Displaying items by tag: Holcim

Thailand/Guatemala: Holcim Ltd has reduced its shareholding in Siam City Cement Company Ltd (SCCC) from 36.8% to 27.5%. The shares have been purchased by Bangkok Broadcasting and Television, a Ratanarak Group company, which will increase its shareholding in SCCC to 47%.

Elsewhere, Holcim has sold its 20% in Cementos Progreso SA to its majority shareholder, Grupo Cemcal SA Progreso, which owns a cement plant in San Miguel with an annual capacity of 3Mt/yr.

For the sale of these two share packages, which is part of the Holcim Leadership Journey, Holcim has received approximately US$410m.

Switzerland: As part of its on-going 'Leadership Journey' Swiss multinational cement producer Holcim has announced that it will be reducing its management structure in Europe to cope with lower levels of construction activity in the region. The group says that proposed measures evaluated and existing ones will lead to annual cost savings of at least Euro99m, a better utilisation rate of capacity and a more efficient allocation of capital expenditure.

The additional cash costs for restructuring in the fourth quarter of 2012 will amount to approximately Euro83.8m including site restoration costs. Write-offs of property, plant and equipment will total Euro339m and will be charged in the fourth quarter of 2012. Consultation procedures with regards to impact on personnel have been initiated in some group companies.

The restructuring accelerates the implementation of the Holcim Leadership Journey. The major part of the anticipated cash costs of Euro166m to realise the Holcim Leadership Journey will be incurred in 2012. The group's payout potential for the 2012 financial year (pre-write-offs) remains. The board of directors will propose the level of the payout at the end of February 2013, as part of the year-end financial statement to be submitted to the annual general meeting.

As 2012 draws to a close the challenges posed by the Australian carbon tax to the Australian cement industry are starting to show. First, Holcim Australia announced it was to lay off 150 staff. Then Boral released the news that it was planning to cut 90 jobs at its Waurn Ponds cement plant.

Following years of debate the Gillard government introduced the Clean Energy Act in July 2012. Heavy polluters were initially charged US$23/t of CO₂ emitted, more than twice the cost of similar schemes in Europe where it is US$10/t. A key criticism of the scheme was that it would damage the Australian domestic cement industry with cheap imports. However the Australian government cushioned the move with compensation packages for major polluters, including cement producers, currently set to last five years.

Although the Australian cement industry hasn't totally collapsed, with the loss of 1800 jobs as the Australian Federal Opposition warned of in 2011, imports have been favoured in recent months. Boral's suspension of clinker production at Waurn Ponds will increase imports. The change will result in 25-30% of Boral's clinker being imported. It's worth noting that Boral pointed out in its press release that this was 'in-line' with the Australian industry.

Adelaide Brighton, the country's third biggest producer after Holcim and Boral, may not have laid anybody off but it has secured a 10-year supply of foreign clinker. On 5 December 2012 the building materials producer announced that it was going to a buy a 30% stake in Malaysian white clinker and white cement producer, Aalborg Portland Malaysia. In the accompanying press statement the company's chief financial officer explicitly blamed the carbon tax as one of the reasons for the acquisition.

Whether the job losses at Boral and Holcim can be totally blamed on the carbon tax remains to be seen. Boral's second-half profit for the year ending 30 June 2012 suffered a fall of 59% to US$35.7m. Holcim noted weaker demand outside of mining regions for the third quarter of 2012. By contrast, Adelaide Brighton reported steady gains in its half-year report for 2012 although cement sales only increased 'marginally'. Elsewhere in its report Adelaide Brighton stated that it would cope with the impact of the carbon tax by reducing reliance on domestic manufacturing. These can hardly be comforting words for the Australian cement industry.

Brazil: Demand for cement rose by 8.5% year-on-year to 45.2Mt in the January to August 2012. The demand has been attributed to brickwork made from cement blocks and cement walls in booming social housing projects.

Cement demand in Brazil rose by 8% year-on-year in 2011 to 65Mt. Industry experts estimate that the use of cement systems may grow from its current level of 22% to 50%. Subsequently, cement producers are increasing their capacity. Brazil's cement capacity was estimated at 78Mt/yr at the end of 2011 and is forecast to rise by 40% to 111Mt/yr in 2016.

Meanwhile, Holcim is spending US$710m to increase its capacity from 1.2Mt/yr to 3.6Mt/yr. Queiroz Galvao is currently building a cement plant in São Luis in collaboration with the Cornelio Brennand group and is said to be planning five more plants.

Colombia: Swiss construction materials company Holcim has announced plans to double its cement production capacity in Colombia by investing US$600m in a new 2Mt/yr cement plant, according to an official statement.

Holcim, which currently produces around 2.1Mt/yr of cement in Colombia at its Nobsa plant, is conducting a feasibility study for the new facility. The construction phase is expected to create 1000 direct and indirect jobs.

"We're evaluating the departments of Bolívar and Antioquia as possible locations but we've yet to make a decision," said country manager, Miguel Ángel Rubalcava.

The new plant announcement comes as the Colombia government embarks on an

ambitious investment programme to develop its infrastructure. Among the plan's goals are a fourfold increase in the country's four-lane highways by 2018.

Infrastructure investments in the country are expected to reach US$10bn by 2014, compared to US$3bn in 2012.

The results are in from the European cement majors and the news from the Mediterranean producers is grim. A common phrase found in most of these financial reports was the 'challenging economic environment' in western Europe. Here's what this means.

In Spain, Cemex saw its net sales in its Mediterranean region (consisting mainly of Spain) slump by 17% to Euro1.10bn. Cementos Portland Valderrivas (CPV) posted a loss of Euro83m for the first nine months of 2012, almost 10 times the loss for the same period in 2011. In July 2012 the Spanish cement association Oficement noted that demand had fallen by 60% year-on-year.

In Italy, Italcementi reported a 92% crash in net profit, to Euro17.1m, for the first nine months of 2012, and a drop in revenue of 4%, to Euro3.39bn, for the first nine months of 2012. Buzzi Unicem reported a 21% decline in sales volumes of cement and clinker, and a drop in sales of 15% to Euro430m. Vicat reported that Italian sales across all its business lines were down by 9% for the year.

By contrast, beleaguered Greek producer Titan has finally started to show a (slight) increase in its revenue. It has been able to report a second consecutive quarter where turnover has risen year-on-year. Although Titan's net profit for the same period still plummeted by 96% to Euro2m.

Elsewhere progress of a kind is being made despite the ongoing European slump, mainly due to profitable assets held outside of western Europe.

Lafarge reported that its overall sales were up by 4% to Euro4.39bn in 2012 so far. Yet its income has fallen by 44% to Euro332m and its profits are suffering from its restructuring programme. In western Europe Lafarge noted that cement volumes were down by 11% to 12.5Mt so far in 2012 and that sales were down by 9% to Euro2.43bn.

Holcim reported a 5% increase in overall net sales and a 7% increase in operating profits to Euro1.57bn. In western Europe Holcim's sales volumes were down by 4.6% (like-for-like) to 20.1Mt and sales were down by 6% to Euro3.68bn.

HeidelbergCement reported a 2.5% increase in overall sales but pre-tax profits have fallen by 5% to Euro601m. HeidelbergCement's revenue from its cement business in western and northern Europe was down by 5% to Euro1.3bn. Buzzi Unicem reported overall flat sales at Euro2.15bn but net profit rose by 50% to Euro85m. Despite this Buzzi Unicem reported a drop of 8.5% in Germany.

Vicat reported little change in sales at Euro1.73bn for the year so far. Vicat's financial reporting made it hard to tell how much was lost in Europe but French cement sales were noted as being down by 12%. Cemex's sales volumes were down by 13% in northern Europe, with net sales down by 15% to Euro3.09bn. Italcementi's cement sales volumes in central and western Europe fell by 16.8% to 12.2Mt.

Of the major producers only Lafarge failed to state the obvious in its outlook about western Europe: that sales will continue to decline in 2012 and 2013. If Titan has set the bar for how much more pain the other European producers have yet to face then conditions are likely to get worse. Get ready for even more 'challenges' in 2013.

Serbia: Claudiu Soare has been appointed the chief executive officer of Holcim Serbia. Soare, aged 42, has been a member of the Holcim Romania team since 2000 and afterwards he became project manager at Holcim Services EMEA (Europe, the Middle East and Asia) in Madrid.

Soare started with Holcim in the ready mixed concrete and aggregates division (RMX & AGG) as a Project Manager in 2000. In 2007 he became technical manager RMX & AGG and in 2011 he moved to Holcim Services EMEA, a shared service centre based in Madrid, Spain. Soare holds a Master degree in Electro-Mechanical Engineering and a MBA.

Switzerland: Holcim Ltd has released its financial results for the first nine months of 2012, which show a 4.8% increase in net sales and over 10% year-on-year improvement in net profit. The group says that its results show the 'advantage of a strong presence in emerging markets, where construction activity remains high.'

Holcim says that its 'unique' geographic diversification has helped support it through a difficult time in its native Europe, allowing it to achieve an increase in consolidated sales of cement, often at better prices. Holcim's group companies in India, the Philippines, Indonesia, Russia, Thailand, Mexico and the USA recorded significantly higher cement sales year-on-year in the period under review. Its consolidated cement sales increased by 3% in the first nine months of 2012 to 111.4Mt.

Despite the difficult market situation in Europe, Holcim's consolidated net sales for the nine months increased by 4.8% to Euro13.4bn and operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 5.9% to Euro2.57bn. Its operating profit increased by 7.2% to Euro1.57bn. Holcim said that these results reflected the solid performance in a number of emerging markets, stronger demand for building materials in North America, improvements in efficiency and the first successes of the Holcim Leadership Journey. Holcim increased its net income by 10.3% year-on-year to Euro910m.

Holcim expects demand for building materials to rise in emerging markets in the whole of 2012 in Asia and Latin America, as well as in Russia and Azerbaijan. In North America, it expects that its cement volumes will also increase. In Europe however, sales volumes are expected to decrease in all business segments.

Holcim reiterated its stance that cost management, including the Holcim Leadership Journey programme, will be paid very close attention. It said that it will continue to pass on inflation-induced cost increases. Its approach to new investments will remain cautious. Holcim expects to achieve organic growth in 2012 on the level of operating EBITDA and to reap the first positive effects of the Holcim Leadership Journey in 2012.

Philippines: Holcim Philippines has plans to invest US$350m to US$450m on building a new 2Mt/yr cement plant due to increased demand and sales in the third quarter. This quarter is normally a weak season for the construction industry because of monsoon rains.

Holcim Philippines' chief operating officer Roland van Wijnen said that cement demand remained robust on account of sustained government infrastructure spending and steady rollout of residential and commercial projects. The Cement Manufacturers Association of the Philippines (CEMAP) has reported a growth rate of 20% since October 2011.

Holcim Philippines reported a 22.5% growth in its net income to US$61.5m in the first nine months of 2012 from US$50.3m in the same period of 2011. Revenues for the past nine months reached US$491m, an increase of 22.5% year on year. However, third quarter earnings in 2012 declined to US$12.5m from US$15.2m in 2011. The company attributed this to having to import clinker to augment production given that several of its facilities were under preventive maintenance.

"The challenge for us is to meet increasing demand over the longer term. We have begun reactivating our idle facilities, beginning with our terminal in Calaca, Batangas in 2011. Our grinding plant in Mabini will be operational by the third quarter of 2011," said van Wijnen. Holcim Philippines is now preparing a proposal for a new cement plant to be submitted for board approval in the first half of 2013. If built this will boost the firm's cement capacity to about 9.5Mt/yr with a completion date of 2016.

Australia: Holcim Australia, a subsidiary of Switzerland-based building materials company Holcim, plans to lay off 150 staff and mothball up to 30 facilities as part of a review of its Australian operations. The majority of the closures and lay offs will affect Holcim's Australia's concrete business.

The company expects to mothball or close about 10% of its sites when it completes an organisational review in the next week. Holcim Australia, previously know as Readymix, employs about 3200 staff and another 1800 contractors and casual workers.

"With softer activity and outlook in some of our key markets, we must also adjust our business to suit," said Holcim Australia chief executive Mark Campbell. He added that since the company had been exposed to both mining and non-mining sectors across Australia its had been able to ride the two-speed economy better than some of its competitors.

Holcim Australia's parent company launched a cost-cutting drive in May 2012 called the 'Holcim Leadership Journey' programme designed to save Euro1.25bn by 2014.