Displaying items by tag: Malaysia

HeidelbergCement made Italy’s Cementir Holding its Valentine last week in the form of a deal for the Italian company to buy up the remaining shares in Lehigh White Cement in the US. Cementir takes control of the former joint venture by upping its share to 63.25% for US$107m and one of the other partners, Cemex, increases its share to 36.75% for US$34m. Despite making the announcement on Valentine’s Day HeidelbergCement then described the sale in fairly unromantic language, “As a niche product with small volumes, the standalone production of white cement does not fit to the strategic focus on efficiency of HeidelbergCement.” Maybe they could just send flowers to each other next year instead!

More seriously, this latest deal by Cementir is yet another intriguing evolution of the Italian multinational building materials producer. The company says it is the largest white cement producer in the world through subsidiaries like Aalborg Portland in Demark, Sinai White Cement in Egypt and Lehigh White Cement in the US. Its plant at El-Arish in Egypt is the largest white cement unit in the world. In 2016 it reported a white cement production capacity of 3.3Mt/yr from six plants in Denmark, Egypt, China, Malaysia and the US. Its volume sales of white cement were 2.2Mt at this time or a capacity utilisation rate of 67%. In the US it operates two white cement plants located in Waco, Texas and York, Pennsylvania with a total capacity of 0.26Mt/yr, as well as a distribution network throughout the country, which is also used to distribute white cement imported from its partners across North America. In 2017 Cementir produced 10.3Mt of Ordinary Portland (grey) Cement and white cement, a rise of 24.6% year-on-year from 8.25Mt in 2016. The boost was delivered by the acquisition of Compagnie des Ciments Belges. Like-for-like sales volumes increased by around 1.7% year-on-year.

Cementir left the Italian market in 2017 when it sold Cementir Italia to HeidelbergCement for Euro315m. As this column commented as the time (GCW320) the deal seemed cheap given that HeidelbergCement paid Euro315m for five integrated cement plants plus extras. However, Cementir appeared to actually make a profit on Sacci which it picked up cheaply in 2016.

Now HeidelbergCement has returned the favour by selling Cementir the controlling stake in Lehigh White Cement. The German cement producer may have grumpily rubbished the sale in its press release but the language makes one wonder whether this was a quiet part of the Cementir Italia deal in 2017. The white cement industry is miniscule compared to the OPC one but HeidelbergCement has just handed even more control of it to Cementir. From Cementir’s perspective this probably seems very efficient.

Malaysia: Isaac Lugun and Goh Chii Bing have taken their new roles at Cahya Mata Sarawak (CMS) as Group Chief Executive Officer – Corporate and Group Chief Executive Officer – Operations respectively. They replace Richard Curtis who retired as Group Managing Director at the end of December 2017. Curtis will remain at the cement producer as a Non-Executive Director until the end of 2018.

Malaysia: Cahya Mata Sarawak’s (CMS) pre-tax profit rose to US$23.4m for the third quarter of 2017 from US$23.1m in the same quarter of 2016. The group said the better profit before tax was attributable to the cement division’s lower production costs. Its revenue, however, declined to US$85.0m from US$87.0m a year earlier. CMS said that the cement division’s clinker and cement operations’ combined profit before tax for the third quarter was 2% ahead of the corresponding quarter of 2016.

The company said that the operating environment was expected to remain challenging and the group’s healthy financial position would help weather the challenging environment. “We remain focused on growing our portfolio of businesses by taking advantage of the business opportunities in Sarawak,” said the company in a statement. “Our strong fundamentals and resilience will enable us to perform and to deliver a satisfactory financial performance for 2017. Coupled with other measures that the management is taking, we are positioning for long-term sustainable revenue and profitability growth.”

Malaysia: Yeoh Tiong Lay, the founder of YTL Group, has died at the age of 88. Lay started with a construction company in Kuala Selangor in 1955 and the built the company into a conglomerate including cement production, power generation, water and sewerage services, communications, construction contracting, property development and investment, hotel development management and more. He was appointed to the board of directors of YTL Corp in mid-1984 and was appointed as the executive chairman in 1985.

Malaysia: Tenaga Nasional Bhd (TNB) is investing US$50m in two waste heat recovery (WHR) plants to generate electricity through the recovery of exhaust waste heat from two cement plants operated by Negeri Sembilan Cement Industries. TNB's wholly-owned subsidiary TNB Repair and Maintenance Sdn Bhd will develop and operate the plants and raise the necessary financing.

Negeri Sembilan Cement owns two cement plants in Bukit Keteri, Perlis and Bahau, Negeri Sembilan with a total production capacity of 7.2Mt/yr. TNB said that the WHR plants will have a combined power generation capability of 23MW, giving Negeri Sembilan a 9-12% saving on its electricity cost.

The group said its venture into the waste heat recovery development will provide a new business opportunity in promoting energy efficiency, green technology and a sustainable long-term energy solution.

Malaysia: Cahya Mata Sarawak's (CMS) net profit jumped more than eight times to US$15.2m in the second quarter of 2017, from US$1.8m in the same quarter of 2016. The positive result was mainly due to lower handling costs, cheaper imported clinker and lower clinker production costs brought about by stable production and lower coal prices. The net profit for the six-month period was also higher by more than nine times at US$20.5m from US$2.1m in the first half of 2016. Total first half revenue decreased by 10% year-on-year to US$157.1m from US$174.7m.

Malaysia: Richard Curtis is to retire as Group Managing Director of Cahya Mata Sarawak Berhad (CMS) on 31 December 2017. He will then remain as a Non-Independent Non-Executive Director until the end of 2018. Curtis will be succeeded by Isaac Lugun as the company’s Group Chief Corporate Officer and Goh Chii Bing as its Group Chief Operating Officer.

Italy: Cementir’s acquisition of Compagnie des Ciments Belges has propped up its sales revenue, volume and operating profit for the first half of 2017. Its sales revenue rose by 31.3% year-on-year to Euro631m in the first half of 2017 from Euro481m in the same period in 2016. However, on a like-for-like basis its sales revenue fell by 1.5%. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 68.5% to Euro85.1m from Euro72m but fell by 4.9% on a like-for like basis. Its sales volumes of cement rose by 34% to 6.37Mt from 4.75Mt but fell by 2.4% on a like-for-like basis. The group blamed its poor like-for-like performance on falling revenue in Turkey and Malaysia despite good results in Denmark, Norway, Sweden, China and Italy.

“Results in the first half 2017 were up thanks to the effect of the acquisitions concluded in the second half 2016, which added Euro16.6m to EBITDA, despite adverse changes in exchange rates. On a like-for-like basis, the improvement in EBITDA in Egypt, Italy, China and Norway partially compensated lower earnings in Turkey and, to a lesser extent, in Denmark and Malaysia, as well as the depreciation of foreign currencies against the Euro – mainly the Egyptian Pound and the Turkish Lira,” said Francesco Caltagirone Jr, Chairman and Chief Executive Officer (CEO).

Southeast Asia: LafargeHolcim has signed an agreement on biodiversity conservation with Fauna & Flora International (FFI). Under the agreement, FFI will perform an independent external review of the group’s existing biodiversity management plans (BMP) at sites in Malaysia, Indonesia and the Philippines; contribute to the development of a group-wide strategy on karst management; identify opportunities for enhancing biodiversity in quarry rehabilitation; and organise a stakeholder dialogue bringing together an external expert group, local government, local non government organisations and LafargeHolcim staff to consult on BMP recommendations. The agreement is intended to help LafargeHolcim meet the biodiversity aspects of its 2030 sustainability plan.

“Biodiversity loss is a major global challenge. We aim to be good stewards of the land where we operate and demonstrate that proper management of quarries can reduce and reverse our impacts and even generate positive change for biodiversity. The new engagement work with FFI will play a key role in achieving our commitment,” said Caroline Hempstead, Group Head of Communications, Public Affairs & Sustainable Development at LafargeHolcim.

Malaysia: Cahya Mata Sarawak Berhad’s (CMS) cement division’s operating profit rose by 2% year-on-year to US$23.6m in 2016 from US$23.2m in 2015. However, its sales revenue fell by 6% to US$127m from US$135m. The group blamed its falling sales on ‘challenging’ market conditions. Overall the group’s sales revenue and profit fell in 2016.

“2016 was a challenging period for us in terms of group performance meeting targets as we had faced challenging market and operational conditions. These macro factors included low commodity selling prices, higher costs of raw materials in the Cement Division resulting from the strong US dollar, and generally the sluggish private and public sector demand attributable to bank lending restraints and the lack of any new big projects. Our group’s core businesses, however, remained resilient during this period and continued to report stable earnings,” said Richard Curtis, Group Managing Director of CMSB.