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Cemex took a major step towards cutting its debts last week when it announced the sale of selected assets in the US for US$400m. Two cement plants in Odessa, Texas and Lyons, Colorado were included in the deal along with three cement terminals and businesses in El Paso, Texas and Las Cruces, New Mexico. Grupo Cementos de Chihuahua (GCC) was announced as the buyer.

Together the two plants being sold hold a cement production capacity of 1.5Mt/yr giving a rough cost of US$267/t for the assets. This compares to the cost of US$170/t that the European Cement Association (CEMBUREAU) estimates is required to build new capacity. Back in August 2015 when Taiheiyo Cement’s Californian subsidiary CalPortland purchased Martin Marietta Materials’ two cement plants in the state it paid US$181/t. Summit Materials paid far more at US$375/t in July 2015 when it purchased Lafarge’s cement plant in Davenport, Iowa, although that deal included seven cement terminals and a swap of a terminal. Other sales in 2014 to Martin Marietta Materials and Cementos Argos also hit values of around US$450/t involving lots of other assets including cement grinding plants and ready mix concrete plants.

Back on Cemex, the current sale to GCC maintains its position as the third largest cement producer in the US after the HeidelbergCement acquisition of Italcementi completes in July 2016 subject to Federal Trade Commission approval. However, it holds it with a reduced presence. Its cement production capacity will fall to 13Mt/yr from 14.5Mt/yr. It loses cement production presence in Colorado although it may retain distribution if it holds on to its terminal in Florence. In Texas it retains the Balcones cement plant near San Antonio and up to nine cement terminals depending on which ones it sells to GCC.

Selling assets in the US must be a tough decision for Cemex given that a quarter of its net sales came from the country in 2015. This was its single biggest territory for sales. This share has increased in the first quarter of 2016 as the US market for construction materials has continued to pick up.

Withdrawing from western Texas with its reliance on the oil industry makes sense. The plant it has retained in that state, the Balcones plant, is within the so-called Texas Triangle and so can hopefully continue to benefit from Texas’ demographic trends for continued housing starts and suchlike. Colorado is one of the middling US states in terms of population and likely to be a lower priority than other locations. The sales will see Cemex retrench its cement production base in southern and eastern parts of the country with the exception of the Victorville plant in California.

We’ve been watching Cemex keenly as other multinational cement producers have merged and laid out plans to merge in recent years. Saddled by debts, Cemex has appeared unable to either buy more assets itself and has remained distant from any talk of merger activity itself. The sales announcements in the US reinforce the image of a company taking action to relieve itself of its debts in 2016 following sales in Thailand, Bangladesh and the Philippines, and amended credit agreements and more borrowing. However, sales of cement plants in west Texas and Colorado outside of the strong markets in the US don’t quite suggest a company that has really committed yet to reducing its debt burden. Cemex continues to walk a tightrope between keeping the creditors at bay and riding the recovery in the US construction market.

This article was updated on 14 June 2016 with amended production capacity data for the Odessa cement plant

Nigeria: AshakaCem, a subsidiary of Lafarge Africa and member of the LafargeHolcim group, has appointed Alhaji Rabiu Abdullahi Umar as its new managing director. AshakaCem said in a statement that Umar was appointed to succeed Leonard Palka, a Polish national, who has resigned from the company.

AshakaCem in Gombe State is one of the four cement companies controlled by Lafarge Africa in Nigeria. Formerly the companies were known as Lafarge Cement WAPCO Nigeria before the name was changed in 2014.

China: CNBM has cancelled its acquisition of Shanshui Cement due to changes in the board composition, disputes regarding the control of Shandong Shanshui Cement Group, the financial difficulties of Shanshui Cement and the prolonged suspension of trading of the shares in Shanshui Cement. It added that the final issue ‘significantly and adversely’ affected the liquidity of the company and impaired attempts to determine the current market price of shares in Shanshui Cement. Shanshui Cement has faced financial troubles since a shareholder battle for control of the company took place in late 2015.

Iran: Iran cement exports fell by 20% year-on-year to 18.5Mt in the financial year that ended on 20 March 2016 according to Abdolreza Sheikhan, secretary of Iran's Cement Industry Employers Association. In comments to the Islamic Republic News Agency Sheikhan blamed the fall in exports on security problems in the region including Iran’s main export market in Iraq. In the previous financial year Iraq represented 60% of Iran’s export market for cement.

Sheikhan noted that Iraq increased its tariffs on imports of cement to US$13/t from US$4/t in the previous year and raised tariffs to US$72/t in the latest financial year. He added that Azerbaijan had increased its cement production capacity that had also reduced its reliance on Iranian cement exports.

Spain: The refinancing of a Euro825m loan of cement producer Cementos Portland Valderrivas has stalled. Fomento de Construcciones & Contratas SA (FCC) offered a 10% ‘haircut’ to the loan which matures in July 2016 but the offer has been rejected by the company’s creditors. FCC, a Spanish civil engineering group, owns an 80% stake in Cementos Portland Valderrivas.

More than 50% of the debt of Portland is now in hands of so called ‘vulture funds’ such as Apollo, Davidson and Avenue whose return requirements are different than those of traditional banks. After a recent Euro709m capital hike FCC has set aside around Euro300m to appease creditors, according to the Expansión newspaper.

Sri Lanka: Holcim Lanka has inaugurated a transport model for the transportation of its raw materials. In a public-private partnership between Holcim Lanka and the government, the state railway will transport raw materials by rail from the port of Trincomalee to the Mahawa railway station. The company's dedicated trucks will then transport the materials to the Puttalam cement plant. The inauguration took place at the China Bay station in Trincomalee, according to the Daily news newspaper.

“The successful launch of this phase would not have been possible without the support received from the Ministry of Transport," said Holcim Lanka Procurement and Logistics Director Charith Wijendra.

Environmental and efficiency improvements of the new model include using Supramax bulk carriers instead of smaller ships, using dedicated containerised trucks to reduce spillages and cut journeys and a reduction in the use of the railway network.

Belgium: FEBELCEM, the federation of cement producers in Belgium, has reported that cement consumption rose by 4.6% year-on-year to 6.4Mt in 2015. It attributed the growth to favourable weather and growth in residential construction. It expressed concern that imports of cement also rose in 2015 by 18% to 1.51Mt from 1.28Mt. This increased the market share of imports to 23.6%.

Australia: Australian Bauxite has completed its first 5560t shipment of cement-grade bauxite from Bell Bay Port in Tasmania. The shipment is the first from Australian Bauxite’s Bald Hill mine, the first new bauxite project in Australia for more than 35 years. The unnamed customer is preparing for a second shipment of 30,000 – 40,000t to be completed by the end of June 2016. The sales mark a change of direction by Australian Bauxite away from alumina refineries towards specialist cements and fertilisers.

Canada: A fire broke out at a coal silo at the Lehigh Cement plant in Edmonton on 10 May 2016. Four fire fighters were sent to hospital to investigate potential carbon monoxide inhalation, according to Postmedia Breaking News. An investigation is now underway to discover the cause.

Lehigh Hanson health and safety director Gerry Sanderson said that the plant wasn't shut down or evacuated. He added that the fire had been contained and that damage to the facility appeared to be minimal.

Mexico: On 9 May 2016 Cemex announced that it had amortised debt worth US$397.4m as part of its refinancing strategy to lower costs. Cemex, which had been selling assets to cut debt, announced an offer to buy back up to US$400m in debt in April 2016.