Displaying items by tag: GCW201
CRH faces competition probe on home turf
20 May 2015CRH's ambitions took a setback this week when the Irish Competition and Consumer Protection Commission (CCPC) raided the offices of its subsidiary Irish Cement as part of an investigation into the bagged-cement industry in Ireland. Details are vague but the media reports state that the inquiry is examining whether or not the Irish market leader has abused its dominant position in the market, valued at Euro50m/yr.
Undoubtedly CRH and Irish Cement hold a leading place in the local cement industry. Irish Cement runs two integrated cement plants in the Republic with a combined production capacity of 2.7Mt/yr. This constitutes 79% of the country's 3.4t/yr total capacity.
Previous acquisition activity such as CRH's purchase of Dudman Group's UK import terminals in July 2013 has led to concerns regarding market competition. At that time Irish cement importer Eircem complained to the UK Competition Commission (CC), claiming that 'there is no free competition' in the market and also to initiate proceedings against CRH for damages relating to alleged anti-competitive behaviour in that market.
Roll the clock forward nearly two years and CRH is making the headlines once more for a much larger acquisition portfolio: the purchase of the largest chunk of assets sold from the merger of Lafarge and Hocim. With regards to Ireland and the UK, CRH will take on three (Dunbar, Tunstead and Aberthaw) of Lafarge Tarmac's five cement plants. Lafarge Tarmac's other two plants (Cookstown and Cauldon) will become part of the Aggregate Industries division of Lafarge Holcim. And once again, following acquisition activity competition, questions are looming as the CCPC raid suggests. This time though the potential impact of any market abuse, if it is actually happening, is far larger given the influx of UK and European assets that CRH are taking on.
We don't know what the CCPC will find but we can look at how CRH was viewed in the UK CC report on 'Aggregates, cement and ready-mix concrete market investigation' published in January 2014. At that time the CC concluded that, "We have seen nothing to suggest... that the recent acquisitions by CRH will result in importers collectively or individually offering a significantly greater constraint on cement producers than in the past." Amusingly though CRH also told the CC that it had no major expansion plants for the UK.
We also know how one of CRH's competitors felt about them. One of the more telling quotations from the CC report was from a Commercial Manager, at Lafarge Cement Ireland who viewed expansion in Ireland by Lafarge as a 'mechanism' to control CRH's ambitions by attacking it in its home market by showing CRH that Lafarge was a global player. Ironically the comments of that anonymous manager look very different now that CRH is on track to becoming a global player itself.
Switzerland: Kaspar E A Wenger has been appointed as the chairman of the board of Holcim (Schweiz) AG. The role follows more than 20 years at Holcim, including more than ten years of operating responsibility for Holcim (Schweiz) AG and the responsibility for Central Europe.
In the framework of the progressing merger between Holcim and Lafarge, Wenger will become designated chairman of the board of Holcim (Schweiz) AG, effective from 30 June 2015. He will relinquish his responsibilities as area manager for Central Europe (Switzerland, South Germany, Italy). Wenger will play a key role in supporting the activities of LafargeHolcim in Switzerland specifically.
Gerd Aufdenblatten, currently CFO of Holcim Central Europe, will replace Wenger and become cluster-CEO. Gerd Aufdenblatten joined Holcim in 2007 and became CFO of Holcim Central Europe in 2013. A successor for the position of CFO will be communicated in due course.
Vaishno Cement appoints three directors
20 May 2015India: Vaishno Cement Company Ltd has appointed Nabin Kr Jain, Vineet Agarwal and Kakali Ghosh as non-executive independent directors with effect from 22 April 2015. Further, Vijay Jaideo Poddar, Girdhar S Bansal and Sarita Agarwal, all non-executive independent directors, have resigned from directorship with effect from 22 April 2015.
Switzerland: Holcim is preparing the reorganisation of group functions in the context of the proposed merger with Lafarge. The objective is to create a lean organisation with empowered countries, regional management platforms and group functions for the combined company.
Group functions are designed to increase the competitiveness of the group at global, regional and local levels, to implement best practices and to support and enable LafargeHolcim to achieve the highest possible performance. The proposed new organisation would result in a net reduction of approximately 120 positions in Holcim group functions in Switzerland.
The social consultation process to reduce the impact on roles that are affected by reductions will now be launched with the employee representatives in Switzerland. In parallel, Lafarge is presenting to its social bodies' representatives the proposed organisation of central functions in the context of the creation of LafargeHolcim.
The merger project is expected to close in July 2015, subject to the acceptance of Holcim's public exchange offer by the shareholders of Lafarge. The implementation of the new organisation is expected for early 2016 after completion of all relevant social consultations in Switzerland and France.
UK: Saxlund International has collaborated with Hope Construction Materials to install and commission a new waste-derived fuel solution for Hope Construction Materials' cement plant in Derbyshire, UK. The solution has been designed to provide storage, transportation, weighing and injection of solid waste fuel (SWF) to the two kilns. The goal is to increase the rate at which Hope can replace fossil fuels with waste-derived alternatives to more than 50%, a key part of its long-term sustainability targets.
The project incorporates a fuel reception and push-floor storage solution, reclaim conveyors, process tower with drum magnet and star screen, together with a weighing and pneumatic injection system to the main burners. The system facilitates stable and reliable process conditions to help minimise build-up in the pre-heater tower. It also offers a 'future-proof' solution with the flexibility to handle changing fuel characteristics and different types of waste-derived fuels, should suppliers change in the future.
"This is a flagship project for us. Once fully operational, the new solid waste fuel (SWF) system will run on a 24/7 basis delivering fuel at a rate of up to 5t/hr to each kiln," said Matt Drew, managing director Saxlund International. "It means that Hope Works will soon be operating with a significantly larger proportion of waste-derived fuels, in the process diverting up to 80,000t/yr of bulk solid waste from landfill and representing significant carbon savings to the business."
Lafarge’s Indian divestments receive six bids
20 May 2015India: Six foreign and domestic cement companies, along with one private equity firm, have expressed interest in buying the assets that Lafarge is divesting in India before it closes its merger with Holcim. The bids were in excess of US$627m.
The deadline for submitting non-binding bids for the assets expired on 16 May 2015. Ahead of that deadline, local media reported that bids came from Shree Cement, Chettinad Cement, HeidelbergCement India, The Ramco Cements, CRH and Blackstone Group.
As a precondition to clearing Indian leg of the LafargeHolcim, the Competition Commission of India (CCI) directed Lafarge to sell two of its assets in Chhattisgarh and Jharkhand. These are a cement plant at Sonadih, Chhattisgarh and a grinding plant at Jojobera, Jharkhand, with a total capacity of approximately 5Mt/yr. In its directions, the CCI said that Lafarge should sell its assets 'to relatively smaller players, having an installed capacity of less than 5% of their total capacity in the relevant geographic market.'
With the non-binding bids in, Lafarge is likely to shortlist bidders by the middle of June 2015. The deal is likely to be concluded in July 2015.
India: UltraTech Cement plans to buy Jaiprakash Associates' Bhilai plant for US$330 – 345m. The plant has US$87.5m of debt.
Eurocement Ukraine cuts cement production by 22%
20 May 2015Ukraine: Eurocement Ukraine cut its cement production by 21.9% year-on-year to 1.09Mt in 2014. Its sales volumes decreased by 24.7% year-on-year to 1.09Mt, while its sales fell by 19.5% to Euro34.1m. Eurocement Ukraine has reported a loss of Euro11.7m for 2014, having decreased its net revenues by 23.6% to Euro34.3m.
UniCem to suffer US$45.2m losses in 2015
20 May 2015Nigeria: The management of United Cement Company of Nigeria (UniCem) has disclosed that the company will suffer losses totalling US$45.2m in 2015 due to the economic downturn currently affecting Nigeria, including devaluation of the Naira.
"The devaluation of the Naira impacts negatively on our business because most of our transactions, like procurement of spares and materials, payment of some of contractors (Macmahon and CBMI), energy cost and servicing of foreign creditors, are basically US$-denominated. Cumulatively, we will have a revenue loss of US$45.2m in 2015 due the devaluation of the Naira," said managing director Olivier Lenoir.
The construction of the line II project at Mfamosing, Akamkpa in Cross River State is on course and will provide employment for hundreds of workers. "This project will at peak employ a total manpower of 1915. At this moment the manpower working in the project is 1290. The operations will determine what the manpower need will be when we handover the project," said Lenoir. "The captive power plant is 85% complete and the civil construction of the second line is at 38%." He added that the major challenges in the project are non-technical and include high level of malaria infection, heavy rainfall and customs clearance problems. Lenoir said that, despite these hitches, UniCem is optimistic that the project will be completed on schedule by September 2016.
France: Lafarge has proposed to cut 380 jobs as part of its pre-merger preparations ahead of its merger with Holcim to form LafaregHolcim. The new group, set to be the world's largest building materials group, will employ approximately 115,000 people.
The organisation of the new group will be balanced between a decentralised structure and strong central functions based on three organizational levels: Countries; Regions (Europe, North America, Middle East & Africa, Latin America, Asia-Pacific, and; Corporate functions, which will help define the Group's key strategies.
There will be an equivalent number of personnel in the central functions in France and Switzerland. The new group's research and development centre will be located in France.
Concerning Lafarge at worldwide level (i.e., in sites located in Atlanta (USA), Beijing (China), Cairo (Egypt), Kuala Lumpur (Malaysia), Lyon (France), Montreal (Canada), Paris (France) and Vienna (Austria)), the proposed new organisation of central functions will result in approximately 380 net job losses, with 166 of these in Paris and Lyon.
The social support measures that will be negotiated with employee representatives will mostly consist of solutions based on internal mobility, early retirement and (in France) voluntary departures. The proposed merger will not affect employment in Lafarge's operational functions in France, which employ more than 4500 people.
This procedure is a key phase in the preparation of the creation of the new LafargeHolcim Group. The completion of the proposed merger is expected to occur in July 2015. Before this can happen, the public exchange offer will have to be successful, with shareholders tendering at least two-thirds of Lafarge shares.