Displaying items by tag: LafargeHolcim
Chile: Hurtado Vicuña Group has been cleared by the Chilean competition authority (TDLC) to buy a controlling stake in Cemento Polpaico from LafargeHolcim. However, it will be required to sell assets from its concrete business worth up to an estimated US$90m, according to the Diario Financiero newspaper. The agreement also includes other measures such as a ban on repurchasing assets within 10 years. Hurtado Vicuña and its subsidiary Inversiones Caburga operate Cementos Bicentenario (BSA). It agreed to buy Cemento Polpaico in October 2016.
Canada: NovaAlgoma Cement Carriers’ (NACC) Canadian subsidiary has been awarded a long-term time charter agreement with Lafarge Canada, for the provision of a modern pneumatic cement carrier early in 2018. A bulk carrier owned by NACC will be converted into a pneumatic cement carrier. It will have maximum cargo deadweight in excess of 12,500t. The conversion process is expected to take around 10 months.
The vessel will primarily carry cement from Lafarge Canada's cement plant in Bath, Ontario to distribution facilities throughout the Great Lakes but the vessel will be capable of other services for Lafarge. NACC Shipping Canada will operate and manage the vessel in Canada. No duration for the contract has been released.
Update on South Korea
28 June 2017Further shifts in the South Korean cement industry this week as Ssangyong Cement purchased Daehan Cement. Private equity firm Hahn & Company owns both producers so this looked like a realignment exercise. Yet it follows a corporate version of pass-the-parcel within the local cement industry. Hyundai Cement was acquired by Hanil Cement in the first half of 2017, Halla Cement was bought by investment firms from LafargeHolcim in mid-2016 and Tongyang Cement was bought by Sampyo Group in 2015.
Ssangyong Cement’s purchase is seen in the local media as an attempt to reaffirm its market dominance. Before the Hyundai Cement auction, Ssangyong Cement was the market leader with a cement production capacity of 15Mt/yr and a market share of around 20%. Hanil Cement’s on-going purchase of Hyundai Cement will see it increase its production capacity from 7Mt/yr to over 15Mt/yr. Ssangyong Cement’s transaction for Daehan Cement puts it back in the lead again.
The local industry is notable for the high ratio of cement grinding plants to integrated plants. The Korean Cement Association (KCA) reported that the country had 12 integrated plants to 23 grinding plants in 2015. This compares to other developed countries in relatively remote places such as Australia and Chile that also have high numbers of grinding plants. South Korea doesn’t import that much clinker though. One difference is its prominent steel industry that has hovered around 70Mt/yr since 2014 and which puts it in the top ten of world producers. Subsequently, as POSCO’s Sunghee Han explained at the Global Slag Conference 2016, 13.9Mt of granulated blast furnace slag (GBFS) was produced in 2015 and the majority of this ended up being used as supplementary cementitious materials (SCM) either to grind cement or to make concrete. The size of this slag market underlines the value of the Daehan Cement sale, as it is a major slag cement producer.
Other notable point about the local cement industry includes the presence of a few extremely large multi-kiln plants with production capacities in excess of 7Mt/yr. The country also has a relative scarcity of limestone. South Korea is the fifth biggest importer of limestone in the world at US$34m. It brings limestone in principally from the UAE, Japan, India, Malaysia, and Vietnam. Notably it also has one of the world’s longest single conveyors, with a length of 12.8km, connecting a quarry to Ssangyong Cement’s Donghae plant.
Graph 1: Cement production and consumption in South Korea, 2010 – 2015. Source: Korean Cement Association.
Unlike the European cement-producing nations that this column has covered in recent weeks, fundamental market structural changes do not appear to be driving the merger and acquisition activity in South Korea. As Graph 1 shows, production and consumption fell from 2010 onwards but has started to pick up since 2013. Instead, a general slowing of the economy from 2010 and a relaxation of the rules triggered merger and acquisition activity. Unsurprisingly then, perhaps, given the potential opportunities for market manipulation, that the Fair Trade Commission fined six of the seven major producers a total of US$168m in early 2016 for alleged price fixing. With the private equity firms widely expected to exit the market after a relative short time, the cement industry looks set to remain volatile for the next few years. Doubtless the market regulators will be watching very carefully indeed to see how it all plays out.
France: LafargeHolcim has appointed Heike Faulhammer as Group Head of Research & Development with effect from 1 July 2017. She will be based at the group’s global research and development (R&D) centre near Lyon, France.
Faulhammer, aged 50 years, joins LafargeHolcim from Arkema, a French chemicals producer, where she has spent 20 years in research, production, product innovation-related functions and sustainable development. In particular, she acted as a Director at Arkema’s global R&D centre in Lacq. Faulhammer graduated from the University of Freiburg (Germany) and holds a PhD in Chemistry.
New Zealand: Holcim New Zealand has reported a loss of US$8.9m in 2016 as it changed its business from production to importation and distribution. The subsidiary of LafargeHolcim made a profit of US$58m in 2015, according to the Business Desk news agency. Its distribution costs also rose to US$54m from US$45m. A company spokesperson attributed the rising distribution costs to a transition away from manufacturing.
The company’s results in 2016 benefited from its sale of its lime business to Canada’s Graymont. It also closed its Westport cement plant and invested in import terminals. It operates terminals in Auckland and Timaru and depots in Dunedin, Lyttelton, Nelson, Wellington and Napier.
Cyprus: The Statistical Service of Cyprus has stopped reporting data on the cement industry following a request by a local cement producer. It has announced that to safeguard ‘statistical confidentiality’ it will no longer disseminate monthly data for the production, sales and exports of cement and clinker. The department of the Republic of Cyprus apologised to the users of the data stating that it is obliged, under the provisions of the Statistics Law of 2000, to respect the request.
The island’s main cement producer is Vassiliko Cement, which operates an integrated plant in the southern Republic of Cyprus. Italy’s Italacementi owned a minority stake in the company before its takeover by HeidelbergCement. LafargeHolcim’s subsidiary Boğaz Endüstri ve Madencilik runs a cement grinding plant in the so-called northern Turkish Republic of Northern Cyprus.
Mexico: A delegation of the Mexican housing development and promotion chamber (Canadevi) in Baja California has warned that construction companies are considering increasing imports of cement due to the high price of the material in the local market. Jose Luis Padilla, president of Canadevi in the state, said that the chamber had asked LafargeHolcim and Cemex to stop rising prices, according to the El Financiero newspaper. He added that the price of cement rose by 32% year-on-year in 2016, by 15% in January 2017 and by 12% in July 2017. Padilla also said that the chamber and building material firms had signed an agreement to prevent prices rising above the level of inflation.
Vietnam: The government has approved development planning to start for an inland port for the Siam City Cement Vietnam Thi Vai cement grinding plant. The proposed site will be adjacent to the Thị Vải River, according to the Vietnam Investment Review magazine. The port is expect to be able to support barges with a capacity of up to 5000t. The plant was acquired by Thailand’s Siam City Cement in March 2017 when it purchased Holcim Vietnam from LafargeHolcim.
LafargeHolcim expands retail network for construction materials in Middle East and Africa
15 June 2017Middle East/Africa: LafargeHolcim is expanding its specialised Binastore retail network for construction materials in Middle East and Africa. The construction materials producer already operates 500 stores in the region that serves end-consumers, self-builders, masons and smaller contractors. The newly-branded network will sell a broad range of LafargeHolcim’s own products and solutions as well as a variety of other construction materials from partner suppliers.
The first stores operating under the Binastore brand have begun to serve customers in Algeria, Cameroon, Iraq and Lebanon. The format of the stores will vary with sizes from 50m2 to 2000m2 and it will also include mobile stores in some rural locations. Existing stores in the region will gradually be rebranded as Binastore, while new stores will also open under this brand.
“Our vision is to build the largest retail network for construction materials in the Middle East Africa region so the Binastore brand becomes a household name for small and medium-size builders. Building on our success in Algeria, our goal is to deliver a range of building products, including our own, through multiple channels to meet the needs and lifestyle of our customers who are becoming more and more sophisticated,” said Saâd Sebbar, Region Head Middle East Africa.
The Binastore network is part of LafargeHolcim’s long-term strategy of expanding its retail business in emerging markets. In April 2017, the group announced the rollout of Disensa, a similar concept, in Latin America, where the goal is to have a network of around 1000 stores operating by the end of 2017.
Israel: Danny Tal, the Trade Levies Commissioner at the Ministry of Economy and Industry, is investigating a claim that cement from Turkey and Greece is being dumped in the local market. The Melet Har Tuv Company originally made the claim to the ministry, according to the Globes business newspaper. In its claim Melet Har Tuv alleged that cement normally sold in Greece was being solid for about 85% of the value in Israel.
"The complainant has reasonably proved that it manufactures in Israel goods that are similar to the imported goods regarding the raw materials, manufacturing processes, physical attributes, marketing channels, the use and the treatment by consumers,” said Tal.
The country’s biggest cement producer Nesher supported the claim in April 2017 and this helped initiate the investigation. Data provided by Har Tuv to the Trade Levies Commissioner suggest that the market share the local cement companies have fallen following the increase of imports. Nesher’s market share fell to 65% from 75% and Melet Har Tuv’s share fell to 5.8% from 10%. It is alleged that LafargeHolcim is the main company ‘flooding’ the local market.