Displaying items by tag: HeidelbergCement
Bosnia-Herzegovina: The Bosnian-Herzegovinian cement producer Tvornica Cementa Kakanj (TCK), part of Germany's HeidelbergCement, has announced that it expects its net profit to increase by 20 - 25% to Euro5.6 - 6.1m in 2013, while it expects cement sales to be broadly flat at around 425,000t. The effects from ongoing investment and process-optimisation measures are expected to kick in in 2013, generating savings that should lead to the projected rise in net profit, according to company director Branimir Muidza. Speaking to regional news agency SeeNews, he described the targets as ambitious and optimistic but not unrealistic.
TCK is making its claims in the midst of a Bosnian market that is estimated to require only 1.05Mt of cement in 2013, a decrease from the 1.10Mt/yr consumed in 2012. In 2008 - 2009 cement consumption was as high as 1.85Mt. Muidza expects that the lack of new investments in the industrial sector and new infrastructure, rising unemployment, illiquidity in the construction sector and a crisis in the real estate market would lead to a continued slump.
Muidza said that the expected impact on TCK's business from the recent EU accession of Croatia, which is the company's largest export market, would not cause problems for TCK, as its cement is already made to EU standards. He added that if Croatia benefits from EU accession further down the road, so will TCK.
Going forward, TCK's investment pipeline for the 2013 - 2014 period features a project for the automation of cement milling and packing operations, modernisation of its sampling laboratory, upgrade of its weighing system, construction of an administrative building and procurement of new IT equipment. No production capacity upgrades have been planned over the medium term as the existing capacity is sufficient to meet the current market demand.
When it comes to long-term investments, which covers the period until 2018, the company plans the construction of a cement silo which should further expand the range of its products and therefore put it in a better competitive position. The cost of the investment is currently thought to be US$10.3m.
It's been a cold and rainy 'summer' so far in 2013 in the UK. So much so that crowds at the Glastonbury Music Festival watching the Rolling Stones this weekend were lucky they didn't get drenched during 'Jumpin' Jack Flash.' However, cement producers around the world are increasingly tackling the opposite problem as they concentrate on water conservation measures.
As we see this week, the Cement Manufacturers' Association of the Philippines (CeMAP) has started advocating the use of rainwater for cement production. According to figures put out by CeMAP, an average dry-process cement plant uses 100-200L of water per tonne of clinker produced. The Philippines uses around 3.2BnL/yr of water for its cement production capacity of 21Mt/yr, which operated at an 85% capacity utilisation rate in 2012. A simple calculation reveals a water usage rate of 179L/t of cement produced in the Philippines. Though close to the top of CeMAP's dry-process water use range, it is actually less than some of the multinational cement producers (see below).
Water conservation among multinational cement producers has become increasingly high-profile in recent years. In January 2013 Cemex announced that it had developed a methodology to standardise water measurement and management across all of the company's operations. This followed a three year partnership between Cemex and the International Union for Conservation of Nature (IUCN). In its 2012 Sustainability Report Cemex reported that 12% of its cement operations were in water-scarce or water-stressed locations. Its water consumption for cement was 305L/t. This compares to Holcim's water consumption for cement of 260L/t in 2012.
Other multinational cement producers have put into place similar measures. Lafarge started to assess its 'water risk' in 2011. It found that 25% of its cement production sites were located in areas of water scarcity or high water scarcity, based on 2025 projections of annual renewable water supplies per person. A follow-up with the WWF Water Risk Filter (WRF) continued the assessment, identifying 15 Lafarge cement sites as being located in 'high-risk' basins, with 10 particular sites identified in Pakistan, India, Algeria, Mexico, Jordan, China, South Africa, Iraq and Uganda.
It is worth noting here that most of these countries are currently growth areas for cement demand and so producers with plans to expand in these regions need to tread a careful line. Cement makers that use vast amounts of water in water-scarce regions will be less desirable neighbours for local populations than those that use less water. This, like consumer and regulatory pressures in developed markets, could turn into a major driving factor for improved environmental performance in developing regions. Investing in water conservation measures therefore appears to make sense socially, environmentally and (ultimately) economically.
Liberia: HeidelbergCement has commissioned a new 0.5Mt/yr, US$14m cement mill at its cement grinding plant in Monrovia, Liberia. The German cement producer operates in Liberia through a subsidiary, Cemenco. It is the only cement producer in the country.
"The construction of the new cement mill in Liberia is in line with our strategy of modernising and expanding clinker and cement capacities in emerging markets," said Dr Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. "In Ghana, we recently increased the cement grinding capacity at our Tema cement plant and are currently building a new cement mill in Takoradi. Together with our existing plants in this region, the new mill in Liberia strengthens our coastal network in West Africa."
Investment in the new cement grinding facility in Liberia includes a two-chambered 65t/hr ball mill with high-efficiency separator, filter, fan and flow meter. The power supply of the new cement-grinding mill is provided through a 5.7MW generator plant on a rental basis.
HeidelbergCement is currently conducting investment projects in sub-Saharan Africa amounting to almost US$400m. They include expansion projects of cement capacity of about 3Mt and of clinker capacity of 1.5Mt.
India: HeidelbergCement India sold a grinding plant in Raigad, Maharashtra to JSW Ispat Steel for an undisclosed sum. The announcement was made at the Indian cement producer's annual general meeting on 16 May 2013.
HeidelbergCement India also announced that its shareholders have given it approval for raising funds of up to US$340m through borrowings.
India: HeidelbergCement India will sell its 0.6Mt/yr cement grinding unit in Raigad, Maharashtra, to JSW Ispat Steel, part of the JSW Group.
"The disposal is in line with HeidelbergCement's philosophy of divesting less strategic assets with lower margins to focus on more strategic and key operations in central India where the company had recently expanded its cement capacity from 2Mt/yr to 5Mt/yr," said Ashish Guha, chief executive and managing director of HeidelbergCement India, in a statement.
The parties are negotiating and finalising the terms of the business transfer agreement, HeidelbergCement India said in a regulatory filing. The transaction will be finalised only after obtaining all relevant approvals, including that of shareholders.
Indocement losing market share in Q1
22 May 2013Indonesia: Indocement Tunggal Prakarsa, a leading Indonesian cement producer, saw its market share fall from 32.5% to 30.6% in the first three months of 2013. A report by the Jakarta Globe attributed the decline due to other cement producers raising their production levels to match growing infrastructure development programs in the country. However, Indocement said that it actually believed in protecting margins rather than increasing its sales.
The HeidelbergCement subsidiary saw its domestic sales increase year-on-year by 2.1% to 4.2Mt for the first three months of 2013. However, the Indonesian cement industry as a whole saw sales volumes of cement rise by 8.6% to 13.6Mt for the quarter.
"Our competitors have managed to add to their cement production capacity, thus resulting in our sales volume being not quite as high as expected," said Indocement's Finance Director Tju Lie Sukanto.
Norway: Oil and gas industry engineering firm Aker Solutions has won a contract to test and study the capture of CO2 from flue gas emitted at Norcem's cement plant in Brevik, Norway. The award from the HeidelbergCement subsidiary, in cooperation with the European Cement Research Academy (ECRA) marks the first time technology to capture CO2 will be used at a cement production plant.
Aker Solutions will perform long-term testing on the actual flue gas to select optimum chemical solvent for high content CO2 flue gas at the plant. Tests will be performed with Aker Solutions' in-house developed Mobile Test Unit (MTU). The MTU is a CO2 capture plant that includes all processes and functions found in a large scale commercial plant.
ECRA members chose Norcem Brevik as the site for ECRA operational CO2-capture test project. The project is supported and partly financed by the CLIMIT programme, which is managed by Gassnova in cooperation with the Research Council of Norway.
Aker Solutions has developed CO2-technology solutions since the early 1990s. A separate company, Aker Clean Carbon, was established in 2007 as a company under Aker ASA to commercialise carbon capture technology. Aker Solutions took full ownership of Aker Clean Carbon in 2012 and carbon capture and storage activities are an integrated part of Aker Solutions.
European Q1 cement round-up
08 May 2013Once again the winter weather was bad in Europe. Once again the major European cement producers reported a fall in sales. So what has changed between the first quarters of 2012 and 2013?
Lafarge's cement sales volumes in Western Europe for the first quarter of 2013 fell by 24% year-on-year, compared to an 11% drop in 2012. Holcim's decline in volumes stabilised, compared to a 13.2% drop in 2012. HeidelbergCement's volume decline increased slightly, from a drop of 8% in 2012 to one of 10% in 2013. Cemex didn't release sales volumes figures for cement but overall net sales in its Northern Europe region fell by 13% in 2013 compared to 11% in 2012. Italcementi's cement sales volumes maintained a steady decline in both the first quarters of 2012 and 2013 at about 19%.
Even with the reduced number of working days for the quarter in 2013 taken into account, things are not looking good. Generally the results fit the prediction made by the UK Mineral Products Association (in the UK at least) that construction activity remains subdued in 2013 so far.
Profitability measures for the European divisions of the big producers, such as earnings before interest, taxes, depreciation and amortisation (EBITDA), reinforce the gloomy outlook, suggesting that most of the cost cutting exercises aren't having much effect on investor balance sheets quite yet. Lafarge's EBITDA in Western Europe fell by 94% to Euro5m. HeidelbergCement's loss before interest and taxes (EBIT) increased to Euro91m. Cemex's operating EBITDA fell from US$55m in 2012 to a loss of US$17m in 2013. Italcementi's EBITDA decreased to Euro12.8m.
Only Holcim reversed this trend, growing its EBITDA by 43% to Euro23.5m. The Holcim Leadership Journey appears to be working. Although the sale of a 25% stake in Cement Australia certainly helped.
Elsewhere, we have an additional story at add to last week's focus on Iraq, with the announcement that Mondi has opened an industrial bags plant in Iraq. It's based in Sulaimaniyah in northern Iraq near to the new Sinoma-Lafarge project that we reported on.
Finally, the news that the Competition Commission of India has been asked to investigate a complaint against a Chinese waste heat recovery vendor raises tensions between the world's largest two cement producers. The story echoes similar trends in the gypsum wallboard business in April 2013 where a selective anti-dumping duty was imposed on imports from China, Indonesia, Thailand and the UAE. Watch this space.
HeidelbergCement reports stable Q1
08 May 2013Germany: HeidelbergCement has reported stable revenues for the first quarter of 2013 at Euro2.76bn compared to Euro2.80bn in the same period of 2012. The German cement producer commented that weak sales volumes in Europe and North America, caused by bad weather and reducing working days, were mostly offset by growth in cement sales volumes in North America, Asia and Africa.
Group share of loss grew to Euro235m in the first quarter of 2013 from Euro208m in the same period in 2012. This follows the announcement by HeidelbergCement in April 2013 that its profits would be hit by a Euro30m fine in the second quarter of 2013 due to previous cartel infringements.
Sales volumes of cement and clinker remained stable at 18.1Mt. By business line, revenues for cement in Western and Northern Europe fell by 9.8% to Euro321m from Euro356m. In the Eastern Europe and Central Asia region revenues fell by 7% to Euro147m from Euro158m. In North America revenues rose by 8% to Euro222m from Euro205m. In the Asia Pacific region revenues rose by 8% to Euro507m from Euro468m. In the Africa-Mediterranean Basin region revenues rose by 5% to Euro201m from Euro191m.
For its outlook for the remainder of 2013, HeidelbergCement expects continued demand for building materials in North America, Asia and Africa. In Europe and Central Asia, the group anticipates stability in Germany, Northern Europe, Russia and Central Asia and weak development elsewhere.
HeidelbergCement takes control of Russian plant
19 April 2013Russia: HeidelbergCement has increased its holding in the Russian cement company CJSC Construction Materials from 51% to 100%. The German cement producer did not disclose the cost of the acquisition.
"The purchasing of the remaining 49% in CJSC is another good example of our strategy of low risk bolt-on acquisitions," said Bernd Scheifele, chairman of the Managing Board of HeidelbergCement.
CJSC Construction Material, located in Sterlitamak in the Russian republic of Bashkortostan, has a cement production capacity of 1.8Mt/yr using a dry production process. It employs 760 people. HeidelbergCement acquired a 51% stake in the Russian cement company in the fourth quarter of 2010.