Displaying items by tag: GCW154

The creation of Lafarge Africa, the clearance of the Cemex West acquisition by Holcim in Germany and the sale of Lafarge's assets in Ecuador all hint at the scale of business that LafargeHolcim will command when it comes into existence. Despite the media saturation of coverage on the merger the implications in developing markets are still worthwhile exploring, especially in Latin American and Africa.

In sub-Saharan Africa, Lafarge is merging its cement companies in Nigeria and South Africa to create Lafarge Africa. Analysts Exotix have described the move as, 'the birth of a leading player on a continental scale'. Indeed, if Lafarge wanted to grow Lafarge Africa to encompass its many other African cement producing subsidiaries it could hold at least 17 integrated cement plants (including plants in north Africa) with a cement production capacity of at least 40Mt/yr in 10 countries and infrastructure in others. That puts it head-to-head with Dangote's plans to meet 40Mt/yr by the end of 2014 through its many expansion projects. Following these two market leaders would come South African-based cement producer PPC with its expansion plans around the continent.

Meanwhile across the Atlantic in Latin America the Lafarge-Holcim merger threatens Cemex. Unlike in Africa where Lafarge has a ubiquitous but disparate presence, Lafarge and Holcim's cement assets are more evenly scattered around the Caribbean, Central and South America. In terms of cement production capacity Cemex and Lafarge-Holcim will both have around 30Mt/yr, with Cemex just in front. The next biggest cement producers in Latin America will be Votorantim (present mainly in Brazil) with just over 20Mt/yr and Cementos Argos (Columbia) with about the same. This includes some new acquisitions in the United States for the growing Columbian producer. In Ecuador Lafarge and Holcim held over 50% of the market share, hence the sale by Lafarge of its assets to Union Andina de Cementos for US$553m.

Depending on how well the merger integrates the two companies, corals the various subsidiaries and implements strategic thinking the merger could just create business as usual with little disruption to the existing order. Yet in both continents the merger has the opportunity to shake up and reinvigorate the cement markets as existing players suddenly discover serious new competition and react accordingly.

Africa has a population of 1.1bn and it had a Gross Domestic Product (GDP) of US$2320/capita in 2013. South America had a population of 359m in 2010 and a GDP of US$8929/capita. This compares to US$27,250/capita in Europe and US$54,152/capita in the US. The economic development potential for each continent is humongous. Post-merger, LafargeHolcim will be first or second in line for some of this potential in Latin America and Africa.

India: Jamshed Naval Cooper, HeidelbergCement India's director of sales and marketing, has taken over as the chief operating officer from 4 June 2014. Cementrum I BV of the Netherlands, the holding company of HeidelbergCement India, proposed the appointment. The position is subject to the approval of the board of directors.

Cooper succeeds Ashish Guha, who had resigned from the position of chief executive and managing director, but acceded to continue in office until the appointment of a successor at the request of the board of directors.

Germany: Gebr. Pfeiffer has announced new orders for mills in Turkey, Iraq and Malaysia.

In Turkey, Bilim Makina has ordered four mills for a cement plant in Elazig. The order covers an MPS 250 BK roller mill with a drive power of 500kW for coal grinding and two safety shut-off dampers. The mill is designed to yield 35t/hr of petroleum coke, with the material being ground to a fineness of 3.5% R90 µm. A MPS 5000 B mill will be used for cement raw material grinding. The mill featuring a drive power of 3800kW will be capable of producing 470t/h of cement raw material ground to a fineness of 12% R 90µm. Two MPS 5000 BC vertical roller mills will be used for cement grinding. Each of the mills features a drive power of 4400kW and will grind 200t/h of Ordinary Portland Cement with a specific surface of 3400cm²/g acc to blaine. All four mills are scheduled to be delivered in the spring of 2015.

In Iraq, Sinoma Suzhou Construction, acting as general contractor, has ordered two MVR 6000 C-6 cement mills. The two MVR cement mills will come equipped with a conventional drive with an installed power of 6000kW. They will grind various cement qualities to the required fineness degrees between 3600 - 5500cm²/g depending on the product type, achieving capacities of 132 - 210t/hr. The cement mills are scheduled to be delivered at the end of 2014.

In Malaysia, Sinoma subsidiary Tianjin Cement Industry Design & Research Institute (TCDRI) has ordered one MPS 2800 BK coal mill for YTL Cement. Featuring an installed power of 700kW, the coal mill will be grinding 35t/hr of a sub-bituminous coal with a total moisture content of 25% to a product fineness of ≤10% R 90µm. The delivery of the mill is scheduled for the end of 2014.

India: Shree Cement plans to set up a 3Mt/yr cement grinding plant at Odapada in Dhenkanal District, Odisha State for about US$76.6m. The location will enable the cement maker to utilise the fly ash produced at the power plants owned by Lanco Badband Power, GMR Kamalanga, Navabharat Ventures and Bhushan Steel based in the region. The plant will be built on an area covering 0.24km² of land which will be allotted by the district administration on Odisha Industrial Infrastructure Development Corporation's request.

Mexico: Holcim will start a programme to use biomass as fuel in August 2014 at its Orizaba cement plant. Its subsidiary Ecoltec has installed a system to utilise biomass, using residual heat from the cement furnaces. The company will use coffee bagasse and biomass from the paper and beer industries, according to spokesman Gustavo Gastelum. Apart from limiting fossil fuel consumption, the project will also reduce methane gas emissions from organic waste. Since 1990 Holcim Mexico has cut its net carbon dioxide emissions by 19%.

India: The Himachal Pradesh State Pollution Control Board (HPSPCB) has ordered Jaypee Cement to halt its over-production immediately, according to local media. In order to ensure that the directive is followed the board has asked the electricity provider to limit the power supply that is provided to the cement plant.

Kazakhstan: HeidelbergCement will soon launch a new 800,000t/yr cement plant in Mangystau Province following a US$273m investment. The plant will use dry chalk as a raw material. So far more than 70,000t of cement has been produced in test mode.

"Our company is included in the programme of forced industrial innovative development," said Evgeny Kholodnyakov, chief technologist of Kaspi cement plant. The plant will supply cement to the local and export markets.

US: Holcim US plans to invest US$100m to modernise its Ada cement plant in Oklahoma State, according to Robin DeCarlo, vice president of Holcim's corporate communications. The company submitted an application for a permit to the Oklahoma Department of Environmental Quality (DEQ) in June 2014 and expects to begin upgrading the plant between October and December 2014.

"We can't start without a permit from DEQ," DeCarlo said. She didn't release specific details about the modernisation but indicated that it would include upgrading the kiln line. DeCarlo noted that the modernisation of the kiln line will meet 'all known environmental regulations and reduce all major regulated emissions,' even with the increased plant capacity.

"We are expecting that there will be approximately 250 temporary jobs during the modernisation phase, which will have a direct and positive impact on the Ada economy," said DeCarlo. "The modernisation will increase our plant's capacity by about 20%." Holcim's plant in Ada currently employs about 120 people.

Paraguay: The Paraguayan Congress is set to approve a US$67m loan to state-owned cement producer Industria Nacional del Cemento (INC) to resume investment in its Villeta and Vallemi cement plants. The funding will allow INC to continue its US$25.7m contract with FLSmidth to convert its fuel from fuel oil to coke as well as its US$6.3m contract with Claudius Peters, according to Esmerk news service. Other contracts are with Haver & Boecker, for US$7m to install two bagging facilities, and with Daca to optimise an agricultural lime plant, which is suspended due to legal issues, for US$5.9m. Overall, the investments that will be made with the loan will save INC US$30m/yr.

Kazakhstan: Karaganda Cement has started the operation of its No. 5 cement production line, the administration of the Karaganda Region has announced. The project cost US$67m and it has created 115 jobs. The cement plant will reach its design cement production capacity of 1.5Mt/yr in 2015. Karaganda Cement is owned by Steppe Cement Holding, a subsidiary of Central Asian Cement.