Displaying items by tag: Brazil

Brazil: Votorantim Cimentos’ net revenue grew by 22% year-on-year to US$954m in the first quarter of 2022 from US$781m in the same period in 2021. Its cement sales volumes rose by 5% to 8Mt from 7.6Mt. However, its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 57% to US$81.4m from US$189m. The group attributed its increased sales to ‘favourable price dynamics’ in Brazil, North America, Europe, Asia and Africa. However, its earnings suffered from inflation, mounting commodity and energy prices and a strong comparison base in the same period in 2021.

"The war in Europe, sanctions imposed on Russia, new lockdowns in China and bottlenecks in logistics chains continue to impact the global economy. In addition, rising interest rates and cost inflation have affected companies and markets as a whole. Faced with this challenging environment, we remained aligned with our strategy and attentive to costs, our operational excellence and our business plan in all regions," said Marcelo Castelli, Global chief executive officer of Votorantim Cimentos.

France: Vicat recorded first-quarter sales of Euro789m in 2022, up by 12% year-on-year from Euro707m in the first quarter of 2021. The group reported ‘solid’ year-on-year consolidated sales growth across all of its regions, with price rises offsetting negative volume effects. Cement sales grew by 7.4% in France, 4.1% in the rest of Europe, 18% in the US, 26% in Brazil and 8.5% in Africa. The Russian invasion of Ukraine did not manifest in any impacts on group activity in the quarter. Vicat estimates that in order to offset higher power costs it will need to raise its cement prices by 15% year-on-year in 2022 as a whole.

Group chair and chief executive officer Guy Sidos said “Vicat’s first-quarter sales performance reflects the dynamism of its markets, despite a high basis of comparison.” He continued “In a global environment providing little visibility in the short term, especially as regards energy costs, we are executing our strategy to improve our production performance, make greater use of secondary fuels and implement a pricing policy tailored to this new environment in pursuit of our operational, environmental and societal targets."

Germany: Beumer has announced its acquisition of conveying systems supplier FAM Group. The group says that the two companies complement each other ‘ideally.’ FAM Group employs 750 people in Germany, Brazil, Canada, Chile, China and India, as well as representatives elsewhere. Beumer says that the company’s ‘leading technology’ for transporting and processing minerals fits well with its own portfolio.

Brazil: The Brazilian cement market closed the first quarter of 2022 with a decline in sales year-on-year, according to data from the Brazilian National Cement Industry Association (SNIC). This was in part due to strong rains that affected parts of the country in January and February 2022. In March 2022, however, there was some recovery, with a 0.3% year-on-year increase in sales, to 5.53Mt.

Between January and March 2022, 14.8Mt of cement were shipped within Brazil, compared to 15.2Mt in the same period in 2021, a fall of 2.6%. Total sales, which include exports, totalled 14.91Mt, a 2.2% contraction compared to 15.25Mt in the same quarter of 2021.

SNIC said that the sector’s March 2022 performance had been bolstered by real estate projects, although this was not expected to continue. According to SNIC head Paulo Camillo Penna, self-construction, an important inducer of cement consumption, continues to slow down due to high unemployment

Brazil: The General Superintendence of the Administrative Council for Economic Defence (CADE) has approved CSN’s takeover deal with Holcim for the latter’s Brazilian business. The América Economía newspaper has reported that the US$1.03m deal covers five cement plants, among other assets.

Holcim has said that its Latin America region remains strategically important within its global operations.

Brazil: Votorantim Cimentos recorded a 37% year-on-year rise in its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$1.10bn in 2021. Its sales rose by 33% to US$4.71bn, while its profit more than tripled to US$2.1bn. The group’s sales grew in all of its regions. Its cement volumes totalled 37.2Mt, up by 15% from 2020 levels. Its capital expenditure (CAPEX) investments grew by 30% year-on-year to US$317m. It commissioned a new production line at its Pecém grinding plant in Brazil and continued to work on an upgrade to Cementos Artigas’ Sayago grinding plant in Uruguay, scheduled for completion in 2022. It also completed its acquisition of Spain-based Cementos Balboa.

Cement operations, logistics and adjacent businesses director Osvaldo Ayres Filho, who was serving as group CFO during 2021, said “We had a record financial performance in 2021, despite the challenging environment due to the ongoing effects of the pandemic and global inflationary pressure.” He added that the producer also made ‘significant strategic moves.’

Brazil: InterCement’s sales revenue grew by 33% year-on-year to US$1.69bn in 2021 from US$1.28bn in 2020. Its cement and clinker sales volumes rose by 6.2% to 20.1Mt from 18.9Mt. All operating regions were reported to have growing volumes. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 37% to US$470m from US$343m. The group said that, although input costs kept rising in 2021, it offset this with price increases.

Brazil: Votorantim Cimentos has appointed Bianca Nasser as its chief financial officer (CFO) and investor relations director. She succeeds Osvaldo Ayres Filho, who will remain in the company as the Director of Cement, Logistics and Adjacent Business Operations.

Nasser worked for Petrobras from 2002 to 2019, eventually becoming the Executive Manager of Corporate Finance and Treasury. She subsequently became the CFO and investor relations officer at BNDES. She is a graduate in economics from the Universidade Federal do Rio de Janeiro and holds a master’s degree in administration and finance from the Pontifical Catholic University of Rio de Janeiro.

Brazil: The Brazilian National Cement Industry Association (SNIC) has recorded cement sales of 64.7Mt by Brazilian cement producers in 2021, up by 6.6% year-on-year from 2020 levels. Home construction work, property development and infrastructure building all contributed to the rise. Capacity utilisation rose to 69% from 65% across the country’s 94Mt/yr, 91-plant cement network.

Holcim’s investors’ event last week confirmed the changes the company has been making to its sales mix. At its Capital Markets Day it revealed its commitment to expand the net sales of its Solutions & Products division to 30% of the group total by 2025. This division covers products such as roofing, mortar, precast concrete and asphalt. At the same time it is reducing the proportion of sales from its cement division. Graph 1, below, from a presentation given by chief executive officer Jans Jenisch, hints at what group may be aiming for: roughly a third of its sales from cement; a third from aggregates and ready mixed concrete; and a third from the Solutions & Products division in 2025.

Graph 1: Forecast growth of sales by Holcim’s Solutions & Products division to 2025. Source: Holcim Capital Markets Day 2021 presentations on website.

To give readers an idea of the scale of change in Holcim’s cement business since the merger with Lafarge in 2015, just look at the figures. In 2015 LafargeHolcim sold 256Mt of cement and it had a cement production capacity of 374Mt/yr. In 2020 it sold 190Mt of cement and it had a cement production capacity of 288Mt/yr. However, the ratio of sales from cement has remained consistent at just below 60%.

This all changed in January 2021 when Holcim announced it was buying roofing and building envelope producer Firestone Building Products for US$3.4bn. Instead of trimming down the business to make synergistic changes as it had been for the previous five years the group significantly changed its sales mix. As noted in ‘2021 in Cement’ in the December 2021 issue of Global Cement Magazine, Holcim remains the world’s largest non-Chinese cement producer. Yet its acquisitions in 2021 have consisted of ready-mixed concrete and aggregate companies in mature markets, and Firestone. Its divestments have been cement subsidiaries. Since 2019, and including the agreed Brazilian sale, planned to complete in 2022, the group has generated US$4.1bn in these divestments. Almost as if to reinforce this change of direction the group also switched its name to Holcim in May 2021.

Aside from the focus on expanding the scope of the Solutions & Products division over the next few years, the group said at its recent investors’ event that it wants to lead in sustainability and innovation. It also reminded investors that growth remains in building materials markets. Once Jenisch had established the potential the construction market has in the coming years it was all about so-called ‘green’ growth. On the sustainability side this includes promoting the group’s Science Based Targets initiative net-zero targets by 2050, pushing sales of its low-carbon concrete products and working on increasing the uptake of construction and demolition waste in Europe. The group has a target of reaching 25% or higher for sales of its ECOPact ready-mixed concrete product by 2025. Holcim reported Scope 1 CEM specific CO₂ net emissions of 555kgCO₂/t in 2020 and it has target of 475kgCO₂/t by 2030. This is broadly in line with its peers. Cemex has also committed to 475kgCO₂/t or lower and HeidelbergCement is currently aiming for 500kgCO₂/t or lower by 2030.

Simultaneously promoting sustainability and growth in products that release CO₂ during their manufacture is quite the balancing act for all cement producers. The way Holcim appears to be squaring this particular circle is by heading elsewhere. Back in January 2021 we asked whether Holcim would leave it with the Firestone acquisition or go further. This question has now been answered with Holcim’s intent to increase the share of its Solutions & Products to 30% by 2025. Other large cement producers don’t seem to be diversifying their sales mix at the same speed but similar strategic thinking along supply chains can be seen from the proposed buyer of LafargeHolcim Brazil, Companhia Siderúrgica Nacional (CSN) Cimentos. CSN is a steel manufacturer and buying cement assets gives it somewhere to use its slag. Fittingly, Holcim’s investors’ day ended with a night out at a museum holding an exhibition on the history of concrete. For now at least concrete looks set to remain a key part of the business.