Displaying items by tag: Cementos Argos
Procemcol opens cement plant in Sogamoso
15 September 2016Colombia: Procemcol has opened its 0.24Mt/yr Productora de Cemento SAS cement plant in Sogamoso. The project had an investment of US$10.2m and it will create 65 jobs, according to the El Tiempo newspaper. Sogamoso also has two other cement plants, owned by Cementos Argos and Cementos del Oriente, which are upgrading their equipment.
Colombia/Thailand: Cementos Argos has held its position in the Dow Jones Sustainability Index (DJSI) for the fourth consecutive year. Cementos Argos was featured as the most sustainable cement company in the world after obtaining the best score in the construction materials sector. The Colombia-based materials producer was listed along with Thailand’s Siam Cement.
"The permanence in this index confirms our business model, in which we start with sustainability and innovation as pillars of the strategy to create value for our customers, shareholders, communities, employees, and other stakeholders,” said Juan Esteban Calle, CEO of Cementos Argos.
Argos obtained the best score among the following variables: Biodiversity, Operational Eco efficiency, Water related risks, Social Reporting, Labour Practice Indicators and Human Rights, Tax Strategy, Corporate Citizenship and Philanthropy, Human Talent Development and Talent Attraction and retention. In addition to being included in the Global Index, Cementos Argos was recognised in Emerging Markets for the fourth consecutive year.
Each year about 2500 global companies, listed on the stock exchange, belonging to about 59 economic sectors, are invited to participate in the DJSI.
Argos lowers stake in Panama
31 August 2016Panama: Cementos Argos has sold a 20% share in its Panamanian subsidiary to the Panama-based real estate investment firm Grupo Provivienda for US$126m. The sale of its stake will leave Cementos Argos with 78.57% of shares in the company, an equivalent of US$700m, while the remaining 1.43% will remain under control of minority shareholders.
Overall, the Panamanian transaction is part of the company's US$350m divestment plan that will finance its purchase of the Essroc cement plant at Martinsburg, West Virginia, USA. The Martinsburg plant is being sold as part of divestments resulting from HeidelbergCement’s ongoing acquisition of Essroc’s parent firm Italcementi.
North with Cementos Argos
23 August 2016Cementos Argos’ deal to buy the Martinsburg cement plant in West Virginia from HeidelbergCement makes a lot of sense. After all, the Colombian-based cement producer has seen its US cement assets perform well so far in 2016 with a cement sales volumes increase of 29% year-on-year to 1.99Mt and an overall sales revenue boost of 19.7% to US$700m. Compare that to the challenges the company has faced so far this year on its home turf in Colombia. There, cement sales volumes fell by 15.5% to 2.47Mt and sales revenue fell slightly to US$465m.
Argos has picked up the Martinsburg cement plant and eight cement terminals in the surrounding states for US$660m. The sale was mandated by the US Federal Trade Commission as one of the conditions of HeidelbergCement’s purchase of Italcementi including its US subsidiary Essroc, the current owner of the plant.
Symbolically, the purchase takes Argos right up to the Mason–Dixon line, the old survey line sometimes used to describe the dividing line between the so-called ‘north’ and ‘south’ in the US. The cement plant is south of the line in West Virginia but some of the cement terminals are firmly in the north-east. Outside of the company’s home turf in Colombia it has a maritime presence around the Gulf of Mexico. Although Martinsburg is inland, the new terminals in Norfolk, Virginia and Baltimore push Argos’ distribution network up the east coast. This could potentially push Argos into conflict with the subject of last week’s column, McInnis Cement, a Canadian cement plant under construction with eventual aspirations to sell its cement to the US.
Back in the US specifically the new plant will bring Argos’ total of integrated cement plants to four, joining Roberta in Alabama, Newberry in Florida and Harleyville in South Carolina. All together the producer will have a production capacity of around 6Mt/yr in the US following the acquisition. Back in 2014 when Global Cement visited Martinsburg the plant was distributing its cement about 60:40 via truck and rail. At that time the plant was shifting cement in an area from central Ohio eastwards to western Pennsylvania and south to southern Virginia, as well as in North Carolina.
Argos has paid US$300/t for Martinsburg’s production capacity of 2.2Mt/yr. As ever determining the cost of the terminals proves difficult. This compares to the US$267t/yr that Grupo Cementos de Chihuahua (GCC) paid to pick up two plants from Cemex in May 2016 or the US$375/t that Summit Materials paid Lafarge for a cement plant and seven terminals in July 2015. Previous Argos purchases in the US were around US$220 – 250/t for deals with Lafarge and Vulcan in 2011 and 2014 respectively. It is also worth considering that Essroc upgraded Martinsburg significantly in 2010 to a dry-process kiln and that the site has a waste-to-solid-fuel plant from Entsorga due to become operational in 2017.
The purchase of Martinsburg by Argos seems like an obvious move. It predicts a compound annual growth rate of 5.4% for cement consumption in the American states it operates within between 2016 and 2020. However, this may be optimistic given that the Portland Cement Association’s chief economist Ed Sullivan has downgraded his consumption forecasts for the US as a whole to 3.4% from 5% as he waits for the recovery to really kick in. The southern US states have also recovered faster since a low in 2009 than the northeastern ones. The purchase marks a new chapter in Cementos Argos’ expansion strategy
US: HeidelbergCement, through its subsidiaries Essroc and Lehigh Hanson, has entered into a definitive agreement with Argos USA, a subsidiary of Cementos Argos, to sell its Martinsburg, West Virginia cement plant and eight related terminals. The disposal was required by the Federal Trade Commission (FTC) to address competition concerns arising from its acquisition of Italcementi. The agreement is subject to the approval of the FTC and other customary closing conditions. The transaction purchase price is US$660m on a cash and debt-free basis. HeidelbergCement expects the transaction to close in the fourth quarter of 2016.
“With the disposal of the Martinsburg plant we have successfully finalised our disposal programme in the context of the Italcementi acquisition,” said Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. “Together with the disposals of the non-core assets and the Belgium assets of Italcementi we have exceeded our Euro1bn target on disposal proceeds and thereby further improved the net financial position of HeidelbergCement.”
Cementos Argos net income rises by 27% to US$96.5m
18 August 2016Colombia: Cementos Argos’ net income has risen by 27% year-on-year to US$96.5m in the first half of 2016 from US$75.9m in the same period of 2015. Its revenue rose by 26.5% to US$1.51bn from US$1.20bn and its cement sales volumes rose by 2% to 6.98Mt from 6.84Mt. The company’s growth in revenue was driven by growing sales in the US.
“The disciplined execution of our internationalisation strategy has allowed us to continue obtaining good results, especially in markets such as the US, a country that keeps representing opportunities for Argos’s sustainable growth and that, added to our other geographies’ performance, enables us to continue contributing to the development of the countries and territories where we operate, through the construction of roads, bridges, homes and other projects in which the dreams of millions of people are materialized,” said Juan Esteban Calle, the CEO of Cementos Argos.
By region the cement producer reported that sales volumes fell by 14.8% to 2.92Mt in Colombia along with a slight fall in sales revenue. In the US its cement sales volumes grew by 29% to 2Mt and its sales revenue rose by 19.7% to US$700m. In the company’s Caribbean and Central American division its cement sales volumes rose by 6% to 2.52Mt and its sales revenue rose by 3.7% to US$283m.
Cementos Argos to close San Gil plant
17 August 2016Colombia: Cementos Argos plans to close its oil well cement production plant at San Gil in Santander. The closure follows falling demand for this type of cement caused by falling global oil prices. The National Construction Material Industry Workers' trade union Sutimac has requested that the cement producer transfer its 75 employees at the San Gil plant to other parts of the business, according to the El Colombiano newspaper. The union hopes that Cementos Argos will repeat its recent transfer of workers from the now-closed Sabanagrande, Atlantico factory to its plants in Cartagena, Tolu and Antioquia.
Cement production expected to increase in Colombia
21 June 2016Colombia: Cement producers are reacting to a boom in infrastructure projects in Colombia by increasing production and upgrading existing production capacity. Demand for ordinary Portland cement is expected to grow in the short-term due to the government's 4G roads programme and the growth of the housing sector. Current expansion projects in the country include Cementos Argos’ new 1.4Mt/yr plant at Sogamoso in Boyaca and Cemex’s 1Mt/yr cement plant at Maceo in Antioquia.
Cementos Argos revenue rises by 34% to US$740m
16 May 2016Colombia: Cementos Argos has reported that its revenue rose by 34% year-on-year to US$740m in the first quarter of 2016 from US$553m in the same period in 2015. Its net income rose by 27% to US$33.4m from US$26.4m. The company attributed the gains to ‘healthy’ sales volumes in all of its markets with a particular emphasis in the US.
By region Cementos Argos saw its cement sales volumes rise by 47.3% to 935,000t in the US led by growth in the Carolinas, Alabama and Georgia. In Colombia its cement volumes fell by 17.1% to 1.48Mt due to lower growth in the central region of the country. Despite this the company increased its revenue in this territory in the quarter. In its Caribbean and Central American region the cement producer reported a rise of 14.4% to 1.11Mt in its cement sales volumes.
Colombia: Cementos Argos has launched energy saving measures that could contribute close to 10% of the energy saving goals of the Colombian national government. The cement producer has joined the energy savings campaign promoted by the government by taking additional measures at its plants and offices that can help conserve this important resource.
Cementos Argos intends to deliver excess energy from its self-generation plants of about 30MW to the domestic electrical network and limit the use of its 16 cement mills during peak hours, which will represent savings of about 38MW. In addition it will maximize its use of flexitime and day work to limit the use of electrical energy at its administrative offices. With these measures the company hopes to save the equivalent of the consumption of close to 100,000 homes per day and of close to 130,000 homes during peak hours.
“We are convinced that by joining our efforts, we can multiply results. That is why, if all companies and families put their best foot forward, we can all contribute to energy saving and create habits that allow us to preserve resources that are fundamental to our planet’s sustainability,” said Jorge Mario Velásquez, CEO of Cementos Argos.