidated sales were Euro89m, 22.2% higher than the Euro72m seen in the first quarter of 2013. Switzerland was highlighted as a good performer, with 13% growth in cement sales, while Italy saw consolidated sales fall by 17.6% year-on-year due to a 19.2% fall in volumes.
In the United States, sales were Euro51m compared to Euro46m in the first quarter of 2013, a 9.5% rise year-on-year. The group said that business continued to pick up in the country, with cement sales picking up by 13.9% and volumes increasing by 3%.
In Turkey sales were Euro44m, 25.8% higher (at constant scope and exchange rates) than in the year-earlier quarter. In India sales came to Euro47m, 27.2% higher (at constant scope and exchange rates) year-on-year. In Kazakhstan sales fell by 14% to Euro9m (at constant scope and exchange rates), which resulted from comparison to unusually high sales in the first quarter of 2013.
In Africa and the Middle East Vicat's consolidated sales were Euro98m, a 12.9% improvement over the first quarter of 2013 when it took Euro87m. Egypt saw a 26.7% improvement year-on-year, while west Africa saw revenues up Euro11.6% due to a 14% improvement in sales volumes.
In the rest of 2014 Vicat expects the French market to gradually stabilise and the Swiss market to continue to be strong. Italy is likely to remain weak, while volume rises and price increasese are expected in the United States. In Turkey Vicat warns that further growth will be dependent on foreign exchange effects and potential after-effects of elections. It says that Egypt remains unpredictable but plans for gradual improvement to the security situation. West Africa is expected to be buoyant in terms of consumption but warns against increased competition that may dampen prices. In India, weak infrastructure development will continue to adversely affect volumes, as will chronic overcapacity in the nation's cement industry. In Kazakhstan, it expects its strong local position to continue to reap rewards.
Criminal investigation at Akhangarancement 29 April 2014
Uzbekistan: Uzbek media has reported the launch of a criminal investigation and financial audit of Akhangarancement, a cement plant that is 84% owned by Russia's Eurocement in Akhangaran, Tashkent province.
State investigators are focused on alleged tax evasion, theft of assets, reporting irregularities and illegal activities of managers. Akhangarancement's general director Denis Dotsenko has reportedly left the country.
According to local media, the investigation was motivated by illegal cement exports for the construction of the Rogun hydroelectric power plant and associated dam in neighbouring Tajikistan. The Rogun plant would significantly reduce water supply from the Syrdarya River, which is of vital importance for Uzbekistan's cotton production, its major export earner.
Colombia: Cementos Argos has reported that the acquisition of cement and concrete assets in Honduras and Florida and the recovery of the US construction market have resulted in 51.7% growth in net profits, from US$4.00m in the first quarter of 2013 to US$6.07m in the first quarter of 2014. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up by 12% and income grew by 18% compared with the same period of 2013. Cement sales in the US grew by 27%, while sales in the Caribbean and Central America grew by 27% in value and 11% in volume.
Switzerland: Holcim has reported its first quarter of 2014 operating results, citing increased like-for-like sales and sales volumes in all of its business segments.
"Holcim reported a significant increase in operating profit during the first quarter of 2014, mainly driven by higher like-for-like cement volumes in all group regions and the continued strong momentum of the Holcim Leadership Journey coupled with strict cost management across the group," said Bernard Fontana, CEO of Holcim. "Margins continued to increase and cash flow from operating activities was also better than in the first quarter of 2013."
Consolidated cement sales increased by 2.9% to 33.0Mt in the first quarter of 2014. This positive development was mainly attributable to Europe, where France, Germany and Russia reported the strongest increases. Net sales reached Euro3.35bn, a fall of 5.4% that was mainly influenced by negative currency effects. On a like-for-like basis net sales were up by 7.8%. Consolidated operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased by 5.1% to Euro507m but grew by 10.1% when adjusted for foreign exchange effects and changes in consolidation. Driven by higher sales, most European group companies reported higher operating EBITDA, while North America, the Middle East and Africa recorded better operating results.
Operating profit was Euro242m, an increase of 9.3%. On a like-for-like basis the growth in operating profit reached 28.4%. Net income, which in the first quarter of 2013 benefited from the sale of a 25% stake in Cement Australia, decreased by 39.5% year-on-year and reached Euro147m. Adjusted for this transaction in 2013 net income was up by 19.6%. Net income attributable to shareholders of Holcim Ltd was down by 57.5% to Euro65.6m. Cash flow from operating activities, which is traditionally negative in the first quarter, improved by 24.9% and reached negative Euro199m. Over the last 12 months Holcim reduced its net financial debt by Euro589m from Euro8.86bn to Euro8.20bn.
As part of the Holcim Leadership Journey, the company continued to optimise its portfolio in the first quarter of 2014 and sold its activities in French Guyana and acquired a port facility in the Philippines. Holcim has made progress with its plans to further optimise its strategic portfolio in Europe, having secured approval for the transaction with Cemex in the Czech Republic and is awaiting the decision on the other parts of the transaction. For the planned streamlining of the ownership structure of its Indian operations, Holcim has received approvals from the High Courts in Delhi and Gujarat and is now awaiting final approval from the Foreign Investment Promotion Board.
On 7 April 2014, Holcim and Lafarge announced their intention to combine the two companies through a merger of equals, which was unanimously approved by their respective board of directors and fully supported by the core shareholders of both companies. After a strategic optimisation of the portfolio through a proactive divestment process in anticipation of regulatory requirements, LafargeHolcim would occupy complementary positions. The proposed combination would be structured as a public offer filed by Holcim for all outstanding shares of Lafarge on the basis of a 1 for 1 exchange ratio and closing is expected in the first half of 2015.
For 2014 Holcim expects global economies to show another year of uneven performance. Construction markets in Europe are expected to have reached the bottom with slow recovery in sight. North American markets are expected to continue to benefit from a further recovery, especially in the United States. Latin America could continue to face uncertainties in Mexico but should overall show slight growth in 2014. The Asia Pacific region is expected to grow, although at a comparatively slower pace than experienced in recent years. Africa and the Middle East are expected to gradually improve. Holcim expects cement sales volumes to increase in all regions in 2014.
Lafarge faces price-fixing penalties 25 April 2014
Kenya: Lafarge could face penalties by the Competition Authority of Kenya (CAK) for suspected price-fixing. CAK has accused Lafarge of possible price-fixing owing to its cross-directorship in East African Portland Cement Company (EAPCC) and Bamburi Cement. Lafarge has a 41.7% stake in EAPCC and a 58.9% stake in Bamburi.
"Cross-shareholdings such as these are widely recognised to dampen competition," said CAK. "Even passive shareholdings change the incentives to set prices, as some of the earnings from sales diverted to a rival are now internalised."
CAK is expected to rule in June 2014 as to whether or not Lafarge is culpable of having 'Unwarranted concentration of economic power.' If found guilty, CAK could force Lafarge to sell off its stake in one of the businesses. The Competition Act (No 12 of 2010) also stipulates that Lafarge directors, if found guilty of price fixing, could be forced to pay up to US$115,000 in fines or serve five-year jail terms.
The report comes four months after the Kenyan government, which together with the National Social Security Fund (NSSF) has a controlling stake of 52.3% in EAPCC, accused Lafarge of attempting to destabilise the cement maker to protect its interests in Bamburi. Lafarge countered that its minority stake in EAPCC is insufficient to exert control over the firm. They added that EAPCC is a genuine competitor of Bamburi Cement and that Lafarge stands to lose if it were to destabilise EAPCC.
The director-general of CAK, Kariuki Wang'ombe, stated that the current shareholding structure is not good for fair business. "Cross-directorship could lead to price-fixing since this creates a position where a competitor is privy to the strategic decisions of another competitor. However, it is not conclusive that there is price-fixing going on," said Wang'ombe.
Two executives at China Resources detained 25 April 2014
China: According to local media, Chinese authorities have detained two senior executives at units of China Resources Holding as the chairman of the state-run conglomerate, Song Lin, is being investigated for corruption.
Wang Hongkun, an executive director of China Resources Land and Wu Ding, chief executive of China Resources Capital Holdings, were detained. China Resources Land said that Hongkun had resigned due to personal health reasons.
China's top anti-corruption body said it was investigating Lin for a 'Serious violation of discipline.' Song has denied the allegations.
China Resources Holdings said that it had appointed Fu Yuning, a former chairman of China Merchants Group, as its new chairman.
Ukraine: HeidelbergCement Ukraine has appointed Wolfram Gaertner and Robert Breyer as supervisory board members for three years. In addition, Andrzej Balcerek, Klaus Schwind and Andreas Kern were re-elected as supervisory board members. At the same time, Ernest Jelito was removed from the supervisory board.
Spain: The European Commission (EC) has launched an in-depth probe into Cemex's plan to buy the Holcim's Spanish cement business. The regulator is due to make a decision on 5 September 2014.
The move follows an initial investigation, which revealed that the transaction could substantially harm competition in the Portland cement market in some areas of Spain. According to the regulator, the reduction in the number of rivals could prompt coordination between the remaining competitors, while the merged firm might control price levels in certain areas. The in-depth probe is intended to either confirm or reject the EC's initial concerns.
Under the deal, which was agreed in August 2013, Cemex will combine its cement, ready-mix and aggregates operations in Spain with those of Holcim and will hold a 75% stake in the enlarged firm. The transaction is part of several interconnected deals, under which Cemex will take over Holcim's operations in the Czech Republic, while offloading its western German operations to Holcim.
In October 2013 the EC also opened an in-depth probe into the deal in Germany, which remains unresolved. The transaction in the Czech Republic was approved by the local anti-trust watchdog in March 2014.