Displaying items by tag: Cemex
Competition and Markets Authority (CMA) approves Breedon Group’s divestments as part of Cemex deal
01 December 2020UK: The Competition and Markets Authority (CMA) has accepted Breedon Group’s proposed divestments as part of its acquisition of certain assets from Cemex subsidiary Cemex Investments. The agreement will see the divestment of 14 sites - including a cement terminal, two quarries and 10 ready-mix plants - to Tillicoultry Quarries.
The building materials producer said that it “notes the announcement today by the CMA that it has accepted Breedon's undertakings in lieu of a reference to a Phase 2 investigation in respect of its acquisition of certain assets from Cemex Investments Limited.”
Third quarter 2020 update for the major cement producers
11 November 20202020 has been a year like no other and this clearly shows in the financial results of the major cement producers so far.
The first jolt is that several major Chinese cement producers have seen their sales fall. Following a tough first quarter due to coronavirus, the Chinese industry then overcame floods in the summer, to eventually report a decrease in cement output of 1.1% year-on-year to 1.68Bnt in the first nine months of 2020. The world’s largest cement producer, CNBM, reported a slightly smaller drop in sales year-on-year in the first nine months of 2020. This relatively small fall, just below 1%, may be due to CNBM’s size and diversity of business interests. Other large Chinese producers have noted bigger losses, such as Huaxin Cement’s 9% sales decline to US$3.04bn and Jidong Cement’s 5% sales fall to US$3.8bn. However, Anhui Conch actually saw a 12% rise in sales to US$18.7bn.
Graph 1: Sales revenue from selected cement producers, Q1 - 3 2020. Source: Company reports.
Graph 2: Cement sales volumes from selected cement producers, Q1 - 3 2020. Source: Company reports.
LafargeHolcim’s sales look worse in Graph 1 than they really are because the group was busy divesting assets in 2019. Its net sales fell by 7.9% on a like-for-like basis to US$18.7bn in the first nine months of 2020, a rate of change similar to HeidelbergCement’s. Being a properly multinational building materials producer brings mixed benefits given that these companies have suffered from coronavirus-related lockdowns in different times in different places but they have also been able to hedge themselves from this effect through their many locations. In the third quarter of 2020, for example, LafargeHolcim was reporting recovering cement sales in its Asia-Pacific, Latin America and western/central parts of its Europe regions but problems in North America. Again, HeidelbergCement noted a similar picture with cement deliveries up in its Africa-Eastern Mediterranean Basin Group area, stable in Northern and Eastern Europe-Central Asia and down elsewhere. How the latest round of public health-related lockdowns in Europe round off a bad year remains to be seen.
The other more regional producers are noteworthy particularly due to their different geographical distribution. Cemex has seen a lower fall in sales revenue and cement sales volumes so far in 2020, possibly due to its greater presence in North America. What happens in the fourth quarter is uncertain at best, with US coronavirus cases rising and the Portland Cement Association (PCA) expecting a small decline in cement consumption overall in 2020. Along similar lines, Buzzi Unicem appears to have benefitted from its strong presence in Germany and the US, leading it to report a below 1% drop in sales revenue so far in 2020, the lowest of the decreases reported here for the western multinational cement companies.
Looking more widely, UltraTech Cement, India’s largest producer, had to contend with a near complete government-mandated plant shutdown in late March 2021. The figures presented here are calculated for comparison with other companies around the world due to the difference between the standard calendar financial year (January to December) and the Indian financial year (April to March). However, they suggest that Ultratech Cement suffered a 14% fall in sales to US$3.9bn and an 8% decline in sales volumes to 56Mt, among the worst decline of all the companies featured here. This is unsurprising given that UltraTech mostly operates in one country. Sure enough it bounced back in its second quarter (June – September 2020) with jumps in revenue, earnings and volumes.
Finally, for a view of a region that hasn’t had to face coronavirus-related economic disruption of anything like the same scale, Dangote Cement has reported solid growth so far in 2020, with rises in sales and volumes both above 5%. Economic problems at home in Nigeria have seen relatively higher growth elsewhere in Africa in recent years but now the pendulum has swung back home again. The big news has been that the company has pushed ahead with plans to turn Nigeria into a cement export hub, with a maiden shipment of clinker from Nigeria to Senegal in June 2020. The vision behind this has expanded from making Nigeria self-sufficient in cement from a few years ago into making the entirety of West and Central Africa cement and clinker ‘independent.’
The big news internationally this week was of the reported effectiveness of a Covid-19 vaccine in early trials by Pfizer and BioNTech. It might not yet make it into people’s arms at scale but it shows that the vaccine appears to work and that others in development and testing may do too. Building material manufacturer share prices didn’t rally as much as airlines or cinema chains on the news, construction has carried on after all, but this is a positive sign that normality for both health and wealth is on the way back at some point in 2021. One point to consider, given the wide regional variation with the economic effects of coronavirus, is what effect a disjointed global rollout of a vaccine or vaccines might have. A building material manufacturer dependent on a region that stamps out the virus later than other places might face an economic penalty. Recovery seems likely in 2021 but it isn’t guaranteed and the implications of the coronavirus crisis seem set to persist for a while yet. Here’s hoping for a different outlook at this point in 2021.
Francisco Aguilera Mendoza appointed as head of Trinidad Cement
11 November 2020Trinidad & Tobago: Trinidad Cement has appointed Francisco Aguilera Mendoza as its chief executive officer (CEO) with effect from 1 December 2020. He succeeds Joe Luis Seijo Gonzalez. Aguilera Mendoza currently serves as deputy chairman and is a member of the board of directors of the company. He will continue in both of these roles.
Seijo Gonzalez has been in post since mid-2015. He will take up a new post with parent company Cemex.
Cemex USA partners with Membrane Technology & Research for government-funded Balcones cement plant carbon capture study
10 November 2020US: The Department of Energy has granted Cemex funding to “research and develop innovative carbon capture technology” at its Balcones, Texas cement plant. The company says that this will partly fund an 18-month feasibility study of partner company Membrane Technology & Research’s membrane carbon capture product at the plant. It says that, if successful, the study will be “an important advancement towards Cemex’s ambition to deliver net-zero carbon dioxide (CO2) concrete globally by 2050.”
USA president Jaime Muguiro said, “At Cemex, sustainability is embedded in our operations and we are consistently looking for opportunities to reduce our carbon footprint. We strive to develop and gradually adapt new technology which will help us achieve our ambition to deliver net-zero CO2 concrete to all of our customers. With this grant, we will be able to leverage our expertise to define the feasibility of implementing the membrane carbon capture technology in a cost-effective manner.”
Membrane Technology & Research has supplied membrane-based separation systems to the petrochemical, natural gas, and refining industries since 1992. Vice President of Technology Tim Merkel said, “Cement plant emissions are a good target for the CO2 capture membrane technology that we’ve been developing with Department of Energy support.” He added, “We look forward to working with Cemex on this exciting project to confirm that our technology can capture cement plant emissions at a minimal cost.”
UK: Breedon Group says that it has agreed to sell 14 sites to Tillicoultry Quarries for Euro13.5m. The sale includes a cement terminal and two quarries in Scotland, and 10 ready-mix plants and an asphalt plant in England. Breedon says it is making the divestment in order to meet the concerns of the Competition and Markets Authority (CMA) with regard to its takeover of part of Cemex UK’s ready-mix and aggregates operations. Once completed the group expects to be able to finalise its integration of the remaining assets acquired from Cemex into its existing business.
Chief executive officer (CEO) Pat Ward said, "We are very pleased with the outcome of this process and believe it is in the interests all stakeholders. It allows Breedon to realise fair value for the assets disposed of, which, together with the people employed in them, will be in good hands under new ownership by Tillicoultry Quarries."
Cemex UK invests Euro0.65m in rail transport in 2020
05 November 2020UK: Cemex UK has invested around Euro0.65m in its UK rail transport network between 1 January 2020 and 31 October 2020, upgrading the Crawley, Cambridge, Dove Holes, Salford, Selby and Sheffield railheads. The company spent Euro0.44m on the Dove Holes railhead upgrade, “extending the rail loading wall to increase the shovel loading and storage capacity and installing track working modifications to provide more flexibility to operations” at the site in Derbyshire. It said that the investments are “part of a rolling four-year development programme, with plans in place to spend similar amounts each year.” This will include further upgrades to the Sheffield and Selby railheads in 2021. The company said that the aim is “to increase safety standards and reliability while providing opportunities to grow and enhance service levels.”
David Hart, Cemex’s Supply Chain Director for UK & France, said, “As a result of the investment into our rail network this year we have been able to grow volumes and make our service more reliable, which in turn has halved our unplanned outage costs and incidents. These developments will also ensure our railheads lead the industry for safety standards and are more robust. Rail is an integral part of Cemex UK’s supply chain network and we are committed to increasing our service further, capitalising on the time, capacity and efficiency benefits this form of transport offers.”
Cemex and Carbon Upcycling Technologies plan reduced-CO2 concrete with nanotechnology
03 November 2020Mexico: Cemex has signed an agreement with Canada-based Carbon Upcycling Technologies to “improve the processing of residue or by-products of industrial processes to produce nanomaterials.” Carbon Upcycling Technologies’ equipment increases the cementitious properties of residues such as fly ash and steel slag by physical processing them into nanomaterials and adding captured CO2, enabling the partnership to produce concrete additives with “greater reactivity and a lower carbon footprint” than their raw materials.
Cemex Ventures Head Gonzalo Galindo said, "This agreement with Carbon Upcycling Technologies is yet another example of our determination to deliver net-zero CO2 concrete products globally by 2050. Our roadmap to achieve this global ambition involves continuing to innovate our technology internally while continuing to seek complementary innovation outside of Cemex through investments in start-ups, consortia, and high-value collaboration agreements such as the one reached with Carbon Upcycling Technologies."
Cemex to launch Vertua concrete product worldwide
30 October 2020Mexico: Cemex plans to launch its net-zero CO2 Vertua concrete product worldwide following its release in Europe. It said that customers in several European countries are using Vertua in infrastructure projects and climate-friendly building projects.
“We believe that climate change is one of the biggest challenges of our time, and we are committed to doing our part to address it. Vertua is clear evidence that we can transition to a carbon-neutral economy, where concrete is an essential component in the development of climate-friendly urban projects, sustainable buildings, and resilient infrastructure,” said Fernando A Gonzalez, chief executive officer (CEO) of Cemex.
Vertua uses a geopolymer binder solution created by Cemex’s Research and Development Center in Switzerland. This solution has a reduced carbon footprint of up to 70%, The compensation of the remaining CO2 is achieved by participating in reforestation projects, among other initiatives.
Cemex Latam Holdings reports nine-month results
29 October 2020Colombia: Cemex subsidiary Cemex Latam Holdings (CLH) recorded net sales of US$571m in the first nine months of 2020 were down by 24% year-on-year from US$752m in the corresponding period of 2019. Operating earnings fell by 14% to US$69.0m from US$87.0m, while consolidated cement volumes fell by 20% to 3.92Mt from 4.89Mt.
Jesus Gonzalez, chief executive officer (CEO) of CLH said, “Our operations could run relatively normally during the third quarter in Colombia, Guatemala, Nicaragua and El Salvador, while restrictions impacted in Panama and to a lesser degree in Costa Rica.” He added that the company improved its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) by 19% on a like-for-like basis to US$51m in the third quarter of 2020.
Cemex reports 4% nine-month sales fall so far in 2020
28 October 2020Mexico: Cemex’s net sales in the first nine months of 2020 were US$9.43bn, down by 4% year-on-year from US$9.87bn in the corresponding period of 2019. Operating earnings before interest, taxation, depreciation and amortisation (EBITDA) was US$1.82bn, in line with the first nine months of 2019. Cement volumes fell by 2% to 46.2Mt from 47.2Mt. The group said that sales volumes increased in most regions in the third quarter of 2020 as economies began to reopen following the Covid-19 lockdown.
Fernando A González, the chief executive officer (CEO) of Cemex said, “We are pleased with our performance in the third quarter in which all regions participated in earnings recovery. Indeed, during the quarter, we experienced EBITDA recovery from the second quarter decline, due to Covid-19, as well as strong year-over-year growth. Operation Resilience played a key role in this performance.”