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Displaying items by tag: Aditya Birla
UAE: Cemex UAE and UltraTech Cement UAE have signed an agreement to collaborate on the development of waste concrete recycling in the UAE, according to Dow Jones Institutional News. The cement producers say that their partnership will help to reduce CO2 emissions from construction, in line with the UAE’s 2050 net zero commitment.
India: UltraTech Cement sold 26.7Mt of cement during the second quarter of the 2024 financial year (1 July – 30 September 2023). This corresponds to year-on-year growth of 16% from 23.1Mt in the second quarter of the previous financial year. Sales in India accounted for 25.7Mt (96%) of total volumes, while overseas sales accounted for 1.18Mt (4%).
UltraTech Cement has a cement capacity of 138Mt/yr across its 23 cement plants and 29 grinding units.
UltraTech Cement acquires land in Vizianagaram from The India Cements
22 September 2023India: UltraTech Cement has bought a 29.8 hectare parcel of land in Andhra Pradesh’s Vizianagaram District from The India Cements. The Times of India newspaper has reported the value of the sale as US$8.44m. The India Cements’ vice chair and managing director Narayanaswami Srinivasan said that the company is looking for ways to monetise its assets amid on-going liquidity issues.
The India Cements’ sales of cement and clinker fell by 4.3% quarter-on-quarter to 2.66Mt in the three months to 30 June 2023 from 2.78Mt in the three months to 31 April 2023. It noted high fossil fuel prices and local overcapacity in the South Indian cement sector.
UltraTech Cement to achieve cement capacity of 160Mt/yr following latest expansion phase
14 August 2023India: UltraTech Cement says that its cement production capacity will rise by 16% to 160Mt/yr, following the completion of its on-going growth phase.
Accord Fintech has reported that UltraTech Cement raised its capacity by 4.1% from 132Mt/yr throughout the 2023 financial year, which ended in March 2023.
UltraTech Cement to acquire 26% stake in VEH Radiant Energy
03 August 2023India: UltraTech Cement has concluded an agreement to buy a 26% stake in renewable power provider VEH Radiant Energy. UltraTech Cement says that VEH Radiant Energy will help it to increase its reliance on renewable power in its operations.
UltraTech Cement expands Magdalla grinding plant
02 August 2023India: Aditya Birla subsidiary UltraTech Cement has more than doubled its Magdalla grinding plant’s capacity to 1.93Mt/yr. The unit is based in Gujarat. The producer now has an installed cement capacity of 132Mt/yr.
India: Aditya Birla subsidiary UltraTech Cement recorded cement sales volumes of 30Mt during the first quarter of the 2024 financial year, which began on 1 April 2023. This corresponds to growth of 20% year-on-year from first-quarter levels in the previous financial year. The Economic Times newspaper has reported that ICICI Securities expects UltraTech Cement's earnings before interest, taxation, depreciation and amortisation (EBITDA) to fall by 3% year-on-year. Declining fuel prices are expected to have contributed to a drop in the producer's costs. Throughout the quarter, its capacity utilisation rate was 90%.
India: UltraTech Cement has announced the inauguration of its expanded Sonar Bangla II cement plant. Reuters has reported that the expansion has more than doubled the plant's capacity to 1.3Mt/yr. It increases UltraTech Cement's total installed capacity by 0.5% to 131Mt/yr.
India: UltraTech Cement increased its cement sales volumes by 20% to 30Mt in the first quarter of the 2024 financial year. Press Trust of India News has reported that the producer sold 950,000t of cement outside of India, up by 13% from 840,000t a year earlier.
During the year, UltraTech Cement recorded a capacity utilisation rate of 90% across its 136Mt/yr capacity.
Update on South Africa, June 2023
21 June 2023Mining and materials company Afrimat said it was buying Lafarge South Africa this week. The assets it is acquiring include aggregate quarries, ready mix concrete (RMX) batching plants, one integrated cement plant, two cement grinding plants, cement terminals and fly-ash sources. The means of purchase is somewhat unusual, as Afrimat is paying around US$6m but it also appears to be taking responsibility for around US$50m of outstanding debt that Lafarge South Africa owes its parent company, Holcim. In a statement Afrimat’s chief executive officer (CEO) Andries van Heerden talked up the benefits for his company in terms of the boost to its aggregates and concrete businesses.
This is quite the change from 2012 when India-based Aditya Birla Group was reportedly looking into buying Lafarge South Africa. At this time the value for the business for a similar mix of assets, including 55 RMX plants and 20 quarries, was said to be to US$900m. Prior to this, Lafarge South Africa spent around US$170m in the late 2000s on increasing the production capacity at its integrated Lichtenburg plant and building its Randfontein grinding plant. Then in 2014, when the merger between Lafarge and Holcim was announced, Lafarge consolidated its Nigeria-based and South Africa-based operations as Lafarge Africa. It later decided to move the South African business to another Holcim subsidiary, Caricement, in 2019 to keep the business in Nigeria more profitable by reducing its debts. This transaction was valued at US$317m. At the time chair Mobolaji Balogun said that Lafarge South Africa’s operations had faced a challenging market in South Africa, with shrinking demand in an aggressively competitive sector. Afrimat is now buying Lafarge South Africa and its subsidiaries from Caricement.
Holcim isn’t alone in making an effort to sell up in South Africa. In April 2023 the Valor Econômico newspaper reported that Brazil-based InterCement was receiving offers for its remaining African-based assets in Mozambique and South Africa with a potential deal valued at around US$300m. InterCement runs Natal Portland Cement in South Africa, which operates one integrated plant and two grinding units. This follows the sale of its Egypt-based assets in January 2023 to an unnamed buyer.
PPC, the country’s largest cement producer, is staying put. However, it issued a mixed trading update this week ahead of the formal release of its annual results to 31 March 2023. Trading conditions in the interior of South Africa and Botswana were described as being ‘difficult,’ with cement sales volumes down by nearly 6% year-on-year and earnings before interest, taxation, depreciation and amortisation (EBITDA) down by 26%. Yet the group says it was able to grow its revenue. PPC’s CEO Roland van Wijnen added, “We therefore remain hopeful that the South African government will roll out its infrastructure development plans and protect the local cement market through the introduction of import tariffs to create a level playing field for domestic producers.” Dangote Cement subsidiary Sephaku Cement was more circumspect in its recent trading update but it too warned that, “deteriorating economic conditions and persistent challenges in the cement industry impacted Sephaku Cement’s financial performance to break-even levels.”
Much of the above makes for gloomy reading. As the local trade association Cement and Concrete South Africa (CCSA) has laid out to local media, the market faces the problem of having 20Mt/yr of production capacity, 12Mt/yr of demand and over 1Mt/yr of imports compounding the problem. Lobbying by local producers against imports has been a feature of the market since the early 2010s and this work continues through the efforts of the CCSA and others. However, the plea by PPC for government infrastructure spending suggests that the market faces more systemic problems. As a consequence some cement producers are trying to leave the market, while others are attempting to tough it out.