Displaying items by tag: LafargeHolcim
Lafarge Cement Zimbabwe conscious of effects of inflation
28 November 2019Zimbabwe: LafargeHolcim subsidiary Lafarge Cement Zimbabwe has complained of implied year-on-year inflation of 350% in September 2019 having possible knock-on effects on its business. Company secretary Flora Chinhaire blamed a 19% year-on-year drop in domestic consumption on ‘declining demand from homeowners due to escalating mortgage financing costs’ and the effects of foreign currency constraints on payments to suppliers for capital expenditure projects. All Africa has reported that power supply issues and unplanned stoppages caused a 1% decline in productivity at Lafarge Cement Zimbabwe’s 0.5Mt/yr integrated cement plant, where it operates a single wet production line.
The International Monetary Fund (IMF) has forecasted a 5.3% contraction in Zimbabwe’s gross domestic product (GDP) in 2019.
Cross River partners with Svante for carbon capture and storage
28 November 2019US: The construction company Cross River has partnered with Canada-based proprietary technology manufacturer Svante to deliver industrial carbon capture and storage (CCS) projects. BusinessWire has reported that Svante has already supplied its CCS pipelines to the 1Mt/yr CO2ment concrete plant in British Colombia, a joint operation between Swiss LafargeHolcim and French Total which uses captured CO2 to aerate its concrete.
Spain: LafargeHolcim Spain plans to spend around Euro20m to reduce its CO2 emissions. The funding will be used to upgrade its plants from 2019 to 2022 with the aim of reducing its emissions by 90,000t/yr. It plans to increase its usage of alternative fuels and reduce its clinker ratio in its products. It follows European funding of Euro145m by LafargeHolcim across 80 projects in 19 European countries to reduce its annual CO2 emissions by 15%. Overall the group hopes to reach by 2030 an average content of 520kg of CO2 per ton of cement.
Algerian cement exports expected to reach US$400m by 2021
20 November 2019Algeria: Trade Minister Said Djellab has revealed that the country’s cement exports are expected to reach a value of US$400m by 2021. Export earnings were around US$20m in 2018 and then tripled to US$60m in 2019, according to the El Mujahid newspaper. The minister made the comments at a ceremony marking an export of cement from a Ciment Lafarge Souakri (CILAS) plant. He added that the local market has a cement production capacity of 40Mt/yr and that only 22Mt/yr is required domestically. Producers are targeting countries in west Africa, including Guinea Bissau, Senegal, Gabon and Mali.
Philippine Competition Commission considers voluntary commitments as part of Holcim acquisition
19 November 2019Philippines: The Philippine Competition Commission (PCC) is considering voluntary commitments submitted by First Stronghold Cement and related parties in connection to its proposed acquisition of Holcim Philippines. First Stronghold Cement, an indirect subsidiary of San Miguel Corporation, has agreed to buy an 85.7% stake in Holcim Philippines, according to the Philippine Star newspaper. Companies undertaking acquisitions can make behavioural or structural voluntary commitments during the process to alleviate competition concerns with the PCC. Behavioural commitments include market constraints imposed by the PCC whilst structural commitments cover divesting assets.
Initial findings by the PCC on the proposed purchase found it could affect the market concentration of relevant products in parts of Luzon, and Northern and Southern Mindanao. This would normally prompt a stage two review of the proposed acquisition. However, if the PCC accepts the suggested voluntary commitments it would bypass this step.
Entec International wins contract with Lafarge Africa
19 November 2019Nigeria: UK-based Entec International has secured a contract to optimise maintenance, repair and operations (MRO) supply chains for Lafarge Africa. The project will involve the consolidation of 125 separate suppliers into a single supply chain, which will be managed by Entec, operating in a single currency with standardised terms. No value for the deal has been disclosed.
“This is a great step for Entec, this contract opens up a new market with huge potential for us. We are delighted to be working with LafargeHolcim, whose commitment to innovation and environmental sustainability reflects our ethos at Entec,” said Entec sales director Charlie Patterson.
Patterson expects Entec to achieve a 12% reduction in freight, clearance and handling costs for Lafarge Africa in year one of the three to five-year contract. Supply chain consolidation is predicted to cut the number of shipments by more than half and will deliver a reduction in the volume of purchase orders and invoices currencies into a single currency, replacing multiple payment terms from different suppliers into a single payment term and converting multiple air freight shipments from Europe and China into consolidated ocean freight.
Entec specialises in saving costs and reducing complexity for client companies by managing their MRO supply chains. It has managed complex supply chains for manufacturers in over 70 different shipping destinations. Entec’s client base includes customers in the food and beverage packaging industries, oil, gas production, textile processing and mining and minerals sectors.
LafargeHolcim supplies 10,000t of cement for Brest expansion
15 November 2019France: LafargeHolcim has fulfilled its contract with the Port of Brest for the delivery of 10,000t of cement and almost 0.17Mt of draining sand by sea to the port in the Département of Brittany. A Euro220m project has been underway since 2016 for expansion and diversification of the port’s handling capacity, with completion scheduled for 2020. LafargeHolcim says that it proposed specific construction solutions for use of its materials in improving the accessibility of Brest’s existing wharves and building a new ‘heavy’ wharf.
US: LafargeHolcim subsidiary Lafarge North America’s Presque Isle quarry, which supplies raw limestone to its 2.6Mt/yr Alpena integrated cement plant – both in Michigan – has won the National Stone, Sand and Gravel Association (NSSGA)’s Gold Award in the Community Relations Excellence category. Business Wire has reported that it previously won Gold for Environmental Excellence in 2018. In recognition of its consecutive Golds, the NSSGA honoured the quarry with its prestigious Two Stars of Excellence award. LafargeHolcim’s operations in the country extend over 350 sites across 43 states. Its aim is to ‘help build better communities with innovative solutions that deliver structural integrity and eco-efficiency.’
Third quarter update 2019 for the major cement producers
13 November 2019As most of the larger cement producers have released their financial results for the third quarter of 2019 it’s time to see how they are doing so far this year.
Graph 1: Revenue from major cement producers, Q1 - 3 2019. Source: Company reports.
Graph 2: Cement sales volumes by major cement producers, Q1 - 3 2019. Source: Company reports.
LafargeHolcim is looking good, with rises in both its net sales and earnings on a like-for-like basis. The sale of its assets in South-East Asia earlier in the year and in 2018 may have appeared to reduce its figures, but the like-for-like growth suggests that the strategy its working. This has been driven by markets in Europe and North America as its other big market, Asia, has continued to slide. The latter vindicates the group’s decision to partly leave the region, in the short term at least. It’s also interesting to note that at the macro-scale LafargeHolcim’s ready-mixed concrete (RMX) sales fell by 1.3% on a like-for-like basis to 7.4Mm3 in the first nine months of 2019. What does this mean for a building materials company that has been moving towards the whole supply chain and concrete?
Anhui Conch Cement reported cement and clinker sales volumes of 202Mt in the first half of 2019, a 42% year-on-year growth for the same period in 2018. Its revenue increased by 42% year-on-year to US$15.9bn in the first nine months of 2019 from US$11.1bn in the same period in 2018, putting it ahead of Germany’s HeidelbergCement in sales terms. The group was coy on how it actually managed to boost its sales so fast in a country where cement sales only rose by 5% in the first half of the year. Yet, it did admit to slowing sales growth in West China in the first half. A 5% fall in fuel and power costs no doubt helped its profit margins also. Notably, its overseas sales nearly doubled to US$143m in the first half of 2019 or 2% of its total revenue.
HeidelbergCement’s financials were solid, with growing revenue, earnings and profits. This was balanced by falling cement and clinker sales volumes. Cement sales fell in all group regions with the exception of North America. However, it was able to boast about ‘positive results in all group countries in the third quarter except for Egypt’s. Company head Bernd Scheifele summarised the sitaution by saying that, “price increases and strict cost discipline more than compensated for the slightly weaker demand for our products in the third quarter.”
Of the building materials companies with larger revenues, Cemex has had a tougher time of it so far in 2019 with declining sales, cement volumes and earnings. In part this has been due to a poor market in Mexico, although chief executive officer (CEO) Fernando A Gonzalez said that the group believed that weak demand for their products was ‘bottoming out’ and that a new infrastructure program made them hopeful looking forward. The group’s Middle East and Africa region also caused concern with a 3% drop in sales volumes in the Philippines, one of its key South-East Asian territories.
Things to note from the smaller producers featured here are as follows. India’s UltraTech Cement says it is the world’s third largest cement producer outside of China. With an installed production capacity of over 100Mt/yr in India this may well be the case. The vast majority of this is based at home in India. Alongside this, its financial figures seem buoyant as it continues to integrate new acquisitions such as Century Textiles and Industries into the business. By contrast Africa’s Dangote Cement has endured mixed fortunes so far 2019 with a modest rise in cement sales volumes and small drop in revenue and a larger decline in earnings in both Nigeria and operations elsewhere in Sub-Saharan Africa. At home this has been attributed to a subdued economy and elsewhere it has pointed to poor markets in South Africa, Zambia and Ethiopia. On the positive side though promotional marketing activity at home in Nigeria helped support an improved third quarter.
Summarising all of this is difficult given the very different nature of these large companies. Generally most of these companies are growing. One takeaway to consider is the emergence of two types of cement producer models at the top end: multinationals and large-local players. In recent years the rise of the large-local player has been a story mirroring the economic prominence of China and India. One can also see it in places like Indonesia and Brazil. The worry is that these kinds of companies are more exposed to regional economic risks than multinational ones. Yet in 2019 some multinational cement producers are also having problems. Whatever else happens, if fears of a new global recession come true, then these larger scale producer models will be tested, possibly to breaking point.
Holcim Argentine launches new concrete range
07 November 2019Argentina: Holcim Argentina has developed the Ultraseries range of 11 concretes for various applications to be produced at its Malagueño plant in Cordoba. José Villacreses, Holcim Argentina general manager of concretes, said “We aim to facilitate a leap in productivity, aesthetics and costs, with comprehensive solutions,” according to La Voz.
The company has announced that its upgraded 3.1Mt/yr Malagueño cement plant will be inaugurated in February 2020.