Displaying items by tag: Aggregates

Brazil: China-based Huaxin Cement has signed a deal worth US$187m to buy aggregates producer Embu. Embu owns four quarries in the metropolitan region of São Paulo with a production capacity of nearly 9Mt/yr, according to the Rio Times newspaper. In 2023 it produced 6.3Mt and reported a net profit of around US$3.2m.

US: Quikrete has entered into a definitive agreement to buy Summit Materials for a total enterprise value of US$11.5bn. The deal will add Summit Materials’ aggregates, cement and ready-mixed concrete business to Quikrete’s concrete and cement-based products business to create a vertically integrated business in North America. Quikcrete’s acquisition offer was first revealed in late October 2024. The transaction is expected to close in the first half of 2025 subject to shareholder approval at Summit Materials, regulatory approvals and other customary conditions.

Will Magill, CEO of Quikcrete, said “We are thrilled to welcome Summit into the Quikrete family.” He added, “This acquisition represents a significant milestone in our journey to expand our capabilities and geographic presence.”

Colombia-based Cementos Argos is Summit Materials’ largest shareholder with a 31% stake. It has agreed to vote all of its shares in Summit’s common stock in favour of the transaction. Cementos Argos says will generate a cash value of around US$2.9bn from the sales of its shares.

Another potentially gargantuan deal in the US building materials sector emerged this week in the shape of Quikrete bidding to buy Summit Materials. The latter company announced that a non-binding acquisition proposal had been received and the business press revealed who it was from. Further reporting suggested that Summit Materials has a market value of around US$7bn.

Quikrete is well known in North America for its packaged concrete products that are often sold in distinctive yellow bags. Its brands include Quikrete cement and concrete, Pavestone and Keystone paver and block products and Rinker concrete pipe and storm-water products amongst others. The company says it operates over 90 manufacturing sites in the US, Canada, Puerto Rico and South America, although it does not appear to own any cement plants. Notably, it is privately owned.

The deal is likely to revolve around the ready-mixed concrete assets that Summit Materials runs. However, readers may recall that Summit Materials and Cementos Argos completed the merger of their operations in the US at the start of 2024. That deal was set to make Colombia-based Cementos Argos the largest shareholder in Summit Materials. The companies also said that it was going to set them up with the fourth-largest cement-making portfolio in the US, with a capacity of 11.6Mt/yr, and place them among the largest aggregates and concrete producers. So it will be interesting, to say the least, to see how Cementos Argos reacts to a change in plans so soon after the merger has finished. Assuming the deal is credible, how it reacts may suggest whether the company is following the money in the short term or sticking to a longer plan.

Yet another large deal in the building materials sector in North America reinforces the diverging fortunes between the markets there and in Europe. However, this dynamic can create its own problems. More details about Holcim’s spin-off of its business in North America, for example, emerged in October 2024. Press reports suggested that the group was considering a dual-listing as its Swiss and other European shareholders were potentially facing restrictions from holding shares outside of their home markets.

Despite the current frenzy for market share and margin in the US by multinational building materials companies though, the cement market hasn’t had the best year so far in 2024. US cement shipments actually fell year-on-year in 2023 and continued to do so during the first seven months of 2024, according to United States Geological Survey (USGS) data. The Portland Cement Association (PCA)’s Chief Economist Ed Sullivan blamed this mainly on high interest rates. He then noted in an autumn forecast that a cut in rates was likely to benefit the construction market from mid-2025 onwards. Anne Noonan, the CEO of Summit Materials, also noted the negative effect of interest rates on construction projects at a recent Colorado Business Roundtable event.

None of this has discouraged the hunger of companies to cash in on the US market. Even the uncertainty of the impending US presidential election taking place on 5 November 2024 has failed to quell this desire. In brief, either administration might take different approaches to trade protectionism, infrastructure investment plans, green investment, permitting, regulations and so on. Yet the market fundamentals are strong for building materials. Koch helped MITER Brands buy window and door manufacturer PGT Innovations for US$3.1bn in January 2024 and Owens Corning acquired another door producer, Masonite, for US$3.9bn in May 2024. Quikrete smells potential and it may follow.

Germany: Cemex has acquired a majority stake in the Berlin-based recycling company RC-Baustoffe to enhance its circularity business Regenera. The company processes construction, demolition and excavation materials. The acquisition integrates RC-Baustoffe with Regenera, allowing the facility to process up to 400,000t/yr, which will be turned into repurposed aggregates for concrete production.

CEO of Cemex, Fernando González, said “With acquisitions such as this, Cemex continues to strengthen its commitment to circularity through Regenera as well as promoting the world’s transition to a more circular economy. Construction and demolition materials account for more than 30% of global ‘waste’ streams and reintegrating these materials into the construction value chain can reduce the use of virgin raw materials."

Peru: Switzerland-based Holcim has acquired ready-mix concrete producer Mixercon and industrial minerals producer Comacsa for US$100m. Comacsa owns a white cement plant in Lima. Noticias Financieras News has reported that the acquisitions mark Holcim’s entry into Peru, strengthening its hold in the South and Central American market.

Regional head Oliver Osswald said "The incorporation of Comacsa and Mixercon will allow us to generate synergies and develop export markets.”

Heidelberg Materials inaugurated a plant near Katowice in Poland this week for separating and sorting demolition concrete. This gives us the chance to catch up with the state of construction and demolition waste (CDW) for the cement and concrete sectors and consider the differences between the strategies of the multinational heavy building materials companies in Europe and the US.

The new CDW recycling unit has a capacity of up to 100t/hr. Heidelberg Materials says that it is the “first company in the industry to introduce high-quality, selective concrete separation at this scale.” The company is using its proprietary ReConcrete process to sort out fractions from the CDW including sand, gravel and, finest of all, recycled concrete paste (RCP). That last one is particularly valuable because it can either be used as an alternative raw material for clinker production by replacing limestone or as a secondary cementitious material. Heidelberg Materials is also promoting the potential use of RCP as a carbon sink over the lifetime of a concrete structure via ‘enforced carbonation.’ The RCP is exposed to raw exhaust gases from cement production allowing it to both mineralise CO₂ and act as a clinker substitute. To further explore this option Heidelberg Materials is building an industrial pilot at its Górażdże plant to test the concept with construction expected by the end of 2024.

Both Holcim and Heidelberg Materials have been visibly busy buying up more aggregate recycling companies over the last nine months since Global Cement Weekly last reported on CDW. Holcim acquired Germany-based Mendiger Basalt in January 2024, Switzerland-based Cand-Landi Group and UK-based Land Recovery in June 2024, and Belgium-based Mark Desmedt in July 2024. It also said at the start of the year that it aimed to conclude 15 - 20 new acquisitions in 2024 with a focus on CDW companies in Belgium, France, Germany and the UK. Heidelberg Materials bought UK-based B&A Group in May 2024 and US-based Highway Materials and Aaron Materials in July 2024. Holcim has set itself a target of recycling 12Mt/yr of CDW by 2030 by using its ECOCycle technology. It reported 8.4Mt/yr in 2023 and hopes to reach 10Mt/yr in 2024.

Some of the recycling companies mentioned above are based in the US but the pace of CDW acquisitions have generally been faster in Europe. In the US, meanwhile, the heavy building materials producers have tended to buy more general aggregates companies. Heidelberg Materials announced on 30 July 2024 that it was buying Albany-based Carver Sand & Gravel. This followed the companies mentioned above and Texas-based Victory Rock, also in July 2024. Holcim said in its first half-year results for 2024 that it had ‘executed’ a bolt-on acquisition in the US that would strengthen its aggregate and ready-mixed concrete business. Cemex also revealed a joint-venture agreement with sand and gravel supplier Couch Aggregates and marine bulk product distributor Premier Holdings in July 2024. It said that the move was part of its “ongoing strategy to accelerate growth in the US and expand its aggregates business.” A big recent deal in the sector was the merger of the US-based operations of Summit Materials and Cementos Argos that completed in January 2024. Although at the time we concentrated on the cement-side of the transaction, it also gave the organisation just under 5Bnt of aggregate reserves.

It may be a stretch to call what’s going on here a trend. Yet the large heavy building materials companies do appear to be acting differently in the US and Europe with regards to aggregate companies and CDW recyclers. The main drivers here are the strength of the US market and the stricter environmental legislation in Europe. Higher population density in Europe compared to the US may also be playing a part in the differences in speed of adoption between the two markets. The ongoing Holcim spinoff demonstrates the differences between the two market regions in bold terms. In short, the company has decided to split itself in two in order to meet the different needs of each market. As for CDW, the trickle of acquisitions keep coming and momentum is steadily building.

China: Poor performance by CNBM’s Basic Building Materials division dragged down the group’s sales in 2023 despite positive performance by the group’s Engineering Technical Services and New Materials segments. Its revenue fell by 10% year-on-year to US$29.1bn in 2023 from US$32.3bn in 2022. Its profit after tax dropped by 33% to US$1.44bn from US$2.13bn. Sales volumes of cement and clinker decreased by 3% to 309Mt from 317Mt. Sales volumes of commercial concrete fell by 5% to 80.8Mm³ from 84.7Mm³.

Revenue for the Basic Building Materials division fell by 19% to US$16.4bn. The company blamed this on a fall in the price of cement, concrete and aggregates although an increase in sales volume of aggregates was noted. The group said that in 2023, the cement industry was characterised by ‘insufficient demand, weakening expectations and weakening off-peak season characteristics,’ coupled with and aggravating surplus and high costs.

China: Huaxin Cement grew its revenue and profit in 2023 by growing its concrete market domestically and increasing its international business. Its revenue rose by 11% year-on-year to US$4.67bn in 2023 from US$4.21bn in 2022. However its operating revenue from cement and clinker declined. The group’s net profit increased by 2% to US$382m from US$373m. Its cement sales volumes grew by 2% to 76.8Mt from 75.3Mt. Concrete sales volumes mounted by 66% to 27.3Mm³.

The share of its international business grew by 16% in 2023 from 13% in 2022. Notable acquisitions in 2023 included the purchases of Oman Cement and InterCement’s assets in Sub-Saharan Africa.

Switzerland: After 128 years as a family-operated business in Grandson, Vaud, Cand-Landi will become a subsidiary of Holcim Group. This acquisition marks an expansion for Holcim in the areas of aggregate and concrete production, as well as landfill management.

The terms of the transaction, including the financial details, have not been disclosed. However, the Cand-Landi name will be kept after the acquisition.

US: Global Cement understands from material published publicly on Breedon Group’s website that the UK-based company acquired ready-mix concrete, aggregates and building products company BMC Enterprises for US$300m on 6 March 2023. This marks the group’s first entry into the US building materials sector. Breedon Group described the acquisition as a ‘compelling opportunity’ in the ‘fragmented and growing’ market. It described BMC Enterprises as a highly attractive, established business upon which to grow a new group platform in the US, in addition to its existing platforms in the UK and Ireland.

Breedon Group CEO Rob Wood said “The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform. BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth. As a high-quality aggregates and concrete business that has grown at pace, organically and through acquisitions, with a strong management team and deep local knowledge, BMC’s culture and values are fully aligned with the Breedon business model.” Wood added "The acquisition is expected to be earnings-enhancing for shareholders, while allowing Breedon to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions across each of our platforms as opportunities arise.”