Displaying items by tag: Holcim

India: Holcim has agreed to sell its Indian business to industry, energy and ports conglomerate Adani Group for US$6.37bn. The assets consist of a 63% stake in Ambuja Cement, which in turn owns 50% of ACC, and a 4.5% direct stake in ACC.

ACC and Ambuja Cement employ 10,700 people and operate 31 cement plants in India. The deal will make Adani Group India’s second-largest cement producer.

Chair Gautam Adani said "With Holcim's global leadership in sustainability, we are acquiring some of the most efficient building materials operations in India, powered with clean technologies like heat recovery systems. We recognise that Ambuja and ACC operations are energy intensive and therefore, when combined with our renewable power generation capabilities, we gain a big head start in the decarbonisation journey that is a must for Indian industry."

Holcim says that its focus is now on expanding its solutions and products business. Reuters News has reported that the group plans to put the proceeds of the assets’ sale towards lower-carbon acquisitions. Its Indian operations contributed 26% of group CO₂ emissions.

CEO Jan Jenisch said "We will always make cement, but we will decarbonise cement.” He added “We are happy to build up other segments like building solutions and products."

Russia: Holcim said that it has received interest from over 30 possible buyers for its Russian business. The group announced that its would sell the assets, including three cement plants, in March 2022, after the Russian invasion of Ukraine on 24 February 2022.

CEO Jan Jenisch said that the sale would need to be handled ‘with very great diligence.’ He continued "We don't expect to write it off completely. I would hope this business has a value." Jenisch asked investors and commentators to ‘give us a couple of months’ to ‘get more clarity.’

Holcim said that it has received interest from over 30 possible buyers for its Russian business. The group announced that its would sell the assets, including three cement plants, in March 2022, after the Russian invasion of Ukraine on 24 February 2022.

CEO Jan Jenisch said that the sale would need to be handled ‘with very great diligence.’ He continued "We don't expect to write it off completely. I would hope this business has a value." Jenisch asked investors and commentators to ‘give us a couple of months’ to ‘get more clarity.’

Philippines: Holcim Philippines has donated 3000 Covid-19 vaccinations to the Lorma Medical Center in San Fernando, La Union. The Business Mirror newspaper has reported that the company aims to help increase inoculation levels in remote parts of the province, at a time when tourism is beginning again.

Vice president and head of communications and corporate social responsibility Cara Ramirez said “We are thankful to the Lorma Medical Center for being our partner in providing vaccines to our neighbours in La Union. We are hopeful that this donation will further strengthen the province's resilience against the disease as we enter summer and tourism once again booms. While the pandemic appears to be easing, we need to remain vigilant and encourage everyone to avail themselves of the vaccines to be more protected.”

Egypt: Lafarge Egypt has signed a US$93m solar energy deal with Lumika Renewables Egypt, a subsidiary of AP Moller Egypt, to produce 140GWh/yr. The agreement is scheduled to become effective by the first quarter of 2024, according to Mist News. Under the terms of the deal the two companies will build a new 50MW solar power plant. This will be the first such plant operated by Lumika Renewables Egypt in the country. The subsidiary of Holcim says it aims to secure a renewable energy supply for 50% of its Ain Al-Sokhna cement plant's total daily energy consumption.

Poland: Holcim has entered into an agreement to acquire waterproofing, adhesives, polystyrene products and plaster producer Izolbet. Izolbet employs 170 people and operates four production plants in Budzyń, Gostynin, Kleszczów and Chmielów, with most of its business in the high-growth repair and refurbishment market. Holcim says that the new acquisition will help to strengthen its footprint in the renovation, thermal insulation and finishing segment.

Europe, Middle East and Africa region head Miljan Gutovic said “Speciality building solutions have been a key focus for expanding Solutions & Products in Europe, notably with the recent acquisitions of PRB Group in France and PTB-Compaktuna in Belgium. I’m excited to be welcoming all of Izolbet’s employees into the Holcim family, to unleash our next chapter of growth together.

India: UltraTech Cement has taken legal advice for its planned bid for Holcim's Indian business and says that it will volunteer to divest 15Mt/yr-worth of cement assets in order to accelerate the Competition Commission of India (CCI) approval process which would follow on from the acceptance of any offer. The Economic Times newspaper has reported that UltraTech Cement has filed five long form merger notifications for acquisitions of this type since 2013. These included its purchases of Binani Cement and Century Cement, and of Jaypee Group's Gujarati cement assets.

The Financial Express newspaper has reported that fellow contender Adani Group has offered 'more than' US$10bn for the assets, while JSW Group plans to offer US$7bn. BusinessLine Online News has reported that a fourth company, steel producer ArcelorMittal, has also held initial talks with Holcim over the assets.

In considering possible competition issues arising under any future deal, the CCI will factor in planned and upcoming cement capacity. In Gujarat, where Holcim India subsidiaries ACC and Ambuja Cements operate 6.8Mt/yr-worth of capacity, Adani Group plans to build a new 10Mt/yr cement plant at Lakhpat.

Germany: Holcim Deutschland says that the preliminary test phase of a new CO₂ separation unit at its Höver cement plant in Lower Saxony has delivered positive results. Plant manager Stephan Hinrichs said that the company was “delighted” with the results so far. In late 2021 Cool Planet Technologies and Hereon signed a memorandum of understanding with Holcim Deutschland to deliver a carbon capture system for a carbon capture and storage (CCS) trial at the plant based on Hereon’s PolyActive membrane technology.

The next stage of the project will start in August 2022 and it will last until late 2024. This will include a one-year active test phase, in which the system is to be examined in long-term operation, planned to start in September 2023. If the results are good enough then the carbon capture unit will be expanded step-by-step so that after the final expansion stage it can separate around 90% of the CO₂ emissions and deliver high-purity CO₂ in liquid form for sequestration or further use. The ultimate aim of the project is to demonstrate performance, economy and operational behaviour on a larger scale in order to check whether the technology can be used at both Höver and other cement plants. Continued funding for the scheme is dependent on an application to the Competence Centre on Climate Change Mitigation in Energy-Intensive Industries (KEI) as part of the Decarbonisation in Industry program.

France: Holcim has completed its acquisition of the French speciality building solutions producer PRB Group. The leading cement producer outside of China said that the acquisition will accelerate its transformation into a 30% solutions and products company in sales terms by 2025.

Europe, Middle East and Africa regional head Miljan Gutovic said “I warmly welcome all members of the PRB Group into the Holcim family. I’m excited about the outstanding expertise and passion they bring to our team in France. This is another exciting step in the expansion of solutions and products in the highly attractive repair and refurbishment market. We look forward to unleashing our next era of growth together to make cities greener with more energy-efficient and long-lasting buildings.”

Many first quarter financial results for cement producers are out already and what can be seen so far deserves discussion. The first observation is that the sales revenues of Chinese companies have suffered compared to their international peers. As can be seen in Graph 1 (below) CNBM increased its sales slightly in the first quarter of 2022 but Anhui Conch and China Resources Cement (CRC) had significant falls. Stronger results from CNBM’s non-cement production subsidiaries released so far suggest that the parent company’s slow performance is likely due to the cement market. The China Cement Association has reported that national cement output dropped by 12% year-on-year to 387Mt in the first quarter of 2022. It blamed this on the latest local coronavirus wave, limited construction project funds and poor weather.

Graph 1: Sales revenues in the first quarter of 2022 from selected cement producers. Source: Company financial reports. Note: SCG data is for its building materials division only.

Outside of China sales revenue growth has been better with Holcim and Dangote Cement leading the companies presented here. Holcim attributed its success to “strong demand, acquisitions and pricing”. Demand and pricing have been familiar refrains in many of the results reports this quarter. The undertone though has been the destabilising effects upon energy prices by the ongoing war in Ukraine. Holcim’s head Jan Jenisch summed it up as navigating “challenging times, from the pandemic to geopolitical uncertainty.” The producers with operations in the Americas and Europe seem to have coped with this so far mostly due to resurgent markets. Quarterly sales revenue growth for Holcim, CRH (not shown in the graphs) and Cemex each exceeded 10% year-on-year in both of these regions.

The regionally focused companies presented here have suffered more. India-based UltraTech Cement said that its energy costs grew by 48%, with prices of petcoke and coal doubling during the period. Nigeria-based Dangote Cement reported that its group sales volumes were down 3.6% mainly due to energy supply challenges in Nigeria. Internationally, its operations relying on cement and clinker imports – in Ghana, Sierra-Leone and Cameroon – were also hit by high freight rates caused by global supply chain issues. Thailand-based SCG said that national demand for cement demand fell by 3% due to negative geopolitical effects causing inflation, a delay to the recovery of tourism and a generally subdued market.

Graph 2: Cement sales volumes in the first quarter of 2022 from selected cement producers. Source: Company financial reports.

It’s too early to read much into it but one final point is worth considering from cement sales volumes in the first quarter of 2022. They have appeared to fall for the companies that have actually released the data. The reasons for CRC in China and Dangote Cement in Sub-Saharan Africa have been covered above. Holcim’s volume decline was 2% on a like-for-like basis and the others were all very small changes.

To summarise, it’s been a good quarter for those cement producers covered here with operations in North American and Europe. Energy instability caused by the war in Ukraine so far seems to have been passed on to consumers through higher prices with no apparent ill effect. The regional producers have suffered more, with the Chinese ones having to cope with falling demand and the others finding it harder to absorb mounting energy costs and supply chain issues. Plenty more first quarter results are due from other cement companies in the next few days and weeks and it will be interesting to see whether these trends hold or if others are taking place.

UK: Aggregate Industries’ Cauldon cement plant in Staffordshire has become the first industrial facility to operate a PRISMA liquid air energy storage system. Green technology developer Innovatium developed the product in collaboration with the University of Birmingham. The supplier says that it can deliver 25% energy savings for air compression and will help Aggregate Industries to realise its 2030 goal of 500kg/t of CO₂ emissions for its cementitious products.

Aggregate Industries sustainability director Kirstin McCarthy said “We are very proud to be the first partner to install the PRISMA system in an operational environment. Aggregate Industries is committed to transitioning to net zero, and supporting innovations like PRISMA is vital in helping us achieve that goal. McCarthy continued “We believe PRISMA can play a major role in addressing the ‘energy trilemma’ of managing energy efficiency, energy cost and energy security, and we're confident that its installation at Cauldon will further prove its decarbonisation credentials - a big step towards full commercialisation of the technology.”