Displaying items by tag: Brazil

Brazil: France’s Vicat Group has completed its purchase of a 65% stake in Cimento Planalto (Ciplan). The transaction was structured through a reserved capital increase of Euro295m. Proceeds will be used to settle Ciplan's existing debt. Ciplan operates a 3.2Mt/yr integrated plant at Sobradinho in Bahia near to Brasilia. It also runs nine ready-mixed concrete plants and five aggregates quarries.

Brazil: Brennand Group plans to invest around US$190m toward building a new cement plant at Ponta Grossa in Paraná state. A provisional building license has been awarded and the company is now waiting on further licenses before construction work can begin according to aRede. The new plant will be build by Brennand Group’s subsidiary Mineracao Delta do Paraná and the plant will operate under the Companhia de Cimento do Paraná (CPR) name.

Funding for plant will come from Brennand Group’s sale of a 50% stake in a subsidiary to Italy’s Buzzi Unicem in 2018.

Brazil: Paulo Camillo, the president of SNIC, forecasts that cement sales will rise by 3% in 2019. If he is correct then it will be the first rise in four years for the local industry. Total cement sales fell by 1.1% year-on-year to 52.8Mt in 2018 from 53.4Mt in 2017. Particular falls in sales were noted in the north and northeast of the country, although exports rose by 14.3% to 88,000t. A truck drivers strike and general economic uncertainty reduced the effects of a positive first half to the year. The cement association also said that freight, fuels and electricity costs grew ‘significantly’ in 2018. However, it is optimistic that new legislation support co-processing of alternative fuels will partly help to alleviate this situation.

Brazil: Walter Dissinger has resigned from Votorantim Cimentos. He will be succeeded as chief executive officer (CEO) by Marcelo Castelli on 1 February 2019. Dissinger will assist the succession in early 2019.

Dissinger has led the company for over five years. He has left to seek new ‘challenges.’ Votorantim said that the years during which the company was led by Dissinger were marked by client-focused management, innovation and a digital transformation. Among other projects, Dissinger played a role in the creation of the first loyalty platform within the construction materials industry, Juntos Somos Mais.

Castelli is an executive with a career of over 31 years. In 1997 he started working at VCP (Votorantim Celulose e Papel). Since then, he has held several executive positions and coordinated the merger of Aracruz and VCP, which created Fibria. At the company, Castelli was the executive officer of different areas, such as Forestry, Paper, Strategy, Supply, and since July 2011 he has been the company’s CEO.

Brazil: Votorantim’s construction materials joint venture has started operation. The scheme, Juntos Somos Mais, is collaboration between Votorantim Cimentos, Tigre Participações and Gerdau Aços Longos. Votorantim holds a 45% share of the scheme. The joint venture will expand Votorantim’s Juntos Somos + scheme, which has been running since 2014. To date it operates in over 40,000 stores with over 60,000 registered participants.

Uruguay: Cement sales rose by 4.6% year-on-year to 0.60Mt in the first nine months of 2018 from 0.57Mt in the same period in 2018. Exports and internal sales both rose by similar ratios to 87,700t and 0.51Mt respectively, according to data from the Chamber of Industries of Uruguay. Despite overall growth, exports in the third quarter of 2018 nearly halved. Most exports were sent to Paraguay, followed by Argentina and Brazil.

The long expected move by a Chinese cement producer outside of East Asia took a step closer this week with the news that Taiwan Cement is negotiating with OYAK Cement over a joint venture in Turkey. Taiwan Cement says it is prepared to invest up to US$1.1bn in the subsidiary that will operate OYAK Cement’s business in Turkey. In its press release Taiwan Cement said, bluntly, that government peak production limits and market saturation in China had forced it to expand internationally.

This isn’t Taiwan Cement’s first flirtation with a Turkish cement producer. Back in June 2018 local press reported that it had signed a memorandum of understanding and a confidentiality clause with Sanko Holding about potential investment. However, the timing is curious this time because almost simultaneously Brazil’s InterCement announced that it was selling its operations in Portugal and Cape Verde to OYAK Cement. This sale alone deserves more attention given that it is the third by a Brazilian producer since September 2018 but that’s a discussion for another week. Back on OYAK Cement, whilst nothing is certain at this stage, a pledge of US$1.1bn from a foreign investor would certainly come in handy helping to raise the money at the Turkish company.

Whoever, if anybody, Taiwan Cement ends up pairing up with, the level of the investment suggests a multi-plant move. Indeed, the suggested OYAK Cement deal involves a 40% share in 13 integrated cement plants in Turkey with a production capacity of around 12Mt/yr or a 16% local market share. This isn’t far off the regular international price of US$200/t for integrated production capacity.

For a Chinese company to choose Turkey is resonant historically because it is towards the western end of the Silk Road. Marco Polo, for example, travelled from Venice to China via the territory of modern-day Turkey. The modern day version, the Belt and Road Initiative, seeks to evoke this trade route as China attempts to expand internationally.

Pertinent to the cement industry, both China and Turkey are both major exporters. Turkey is the bigger exporter by proportion of production, at 10% in 2017. Both countries were in the top five exporters to the US in 2017 with 2Mt from China and 1.4Mt from Turkey. The commonly accepted wisdom is that the Chinese industry faces major hurdles to exporting its overcapacity. Yet its production base is so large, 15 times larger than Turkey’s, that the little clinker and cement it has the infrastructure to export is still significant. It’s interesting that a major Chinese producer seeking to overcome structural and market obstacles to its expansion at home is targeting a major exporting nation. Typically, when a foreign cement producer buys local companies, one strategy is to use the new assets to ‘naturalise’ its clinker imports as ‘local’ product. Given Turkey’s already large export market this seems unlikely in this case.

The highly public nature of Taiwan Cement’s latest attempt to strike it lucky in Turkey smacks of bolstering investor confidence as much as closing the deal. Normally, this kind of thing gets announced once everything has been agreed, possibly bar the regulatory approval. Putting some money up front may make Taiwan Cement seem serious but OYAK Cement also stands to benefit from its acquisition of the former-Cimpor assets in Portugal and Cape Verde, since it gives it a toehold within the European Union (EU). This one could go either way.

Brazil/Portugal/Cape Verde/Turkey: Brazil’s InterCement has sold its operations in Portugal and Cape Verde to Turkey’s OYAK Cement for an undisclosed amount. The sale includes three integrated cement plants and two mills, with a total cement production capacity of 9.1Mt/yr, 46 concrete units, two dry mortar units, 17 quarries and a cement bagging plant. The completion of the agreement is dependent on regulatory approval.

InterCement, part of Camargo Corrêa group, purchased a majority stake in Portugal’s Cimpor in 2012, including assets in Portugal and Cape Verde. It says it will allocate a portion of the net proceeds from the sale to reduce its debts. Following completion of the transaction the Brazilian building materials company intends to focus its cement business in South America and Africa. In these regions it holds 39Mt/yr of installed production capacity at 35 cement plants.

Brazil: Walter Dissinger, the chief executive officer of Votorantim Cimentos, says that company’s diverse geographical spread and its products protected it from turbulent markets, especially at home in Brazil since 2015. Dissinger made the comments in an interview to the Valor Econômico newspaper ahead of a company meeting to plan its strategy for the next five years. He forecast that the local cement market is likely to decline for the fourth consecutive year in 2018, with a drop in consumption of 2%.

He mentioned expansion plans in the US and upgrade projects in Argentina. Six new mortar plants are also planned over the next four years with an investment of US$30m. These units will generally be built next to existing integrated cement plants. The company is expanding its limestone business with an investment of US$54m. Dissinger added that the company’s Nobres plant in Mato Grosso is making more revenue from limestone products than from cement. The company is also cutting fuel costs by replacing petcoke imports from the US with co-processing refuse derived fuels and exploring biofuel options.

Brazil: France’s Vicat Group has acquired a majority share in Cimento Planalto (Ciplan). It has signed a binding agreement to buy a 65% share for Euro290m through a reserved capital increase. Ciplan will use the proceeds of the share to settle the ‘vast majority’ of its existing debt. Vicat noted that the transaction will be debt funded and its closing is subject to the fulfilment of ‘certain’ conditions.

Ciplan operates a 3.2Mt/yr integrated plant at Sobradinho in Bahia near to Brasilia. It also runs nine ready-mixed concrete plants and five aggregates quarries.

Vicat says that this acquisition is intended to support its targeted external growth and geographical diversification strategy. In order to ‘capture’ the Brazilian market the company plans to leverage an industrial asset base, strong brand awareness, abundant quarry reserves and a competitive position in its local markets.