Displaying items by tag: Argentina
Cementos Molins to invest Euro127m in 2015
06 July 2015Spain: According to the Spanish Collection, Cementos Molins plans to invest Euro127m in 2015 to boost its expansion on the markets where it already has presence. Its investments on the Spanish market will stand at Euro10m and its main project abroad will be the construction of a furnace at the San Luis plant in Argentina. Cementos Molins expects a rise in profit year-on-year in 2015. In the first quarter of the year, its consolidated profit was Euro15.1m.
The Greek debt crisis directly hit the local cement industry on Tuesday 30 June 2015 when Titan Cement reported that it was unable to pay a dividend to its shareholders. The leading local cement producer blamed the capital controls introduced by the government.
It is worth looking at the effects on the domestic cement industry as the Eurozone bureaucracy and the Greek government play 'chicken' with each other while Greece starts the default process, having failed to pay the latest International Monetary Fund (IMF) payment on 30 June 2015. Greece will now join a group, possibly even more select than the European Union, of countries that have failed to pay back the IMF, including current defaulters like Sudan and Zimbabwe.
A better comparison might be made with Argentina which defaulted upon its foreign debts in 2001. Its construction industry fell by 12% year-on-year in 2001 and by a further 30% in 2002. Cement consumption and cement production utilisation rates hit 23% in 2002. One key difference with Greece is that the country has had major financial difficulties for far longer than Argentina. Argentina ran into financial depression in 1998 and defaulted in 2001. Greece ran into financial trouble following the 2008 financial crisis and then received its first bailout in 2010.
As the capital controls show, even initial responses to the financial situations are impacting upon the standard transactions a limited company conducts. The Financial Times ran an article in May 2015 examining the potential effects on businesses of a debt default and Greek exit from the Eurozone (Grexit). In short, business and commerce will continue where possible reacting to whatever comes their way. For example, an olive oil producer reported switching to exports to make profits. Crucially though, another company interviewed, a construction contractor, worried about potential cuts to government or EU-led infrastructure projects.
As Titan reported in its first quarter results for 2015, its Greek market has been dependent on road building. In February 2014 Titan Cement reported its first improved operating results in seven years followed by profit in 2014 as a whole. The other major cement producers, Lafarge subsidiary Heracles General Cement and Italcementi subsidiary Halyps Cement, reported an improved construction market in 2014 with rising cement volumes. However, it was noted by Lafarge that it was developing exports to 'optimise kiln utilisation.' Titan also noted the benefits of exports in its first quarter report for 2015, focusing on a strengthening US Dollar versus the Euro. Given on-going events, one suspects there is going to be a lot more 'development' of this kind.
To set some sense of scale of the crisis Jim O'Neill, former head of economics at Goldman Sachs, famously calculated that, at the height of its growth, China created an economy the size of Greece's every three months. What happens next is down to the crystal balls of economists, although the path of least resistance now seems to be pointing at further default, departure from the Eurozone and Euro and further significant financial pain for Greece.
It looks likely that the local construction market will stay subdued and exports will offer a lifeline. How much the EU is prepared to let Greece default on its bills and then try and undercut its own over-capacity cement industries remains to be seen. However, since the main cement producers in Greece are all multinational outfits, it will afford them some flexibility in their strategy in coping with the fallout. Meanwhile a cement production capacity of around 14Mt/yr for a population of 11m suggests over capacity by European standards. If exports can't help then the situation looks grim.
UPDATE: Here is Global Cement's previous take on Greece from June 2012
Loma Negra cement assets expected to change hands
12 June 2015Argentina: Loma Negra, the cement assets purchased in 2005 by Brazil's Camargo Corrêa Cimentos from the Fortabat family in a US$1bn deal and later incorporated into Intercement is likely to be sold, according to El Cronista. Loma Negra began 2011 with a US$400m four-year investment that includes US$250m to set up a plant at San Juan, Puerto Rico. It would be Loma Negra's 10th cement plant.
Spain/Mexico/Argentina: Cementos Molins plans to build its international presence outside of Spain with expansions planned for Mexico and Argentina. The company hopes to generate just 20% of revenues in Spain in 2017. The company reported a profit of Euro6.5m for the first quarter of 2014.
The Spain-based cement producer intends to invest in a Euro147m cement plant project in Veracruz, Mexico in 2015 – 2016 shared with Buzzi Unicem and Mexican company Carso. Cementos Molins also plans to upgrade its existing cement plant in San Luis, Argentina. Other projects include two cement plants at unspecified locations.
Cimpor to invest US$1.33bn in Latin America by 2017
18 September 2013Portugal: Cimpor intends to invest around US$1.33bn in Latin America by 2017, according to its CEO Ricardo Lima. The main objective of Cimpor is to reinforce its position in Brazil where it already operates in all regions, except in the northern parts of the country, Lima told the Portuguese news agency Lusa.
The Portugal-based cement producer will spend part of the investment building a new cement plant in northern Brazil, at either Belém or Manaus. Due to positive results in the Argentine market another plant is planned for Argentina's western province of San Juan. In October 2013 Cimpor will inaugurate a plant in Paraguay where it holds a 35% share of the market but where it currently sells its surplus Portuguese cement.
Argentinian production for May 2013
19 June 2013Argentina: In 2013 Argentinian cement factories shipped 1.02Mt of cement including exports, representing a 14.3% increase compared to May 2012, according to the Asociación de Fabricantes de Cemento Portland.
Domestic consumption, including imports, reached 998,196t, leaving around 22,000t that was exported.
Loma Negra profit halves in 2012
13 March 2013Argentina: Loma Negra, a subsidiary of Camargo Correa of Brazil, has reported that its profits fell by half to US$43.9m in 2012 from US$96m in 2011. Sales dropped to US$688m from US$704m following the official currency quotation in December 2012. Cement and lime production fell by 9% to 5.7Mt from 6Mt.
Loma Negra's performance follows a general reduction in the construction sector in Argentina, where the construction index (ISAC) fell by 3.2% in 2012. Loma Negra has confirmed that its results were affected by the acquisition of a 35% stake in Paraguay's Cementos Yguazu at cost of US$19m. Camargo Correa holds a 70% stake in Yguazu, with 30% belonging to Concret Mix.
Spain: Cementos Molins has sold 10.61% in its Argentina-based unit Cementos Avellaneda to Votorantim Europe for Euro45.2m. Following the deal Cementos Molins retains 51% in the company and Votorantim Europe, part of Brazilian group Votorantim, is holds 49%. The Spanish firm also transferred a 12.61% stake in its Uruguayan-based unit Cementos Artigas to Votorantim Europe for Euro19m, keeping 49% in the subsidiary and its partner raised its stake to 51%.
Argentina: Loesche, the German producer of vertical roller mills for the cement industry, has been awarded a contract by InterCement in Argentina for the supply of a solid fuel mill for its cement plant in Barker, Argentina.
The Loesche LM 35.3 D mill will be used for InterCement's Barker Coal project and will be used to replace natural gas in the kiln. The solid fuel dry-grinding plant will be designed for the grinding of coal and petcoke with product rates of 45t/hr for coal and 30t/hr for petcoke respectively. The mill's main drive power rating will be 960kW.
Besides the mill, the order comprises the complete machinery of the grinding plant in between the raw coal storage and the pulverised fuel dosification area. Electrical equipment and automation systems as well as the steel structures for buildings will be delivered by Loesche. Complete delivery is scheduled for the second half of 2012.
New capacity for Cementos Avellaneda
14 February 2012Argentina: Cementos Avellaneda has dedicated a new 2.5Mt/yr cement plant at Olavarria, where it has invested US$85m, with the aim of meeting growing demand in Argentina. Cement sales increased to 11.6Mt in 2011, an 11% rise compared to sales in 2010. Demand in 2003 was just 6.5Mt.