Displaying items by tag: Malaysia
Jenisch ejects LafargeHolcim from Southeast Asia
15 May 2019Jan Jenisch and the team at LafargeHolcim only went and bloody did it! Apologies for readers not wanting yet more column inches on LafargeHolcim but when the world’s largest cement producer leaves an entire sub-continental market it deserves mention.
First Indonesia, then Malaysia and now the Philippines. LafargeHolcim will soon no longer produce clinker in Southeast Asia. That’s a region with 651 million inhabitants or around 8% of the world’s total population. All of those people need cement and other building products as their nations build houses, infrastructure and so on. And LafargeHolcim is no longer there.
The reason, of course, is local production overcapacity in many of these countries and rampageous importers pulling in cheaper product from elsewhere. The Association of Southeast Asian Nations (ASEAN) includes Thailand and Vietnam, two of the world’s largest cement exporters. The region also borders China, the place which could produce 40% of the world’s cement if it so wanted. So, understandably, LafargeHolcim pulled the plug. Note that the recent divestments in the region didn’t include its seabourne trading wing, LafargeHolcim Trading. Oh no! Clearly, if you can’t beat them, you join them instead.
So, what to say about the Philippines sale? Unlike the divestments in Indonesia, this sale has valued the production base more highly. LafargeHolcim’s integrated production capacity, including the upgrade at its Bulacan plant, is being sold for over US$175/t with the partial share factored in. And that’s not even including the grinding plant at Mabini. The sale in Indonesia was US$120/t or lower. The Duterte administration’s infrastructure drive (Build, Build, Build) and muscular government action on imports have doubtless played their part here. Yet still LafargeHolcim sold. In the words of chief executive officer (CEO) Jan Jenisch the area was ‘hyper competitive.’
Back home at the group’s headquarters in Switzerland, the potential revenue of over US$4bn from the three ASEAN divestment is poised to trickle onto the balance sheets for 2019. If it were all to go towards debt reduction then these proceeds could pile drive the group’s net financial debt to below Euro10bn. This would be good place to be if the on-going Chinese-US trade tiffs became a little hotter, say, or in the case of a fresh banking crisis. Alternatively the group could pick a new region for development and start all over again or focus on diversifying its business along the building materials chain. And let’s not forget the potential legal bill from the on-going investigation into Lafarge Syria’s conduct during the Syrian civil war.
Throughout this whole exercise, from the outside looking in at LafargeHolcim’s actions, the thought has persistently been: what do they know that everyone else doesn’t? The answer, it may turn out to be, nothing. Yet, rightly or wrongly, we’re marvelling at the bravado of it all.
Malaysia: Lafarge Malaysia has resumed supplying cement to the East Coast Rail Link project. The cement producer has been asked to continue supplying the project until the end of 2019, according to the Star newspaper. The US$65m contract was originally agreed in March 2018 but then suspended in July 2018 when the government reviewed the project.
Malaysia/Singapore: Switzerland’s LafargeHolcim has signed a deal to sell its 51% stake in Lafarge Malaysia to YTL Cement for US$396m. Lafarge Malaysia operates three integrated cement and two grinding plants. With the divestment, LafargeHolcim will fully exit the Malaysian market. LafargeHolcim has also signed an agreement with YTL Cement Singapore for the divestment of its entire 91% share in Holcim Singapore.
YTL Cement is part of YTL Corporation, a Malaysian infrastructure conglomerate, which is active in cement production, construction, property development and utilities. The deal is expected to be completed within the second quarter of 2019. It is subject to approval by regulatory bodies.
Malaysia: Lafarge Malaysia has appointed Yeoh Khoon Cheng as its chief executive officer (CEO). He has held the role of interim CEO since late 2018 and was also the company’s chief financial officer (CFO), according to the New Vision newspaper. Edward James Coultrup will succeed Yeoh as CFO.
Yeoh, aged 60 years, holds over 30 years of experience in the cement industry and 18 years of experience as a CFO. He has worked for LafargeHolcim’s subsidiaries and predecessor companies since 1999. He first held the CFO post in Malayan Cement Berhad, now Lafarge Malaysia, from 1999 until 2011. He has since been CFO at Lafarge Cement China and Huaxin Cement. He is a Certified Public Accountant and is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and Malaysian Institute of Accountants (MIA).
CMS cement profit down in 2018 due to maintenance costs
27 February 2019Malaysia: Cahya Mata Sarawak’s (CMS) sales from its cement division rose by 7% year-on-year to US$137m in 2019 from US$128m in 2017. Its operating profit fell by 11% to US$22.2m from US$24.9m. CMS attributed the drop in profit on repair costs from maintenance to its integrated plant at Kuching. Rising international clinker prices were also blamed.
Cementir sales down in 2018 due to issues in Egypt and Norway
15 February 2019Italy: Cementir Holding’s sales revenue fell by 4.2% in 2018 on a like-for-like basis due to poor performance in Egypt and Norway. Military operations in the Sinai impacted production in Egypt between February and May 2018 and bad weather in Norway affected the first quarter. However, it noted good results in Malaysia, Belgium and China.
On an adjusted basis its revenue rose by 4.9% to Euro1.2bn from Euro1.14bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7.1% to Euro239m from Euro223m. Grey and white cement sales volumes fell by 4.4% to 9.8Mt from 10.3Mt. Ready-mixed concrete volumes fell slightly to 4.9Mm3.
YTL Cement orders emissions control upgrades from CTP Team
13 December 2018Malaysia: YTL Cement has awarded a turnkey project for air pollution control to Italy’s CTP Team. The project at the Perak-Hanjoong Simen cement plant in Pedang Rengas includes the conversion of an existing PL1 raw mill electrostatic precipitator (ESP) to a fabric filter and the upgrade of an existing exhaust fan.
The work includes converting an existing 740,000m3/hr ESP unit downstream of the kiln and raw mills of Line 1 to a bag filter. The conversion will abide to the current footprint on foundations with the minimum impact on steel structures, ducting and dust transport system. The new filter will reduce the emission limits below 10mg/Nm3 by June 2019. The intention is to meet new government regulations quickly. The unit will also be equipped with CTP’s SWAP technology for the cleaning of bags with low-pressure compressed air. CTP Team will work with local partner Shinco Industrial Equipment on the project. No value for the deal has been disclosed.
Malaysia: Cahya Mata Sarawak’s (CMS) cement division profits have fallen so far in 2018 due to planned maintenance shutdown at its integrated plant and rising clinker prices. Its profit before tax dropped by 14% to US$16.7m in the first nine months of 2018 from US$19.6m in the same period in 2017. The division’s performance was also hit by an increase in the price of imported clinker. The company said that this occurred due to a spike in global demand, following the reduction of clinker production in China and continued high demand for clinker especially from Bangladesh and the Philippines. Overall, CMS’ sales revenue and profit have risen so far in 2018.
Malaysia: Lafarge Malaysia has appointed Yeoh Khoon Cheng as its interim chief executive officer (CEO).
Yeoh started his career with Deloitte Kassim Chan in 1979. He joined Lafarge Malaysia in 1987 as finance manager and has held various positions involving business development, mergers and acquisitions and corporate finance activities and acted as company secretary from 1990 to 1998. He was appointed as executive director and chief financial officer (CFO) in 1999. From mid-2011 to the end of 2015, he was the CFO for Lafarge Cement China. Latterly, Yeoh was the CFO of Huaxin Cement in China from 2016 to mid-2017. He is a member of the Malaysian of Institute of Accountants and the Malaysian Institute of Certified Public Accountants.
CMS launches Portland Limestone Cement product
14 November 2018Malaysia: Cahya Mata Sarawak (CMS) has launched a new Portland Limestone Cement (PLC) product. The 32.5N strength product is targeted for low-rise concrete structures such as single storey residential, office and commercial buildings. It is also intended for plastering, bricklaying and for use in the construction of drains and rural or kampong roads. CMS has also been conducting trials with Universiti Malaysia Sarawak (UNIMAS) on testing it as a binder for soil stabilisation. The new cement type will compliment CMS’ existing Portland Cement 42.5N product.
CMS operates one integrated cement plant and two grinding plants. Both grinding plants, at Pending in Kuching and Bintulu, have direct access to ports allowing entry to export markets for bagged and bulk product. The state-owned cement producer also operates two bulk marine terminals at Sibu and Miri.