September 2024
ACC launches Houses of Tomorrow in India 28 April 2022
India: ACC has launched Holcim’s Houses of Tomorrow sustainable homebuilding initiative with the construction of a low CO2 home in Puducherry called Gratitude Villa. Projects Today News has reported that architect Trupti Doshi selected building materials to reduce CO2 emissions by 40% by comparison to conventional materials such as ordinary Portland cement (OPC). She opted for ACC’s Suraksha brand cement, fly ash bricks and ECOPact green concrete.
Mexico: Eight people have died in an armed clash at Cooperativa La Cruz Azul’s Hidalgo cement plant. The El País newspaper has reported that attackers riding in multiple trucks arrived at the plant in the early hours of 27 April 2022. In addition to the eight dead, a further 12 people were wounded in the ensuing fight with defenders. Attackers also destroyed some control panel wiring at the plant and set fire to eight vehicles. The altercation caused a suspension of cement production at the facility.
Police detained nine suspects and have established a watch at the Hidalgo plant.
Cement shortages in the southern US 27 April 2022
Cement shortages were being reported in the US media last week in Alabama and South Carolina. The owner of a ready-mixed concrete supplier in South Carolina was blaming it on labour and supply shortages. Dan Crosby, the president of Metrocon, told Fox News that his business could only take on 60% of the work it could normally cope with due to the issue despite demand for construction growing in the state. Meanwhile, the Alabama Concrete Industries Association said that its home state saw a 14% increase in the demand for concrete in 2021 but that a cement shortage might cause delays to projects. The association also pointed the blame at labour and supply issues. It pointed out that high demand for concrete during the winter prevented inventory being built up and then the annual cement plant maintenance breaks in the spring added to the problems. Once contractors actually secured supplies of cement they then faced further delays due to a nationwide truck driver shortage!
Graph 1: Annual rolling cement shipments in the South of the US. Source: USGS.
Data from the United States Geological Survey (USGS) doesn’t especially shed light on the situation in Alabama and South Carolina. Alabama was the fifth largest cement producing state in the country in January 2022 but this is unsurprising as it’s the state with the fifth largest cement production capacity. Rolling annual data on Portland and blended cement shipments by origin show the effects of the coronavirus outbreak in the south from the start of 2020 to January 2022. Shipments took a dive in 2020 and then mostly recovered in 2021. However, Alabama, Kentucky and Tennessee saw shipments rise from 7.1Mt pre-pandemic to 7.6Mt in January 2022. South Carolina’s shipments grew from 3Mt to 3.2Mt. Regionally, the North East had a similar pattern although, unlike the South, shipments have surpassed those at the start of 2020. The Midwest and West were different with a general upwards trend over the two years, although the West softened slightly from mid-2021 onwards. Overall the US as a whole has seen its shipments grow throughout this period.
Ed Sullivan from the Portland Cement Association (PCA) told the May 2022 issue of Global Cement Magazine that the US cement sector did well in 2021 with a 4.1% year-on-year rise in sales to 104Mt. However, he flagged up supply chain problems that actually slowed growth, led by a lack of staff.
The other point along these lines that Sullivan made was that imports of cement might not necessarily be able to compensate for domestic supply issues due to global demand for shipping post-coronavirus. USGS data placed imports to the US at 13.7Mt in 2019 compared to 16.3Mt in 2021. Notably, Cemex restarted one production line in 2021 at its CPN cement plant in Sonora State in Mexico to export cement to the west of the US. In March 2022 it added that it was going to restart another line at the plant also. It’s not alone though as GCC reported in January 2022 that a line at one of its plants in Chihuahua, Mexico, was exporting cement to Texas. Sullivan reckoned that January 2022 was ‘weak’ but that it was followed by an ‘extremely strong’ February 2022. The first quarter results from Holcim and CRH seem to back this up with the former describing the period as ‘outstanding’ and the region leading its sales and earnings growth rate globally. CRH reported strong demand in central and southern regions.
As the US economy restarted following the peak of the early coronavirus waves in 2020, various supply chain issues have manifested. Staff shortages are one issue and this can also worsen other logistic problems. The south seems particularly vulnerable to all of this as it is both the country’s largest cement market and because demand has held up. In January 2022 research by the International Monetary Fund (IMF) identified several reasons for staff shortages in the US and the UK. These included increased inactivity among older workers, the so called ‘She-cession’ (where female employment has overly reduced due to coronavirus trends) and shifting worker preferences amid strong labour demand.
Staff shortages are expected to sort themselves out throughout 2022 but favourable forecast demand for cement in the US is balanced by inflationary pressure. Persistent low staffing levels could further add to inflation growth. The US cement sector may be doing well at the moment but even success carries risks.
Global Cement’s Robert McCaffrey will be giving a keynote presentation at the IEEE-PCA Cement Conference in Las Vegas on Tuesday 3 May 2022. The May 2022 issue of Global Cement Magazine, including interviews with PCA chief executive officer Mike Ireland and chief economist Ed Sullivan, is available to download now.
Rashmi Khandelwal appointed a company secretary of ACC 27 April 2022
India: ACC has appointed Rashmi Khandelwal as its company secretary. She succeeds Rajiv Choubey who will remain with ACC as chief legal officer.
Khandelwal is a qualified company secretary with 13 years of professional experience. Previous roles include working for YES Bank and the legal company Mis Yaish Associates. She has also co-written two books about the government’s Companies Act 2013.
India: Adani Group has reportedly entered an advanced stage of discussions with Holcim over its possible acquisition of the latter's Indian cement operations. The Times of India newspaper has reported that Holcim subsidiaries Ambuja Cements and ACC together have a cement production capacity of 64Mt/yr. The value of their assets has a market cap of US$15.7bn.
GCC boosts first-quarter sales and earnings in 2022 27 April 2022
Mexico: GCC recorded consolidated sales of US$207m in the first quarter of 2022, up by 16% year-on-year from first-quarter 2021 levels. US sales growth of 21% contributed to the increase, driven by regional cement volumes growth of 10%. The group's cement volumes in its native Mexico rose by 12%. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) in the quarter reached US$54.5m, up by 10% year-on-year. Following the results, the company plans to reactivate its on-going share buyback programme.
Chief executive officer (CEO) Enrique Escalante said "GCC is off to an excellent start this year. We are pleased with the results delivered during this quarter and of the way we are overcoming a high inflation environment amid global challenges. One of our top priorities is being extremely vigilant in offsetting cost pressures as we capitalise on market opportunities and focus our efforts in maximising production and terminal outputs. Market trends and full-year backlogs are encouraging for 2022; therefore, we expect to end the year in line with our high-single to double-digit EBITDA growth guidance."
Cementos Molins increases sales in first quarter of 2022 27 April 2022
Spain: Cementos Molins recorded first-quarter consolidated sales of Euro274m in 2022, up by 23% year-on-year from first-quarter 2021 levels. The group's net profit for the period fell by 34% year-on-year to Euro22m. It attributed this to material, power and transport costs inflation. During the quarter, Cementos Molins acquired Hanson Hispania's Catalonian ready-mix concrete and aggregates operations. It says that its 0.8x debt-to-earnings before interest, taxation, depreciation and amortisation (EBITDA) ratio positions it well to continue with the execution of its Strategic Plan 2020-2023.
Chief executive officer (CEO) Julio Rodríguez said “The year 2022 has an uncertain and highly complex global environment, in which the war in Ukraine and its global effects are added to the previously existing problems of costs inflation and supply chain disruptions. Despite this complex environment, we expect to continue in 2022 the path of solid results achieved in previous years."
Orient Group seeking to raise funds 27 April 2022
Uzbekistan: Orient Group has entered talks with foreign banks to obtain loans and raise funds. BNE IntelleNewshas reported that the company's earnings before interest, taxation, depreciation and amortisation (EBITDA) is 3x its debt.
Head of corporate finance Davron Ozgurer said “Now we are well diversified, but we plan to exit some of the businesses and sectors but we are also considering getting into some new businesses. The main change will be that now we are an operational company – we make and sell things – but the plan is to transform into more of a financial holding. But that will take time.” Regarding future fundraising, Ozgurer said “Nothing is decided yet. We are just looking at options, but we could issue a bond, or maybe take a syndicated loan. Eventually, an initial public offering (IPO) could be possible.”
India: Police in Mumbai, Maharashtra, have opened a case against a Gujarat-based cement producer on charges of cheating, forgery and criminal conspiracy. The Times of India newspaper has reported that the accused company borrowed US$27m in 2017 and early 2018, purportedly for the purchase of four clinker carrier ships and the construction of jetties at two sites in Gujarat. However, the producer had mortgaged all four ships, pledging over 20% of its shares. From the funds, it reportedly paid itself for the construction of the jetties, and used US$17.35 to repay outstanding bank loans.
Dominican Republic: Mexico-based Cemex has reopened the second production line at its integrated San Pedro Macoris plant. The decision will add 0.5Mt/yr to the plant’s production capacity bringing its total to 2.5Mt/yr. The decision has been made to support customers in the Caribbean market. Other recent investment in the country by Cemex include new packaging machines, palletisers, hydro combustion, new trucks and tanks.
Jesús González, the president of Cemex South, Central America and the Caribbean said “The reactivation of the production line is a clear example of our commitment to the sustainable development of the Dominican Republic. This investment contributes to the revitalisation of the national economy, promotes exports, reduces the need for imports and supports employment and a more sustainable environment in the country."