Displaying items by tag: Czech Republic

Czech Republic: Lafarge Czech Republic plans to spend nearly Euro4m on upgrades for its Ciskovice plant. Half of this investment has been spent on rebuilding an electrostatic precipitator for the main chimney for the plant. An additional Euro1.5m will be spent on improvements to the warehouse, handling and dosing of alternative fuels for the kiln. Upgrades to improve the unit’s noise and fire protection are also scheduled.

Czech Republic: Cement Hranice’s cement sales rose by nearly 9% year-on-year in 2017 due to despatches to fellow subsidiaries of Buzzi Unicem in the Czech Republic and Slovakia. Its overall sales rose by 6.3% to Euro61.5m from Euro57.9m, according to the Czech News Agency. Board member Roman Michalcik said that the local construction sector had grown in 2017 due to good weather towards the end of the period and large local infrastructure projects.

Czech Republic/Slovakia: The sale of Holcim's operations in the Czech Republic and Slovakia has prompted a series of management changes to Cemex's operations in those countries.

Hermann Dietrich has been appointed as Cemex's vice president for strategic planning in the Czech Republic and Slovakia. Henning Weber has become the vice president for operation and technology at the cement division, Mariusz Kostowski has been named as the trade and logistics director with the cement division and Justus Geiseler has been appointed as the BSO director. Lubos Merunka and Hana Fidrova, who have been named as the head of the stone aggregate division and the company lawyer respectively, both came to Cemex from Holcim after the asset handover.

Cemex's general director in the Czech Republic and Slovakia, Peter Dajko, has stated that the company is not planning any additional personnel changes in the foreseeable future.

Cemex's decision to head deeper into eastern Europe as part of the Cemex-Holcim asset swap announced this week suggests some nerve. Cement production levels started to fall in the region from 2012, according to Cembureau figures, with continued problems reported so far by the multinational cement producers in 2013. Cemex seems likely to lose money from the start with its new assets in the Czech Republic.

In more detail, Cemex will acquire all of Holcim's assets in the Czech Republic, which include a 1.1Mt/yr cement plant, four aggregates quarries and 17 ready-mix plants. In return Holcim will give Cemex Euro70m and Cemex will give Holcim its assets in western Germany including one cement plant and two grinding mills that encompass a total capacity of 2.5Mt/yr, one slag granulator, 22 aggregates quarries and 79 ready-mix plants.

Cemex must believe that it can wait out the recovery of the construction sector in eastern Europe or make savings from having a more easterly spread of assets. Certainly Cemex said in its press release on the asset swap that its earnings before interest, tax, depreciation and amortisation (EBITDA) would start to rise from US$20m to US$30m from 2014.

The question for the buyers at Cemex who considered this deal is whether the construction market has bottomed out in the Czech Republic yet. According to World Bank figures, following the 2008 financial crisis Czech Gross Domestic Product (GDP) fell to a low of US$197bn in 2009, rose again until 2011 but then fell to US$196bn in 2012. Currently the Czech National Bank is anticipating a further fall in growth in 2013. Meanwhile, data from a third quarter 2013 Czech construction sector analysis by CEEC Research reported that a drop of at least 4.7% was expected in 2013 with a follow-on decline of 2.7% in 2014.

Possibly one deal-maker for Cemex was the prospect of combined operations with Holcim in Spain across cement, aggregates and ready-mix. Similar to the Lafarge-Tarmac joint-venture in the UK, the move offers reduced risk in a declining western European market. How the Spanish competition authorities will respond remains to be seen. Elsewhere on the continent this week the decision by the Belgian Competition Council to fine the Belgian cement sector shows an example of behaviour the Spanish authorities will want to avoid.