Displaying items by tag: Boral
Boral applies for new grinding plant
27 July 2017Australia: Boral Cement has ¬applied to the Environment Protection Authority (EPA) to run a 1.3Mt/yr cement grinding plant at Geelong in Melbourne, Victoria for 24 hours per day. The proposed facility would enable the company to unload from ships to be delivered to the production site via covered belt conveyors.
“The new site is directly adjacent to the wharf complex, which would allow efficient unloading of clinker from ships,” a Boral spokesman said when the company first raised the concept in late 2016. “Importantly, the site is also surrounded by other large industrial premises, meaning it is well separated and largely hidden from residential areas.” Boral has also proposed constructing new equipment, including an enclosed ball mill and covered store, outdoor product stockpiles and clinker unloading and delivery infrastructure.
EPA development assessments manager Tim Faragher said that Boral Cement required a works approval before starting any construction works on the clinker grinding mill. “Work approvals are ¬required for industrial and waste management activities that have the potential for ¬significant environmental impact,” said Faragher. The EPA now has four months to make a decision on Boral’s application.
Boral completes acquisition of Headwaters
09 May 2017US: Boral has completed its acquisition of Headwaters, a leading building products manufacturer and fly ash marketer in North America. Boral USA and Headwaters will form a new division to be named Boral North America, which will be headquartered in Atlanta, Georgia, the location of Boral’s current US headquarters.
US: The Federal Trade Commission (FTC) has approved Boral’s proposed acquisition of Headwaters. Boral expects that the transaction will be completed within two business days. The transaction is worth US$2.6bn. Following the purchase Boral USA and Headwaters will form a new division to be named Boral North America.
“We have been eagerly awaiting the approval from US regulators to allow us to complete the acquisition and to deliver on our strategy. In the meantime, we have continued to develop our integration plans and we are confident in our ability to deliver on the synergy targets we established when the transaction was announced,” said Boral’s chief executive officer and managing director Mike Kane. He added that Boral North America will focus on building products and fly ash.
Australia: The Construction, Forestry, Mining and Energy Union (CFMEU) has expressed concern over contaminated cement produced at Adelaide Brighton’s Birkenhead plant. Several large construction projects around Adelaide have used the contaminated cement the union has told the Australian Broadcasting Corporation (ABC) News. Adelaide Brighton says it is investigating an issue with its bulk cement that took place at the plant between 7 April and 10 April 2017.
Several companies including Boral distributed the cement. Adelaide Brighton says it has reviewed the situation and taken action subsequently to minimise the effect. This has included disposing of a large volume of cement.
Focus on Australia
01 March 2017A couple of news stories from Australia this week give us a reason to look at the country’s cement industry. All the main producers have now released their preliminary reports for the second half of 2016, with the exception of LafargeHolcim, one of the joint owners of Cement Australia. Essentially, the picture is mixed from two of the three main producers - Adelaide Brighton and Boral - with falling sales revenues but growing sales in the east. In mid-2016 the Australian Industry Group Construction Outlook survey predicted that the infrastructure, commercial and residential sectors would start to recover in the second half of 2016 leading to an upturn in 2017, although falling mining and heavy engineering construction was expected to continue to contrast in 2016.
The local market is split in clinker production terms with most of the producers (relatively) concentrated in the south and east of the country. Cement Australia leads in cement production capacity with 2.8Mt/yr or 42% of the country's production base from two integrated plants. Adelaide Brighton then comes next with 2.3Mt/yr or 35% from three plants and Boral follows with 1.5Mt/yr from one plant since the closure of clinker production at its Waum Ponds Plant in Victoria in 2012. The cement grinding plant situation is more varied with Adelaide Brighton's Northern Cement plant in the Northern Territory and BGC Cement plant in Western Australia amongst the country's 12 units, according to Global Cement Directory 2017 data. This total also includes a few slag cement grinding plants such as the Australian Steel Mill Services' plant and the Cement Australia-Ecocem plant that are both in Port Kembla.
Adelaide Brighton reported that its sales volumes of cement were down in 2016 due to major declines in Western Australia and the Northern Territory. Here, volumes had fallen by around 20% year-on-year. Unfortunately, a revival in southern and eastern Australia in the second half of the year wasn’t enough to stem the tide of poor sales. Power supply issues in Southern Australia also caused disruptions at both the company’s own plants and at those of its customers, leading to reduced sales. The cement producer also said that its import volumes had fallen by 2Mt due to lower sales in Western Australia and the Northern Territory and that import costs had increased due to a drop in the value of the Australian Dollar. Adelaide Brighton's reliance on imports is interesting given that this week Semen Padang, a subsidiary of Semen Indonesia, announced that it had started exporting cement to Australia.
Meanwhile, Boral Australia said that its cement revenue had fallen by 3% year-on-year to US$95.3m for its first half to 31 December 2016. However, cement sales volumes grew by 3% driven by higher direct sales. It also noted that competition and energy costs had increased in the period. HeidelbergCement, the other joint owner of Cement Australia, along with LafargeHolcim, said that its operations in Australia had delivered solid development due to strong residential construction demand and strong demand on the East Coast that compensated for a weaker mining sector. LafargeHolcim confirmed this in its half-year report adding that road infrastructure projects had also helped. It also noted that benefits to its adjusted operating earnings before interest, taxation, depreciation and amortisation (EBITDA) had been accrued through energy savings and lower clinker import costs.
LafargeHolcim's financial results for 2016 are due later this week on 2 March 2017. Potentially they have big implications for the Australian cement market given the rumours that were swirling around a year ago about a potential divestment. Although the signs so far suggest that its subsidiary Cement Australia did okay in 2016, pressure elsewhere in the group might prompt a sale of its share. We discussed this issue in December 2015 but since then Adelaide Brighton publicly said it was working on an acquisition plan, including strategy on how to cope with any potential competition issues. All eyes will be on LafargeHolcim later in the week.
Australia: Boral’s revenue from its cement business fell by 4% year-on-year to US$118m in the first half of its financial year, which ended on 31 December 2016. Total cement sales volumes rose by 3%. The building materials producer blamed the fall in sales revenue on low wholesale clinker volumes due to higher direct sales volumes of cement. Its sales prices for cement grew by 1% for bulk cement and 3% for packaged products. It added that, although competition pressure and energy costs are rising, its cost improvement plans are helping.
Overall, Boral’s sales revenue fell by 5% to US$1.6bn from US$1.68bn. However, its profit after tax rose by 9% to US$114m from US$105m. It attributed this to a ‘solid’ performance in Australia combined with good earnings from Boral USA and USG Boral.
Headwaters shareholders approve acquisition by Boral
06 February 2017US: The shareholders of Headwaters have approved the acquisition of the company by Australia’s Boral. Over 98% of the votes cast were in favour of the deal. Boral will now continue to seek regulatory approval for the purchase and it plans to complete the deal by mid-2017. Headwaters’ Construction Materials division is one of the largest marketers of fly ash in the US.
Boral to buy Headwaters for US$2.6bn
21 November 2016US: Boral has agreed to buy Headwaters, a manufacturer of building products, for US$2.6bn subject to shareholder and regulatory approval. Headwaters’ Construction Materials division delivers around US$370m/yr of revenue and is one of the largest marketers of fly ash in the US. Boral has described the acquisition as ‘transformative’ as it will significantly boost its US division, Boral USA.
“The businesses of Headwaters are highly complementary with Boral’s existing US operations – in fly ash, roofing, stone and light building products. It’s this strong alignment that means we can deliver substantial value through synergies – ramping up to approximately US$100m/yr of synergies within four years of closing,” said Boral’s chief executive officer and managing director Mike Kane.
Boral’s profit rises by 8% to US$204m
25 August 2016Australia: Boral’s profit after tax has risen by 8% year-on-year to US$204m in its financial year which ended on 30 June 2016 from US$190m in the previous year. Its sales revenue fell, by 2% to US$3.28bn, but revenue from continuing operations rose slightly. Revenue from continuing operations benefitted from stronger residential activity in Australia and the US, which offset the decline in resource-based and other major project activity. The company’s earnings before interest and tax (EBIT) also rose due to operational cost improvements, lower fuel costs and some pricing gains.
“We have continued to improve our performance across our businesses in line with our strategy, managing our portfolio more efficiently and maintaining a strong balance sheet,” said CEO and managing director Mike Kane. “The continued growth in Boral’s earnings demonstrates the great work that has been done to improve our cost base, grow margins, and efficiently supply market demand, which continues to be strong in Australia and Asia, and is growing in the US.”
The group’s revenue from its cement business grew by 3% to US$231m due to a 6% increase in cement volumes due to stronger activity in New South Wales and 2% higher average prices, partially offset by lower wholesale clinker volumes due to kiln availability. Earnings also grew with cost improvement initiatives, including improved utilisation of assets and sourcing of lower cost raw materials and energy.
Boral profit grows by 23% to US$97.2m for half year
10 February 2016Australia: Boral’s profit after tax has grown by 23% year-on-year to US$97.2m in the first half of its 2016 financial year. It reported a profit of US$80m for the same period in its 2015 period. It attributed the growth to a strong residential
market and growth in New South Wales (NSW) with cost cutting, price rises and slightly higher property earnings for its construction materials and cement business. Overall revenue fell by 4% year-on-year to US$1.6bn.
“The success of the first half is underpinned by a very strong residential construction market in NSW, a solid performance in South-East Queensland, further recovery in the US and a successful growth strategy in the gypsum business in Australia and Asia,” said Boral CEO and Managing Director Mike Kane
Boral’s cement business reported a 6% rise in external revenue to US$113m. Profitability was also aided by cost cutting inititaives including improved utilisation of assets and sourcing of raw materials and energy at lower cost.