Displaying items by tag: Aggregates
Poor cement market slows CNBM financial results in 2023
03 April 2024China: 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.
Huaxin Cement fights off decline in cement market
03 April 2024China: 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.
Holcim acquires Cand-Landi
20 March 2024Switzerland: 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.”
Cemex UK to build shore power system at Shoreham Port
06 February 2024UK: The UK Department for Transport has awarded Cemex UK a grant of just under Euro2m to build a shore power system for its maritime logistics operations at Shoreham Port in West Sussex. The system will enable the company to eliminate on-board diesel engine use during marine aggregate discharges. It will incorporate battery energy storage and solar power generation to provide constant power, whilst simulating fluctuating power demands. Cemex UK will now work with automation specialist Iconsys and the University of Warwick to deploy a demonstration system, which will run from April 2024 until April 2025.
Cemex West Europe materials operational excellence and business development director Laurence Dagley said "Our initial feasibility study for this shore power system identified an opportunity to save a significant amount of CO2 during each dredger discharge, while also improving local air quality at the port itself. We are, therefore, pleased to have received this funding to progress to the next stage of the project and undertake on-site demonstration."
Holcim announces over 15 upcoming acquisitions in 2024
18 January 2024Switzerland: Holcim says that it aims to conclude 15 - 20 new acquisitions in 2024, and potentially ‘many more.’ The value of individual deals ranges from US$5.78 – 115m, but might possibly exceed US$230m. Holcim says that it is focussing on growing its construction waste recycling business in Belgium, France, Germany and the UK, as well as its aggregates business in Eastern Europe.
Afrimat secures recommendation to acquire Lafarge South Africa
08 November 2023South Africa: The Competition Tribunal has received a recommendation from the Competition Commission that it should allow aggregates producer Afrimat to acquire Lafarge South Africa. Creamer Engineering News has reported that the commission found that the merger involves ‘horizontal overlaps’ in the aggregates and ready-mix concrete sectors. As such, it recommended that the parties be required to divest assets across the affected sectors.
Reconfiguration in the US cement market
13 September 2023The big US news this week has been that Summit Materials and Argos USA are planning to merge their operations. The new organisation will operate six integrated cement plants with a production capacity of 8.4Mt/yr, based on Global Cement Directory 2023 data. The companies say that this will make them the fourth biggest cement producer in the country, at 11.8Mt/yr, based on grinding capacity, and the largest domestically-owned operator. Additionally, the combined entity will also hold just under 5Bnt of aggregate reserves, 224 ready-mixed concrete (RMX) plants and 32 asphalt plants.
The deal is expected to close in the first half of 2024 subject to the usual regulatory clearances and shareholder approval. At this point Argos should own approximately 31% of the new company and Summit Materials’ shareholders will be the majority owner. Although, if we remember anything from the Lafarge-Holcim merger from nearly a decade ago, it is that if the share prices between the two companies diverge too much in the next six months then that proportion may change. In simple terms that split for Argos USA is in the region of where one might expect it to be given that Argos USA made 39% of the combined revenue for both itself and Summit Materials in 2022 and 28% of the combined earnings.
The two companies complement each other well for the purposes of forming a new heavy building materials concern. Summit Materials reported revenue of US$2.41bn in 2022, with 30% deriving from its aggregates businesses, another 30% coming from RMX and about 20% from paving. Cement generated US$341m, or 14%, of total revenue. By contrast Argos USA reported revenue of US$1.57bn in 2022 from a business just concerning cement and concrete. Geographically, Summit Materials’ integrated plants are in the Midwest, in Iowa and Missouri respectively, and its cement terminals follow the Mississippi River from Minneapolis to New Orleans. Notably, it made the point in the merger announcement that the deal would reduce the seasonality of its cement business. Argos USA’s plants and terminals are mostly spaced out in the Southern states with its plants in Alabama, Florida, South Carolina and West Virginia.
It goes against recent trends for a US-based company to be increasing its share in the domestic cement market, although it has resorted to teaming up with a Colombia-based one to do so. Usually it is foreign-headquarted companies making moves in the US. For example, Ireland-based CRH is in the final stages of switching its primary listing to the New York Stock Exchange. Its head Albert Manifold described the US construction market as going through a “golden age” earlier in the year whilst trying to sell the stock market move at the company’s annual general meeting. Meanwhile, there have been various smaller acquisitions such as Peru-based UNACEMs’ agreement to buy the Tehachapi cement plant in California from Martin Marietta Materials in August 2023.
Given the ongoing importance of the North American market for the international cement producers it is not surprising that merger and acquisition activity has been taking place. Each of the four largest US-based cement producers performed well in the first six months of 2023, increasing both revenue and earnings significantly. However, the picture is mixed. The Portland Cement Association (PCA) forecast at the start of 2023 that cement consumption would decline in the second half of 2023 due to a worsening general economic outlook. The downturn was estimated to be brief though as interest rates were expected to dip and infrastructure spending to rise in 2024. Half-year data from the United States Geological Survey (USGS) supported this view as shipments reached an estimated 51.0Mt, a slight decrease from the same period in 2022. The cement companies have made money so far in 2023 partly by raising their prices. Yet, some segments of the residential homebuilding market have also driven demand despite the general economic picture.
One last thing to consider is how much thought was given to the carbon risk of forming a new heavy building materials company in a developed economy in the 2020s. Sustainability receives a mention in Summit Materials’ investor presentation in the form of current achievements such as switching to blended cements or reducing fossil fuel usage but there is no suggestion that any serious investment to curtail process emissions is expected any time soon. However, one could make the case that the enlarged company might benefit from synergistic effects if it were forced to spend more on CO2 emission reduction. This proposed merger concerns two existing organisations teaming up rather than new equity entering the arena. In this context it will be worth noting whether the next cement industry merger or acquisition in the US or Europe will involve existing companies or new entrants.
China: Anhui Conch grew its concrete and aggregate sales in the first half of 2023 to increase overall sales. Its revenue grew by 16% year-on-year to US$8.99bn in the first half of 2023 from US$7.73bn in the same period in 2022. However, its cement and clinker sales fell by 7% to US$6bn from US$6.46bn. Sales revenue fell in all of its domestic sales regions, although they rose overseas. By contrast, sales and trading of other products more than doubled to US$2.7bn. The group’s sales volumes of cement and clinker increased by 3% to 134Mt. Its total profit fell by 32% to US$928m from US$1.37bn.
In its interim results the company said that it had “actively responded to the complicated and difficult industry situation and strived to overcome the impact of unfavourable factors such as declining real estate investment, sluggish market demand and intensified industry competition.”
France: Heidelberg Materials has announced plans for its CIRCO₂BETON concrete recycling project. It intends to build an industrial-scale selective separation unit at its Achères quarry near Paris. Here it will recycle demolished concrete by crushing it and separating it into its components: sand, aggregates, and recycled concrete paste (RCP). The recycled sand and aggregates will be reincorporated into new concrete.
The RCP will be transported to the Ranville cement plant in the Normandy region. There, a reactor for enforced carbonation will be installed to carbonate the RCP by exposing it to CO₂-containing exhaust gases from the kiln. The carbonated RCP acts as a carbon sink and will replace clinker in new low-carbon cement types. The project has the potential to reduce the CO₂ emissions of the Ranville cement plant by 20%.
CIRCO₂BETON is supported by the ‘Investment for the Future’ Program coordinated by the Ecological Transition Agency (ADEME). In addition, the Île-de-France region supports the selective separation plant at Achères through its zero-waste and circular economy plan. Subject to the funding, construction of both industrial pilots is scheduled to start in 2024 with production of RCP starting in 2025. The carbonation reactor is planned to be operational by 2026.
Nicola Kimm, the chief sustainability officer at Heidelberg Materials, said ”We are investing in a pioneering large-scale project based on innovative process technologies. Selective separation and CO₂ mineralisation are important levers to reduce the carbon footprint of our products. By closing the materials loop, we prove that concrete has the potential to be the most sustainable building product over its entire life cycle from production to recycling.”
Read more about RCP in the Decemeber 2022 issue of Global Cement Magazine