Displaying items by tag: Lafarge
Brazil: Brazil's anti-trust regulator, Conselho Administrativo de Defesa Econômica (Cade) will force the sale of 24% of the total installed capacity of the country's four largest cement manufacturers and fine them a total of US$1.4bn as punishment for cartel activities. The decision to implement these measures comes after months of internal uncertainty at Cade.
The four companies are Votorantim, InterCement, Itabira and Holcim. Lafarge Brasil had previously settled with Cade by way of an agreement on divestments and a negotiated fine of US$19m.
Votorantim will be the most affected by the forced divestments. It will have to sell 35% of its production capacity, which Cade says is equivalent to 15% of the Brazilian cement market. InterCement will have to sell 25% of its capacity, equivalent to 4% of the market, Itabira will have to sell 22% of its assets, which is 3% of the market share and Holcim Brasil's 22% divestment equates to 2% of the market.
According to Cade, there has been a cement cartel active in Brazil for the last 10 years, which has seen companies collude to fix prices and sales volumes and create barriers to competition. Cade estimates that this has cost the economy US$6.3bn in inflated prices.
Holcim and Lafarge agree merger to create cement giant
07 April 2014Worldwide: Reuters has reported new details regarding the potential merger of Holcim and Lafarge. The merger would spark some Euro5bn of asset sales worldwide to steer it through antitrust rules.
With operations in 90 countries, Lafarge and Holcim expect to face antitrust scrutiny in 15 jurisdictions, including Brazil, Canada, Ecuador, France, the UK, the US, Morocco and the Philippines. LafargeHolcim could have a market share in excess of 50% in some areas. Even in countries such as the US where it would be smaller, monopoly authorities are likely to become involved.
The deal will help the companies slash costs, trim debt and better cope with soaring energy prices, tough competition and weaker demand that have hurt the sector since the 2008 economic crisis. The groups complement each other well geographically, with Lafarge stronger in Africa and Holcim stronger in Latin America. Emerging markets such as Latin America and Africa will account for 60% of the new group's sales, but no single country will represent more than 10%.
"The new group will offer higher growth and low risk thus creating more value," said Lafarge chief executive Bruno Lafont, who will become CEO of LafargeHolcim. The companies added that they expected total annual savings from joining forces of Euro1.4bn after three years, thanks to economies of scale, better operational efficiency and lower financing costs.
Lafarge and Holcim confirmed that they would sell businesses worth 10 - 15% of the group's earnings before interest, tax, depreciation and amortisation (EBITDA) to satisfy antitrust concerns, worth about Euro5bn in total. Two-thirds of the asset sales would be in Europe, according to Lafont. The companies also have overlapping business operations in Canada, Brazil, India and China.
"We are immediately going to start discussions with the European Commission and other competition regulators in a constructive spirit," Lafont said, adding that the combined company would continue to improve operational performance and that there would be no plant closures associated with the deal.
The expected EBITDA synergies are made up of Euro200m at operational level, Euro340m in purchasing, Euro250m in sales and Euro200m in innovation. On top of this, the company sees Euro200m of savings on financial costs and Euro200m for investments.
Lafarge's largest shareholder, Belgian holding company Groupe Bruxelles Lambert, which has a 21% stake, said that it would support the deal and would hold about 10% stake in the combined group after the transaction was completed. The transaction has the support of core shareholders and is expected to close in the first half of 2015, the companies added.
European Commission spokesman for competition policy, Antoine Colombani, said that the companies had not yet formally notified the European Union about the deal.
LafargeHolcim merger gathers pace
07 April 2014Worldwide: More details have emerged over the weekend regarding the proposed merger of Lafarge and Holcim, with the name LafargeHolcim mentioned by key staff. The discussions look set to lead to a company with combined sales of around Euro32bn and earnings before interest, taxes, depreciation and amortisation (EBITDA) of Euro6.5bn.
"This proposed merger is a once in a lifetime opportunity to deliver substantially better value to customers with more innovation, a wider range of products and solutions and more sustainability and enhanced returns to shareholders," said Rolf Soiron, chairman of Holcim. "LafargeHolcim will be uniquely positioned to take advantage of growth in developed markets and the world's fastest growing economies by supplying the materials that will enable the construction industry to meet the challenges of the future."
"By combining Holcim's experienced teams, complementary geographies and innovative expertise with ours, we propose to set up the most advanced group in the construction industry, for the benefit of our clients, our employees and our shareholders," said Bruno Lafont, chairman and CEO of Lafarge. "I am confident that this merger of equals provides a unique opportunity to rapidly create the most advanced platform in our industry with outstanding synergies. With a best-in-class international portfolio, robust balance sheet and strong governance, the new group will offer higher growth and low risk, thus creating more value.'
Unofficial sources have suggested that the weekend's meetings involved detailed discussions regarding the sale of some parts of the companies' assets to conform to national and regional anti-monopoly regulations.
Subject to shareholder and regulatory approvals and other customary authorisations completion is to take place by the end of the first half of 2015.
Holcim and Lafarge discuss possible combination
04 April 2014Worldwide: Holcim has confirmed that Lafarge and Holcim are in advanced discussions regarding a possible combination.
Holcim and Lafarge have stated that, given the strong complementarity of their portfolio and the cultural proximity between the two companies, there is rationale in considering a potential merger that could deliver significant benefits to customers, employees and shareholders. Holcim said that their discussions have been based on principles consistent with a merger of equals, which would build on the strengths and identities of the two companies.
No agreement has yet been reached and no assurance can be given that these discussions will lead to a definitive agreement. Holcim stated that it will inform the public of any material developments in this respect.
Canada: Mantra Energy Alternatives has struck a deal with Lafarge Canada to deploy an electrochemical reduction technology at one of Lafarge cement plants. The technology will convert carbon dioxide emissions into useful chemicals.
"This will be the first pilot plant of its kind in the world," said Mantra's vice president Patrick Dodd. If the system works as advertised it could be deployed at all of Lafarge's facilities.
The technology would convert carbon dioxide into useful chemicals like formic acid and formate salts. The pilot plant would convert 100kg/day of carbon dioxide emitted from the cement plant into concentrated formate salts. Colin Oloman and Hui Li of the Clean Energy Research Centre developed the technology at the University of British Colombia. Mantra Venture Group then purchased it in 2008.
Mantra plans to use the formic acid for use in its patented fuel cells, which it bills as a significantly less expensive fuel cell with greater power density.
Now that the deal between Mantra and Lafarge has been signed, work will begin on the detailed engineering for the plant and the purchase of custom equipment.
US: Chemical distributor Univar has shipped 379,000M3 (100 million gallons) of fuel-quality waste from its waste chemical business, ChemCare, to Systech Environmental, a subsidiary of Lafarge. The two companies have been in partnership in waste management since 1989.
"We are committed to responsible waste management for our ChemCare customers, including the recycling of materials wherever possible. Our 25 year partnership with Systech has been an outstanding reflection of this, enabling the responsible disposal of waste while providing an alternative fuel source for cement kilns," said Greg Vas Nunes, vice president of ChemCare. Systech Environmental added that the arrangement had prevented the generation of 800,000t of CO2.
ChemCare provides waste management service that collects both hazardous and non-hazardous waste products at customer locations in the US and Canada. It then works with partners in the waste disposal business to transport these materials to licensed third-party treatment, storage and disposal facilities.
Systech Environmental processes hazardous and non-hazardous industrial waste for use as fuel in cement kilns. It is actively processing or marketing fuels at 16 cement plants in the US.
Nicolas Valdinoci becomes director of Lafarge Moldova
19 March 2014Moldova: Nicolas Valdinoci has become the new director of Lafarge Moldova. He replaces Louis de Sambucy who has moved to Lafarge Algeria. Valdinoci worked for three years in Lafarge's department of strategy and in 2010 he became the financial director of the concrete and aggregates division in Lafarge Algeria. In 2012, he was appointed as deputy director of sales at Lafarge Algeria.
Opportunities beckon in Algeria
05 March 2014Algeria has been steadily building up cement industry interest over the past few months. In late 2013 Lafarge opened its fourth world research laboratory in Algiers. Then this week South African producer PPC confirmed its intention to enter the local market with a new plant and German construction firm ThyssenKrupp announced an order to build a cement plant for Groupe Industriel des Ciments d'Algérie.
According to United States Geological Survey (USGS) data, Algeria saw its cement production more than double from 9Mt/yr in 2002 to 20Mt/yr in 2011. At present Global Cement Directory 2014 figures places the country's cement production capacity from 21Mt/yr with 30Mt/yr a reasonable estimate for 2017. Throw in similarly rising gross domestic product per capita, US$7500 in 2013, with infrastructure investments of US$286bn planned and Algeria appears to be a promising investment for the cement market.
Lafarge, which holds minority stakes in two cement plants in the country, reported that market demand was high in 2012. Its cement sales rose by 9% year-on-year in 2013. The other major foreign player, ASEC Cement, reported in its 2012 financial report that Algeria consumed 21Mt of cement in 2012 but that it had to import 3Mt that year. ASEC was planning to build a 3.16Mt/yr plant at Djelfa to plug that market gap. Yet news reports in early 2013 reveal that the project was paused due to financial issues at ASEC with the suggestion of a possible downgrade to a 1.5Mt/yr production capacity instead.
The decision by PPC to build in Algeria is the first big project by one of Africa's international sub-Saharan cement producers north of the Sahara. It steps away from PPC's expansion strategy so far of building projects out from South Africa. Hodna in Algeria is a long way from Johannesburg! It will also cause tension between PPC and whoever is supplying imported cement to Algeria, most likely indebted southern European producers. Both PPC and its Nigerian competitor Dangote are used to fighting foreign imports to their core markets. Data from the Algerian customs office show that the value of cement imports to Algeria in 2013 rose by 26% year-on-year to US$395m. That's a market worth fighting for.
Lafarge to build cement depot in east Zambia
05 March 2014Zambia: Lafarge Zambia is building a cement depot in Chipata District, Eastern Province with an investment of US$0.7m. The depot will have a storage capacity of 3000t. Emmanuel Rigaux, managing director of Lafarge Zambia, said that Lafarge had decided to build the depot due to high demand for cement. However, he added that this new storage capacity would not be enough for the whole province and that the company would increase its number of warehouses depending on demand.
Lafarge to invest US$1.37bn in Nigeria expansion
03 March 2014Nigeria: Lafarge WAPCO intends to double its cement production capacity in Nigeria to 16Mt/yr with an investment of US$1.37bn by 2018. The proposed investment will enable Lafarge to complete the expansion of its cement plant in Calabar and the Ashaka Cement plant.
"Between 2009 and 2012 we invested over US$1.37bn in our operations," said Country Chief Executive Officer (CEO) Nigeria and Benin Republic, Guillaume Roux. He added that the expansion plan is in support of Nigeria's backward integration policy in cement production.
On a separate issue, Roux stated that a recent spate of building collapses was not caused by poor quality cement. He blamed the collapses on structural designs and poor usage of building materials by project handlers. He denied the existence of substandard cement in Nigeria, stating that "in Lafarge we put the control of the quality of cement at the forefront of our operation because we want to deliver very good quality products and services."