Displaying items by tag: Holcim

Australia: Swiss cement maker Holcim has announced plans to operate Cement Australia as a joint venture (JV), in which both Holcim and Germany's HeidelbergCement AG will hold equal 50% stakes. Holcim will therefore sell 25% of its stake in Cement Australia to HeidelbergCement for an undisclosed amount. The move has already been approved by the Austrian authorities, according to Holcim.

Cement Australia operates two cement plants and a grinding station in the east and southeast of Australia and in Tasmania with a total cement capacity of 4.2Mt/yr. In addition, a new grinding station in Port Kembla with an annual capacity of 1.1Mt/yr is expected to go online in 2013.

Lebanon: Holcim has been named by the Environment Ministry as the country's sole disposer of pharmaceutical waste, according to a press release. The ministry issued a permit to the company to burn the drugs in its cement kiln. Holcim is in the process of destroying hundreds of tons of expired pharmaceuticals in the kiln at its factory in Shekka, in the north of Lebanon.

The drugs that are to be burnt were discovered during investigations that uncovered hundreds of tonnes of expired medicinal goods around the country. Officials sought a responsible way to dispose of the material and discovered that they could be used as an alternative fuel for a cement kiln. The high temperatures (~1500°C) in the kiln ensure that organic materials are completely destroyed during combustion.

India/Germany: ACC has ordered two vertical roller mills from Loesche, in a consortium with KHD, for its Jamul cement plant.

The Holcim subsidiary has ordered a Loesche Mill Type LM 56.3+3 CS equipped with a classifier type LDC to grind clinker. The vertical roller mill will be operated with the power of a 5600kW motor and will have a capacity of 195t/hr. In addition a Loesche vertical roller mill Type LM 43.4 D will be part of the project and is designed to have a capacity of 90t/hr. The gearbox has a capacity of 1300kW.

Loesche's scope of supply for the Jamul project of Holcim will include additional equipment which is delivered in a joint venture by Loesche GmbH, Duesseldorf, as well as by Loesche India Pvt. Ltd.

With the annual results for 2012 in from Lafarge, Holcim and CRH we now return to look at how the European markets coped.

Holcim summed up the mood perfectly in its media release on its annual results for 2012. First it pushed the big positive (net sales up overall) but then finished its first (!) sentence with: '...despite the difficult economic environment in Europe.'

Overall in Europe, Lafarge saw its cement volumes fall by 9% to 29.6Mt from 32.5Mt. Notably sales volumes fell significantly in Spain and Greece, by 26% and 37% respectively.

Holcim saw its cement volumes fall by 2% in Europe to 26.3Mt from 26.8Mt. There were specific country figures from Holcim but it did comment that the 'severe crisis' in southern Europe had 'contaminated' economies further north such as a France, Benelux, Germany and Switzerland.

CRH was less candid about its cement business in Europe although it did report that its sales revenues fell by 10% to Euro2.69bn in 2012 from Euro2.99bn in 2011. Notable losses occurred in Poland (11% volume decline), Ireland (17% decline) and Spain (30% decline).

These figures compare against a 4% decline in volumes in Western and Northern Europe to 22.1Mt from 21.3Mt by HeidelbergCement, a 13% drop in overall net sales to Euro3.05bn in Cemex's Northern Europe section and a 16% drop in volumes to 16Mt from Italcementi in its Central Western Europe region.

The question to ask at this point is how HeidelbergCement and Holcim managed to suffer smaller losses compared to everybody else. Less exposure to southern Europe is one answer. Depressingly though they both suffered similar drops in profit indicators such as earnings before interest, taxes, depreciation, and amortisation (EBITDA) to the others (20% and 33% respectively).

Both Holcim and CRH are expecting continued tough conditions in Europe in 2013. However, both companies are mildly optimistic that the worst has passed, with talk of the work of the European Central Bank supporting peripheral Eurozone economies showing some effect. Lafarge doesn't even mention Europe in its outlook.

As mentioned in Global Cement Weekly #87 on 13 February 2013, EU regional GDP growth is forecast to become positive in 2013. Everybody is going to be watching the European quarterly results for the cement majors in 2013 very carefully indeed. In the meantime all every cement producer with a presence in Europe can do is to carry on cutting costs.

Switzerland: Swiss-based multinational building materials producer Holcim has reported a 2.5% rise in cement sales to 148Mt in 2012 from 144Mt in 2011. In its media release Holcim mentioned that the increase came, 'despite declines in the European businesses.'

Holcim's net sales rose by 6.4% to Euro17.9bn in 2012 from Euro16.8bn in 2011. Operating earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 3.1% to Euro3.30bn from Euro3.20bn. However, operating profit fell by 3.7% to Euro1.51bn from Euro1.57bn.

In cement deliveries were up in all major group regions except Europe, where only Russia and Azerbaijan posted significant increases in sales, partly also in connection with capacity expansion.

By region, Holcim singled out its Asia Pacific as its 'key growth' area. Sales of cement rose by 5% to 79.2Mt from 75.6Mt. Total net sales rose by 9% to Euro5.47bn from Euro5bn. Thailand and the Philippines were singled out as performing well, while Australia turned in a 'less dynamic performance than in 2011.'

In Latin America sales of cement increased by 3% to 24.9Mt from 24.2Mt. Total net sales rose by 9% to Euro2.29bn from Euro2.11bn. Amidst positive performance in most countries, Argentina witnessed a 'significant' downturn in 2012.

In Europe sales of cement fell by 2% to 2.3Mt from 2.4Mt. Total net sales fell by 3% to Euro2.16 from Euro2.23bn. As Holcim's annual report put it, 'the severe crisis dogging Southern Europe contaminated other countries, also affecting hitherto relatively stable economies such as France, the Benelux states and Germany, with repercussions for Switzerland'. Only Russia and Azerbaijan avoided this.

In North America sales of cement rose by 5% to 12Mt from 11.4Mt as the US economy recovered. Total net sales rose by 13% to Euro1.13bn from Euro1.01bn.

In Africa/Middle East sales of cement fell by 4.4% to 8.4Mt from 8.7Mt. Total net sales fell by 1% to Euro697m from Euro706m. Here, performance was impacted upon by the 'political uncertainties in North Africa and the civil war in Syria.'

In its outlook for 2013 Holcim anticipated an increase in sales of cement in 2013, led by its Asia Pacific, North America and Latin America regions. Margins are expected to improve as its cost saving programme, the 'Holcim Leadership Journey', continues.

US: The board of directors of Holcim (US) has appointed Filiberto Ruiz to serve as the company's president and chief executive officer. Ruiz's appointment also includes serving as president and chief executive officer of Aggregate Industries US, a Holcim Group Company.

Additionally, Bernard Terver, currently a member of the Holcim Ltd Executive Committee, formerly president and chief executive officer of Holcim (US) and Aggregate Industries US, has been named chairman of the board.

Ruiz has served as the company's deputy chief executive officer since August 2012 and has been with the company for more than 26 years, holding a range of general management, manufacturing and sales and marketing positions both within and outside of the US.

Terver has been president and chief executive officer of Holcim (US) since October 2008 and Aggregate Industries US since 2010. He has more than 30 years' experience in the cement and mineral components industry both in the US and internationally.

Nigeria: Flour Mills of Nigeria plans to borrow up to US$500m to finance a 2.5Mt/yr upgrade at its 2.5Mt/yr UNICEM joint venture cement plant in Calabar, according to its chief finance officer. Flour Mills operates in the Nigerian cement market as Burham Cement and it shares its joint venture with Holcim and Lafarge.

In an interview with Reuters, Jacques Vauthier announced that the conglomerate had appointed financial advisers and banks to raise a term loan from the local market for the construction of the plant. He said that the details of the loan were still being finalised. The new cement plant will be completed by the first quarter of 2016.

Vauthier acknowledged the cement glut in 2012 and blamed it on cheap imports from Asia. He added that sales were picking up again and he expected its cement subsidiary Unicem to end 2013 with a year-on-year growth rate that is in double-digits.

This news story was updated on 11 November 2013 with the exisiting capacity of the UNICEM cement plant

Ireland: CRH chief executive Myles Lee has confirmed that the building materials group is interested in expanding its presence in India. The comment follows rumours from the Indian media that CRH and Holcim are both in separate talks with the Shriram Group to buy a stake in Sree Jayajothi Cements (SJJCL).

Lee said that CRH remained interested in expanding its presence in India, but declined to comment on Sree Jayajothi. CRH 'terminated' negotiations with Jaypee Cement Corporation in October 2012 because the parties were unable to agree terms.

"We have been on the lookout for a partner for quite some time and we keep having several discussions with different players both strategic and financial," said T Shivaraman, managing director and chief executive of Shriram Engineering and Procurement Company, which owns SJJCL. He refused to comment on the involvement of either CRH or Holcim. It has been reported that private equity giants Blackstone and KKR are also in separate preliminary talks with Shriram about its stake in the cement manufacturer. SJJCL owns a cement plant with a production capacity of 3.2Mt/yr based in Andhra Pradesh.

The rumours arrived at the same time that CRH announced it had made acquisitions and investments valued at Euro630m in 2012. The bulk of the money was spent in the US, where Euro256m was spent in the second half of the year. In Europe CRH spent Euro119m in the second half of 2012 in acquisitions in Finland and the UK. Lee confirmed that CRH holds between Euro1bn and Euro1.5bn to spend on deals.

Both CRH and Holcim have a combined capacity of around 61Mt/yr in India. Holcim controls ACC and Ambuja Cements while CRH has a venture with Hyderabad-based My Home Industries, which owns a 4.2Mt/yr plant.

Just before the end of 2012 Holcim sold shares in companies it owned in Thailand and Guatemala. It reduced its stake in Siam City Cement Company (SCCC) in Thailand from 36.8% to 27.5% and it sold its entire 20% minority stake in Cementos Progreso in Guatemala. For the sale of these two share packages Holcim received approximately Euro310m.

This is interesting given that Asia-Pacific was the Switzerland-based multinational's biggest sales area in 2011 and because sales of cement rose by 6% in Latin America in 2011. Similarly in 2012 from January to September the two regions propped up the group's profits. Why would Holcim sell stakes into two of its most profitable regions?

In its third quarter report in 2012 Holcim repeatedly described Thailand as 'encouraging' following floods in 2011. It added that it had focused increasingly on the cement market in the country and strengthened its position in neighbouring countries that resulted in lower clinker exports.

According to the Global Cement Directory 2013 SCCC has a capacity of 31Mt/yr, 65% of Thailand's total capacity of 48Mt/yr. SCCC predicted in December 2012 that domestic cement demand would increase by 5-10% in 2013. The company is currently planning to build new plants in Indonesia and Cambodia and is considering investing in Myanmar. In Indoniesia Holcim is the third biggest producer after Semen Gresik and HeidelbergCement subsidiary Indocement.

Meanwhile in Central America, Cementos Progreso was the sole producer in Guatemala with 2.5Mt/yr from two plants. This was set to double with the commissioning of a third plant towards the end of 2012. However, Holcim retains seven plants in southern Mexico (12Mt/yr), both of El Salvador's plants (2Mt/yr) and a plant in Costa Rica (1Mt/yr).

With Holcim's strong presence in Central America and the North American market reviving leaving Guatemala makes sense with the group's debt reduction programme in mind. The situation in Thailand is more complex, so unsurprisingly Holcim has reduced its stake rather than leaving completely. SCCC's expansion plans outside of Thailand suggest, that although growing, the market is maturing. In one such potential expansion target, Indonesia, Holcim is already a major producer.

In its press release announcing the sales in Thailand and Guatemala, Holcim attributed the decision to its ongoing debt reduction programme. As part of its 'Leadership Journey' the group intends to save Euro1.25bn by the end of 2014. Other savings in 2012 included reducing management in Europe, layoffs and closures in Australia, a plant closure in Hungary, further delays on the decision to build a new plant in New Zealand and layoffs in Spain. The management changes in Europe alone contributed a Euro99m chunk of Holcim's target saving of Euro124m for 2012.

Yet it's worth considering that a week after the sales of its shares Holcim's subsidiary in India, Ambuja Cements, announced investments of Euro277m in India. Perhaps the best way to save money is to make more money.

India: Ambuja Cements has announced investments of US$365m in India, of which US$100m is targeted for Bengal. The Indian cement producer intends to try to maintain its market share at 10% until 2018.

The subsidiary of Holcim announced it would invest US$59.2m at a grinding unit in Sankrail to expand its capacity to 2.4Mt/yr from 1.5Mt/yr by 2015. It has also proposed to invest US$41m in another grinding unit in the state at Bandel, according to Bengal industries minister Partha Chatterjee.

"This plant (Sankrail) is working at a capacity of 1.5Mt/yr and we will go up to 2.4Mt/yr. We also have a unit in Farakka with a 1.25Mt/yr capacity. So, with this, we will be one of the largest cement players in Bengal," said Ajay Kapur, CEO of Ambuja Cements.

Ambua Cements also announced that it is yet to gain clearance for the construction of a 3Mt/yr greenfield integrated cement plant in Rajasthan. Ambuja Cements holds a total capacity of 27.25Mt/yr in Rajasthan. A 1.5Mt/yr grinding unit at Sanand, Gujarat, is also being considered.