Displaying items by tag: Chile

Chile: Melón’s sales rose by 2% year-on-year to US$305m in 2022. The producer recorded a 17% drop in its cement production to 1.13Mt. Operating costs rose by 11%, with rises across raw materials, transport and utilities costs. As such, the producer reported a net loss of US$12m, compared to a net profit of US$15.3m in 2021.

Melón noted a ‘very challenging market’ with ‘active competition’ so far in 2023, including a low capacity utilisation situation in the domestic cement industry.

Chile: A fire at Sites 1, 2, 3 and 5 of Puerto Ventanas port in Valparaíso Region has disrupted clinker transportation to Melón’s Puerto Ventanas cement plant. The La Tercera newspaper has reported that the fire destroyed a clinker conveying system connecting the port to the cement plant. The producer expects the damage to ‘significantly impact’ its cement production capacity for a period which it is ‘not yet possible to specify.’

Melón said, “We have deployed contingency and operational continuity plans in order to ensure our supply to our customers." It added that it could not yet quantify the ultimate impacts on its assets, liabilities or results.

Chile: Cement shipments fell by 14% year-on-year during the first nine months of 2022, to 3.2Mt from 3.7Mt. The La Tercera newspaper has reported that a construction slowdown impacted on the cement sales of all three of Chile’s cement producers. Cbb’s despatches fell by 18%, Cementos Melón’s by 15% and Cemento Polpaico’s by 9.5%. At the same time, the producers’ expenses rose due to increased costs across transportation, raw materials, fuels, labour, administration and finance. Meanwhile, imported cement from Asia reportedly presents a cheaper alternative for customers.

Chile: UNACEM Chile and its ready-mix concrete partner UNICON Chile are set to acquire aggregates company Constructora de Obras y Viales Limitada (Conovia). Peru-based UNACEM Group concluded an agreement to buy Conovia's parent companies Inversiones Befeld Limitada and Inversiones Majas Limitada for US$3.7m on 21 November 2021. Gestión News has reported that Conovia has 180,000t/yr of aggregates production capacity in Valparaíso Region. At present, UNACEM Chile has 600,000t/yr in cement grinding capacity, while UNICON Chile has 1.2Mm³/yr in ready-mix concrete capacity.

UNACEM Group aims to grow its Chilean cement market share to 10 - 15% in 2025, from 8% during 2021. The market is reportedly valued at US$350m/yr.

Brazil: Germany-based INFORM has established a joint venture with its partner Portia LAC in São Paulo. The new company called INFORM PORTIA will take over sales, consulting and support for INFORM software products in Brazil.

Andreas Meyer, the chief executive officer of INFORM, said “With this joint venture, we are expanding our presence in South America to meet the growing demand for software solutions to optimise business processes.” He added, “This joint venture is an important building block in our global network. We strive to maintain a relationship with our customers based on partnership and trust. However, this is much more successful if you also have a local presence.” In addition to its headquarters in Aachen in Germany and new joint venture in Brazil, INFORM is represented by five other INFORM related companies in the US, Chile, Australia, Singapore, and Portugal respectively.

Cemento Yura said it was considering expanding cement and lime production this week. The announcement, made in an interview to business newspaper Gestión, follows a strong second quarter for the subsidiary of Grupo Gloria with clinker production volumes jumping up by 36% year-on-year to 0.51Mt. Overall for the half-year its clinker and cement production rose by 12.8% year-on-year to 0.86Mt and 12.7% to 1.47Mt. The success was attributed to consistent demand from the domestic sector as well as various large-scale mining projects. Julio Cáceres, the commercial director for its Cement, Concrete and Lime Division in Peru, Chile and Bolivia, wouldn’t say where the company was considering heading next, other than that remarking that it was attentive to new markets.

As Cáceres’ job title implies Cemento Yura also operates cement plants outside of Peru. At home it runs one integrated plant in the south of the country near to Arequipa as well as a lime plant at Juliaca. Outside of Peru though it also runs two integrated plants and a grinding unit in Bolivia, via its Sociedad Boliviana de Cemento (SOBOCE) subsidiary, and two integrated plants in Ecuador, via its Union Cementera Nacional (UCEM) subsidiary. The company also has assorted concrete assets. The international aspect to Cemento Yura’s business is interesting given that the larger cement producers in Peru are dominant in different parts of the country with Cementos Pacasmayo in the north, UNACEM (Unión Andina de Cementos) in the centre around Lima and Cemento Yura in the south. Notably, UNACEM also runs a plant in Ecuador and one in Arizona, US. It is also worth mentioning that competition issues have been reported in the local market previously. In mid-2021 Peru’s competition authority, the National Institute of the Defense of Competition and Intellectual Property Protection (INDECOPI), investigated Cemento Yura.

Cemento Yura’s rise in clinker production in the second quarter of 2022 is worth considering because in a previous interview with the local press Humberto Nadal, the chief executive officer of Cementos Pacasmayo, said that importing clinker had become more expensive in 2021. Subsequently, the company started a US$70m upgrade at its Pacasmayo plant to increase its production capacity by 0.6Mt/yr. In its second quarter financial results for 2022 Cementos Pacasmayo directly credited a 27% increase in its earnings on higher operating profits arising from decreasing costs by using less imported clinker. Sure enough data from Association of Cement Producers (ASOCEM) shows that both cement and clinker imports started to fall in October 2021 and have mostly followed a downward trend since then. Clinker imports fell by 41% year-on-year to 0.66Mt from January to August 2022 compared to the same period in 2021.

Graph 1: Cement production in Peru, 2014 – present. Source. Association of Cement Producers (ASOCEM).

Looking at the wider picture in Peru, cement production has stayed fairly consistent since 2014 at around 10Mt/yr. An upward trend probably started in 2019 but then the Covid-19 pandemic cut it off in the first half of 2022 before the market surged back in the second half of that year. 2021 was a good year with production peaking at 12.9Mt. So far the first eight months of 2022 have seen production rise by 5.3% year-on-year to 8.64Mt.

In summary, cement production is rising in Peru, importing clinker appears to have become more expensive for at least one of the producers and some of the larger local companies are investing in new production capacity, considering it or thinking about acquisitions elsewhere. Local clinker producers appear to be in a good place; clinker importers, or those reliant on it, not so much.

Chile: Cbb has reported a profit of US$2m for the period January - June 2022, which represents a decrease of 74% year-on-year compared US$7.9m during the same period in 2021. The decrease came despite a 15.3% increase in revenues, which rose to US$169m. The company said that the difference could be mainly explained by lower margins from increased distribution costs and administration expenses.

Chile: Despatches of cement fell by 10% year-on-year to 2.25Mt in the first seven months of 2022 from 2.51Mt in the same period in 2021. Data from the Cámara Chilena de la Construcción (CCHC) shows that cumulative annual despatches have been falling month-on-month since January 2022.

Belgium: Magotteaux has appointed Gonzalo Cavada as its chief executive officer with effect from 31 October 2022. He will succeed Sébastien Dossogne, who will stay in post until the end of October 2022 as part of a transition period. Cavada will be based in Vaux-sous-Chèvremont in Belgium, at Magotteaux’s headquarters.

Cavada currently works as the chief financial officer of Magotteaux’s parent company Sigdo Koppers (SK). He previously worked for SK’s acquisition team when the Chile-based conglomerate purchased Magotteaux in 2011. He is a trained civil engineer who attended the Pontifical Catholic University of Chile and he holds a master’s degree in Business Administration (MBA) from the University of Cambridge.

Chile: Cbb's first-quarter operating income was US$93.5m in 2022, up by 14% year-on-year from US$81.7m the first quarter of 2021. Nonetheless, the company's net profit fell by 89% to US$573,000 from US$5.04m.