Displaying items by tag: LafargeHolcim
Philippines: Holcim Philippines has announced its full return to cement production across all integrated plants after it resumed operations at its 3.3Mt/yr Bulacan, Norzagaray plant, 2.1Mt/yr Davao, Ilang plant and 1.2Mt/yr La Union, Bacnotan plant. The company’s 1.8Mt/yr Lugait, Misamis Oriental plant remained open throughout the coronavirus lockdown. It says that it started to reopen plants and terminals from mid-March 2020 after national and local governments began to ease the lockdown.
Holcim Philippines president and chief executive officer (CEO) John Stull said, “We are ready to continue supporting our partners nationwide as they build important structures and contribute to reinvigorating the economy. Holcim Philippines is determined to ensure the wellbeing of our people, communities and business partners in our operations consistent with our core value of health and safety. Our company is also ready to share our expertise on this area to government and private sector partners to further contribute to the recovery efforts.”
Switzerland/US: LafargeHolcim has announced the extension of its partnership with Solidia Technologies to mid-2020. Cash News has reported that the partnership, which has seen a 30% reduction in LafargeHolcim’s overall CO2 emissions since its formation in mid-2013, aims to achieve a 70% reduction in the producer’s carbon footprint.
Zimbabwe: Lafarge Cement Zimbabwe has predicted a 30% year-on-year decline in sales volumes in 2020 due to the coronavirus pandemic. All Africa News has reported that Lafarge Cement Zimbabwe is expecting to rely on foreign investment-led projects to stimulate a base level of cement demand to sustain the company’s operations.
Lafarge Cement Zimbabwe said, "The ripple effects of the lockdown and border closures are still to be fully quantified, but the business expects to continue to feel the effects of the COVID-19 outbreak into the second half of 2020."
US: The Portland Cement Association (PCA) has announced the winners of its Chairman’s Safety Performance Award for outstanding safety performance in Portland cement production in the US.
The winners were: Cemex USA’s Clinchfield, Georgia and Victorville, California plants; Lehigh Hanson’s Cupertino, California and Tehachapi, California plants; Titan America’s Medley, Florida and Troutville, Virginia plants; LafargeHolcim’s Morgan, Utah and Theodore, Alabama plants; Buzzi Unicem’s Chattanooga, Tennessee plant; GCC of America’s Pueblo, Colorado plant; and Argos USA’s Atlanta, Georgia grinding plant.
PCA chair Tom Beck said, “We’re proud to highlight these top safety performers. Our industry is constantly focused on doing everything possible to assure our employees go home in the same condition as they arrived.”
Germany: Holcim Deutschland has reported the successful delivery of 280m3 of climate-neutral concrete to the NABU Conservation Centre Rheinauen in Bingen, Rheinland-Palatinate. The construction of the conservation centre by Karl Gemünden is scheduled for completion in 2021.
The concrete contains Holcim Duo 3 N CEM-III slag cement from Holcim Deutschland’s Dortmund slag plant in North-Rhine Westphalia. The company said, “Only select raw materials are used in the production of Holcim EcoPact Zero, which is mixed in optimal proportions in line with applicable norms.” Moorfutures offset 44t of CO2 by deposition in Moorland in Schleswig Holstein to account for the EcoPact’s CO2 emissions.
“We are proud of this first successful application of Holcim EcoPact Zero,” said Holcim Deutschland head of building materials technology Marc Holberg. “We look forward to many further climate-friendly projects!”
Many of the first quarter financial results are in from the multinational cement producers and a few points are worth discussing. As usual a few caveats are worth mentioning such as seasonal and geographical variations between companies, such as producers in the northern hemisphere experiencing a generally slower period. It’s also worth noting that this is a selective look at some of the larger cement producers as not all of them release detailed figures at this stage and others have been delayed. However, the economic effects of the coronavirus lockdowns are clearly showing an effect in a kind of wave as the pandemic has spread.
Graph 1: Sales revenues in the first quarter of 2020 from selected cement producers. Source: Company financial reports.
Graph 1 above shows the effects of the earlier lockdown in China upon the results of the Chinese producers like CNBM, Anhui Conch and China Resources Cement (CRC). What’s interesting with these companies is that they have all suffered revenue hits of 20 – 25%. Huaxin Cement, a producer based in Hubei province near Wuhan where the Chinese lockdown was strictest, is not shown in Graph 1 but its revenue fell by 35% in the first quarter. See GCW452 for more on coronavirus effects on the Chinese cement industry.
Looking more widely, both LafargeHolcim and HeidelbergCement suffered declines of around 10%. This is somewhat misleading as both companies are constantly selling assets making the like-for-like results not quite as bad, particularly in the case of LafargeHolcim with its South-East Asian divestments. Although note this week that LafargeHolcim’s deal to sell its majority stake in Holcim Philippines lapsed this week due to the local competition regulator not granting permission in time. Yet, they are also beneficiaries and victims to an extent of their wide geographical spread with worse performance in Asia and better results in North America. For a fuller look at LafargeHolcim’s first quarter results see last week’s column. The rest of the producers featured generally reflect their tighter market spread with Buzzi Unicem particularly benefiting from the relatively untouched market in the US. Shree Cement, an Indian producer, escaped relatively unscathed, possibly as the Indian lockdown only started in late March 2020. All eyes will be on the results of UltraTech Cement, the largest producer in India, when they finally emerge.
Graph 2: Cement sales volumes in the first quarter of 2020 from selected cement producers. Source: Company financial reports.
Cement sales volumes tell a similar story, although a few different companies are featured in Graph 2. Note CRC’s year-on-year fall of 26% to 11.2Mt in the first quarter. It’s the only larger Chinese cement producer that we’ve found so far that has released sales volumes. Semen Indonesia is interesting too because its figures jumped in January 2020 as its acquisition of Holcim Indonesia only went on the books in February 2019. It’s February and March sales volumes have each been 4 - 5% down year-on-year but it’s far from clear whether this is due to general production overcapacity in the country or from the global health crisis. Despite this, its export volumes from both the mainland and its TLCC subsidiary in Vietnam have held up well. Unfortunately though, its performance in Vietnam may be an outlier if data from the General Department of Vietnam Customs is to be believed this week. It indicated that overall cement exports from the country fell by 9.7% year-on-year to 7.73Mt in the first quarter of 2020. Cementos Argos is also worth looking at as it suffered from the government lockdown in Colombia despite having an international presence in the Caribbean and the US.
Most of the world’s largest cement producers are preparing for the economic shockwaves from lockdowns to hit balance sheets in the second quarter of 2020. Many have said exactly this and have paraded their liquidity levels in preparation. Alongside this the results of the Chinese producers in the next quarter may offer some light on what kind of recovery is possible from easing lockdown measures. Yet the risk of second waves of infections from coronavirus potentially jeopardises any kind of fast or easy recovery without a vaccine. Today’s news that Cemex is considering mothballing its integrated plant at South Ferriby in the UK has been blamed on an analysis of the company’s European cement supply chain. The company says it is not related to coronoavirus but it does suggest the company is making savings.
This week has seen international press coverage return to Wuhan, China and South Korea where small numbers of infections have started to build despite being thought mostly eradicated. No one wants the so-called ‘W’ economic recovery with its rollercoaster ride of crests and dips or indeed the ‘L’ with its slow tail of recovery. Yet, for better or for worse, some form of normality has to return after the lockdowns end. The UK, for example, the country with the worst death rate from coronanvirus in Europe, has allowed its construction workers to pick up tools this week. If and when they can do so in the UK and everywhere else without causing the basic reproduction number (R0) to rise then the future starts to look a little brighter.
Nigeria: Lafarge Africa has appointed Adebode Adefioye as its new chairman with effect from 4 June 2020. He succeeds Mobolaji Balogun, who has decided to retire from the role.
Adefioye, a non-executive director of the company, is the chairman of the board finance and strategy committee, chairman of the board property optimisation committee and a member of the nominations, governance and remuneration committee. He has also served on the statutory audit committee and the risk management and ethics committee.
Adefioye holds over 32 years experience in different industries and is a graduate of the University of Lagos with Masters of Science degree. He is a member of the Institute of Directors and the Institute of Public Analysts of Nigeria. He was appointed to the board of directors in late 2012 and currently sits on the boards of Wema Bank and Eterna. He also resides on the governing council of Bank Directors Association in Nigeria. Adefioye will step down from all board committees of Lafarge Africa on assumption of the role as chairman of the board.
Balogun has worked for Lafarge Africa for over 15 years, having joined the board in 2005. He served for the first 10 years as a non-executive director and was appointed chairman in mid-2015.
Kenya: Bamburi Cement’s profit before tax grew by 17% year-on-year to US$6.9m in 2019 from US$5.8m in 2018. It attributed the result to cost cutting and an optimisation initiative under its ‘Building for Growth’ plan. It said that this was achieved in spite of a decline in the Kenyan cement market and lower selling prices.
“Despite market challenges, including the absence of sales to Rwanda through Hima Cement, the shelving of major infrastructural projects such as Phase 2B of the Standard Gauge Railway (SGR) project in Kenya, contraction of the Kenyan market and price erosion fuelled by aggressive competitive pressure, both Bamburi Cement and Hima Cement grew share while sustaining respective market leadership,” said Bamburi Cement’s Group Managing Director Seddiq Hassani. He added that Bamburi Cement and Hima Cement remained resilient despite ‘challenging’ economic conditions.
The subsidiary of LafargeHolcim reported an increase in finance costs due to debt related to a capacity expansion project commissioned by Hima Cement in 2018. An impairment of assets in Rwanda was caused by its Hima Cement subsidiary in Uganda being unable to ‘access’ the market in Rwanda. The closure of the border between Uganda and Rwanda in February 2019 also further negatively impacted growth.
In Kenya, overall sales were negatively affected by the shift of volumes previously exported to Uganda from Bamburi Cement, following the commissioning of Hima Cement capacity expansion project in 2018, further reducing despatches from Bamburi Cement. In Uganda, although overall sales were negatively impacted by the inability to access the Rwanda market, Hima Cement domestic volumes grew.
Philippines: LafargeHolcim’s sale of its 86% stake in Holcim Philippines to San Miguel Corporation for US$2.15bn has fallen through after the Philippines Competition Authority (PCC) failed to approve the deal within 12 months of its conclusion. Reuters News has reported that the agreement, dated 10 May 2020, covered the exchange of four integrated plants and one grinding plant. LafargeHolcim has been divesting assets to pay off debt. The sale of its Holcim Philippines stake would have completed its withdrawal from the South-East Asia market, where its operations across Indonesia, Malaysia, Singapore and the Philippines had been valued at US$4.90bn.
LafargeHolcim has said that three of its four integrated Philippines cement plants have been able to resume operations following the lockdown due to the coronavirus outbreak. It says that it will ‘focus on strengthening operations in the Philippines.’
US: Switzerland-based LafargeHolcim has named the eight recipients of its 38th annual Gygi and von Wyss Foundation Scholarship. LafargeHolcim subsidiary US Cement CEO Jamie Gentoso said, “It’s essential to invest in the education of the next generation and, with the rising costs of higher education, scholarships are more important than ever to help reduce the impact and assist in these students’ success.” Under the scholarship scheme, children of LafargeHolcim employees in the US can receive US$6000 towards higher education for a year and again for three subsequent years subject to academic performance.