Displaying items by tag: Heidelberg Materials

Tanzania: The Tanzania Fair Competition Tribunal (FCT) has ruled that Heidelberg Materials subsidiary Scancem International cannot acquire Tanga Cement from AfriSam at present. The Fair Competition Committee had previously approved the acquisition to proceed in February 2023. In its latest ruling, the FCT found that the commission had not been within its powers to set aside a previous court ruling of the FCT, dated September 2022. The FCT acknowledged that the market situation may have changed since its first ruling, but underlined the need for legal procedure.

Judge Salma Maghimbi said “The act or conduct of the two respondents did not send a good message to the public, nor to potential investors who would have been interested in coming to invest in our country.”

Gambia: Heidelberg Materials has sold its business in the Gambia to iron and steel products company B5 Plus. The business consists of the Banjul cement terminal. Heidelberg Materials says that it will continue to supply West African customers through its operations in Benin, Burkina Faso, Ghana, Liberia and Togo. The company sold its subsidiary in Sierra Leone in 2021.

US: Heidelberg Materials North America has reached an agreement with the administration of Santa Clara County to decommission its quarry in the county, near Cupertino. Silicon Valley News has reported that the quarry historically supplied limestone for cement production at Permanente cement plant, which came offline in April 2020. The county administration says that the deal signals that it has achieved its aim to ensure final closure of the Permanente plant.

Heidelberg Materials North America spokesperson Jeff Sieg said that the company is ‘pleased to formalise our agreement not to restart the kiln at our Permanente cement plant.’ He continued "We remain focused on working collaboratively with the community and other stakeholders on the development of a long-term strategy for the property, so that it can continue to provide value in the future.”

Canada: Mitsubishi Heavy Industries has successfully delivered and installed a KS-21 solvent-based carbon capture pilot system at Heidelberg Materials North America’s Edmonton cement plant in Alberta. The partners will now proceed to test the technology using different fuel sources and plant operating modes. Heidelberg Materials North America says that the installation is an ‘important step’ in the CO₂MPACT carbon capture and storage (CCS) project. Once completed the project will comprise a 1Mt/yr capture installation at the plant and its integrated heat and power system. Heidelberg Materials North America expects the installation to be operational by late 2026.

Heidelberg Materials North America’s vice president cement operations, Northwest Region, Joerg Nixdorf said “Today is a substantial milestone in our journey to building the world’s first full-scale carbon capture project in the cement industry.”

US: Heidelberg Materials North America and Levy Group of Companies signed a granulated blast furnace slag (GBFS) supply contract on 9 August 2023. Under the contract, Levy Group of Companies will supply Heidelberg Materials North America with 400,000t/yr of GBFS for use in its slag cement production. Deliveries will begin in early 2024. Heidelberg Materials North America says that it has upgraded its Speed cement plant in Indiana to increase the efficiency with which it grinds GBFS. Following the inauguration of its nearby 2.4Mt/yr Mitchell cement plant in June 2023, Heidelberg Materials North America plans to transition the 1Mt/yr to 100% speciality and slag cement production. Levy Group of Companies will supply the GBFS from steel industry sites in the Midwest Region.

Heidelberg Materials Midwest US president Axel Conrads said “Our agreement with the Levy Group of Companies to secure a consistent supply of slag granules will help us accelerate the transition of the Speed plant to slag cement production and better meet the increasing demand for more sustainable cement products in the growing Midwest market.”

US: Heidelberg Materials North America reported the death of a man at its Port Everglades cement terminal in Florida on 5 August 2023. Local press has reported that the body of the man was found inside equipment, where he is believed to have fallen. He was an external contractor who had been carrying out repair work. Authorities are currently investigating the tragedy.

Heidelberg Materials North America said "We are working closely with the appropriate authorities to ensure a thorough investigation into the cause of the accident."

Australia: Cement Australia has commemorated the 100th anniversary of the start of operations at its Railton cement plant in Tasmania with a centenary dinner.

Production manager Garry Bissett said "When it opened up in 1923, they built the small kiln, and it was only capable of cement production of 25,000t/yr; now we're producing 1.4Mt/yr." He added that the workforce has fallen to less than half of its original size of 300 people, to 140. Bissett concluded "We're doing some major work, with a lot of capital upgrades in the near future."

The release of the half-year financial results from many of the larger multinational cement producers in Europe and North America gives us the usual opportunity to examine how well the year has gone so far. In summary, each of the companies highlighted here increased its sales and earnings on a like-for-like basis. However, in many cases, but not all, sales volumes of cement fell. Notably, both Holcim and Heidelberg Materials did not appear to release these figures. Heidelberg Materials did say though that its sales volumes declined in all business lines as “a result of the global economic down-turn.” In Holcim’s case, on top of whatever else has been going on over the last six months, the group has continued to divest cement assets as it realigns its portfolio. One more interesting point to note is that, instead, Holcim and Heidelberg Materials highlighted their reductions in CO₂ emissions at the start of their half-year reports.

Graph 1: Sales revenue for selected multinational cement producers in the first half of 2023. Source: Company financial reports.

Holcim continued to expand its light building materials business segment in North America as well as picking up some aggregate and ready-mix concrete assets in North America and Europe. Its sales grew fastest in North America, although Europe generated more sales overall. Elsewhere the other geographic business areas all held up. The group’s Solutions & Products division, the one responsible for the light building materials, lost sales and earnings year-on-year. This was blamed on the “normalisation of buying patterns” in the roofing market in North America in late 2022 and carrying into 2023, leading to destocking in various distribution channels. How this might effect the group’s ongoing diversification strategy remains to be seen.

Heidelberg Materials was more upfront about the specifics of its cement business in the first half of 2023. Sales volumes fell in all business lines. For cement, the largest falls were reported in the Western and Southern Europe Group area due to a ‘significant’ decline in residential construction followed by the Africa-Eastern Mediterranean Basin area although a slight increase was recorded in deliveries in Asia-Pacific. That last region benefited from the local subsidiary increasing its cement and clinker deliveries in Indonesia. This was reportedly due to the company leasing the Maros cement plant in September 2022. The plant serves markets in the east of the country. Overall, despite the falls in revenue in many regions, the group pushed up its prices sufficiently to keep net sales revenue and earnings growing well.

Cemex, meanwhile, was keen to shout about its improved earnings in all of its regions. It attributed this to its price strategy, lowering input cost inflation and the growing effects of its investments portfolio and its Urbanisation Solutions business. Each of the group’s main regions – Mexico, the US and Europe – performed well, with Mexico growing sales the fastest, the US driving up earnings the most and Europe, Middle East, Africa and Asia holding growth steady despite demand issues. Pricing was cited as a main issue for the success of each region.

Vicat’s sales and earnings rose due to increased sales volumes of cement and higher prices. At home in France, the company successfully fought off falling cement sales volumes with price rises, particularly due to energy price inflation. North America, the group’s other big market, grew strongly, boosted by the ramp-up of production and sales from the new kiln at the Ragland plant in Alabama. Finally, Titan experienced a similar situation to the other companies featured here, with increasing demand driving sales and further helped by prices. Earnings then grew in turn. Unlike the other companies, the US contributed a much larger share of sales for Titan than Europe or elsewhere. Back home in Greece the company’s sales and earnings benefited from increased sales volumes across all business lines. Both Vicat and Titan had mixed experiences in Egypt and Türkiye, with negative currency exchange effects causing problems in both countries, despite demand mounting in the latter.

On the basis of these financial results, it has been a positive first half for the larger cement companies based in Europe and North America. Cement sales volume growth has been mixed, where known, but price rises have compensated for this, leading to higher earnings. Whether these companies can continue to pull off this trick as or if global inflation starts to slow down is very much an ongoing question. As mentioned at the start, some of the companies also led their half-year reports with emission figures and many of them prominently highlighted forthcoming sustainability projects. These companies may be making most of their money in Europe and North America but there is clearly an awareness that these regions are also leading globally in implementing CO₂ emission legislation.

Germany: Heidelberg Materials' consolidated sales rose by 5.3% year-on-year to Euro10.5bn in the first half of 2022. The producer noted a continuing 'downward trend' in its cement sales volumes in the second quarter of the year. The group recorded a net profit of Euro783m, up by 31% year-on-year from Euro597m.

Chair Dominik von Achten said “We have closed the first half of 2023 with a good result. Even in a weaker market environment, with significant declines in sales volumes in some cases, we performed quite well. We remain confident about the second half of the year, and are once again upgrading our outlook for 2023 significantly." He continued "In the first half of 2023, we achieved a further reduction in our specific net CO₂ emissions through numerous measures. With the large number of our carbon capture, utilisation and storage (CCUS) projects, we are aiming at the full decarbonisation of our products. Just recently, one of our pioneering carbon capture and storage projects in Germany was approved to receive funding from the EU Innovation Fund. The continuous reduction of our carbon footprint and strengthening the circular economy are our most powerful levers to offer our customers climate-friendly products on a large scale."

Chief financial officer René Aldach said that the company will demonstrate its financial strength with a third tranche of its on-going share buyback programme, commencing on 28 July 2023.

UK: Heidelberg Materials subsidiary Hanson UK successfully replaced a 130t section of the kiln at its 1Mt/yr Ribblesdale cement plant in Lancashire earlier in 2023. The section was 22m long, 4.6m in diameter and ran at a 4° angle. Contractor Ainscough Crane Hire used its heaviest, 800t lattice boom crane, and brought the project from acceptance to completion in 18 months. Engineering firm Grayton was Hanson's service partner for the upgrade.