Displaying items by tag: GCW137

Algeria: South African cement firm PPC has announced that it will buy a stake in an Algerian cement company as part of its drive to boost sales outside its home market.

PPC said that it will buy a 49% stake in Hodna Cement, which plans to construct a US$350m plant in the country. PPC did not disclose how much the deal will cost, but said that it will be funded on a project finance basis, with 80% of the debt to be sourced from local Algerian banks.

"This project sees us entering yet another African country and gives us confidence that by 2017, 40% of PPC revenues will be earned outside of South Africa," said PPC CEO, Ketso Gordhan. PPC is also constructing cement plants in Ethiopia, Rwanda and the Democratic Republic of Congo.

Nigeria: Dangote Cement plc has commissioned a new 72,000 bag capacity cement depot in Idi-Iroko, Ogun State.

Regional director of Dangote Cement, Akin Adesokan, said that the firm would ensure constant supply of the product to ease transportation problems. "We will ensure that the depot is always stocked with cement,' said Adesokan, adding that the cement to be sold in the depot is 42.5 grade.

He said that with the commissioning, the firm is delivering on its main objective of bringing its product nearer to the people. "We are ensuring that Nigerians have access to the major component in building, which is cement. We are ensuring that houses in Nigeria stand strong. We are ensuring that Nigerians have the ability to build their personal houses."

The depot was built by Jimmy Azeez Enterprise, one of Dangote Cement's major distributors, which will also manage the facility. Adesokan described the collaboration with Jimmy Azeez as; "another milestone in our mutually-beneficial business relationship with our distributors."

India: Ambuja Cements and ACC, the Indian arms of Holcim, are likely to see top-level management changes in the coming months. Managing director (MD) of Ambuja Cements, Onne van der Weijde and MD of ACC, Kuldip Kaura, have offered to resign, according to industry sources. Additionally, the sources revealed that Sumit Banerjee, the former MD of ACC who had quit to join Reliance Cement, is likely to re-join ACC as the MD.

The management changes at ACC and Ambuja Cements have resulted from restructuring of the parent company, Holcim, which has been underway since July 2013. Holcim has appointed Bernard Terver as the head of Asia, replacing Paul Hugentobler, who retired in February 2014. Terver, a member of the Holcim Executive Committee, has been appointed to head of a region that encompasses Africa, the Middle East and the Indian subcontinent.

While van der Weijde is said to be unhappy with these management changes, Kaura is said to have been uncomfortable with the new structure, in which ACC will become a subsidiary of Ambuja Cements. Under the restructuring programme, an India management committee that is headed by van der Weijde, was to oversee the integration between the operations of Ambuja and ACC. The two MDs of Ambuja and ACC had to report to van der Weijde, which did not go down well with Kaura, according to unnamed sources. However, it's unlikely that Holcim will take any decision in haste, especially before the restructuring is approved by the Gujarat High Court, which is expected by April 2014.

Only after the court approval can Holcim receive full approval from the Foreign Investment Promotion Board (FIPB), as currently it is only a conditional approval that is subject to legal clearances. Any management change at this juncture will lead to a lot of questioning, which will put the spotlight back on the entire process.

US: Lafarge North America has contracted Gebr. Pfeiffer Inc. to supply an MVR vertical roller mill as part of the overall modernisation project underway at the Lafarge Ravena plant located in the Town of Coeymans, New York. The modernisation project will replace the current wet process kiln with a dry line, allowing the plant to cut emissions and also increase its capacity.

A Gebr. Pfeiffer MVR 6000 R-6 will be installed in a complete new line at the plant, replacing two existing raw material mills. The scope of supply will also includes a 5600kW motor, engineering, supply and related services. Commissioning for this project is planned for the middle of 2016.

Kenya: The Kenyan government has been stopped from asking French conglomerate Lafarge to dilute its stake in East Africa Portland Cement Company (EAPCC) as the High Court seeks to establish whether the cement maker is a state-owned firm.

On 6 February 2014 Justice George Odunga allowed activist Charles Omanga to oppose the government's latest bid to have Lafarge reduce its interest in EAPCC. In 2012, the Competition Authority of Kenya issued Lafarge with an ultimatum to voluntarily offload part of its shares in EAPCC or have its stake in the company diluted by force under anti-trust laws.

The court will also review recommendations of a task force appointed by President Uhuru Kenyatta, which says that EAPCC does not qualify as a state-owned company because National Social Security Fund (NSSF) shares do not belong to the state but to contributors. Omanga wants this recommendation adopted in what will see the government lose the power to appoint the chairman of EAPCC, shifting the power to French giant Lafarge.

"I have granted leave to commence judicial review in terms of requests 2a, b and d," ordered Justice Odunga. "The implementation of the decision of the presidential task force for the government to invoke the Competition Act and dilute shareholding of (Lafarge) in EAPCC is to be kept in abeyance." The requests mentioned touched on Omanga's plea for the state to be stopped from interfering with Lafarge's stake with regard to competition matters and the declaration of EAPCC as public and not state-owned.

This recommendation of the taskforce will see the state ownership in EAPCC drop below 50%, given that the government has been treating NSSF shares as its own, making the cement firm a state corporation.

The government's stake in EAPCC stands at 25% compared to NSSF's 27%, Lafarge's 41% and the remaining 6% is held by investors through the Nairobi bourse. Lafarge also owns 58.9% of Bamburi Cement and the government has accused the French firm of seeking to damage EAPCC in order to protect its interests in the rival cement maker.

EAPCC has been embroiled in a long shareholder war that is mainly centred around the government's determination to have a new team shepherd the firm, a move that has been difficult with Lafarge's upper hand in the board.

Mexico: Cemex has anounced that its consolidated net sales increased by 4% during the fourth quarter of 2013 to approximately US$3.9bn and increased by 2% for the whole of 2013 to US$15.2bn versus the comparable periods of 2012. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 4% during the fourth quarter of 2013 to US$642m and increased by 1% for the whole of 2013 to US$2.6bn versus 2012.

Cemex said that the increase in consolidated net sales was due to higher volumes in the US and its operations in the Mediterranean, Northern Europe, Asia and South, Central America and the Caribbean, as well as higher product prices in local currency terms in most regions. Operating earnings before other expenses in the fourth quarter increased by 30% to US$359m and increased by 17% to US$1.5bn for the full-year 2013.

Cemex reported a narrower controlling interest net loss of US$255m during the fourth quarter of 2013, down from a loss of US$494m in the same period of 2012. For the full-year 2013, controlling interest net loss improved to US$843m from a loss of US$913m in 2012.

Operating EBITDA during the fourth quarter increased by 4% to US$642m. For the full year 2013, operating EBITDA increased by 1% to US$2.6bn versus 2012. On a like-to-like basis and also adjusting for the pension plan effect, full-year 2013 operating EBITDA increased by 4%.

Fernando A González, Executive Vice President of Finance and Administration, said, "During 2013 we continued to deliver. This is our third consecutive year of EBITDA growth, driven by improvement in pricing and volume in most of our regions, the favorable operating leverage effect in the US and our continued initiatives to improve our operating efficiency."

The fourth quarter of 2013 by region

Net sales in Cemex's operations in Mexico decreased by 6% in the fourth quarter of 2013 to US$785m, compared with US$832m in the fourth quarter of 2012. Operating EBITDA decreased by 17% to US$247m versus the same period of 2012.

Cemex's operations in the US reported net sales of US$819m in the fourth quarter of 2013, up by 8% from the same period in 2012. Operating EBITDA increased to US$77m in the quarter, versus a US$13m profit in the same quarter of 2012.

In northern Europe, net sales for the fourth quarter of 2013 increased by 5% to US$1.1bn, compared with US$1.0bn in the fourth quarter of 2012. Operating EBITDA was US$79m for the fourth quarter, 1% lower than the same period of 2012.

Fourth-quarter net sales in the Mediterranean region were US$394m, 11% higher when compared to sales of US$354m during the fourth quarter of 2012. Operating EBITDA decreased by 5% to US$78m for the quarter versus the comparable period in 2012.

Cemex's operations in South, Central America and the Caribbean reported net sales of US$577m during the fourth quarter of 2013, representing an increase of 11% over the same period of 2012. Operating EBITDA increased by 15% to US$183m in the fourth quarter of 2013, from US$159m in the fourth quarter of 2012.

Operations in Asia reported a 4% decrease in net sales for the fourth quarter of 2013, to US$133m, versus the fourth quarter of 2012. Operating EBITDA for the quarter was US$32m, up by 12% from the same period of 2012.

Germany: HeidelbergCement has announced its unaudited results for the fourth quarter of 2013 and the full year of 2013.

The German multinational cement producer reported revenues of Euro13.94bn for 2013, a 3.4% increase on 2012 (like-for-like), although revenue was slightly down (by 0.6%) in absolute terms. Operating income before depreciation was also up in like-for-like terms (2.0%) but was down by 2.1% across all business at Euro2.42bn. Operating income was flat at Euro1.61bn in 2013, a 5.2% rise like-for-like and a 0.2% rise in absolute terms.

For the fourth quarter of 2013, HeidelbergCement took revenues of Euro3.48bn (up 6.9% like-for-like and down 0.3% in absolute terms), had an operating income of Euro661m (up by 1.8% like-for-like and down 5.3% in absolute terms) and had an operating income of Euro463m (up by 12.4% like-for-like and up by 2.4% in absolute terms.

HeidelbergCement reported that its cement sales volumes rose slightly year on year, driven by the positive development in sales volumes in its North America, Asia-Pacific and Africa-Mediterranean Basin regions, which more than offset the decline in demand elsewhere, particularly in eastern Europe. It sold 91.3Mt of cement, cement clinker and ground granulated blast furnace slag (GGBS) in 2013, a rise of 1.4% in like-for-like terms and a rise of 2.6% in absolute terms.

In the fourth quarter of 2013 it sold 23.6Mt of cement, cement clinker and GGBS, which was 6.3% more than in 2012 in like-for-like terms and 7.5% more in absolute terms. HeidelbergCement said that its fourth quarter sales volumes had benefited from milder than usual weather that led to an extended construction season in Europe.

Western and northern Europe

For 2013 as a whole, HeidelbergCement reported that its interests in western and northern Europe benefited from the emerging recovery in demand for building materials in the UK, which was driven by private residential construction and large infrastructure projects in London. Sales volumes of cement at its UK plants increased from low levels by a double-digit percentage. In Benelux and Northern Europe, sales volumes were steady or saw only a marginal decline. Sales volumes in Germany diminished, partly as a result of the long period of bad weather at the beginning of 2013.

Despite a slight overall decline in sales volumes in this region, revenue before exchange rate effects remained largely stable thanks to successfully-implemented price increases. Falling energy costs also had a positive impact on operating income and profit margins.

Revenue for northern and western Europe was Euro4.15bn, a real-terms fall of 1.3% (a 0.3% fall like- for-like). Operating income was Euro319m, a 4.9% increase in real terms over 2012 (a 5.6% fall like-for-like). Cement sales for the region came in at 20.9Mt, a 1.8% fall when compared to 2012.

Eastern Europe and central Asia

Over the course of 2013, HeidelbergCement had a difficult year in eastern Europe and central Asia. In the first half of 2013, construction activities were adversely affected by the long winter and demand for building materials saw a decline in many countries of eastern Europe due to weak economic development and low infrastructure expenditure. In addition, prices were under pressure in a number of markets, the result of the combination of low demand and increased competition. Increases in sales volumes in Russia due to an increase in the capacity of the Tula plant near Moscow and a slight volume increase in Georgia did not compensate for the weak demand.

The situation improved in the second half of 2013. Poland was the first country in eastern Europe to show signs of a recovery. The fourth quarter was also boosted by a sustained period of mild weather. As a result, revenue and operating income improved despite negative exchange rate effects.

Revenue for the region in 2013 came to Euro1.34bn, a 4.2% decline like-for-like and a 6.9% decline in absolute terms. Operating income was Euro150m, a 20% drop in like-for-like terms and a 21.8% dip in absolute terms. Cement, clinker and GGBS sales for the region were 16.7Mt in 2013, a 2.9% drop in both real and like-for-like terms compared to 2012.

North America

In 2013 the recovery of cement demand continued in North America, driven particularly by growth in residential construction. HeidelbergCement reported that revenue and results in North America had benefited from successfully-implemented price increases in 2013 but that these parameters were also adversely affected by the weakening of the Canadian Dollar in comparison with the Euro.

Revenue for North America was Euro3.41bn in 2013, a 3.4% rise in like-for-like terms and a 1% fall in real terms. Operating income was Euro378m, a 19.9% rise in like-for-like terms and a 17.4% rise in real terms. HeidelbergCement sold 12.5Mt of cement, clinker and GGBS in North America in 2013, a 6.8% rise in both like-for-like and absolute terms.

Asia-Pacific

Demand for HeidelbergCement's products remained very strong in its Asia-Pacific region, with construction activity stimulated by the economic growth in the region. Sales volumes also benefited from the increase of its share in Cement Australia from 25% to 50%. The Asia-Pacific Group area recorded the largest negative exchange rate effect as a result of the weakness of the Indonesian Rupiah and Australian Dollar against the Euro.

Revenue for HeidelbergCement in Asia-Pacific came in at Euro3.42bn in 2013 as a whole, a 5.2% like-for-like rise year-on-year and a 1.7% fall in real terms. Operating income for the year was Euro686m, a 0.7% rise like-for-like and a 6.3% fall in absolute terms. The company sold 31.9Mt of cement, clinker and GGBS in the region, a 3% rise in like-for-like terms and a 6.3% rise in absolute terms.

Africa and Mediterranean basin

HeidelbergCement reported a continuation of positive demand development in Africa in 2013. It said that it was able to increase its cement deliveries, partly as a result of new capacity. The building materials business in Turkey also developed positively and only the Spanish market remained in decline in this region. Although revenue and results in the Africa-Mediterranean Basin Group area were also impaired by negative exchange rate effects, HeidelbergCement reported that it was able to improve these figures thanks to strong operational development in Turkey and Israel.

Outlook for 2014

In North America, HeidelbergCement reports that it expects a continuing economic recovery and consequently a further increase in demand for building materials.

In eastern Europe, a stabilisation of the national markets is expected following the weak phase experienced during 2013. Poland should be the first country in this area to benefit from the emerging recovery. In central Asia, a further rise in demand for building materials is anticipated. In western and northern Europe, positive market development is expected in all countries. This is based on the healthy economic development in Germany and northern Europe as well as a recovery in the UK and Benelux. In Asia and Africa, HeidelbergCement still expects sustained growth in demand.

"Considering the positive outlook for the world economy and our advantageous geographical positioning, we are cautiously confident about the future," said Bernd Scheifele, CEO of HeidelbergCement. "However, substantial macro-economic risks still remain. The effect of the tapering of the Federal Reserve on the currencies in emerging countries represents a considerable uncertainty. The decline in exchange rates in the second half of 2013 will also impair our revenue and results, particularly in the first half of 2014."

"We will focus on what we can directly influence: the management of our operational business," continued Scheifele. "In 2014, we will once again work on further improving our margins by means of our ongoing programmes and a continued focus on reducing costs and increasing efficiency. Price increases will continue to be at the forefront of our efforts in 2014."

The complete consolidated financial statements of HeidelbergCement including a full outlook will be published on 19 March 2014.

Switzerland: Thorwesten Vent has completed a turnkey contract for the design and assembly of a large capacity silo for the storage of pulverised lignite in Switzerland. In close cooperation with its sister company, Silobau Thorwesten, the engineering teams of both companies designed a 2300m³ silo that is 55m high and 9m in diameter.

Besides the silo cell, which is equipped with a maintenance-friendly flat roof, Thorwesten delivered all of the safety equipment for required conformation to regulations. The company used its newly-developed self-reclosing explosion venting devices based on a carbon-fibre lid and an emergency inerting system in combination with an intelligent analysis and monitoring system. Additional components, including instrumentation and an in-feed line, completed the order.

Belarus: Russia's Eurocement Group is ready to invest US$70 – 80m in a project to upgrade cement production facilities in Belarus, according to the minister of Architecture and Construction, Anatoly Chernyi.

"Eurocement offered to help us to switch the cement production plants from the wet process of cement production to the dry process," said Chernyi. Further negotiations will be held between the participants of the project to upgrade the facilities by 2017. The government has already approved the plans. The minister stressed that the wet process of cement production is energy consuming and costly.

The current combined capacity of the Belarusian cement plants is 9.5Mt/yr of cement, of which 5.4Mt is produced by dry kilns.