Displaying items by tag: GCW502

LafargeHolcim retained its ability to surprise this week with the news that it may be making preparations to leave Brazil. Local press in Minas Gerais revealed on 20 April 2021 that the company was about to try and sell its operations in the country. The building materials producer has not made a public statement yet on the matter, it may not until a deal is done and/or this could all be a great big misunderstanding. So treat the following with caution.

Firstly, LafargeHolcim deciding to sell in Brazil fits with the selective approach increasingly shown by the non-Chinese cement multinationals in recent years. It famously decided to sell up in South-East Asia from 2018 and it got as far as divesting assets in Indonesia and Malaysia. It also tried to sell in the Philippines but the local competition commission didn’t give permission for the proposed deal in the end. As Global Cement Weekly mentioned at the time this was a bold move and doing the same in Brazil seems similarly decisive now. It’s a big market to leave! CRH and HeidelbergCement have both talked openly as well about taking a value-first approach to their divestment strategies rather than trying to retain blanket coverage. However, just because a sale in Brazil by LafargeHolcim sounds right doesn’t mean it is right.

Secondly, data from the National Cement Industry Association (SNIC) shows that the Brazilian cement industry had a good year in 2020. Despite the relentlessly bad news from the coronavirus pandemic, the Brazilian government decided to keep the economy mostly open, allowing the cement industry to continue its recovery since 2018. The sector reported an 11% rise year-on-year in cement sales to 60Mt in 2020. So far in 2021 it has noted a 19% rise year-on-year to 15.3Mt in the first quarter of 2021. Yet, the association forecast slower growth in 2021 as a whole and has warned that the first quarter figures in 2021 don’t show a true picture due to a decline in sales per working day so far in 2021 despite an apparent growth in absolute figures. On the surface it’s a good time to sell cement assets in the country since the sector has been riding a recovery but the general outlook for the country is looking gloomy especially considering the ongoing scale of its coronavirus outbreak and the uncertain damage this may do to the economy as a whole.

Whether or not LafargeHolcim is actually selling up in Brazil or not it, follows the conclusion of the CRH Brazil acquisition by Buzzi Unicem’s Companhia Nacional de Cimento (CNC) joint-venture that was also announced this week after approval by the completion authority. The assets that CRH Brasil has now sold include three integrated cement plants and two grinding plants in the south-east of the country. The subsidiary sold approximately 2.8Mt of cement in 2020. If nothing else this suggests that there should be companies out there pursuing a different strategy to LafargeHolcim, CRH, HeidelbergCement and the rest who will be only too happy to build their portfolio if LafargeHolcim’s Brazilian business does go on sale.

CRH originally bought its plants in Brazil as part of a package deal when Lafarge and Holcim merged in 2015 and any potential sales by LafargeHolcim also link back to this. LafargeHolcim has spent much of the last six years working out what kind of company it wants to be. Certainly, since the current chief executive officer Jan Jenisch took charge it has had the air of a company with a mission. The Firestone Building Products acquisition earlier in 2021 is an example of this, propelling the group away from the triad of cement, concrete and aggregates as the carbon risks of heavy building materials heat up. There is something fitting perhaps that at the company’s next annual general meeting its shareholders will be asked whether they want to change the company’s name to Holcim at the group level. It’s a small thing, all market brands will remain as they are, but it may bookend the post-merger era as much as asset divestments in Indonesia and... potentially Brazil.

Kenya: Bamburi Cement has appointed John Stull as a non-executive director following the resignation of Pierre Deleplanque. The latter was appointed to the company’s board in mid-2018 and is its Area Manager - East, South Africa & Indian Ocean.

Stull, an American national, is the Head of Strategy and Mergers & Acquisitions for LafargeHolcim Middle East & Africa region, and has over 28 years’ experience in the LafargeHolcim Group having joined it in 1992 as Operations Manager, Alpena Michigan - USA. In 1996 he was promoted to Vice President, Manufacturing - USA Region, and thereafter held several leadership positions including: President, Missouri Division, Ready Mix and Aggregates; Senior Vice President, Marketing and Supply Chain - Lafarge France; Regional President, Sub-Saharan Africa; President and Chief Executive Officer (CEO) LafargeHolcim USA; CEO US CEM; and prior to his latest role as President & CEO -LafargeHolcim Philippines. He holds a Bachelor of Science Degree in Chemical Engineering from the University of Akron and an Advanced Management Degree from Harvard University.

Brazil: LafargeHolcim Brasil, part of Switzerland-based LafargeHolcim, is reportedly seeking to sell its assets. The Diario do Comercio newspaper has reported the rumour without detailing its sources. LafargeHolcim has not commented on the matter. However, local government officials in Borosso, Minas Gerais said they were waiting for an official confirmation from the cement producer before they could comment. The newspaper also speculated that the group may have already notified the Brazil government of its intent to sell. Under Brazilian law, any sale would require the approval of the Administrative Council for Economic Defence (CADE). The producer operates three cement plants and two grinding plants in the country.

Nigeria: The Senate of Nigeria has called for the federal government to introduce policies, such as tax breaks, to encourage local investments in cement production. The upper legislative chamber made the resolution following a debate about a bill intended to relax rules surrounding cement policy in the country, according the Punch newspaper. It also requested the federal government to provide more industrial incentives and protections such as offering concessionary loans and larger tax incentives for new entrants in order to boost production of cement, reduce prices and encourage more ‘valuable’ local producers.

Senator Lola Ashiru, one of the co-sponsors of the bill, noted that cement was one of the few building materials in which Nigeria was self-sufficient with production capacity reportedly over twice as high as estimated consumption in 2018. However, he said that cement prices in the country were about 240% higher than the global average.

Saudi Arabia: Yamama Cement plans to transfer and install the seventh production line from its old plant in the south of Riyadh to the new plant’s location in Northern Halal in Al-Kharj governorate of the Riyadh region. The line has a clinker production capacity of 10,000t/day. Following the completion of the move by the end of 2024 the new plant will have a capacity of 30,000t/day. The cement producer said that cost of the move would be funded from the available company's resources.

Saudi Arabia: Yanbu Cement says that a two months modernisation project on Line 4 at its integrated Yanbu plant that was first reported in mid-February 2021 has been delayed. This has been caused by a hold up in receiving certain spare parts. The cement producer said that the financial impact would be limited to the increase in production costs only since the start of the shutdown date. It also stressed that sales would not be affected by the stoppage due to its existing clinker stocks.

France: LafargeHolcim France, part of Switzerland-based LafargeHolcim, plans to invest Euro6.2m in 2021 in upgrading its integrated La Malle cement plant in Bouc-Bel-Air, Bouches-du-Rhône department. The La Provence newspaper has reported that the plans include a Euro4.5m modernisation of the flue gas desulphurisation system of the plant’s Line 2 using equipment ordered from Italy-based Boldrocchi. The company said that it plans to maintain similar investment levels in the plant in 2022 and 2023.

The plant had reportedly received complaints about sulphurous smells in the local area. The producer attributed this to the high sulphur content in its clay, which is sometimes over 70%. It said that it is altering supply arrangement to include clay from its L'Estaque, Bouc-Bel-Air and Bellegarde, Ain quarries in its clinker mix in order to reduce sulphur content by 20%.

France: A fire has been reported at LafargeHolcim France’s integrated Saint-Pierre-la-Cour plant. It appears to have been caused by a fuel supply line explosion attached to the plant’s kiln, according to the Ouest France newspaper. No casualties have been reported by local fire fighters. The single kiln 1.5Mt/yr plant is the company’s largest in the country.

Japan: Taiheiyo Cement plans to start a CO₂ capture demonstration project at its Kumagaya plant in Kumagaya City, Saitama. It will use technology for CO₂ chemical absorption supplied by UK-based Carbon Clean, which has been awarded by Japan-based Marubeni Protechs in Japan. The project will have a capacity of 10t/day and demonstration tests will begin in September 2021. Taiheiyo Cement says that it believes that CO₂ recovery technology from cement kiln flue gas will require compact equipment that could be installed in cement plants and that suitable amine solvents for cement kiln flue gas are essential conditions. Its ultimate goal is to establish a technology that can be used to help it reach carbon neutrality by 2050.

The cement producer has been developing this technology as a sole grant recipient of the ‘Development of Carbon Circulation Technology for the Cement Industry,’ a project funded by the New Energy and Industrial Technology Development Organization (NEDO) which was awarded in June 2020. It also launched its internal Carbon Neutral Technology Development Project Team in April 2020, which has led on the project.

Marubeni Protechs, a wholly owned subsidiary of Marubeni Corporation, which invested in Carbon Clean, have been involved in a variety of domestic and international projects involving equipment supply and construction. The project at the Kumagaya plant is expected to be the first CO₂ capture plant that Marubeni Protechs and Carbon Clean have introduced in Japan. Marubeni Protechs and Carbon Clean intend to jointly introduce CO₂ capture plants in the future.

Japan: Researchers from the University of Tokyo have developed a new method for producing cement-free concrete from sand. The method reacts sand with alcohol in the presence of a catalyst, according to ChemEurope. When dehydrated, this produces tetraalkoxysilate. The research team then reintroduced water, and thus allowed the reactants to move back and forth between tetraalkoxysilate and sand. In this way, the sand particles progressively bonded together. The resulting concrete is reportedly more resilient to chemical, temperature and humidity changes than concrete produced from Ordinary Portland Cement (OPC).

In the report of the findings, researcher Ahmad Farahani wrote that various sources of sand tested suitable for use, including silica sand, glass beads and simulated moon sand. This gives the method the advantage that it is non-specific to raw materials or locations, and can be integrated into waste management.