Displaying items by tag: GCW395

All the major multinational cement producers reported growing sales in 2018. Yet, the big growth was found outside of Europe, with China Resources Cement (CRC), Ultratech Cement and Dangote Cement all posting sales revenue growth of above 10%. Similarly, cement sales volumes continued to rise. CRC and Ultratech Cement were the standouts here, with the latter benefitting from its acquisitions including, most recently, Binani Cement. Concrete sales volumes were the same, rising for all the companies with the exception of Buzzi Unicem. It suffered market issues in Italy and Germany.

Graph 1: Sales revenue from selected multinational cement producers in 2017 and 2018 (Euro billions). Source: Company financial reports.

Graph 2: Cement sales volumes from selected multinational cement producers in 2017 and 2018 (Mt). Source: Company financial reports.

Graph 3: Ready-mixed concrete sales volumes from selected multinational concrete producers in 2017 and 2018 (Mm³). Source: Company financial reports.

With the major Chinese producers, including CNBM and Anhui Conch, yet to release their annual results for 2018, CRC is included in this roundup to give an idea of how that market is performing. Both CNBM and Anhui Conch have released profit alerts anticipating bumper results in 2018 though. This is likely due to boosted local cement prices.

The major story for the European-based producers was one of asset sales and debt reduction. LafargeHolcim returned to positive income in 2018 with a focus on its Strategy 2022 programme. HeidelbergCement’s earnings were hit by poor weather in the US and insufficient divestments. Cemex, although based in Mexico, retains a significant European presence and so it included here. It suffered from poor sales outside of its base in Mexico and the US. CRH continued on its trajectory as the world’s biggest building materials company with solid sales and earnings growth. Interestingly though given its expansion strategy in recent years CRH’s debt to earnings before interest, taxation, depreciation and amortisation (EBTIDA) ratio remains better than the other three majors above, even after its purchase of Ash Grove Cement in mid-2018 taken into account. Although other financial comparisons are worth considering, such as EBITDA margin.

Despite Cemex’s relatively high net debt compared to its peers it has been cutting its debt the fastest, at 8% to US$10.4bn in 2018. Its current plan is to reach an ‘investment-grade’ balance sheet by 2020. LafargeHolcim and HeidelbergCement are in ‘cuts’ mode leading to all sorts of speculation about where they might sell next. The wilder rumours in the press include preparations by LafargeHolcim to sell its entire operation in the Middle East and Africa. Similar tales about a sale in the Philippines are more credible but remain unconfirmed. HeidelbergCement is keeping its cards closer to its chest but poor performing territories that might be up for sale include some of its Italian plants and parts of Africa.

Of the larger producers without a European presence, Ultratech Cement has been negatively effected by energy costs during the nine months to the end of 2018 with its income and EBITDA down. Dangote Cement’s performance in 2018 was driven by sales at home in Nigeria although earnings elsewhere continued to grow.

With all of this in mind the scene appears set for a breakout by a major Chinese producer to buy a big bolt-on acquisition or expansion by regional or national players along the lines of that seen by Semen Indonesia or UltraTech Cement. Taiwan Cement has been ahead here with its purchase of a 40% stake in Turkey’s Oyak Cement but what we’re really waiting for is a majority position within a country or territory. At which point CNBM and the like will have earned its place in the 2019 version of this article. Perhaps the age of truly multinational cement producer is coming to an end as regional players become more prominent.

Brazil: InterCement has appointed Flavio Aidar as its chief executive officer (CEO). He succeeds Paul Nigo, who took the role in early 2018. Aidar has worked in the financial services sector including for Goldman Sachs, where he left as managing director in 2017. He then moved on to Mover Participações, formerly known as Camargo Corrêa and the controlling shareholder of InterCement, as a member of its advisory board.

Russia: M Goncharov has been appointed as the chief executive officer (CEO) of LafargeHolcim Russia. He took up the role at the start of March 2019. G Brusco, the previous CEO, has been transferred to a role at LafargeHolcim’s headquarters in Switzerland, according to the AK&M Information Agency. E Molodtsova has separately been named as the subsidiary’s commercial director.

Zambia: The board chairman of Lafarge Zambia, a member of LafargeHolcim, has announced that Jimmy Khan has become the company’s new CEO, with immediate effect.
Khan holds a Bachelor of Science in Business with a major in Accounting and Information System from Virginia Tech University in the US. His 14-year career with Lafarge / LafargeHolcim has included appointments in Mauritius, Seychelles, Nigeria, France and North America.

Nepal: Sajan Devkota has been appointed as the chief executive officer (CEO) of Shivam Cements. He takes up the post on 15 March 2019, according to the Himalayan Times newspaper. Devkota holds 22 years of corporate experience with companies including Nestlé India, Nepal Lever, Varun Beverages, Nebico Biscuits and Chaudhary Group. He has been associated with Shivam Cements since 2015.

Germany: Schenck Process has appointed Keith Cochrane appointed as chief executive officer (CEO). He succeeded Andreas Evertz on 1 March 2019. Evertz, who joined the group in 2014, has left the company to pursue new career opportunities. Cochrane has served as the chairman of the advisory board of Schenck Process since late 2017. Before that, he was the CEO of the Weir Group between 2009 and 2016.

US: Metso Waste Recycling has appointed Lou Martins as its General Sales Manager in North America. His role will involve establishing the waste recycling organisation in North America to drive growth in the region for both static and mobile waste shredders. This includes hiring a distribution manager, establishing partner relations with plant builders and driving new business in North America.

Martins holds experience in the solid waste market, including six years with Van Dyk Recycling Solutions. He holds a bachelor’s degree in mechanical engineering as well as an MBA in Sales and Marketing.

Kenya: Cement production fell by 8.5% year-on-year to 5.64Mt in 2018 from 6.16Mt in 2017. Data from the Kenya National Bureau of Statistics also shows that consumption decreased by 5% to 5.49Mt from 5.79Mt. This follows drops in production and consumption since 2016. Local cement producers, including East African Portland Cement (EAPCC) and ARM Cement, have reported on-going financial difficulties since 2018.

UK: Wincanton has won a five-year deal with Aggregate Industries for the distribution of concrete products from a majority of its UK manufacturing sites. Under the new agreement, logistics firm Wincanton will operate a dedicated fleet of specialised vehicles, backed up by its national network, from 10 factories to customers across the country. This deal is in addition to two existing contracts, which cover distribution of bulk and packed cement from Aggregate Industries’ Cauldon works and the provision of Readymix assets.

"We have witnessed Wincanton’s ability to deliver on major national contracts at our Cauldon bulk operation. We have also seen how its commitment to continuous improvement can generate material benefits across the business. We are looking forward to the Wincanton team joining our concrete products operation," said Shaun Elliott, Head of Logistics, Concrete Products at Aggregate Industries.

Denmark: FLSmidth says it sold 31 new vertical roller mills (VRM) in 2018 for all grinding applications. The combined cement grinding capacity of its OK Mills VRM product line grew by over 38% year-on-year to 3145t/hr in 2018 from 2270t/hr in 2017. The average grinding capacity per sale of OK Mills for the cement industry grew by almost 10% to 225t/hr from 206t/hr.

The Danish equipment manufacturer installed its first OK Mill in 1982. To the end of 2018 it has sold 184 mills. It has supplied VRMs to 67 countries around the world since the OK Mill launched. Since the start of 2017 OK Mills have been sold in Indonesia, the Philippines, Algeria, Turkey, the UK, Pakistan, Nigeria, Kenya, Peru, Cuba, India, Nepal, Algeria and Egypt. Shah Cement in Bangladesh inaugurated in 2018 an 81-6 OK Mill, the world’s largest vertical roller mill for cement grinding. It featuring six rollers and an 8.1m diameter grinding table.