Displaying items by tag: LafargeHolcim
PCA names leaders in safety and sustainability
10 May 2017US: The Portland Cement Association (PCA) has announced the winners of its Chairman’s Safety Performance, Safety Innovation and Energy and Environment Awards. The awards recognise outstanding safety performance in the manufacturing of Portland cement, creative safety-enhancing projects in the cement industry and outstanding environmental and community relations respectively.
“The facilities recognised today are to be congratulated for their safety achievements,” said Allen Hamblen, PCA chairman and president and chief executive officer of CalPortland, in relation to the Safety Performance Awards.
Winners of the 2017 PCA Chairman’s Safety Performance Awards:
Category: Less than 226,000 hours
Buzzi Unicem USA – Chattanooga, Tennessee
LafargeHolcim US – Morgan, Utah
Lehigh Hanson, Inc. – Tehachapi, California
Category: 226,001 - 289,000 hours
Ash Grove Cement – Foreman, Arkansas
GCC Permian – Odessa, Texas
Lehigh Hanson, Inc. – Leeds, Alabama
Category: 289,001 - 563,000 hours
Cemex USA – Brooksville, Florida
Cemex USA – New Braunfels, Texas
Martin Marietta Materials – New Braunfels, Texas
Winners of the 2017 Safety Innovation Awards:
Milling/Grinding
Ash Grove Cement, Montana City, Montana
Pyroprocessing
Cemex USA, Balcones, Texas
Distribution
CalPortland Cement Terminal, Portland, Oregon
LafargeHolcim US, Corporate Program, Chicago
Winners of the 2017 Energy and Environment Awards:
Energy Efficiency
Cemex USA Construction Materials, Pacific, LLC, Victorville, California
Environmental Performance
Cemex USA Construction Materials, Pacific, LLC, Victorville, California
Land Stewardship
Continental Cement Company/Green America Recycling, Hannibal, Missouri
Outreach Winner
Mitsubishi Cement Corporation, Lucerne Valley, California
ACC and Ambuja Cement consider merger options
08 May 2017India: LafargeHolcim’s subsidiaries ACC and Ambuja Cement have started exploring the options for a merger. The cement producers have initiated a study to assess the benefits of the move. A special committee of directors, of which the majority are independent directors, has been constituted to commence the evaluation. The boards of both companies will make a decision once a recommendation is received from the special committee of directors and the Audit Committee.
Switzerland: Eric Olsen, the chief executive officer of LafargeHolcim, has denied that his departure from the group is connected to payments to armed groups in Syria. Olsen announced his resignation following a review into a conduct of a cement plant in Syria, according to the Associated Press. However, he was found not responsible or even aware of the misconduct. Olsen told reporters at the publication of the group’s first quarter financial results that his decision to leave was not related to Syria but he did acknowledge ‘tensions’ at the company. LafargeHolcim hopes to have recruited a replacement for Olsen by the end of 2017.
India: Ambuja Cement has launched Ambuja Compocem, a composite cement made from fly ash and slag. The product is being produced at its Chhattisgarh plant and it has been introduced to markets in Bihar and Jharkland. It is being marketed to all market segments including individual house builders, real estate developers and infrastructure projects.
“With the launch of Ambuja Compocem, we have achieved a three pronged sustainability approach by conserving natural resources, creating a greener product and fulfilling customer needs for a superior performance product. We call this approach delivering true value,” said Ambuja Cement’s managing director and chief executive officer Ajay Kapur.
Brand matters in the Philippines
03 May 2017The Philippines has been messing up the balance sheets of cement producers so far in 2017. Over the last week Holcim Philippines, CRH and Cemex have each reported lacklustre first quarter results dragged down by poor performance in the country. CRH’s chief executive officer Albert Manifold seemed to receive the worst kicking when analysts in a conference call refused to let it pass that the company’s sales had dropped by 12% year-on-year in Asia. Although to be fair to him the group’s Asian division only represented 2% of global sales at Euro0.5bn…
CRH’s quarterly financial reports tend to be in the form of sparse trading updates. So this lack of detail and CRH’s plans to invest over Euro300m in the market may have prompted Manifold’s grilling. According to the Irish Times he blamed the situation on cheap imports from south-east Asia pulling down the price. He then defended the investment on the grounds that local producers would have an advantage as they increase production capacity due to constant production and ‘guaranteed’ regulation and certification.
CRH isn’t the only organisation that has been burned by the Philippines. Before Christmas this column was praising the local industry for being in a boom. Cement sales had risen by 10.1% year-on-year to 20.1Mt according to CEMAP data in the first nine months of 2016 and the Duterte Infrastructure Plan was starting to target hundreds of billions of US dollars towards infrastructure spending. In the end cement sales rose by 6.6% to 26Mt for the full year in 2016 and this was a solid performance despite being brought down by the fourth quarter.
From the cement producers mentioned above, Cemex reported that its Ordinary Portland Cement sales volumes fell by 9% in the first quarter. It blamed the fall on bad weather and a tough quarter to compare against in 2015. Holcim Philippines said that its net sales fell by 12% to US$176m and it attributed it to lower public infrastructure spending, tighter industry competition and higher production expenses. Eagle Cement meanwhile, the fourth of the country’s major producers, is preparing to float on the local stock market in May 2017 to fund an expansion drive. The poor results of the other three cement producers may dent its proceeds from the initial public offering (IPO).
The words CRH’s Albert Manifold used in his defence were that, “Brand matters over there.” Funnily enough the other big Philippines cement industry news story that has been rumbling away for the last few months is an investigation by the Philippine Competition Commission (PCC) into the conduct of the Cement Manufacturers Association of the Philippines (CEMAP) and some of the leading cement producers. Naturally this includes CRH’s joint venture Republic Cement. The enquiry was prompted in mid-2016 by the accusation of anti-competitive agreements by a former trade official. He also made direct allegations against Ernesto Ordonez, the head of CEMAP. The investigation is on-going and perhaps it will find out exactly how much ‘brand matters’ in the Philippines.
Switzerland: LafargeHolcim’s net sales rose by 5.3% year-on-year to Euro5.21bn in the first quarter of 2017 due to higher prices and rising aggregate volumes. Its results were presented on a like-for-like basis adjusted for the group’s divestments in 2016. Operating earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 8.8% to Euro652m. However, cement sales volumes remained flat at 48.1Mt for the period and even this was bolstered by a strong performance in March 2017.
“Continued pricing strength, improving volume momentum and synergies underpinned our results across the portfolio. Our Middle East Africa region performed particularly well with a recovering Nigeria making a notable contribution to earnings growth. India showed encouraging signs in the quarter with the impact of demonetisation now behind us while our US business was robust despite tough prior year comparisons on the back of mild weather in the first three months of 2016,” commented the group’s outgoing chief executive officer Eric Olsen.
By region the group reported falling cement sales volumes on a like-for-like basis in Latin America, Middle East Africa and North America. In Asia Pacific cement sales volumes were stagnant but it reported ‘challenging’ market conditions in Indonesia and Malaysia, and a slowing market in Philippines. However, it said that the impact of demonetisation in India had abated in the period and was now ‘fully’ behind the business.
India: Ambuja Cement says it has ‘largely’ put demonetisation behind it as its net sales rose by 5% year-on-year to US$395m in the first quarter of 2017 from US$375m in the same period of 2016. Its cement sales volumes rose by 3% to 6.02Mt from 5.86Mt. However, the subsidiary of LafargeHolcim’s operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 13% to US$61m from US$70m due to higher petcoke and imported coal prices.
“Improving sales volumes, combined with favourable pricing, contributed to a positive quarter despite rising costs. With demonetisation largely behind us, we are well placed to serve both small and large customers,” said Ajay Kapir, managing director and chief executive officer of Ambuja Cement.
Holcim Philippines reports tough first quarter in 2017
28 April 2017Philippines: Holcim Philippines has blamed lower public infrastructure spending, tighter industry competition and higher production expenses for a drop in its financial performance in the first quarter of 2017. Its net sales fell by 12% year-on-year to US$176m and its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 32% to US$40m. The subsidiary of LafargeHolcim also attributed its problems to rising fuel costs and a declining local currency. It estimates that cement demand in the country fell in the quarter year-on-year due to higher infrastructure spending in the lead-up to the election in 2016.
“Infrastructure and innovation are cited as pillars for the country’s 2017 productivity growth forecast at 6.4% gross domestic product (GDP) growth. These pillars are strengths of Holcim Philippines that we believe will buoy the company and make a big difference for customers. This region has been showing strong growth, giving us the optimism to continue to transform and serve our customers even better,” said chief operating officer Sapna Sood in a bullish mood.
Serenity when? LafargeHolcim and Syria
26 April 2017LafargeHolcim’s investigation into its conduct in Syria claimed its biggest scalp so far this week with the shock resignation of chief executive officer (CEO) Eric Olsen. His decision landed with the publication of the group’s investigation into the conduct of the legacy Lafarge operations in the country in 2013 and 2014. As per the initial findings of the investigation that were released in March 2017, it confirmed that selected personnel had engaged in dealings with terrorists in connection to one of its cement plants in the country during 2013 until the unit closed in September 2014. The board decided that Olsen had no connection or even awareness of the misconduct. However, he decided to quit anyway in order to restore ‘serenity’ to the company.
In its latest public statement on the investigation, LafargeHolcim outlines five weaknesses with its compliance led by improper payments related to Lafarge Syria’s security and supply chain. It then goes on to list a failure of line management, inadequate controls over expenses and a failure to detect improper payments and improperly recorded payments. It’s all presented as ‘chaos reigned’ or wayward staff in tough circumstances trying to do their muddled best for the company. Unfortunately for this narrative, selected members of group management were aware of the situation and appeared to have done nothing about it. This then begs the question: who knew what when?
Olsen may have been exonerated by the board on his departure but he was Lafarge’s Executive Vice-President of Operations for Lafarge in 2014. If he didn’t know what was going on in Syria during his watch then he wasn’t doing his job properly or it was being hidden from him. The head of Lafarge itself at the time, Bruno Lafont, might also have been a viable target for discipline but he decided to stand down from the board of LafargeHolcim in early April 2017. No doubt other former members of the Lafarge management team may bear more responsibility. LafargeHolcim’s implementation of its remedial measures may turn up more culprits, as may the on-going criminal complaints process continues in France.
French newspaper Le Monde, the newspaper that originally broke the story, is probably on the money with its assessment that Olsen’s departure is actually the continuation of the boardroom battle between the board and its shareholders that has raged since before Lafarge and Holcim formally merged. Bruno Lafont was originally lined up to become the CEO of the new company until Lafarge’s worsening financial position compared to Holcim’s prompted a backlash from Holcim shareholders. Le Monde describes how LafargeHolcim’s shareholders include four prominent billionaires: Switzerland’s Thomas Schmidheiny, Belgium’s Albert Frère, Canada’s Paul Desmarais and Egypt’s Nassef Sawiris. Schmidheiny, readers may remember, was one of the principal actors who sunk Lafont’s bid to be CEO back in early 2015.
Placed in this context, Olsen’s departure might seem forced, especially if he had no connection to the debacle in Syria. LafargeHolcim has faced a tough couple of years following its formation with consistently falling sales revenue. Asset divestments and cuts have been the cure as the group struggled to find its new size. Yet, the group saw its adjusted operating earning before interest, taxation, depreciation and amortisation (EBITDA) start to rise in 2016 suggesting that the remedial action was starting to work. LafargeHolcim’s management and shareholders will be acutely aware of its performance so far in 2017 ahead of the public release of its first quarter results in early May 2017. Under these circumstances it seems unlikely that serenity will be restored to the upper echelons of LafargeHolcim any time soon.
Canada: Lafarge Canada has clarified its role in supporting the Vision Zero road safety campaign following a city council meeting in Edmonton. The construction materials producer explained that its focus is on health and safety and that it is not intending to use its trucks to monitor the speed of other drivers. In a statement the company explained that as one of the largest trucking companies in Edmonton it has dozens of concrete trucks moving around the Greater Edmonton Area, interacting with vehicles, bicycles and pedestrians. Due to this the Zero Vision campaign caught its attention and it expressed its interest in supporting it including speed reduction measures and reducing heavy acceleration and braking in its fleet.
Following the meeting in mid-April 2017 local press including the Edmonton Sun newspaper reported remarks by Bruce Willmer, regional vice-president for Lafarge Canada that on-truck cameras could potentially be used to record speeding vehicles and that this information could be passed on to the authorities. The comments received a mixed response in the local media.