Displaying items by tag: LafargeHolcim
US: Holcim (US), part of LafargeHolcim, has announced that five of its plants earned the US Environmental Protection Agency's (EPA) prestigious Energy Star.
"We are pleased that the EPA has recognised Holcim's continued commitment to environmentally sound practices by awarding five of our plants with the Energy Star Award," said John Stull, chief executive officer of Holcim (US). "Sustainability is a core component of our values and a priority for our employees at every plant and facility."
This marks the fourth time Holcim's Portland plant in Florence, Colorado and the Midlothian plant in Midlothian, Texas have received the award, while the Devil's Slide plant in Morgan, Utah has been honoured for its eight consecutive year. The Holly Hill plant in Holly Hill, South Carolina and the Ste. Genevieve plant in Bloomsdale, Missouri are both receiving the award for the sixth time.
India: The acquisition of Lafarge India's two cement plants by Birla Corporation may come unstuck. According to local media, there are questions being raised on the outcome of the deal, which is the biggest acquisition in the 96-year history of Birla Corporation.
The ownership dispute between the Birla family and the Lodhas, who currently manage Birla Corporation, could create obstacles for the deal. After the death of Priyamvada Birla in 2004, the widow of M P Birla, her will had named R S Lodha, a chartered accountant and close confidant of the family, as the heir to her entire estate which ran into billions of US Dollars. This was hotly contested by the Birla family on the legal front. Today, the late R S Lodha's son, Harsh Lodha, is the chairman of Birla Corporation. The M P Birla Group has around a 63% stake in Birla Corporation.
There are now doubts whether the Birla Corporation's deal to acquire Lafarge India's assets may be consummated, given the continued ownership dispute. However, Debanjan Mondal, a partner in Fox & Mondal, the legal counsel of Harsh Lodha, said that, "If required, appropriate shareholders resolution will be taken for the acquisition. This has nothing to do with the will dispute and it will not come in the way of the deal." Analysts have highlighted that Birla Corporation would have to raise funds to finance the transaction, requiring the mortgage of assets, which may be difficult given the ownership dispute.
India: LafargeHolcim has entered into a letter agreement with Birla Corporation Limited, subject to approval by the Competition Commission of India (CCI), for the divestment of certain assets in India as part of the merger for US$768m. The proceeds from the sale of the divestment business will be used to further reduce debt.
The assets include Lafarge's Sonadih cement plant and Jojobera grinding plant in Eastern India, which have 5.15Mt/yr of cement production capacity. The transaction with Birla Corporation will be submitted to the CCI for approval and is subject to other regulatory approvals and customary conditions. Following the divestment, LafargeHolcim will have around 68Mt/yr of cement capacity in India.
LafargeHolcim to expedite merger process in Indonesia
17 August 2015Indonesia: Holcim Indonesia and Lafarge Cement Indonesia have sped up their merger process, slated to finish by the end of 2015, in a bid to increase the companies' market shares. The companies have remained under different management and targeted separate market segments despite the merger of their parent companies.
"We hope to finish the merger process by the end of 2015. As Holcim is listed on the bourse, we are still waiting for the permit from Bapepam (Capital Market Supervisory Agency) and KPPU (Business Competition Supervisory Commission)," said Holcim vice president of sales Juhans Suryantan.
The speedy merger process is part of Holcim's efforts to expand its share of the Indonesian cement market, which stood at 15% before the merger, after Semen Indonesia with 43.7% and PT Indocement Tunggal Prakarsa with 30%. Meanwhile, Lafarge Indonesia had a 3% market share, placing it in fifth place.
Juhans added that both product brands would stay separate after the merger. "We have not decided on the brands. We might still use our own brands for the next one or two years," he said. The brands are deemed not to overlap due to the different target markets of both companies, as Holcim has a stronger grip on Java and southern Sumatra, while Lafarge Indonesia was stronger in Aceh and northern Sumatra.
Consolidation in the African cement market
05 August 2015A member of the Global Cement LinkedIn group recently posed a question about the relative sizes of LafargeHolcim and Nigeria's Dangote Cement in the African cement market. The correspondent wanted to get a handle on their relative sizes and how the situation would change as a result of the merger. Would Dangote lose its position as Africa's number one producer? If so, would its aggressive expansion allow it to regain its position at the number one spot?
As both one of the most rapidly-growing markets in the world for cement and the one with the most potential for future gains, Africa has been discussed in this column on many previous occasions. However, we have previously considered Africa's different regional markets, be it Dangote-dominated West Africa, North Africa, rapidly-growing East Africa or the far south, where PPC is looking to counter Dangote's growing strength.
However, the formation of LafargeHolcim and the news that HeidelbergCement will acquire Italcementi (starting with an immediate 45% stake), has massively consolidated the African market. In conjunction with Dangote's rapid development, these deals have transformed the African cement sector from one with a large number of small national and regional markets into a far more homogeneous entity. A number of key players, namely LafargeHolcim, Dangote Cement, HeidelbergCement and PPC, are present in numerous important markets all over the continent.
In answer to the aforementioned LinkedIn group member, the Global Cement Lafarge-Holcim Merger Report, states that LafargeHolcim controls 47.1Mt/yr of capacity in Africa. The new group is present in markets as diverse as Egypt, Morocco, Nigeria, South Africa and Zimbabwe. It is currently Africa's largest cement producer.
The second-largest producer at the moment is Dangote Cement, the only African-based large multinational cement producer. According to its website, it has 31.2Mt/yr of capacity currently active in Africa. The group is rapidly expanding. "We hope to commission four other cement plants in Senegal, South Africa, Cameroon and Tanzania before the end of 2015," said Aiko Dangote, Dangote Group President this week.
The new Dangote capacity that we can identify adds 4Mt/yr. This takes Dangote's total to 35.2Mt/yr. This is close to the 37.1Mt/yr of African capacity that LafargeHolcim actually owns, but Dangote is always planning its next move. Indeed this week it was rumoured to have been looking at purchasing Italcementi itself, hence HeidelbergCement's rapid movement.
In its press-release, HeidelbergCement suggests that the purchase of Italcementi will give it a position as strong as Dangote in the African market at around 30Mt/yr. It will add strong positions in Morocco and Egypt to its existing strengths on the West African coast. For its part, South Africa-based PPC currently has around 8Mt/yr of capacity in South Africa (4Mt/yr), Botswana, Zimbabwe and Ethiopia. It is currently installing capacity in the Democratic Republic of Congo and as far afield as Algeria, where it is involved in a joint venture with a local group.
Between them, these 'Big Four' share approximately 116Mt/yr of capacity in Africa. According to the Global Cement Directory 2015, this is just over half of Africa's 225Mt/yr of cement production capacity. This proportion will only increase as Dangote and PPC enlarge their presences.
The multinational players will likely not expand as rapidly, even in Africa. At the launch of LafargeHolcim, Group CEO Eric Olsen was pretty clear that the company does not plan any 'capital-intensive' expansions in the coming years. HeidelbergCement's future actions are less predictable, especially as we are yet to hear about any divestments that may be required from HeidelbergCement and Italcementi in order to satisfy competition authorities around the world.
Whatever happens in the future, it is clear that the African cement industry has undergone a significant transformation in the past few weeks. With per-capita cement consumption far lower than on other continents, there will be plenty of room for growth as well as for more acquisitions, divestments, mergers and expansion projects from the 'Big Four' and others in the coming years.
Perella Weinberg Partners hires LafargeHolcim co-chairman Wolfgang Reitzle in advisory role
05 August 2015UK: Investment boutique Perella Weinberg Partners has hired LafargeHolcim co-chairman Wolfgang Reitzle as an advisory partner.
Reitzle, also a former chief executive of the German gas maker Linde and chairman of the supervisory board of German car supplier Continental, will provide counsel in a senior role to the investment firm and its clients, especially in Europe, according to Perella Weinberg. He will continue in his role at LafargeHolcim.
Reitzle has had previous dealings with Perella Weinberg Partners; Holcim appointed Perella Weinberg banker Dietrich Becker to renegotiate the terms of its merger with Lafarge. "Reitzle has an exceptional track record of successfully managing growth across a variety of industries," said Joseph Perella, co-founder and chairman of Perella Weinberg Partners.
Europe: LafargeHolcim has decided to initiate a squeeze-out process for all issued and outstanding shares of Lafarge. After surpassing the necessary 95% threshold in the share capital and voting rights and following a decision by the board of directors, LafargeHolcim plans to request that the AMF implement a squeeze-out procedure pursuant to their general regulations for Lafarge shares not tendered to the Public Exchange Offer. LafargeHolcim will publish further details on the squeeze-out upon filing with the AMF.
CRH completes LafargeHolcim acquisition
03 August 2015Ireland: On 2 February 2015, CRH announced that it had reached an agreement to acquire certain assets from Lafarge and Holcim for Euro6.5bn. The deal has now been completed, with the exception of the Philippines, which is expected to close in the third quarter of 2015.
"Today we extend a warm welcome to 15,000 new colleagues joining CRH. With their expertise and talent on board, combined with the strength of our existing employee base, CRH is a step closer to achieving our aim of becoming the world's leading building materials company. The businesses we are acquiring, which represent an excellent geographic fit with CRH's existing operations, are all strong performers in their respective areas. The integration of these high quality assets, which we have acquired at an attractive valuation and at the right point of the cycle, will strengthen our presence in a number of key markets as well as providing new platforms for strategic growth. The additional scale will help us to improve efficiency, speed up innovation and provide an even better service to our customers," said Albert Manifold, CRH chief executive.
The transaction more than doubles CRH's cement production volumes and will further expand its aggregates and ready-mixed concrete portfolios. The acquired assets consist of more than 685 locations in 11 countries and include:
- The largest cement producer in central Canada; an excellent fit with CRH's existing Americas Materials business;
- Major cement and aggregates operations in western Europe's three largest markets: The UK, France and Germany;
- Leading cement and aggregates companies in the growth regions of central and eastern Europe, creating a strong regional cluster in which CRH becomes the number one heavy-side building materials company;
- Entry positions of scale in two emerging economic regions; Brazil and the Philippines.
With the closure, Tarmac and Blue Circle come together to form Tarmac, under the new ownership of CRH, according to Agg-Net. The company's new branding combines the heritage and innovation associated with the Tarmac name and the unique identity of the Blue Circle logo. The newly combined business is now the market leader in aggregates, asphalt, contracting services, lime and powders and is a leading player nationwide in cement, concrete and other building products.
"This is an exciting evolution for our business. With our new owner CRH in place to support the ongoing development and delivery of our strategic vision, we're in an exceptionally strong position to deliver our growth ambitions and continue creating value for our customers, our shareholders and our employees," said Tarmac's CEO, Cyrille Ragoucy, said. Tarmac has confirmed that there will be no change to its relationships with customers, suppliers and other stakeholders.
Results of the re-opened LafargeHolcim public exchange offer
03 August 2015Europe: The Autorité des marchés financiers (AMF) has published the final results of the re-opened public exchange offer initiated by LafargeHolcim for the shares of Lafarge.
Some 25,901,191 additional Lafarge shares have been tendered. Following the settlement-delivery of the re-opened offer, which is expected to occur on 4 August 2015, LafargeHolcim will hold 278,131,864 Lafarge shares representing 96.41% of the share capital and at least 95.25% of the voting rights of Lafarge. As at least 95% of the share capital and voting rights in Lafarge have been tendered, LafargeHolcim could request the AMF to implement a squeeze-out procedure pursuant to the general regulations of the AMF for all issued and outstanding Lafarge shares not tendered to the public exchange offer. As of yet, no decision by the LafargeHolcim board of directors of LafargeHolcim has been taken in this regard.
CRH buying into India – Whatever next…?
29 July 2015Ireland's CRH this week submitted a binding bid for various Indian assets of LafargeHolcim that will be sold by the newly-formed group as a condition of its formation. CRH will compete for the assets with HeidelbergCement and Barings Private Equity, which sold its stake in the same assets to Lafarge India prior to the merger. According to the Irish Examiner, the scale of the bids is in the region of US$600 - 800m. On the back-burner is another deal that could see CRH snap up a 74% stake in Tongyang Cement and Energy in South Korea.
These moves are consistent with CRH's new-found commitment to rapid expansion into new markets and an apparent desire to become a far bigger player in the global cement industry. It is in line with the sentiment expressed by its CEO Albert Manifold back in February 2015, when he stated in a letter to shareholders that CRH had given 'hell or high water commitments to Lafarge and Holcim' regarding its earlier Euro6.5bn purchase of assets as part of the LafargeHolcim merger. At that point CRH appeared almost 'over committed' to the huge deal, with some analysts asking whether or not CRH had paid too much.
Let's stop a minute to look at where CRH finds itself. Europe, its main cement market, is still under siege from a general lack of investment, both private and public. The UK is likely to perform well, although an ongoing Competition Enquiry at Irish Cement is an unwelcome distraction. CRH's new eastern European ventures are all in fairly small markets. Poland, in which CRH operates Grupa Ozarow, appears to act as the model for these acquisitions, but they remain at risk from the prolonged Eurozone crisis.
In Brazil, another new market, CRH is 'up against it,' with massive competition from Votorantim and InterCement, smaller local players and LafargeHolcim. A decline in cement demand here so far in 2015 year-on-year is not a good omen. Neither is Votorantim's decision this week to turn one of its plants into a distribution centre due to continued low demand.
In Canada CRH will gain 3.1Mt/yr of former Holcim capacity, around 20% of that market's capacity. This, along with its 2.7Mt/yr acquisition in the Philippines, probably represents CRH's best opportunities out of its newly-acquired assets.
However, with the confirmation that it intends to invest in 5Mt/yr of former Lafarge assets in India, a market not exactly enjoying buoyant conditions at present, CRH appears to be further exposing itself to another 'sub-optimal' market. We recently reported on the 100Mt/yr of capacity that is sitting idle in India at present , hardly a situation to instil confidence in a new entrant.
Whether CRH will be forced to leave some of these markets, buy into others or otherwise shuffle its cement assets to better suit the world economy remains to be seen.
Meanwhile, on the other side of the aforementioned mega-deal, LafargeHolcim gave the first indications of how it will go about re-branding in various markets this week. While a new brand will be introduced in markets with 'a balanced overlap' of former Lafarge and Holcim assets, countries without overlap will see existing Lafarge or Holcim 'brands' become 'endorsed' by LafargeHolcim. In countries with unbalanced overlap, either Lafarge or Holcim will be the endorsed brand.
Of course, in every market that it has bought a LafargeHolcim asset, CRH will also have to re-brand. So far it has announced that its operations in France will be branded as 'Orsima' from 1 August 2015. No elaboration on how this name was derived has been provided, but let's hope that there are not too many other new names to remember!