Displaying items by tag: Argentina

The Federación Interamericana del Cemento (FICEM) held its 2018 technical congress in Panama City last week and was attended by Global Cement. We’ll run a full write-up of the event in the October 2018 issue of Global Cement Magazine. The short version is that the conference was technically good but, from our perspective, it could have done with more regional analysis. Given that the event is for the local industry this is not a big issue as most of the delegates will know their own markets inside out and many were happy to discuss just this when asked. Likewise, FICEM’s in-house publication also included plenty of local data.

The nearest the presentations came to this was a global overview of the cement industry by Arnaud Pinatel of On Field Investment Research ahead of a market report the analysts are about to release. Although it covered the global cement industry the key local news was that the Latin American sector’s production capacity had grown by 3% from 2010 to 2018 but that prices had fallen in this time. The forecast suggested that cement sales volumes were expected to grow by 3% in 2019 - supported by Brazil, Peru and Bolivia - but that prices were also expected to fall by 1%, mainly due to issues in Argentina.

That last point is especially interesting over the last week because the Argentine cement body, the Asociación de Fabricantes de Cemento Portland (AFCP), released its figures last week to reveal that cement despatches rose by 4.2% year-on-year for the first eight months of 2018. However, at the same time the general news broke that the International Monetary Fund (IMF) was providing an emergency loan to support the country’s economy. The government was keen to shore up confidence in the economy and attributed the growth in the cement sector to the ‘most ambitious infrastructure plan in history.’

Only last year in 2017 the industry was riding a construction boom with cement shortages, new production capacity announced and the initial public offering of Loma Negra. Bailouts from the IMF don’t fit this picture of the poster boy for the South American construction industry. And, if a financial correction is pending, the new capacity that has been ordered may arrive at a bad time. This is a pretty worrying situation.

Meanwhile, across the Uruguay River into Brazil something long expected and hopefully more encouraging has occurred: the acquisition of cement plants. Italy’s Buzzi Unicem revealed that it had struck a deal to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m. The arrangements cover two integrated plants: one 2.4Mt/yr unit at Sete Lagoas in Minas Gerais and a 1.7Mt/yr unit at Pitimbu in Paraíba. Buzzi has also added an option to buy the other half of the business until 2025.

It’s hard to place a value on the sale, but it looks as if Buzzi has picked up the capacity for just under US$100/t, subject to future variation on how well the company does. At that price though this a low figure and a bargain for Buzzi. Given the pain the Brazilian cement industry had been through in recent years some form of traction is welcome. Unfortunately, Grupo Ricardo Brennand has surely lost money on the deal given that the two plants were commissioned in 2011 and 2015 respectively. The complexity of the financial arrangements suggest that Ricardo Brennand is fighting to stay in the game if and when the recovery comes. If Buzzi has moved in then this suggests that it thinks it will make their money back and that it reckons that the bottom of the construction industry trough has been reached. A Brazilian take on this situation would be fascinating.

With these kinds of events happening the same week as the FICEM technical congress it really shows how vibrant and varied the region’s cement industry is. Next year’s conference will surely be even more interesting as market events in Brazil, Argentina and other countries develop.

Argentina: Carlos Casado has become the new Director of Operations at Holcim Argentina. He previously held positions for Holcim and LafargeHolcim in Europe, Asia and Latin America. He will be based in Córdoba and will control plants in Córdoba, Jujuy, Mendoza and Buenos Aires. Casado is an industrial engineer from the Polytechnic University of Valencia, Spain, who has 17 years of experience in the LafargeHolcim group.

Argentina: Both the sale and consumption of cement grew by 17% in August 2018 compared to July 2018, according to the national government. With sales of 1.1Mt, August 2018 also grew 0.1% compared to August 2017.

"The August figures are very positive in this economic context, which shows that construction, public and private, continues to advance,” said Guillermo Dietrich, Minister of Transportation. “The sale of cement maintains the same values as in August 2017, setting a historical record. We are facing the most ambitious infrastructure plan in history and that does not stop."

Argentina: Loma Negra has announced its results for the three and six-month periods that ended on 30 June 2018. Its net revenue rose by 37.2% year-on-year to US$202m, mainly driven by growth in its core cement, masonry and lime businesses in Argentina. Argentine cement, masonry and lime net revenues rose by 33.4%, despite relatively flat sales volumes.
Consolidated adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 26.9% year-on-year to US$49m, mainly driven by the 36.6% increase in adjusted EBITDA from Argentina. Cement, masonry and lime sales in Argentina came to US$42m.

Commenting on the financial and operating performance for the second quarter of 2018, Sergio Fairman, Loma Negra’s Chief Executive Officer, said, "Our core business, cement in Argentina, continued to deliver a solid performance, posting both revenue growth and EBITDA margin expansion despite the current challenging macroeconomic environment in the country. This was achieved despite relatively flat volumes year-on-year, as we continue with our strategy of balancing profitability and market position. Sustained growth in concrete volume demand, by contrast, was supported by ongoing implementation of public infrastructure projects in our key markets."

"Looking ahead, we remain cautiously optimistic with the cement demand outlook in Argentina. Despite the potential impact of an adverse macro environment in the second half of the year and, given current market conditions, we believe the industry could reach similar record volumes (to those) achieved last year."

Argentina: Cement consumption rose by 7% year-on-year to 5.85Mt in the first half of 2018 from 5.49Mt in the same period in 2017. Data from the Asociación de Fabricantes de Cemento Portland (AFCP) also showed that despatches rose by 7% to 5.86Mt from 5.49Mt. However, both consumption and despatches for May and June 2018 fell.

Argentina: The National Commission for Protection of Competition (CNDC) has hastened an investigation into alleged collusion and coordinated behaviour in the cement industry. Cement prices increased by 13% in May 2018, according to La Nacion newspaper. So far in 2018 the price of cement has risen by 23% and the cement companies say that further price rises are expected in June 2018.

The local industry has blamed rising input prices of up to 50% due to local currency devaluation but the Argentine Peso has only fallen by 30% so far in 2018. The companies under investigation include Loma Negra, LafargeHolcim, Petroquimica Comodoro Rivadavia and others.

Chile: Cementos Bío Bío is considering expansion plans in Argentina and Peru, according to the El Mercurio newspaper. The plans are part of its 2021 strategy. It also wants to consolidate its leadership in its local market.

Argentina: Cement despatches grew by 13% year-on-year to 3.08Mt in the first three months of 2018 from 2.72Mt in the same period in 2016. The Asociación de Fabricantes de Cemento Portland (AFCP) forecasts that despatches will rise by 6% to 12.9Mt in 2018.

Argentina: Germany’s KHD has been awarded a contract by Holcim Argentina for the upgrade project of a clinker production line at its Malagueño cement plant near Córdoba. Holcim Argentina intends to recommission its mothballed 1650t/day production line, which originally was supplied by KHD Humboldt Wedag in the early 1980s. Commissioning for the updated line is planned for mid-2019.

KHD’s scope includes the engineering and supply of mechanical equipment for raw material preparation and clinker production as well as electrical equipment in order to modernise and recommission the currently mothballed production line no 1.

Core equipment for the project includes: tertiary raw material crusher with a capacity of 250t/hr; ball mill drive for existing ball mill and new feeding equipment for raw meal preparation; separator for raw material grinding plant; kiln feed dosing system; four-stage preheater; rotary kiln 4.4m x 64m and drive system; revamping of existing clinker cooler with ‘fourth generation’ walking floor grate; main bag house for kiln/mill and clinker cooler; and main process fans.

Argentina: Loma Negra’s sales and earnings have increased due to a strong market recovery in its domestic market. Its sales revenue rose by 54.8% year-on-year to US$752m in 2017 from US$486m in 2016. Its adjusted earnings before, interest, taxation, depreciation and amortisation (EBITDA) rose by 67.7% to US$194m from US$116m. Its cement and lime sales rose by 18.6% to 6.99Mt from 5.89Mt. The cement producer also benefited from an increased equity share of Paraguay’s Yguazú Cementos during the year.

“2017 was a pivotal year for Loma Negra marked by achieving significant milestones. Key events for the company last year included: volume and sales expansion benefitting from the economic momentum in Argentina, record EBITDA, commenced expansion of the L’Amalí plant and ending the year with the successful Initial Public Offering (IPO) – the largest Argentine IPO in almost 25 years and the largest ever for a cement company,” said Sergio Faifman, Loma Negra’s Chief Executive Officer.