Displaying items by tag: LafargeHolcim

New Zealand: Holcim, part of LafargeHolcim, is making faster than expected progress on an operational restructure that will lead to 120 job losses on the west coast.

The New Zealand operation has revealed plans to close its manufacturing plant at Cape Foulwind, Westport, with cement instead to be imported from the Mitsubishi Kanda plant in Fukuoka, Japan, via the Timaru and Auckland ports. Holcim will now close its Westport cement plant in the middle of 2016, with 120 job losses expected. The company said that some employees have switched to other roles.

Holcim is building a 30,000t cement silo at Timaru Port and is spending a similar amount at the Port of Auckland. The company had previously said that the silo and importing facilities would be finished in the second half of 2016. However, Holcim New Zealand country manager Glenda Harvey said that the Timaru facility could be operational in January or February 2016 and that the Auckland facility should be completed in May 2016 rather than June 2016. The Westport cement plant will remain operational until the Auckland import site is fully commissioned, then it will be closed.

When the Timaru and Auckland terminals are completed, there will be about 30 staff employed in sales, operations and technical laboratory roles. Westport cement plant staff have been able to apply for positions at Holcim's Timaru and Auckland operations and also overseas, with a small number having taken up roles in other parts of the business. Workers have redundancy provisions in their contracts. The company has about 40 staff within its Christchurch head office operation and 360 in the country across the cement and aggregates businesses.

Some Westport residents have said that the Westport cement plant site and buildings could be used as an industrial park, for electricity generation or as an eco park. Harvey said there has been no update on the site, or if alternative uses could be found. The cement plant has been operating for 57 years.

Malaysia: Lafarge Malaysia plans to buy Holcim Malaysia, for US$77.3m according to a regulatory filing. The acquisition of the subsidiary of Holcim Indonesia, is expected to be completed the fourth quarter of 2015. It will be paid for using internal funds and borrowing. Holcim Indonesia originally bought the unit for US$37m in 2009.

"The acquisition is also expected to deliver synergies through operational efficiencies, including the increase in economies of scale and bargaining power and reduction or elimination of duplicative functions," said a Lafarge Malaysia spokesperson. The acquisition of Holcim Malaysia will increase the cement production capacity of Lafarge Malaysia from 12.95Mt/yr to 14.14Mt/yr.

Cement shortages have been reported again in western Argentina this week. The story has been simmering over the summer in Mendoza and San Juan Provinces with local construction firms becoming irate with delays to their projects.

The cause is reported by local media to be a broken raw mill at Holcim Argentina's Capdeville cement plant north of the city of Mendoza. Production has been reduced by 2400t/month of cement from the 0.66Mt/yr capacity plant. Unfortunately, cement plants in neighbouring states have lowered their deliveries. Subsequently prices are estimated to have risen by 8 – 10% in July and August 2015 alone..

To put some perspective on the cement shortage, the Cuyo region of Argentina (comprising Mendoza, San Juan and San Luis Provinces) consumed just over 1Mt of cement in 2014 compared to 11Mt for the entire country. However all three provinces in the region are above the national mean cement consumption of 271kg/capita.

Despite the bottleneck in the provinces, the Asociacion de Fabricantes de Cemento (AFCP) recently revised its cement sales forecast for 2015 upwards to over 12Mt, the highest level on record. It attributed the rise demand to public infrastructure projects, house building and the Argentina Credit Programme (ProCreAr). Total despatches to the end of August 2015 were 7.99Mt, a rise of 8.73% or 641,664t from 7.35Mt in August 2014.

This followed a poor year in 2014 when national cement consumption fell by 3.5% year-on-year according to local press. The AFCP reported a fall in production by 4.1% to 11.4Mt.

Notably for the current news story, San Juan Province saw one of the biggest sales drops in 2014 at 10.5%. As InterCement (through its subsidiary Loma Negra) commented in its annual report, the country suffered both a gross domestic product (GDP) contraction of 1% in 2014 and instability in its financial markets that adversely affected consumption. Both the other major cement producers, Cementos Avellaneda (a subsidiary of Cementos Molins) and Holcim Argentina, also reported poor sales in 2014. Under these conditions it is unsurprising that consumers have angered due to localised cement shortages. There should be lots of cement available!

Into 2015, Holcim reported increased cement volumes in the first half of 2015 due to high demand in the Cordoba Province that neighbours Mendoza Province. By contrast, InterCement forecast in its 2014 annual report that it expected sales to remain lower than the high set in 2013. However it also expected continued demand for cement to reflect a response to the economic situation in Argentina with private investors moving to real estate for security.

InterCement and the rest will be monitoring Argentina's economy very closely for the remainder of 2015. Presidential elections are due in October that may change the current scenario. For the moment though the country remains in recession but it has managed to bring in foreign investment. Regardless of this though, the quicker Holcim Argentina and the others address the shortage in Mendoza the better. Demand may not last forever.

Ireland/Philippines: CRH has completed the Philippines element of its Euro6.5bn acquisition of certain Lafarge-Holcim assets and as such has now completed the entire deal.

On 2 February 2015, CRH announced that it had reached agreement to acquire certain assets from Lafarge and Holcim for a total enterprise value of Euro6.5bn. On 3 August 2015, CRH confirmed that the majority of the transaction was complete, with the exception of the operations in the Philippines. In a press release issued on 15 September 2015, CRH announced that the Philippines element of the transaction is now complete.

Europe: LafargeHolcim has announced that it will pay Lafarge minority shareholders Euro60/share in a planned squeeze-out. As an alternative, the minority shareholders have the option to receive 9.45 new LafargeHolcim shares per 10 Lafarge shares. The transaction still needs to be approved by France's Financial Markets Authority (AMF). Provided that the regulator approves the process, the squeeze-out will take place in October 2015. Lafarge's shares are then expected to be delisted from Euronext Paris on 23 October 2015.

Zambia: Lafarge Zambia's post-tax profit grew by 4% year-on-year to US$36,017 in the first half of 2015 despite economic challenges in Zambia and political uncertainties in the Democratic Republic of Congo, which constitutes the company's major export market. Lafarge Zambia recently merged with Holcim Construction Group, which reported a 14% increase in turnover to US$134,577 in the first half of 2015.

Lafarge Zambia said that electricity supply disruptions adversely impacted cement production in 2015. Company chief executive officer Emmanuel Rigaux said that domestic demand in the second half of 2015 is expected to continue to slow down until Eurobond proceeds are directed towards infrastructure and construction activity.

"Strong focus in the second half of 2015 will be placed on adjusting our cost base wherever necessary. Market activity was subdued in the first half of the year in the Zambian market and was negatively impacted by political uncertainties in the Democratic Republic of Congo, which constitutes our major export market. The successful issuance of the US$1.25bn by the Zambian government is expected to generate increased construction activity," said Rigaux.

Indonesia: PT Holcim Indonesia Tbk has launched its new US$800m, 3.4Mt/yr cement plant in Tuban, East Java.

Having started the construction five years ago, the plant is Holcim's first greenfield project in Indonesia. The plant will serve the East Java market and supply Sumatra and Kalimantan. With the new plant, Holcim Indonesia's cement production capacity has grown by 40% to 12.5Mt/yr.

"Currently, Holcim Indonesia is operating in an oversupply market and market slowdown. However, we believe that it is temporary as construction markets in developing countries are cyclical. The overall long-term macroeconomic fundamentals in Indonesia remain strong and the domestic economy will recover with the realisation of delayed infrastructure projects and housing," said Gary Schutz, CEO of Holcim Indonesia. "The new Tuban Plant completes our presence in Java as it will serves our markets better, ensures supplies and secures our position among the three biggest cement players in Indonesia."

Europe: Following the successful completion of the LafargeHolcim merger, an exceptional scrip dividend of one new LafargeHolcim share for every twenty existing LafargeHolcim shares has been distributed to all LafargeHolcim shareholders. At the Extraordinary General Meeting on 8 May 2015, the group's shareholders voted in favour of an authorised share capital increase.

The last date to trade LafargeHolcim shares 'cum' scrip dividend was 7 September 2015. As of 8 September 2015, LafargeHolcim shares have traded 'ex' scrip dividend. The settlement and delivery of the newly issued shares will occur from 10 September 2015. No fractional LafargeHolcim shares will be issued. As a consequence, shareholders entitled to receive a number of LafargeHolcim shares not corresponding to a whole number will receive the rounded-down whole number of LafargeHolcim shares and the balance will be paid in cash. This will take place on 16 September 2015.

An application has been made for admission of the new LafargeHolcim shares to trade on the SIX Swiss Exchange in Zurich and on Euronext Paris. The newly-issued shares of LafargeHolcim will carry the same rights and obligations as the existing LafargeHolcim shares and will be fully assimilated with them.

For the purpose of the scrip dividend, 28,870,252 new LafargeHolcim shares, representing 5% of the LafargeHolcim share capital and voting rights as of 3 September 2015, will be issued.

Chile/Peru: Peruvian mining company Volcan could sell its share in Chilean cement producer Polpaico if metal prices continue to fall, according to Volcan's CFO Jorge Murillo. Volcan could receive around US$27m for its approximate 20% stake in the business. Holcim, part of LafargeHolcim, owns 54.3% of Polpaico, which has 2.7Mt/yr of cement production capacity.

Lebanon: Holcim Liban has reported US$2m of unaudited net profits in the first half of 2015, a decrease of 78.3% from net earnings of US$9.4m in the same period of 2014. The company's sales fell by 28.5% year-on-year to US$66.7m in the first half of 2015. Its gross profits margin reached 28% compared to 30.7% in the first half of 2014. Holcim Liban's assets fell by 3% year-on-year to US$275m at the end of June 2015