Displaying items by tag: Colombia

Colombia: Cemex has announced that it will begin construction of a US$340m cement plant in Colombia. The first phase of the project includes construction of a new grinding mill that will begin to produce cement in the second quarter of 2015. The rest of the plant will be completed in the second half of 2016.

"We are proud to contribute to the development of Colombia and wish to continue to be a long-term partner on its path to a prosperous, sustainable future," said Cemex's CEO, Fernando Gonzalez. The investment by Cemex Latam Holdings is expected to boost production capacity in Colombia from 4.5Mt/yr to nearly 5.5Mt/yr.

The plant will be built in the north-western Colombian province of Antioquia, a region with high economic-growth levels. It is expected to create 1000 direct jobs in the construction phase and around 300 jobs once operations begin.

Colombia: Cementos Argos has reported an 87% increase in its net profits for the second quarter of 2014. This was driven by the positive behaviour in its main markets, most notably in the US, as well as an organisational excellence plan that has allowed the company to improve efficiency in various aspects.

Corporate earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the second quarter of 2014 rose to US$142m, some 11% more than in the same period in 2013. EBITDA for the first half of 2014 reached US$272m, despite non-recurring expenses of US$20m that mainly stemmed from recent acquisitions. After integrating the cement and concrete assets that were acquired in Honduras, the US and French Guiana, consolidated revenues for the quarter grew by 18%, while cement sales volumes rose by 9.3%.

"The results that were recorded for this second quarter came from a solid demand in most of the geographies in which we operate," said Jorge Mario Velásquez, Argos' CEO. "It is especially satisfactory to see the recovery of profitability in the United States, the successful integration of the company's recent acquisitions and the strategic advantage that Argos draws from the fact that it operates in 12 countries that have dynamic markets and different economic cycles."

In the US its EBITDA generated during this second quarter of 2014 was nearly twice as high as the EBITDA recorded for the whole of 2013. The country's performance was driven by increasing sales volumes during the first half of 2014, with an upturn of 59% for cement dispatch.

In Colombia, cement sales volumes increased by 3% and revenues amounted to more than US$604m for the first half of 2014, which was a result similar to 2013. During this period, Cementos Argos recorded a bigger increase in sales of the bulk cement segment and in concrete dispatching, as well as positive trends in housing construction, thanks to the approval of an increased number of building permits and the continuation of mortgage subsidies.

In the Caribbean and Central American Regional Division, revenues rose by 20% and EBITDA improved by 38% in the first half of 2014, reflecting the positive effect of including the results of the plant in Honduras and of the cement grinding plant in French Guiana.

Sweden/Colombia: Swedish engineering firm SKF has signed a three-year deal with Cementos Argos to provide engineering products and services for its operations in Colombia. SKF will provide everything from bearings, housings and seals to training and application engineering, to support Argos' operations in 10 plants throughout the country. Argos has expanded the scope of the agreement to include seals and more bearing products than SKF had supplied previously.

"SKF has an extensive partnership to support Argos in maximising the utilisation and reliability of its assets, thereby achieving its business objectives," said Vartan Vartanian, President, SKF Industrial Market, Regional Sales and Service. The deal expands SKF's existing contract for maintenance services, mechanical services, reliability engineering services and condition monitoring solutions for conveyors, gearboxes and mills at four of Cementos Argos' plants in Colombia.

Colombia: Cemex, via its Colombian subsidiary Cemex Colombia, will launch a new business division called Cemex Energy. The initial objective is to reach energy self-sufficiency and it will also sell any excess energy generated to the national electricity system.

At present, Cemex generates 41MW of energy that covers 65% of its needs, via hydropower (12MW) and thermal and natural gas plants (29MW). Cemex's announcement follows the approval of renewable energy legislation in the country, which allows companies to participate in this area. Cemex added that energy self-sufficiency signifies major savings in relation to market tariffs. It plans to focus on biogas and wind power schemes, potentially requiring investments of US$50m during the next five years.

Colombia: Cemex is pursuing alternative energy sources, including landfill biogas, wind and solar energy, for its operations in Colombia. It has planned some US$50m of projects for the next five years. The company will look for partners among financial entities and investment funds, according to Edgar Angeles, Cemex's vice president of operations for Central, South America and the Caribbean.

Since the elaboration of Colombia's law on renewable energy, Cemex has been studying projects of this type. The law allows companies to invest in their own power supply and to sell any surplus on the wholesale market. Cemex wants to guarantee 100% of its power supply, compared to 65% now. It already has three small hydroelectric stations and a gas-fired plant in Colombia's Junin, Bucaramanga and Ibague municipalities.

Colombia: Cementos Argos has reported that the acquisition of cement and concrete assets in Honduras and Florida and the recovery of the US construction market have resulted in 51.7% growth in net profits, from US$4.00m in the first quarter of 2013 to US$6.07m in the first quarter of 2014. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were up by 12% and income grew by 18% compared with the same period of 2013. Cement sales in the US grew by 27%, while sales in the Caribbean and Central America grew by 27% in value and 11% in volume.

Colombia: Jose Alberto Velez, president of Cementos Argos group, says that 2014 will be a year of integrating the assets acquired in 2013 in Honduras and the United States for the Colombian firm. Further acquisitions would only be considered as of 2015. He stressed that the US$720m purchase of Vulcan Materials needs time to be digested, as well cement assets in Honduras costing above US$250m.

Velez has forecast a growing cement demand in 2014 that Cementos Argos will strive to meet in the US, Central America and the Caribbean, while in Colombia new infrastructure concessions will also increase cement and concrete sales.

During 2013, Cementos Argos had sales of 11.4Mt of cement, up by 5% on 2012. Income grew by 13.4% to US$376m and profits reached US$13.9m. Cementos Argos is also earmarking investments of US$200m in 2014 for various projects, including the start up of a US$35m cement distribution centre in Cartagena, in addition to the expansion and modernisation of several plants in Rio Claro, El Cairo and Nare costing US$100m.

Colombia: Colombia's Superintendent of Industry and Commerce (SIC) has launched an investigation into possible anti-competitive behaviour within the cement industry. According to the regulator, the investigation relates to alleged 'sustained and unjustified increases in the price of cement since January 2010.'

In 2008 the regulator issued fines in excess of US$1m to cement firms for involvement in a market sharing agreement. Cementos Argos has denied involvement in price fixing or market sharing.

Colombia: Mexican cement maker Cemex has opened its fifth plant in Clemencia, Colombia. The US$50m plant in northern Colombia has a cement production capacity of 0.45Mt/yr.

Cemex plans to begin building its sixth plant in Colombia at the start of 2014 with a US$125m investment. The construction is expected to last 24 months and have a cement production capacity of 0.50Mt/yr.

Cemex foresees strong growth in the Colombian market, specifically in infrastructure, as President Juan Manuel Santos has been investing heavily in roads, ports, railways and airports, with some US$25bn invested in the past four years.

The timing of the UK Mineral Products Association's (MPA) latest call to arms makes one wonder how well the economic recovery is going in parts of Europe. The MPA has launched a document entitled 'Cementing the Future – Sustaining an Essential British Industry' to promote the UK cement industry. It is the MPA's job to beat the drum for the industries it represents so in this sense it should always be trying to raise the minerals sector's profile.

Yet as the UK economy starts to lumber out of the recession, a publication like this suggests that the challenges ahead of the industry are still large. MPA figures released in July 2013 showed that year-on-year growth in cement volumes hit a low of -10% in the second quarter of 2012 before rising to better (negative) rates to the first quarter of 2013. No data was available for the second quarter of 2013.

One of the MPA's recommendations is that the UK government does more to protect the main internationally-owned players from international trading markets. At least foreign-owned companies provide local jobs. The main thrust is to protect the industry from carbon taxation, ensuring better international competiveness. On the back of Cembureau's latest industry figures, chief executive Koen Coppenholle recommends much the same thing for Europe as a whole in his column in the September 2013 issue of Global Cement Magazine.

One thing the MPA doesn't need is more bad news when the UK Competition Commission publishes its report on an investigation on the aggregates, cement and ready-mix concrete market in December 2013. On that score the investigation hasn't been too troubling so far with its provisional findings concluding that despite poor competition between firms on price there was no explicit collusion.

In terms of competition though things could be worse. For example, take Colombia. In August 2013 the Colombian competition agency, the Superintendency of Industry and Commerce (SIC), announced its investigation in the country's main players for 'sustained and unjustified' increases in the price of cement since 2010. For the first six months of 2013 cement prices rose by 8% compared to an inflation rate of 1.73%.

Whatever is happening in Colombia, its largest cement producer, Cementos Argos, saw its profits rise by 5.9% to US$218m in 2012. At present the MPA can only dream of times like that again and hope that the UK government takes note of its advocacy.