September 2024
Construction starts on two cement plants in Tajikistan 09 April 2014
Tajikistan: Construction work on two cement plants with a total installed production capacity of 1.8Mt/yr has started in northern Tajikistan. President Emomali Rahmon attended the opening ceremonies of both plants.
The first plant, Ghayur-Sughd Cement - with a production capacity of 1.2Mt/yr - will be built in Ghafur district on a 48 hectare site. The plant will be built by the Tajik Ghayur company together with a Chinese partner, Huaksin Central Asia Investment. The cost of the project is over US$100m. After the plant is commissioned it will employ 1000 people. The first unit of the plant is scheduled for launch in 2015 and the second in 2016. Previously Tajik Ghayur and Huaksin built the 1Mt/yr Yuvon cement plant, which opened in 2013.
President Rahmon also attended the opening ceremony of the construction of Chjuntsay-Taboshar Cement plant. This 0.6Mt/yr plant is scheduled for completion in 2015 and it will employ nearly 500 people.
Dangote Cement to double capacity in 2014 08 April 2014
Nigeria: Dangote Cement expects to double its cement production capacity across Africa in 2014 to 40Mt/yr, according to Devakumar Edwin, chief executive of Dangote.
Edwin said that in Lagos the firm would add 9Mt/yr of capacity, bringing it to 29Mt/yr. Dangote will also open plants across Africa that have been several years in the making, adding a further 11Mt/yr of production capacity.
Dangote Cement saw its 2013 profits increase by 40% to US$1.16bn, up from US$498bn in 2012. "The key driver is the increase in volumes. We have kept a focus on controlling costs, however, our focus on volume growth is what has increased our profits," Edwin said.
Dangote has cement plants spanning Africa, though most are in the construction phase. Between them they contribute less than 1Mt/yr to the group's current overall production capacity. That will change in 2014, as plants in Senegal, Sierra Leone, Cameroon, Zambia, South Africa and Ethiopia begin operations. Additional capacity in Ivory Coast, Ghana, Liberia, Tanzania, Congo and in Nigeria would mean that by mid-2016 Dangote is expected to have a 60Mt/yr capacity.
Almost all of the expansion has been funded with internal cash flows, according to Edwin, unlike rivals. "Other cement majors borrowed heavily for mergers. One of the key reasons we have been able to grow aggressively in the African market is because they are cash strapped and we do not have that problem," he said.
Brazil: Brazil's anti-trust regulator, Conselho Administrativo de Defesa Econômica (Cade) will force the sale of 24% of the total installed capacity of the country's four largest cement manufacturers and fine them a total of US$1.4bn as punishment for cartel activities. The decision to implement these measures comes after months of internal uncertainty at Cade.
The four companies are Votorantim, InterCement, Itabira and Holcim. Lafarge Brasil had previously settled with Cade by way of an agreement on divestments and a negotiated fine of US$19m.
Votorantim will be the most affected by the forced divestments. It will have to sell 35% of its production capacity, which Cade says is equivalent to 15% of the Brazilian cement market. InterCement will have to sell 25% of its capacity, equivalent to 4% of the market, Itabira will have to sell 22% of its assets, which is 3% of the market share and Holcim Brasil's 22% divestment equates to 2% of the market.
According to Cade, there has been a cement cartel active in Brazil for the last 10 years, which has seen companies collude to fix prices and sales volumes and create barriers to competition. Cade estimates that this has cost the economy US$6.3bn in inflated prices.
Holcim and Lafarge agree merger to create cement giant 07 April 2014
Worldwide: Reuters has reported new details regarding the potential merger of Holcim and Lafarge. The merger would spark some Euro5bn of asset sales worldwide to steer it through antitrust rules.
With operations in 90 countries, Lafarge and Holcim expect to face antitrust scrutiny in 15 jurisdictions, including Brazil, Canada, Ecuador, France, the UK, the US, Morocco and the Philippines. LafargeHolcim could have a market share in excess of 50% in some areas. Even in countries such as the US where it would be smaller, monopoly authorities are likely to become involved.
The deal will help the companies slash costs, trim debt and better cope with soaring energy prices, tough competition and weaker demand that have hurt the sector since the 2008 economic crisis. The groups complement each other well geographically, with Lafarge stronger in Africa and Holcim stronger in Latin America. Emerging markets such as Latin America and Africa will account for 60% of the new group's sales, but no single country will represent more than 10%.
"The new group will offer higher growth and low risk thus creating more value," said Lafarge chief executive Bruno Lafont, who will become CEO of LafargeHolcim. The companies added that they expected total annual savings from joining forces of Euro1.4bn after three years, thanks to economies of scale, better operational efficiency and lower financing costs.
Lafarge and Holcim confirmed that they would sell businesses worth 10 - 15% of the group's earnings before interest, tax, depreciation and amortisation (EBITDA) to satisfy antitrust concerns, worth about Euro5bn in total. Two-thirds of the asset sales would be in Europe, according to Lafont. The companies also have overlapping business operations in Canada, Brazil, India and China.
"We are immediately going to start discussions with the European Commission and other competition regulators in a constructive spirit," Lafont said, adding that the combined company would continue to improve operational performance and that there would be no plant closures associated with the deal.
The expected EBITDA synergies are made up of Euro200m at operational level, Euro340m in purchasing, Euro250m in sales and Euro200m in innovation. On top of this, the company sees Euro200m of savings on financial costs and Euro200m for investments.
Lafarge's largest shareholder, Belgian holding company Groupe Bruxelles Lambert, which has a 21% stake, said that it would support the deal and would hold about 10% stake in the combined group after the transaction was completed. The transaction has the support of core shareholders and is expected to close in the first half of 2015, the companies added.
European Commission spokesman for competition policy, Antoine Colombani, said that the companies had not yet formally notified the European Union about the deal.
LafargeHolcim merger gathers pace 07 April 2014
Worldwide: More details have emerged over the weekend regarding the proposed merger of Lafarge and Holcim, with the name LafargeHolcim mentioned by key staff. The discussions look set to lead to a company with combined sales of around Euro32bn and earnings before interest, taxes, depreciation and amortisation (EBITDA) of Euro6.5bn.
"This proposed merger is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions and more sustainability and enhanced returns to shareholders," said Rolf Soiron, chairman of Holcim. "LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world's fastest growing economies by supplying the materials that will enable the construction industry to meet the challenges of the future."
"By combining Holcim's experienced teams, complementary geographies and innovative expertise with ours, we propose to set up the most advanced group in the construction industry, for the benefit of our clients, our employees and our shareholders," said Bruno Lafont, chairman and CEO of Lafarge. "I am confident that this merger of equals provides a unique opportunity to rapidly create the most advanced platform in our industry with outstanding synergies. With a best-in-class international portfolio, robust balance sheet and strong governance, the new group will offer higher growth and low risk, thus creating more value.'
Unofficial sources have suggested that the weekend's meetings involved detailed discussions regarding the sale of some parts of the companies' assets to conform to national and regional anti-monopoly regulations.
Subject to shareholder and regulatory approvals and other customary authorisations completion is to take place by the end of the first half of 2015.
Sacyr to build cement plant in Bolivia for US$244m 07 April 2014
Bolivia: A consortium, led by Sacyr Industrial, has won an order for the construction of a cement plant in Bolivia for US$244m.
The contract, which was signed with the Bolivian state-run cement producer Empresa Publica Productiva Cementos de Bolivia (ECEBOL), includes the design, supply of machinery, construction, installation and launch of the plant in the city of Oruro in the central west of the country. The plant is planned to have a clinker capacity of at least 3000t/day.
The contract is in line with Sacyr's strategy for global expansion. The company is already present in Australia, the UK and Peru, with various projects in the oil, gas, power infrastructure, energy and waste-treatment sectors.
US: Essroc's cement plant in Nazareth, Pennsylvania has earned certification for superior energy efficiency from the US Environmental Protection Agency (EPA). The Energy Star certification signifies that the plant performs in the top 25% of similar facilities nationally and meets the strict energy efficiency performance levels set by the EPA.
The plant has recently improved its performance by managing its energy strategically across the entire organisation and by making cost-effective improvements, such as meters, LED, low-voltage lighting, timers and sensors. To earn the certification, the plant established a local energy team to discuss actions to be implemented to lower energy consumption, establish an action plan and review progress of those being implemented.
"Energy reduction is the most important part of the programme. The certification is the cherry on top of the cake," said Jean Paul-Morel, Essroc's chief electrical engineer.
Holcim and Lafarge discuss possible combination 04 April 2014
Worldwide: Holcim has confirmed that Lafarge and Holcim are in advanced discussions regarding a possible combination.
Holcim and Lafarge have stated that, given the strong complementarity of their portfolio and the cultural proximity between the two companies, there is rationale in considering a potential merger that could deliver significant benefits to customers, employees and shareholders. Holcim said that their discussions have been based on principles consistent with a merger of equals, which would build on the strengths and identities of the two companies.
No agreement has yet been reached and no assurance can be given that these discussions will lead to a definitive agreement. Holcim stated that it will inform the public of any material developments in this respect.
BEE deal increases staff ownership of PPC to 12% 04 April 2014
South Africa: PPC's new black economic empowerment (BEE) deal has shifted the beneficiary base from broad-based trusts to the company's employees themselves, using the 'proximity principle.' The new transaction will increase the company's staff ownership to 12%.
This follows a move in 2013 to close the income inequality gap through an executive pay freeze that bumped up the salaries of lower-paid workers. CEO Ketso Gordhan said that the company has spent time on the ground with its employees, who have shown an appreciation for being listened to. Whether PPC will follow this up with further executive pay cuts and freezes remains to be seen, though Gordhan has said that the company intends to reduce the wage differential further.
Asia Cement unit plans to buy Sichuan cement plant 04 April 2014
China: Asia Cement said that its subsidiary interest Sichuan Yadong Cement has entered into a framework agreement with the existing shareholders of Sichuan Lanfeng Cement to acquire their entire equity interest in Sichuan Lanfeng and thus indirectly the entire equity interest in Sichuan Lanfeng's wholly-owned subsidiary, Sichuan Lanfeng Building Materials.
The target companies principally engage in the manufacture and sale of cement, concrete and related products in Sichuan Province. They operate a cement plant located in Pengzhou City, Sichuan which comprises two new dry process clinker production lines with a total cement production capacity of 5Mt/yr.
The parties are expected to sign the formal sale and purchase agreement before 16 April 2014.