Displaying items by tag: Holcim

Companhia Siderúrgica Nacional (CSN) Cimentos was confirmed this week as the agreed buyer for Holcim’s Brazilian cement business for US$1.03bn. The deal includes five integrated cement plants, four grinding plants and 19 ready-mix concrete facilities. CSN is now poised to become Brazil’s third-largest cement producer by production capacity after Votorantim and InterCement. Or second place if you believe CSN’s cheeky claims about a competitor’s idle capacity!

Figure 1: Map of cement plants included in CSN Cimentos’ deal to buy LafargeHolcim Brazil assets. Source: CSN Investor Relations website.

CSN originally started out in steel production and this remains the major part of its operations to the present day. In 2020 it reported revenue of US$5.74bn. Around 55% of this came from its steel business, 42% from mining, 5% in logistics and only 3% came from its cement segment. CSN’s path in the cement sector started in 2009 when it started grinding blast furnace slag and clinker at its Presidente Vargas Plant at Volta Redonda in Rio de Janeiro state. It then started clinker production in 2011 at its integrated Arcos plant in Minas Gerais. Not a lot happened for the next decade, publicly at least, as the country faced an economic downturn and national cement sales sunk to a low in 2017. From around 2019, CSN Cimentos then started talking about a number of new proposed plant projects elsewhere in Brazil, dependent on market growth and an anticipated initial public offering (IPO). These included plants at Ceará, Sergipe, Pará and Paraná and expansion to the existing units in the south-east. Then CSN Cimentos agreed to buy Cimento Elizabeth for US$220m in July 2021.

It is worth noting that the Holcim acquisition is subject to approval by the local competition authority. For example, the Cimento Elizabeth plant and Holcim’s Caaporã plant are both in Paraíba state and within about 30km of each other. If approved, this would give CSN Cimentos two of the four integrated plants in the state, with the other two operated by Votorantim and InterCement respectively. CSN also stands to pick up four integrated plants in Minas Gerais from Holcim to add to the one it holds at present. Although this would seem to be of less concern due to the high number of plants in the state.

Holcim has made a point of saying that its divestment in Brazil is part of its strategy to refocus on sustainable building solutions with the proceeds going towards its Solutions & Products business following the Firestone acquisition that completed in early 2021. It has also stated previously that it wants to concentrate on core markets with long term prospects. In this context a major steelmaker like CSN diversifying into cement is a contrast. Both industries are high CO₂ emitters so CSN is hardly moving away from carbon-intensive sectors. Yet the two have operational, economic and sustainability synergies through the use of slag in cement production. This puts CSN Cimentos in company with Votorantim in Brazil and JSW Cement in India, two other steel manufacturers that also produce cement. Whatever else happens at the 26th United Nations Climate Change conference (COP26) in November 2021, it seems unlikely that global demand for steel or cement is likely to be significantly reduced. CSN Cimentos is now going to resume its IPO of shares to raise funds for the Holcim acquisition.

Acquisitions are all about timing. The CSN Cimentos-Holcim deal follows the purchase of CRH Brazil by Buzzi Unicem’s Companhia Nacional de Cimento (CNC) joint-venture earlier in 2021. As mentioned above, the cement market in Brazil has been doing well since it started recovering in 2018. The coronavirus pandemic barely slowed this down due to weak lockdown measures compared to other countries. The current run of sales growth may be tapering off based on the latest National Cement Industry Association (SNIC) figures for August 2021. Rolling annual totals on a monthly basis had been growing since mid-2019 but this started to slow in May 2021. Annual sales will be up in 2021 based on the figures so far this year but after that, who knows? A CSN investors’ day document in December 2020 predicted, as one would expect, steady cement consumption growth in Brazil until at least 2025, based on correlated forecast growth in the general economy. Yet fears of inflation, rising prices and political uncertainty ahead of the next general election in late 2022 may undermine this. InterCement, for example, cancelled a proposed IPO in July 2021 due to low valuations amid investor uncertainty. CSN Cimentos may encounter similar issues with its own planned IPO or face over-leveraging itself when it picks up the tab for LafargeHolcim Brazil. Either way, CSN decided to take the risk on its path to becoming Brazil’s third largest cement producer.

US: LafargeHolcim US says that the integrated 2Mt/yr Midlothian plant in Texas will become the first cement plant in the country to fully convert to Portland Limestone Cement (PLC) production. The unit will switch to producing the company’s OneCem product, a blended cement manufactured with up to 15% of finely ground limestone. The move is intended to help LafargeHolcim US and its customers meet sustainable construction goals and lower carbon emissions.

“This is an important, but not unique, step for us. We were the first to produce OneCem, a PLC product, in one of the fastest-growing metro areas in the country, and fuel our industry’s step towards a zero carbon future,” said Patrick Cleary, senior vice president of sales, LafargeHolcim US Cement.

The company is promoting OneCem as an alternative to Ordinary Portland Cement in terms of concrete workability, set time, durability and strength development. It can be incorporated into a broad spectrum of applications that will support foundational structures. The product is available in the Western and Southern regions of the US and the company plans to ‘rapidly’ expand production.

Brazil: Companhia Siderúrgica Nacional (CSN) has agreed to acquire Switzerland-based Holcim’s Brazilian cement business for US$1.03bn. The business’ assets include five integrated cement plants, four grinding plants and 19 ready-mix concrete facilities. Holcim said that the deal strengthens its balance sheet by ‘significantly’ reducing its debt ratio. It will use the proceeds to invest in its solutions and products business, building its recently acquired subsidiary Firestone. Latin America remains a core strategic growth region, according to the company.

Cheif executive officer Jan Jenisch said “This divestment is another step in our transformation to become the global leader in innovative and sustainable building solutions, giving us the flexibility to continue investing in attractive growth opportunities. We are pleased to have found a responsible buyer with CSN that will develop the Brazilian business over the long term.”

France: The Court of Cassation has denied Lafarge’s appeals against the charge of complicity in crimes against humanity in Syria. The court of last resort has reversed the decision by the Paris Court of Appeal in 2019, according to the Agence France Presse. The case has now been referred back to investigating magistrates for reconsideration along with another charge of ‘endangering the lives of others.’ In a statement Lafarge said that the decision by the Court of Cassation did not in any way presume any guilt on its part and that it would continue to cooperate fully.

The legal case relates to the conduct of Lafarge in Syria between 2011 and 2014. Lafarge and Holcim later merged in 2015 becoming LafargeHolcim. LafargeHolcim’s shareholders voted to change the company’s name to Holcim in May 2021.

Switzerland: Holcim has announced further details of its ‘nature-positive’ 2030 biodiversity and water management strategy. The producer says that under the strategy it will implement a 33% reduction in its cement operations’ water intensity by 2030. It will reduce the water intensity of its ready-mix concrete operations by 15% over the same period. Across all its activities, it is aiming to achieve water positivity at 75% of its sites and install a water recycling system at every site. The company says that it will continue to develop and deploy its nature-based approach across its products and solutions.

India: Ambuja Cements has launched Concrete Futures Laboratories, a one-stop solution for the architecture, engineering and construction (AEC) professionals. Eight laboratories across India will enable them to test various aspects of cement and concrete.

CEO Neeraj Akhoury said "Our strong credentials in research and development and innovation have helped us develop new products and services tailored to our customers' needs. We consistently work towards developing cutting-edge solutions for our stakeholders, and the Concrete Futures Laboratory is a testament to our efforts. We aim to create an ecosystem that is focused on collaboration and inclusive growth to build a better and sustainable tomorrow."

France: Lafarge France has awarded a contract to Germany-based Inform for the supply of its transport optimisation software across its 160 aggregates locations and 900-truck fleet. The software uses algorithms to analyse scheduling decisions in real-time and identify those that are ideal for minimising costs and maximising service and on-time performance.

Supply chain projects head Kevin Perrault said “We have been using Inform’s transport optimisation software for over 25 years in our aggregates business.” He added “We pride ourselves in delivering the best possible service to our customers, and upgrading our operations to the latest version is a key element to help us achieve our goals and to remain competitive in the industry.”

Nigeria: Lafarge Africa, part of Switzerland-based Holcim, has presented its 2020 Sustainability Report. The company’s sustainability strategy consists of four pillars: climate and energy, circular economy, environment and community. In 2020, it co-processed 71,029t of refuse-derived fuel (RDF) and its water intensity was 201/t of cement. It also says it played a leading role in waste management in Nigeria through its partnership with the Food and Beverage Recycling Alliance (FBRA), creating 3000 new jobs in recycling. In line with its quarry rehabilitation plan, it restored 933ha of land during the year. 9.6% of its energy consumption derived from renewable sources.

Lafarge Africa doubled the number of beneficiaries of its corporate social responsibility (CSR) activities within its host communities year-on-year to 250,000 in 2020. Its investments in community development initiatives to counteract the Covid-19 outbreak and its impact totalled US$2.92m.

Chair Prince Adefioye said “By deploying innovation, we are championing how Nigeria builds better. It is holistic and strategically driven to ensure that we are scaling in reach and impact in the economic and environmental spheres. In the social sphere, we are also deliberately implementing initiatives that further prepare us for the future such as leveraging technology and improving our diversity indicators.”

Switzerland: Holcim has announced a strategy to become ‘nature-positive’ by restoring and preserving biodiversity and water. It will also undertake measures to bring more nature into cities. The strategy is based on transformative rehabilitation plans and measured by a science-based methodology developed in partnership with the International Union for Conservation of Nature (IUCN). Holcim aims to replenish freshwater in water-risk areas while lowering water intensity across all its product lines. It will also accelerate the deployment of solutions such as Hydromedia and green roof systems for more liveable urban environments. The group says that its nature-positive strategy places it among the top 1% of the 500 largest global companies with science-driven biodiversity targets.

Chief Sustainability and Innovation Officer Magali Anderson said, “With nature at the heart of everything we do, I am pleased that we are taking significant steps to improve our biodiversity and water stewardship in a measurable and science-driven way. Building on our Net Zero commitment, our nature-based solutions play a vital role in reducing the impact of climate change and increasing our business resilience. Becoming nature-positive plays a critical role in our vision to build progress for people and the planet.”

India: Ambuja Cement has saved 70Ml of water since the beginning of 2020 through the installation of rooftop rainwater harvesting systems at 268 construction sites across India.

Neeraj Akhoury, the chief executive officer of Ambuja Cement, said "The scope and opportunities for creating a sustainable future are immense. As part of the global organisation, Holcim, Ambuja Cement's ambition is to be a part of the solution to the sustainability challenges faced today. I am pleased with the progress that we have made through our efforts, and we will continue to put into action bolder plans for emission reduction, resource optimisation and water conservation to build a sustainable India."