Displaying items by tag: Germany

Germany: Loesche says it has acquired the technical knowledge of hydraulic systems supplier Ruhfus Systemhydraulik following the latter company’s insolvency. The acquisition of Ruhfus’ expertise will expand Loesche's capabilities in the field of hydraulic technology and enable the company to offer spare parts and services outside of the cement sector. In addition, a collaboration with former employees of Ruhfus Systemhydraulik will help it to develop new hydraulic solutions.

Ruhfus Systemhydraulik was originally founded as Rheinisches Kleineisenwerk August Ruhfus in 1907. It originally supplied metal parts for the railway sector before moving into hydraulics in the late 1950s. The company is based in Neuss and has over 100 employees.

Germany: Menzel held the ribbon-cutting ceremony for its new Hennigsdorf motor plant in Berlin earlier in November 2023. From the start of operations there on 2 January 2024, the site will consolidate Menzel’s production and administrative operations.

CEO Mathis Menzel said “This move will ring in a new era in the history of our family business. The new plant is tailored to our requirements in every detail: generously proportioned logistics and production areas, continuous crane accessibility with an 80t lifting capacity. That will enable us to achieve streamlined production processes and schedule and complete customer projects even more flexibly and reliably, and will properly set us up for the future as the international headquarters of our group.”

Malaysia: UEM Group, a subsidiary of the Malaysian sovereign wealth fund, has revealed that it has shortlisted prospective buyers for Cement Industries of Malaysia (CIMA). The Edge Malaysia newspaper has reported that the list is comprised of four local entities, one entity based in China, one in Germany and one in the Philippines. None of the bidders is reportedly an existing competitor of CIMA in the Malaysian cement sector.

CIMA operates the 1.3Mt/yr Bahau cement plant in Negeri Sembilan. UEM group announced that it was seeking a buyer for the business in February 2023, at which time it was seeking a valuation of US$230m for it.

Europe: Ireland-based CRH has agreed to sell its European lime business to UK-based SigmaRoc for US$1.1bn. The business controls 16 sites across the Czech Republic, Germany, Ireland, Poland and the UK. CRH says that the first phase of the transaction, which is scheduled for completion in early 2024, will hand over control of the Czech Republic, Germany and Ireland businesses to SigmaRoc, while control of the Poland and UK business will pass over in two subsequent phases.

CRH chief executive officer Albert Manifold said “The decision to divest at an attractive valuation follows a comprehensive review of the Business and demonstrates CRH’s active approach to portfolio management. The proceeds from the divestment will provide us with significant additional capital allocation opportunities to deliver further growth and value creation for our shareholders.”

Last week the US General Services Administration (GSA) announced that it was investing US$2bn on over 150 construction projects that use low-embodied carbon (LEC) materials. The funding is intended to support the use of US-manufactured low carbon asphalt, concrete, glass and steel as part of the Inflation Reduction Act. For readers who don’t know, the GSA manages federal government property and provides contracting options for government agencies. As part of this new message, it will spend US$767m on LEC concrete on federal government buildings projects following a pilot that started in May 2023. The full list of the projects can be found here.

This is relevant because the US-based ready-mixed concrete (RMX) market has been valued roughly at around US$60bn/yr. One estimate of how much the US federal government spent on concrete was around US$5bn in 2018. So the government buys a significant minority of RMX in the country, and if it starts specifying LEC products, this will affect the industry. And, at present at least, a key ingredient of all that concrete is cement.

This isn’t the first time that legislators in the US have specified LEC concrete. In 2019 Marin County in California introduced what it said was the world’s first building code that attempted to minimise carbon emissions from concrete production. It did this by setting maximum ordinary Portland cement (OPC) and embodied carbon levels and offering several ways suppliers can achieve this, including increasing the use of supplementary cementitious materials (SCM), using admixtures, optimising concrete mixtures and so on. Unlike the GSA’s approach in November 2023 though, this applies to all plain and reinforced concrete installed in the area, not just a portion of procured concrete via a government agency. Other similar regional schemes in the US include limits on embodied carbon levels in RMX in Denver, Colorado, and a reduction in the cement used in RMX in Berkeley, California. Environmental services company Tangible compiled a wider list of embodied carbon building codes in North America that can be viewed here. This grouping also includes the use of building intensity policies, whole building life cycle assessments (LCA), environmental product declarations (EPD), demolition and deconstruction directives, tax incentives and building reuse plans.

Government-backed procurement codes promoting or requiring the use of LEC building materials for infrastructure projects have been around for a while in various places. The general trend has been to start with measurement via tools such as LCAs and EPDs, move on to government procurement and then start setting embodied carbon limits for buildings. In the US the GSA’s latest pronouncement follows on from the Federal Buy Clean Initiative and from when California introduced its Buy Clean California Act in 2017. Outside of the US similar programmes have been introduced in countries including Canada, Germany, the Netherlands, Sweden and the UK. On the corporate side members of the World Economic Forum’s First Movers’ Coalition have committed to purchasing or specifying volumes of LEC cement and/or concrete by 2030. Examples of whole countries actually setting embodied carbon emissions limits for non-government buildings are rarer, but some are emerging. Both France and Sweden, for example, introduced laws in 2022 that start by analysing life-cycle emissions of buildings and will move on to setting embodied carbon limits in the late 2020s. Denmark, Finland and New Zealand are also in the process of introducing similar schemes. The next big move could be in the EU, where legislators are considering embodied carbon limits for building materials as part of its ongoing revisions to its Energy Performance of Buildings Directive or the Construction Products Regulation legislations. Lobbying, debate and arguing remains ongoing at present.

To finish, Ireland-based Ecocem spent a period in the 2010s attempting to build a slag cement grinding plant at Vallejo, Solano County, in the San Francisco Bay Area of California. The project met with considerable local opposition on environmental grounds and was eventually refused planning permission. The irony is that slag cement is one of those SCM-style cements that Marin County, also in the San Francisco Bay Area, started encouraging the use of just a few years later. Ecocem held its inaugural science symposium in Paris this week. A number of scientists who attended the event called for existing low carbon technologies to be adopted by the cement and concrete sectors as fast as possible. One such approach is to lower the clinker factor in cement through the use of products that Ecocem and other companies sell. A point to consider is, if Marin County’s code or the GSA’s recent procurement directive came earlier, then that slag plant in Vallejo might have been built. Encouraging the use of LEC building materials by governments looks set to proliferate but it may not be a straightforward process. Clear and consistent policies will be key.

Germany: Heidelberg Materials raised its sales by 1.8% year-on-year to Euro16.1bn in the first nine months of 2023. Regionally, sales rose by 7.5% to Euro3.69bn in North America, by 2.6% to Euro2.76bn in Asia-Pacific by 3.5% to Euro4.94bn in Western and Southern Europe, by 2.5% to Euro2.74bn in Northern and Eastern Europe and Central Asia, but fell by 10% in Africa-Eastern Mediterranean Basin to Euro1.41bn. Cement volumes fell across all of the group’s business lines, as ‘solid developments’ in infrastructure and industrial commercial construction failed to offset locally ‘massive’ declines in residential construction. Heidelberg Materials raised its 2023 outlook based on anticipated continued moderate revenues growth to a full-year result of Euro2.85 – 3bn, from Euro2.7 – 2.9bn previously.

Chair Dominik von Achten said “We have closed the first three quarters of 2023 with a strong result, despite declining demand for our building materials. On a like-for-like basis, all group areas have contributed to this result. I would like to thank the entire Heidelberg Materials team for their outstanding performance in what continues to be a very challenging business environment.” Von Achten continued “In the third quarter, we were able to further strengthen our pioneering role in the decarbonisation of the building materials sector. Our activities have gained further momentum with the installation of the core equipment of the carbon capture, utilisation and storage (CCUS) plant in Brevik, Norway, and the start of construction of a CCUS pilot plant in Bulgaria. This brings us much closer to our goal of offering our customers climate-friendly products on a large scale.”

Germany: Heidelberg Materials preliminary reported a 4% year-on-year decline in its sales during the third quarter of 2023, to Euro 5.6bn. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 17% to Euro1.39bn from Euro1.28bn. The group succeeded in raising its profit in the quarter, by 24% year-on-year to Euro1.08bn.

Heidelberg Materials says that it expects to record a ‘moderate increase’ in its revenues in full-year 2023. The company raised its profit target range for the year to Euro2.85 – 3bn from Euro2.7 – 2.9bn.

The Indian corporate rumour mill ramped up this week with speculation that UltraTech Cement and Adani Group might possibly be interested in buying Heidelberg Materials' assets in India. This follows the story broken by the Economist newspaper last week that JSW Cement had made an unsolicited offer to buy them. However, when HeidelbergCement India was asked by the Bombay Stock Exchange what exactly was going on, it replied that it was unaware of any such development and that it did not comment on market speculation.

A week later though and now another related story has popped up. In this case it is unclear exactly what the Hindu newspaper actually knew. The country’s two largest cement producers are locked in a battle for capacity expansion and any opportunity is likely to be of interest to them both. Yet the newspaper did quote a source who said that any divestment by HeidelbergCement India (HCI) would involve a “full-fledged bidding process,” implying that something may be going on.

Germany-based Heidelberg Materials operates four main subsidiaries in India: Gulbarga Cement; HC Trading (India); HCI; and Zuari Cement. HCI and Zuari Cement are the main two in terms of cement production. Heidelberg Materials entered the market in 2006 via a number of purchases and a joint-venture. It then acquired Zuari Cement via its takeover of Italcementi in 2016. Between them the two subsidiaries operate four integrated plants, three grinding plants and one terminal in Central and Southern India. Altogether the company says it has a total cement production capacity of 14Mt/yr. Gulbarga Cement, meanwhile, is a long running project via Zuari Cement to build a new integrated plant at Gulbarga in Karnataka. As of mid-2021 at least the company was still finalising planning and permitting requirements.

HCI’s income fell by 3% year-on-year to US$275m in the financial year to the end of March 2023 from US$282m in the same period that ended in 2022. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 39% to US$35.4m from US$58.2m, its lowest figure since at least its 2017 financial year. The company blamed this on higher fuel prices, although it has been trying to offset this by optimising its fuel and power mix. Unfortunately, it was not able to pass these costs on to its customers through price rises due to competition and new cement plants being commissioned in its market areas. Its revenue and profits improved somewhat in the quarter to July 2023. Recent financial data on Zuari Cement appears to be unavailable, possibly in part due to the company changing the dates of its financial year in 2020. However, it reported revenue of US$249m in its 2021 financial year, a broadly comparable figure to HCI’s. When asked during the company’s earnings call in July 2023, HCI’s managing director Joydeep Mukherjee did confirm that the company was looking at a potential merger with Zuari Cement. However, the company was waiting for the right time before it would consider actually doing it.

The Indian cement market has been consolidating in recent years. Companies have been increasing their production capacity, competition has been intensifying and the spike in fuel prices in 2022 battered profits. Adani Group’s acquisition of Holcim’s businesses in 2022 has probably been the most visible example of this trend towards mergers and acquisitions. It follows UltraTech Cement’s acquisition of Jaiprakash Associates in 2017. Heidelberg Materials has been steadily selling off bits and pieces of its cement business since the mid 2010s but at a slower pace than Holcim. Selected sales have occurred in Italy, Spain, Georgia, Ukraine and various countries in Africa, but the biggest was the sale of its US West region to Martin Marietta Materials for US$2.3bn in 2021. It reinforced this process with its ‘Beyond 2020’ strategy with the stated aim to simplify its country portfolio and prioritise its strongest market positions. A large-scale divestment of its operations in India would certainly fit with this plan. Whether the current reporting is accurate or not, Heidelberg Materials’ intentions for its Indian operations are certainly worth keeping an eye on.

Germany: Schade Lagertechnik appointed Jan Weckes as its managing director from the start of September 2023. Weckes previously worked as the managing director for IAS. Prior to this he had managerial sales and marketing roles with MBE Coal & Minerals Technology and worked for Outotec for a decade. He holds a PhD in metallurgy and materials engineering from RWTH Aachen University.

Germany: Heidelberg Materials has announced several senior-level changes to its corporate structure, with the establishment of some new roles. Jon Morrish, currently responsible for Western & Southern Europe, will take on responsibility for the newly established group area of Europe as of January 2024. This will follow the retirement of Ernest Jelito, currently responsible for Northern & Eastern Europe-Central Asia and the Competence Center Cement of Heidelberg Materials, at the end of December 2023.

Elsewhere, Roberto Callieri, General Manager Italy, will be promoted to the Heidelberg Materials Managing Board and take on responsibility for Asia as of January 2024. Incumbent Kevin Gluskie’s term will end at the end of January 2024. As part of the change, René Aldach, chief financial officer, will assume additional responsibility for Australia as of January 2024. Axel Conrads, currently President of the Midwest Region in the US, will be promoted to the Heidelberg Materials Managing Board, taking over the new role of chief technical officer as of February 2024.