Displaying items by tag: Ireland

Ireland: 26 hedge funds have bought or expanded stakes in CRH since 30 June 2023. Bloomberg has reported that existing shareholders that expanded their holdings included US-based Baupost Group and Soros Fund Management.

CRH is due to complete its transition into a primarily US-listed company in late September 2023.

Ireland: Ecocem has appointed Jaouad Nadah as its Innovation Project Manager. He will be responsible for the coordination of the company’s ACT technology as it scales up development. This will include supporting a range of partnerships under development by Ecocem across Europe and beyond. Nadah previously worked for CRH-subsidiary Eqiom and Holcim, with a focus on innovation in the low carbon cement market. Ecocem launched ACT in late 2022. It says it is an alternative materials-based cement ingredient capable of reducing the CO₂ emissions of cement production by up to 70%.

Ireland/US: Shareholders have approved Ireland-based CRH's board recommendation to transition to a US primary listing on the New York Stock Exchange. The company says that it will effect its transition on or around 25 September 2023. This will entail delisting shares from Ireland's Euronext Dublin, while retaining a standard listing on the UK's London Stock Exchange (LSE).

CRH derived 75% of earnings from North America in 2022. It expects the US market to be a key driver of future growth due to the country's growing populace and construction needs.

CEO Albert Manifold said "We are pleased to see such strong shareholder support for the listing transition, as it marks an important milestone in our development and will enable CRH to fully participate in the significant growth opportunities that lie ahead.”

Ireland/US: Albert Manifold, the chief executive officer of CRH, has described the company as a ‘de facto’ American company at it its annual general meeting. "This is a golden age of construction in the US," said Manifold, according to the Irish Times newspaper. He added that moving the group's main stock market listing to the US made it "more of an American company, which de facto we actually are". He also noted comments by US president Joe Biden in February 2023 that the country was planning “to buy American” as part of its infrastructure spending. North America accounted for 75% of the group’s earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2022 compared to around a half in the early 2010s.

CRH said in March 2023 that it was preparing to move its primary listing of shares to a US-based stock exchange.

Ireland: CRH has reported a ‘positive’ start to 2023, with first quarter sales and earnings before interest, tax, depreciation and amortisation (EBITDA) ahead of its own expectations.

In a trading update chief executive officer Albert Manifold said “We had a positive start to the year in a seasonally quiet trading period. While some adverse weather conditions were experienced in the first quarter, sales and EBITDA were ahead, underpinned by the continued execution of our integrated solutions strategy and further commercial progress across our markets.”

In its Americas Materials Solutions business unit, CRH’s sales were 10% ahead of the first quarter of 2022, driven by robust pricing which more than offset the impact of unfavourable weather on activity levels in certain markets during this seasonally less significant quarter.

In Europe, like-for-like sales were 6% ahead of the first quarter of 2022 due to strong pricing momentum across all products and regions. Activity levels were impacted by less favourable weather conditions compared to the same period in 2022. Unfavourable currency exchange effects resulted in total sales being 1% behind 2022.

Manifold added, “Looking ahead, despite some ongoing macroeconomic uncertainties and an inflationary cost environment, we expect first-half sales, EBITDA and margin to be ahead of the prior year period.”

Ireland/UK: A six-month feasibility study conducted by Mannok at its Derrylin plant, in conjunction with Catagen, has found a number of ways that the cement producer can reduce its CO₂ emissions. Using Catagen’s HGEN renewable hydrogen generator with waste heat recovery could potentially decrease the cement plant’s annual CO₂ emissions by 7%. In addition the study found that using biohydrogen generation from waste biomass could generate larger volumes of hydrogen with less renewable energy required, compared to electrolytic hydrogen generation. Using Catagen’s BIOHGEN process in this way could minimise carbon intensity by a further 18%. A combined group of engineers from Mannok and Catagen worked on the project.

Kevin Lunney, operations director at Mannok, said “We are very excited to be working with the Catagen team, who have demonstrated a deep level of technical ability and competency during the feasibility work. I have no doubt that Mannok will derive significant value from the work already completed, with many new opportunities for collaboration now presenting that we would not have considered before. Achieving Net Zero is now the primary goal for our business and I expect Catagen will play a significant role in our achieving that goal, which we expect will have major benefits for the sector overall.”

In early April 2023 Mannok revealed that it had secured funding from the UK Government Green Energy Scheme to support its energy transformation programme. The first phase of the initiative, which the funding will support, is the generation of onsite green hydrogen to replace the use of diesel in over 70% of the company’s 150 heavy-goods truck fleet.

Belfast-based Catagen started as a testing company providing emissions data to the automotive sector. It has started working in other industrial sectors - such as cement, glass and steel in Europe and the US – as part of its ClimaHtech product range.

After the initial shocking coverage of the Russian invasion of Ukraine, which began in February 2022, came announcements of the most extensive sanctions in history by the EU, G7 nations and others against Russia. In the EU, this effectively deconsolidated companies' Russian subsidiaries, leaving decision makers with the choice whether to sell up or hold out for better times.¹ Four Russian-facing EU cement producers - Buzzi Unicem, CRH, Heidelberg Materials and Holcim - finalised their strategic responses in March 2022.

One year on, on 15 March 2023, 666 (21%) of 3110 eligible multinationals have withdrawn from Russia, according to the KSE Institute.² Ireland-based CRH led the cement sector exit. It abandoned its Finland-based subsidiary Rudus' ready-mix concrete joint venture, LujaBetomix, on 2 March 2022. Switzerland-based Holcim took longer, but affected its exit on 14 December 2022, agreeing to sell Holcim Russia to local management. One condition of the sale was a rebrand (to Cementum, in February 2023) to withdraw the Holcim name from Russia. Unlike CRH, Holcim's Russian business included multiple cement plants - though the producer stated that it contributed less than 1% of group sales during 2021.

The KSE Institute uses the equivocal label of 'waiting' for companies which have paused investments, or scaled back operations, in Russia, while retaining their subsidiaries. This applies to 500 companies globally (16% of the pre-war total). Germany-based Heidelberg Materials acted swiftly to freeze further investments in HeidelbergCement Russia on 10 March 2022. At that time, its three cement plants were in winter shutdown. In terms of capacity, the 4.7Mt/yr-capacity Heidelberg Materials Russia constitutes 2.8% of Heidelberg Materials. In 2022, Heidelberg Materials suffered a Euro102m impairment on account of its Russian business. CEO Dominik von Achten, announcing the freeze, had described the subsidiary as a 'pure local business with no imports or exports.' Its website has since come offline, but the corporate structure presumably maintains in its frozen isolation.

1220 global multinationals - 39% of all those previously operating in Russia - are still 'continuing operations.' Among these is Buzzi Unicem. Having decided that 12 months was long enough, the Ukrainian National Agency for the Prevention of Corruption (NAPC) placed Italy-based Buzzi Unicem on its list of Russian war sponsors on 8 March 2023 for the actions of its subsidiary SLK Cement. A scathing denouncement accompanied the listing, in which the NAPC set out its main charges. It accused Buzzi Unicem of:

1. Expanding its business in Russia since the invasion;

2. Supplying its products to Russian state-owned businesses, including energy suppliers Rosatom and Rosneft;

3. Voicing support for the invasion via its social media presence.

The NAPC concluded “Buzzi Unicem's continued business in Russia means direct support and sponsorship of terrorism by Russia.”

Buzzi Unicem responded in no uncertain terms that these allegations are untrue: it has no business in Russia, and the entity bearing its logo on its (SLK Cement's) website is entirely independent in its decision-making and commercial actions.

This goes to the root of what it means to be a subsidiary of a corporation. Buzzi Unicem seeks to define the relationship as beginning and ending in operational involvement. Yet Buzzi Unicem and other corporations have invested large sums in businesses like SLK Cement. According to the NAPC, Buzzi Unicem paid Euro62m in taxes alone in Russia between 2016 and 2021. Whether they have elected to 'continue operations,' 'wait' or write in favourable buy-back options into sales contracts, as has happened in other industries, companies can be expected to seek to return to their investment.

As such, it is not entirely surprising that Buzzi Unicem should have followed up its rebuttal with a defence of SLK Cement. It stated "SLK Cement is a Russian domiciled entity operating exclusively in that country and therefore subject to domestic legislation. Payment of taxes and having employees being mobilised to the army are not discretionary decisions, rather legal obligations within the Russian jurisdiction."

In the decision to sell or hold, multinationals face the usual considerations: can they afford to yield their market share to other - less conscientious - competitors? Or, in this instance, those from Türkiye, India and China, whose potential investments are unrestrained by sanctions? Even as Holcim thrashed out its exit deal in October 2022, China-based West China Cement announced plans for a new US$260m, 1.2Mt/yr cement plant in Tatarstan, Volga Federal District. Meanwhile, Cemros (formerly Eurocement) is carrying out a Euro3m mill upgrade at its Lipetsk integrated cement plant in Central Federal District, which will increase the plant's capacity by 20% upon commissioning in early 2023. Between them, Central Federal District and Volga Federal District host four former Holcim cement plants.

12 months into the Russian invasion of Ukraine, an onslaught of withdrawals has shrunk, but not collapsed, the Russian economy.³ The Russian government insists that cement demand remains high (up by 2.1% year-on-year to 58.3Mt during the first 11 months of 2022, according to the Russian cement association Soyuzcement).⁴ The country has substituted new sources of imports for those lost since the beginning of the invasion, the government claims. It is even preparing for a cement shortage from 2024 onward by 'further developing domestic production capacities.'

Far from shrinking, Russian cement production rose by approximately 2.5% year-on-year to 60.7Mt in 2022.^{4, 5} The two aforementioned districts - Central Federal District and Volga Federal District - contributed a healthy 15.3Mt (25%) and 13.4Mt (22%) respectively. If the statistics are to be believed, the EU's recalled producers are missing out on a bonanza.

At the same time, all four EU-based producers face the parallel burden of increased costs in their key markets, as sanctions keep energy prices at an all-time high, and nowhere more so than in Europe. These sanctions purport to target Russian businesses and individuals, but their bite is far less discriminating. Companies may well wonder why they are being penalised by governments whose policies failed to prevent a Russian invasion of Ukraine in the first place.

We have no idea what will happen in Ukraine and Russia in the rest of 2023, but we can be sure it will be uncertain territory for the two countries’ cement producers. Those with (former) assets in the Russian market will have to continue their delicate balancing act.

1. European Commission, 'Frequently Asked Questions,' 16 March 2022, https://trade.ec.europa.eu/doclib/docs/2022/march/tradoc_160079.pdf

2. KSE Institute, 'Stop Doing Business with Russia,' 15 March 2023, https://leave-russia.org/leaving-companies?flt%5B147%5D%5Beq%5D%5B%5D=9062

3. European Council, 'Infographic - Impact of sanctions on the Russian economy ,' 9 March 2023, https://www.consilium.europa.eu/en/infographics/impact-sanctions-russian-economy/

4. Soyuzcement, 'Cement Review,' December 2022, https://soyuzcem.ru/documents/%D0%A6%D0%B5%D0%BC%D0%B5%D0%BD%D1%82%D0%BD%D0%BE%D0%B5_%D0%BE%D0%B1%D0%BE%D0%B7%D1%80%D0%B5%D0%BD%D0%B8%D0%B5_%D0%B4%D0%B5%D0%BA%D0%B0%D0%B1%D1%80%D1%8C%202022.pdf

5. BusinessStat, 'In 2022, 60.7 million tons of cement were produced in Russia,' 21 February 2023, https://marketing.rbc.ru/articles/14025/

UK: Breedon Group's sales were Euro1.57bn in 2022, up by 13% year-on-year from Euro1.39bn in 2021. Its earnings before interest and taxation (EBIT) rose by 16% to Euro166m from Euro143m. The group increased its cement volumes by 9.1% during the year, to 2.4Mt from 2.2Mt.

Breedon Group said "The outlook for the cement market is positive, underpinned by large ongoing infrastructure projects in the UK. In Ireland, housing and infrastructure are supported by the government’s development plans to accommodate a rapidly growing population."

Ireland: CRH is preparing to move its primary listing of shares to a US-based stock exchange. The group said in its financial results for 2022 that it had come to the conclusion that, “a US primary listing would bring increased commercial, operational and acquisition opportunities for CRH, further accelerating our successful integrated solutions strategy and delivering even higher levels of profitability, returns and cash for our shareholders.” It added that the US market represented around 75% of its earnings before interest, taxation, depreciation and amortisation (EBITDA). It expects that the US will be a ‘key’ driver of future growth for the company, with increases in infrastructure funding, a push for on-shoring of manufacturing activity and high levels of under-build in the residential construction market supporting this outlook.

The group plans to tell its shareholders in further details about the move in exchange. CRH plc will remain headquartered, incorporated and tax-resident in Ireland.

Ireland: CRH recorded consolidated sales of US$32.7bn in 2022, up by 12% year-on-year from US$29.2bn in 2021. The producer's Americas Materials business reported sales of US$14.3bn, up by 15% US$12.4bn. Across the Americas, its cement revenues grew by 8% year-on-year. A 12% regional price rise offset a decline in the business' cement sales volumes. CRH's Europe Materials business reported sales of US$10.6bn, in line with 2021 levels. Its cement revenues were US$2.04bn across the region.

Chief executive officer Albert Manifold said "Our 2022 performance reflects the outstanding commitment of our people, the underlying strength and resilience of our business and the continued delivery of our integrated, solutions-focused strategy. Despite significant cost pressures throughout the year, we delivered further improvements in profits, margins and returns. Our strong cash generation together with our relentless focus on disciplined capital allocation has also delivered the strongest balance sheet in our history, providing us with significant opportunities for further growth and value creation going forward."