Displaying items by tag: GCW341

HeidelbergCement made Italy’s Cementir Holding its Valentine last week in the form of a deal for the Italian company to buy up the remaining shares in Lehigh White Cement in the US. Cementir takes control of the former joint venture by upping its share to 63.25% for US$107m and one of the other partners, Cemex, increases its share to 36.75% for US$34m. Despite making the announcement on Valentine’s Day HeidelbergCement then described the sale in fairly unromantic language, “As a niche product with small volumes, the standalone production of white cement does not fit to the strategic focus on efficiency of HeidelbergCement.” Maybe they could just send flowers to each other next year instead!

More seriously, this latest deal by Cementir is yet another intriguing evolution of the Italian multinational building materials producer. The company says it is the largest white cement producer in the world through subsidiaries like Aalborg Portland in Demark, Sinai White Cement in Egypt and Lehigh White Cement in the US. Its plant at El-Arish in Egypt is the largest white cement unit in the world. In 2016 it reported a white cement production capacity of 3.3Mt/yr from six plants in Denmark, Egypt, China, Malaysia and the US. Its volume sales of white cement were 2.2Mt at this time or a capacity utilisation rate of 67%. In the US it operates two white cement plants located in Waco, Texas and York, Pennsylvania with a total capacity of 0.26Mt/yr, as well as a distribution network throughout the country, which is also used to distribute white cement imported from its partners across North America. In 2017 Cementir produced 10.3Mt of Ordinary Portland (grey) Cement and white cement, a rise of 24.6% year-on-year from 8.25Mt in 2016. The boost was delivered by the acquisition of Compagnie des Ciments Belges. Like-for-like sales volumes increased by around 1.7% year-on-year.

Cementir left the Italian market in 2017 when it sold Cementir Italia to HeidelbergCement for Euro315m. As this column commented as the time (GCW320) the deal seemed cheap given that HeidelbergCement paid Euro315m for five integrated cement plants plus extras. However, Cementir appeared to actually make a profit on Sacci which it picked up cheaply in 2016.

Now HeidelbergCement has returned the favour by selling Cementir the controlling stake in Lehigh White Cement. The German cement producer may have grumpily rubbished the sale in its press release but the language makes one wonder whether this was a quiet part of the Cementir Italia deal in 2017. The white cement industry is miniscule compared to the OPC one but HeidelbergCement has just handed even more control of it to Cementir. From Cementir’s perspective this probably seems very efficient.

South Africa: PPC has announced that its interim chief executive Johan Claassen as chief executive and executive director of the group, effective 15 February 2018. He had been appointed as interim chief executive in July 2017 following the sudden resignation of Darryl Castle.

PPC chairperson Peter Nelson said that, since his appointment as interim chief executive, Claassen had overseen a number of important milestones. He said Claassen had also demonstrated that he had the right skills to lead effectively. PPC also confirmed Njombo Lekula as managing director of the group’s South African cement activities and Mokate Ramafoko as managing director for the rest of Africa’s cement activities.

Oman: Kuldip Chadha has been appointed as the financial officer of Raysut Cement. The Indian national is a qualified chartered accountant with over 40 years’ experience in internal audit, including 26 years at a senior management level.

The cement producer has also appointed Gopal Parikh as its chief operation officer. Gopal, also an Indian national, holds a BE (Mechanical) from Engineering College in India and has more than 30 years’ experience in cement industries at a senior management level.

Greece: Dimitris Hanis has been appointed as the chief executive officer (CEO) of Heracles Group, a subsidiary of LafargeHolcim. Hanis began working in Heracles Group in 2003 and has since taken executive positions in the group, according to the Athens News Agency. Heracles Group is the largest cement producer in Greece, with more than 100 years of presence in the market. It operates a network of 33 production and commercial facilities in the country.

India: LafargeHolcim plans to spend US$214m towards building a new cement plant in the state of Rajasthan. The 3.1Mt/yr plant will be operated by its local subsidiary, Ambuja Cement, and it will target markets in the north of the country, including Delhi. Commissioning for the plant is scheduled for the second half of 2020.

"India is the second biggest global cement market and is forecasted to continue to see high growth rates. We are excited to invest in this highly attractive market to further strengthen our footprint and to reinforce our leading building materials position in India," said Jan Jenisch, Group chief executive officer (CEO) of LafargeHolcim.

Honduras: Cementos Argos has ordered two Plug&Grind XL modular grinding units for a project in Honduras. Each mill has a production capacity of 220,000t/yr. The ball mills are 3.0 x 9.5m and they have a power of 1100kW. They also include 50,000m³/hr bag filters and classifiers. The scope of supply includes new cement storage silos for finished product, packing and dispatching equipment. The cement producer announced in early February 2018 that it was planning to spend US$20m on building a new cement grinding plant at Choloma.

Pakistan: DG Khan’s sales grew by 8% to US$154m in the second half of 2017 from US$142m from in the same period of 2016. However, its profit after taxation fell by 21% to US$31m from US$40m.

Germany: HeidelbergCement has continued to benefit from its acquisition of Italy’s Italcementi. Its sales revenue rose by 2.1% year-on-year on a like-for-like basis to Euro17.3bn in 2017 from Euro17.1m in 2016. Its cement sales volumes increased by 1.1% to 126Mt from 124Mt.

“The challenges were numerous: energy cost inflation, increased competition in emerging markets, especially in Indonesia, uncertainties following the Brexit decision and bad weather, especially in the USA,” said Bernd Scheifele, chairman of the managing board of HeidelbergCement. “Nevertheless, we were able to increase our result from current operations as guided. The consistent focus on efficiency and margin improvement and the successful integration of Italcementi that led to higher than expected synergies contributed to this success. Overall, 2017 was a record year for sales volumes, revenue and result from current operations.”

The group reported increasing cement deliveries in all areas except Africa-Eastern Mediterranean in its preliminary results. In this region cement sales volumes fell by 0.6% to 19Mt from 19.1Mt due to a poor market in Egypt. Otherwise it described its market development in the region as ‘varied.’

France: Vicat’s earnings have suffered from by falling cement sales volumes in Egypt and a ‘sharp’ increase in production costs caused by the devaluation of the Egyptian Pound in late 2016. Its earnings before interest, taxation, depreciation and amortisation (EBTIDA) fell by 5.9% at constant scope and exchange rates to Euro444m in 2017 from Euro458 in 2016. Despite this, its consolidated sales rose by 6.4% to Euro2.56bn from Euro2.45bn. The cement producer’s cement sales volumes rose by 4.9% to 22.9Mt from 21.9Mt.

“Vicat posted a healthy performance in 2017 amid a very mixed environment,” said group chairman and chief executive officer (CEO) Guy Sidos. He added that the group had faced ‘difficult’ weather conditions, currency trends and geopolitical tensions in some of its markets. “In spite of these headwinds, our businesses in France, Asia and the US made healthy progress and offset the contractions in the Africa and Middle East region.”

India: Ambuja Cements has benefited in 2017 as the impact of demonetisation and general sales tax eased. The subsidiary of LafargeHolcim reported that its sales rose by 12% year-on-year to US$1.58bn in 2017 from US$1.41bn in 2016. Its operating earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 14.9% to US$300m from US$261m. Its cement sales volumes rose by 8.7% to 23Mt from 21Mt.

“During the year, we focused on providing specific solutions to address customer needs, value offerings, particularly for the retail segment products, and made strong investments in building brand equity. Our strategy to focus on premium products, core markets and managing costs has delivered higher sales and EBITDA growth,” said Ajya Kapur, managing director and chief executive officer (CEO) of Ambuja Cements.