
Displaying items by tag: Mexico
Mexico: Cemex has embarked upon a cost cutting exercise following a drop of sales volumes in 2024. Sales volumes of cement, ready-mixed concrete (RMX) and aggregates all fell in 2024. This in turn reduced sales revenue, despite higher prices and earnings. The group’s sales volumes of cement decreased by 2% year-on-year to 44.3Mt in 2024 from 45.2Mt in 2023. RMX sales volumes dropped by 6% to 44Mm3 from 46.8Mm3. Sales revenue and operating earnings before interest, taxation, depreciation and amortisation (EBITDA) dipped by 2% to US$16.2Bn and by 2% to US$3.08Bn respectively.
Sales and earnings rose on a like-for-like basis in Mexico and South, Central America and the Caribbean but fell elsewhere. In Mexico the group noted a strong first half of 2024 followed by a poor second half. In the US it reported a number of ‘extreme’ weather events. In Europe, Middle East, and Africa it said a recovery trend in earnings was observed in the second half of the year.
In response the company has launched ‘Project Cutting Edge,’ a three-year, US$350m saving programme intended to streamline operations, improve efficiency and further use digital technology throughout the business. The initiative is anticipated to deliver US$150m in incremental EBITDA in 2025 and expected to reach a run-rate of US$350m by 2027.
Fernando A González, CEO of Cemex, said “With the recovery of our investment grade ratings, improved free cash flow generation and the execution of US$2.2bn in asset divestments, we can now pursue more aggressively our capital allocation priorities of growth through small to medium-sized acquisitions, primarily in the US, additional deleveraging, and building further on our shareholder return programs.”
Consequences of US tariffs on the cement sector
05 February 2025US President Donald Trump threatened tariffs on imports from Canada, China, Mexico and the European Union this week. Tariffs to Canada and Mexico were announced on 1 February 2025 and then paused for a month to allow for negotiations. Ones to China have been implemented. Tariffs to the European Union have been proposed but nothing has happened yet. What does this mean for the cement sector?
Graph 1: Imports of cement and clinker to the US. Source: USGS. Estimated data for 2024.
The data suggests that whacking 25% tariffs on cement imports from Canada and Mexico would have an impact. The US imported 26.5Mt of cement and clinker in 2023. Based on United States Geological Survey (USGS) data from January to October 2024, imports in 2024 have fallen by 8% year-on-year but they still represent a large chunk of consumption. Türkiye has been the biggest source of imports over the last five years but Canada has been the second biggest supplier. Together with Mexico, it provided over a quarter of imports in 2023. A similar share is expected in 2024. Greece, a country in the EU, has also been present in the top five importing countries to the US during this time.
The Portland Cement Association (PCA) reinforced this view. In a carefully worded statement it took pains to point out alignment with the intentions behind the tariffs, such as appreciating that the administration was open to negotiation and appeared to be flexible. However, it warned that the moves could adversely affect energy and national security, delay infrastructure projects and raise costs. It pointed out the import share from Canada and Mexico, adding that this represented nearly 7% of the US’ cement consumption. It noted which states were the main entry points for cement imports from the two countries. Finally, it highlighted the high level of consumption (36%) that imports from Canada might account for in northern states such as New York, Washington and so on. Meanwhile, Mexico’s National Chamber of Cement (CANACEM) warned that the proposed actions might trigger a ‘competitiveness crisis’ in the US.
Holcim’s CEO, by contrast, nonchalantly told Reuters that he didn’t expect any impact by tariffs on his business. Miljan Gutovic described the group’s US operations as a local business with production happening in the country and equipment and spare parts all being sourced locally. This optimistic view is likely to be influenced by the company’s impending spin-off of its US business. The listing in the US remains scheduled for the first half of 2025 with no complications expected from tariffs.
Clearly, implementing tariffs on imports of cement and clinker from Canada and Mexico could cause a shortage in the US in the short term. This, in turn, could lead to higher prices for consumers in the US. This potential effect would be pronounced in border regions that are reliant on imports. It is worth noting that a number of production lines in both Mexico and Canada have previously been mobilised to meet the export market to the US. These lines would likely be mothballed if tariffs were to be implemented, unless they could find other markets. In the medium term though, as the World Cement Association (WCA) pointed out this week, the world produces too much cement. So it looks likely that the US cement market would adjust to a new equilibrium. Taxing imports from the EU would have a similar effect. Although it seems like it would be less pronounced for the US cement market unless it was in conjunction with tariffs to Canada and Mexico. It would certainly be bad news for cement producers in Greece.
Cement producers in the US look set to benefit from tariffs as demand for their products and prices could increase. There is a risk that too sudden a change to the import market could cause adverse market effects through shortages. Many of these companies are multinational groups with headquarters in foreign countries. However, the strength of the US market compared to elsewhere has prompted some of these businesses to become more ‘American’ through listing in the US or focusing merger and acquisition activity in North America.
At this point we’re stuck in a half-way house place where import tariffs have been threatened and negotiations are pending. The relatively muted stock market reaction to the tariffs and Trump’s swiftness in enacting pauses suggest that it is brinkmanship by the US administration. If this situation continues for any length of time then it will likely have an effect all of its own. In which case don’t expect any export-focused investment by cement companies in Canada and Mexico any time soon.
US: The Portland Cement Association (PCA) has issued a statement following the US government’s announcement of proposed 25% tariffs on imports of cement from Canada and Mexico. The association lauded President Donald Trump’s stated goal of protecting the US cement industry, while also calling for careful consideration of measures to be taken.
President and CEO Mike Ireland said “While the US cement industry agrees with the President’s objectives of bolstering American manufacturing, increasing border security, and advancing the country’s energy independence, the industry believes 25% tariffs on cement imported from Canada and Mexico could adversely affect energy and national security while delaying infrastructure projects and raising their costs.” Ireland continued “The availability of affordable cement and concrete is vital to meet our country’s infrastructure needs and for the oil and gas sector’s expansion. Mexico and Canada play a crucial role in stabilizing US supply, so we appreciate that the administration is open to negotiations and taking a flexible approach to implementing trade policy.”
Mexican National Chamber of Cement speaks out against US’ proposed 25% tariff on cement
05 February 2025Mexico: The Mexican National Chamber of Cement (CANACEM) has warned that the US government’s proposed reimposition of a 25% tariff on imports of cement from Mexico may trigger a ‘competitiveness crisis’ in the US, with dire consequences for North America as a whole. Mexico exported 1.5Mt of cement to the US in 2024. This corresponds to 7% of US cement imports and 1.4% of the country’s total consumption. The El Norte newspaper has reported that CANACEM sees the current situation as an opportunity for Mexican and US policymakers and stakeholders to increase their mutually beneficial initiatives, citing the example of a proposed Carbon Border Adjustment Mechanism (CBAM) on a region-wide scale.
CANACEM president José María Barroso said "In addition to incentivising more sustainable production, this would promote greater integration and strengthen the regional market. The Mexican cement industry is ready to work with our government and our trade partners to find solutions that promote greater regional integration."
Holcim does not expect impact from US tariffs
04 February 2025US: Holcim’s CEO Miljan Gutovic says he does not expect any effects of proposed US tariffs upon his company. "I don't really see any impact, because our business is a local business (in the US)," said Gutovic in an interview with Reuters. "We are producing locally, we are sourcing the equipment, the spare parts locally, so how is this going to affect us? I do not see it." He added that the proposed tariffs were also unlikely to pose any problems to the group’s planned spin-off of its business in the US. The listing of its North America-based business is remains scheduled for the first half of 2025.
The US government proposed tariffs upon imported goods from Canada and Mexico in early February 2025 but these have been paused for one month. Tariffs on China are set to start on 4 February 2025. US President Donald Trump has also spoken about implementing tariffs on the EU.
GCC reports 2024 full year and fourth quarter results
31 January 2025Mexico: GCC has reported a 0.2% increase in its 2024 consolidated net sales to US$1.367m, whilst sales in the fourth quarter of the 2024 financial year declined by 1% to US$335m.
US operations showed strength, with 4% sales growth and 4.5% increase in concrete volumes in the fourth quarter. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 6% to US$500m for 2024, with the fourth quarter showing 4% growth to US$122m.
CEO Enrique Escalante said "GCC delivered exceptional results once again in 2024. Despite navigating a challenging economic environment, we achieved record-breaking sales, EBITDA, margins and net income. These results underscore our team’s flexibility and agility to successfully execute our strategy. Looking ahead, we remain cautious about demand dynamics. The fundamentals of our business remain strong, especially in the US market where we generated more than 75% of our EBITDA.”
Daniel Llaguno appointed as president of Unified International Technical Conference on Refractories
08 January 2025World: The Biennial Unified International Technical Conference on Refractories (UNITECR) has appointed Daniel Llaguno as its president. He succeeds Mauro Cueva who has resigned due to health issues. Llaguno was the vice-president of UNITECR 2025. He is also the CEO of NUTEC Group, a company that produces industrial heating products.
Jessica Fernández has been appointed as the vice-president of UNITECR 2025. She is the Administrative Vice President at Mexico-based WM Refractories and has worked for the company for over 20 years.
UNITECR 2025 will take place on 27 - 30 October 2025 in Cancun, Mexico.
Cruz Azul inaugurates crusher at Oaxaca cement plant
25 December 2024Mexico: Cruz Azul has inaugurated a new limestone crusher at its Oaxaca integrated cement plant in Lagunas in Oaxaca state. Construction of a new mill at the site has also started, according to the Herald of Mexico newspaper. It was announced in August 2024 that the new grinding mill has an investment of US$40m and it is scheduled for completion by October 2025. The company is also expanding a local hospital. The projects were presented as part of a ceremony linked to the community’s 493rd anniversary of the apparition of the Virgin of Guadalupe.
Azerbaijan: Cemex has won the Net-Zero Industries Award for its clinker decarbonisation process using concentrated solar power. The award was presented at COP29 in Baku. Cemex’s solar clinker project is a collaboration with cleantech company Synhelion, which developed the high-temperature solar heat technology it uses. Cemex and Synhelion partnered in 2019 and achieved the first successful production of solar clinker in 2022.
Davide Zampini, vice president of Global R&D at Cemex, said "Together with Synhelion, we are pioneering solar-powered clinker production, a breakthrough process that can contribute to decarbonising cement manufacturing."
Cemex reports 2024 third-quarter financial results
29 October 2024Mexico: Cemex recorded an earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$747m in the third quarter of 2024, down by 9% year-on-year, with net sales falling by 3% to US$4.09bn. This period was influenced by adverse weather and foreign exchange movements, according to the company. Net income for the quarter more than tripled year-on-year to reach US$406m.
Compared to the corresponding period in 2023, sales in Mexico fell by 5% to US$1.14bn, while sales in the US decreased by 4% to US$1.34bn. In South and Central America and the Caribbean, sales declined by 1% to US$311m. Conversely, sales in the Europe, Middle East and Africa region rose by 1% to US$1.24bn.