September 2024
Russia: Belarusian Cement Company (BCC) increased its cement supplies to the Russian Federation by 3.5% year-on-year in the first half of 2024, and by 50% in June 2024, reports Belta News. Major sales markets for BCC in Russia include Moscow, Moscow Oblast, the Central Federal District and the North-Western Federal District.
Vyacheslav Golovatsky, deputy director general for foreign economic activities, credited the growth in foreign cement sales to logistics. He said “We did a lot of work in 2023. We created a commodity distribution network, BCC-Soyuz, which has its own cement transshipment facilities. When there were difficulties with cement delivery in late 2023 – early 2024, logistics came into play. We started routing deliveries, launching our own trains that consisted of our own cars. In March 2024, our first route train went to Russia, in May 2024 we had already 12 BCC route trains, and in June 2024 - 15. Our products have been delivered to transshipment facilities, unloaded and distributed to consumers more promptly.”
Kaushalya Logistics launches new cement depot in Maharashtra 09 August 2024
India: Kaushalya Logistics (KLL) has launched a new cement depot in Ahmednagar, Maharashtra, enhancing its logistics services for Adani Cement. The depot will handle approximately 120,000t/yr of cement, supporting ACC and Ambuja Cement brands.
KLL has also introduced a new vertical in freight forwarding under full truck load services, commencing operations with VMS Equipment, a group company of construction equipment manufacturer ACE.
Managing director Uddhav Poddar said “We are thrilled to start this new association with Adani group with a new depot in Ahmednagar. Our collaboration with Adani Cement showcases our cement logistics capabilities, and our entry into the freight forwarding market marks a pivotal step in our growth strategy.”
Nigeria: An update has been released on the cement plant planned in Bauchi State, on which Global Cement previously reported on 11 June 2024. On 7 August 2024, the Bauchi State government signed a Memorandum of Understanding (MoU) worth US$1.5bn with Resident Cement Company to establish a cement plant in Gwana District, the Nigerian Tribune reports. The plant is expected to produce 10Mt/yr of cement. The project includes a 100MW power plant, a dam and other amenities for the community, which will reportedly help to attract foreign investment and boost the local economy.
CRH releases second quarter 2024 financial results 08 August 2024
US: CRH has announced its financial results for the second quarter of 2024. Revenue was US$9.7bn, down by 1% year-on-year, net income was US$1.3bn, up by 8% year-on-year, and adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$2.3bn, up by 12%. CRH raised its 2024 financial year guidance, projecting net income increase to US$3.85bn from the previous figure of US$3.7bn and an adjusted EBITDA increase from US$6.82bn to US$7.02bn.
Albert Manifold, chief executive of CRH, said "We are pleased to report another period of further profit growth and margin expansion for CRH. Reflecting the strength of our financial performance, the positive underlying momentum in our business as well as the positive contribution from recent portfolio activity, we are raising our guidance and remain well positioned to deliver another record year in 2024."
Loma Negra reports second quarter 2024 results 08 August 2024
Argentina: Loma Negra has announced its financial results for the second quarter of 2024. Net sales were US$147m, down by 28% year-on-year. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell to US$51m, a 19% decrease from the second quarter of 2023. Net profit reached US$31.6m, up by 226% from US$9.7m in the same period in 2023, reportedly due to the ‘solid’ operational results and an improvement in the net total finance gain.
CEO Sergio Faifman said "We are glad to report another set of solid results. We are optimistic that this positive trend in the industry will consolidate, as July 2024’s dispatch figures already show significant improvement. Therefore, we have strong indications to expect further recovery in the second half of 2024."
UK: Following a successful trial in mid 2024, Aggregate Industries will deploy the ‘first electric cement truck in the UK’, according to the company, with more to follow. The trucks will be based at the Cauldon cement plant, alongside the company’s existing fleet of 60 trucks. The vehicles are equipped with a 600kW motor to deliver both bulk and bagged cement. Aggregate Industries has partnered with Lomas Distribution, its contracted haulier for the UK domestic market.
Gareth Durnall, general manager at Lomas Distribution, said "We are excited to work together with Aggregate Industries in adopting sustainable practices."
Steve Curley, Aggregate Industries’ managing director of cement division, said "Introducing electric trucks in our operations marks a pivotal shift towards efficiency and sustainability and is all part of our ongoing effort to decarbonise the business and contribute to our own net zero Strategy."
Ukraine: Companies belonging to the Ukrcement association increased cement production by 24% year-on-year to 3.8Mt between January and June 2024, according to a press release.
Clinker production also rose by 13% year-on-year to 3Mt.
The statement said "Despite the enormous challenges of the war, the enterprises of the Association of Cement Producers of Ukraine Ukrcement continue to adapt to new realities and produce strategically important products – cement.”
Cemex sells in the Dominican Republic 07 August 2024
Cemex announced this week that it is preparing to divest its operations in the Dominican Republic for US$950m. At first this seems a little close to home for the Mexico-based company but it felt similar at the start of 2022 when it sold its businesses in Costa Rica and El Salvador to the same company, Cementos Progreso. Readers may also recall that the business press reported, correctly we now know, in mid-2023 that Cemex was seriously considering its options in the Dominican Republic.
The current agreement will see Cemex sell one cement plant in the Dominican Republic along with related cement, concrete, aggregates and marine terminal assets for US$950m. The deal is expected to close towards the end of 2024. Cemex says that it is making the transaction to reduce its exposure to emerging markets and refocus its capital upon priority markets, such as the US. This reasoning is very much in line with its international peers in the building materials sector, which have been doing likewise.
This is the potential biggest divestment Cemex will have made since 2009. It is bigger than the agreement to sell the share of its business in the Philippines, revealed earlier in 2024, for an enterprise value of US$660m. Back in 2000, Cemex sold its Australia-based subsidiary to Holcim for US$1.7bn. Holcim still operates in Australia today via Cement Australia, a joint-venture with Heidelberg Materials. Plus, CRH, one of Cemex’s competitors that has also shown a keen interest in the US market previously, concluded a deal to buy a stake in AdBri in July 2024. Infamously, Cemex took over building products company Rinker in 2007 just as the 2007 - 2008 financial crisis burst. It then spent the next decade-and-a-half reducing its debt levels. In April 2024 it was pleased to announce that it had been awarded full investment grade status by rating agency Fitch Ratings.
Selling up in the Dominican Republic seems curious at first but, as mentioned at the start, we’ve been here before with Cemex’s subsidiaries in Central America and the Caribbean, plus the company has been working on it for at least a year. It is worth noting though that Cemex reopened a second production line at its San Pedro de Macorís site in 2022 giving the plant a cement production capacity of 2.4Mt/yr. That gives the current deal a value of US$380/t based on capacity. Local competitor Domicem also started up a second line at its Sabana Grande de Palenque cement plant in late 2023, demonstrating that other cement companies have also been investing in the market. Cemex’s sales from its business in the country were reasonable in 2023 but its operating earnings were the fourth biggest in the group after Mexico, the US and the UK. In its results for the first half of 2024 the group noted that tourism projects were driving demand in the country.
Graph 1: Mix of sales by region for Cemex, 2019 - 2023. Source: Company reports.
Graph 1 above presents the general way Cemex has been directing its business internationally over the last five years. Sales were roughly half-and-half between Mexico & the US and the rest of the world in 2019. In 2023 the ratio was more like 60:40. Operating earnings have tracked the same way with an even greater emphasis on Mexico and the US. It should be noted though that despite sales revenue being higher in the US, operating earnings remain higher in Mexico.
Pretty much every western international cement company is watching the US market intently right now. So, Cemex’s decision to sell a profitable business in the Dominican Republic to fund further investment in the US makes sense. Although what it might actually want to buy at US prices right now might be a tough call. CRH, for example, paid US$2.1bn in late 2023 to buy the 2.1Mt/yr Hunter cement plant, a network of cement terminals and 20 ready-mix concrete batching plants in South Texas. This was arguably quite a high price. One last point to consider is that the financial press was reporting falls in the global stock markets this week amid fears over the outlook of the US economy. Whatever happens next, at least Cemex is selling rather than buying this time round.
Nicolas George appointed as head of Holcim Philippines 07 August 2024
Philippines: Holcim Philippines has appointed Nicolas George as its president and CEO. He succeeds Horia Adrian, who will assume the role of Head of Decarbonization for Holcim in the Asia, Middle East, and Africa region.
George previously worked as the CEO of Lafarge Algeria from 2021. Before this he was the CEO of Chip Mong Insee Cement in Cambodia. George joined Holcim in 2007 as a Strategy Manager in China and has also worked as the CEO of Myanmar and Uganda for the group. He holds a degree in Industry Management, Innovation, and Performance from the Institut National Agronomique Paris-Grignon.
Teng Yongjun appointed as chair of Shanshui Cement 07 August 2024
China: Shanshui Cement has appointed Teng Yongjun as its chair.
Teng, aged 54 years, worked as the general manager of the Jinan Public Transportation Group from 2023 to July 2024 and he was a director for the Jinan Financial Investment Fund from 2020 to early 2023. Before this he spent his career working in government roles, mostly in the Huaiyin District of Jinan, Shandong Province. He is a graduate in county and rural economy management from the Shandong Economic Institute and holds a degree in economy management from the Shandong Province People’s Party University.