Displaying items by tag: Cemex
Update on the Philippines
07 December 2016Construction firm DMCI Holdings announced plans this week to enter the Philippine cement market. The company intends to build one cement plant on Semirara and three cement grinding plants elsewhere – at Batangas, Iloilo and Zamboanga – to give it a national presence. DMCI’s managing director Victor Limlingan admitted to local press that his company was taking a gamble on spending US$368m in this way.
It has staked its money on the Duterte Infrastructure Plan, a scheme from the new administration that was elected in June 2016 to target US$165bn (!) towards infrastructure spending until the early 2020s. Even if a portion of this money makes it from political hyperbole to the diggers then it is likely to mean a sustained construction boom for an economy that is already growing at around 6%/yr. DCMI’s excitement was almost palpable in mid-November 2016 when it put out a press release calling for potential partners to help it benefit from the rush when it comes. Although the company did add that all the discussions were at the exploratory stage at this time because it was still awaiting bidding documents.
DMCI’s project joins six plants in various stages of planning and construction from San Miguel, Northern Cement, Eagle Cement and LafargeHolcim. In addition four existing plants are carrying out upgrades to increase their production capacity. Clearly, things are looking up for the local cement industry. DMCI follows San Miguel which announced that it was going to spend US$1bn on building five cement plants around the country in mid-2015.
In line with this kind of investment the Cement Manufacturers Association of the Philippines (CEMAP) said that cement sales had risen by 10.1% year-on-year to 20.1Mt in the first three quarters of 2016. This follows annual sales growth of 8.7% to 21.3Mt in 2014 and of 14.3% to 24Mt in 2015. CEMAP’s data for 2015 also shows that local demand overtook the country’s kiln capacity in 2014. Subsequently imports peaked to 314,000t in 2014, the highest level since 2002.
The country’s second largest producer Republic Cement, a joint venture between CRH and Aboitiz, reported sales growth similar to CEMAP’s one for the first three months of the year. LafargeHolcim, the largest producer, didn’t reveal any figures in its third quarter report but it marked the Philippines as one of its key contributors in the quarter. By contrast, Cemex noted lower growth in its third quarter report at 4% for the nine months to September 2016. It also said that the government transition following the election had slowed cement consumption, especially from infrastructure projects.
The Philippine cement industry is in the enviable position of being in a boom. The kind of problems it has to cope with includes provincial cement shortages, lobbying to increase usage of blended cements, scrutiny of prices by the government and a rise in technical smuggling. Once the new plants and upgrades start becoming operational the true nature of the market should become more apparent. At present it looks likely that DCMI gamble may turn out to be a wise one. The next question will be how many more companies want a piece of the piece too?
Cemex to meet debt reduction target in 2016
07 December 2016Mexico: Cemex says that it has made progress towards reducing its debts in 2016. So far it has announced divestments of close to US$2bn, it has reduced its total debt plus perpetual securities by more than US$2bn and says it is on target to reach its leverage ratio target of about 4.25 times by the end of the year. Cemex is also on track to reach its debt reduction target of US$3 - 3.5bn by the end of 2017.
“Despite challenging market conditions, working on the variables we can control has allowed us to be well on our way to significantly strengthen our capital structure, and we expect to continue to be able to do so in the near future,” said Fernando A Gonzalez, chief executive officer of Cemex.
Cemex to take over Trinidad Cement for US$89m
06 December 2016Trinidad and Tobago: Cemex plans to takeover Trinidad Cement by increasing its share in the cement producer through its subsidiary Sierra Trading. It will present an offer and take-over bid to Trinidad Cement’s shareholders, which if successful, will increase its share of the company to 74.9% from the 39.5% that it holds at present. The value of the offer has been placed at US$89m. The offer is reliant on Sierra acquiring at least enough of Trinidad Cement’s shares to give it control. The offer period is expected to close on 10 January 2017.
If the offer is successful, Trinidad Cement will continue operating as previously. Trinidad Cement’s main operations are in Trinidad and Tobago, Jamaica and Barbados. It is the majority shareholder of Caribbean Cement Company.
Colombia: Cemex Latam, the Latin American subsidiary of Cemex, intends to enter dialogue with the Regional Autonomous Corporation of Antioquia (Corantioquia) to revoke its environmental permit for Maceo cement plant project. Corantioquia has requested that the permit from Central de Mezclas, a subsidiary of CHL, be returned to the CI Calizas y Minerales, according to the El Colombiano newspaper. The government agency has removed the clearance on procedural grounds and over the mining rights in the area.
Grupo Cementos de Chihuahua completes purchase of Cemex assets in US
21 November 2016US: Grupo Cementos de Chihuahua (GCC) has completed its purchase of a selection of assets from Cemex for US$306m. The assets consist of a cement plant located in Odessa in Texas, two cement distribution terminals located in Amarillo and El Paso in Texas and concrete, aggregates, asphalt and building materials businesses in El Paso, Texas and Las Cruces, New Mexico. The acquisition comprises all facilities, equipment and inventories. The purchase was financed with internal funds and an unsecured loan of US$254m.
“This acquisition represents a significant advance in our strategy of sustainable cement growth in the US, in markets contiguous to those of GCC ́s geographic footprint. With these assets and colleagues joining the company, we will enhance the competitive advantage of our logistics system, expand our product portfolio and optimise our operations by sharing best practices,” said Enrique Escalante, chief executive officer of GCC.
Cemex’s Victorville cement plant picks up Wildlife Habitat Council Conservation Certification
10 November 2016US: Cemex USA’s Victorville cement plant in California has been awarded Wildlife Habitat Council (WHC) Conservation Certification for work towards sustainability, environmental-protection and land-stewardship. The WHC presented the Victorville plant with the certification on 3 November 2016 during a ceremony at the 2016 WHC Conservation Conference in Baltimore. The designation means that all Cemex USA’s cement plants are now WHC-certified. WHC focuses on healthy ecosystems and connected communities. Cemex now has 18 WHC-certified sites in North America, of which fifteen are in the US
Cemex’s WHC Conservation Certification programs are mainly focused on habitat restoration and sustainability. In 2013, two wind turbines were commissioned at the Victorville plant. The plant also earned its fifth Energy Star certification earlier in 2016 for reducing its energy use and environmental impact and the Mojave Desert Air Quality Management District awarded Cemex USA’s Victorville plant operation the 2015/2016 Exemplar Award.
"This plant has persevered through good times and bad: two world wars, three different owners and countless upgrades to its facilities and equipment. Through all of the changes, two things have remained constant: a commitment to safety and a commitment to producing a high-quality product," said Hugo Bolio, Cemex USA’s Executive Vice President of Cement Operations and Technology. The Victorville Cement Plant was established in 1916 and was upgraded in 1997 and 2001. It has a production capacity of 3Mt/yr.
Jamaica: Peter Donkersloot Ponce has been appointed as the general manager of Caribbean Cement Company with effect from 7 November 2016. He replaces Alejandro Varés Leal who was originally appointed in May 2015 subject to an agreement between Caribbean Cement’s owner Trinidad Cement and Cemex. However, Varés Leal has taken up a promotion with Cemex. In accordance with the Agreement, Ponce was proposed by Cemex to replace Varés Leal.
Mexico: Cemex’s net sales have fallen by 2% year-on-year to US$10.5Bn in the first nine months of 2016 from US$10.7Bn in the same period in 2015. However, in a like-for-like basis adjusted for ongoing operations and currency fluctuations its sales rose by 5%. Its gross profit rose by 3% to US$3.65bn and its operating earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 9% to US$2.14bn. It attributed the rise in sales on a like-for-like basis to higher prices in local currency terms and higher volumes in Mexico and its European and Asia, Middle East & Africa regions.
“During the third quarter, we continued to deliver strong underlying operational and financial results by remaining focused on the variables we can control. Our year-to-date operating EBITDA grew 17% on a like-for-like basis, with a 5% growth in sales. This was the highest year-to-date EBITDA growth in a decade,” said the group’s chief executive officer, Fernando A Gonzalez.
Overall, the cement producer saw its cement volumes rise by 1% to 50.8Mt from 50.1Mt. Its net sales on a like-for-like basis and sales volumes rose in most of its operating regions except for South, Central America and the Caribbean and Europe.
Eugenio Correa defends role in Cemex Maceo project
26 October 2016Colombia: The broker named in an internal probe by Cemex Latam has defended his involvement with relation to the purchase of land and mining rights for a cement plant project in Maceo, Antioquia in comments to the La Republica newspaper. Eugenio Correa, representing Calizas y Minerales, says that he has only received US$6.85m from Cemex despite claims by Cemex that he is holding US$20.5m in funds for the project. He adds that Cemex conducted at least 25 visits from its engineers, lawyers and accountants at the Maceo site between July 2011 and December 2015 keeping it up to date on the project’s progress.
Correa says that he originally signed a memorandum of understanding with Cemex for the sale of 340 hectares, economic free zone and the mining rights for US$22.20m in August 2012. He adds that the contract was extended in April 2016 to June 2019. In late September 2016 Cemex dismissed several senior staff members in relation to the project and the subsidiary’s chief executive resigned.
Mexico: Grupo Kopar has won first place at the Cemex Integrate Supplier’s Innovation Program. Three ideas for innovation and their contribution to the company, the communities where it operates, and the environment were recognised from a field of 28 suppliers at Cemex Mexico’s Supplier’s Day 2016. The awards were presented at a ceremony at Monterrey on 12 October 2016.
The ideas submitted, which mainly focused on providing more efficient processes, products and services, were subjected to an evaluation and voting process directed by a group of 20 executives and experts from different areas of the company. Additionally, 40 companies earned the OHSAS 18001:2008 Standard and were recognised as ‘Health and Safety Certified Suppliers.’
Grupo Kopar came first with its idea for a high efficiency valve for dust collectors. The project consisted of making more efficient dust collectors by redefining the pulse filter cleaning valve system by migrating from traditional diaphragm valve technology to efficient Mac spool valves. Grupo Kopar supplies pneumatic and motion control components, with applications ranging from pneumatic valves and cylinders to robots.
Second place was awarded to Equipos y Explosivos del Noreste for its idea for a low-density blasting agent. Its agent is made from a different fuel than the one currently used, offering a cost reduction and improved results for the displacement and fragmentation of each quarry blast. Equipo y Explosivos del Noreste has been present in the mining and construction explosives market since 1989, providing high-quality technology in all of its products.
Third place was won by Vidmar for its automatic bag weigher CWB 25-50. The system is designed to perform automatic random cement bag weight sampling without human intervention to improve health and safety conditions. Vidmar is a specialised engineering group with more than 30 years of experience. It is a global specialised supplier in the industrial weight and automation field.