Displaying items by tag: Legal

Cuba/US: A court in Florida has accepted a request for damages worth US$270m from LafargeHolcim to over 20 parties from Cuba whose land was nationalised and subsequently had a cement plant built on it. The claim alleges that Switzerland-based Holderbank has held a stake in the partly-state owned Carlos Marx cement plant near Cienfuegos since 2001 via a deliberately “complex network of letterbox companies and transactions” in the Netherlands and Spain, according to the Tages Anzeiger newspaper. Holderbank later became Holcim and then LafargeHolcim.

The building materials producer’s alleged involvement may constitute a violation of the US embargo on trade with Cuba for companies active in the US. The claim has been aided by a clause in the US’s Cuban blockade law, activated by President Donald Trump, enabling Cubans to claim damages in US courts for expropriated property from private companies which profited from them.

Çimsa and its parent company Sabancı Holding renewed their ambition to become a global leader in the global white cement market this week with the formation of Cimsa Sabanci Cement. The new subsidiary brings together most of Çimsa’s international white cement companies including Cimsa Americas Cement Manufacturing and Sales Corporation in the US, Cimsa Cement Sales North in Germany, Cimsa Cementos Espana in Spain and Cimsa Adriatico in Italy. Notably, the new entity does not include businesses in Romania and Russia or at home in Turkey. The move coincides with regulatory approval from the Comisión Nacional de los Mercados y la Competencia (CNMC) for Çimsa’s purchase of Cemex’s white cement business in Spain, including its integrated Buñol white cement plant, for around US$180m, which was first announced in March 2019.

The acquisition in Spain came with conditions though since Çimsa has now become the market leader in both bagged and bulk white cement locally, with a combined share of over 50% in the case of bulk white cement. Firstly, Çimsa has agreed to give Cementos Molins the rights to use its silo in Alicante along with a customer list over the last three years. Secondly, it has agreed to supply all its customers previously supplied from a silo in Seville from one in Motril instead for two years. The Motril terminal was purchased from Cemex. The idea here is to give Cementos Molins time to establish itself in the new market and for customers in the south of Spain to find alternative white cement suppliers if they want to. The latter condition was enough for the CNMC to approve the Cemex purchase in Spain. It was proposed on 24 September 2020 and then approved by the end of the month.

The wider picture is that Çimsa has been playing up its ambitions in white cement for a while now. At the time that the acquisition in Spain was announced, Tamer Saka, the president of Sabancı Holding Cement Group and chairman of Çimsa said, “With the integration of the Buñol white cement plant to our production and distribution networks, we will increase our white cement production capacity by 40%, translating into Çimsa becoming the world's largest white cement company.” This compares to Cementir’s self-declared world share of around 27% white cement production capacity, through its Aalborg White brand and others. Other recent developments at Çimsa include the commissioning of a 0.35Mt/yr white cement grinding plant in Houston, Texas by Cimsa Americas Cement Manufacturing and Sales Corporation in July 2019 with commercial sales starting later that year.

Back home in Turkey the domestic grey cement industry has faced difficulties in the last few years as the economy suffered, the capacity utilisation rate fell, competition increased in export markets and then coronavirus-related lockdowns caused further stress this year. By contrast the world white cement market has remained quite buoyant over the last decade, rising by around 7% year-on-year to 21Mt in 2018 and then remaining at a similar level in 2019.

HeidelbergCement memorably described white cement as a “niche product” when it left the scene in 2018 by selling its remaining shares in Lehigh White Cement in the US to Cementir. It has faced problems of its own this week with the decision by the European General Court (EGC) to uphold the European Commission’s (EC) previous ruling in 2017 to block a proposed takeover of Cemex Croatia by HeidelbergCement and Schwenk Zement. Funnily enough, that acquisition also revolved around a cement terminal. In this case the EC didn’t think that the offer by the potential buyers to grant access to a cement terminal in Metković in southern Croatia would be enough to assuage concerns about reduced competition following the transaction. Some you win, some you lose.

US: A US federal court has upheld the ruling of a Colorado district court that Mexico-based Grupo Cementos de Chihuahua (GCC) must pay around US$36m compensation to Compañía de Inversiones Mercantiles (CIMSA) for failing to grant it a right of preference prior to GCC’s sale of its 47% stake in Sociedad Boliviana de Cemento (SOBOCE).

Peru-based Consorcio Cementero del Sur obtained 100% ownership of Bolivia-based SOBOCE following its acquisition of GCC’s stake in 2011.

Croatia: A European Union (EU) court has ruled in favour of the European Commission’s antitrust veto of Germany-based HeidelbergCement and Schwenk Zement’s 2017 acquisition agreement with Mexico-based Cemex for acquisition of its subsidiary Cemex Croatia. The court said that the deal was anti-competitive in that it had the potential to push up cement prices in Croatia, in spite of HeidlebergCement and Schwenk Zement’s offer to grant other cement suppliers access to a terminal.

Mexico: The board of directors of Cemento Cruz Azul has asserted legal control of its Cementos y Concretos Nacionales (CYCNA) subsidiary cement plants in Puebla and Aguascalientes following accusations of ‘looting’ by partners in the company. In a video statement José Antonio Marín, president of the board of directors, said that the move would give the producer greater control over its operations since all cement would be registered in an internal audit programme, according to the Milenio newspaper. He alleged that some partners of the company had sold cement manufactured at the units independently.

José Antonio Cárdenas has been appointed manager of the CYCNA plants to replace Benito Rodríguez Fayad. Fayad allegedly had links to Cruz Azul’s former director Guillermo ‘Billy’ Álvarez, a former director of the company who is currently being investigated by law enforcement for links to organised crime and money laundering.

France: LafargeHolcim has said that Lafarge Béton is not responsible for the discharge of ‘particles of cement, treatment liquids and plastic microfibers’ from its Bercy concrete plant in Paris Department. The La Télégramme newspaper has reported that the plant has been under environmental inspection since late August 2020. The company says that the pollution resulted from a single incident ‘caused by malicious parties’ who knew of the on-going investigation.

The mayor of Paris has contacted the public prosecutor to request a criminal action against LafargeHolcim.

Mozambique: China-based International Cement Group has confined builders working on the construction of its integrated Salamanga cement plant in Maputo Province to the site of the upcoming plant since March 2020. BBC news has reported that 60 Mozambicans have been living in temporary accommodation without being able to leave the site “in order to prevent possible transmission of coronavirus from workers,” according to the company. The group agreed to permit workers to leave from 23 August 2020 following action by a local lawyer.

Barbados: The Caribbean Court of Justice (CCJ) has ruled in favour of the Council for Trade and Economic Development (COTED) in its dispute with Trinidad and Tobago-based Rock Hard Cement. Stabroek News has reported that Rock Hard’s products had previously attracted a 5% import duty due to their classification as ‘other hydraulic cements.’ However, in mid-2019 COTED approved a decision by the Caribbean Community (CARICOM) to permit Barbados to enforce a tariff of 35% on this class of goods, compared to 15% on ’grey cement’ until mid-2021 in order to protect domestic producer Arawak Cement. The court found this reason to be, “within the rule of law.”

US: A lawsuit raised by the US Equal Employment Opportunity Commission (EEOC) against CCC Group alleges that black construction workers were subject to racial discrimination and harassment during the construction company’s work on an upgrade at the Lafarge Ravena cement plant in 2016. The EEOC says that the workers were the target of racial language, were threatened and made to carry out more dangerous and physically taxing tasks. It added that it only took legal action after first attempting to reach a pre-litigation settlement through the agency’s conciliation process.

CCC Group says it investigated the claims from one former employee in 2017 about ‘inappropriate comments’ after it was reported to the EEOC. However, it says that the complaint was never reported internally and that the EEOC refused to share information about the allegations. Subsequently, it was unable to determine what happened. The construction company only became aware of the other allegations when the EEOC filed its lawsuit in June 2020. CCC Group said, “We take all such allegations very seriously and continue to thoroughly investigate these claims. Regardless, CCC Group will continue its commitment to ensure that any such conduct is not tolerated or allowed to occur in our workplaces.”

800 workers were involved in the upgrade to the plant in New York State, which brought it to its present integrated capacity of 2Mt/yr.

This story was updated on 16 June 2020 following comment from CCC Group

Australia: The Queensland Supreme Court has ruled that Wagners must meet lower prices offered by a competitor in the market in its cement supply contract with Boral. Wagners suspended its supply of cement products to Boral for six months in early 2019 when Boral said it found cheaper cement from Cement Australia, according to the Australian newspaper. However, the court found that an October 2019 pricing notice for cheaper supplies from Cement Australia was ‘valid and effective’. Boral will continue buying cement from Wagners until 2031.