Displaying items by tag: GCW171
Grand Theft Carbon
08 October 2014It's been an expensive few weeks for Holcim. First, the Venuezuelan state-run outfit Corporación Socialista Del Cemento failed to pay its last instalment of US$97.5m in compensation for its forced nationalisation in 2008. Then the European Court of Justice dismissed Holcim's lawsuit against the European Commission over the theft of 1.6 million emissions allowances in 2010. Here we concentrate on the second story.
Holcim Romania's CO2 accounts held within the Romanian National Registry for Greenhouse Gases were illegally accessed by hackers in November 2010. 1,000,000 CO2 allowances were transferred to an account in Liechtenstein. Another 600,000 CO2 allowances were transferred to a company in Italy, which had account registries in Italy and the UK. Parts were then transferred to accounts in the Czech Republic, the UK and France before being sold on to emissions exchanges in Paris and Amsterdam.
Holcim then tried to sue the Commission, which administers the bloc's electronic emissions trading network, in 2012 for failing to freeze the accounts containing the stolen units, for not returning them and for allowing other companies to turn them in for compliance under the EU Emissions Trading System (ETS). The multinational building materials producer tried to force the commission to pay it Euro17.6m for damages associated with the theft. The amount was equivalent to the 905,000 allowances that remain unaccounted for at a spot price of Euro14.6/unit and an interest rate of 8%.
Other registries were also targeted in early 2011. As much as Euro30m in carbon allowances were stolen at the time, leading to exchanges having to stop trading temporarily.
Although this is a relatively small amount for a multinational company that reported net sales of over Euro16bn in 2013, it feels harsh. If a personal investor had assets stolen from a bank or investment scheme they would expect some sort of compensation.
It should be noted though that it is unclear how the hackers gained entry to Holcim's account details. Successful 'phishing' for account logins via fake emails and the like might suggest lax security on Holcim's side. Or a more conventional hack on the registry server might suggest loose security on the registry's side. Add to this the fact that the price of carbon allowances has fallen since 2010. Reuters estimated that the outstanding allowances would be worth Euro5.1m today.
Hopefully the thefts in late 2010 and early 2011 can be marked down as teething problems. Yet the European Union Emission Trading Scheme is compulsory for 11,000 power stations and manufacturing plants. Any European company that may be less keen on the scheme is unlikely to have its fears settled by high profile cases of carbon credit thefts or the current low price of trading.
Meanwhile, companies and investors involved with China's Guangdong Province carbon emission trading scheme, the world's second biggest such scheme after Europe, may well be watching what happens in Europe closely.
India: The board of directors of Gujarat Sidhee Cement Ltd has appointed R Mohnot as CFO and company secretary effective from 1 October 2014.
Pakistan’s sales affected by smuggling from Iran
08 October 2014Pakistan: During the first quarter of the current fiscal year, which began on 1 July 2014, the Pakistani cement industry posted growth of 9.9% in local sales compared with sales during the first quarter of previous fiscal year. However, exports declined by 8.1% compared with exports during the year-earlier quarter. Overall growth was 4.9% year-on-year for the quarter.
Cement despatches to domestic markets during the month of September 2014 were 2.42Mt, compared with 2.12Mt during September 2013, an increase of 13.9%. Exports during September 2014 were 0.73Mt against 0.82Mt during September 2013, a decline of 10.6%. Total despatches during September 2014 were 3.15Mt compared to 2.94Mt during the same month of 2013, an increase of 7.1%.
Officials said that Pakistan's cement industry is already facing a lot of issues due to high duty/tax structures, impractical imposition of sales taxes, increasing coal import duties, increasing power tariffs and axel load restrictions for haulage trucks that limit load capacities. Now they claim that it is also facing smuggling from Iran.
Domestic cement uptake in the south of the country is being seriously affected due to the influx of Iranian cement. Statistics showed that, against a 10.8% increase in domestic sales in the north during the first quarter of the current fiscal year, the domestic sales in the south showed an increase of only 5.4%.
A spokesman from the All Pakistan Cement Manufacturer's Association (APCMA) pointed out that despatches in the south should have been higher because the exports from this region during the first quarter of the current fiscal year increased by 12.2% to 0.78Mt against 0.70Mt during same period in 2013. On the contrary, exports from the north of Pakistan declined by 17.3% to 1.28Mt during the first quarter against 1.56Mt during same period last year.
The spokesman said that such lopsided sales are 'puzzling' at a time when the economic activities in the south have picked up appreciably. He said that a deep analysis of the situation revealed that the consumption has most probably increased at par or higher than the northern region but that Iranian cement smuggled without paying the duties and sales tax has penetrated the southern market, which is close to the Iranian border.
Argos gets green light to access more cash
08 October 2014Colombia: Directors at Cementos Argos have given the green light for an ordinary bond issuance of up to US$495m to be used as working capital and to swap financial liabilities. The company will have three years to carry out the issuance, although it will most likely do so in the coming months.
Previous issuances by Cementos Argos, such as those carried out in 2012 to raise US$495m, have helped the firm expand in Colombia, Latin America and the United States. Argos revealed in August 2014 that it is considering buying Holcim and Lafarge assets in the region, particularly Mexico and Brazil, and has announced that it will also build a US$450m plant.
JSW eyes up Kerala for new business
08 October 2014India: JSW cement, the largest producer of slag cement in India, is reported to be eyeing up the coastal state of Kerala as a location into which to expand. The company is aiming at 9 - 10% growth from states in southern India in 2014, according to Pankaj Kulkarni, Director of JSW Cement Ltd.
It says that the focus will be on selling its Portland slag cement (PSC), which is highly-resistant to corrosion both from the soil and sea. This perfectly matches conditions in Kerala, which has a long coastline and severe monsoon.
The company is also looking at expanding its clinker production capacity in the near future by setting up a plant in Chittapur in Karnataka. Growth in cities like Chennai, Hyderabad, Bangalore and Kochi will lead the way in the Southern market, according to Anil Kumar Pillai, CEO of JSW Cement Ltd. He added that JSW Cement, part of JSW Group, has made significant investments into cement manufacturing and will continue to add capacity to serve the burgeoning cement market.
Suez Cement to close Tourah Factory 1
08 October 2014Egypt: Suez Cement Co has voluntarily agreed to close its Tourah Cement Factory 1 to comply with the local government's policy to reduce the number of facilities that do not meet environmental standards. Suez Cement has instead chosen to invest US$69.9m in environmental mitigation measures at its Tourah Cement Factory 2.
Century Textiles' Manikgarh cement plant II commences production
08 October 2014India: Century Textiles and Industries Manikgarh cement plant II has commenced production as of 26 September 2014. The plant has 2.8Mt/yr of cement production capacity.
Romania: Holcim is mulling its options after the European Union's (EU) top court dismissed its lawsuit against the European Commission (EC) over the theft of 1.6 million emissions allowances in 2010.
The European Court of Justice (ECJ) on 18 Sept 2014 rejected Holcim's arguments that the EC should compensate it for Euro17.6m for damages suffered when the online carbon trading account of its Romanian subsidiary was hacked. In its judgment, the court ruled that Holcim must bear the losses resulting from the thefts and pay the EC's legal costs in the case, which were not disclosed.
"Holcim has taken note of the General Court's judgement," said a Holcim sposewoman. "We are currently analysing the decision in more detail and cannot comment any further."
In November 2010 cyber criminals hacked into Holcim's account at the Romanian emissions trading registry - previously one of around 30 online trading hubs in the EU carbon market - and transferred 1.6 million s-called EU allowances to two accounts at the Italian and Liechtenstein registries. According to EU records, the allowances then passed through registry accounts in the UK, France, the Netherlands and the Czech Republic within hours, before eventually being sold on emissions exchanges in Paris and Amsterdam.
Around 695,000 allowances were later returned to Holcim by various European authorities, but the company's spokeswoman said that the remaining units have still not been recovered.
Holcim sued the EC, which administers the bloc's electronic emissions trading network, in 2012 for failing to freeze the accounts containing the stolen units, for not returning them and for allowing other companies to turn them in for compliance under the EU Emissions Trading System (ETS). The EC refused to reveal the location of the allowances, saying that under EU law the details were confidential and could only be passed to European authorities.
Several European companies including International Power and ScottishPower have since surrendered some of the units to comply with the ETS, but claimed that they bought them in good faith, without knowing that they had been reported stolen.
Holcim had claimed that the EU should pay it the value of any allowances still missing, based on the market price on 16 November 2010 (the day of the theft) plus annual interest of 8%. That amounts to more than Euro17.6m, based on a spot allowance price of Euro14.60/unit.
Holcim has also sued Romania's National Environmental Protection Agency (NEPA) over similar claims.
"The court case against NEPA has been suspended by the civil court until the Romanian law enforcement agency (DIICOT) finalises the criminal investigation, but as of now we have no indication as to when this might happen," said Holcim.
Holcim cement plant to take toxic Ha Long oil
07 October 2014Vietnam: Authorities in the northern province of Quang Ninh will remove 7000L of toxic oil from the edge of the Ha Long Bay in October 2014 and dispose of it at Holcim's cement plant in Mekong Delta. According to local media, the plant is the only facility in the country with the required technology.
The oil is contaminated with PCBs (polychlorinated biphenyls), a chemical group that associated with endocrine disruption and neurotoxicity and an illegal substance in Vietnam. PCBs are also carcinogenic.
The oil was imported by the state-owned Cuu Long Company in old transformers that were purchased in South Korea in November 2007. Quang Ninh officials fined Cuu Long for importing the machines in 2008 and ordered the company to return the transformers, which were intended for use in the construction of a thermal power plant. However, the exporter refused to take them back. The oil idled in the rusting devices, which sat covered in canvas at Cai Lan Port on the edge of the UNESCO world heritage site until the transformers began to leak.
Eurocement shuts down Savinsky cement plant
07 October 2014Russia: Eurocement has closed down Savinsky cement plant in the Arkhangelsk region for modernisation until 2018. Employees of the plant are reportedly afraid that the production will be eliminated as voluntary resignation was offered by the management of the plant. Savinsky cement plant produced 207,000t of cement in January - August 2014, down by 57% compared with the same period of 2013.