Displaying items by tag: Minas Gerais

Brazil: Cimento Tupi has filed for so-called preventative bankruptcy to deal with its US$627m total debts, with the majority attributable to bondholders. The Valor Economico newspaper has reported that the cement producer has suffered due to a downturn in the sector since 2014 and currency depreciation.

The producer has an installed capacity of 2.5Mt/yr consisting of one integrated plant at Pedra do Sino in Minas Gerais and a grinding plant in Modi das Cruzes in São Paulo. In 2011 it began modernisation of its cement operations, for which it withdrew bank loans. Lenders launched legal action in April 2019 after the company defaulted on around US$30m of repayments to foreign investors.

Buzzi Unicem beefed up its presence in Brazil this week with the announcement that it is buying CRH’s local cement plants through its Companhia Nacional de Cimento (CNC) joint-venture with Grupo Ricardo Brennand. The deal covers CRH Brazil’s three integrated plants at Cantagalo in Rio de Janeiro, and, Arcos and Matozinhos in Minas Gerais. It also throws in two grinding plants including the Santa Luzia Plant in Minas Gerais for a total of US$218m, although the final figure may change depending on conditions such as the net financial situation at the closing date.

The purchase brings up two trends. Firstly, it’s a continuation of CRH’s refocus on safe havens in Europe and North America. The Ireland-based building materials producer originally picked up these plants in the wake of the formation of LafargeHolcim in 2015 as part of a package deal for Euro6.5bn in its ‘bolt-on’ acquisition expansion phase. Most of the assets in that deal were in Europe and North America, although it did see CRH also build a presence in the Philippines.

Since late 2019 reports have emerged in the press about plans to sell up in Brazil and the Philippines. Whether CRH has made any profit on its sale in Brazil is hard to tell given the scale of its purchases from Lafarge and Holcim in 2015. The focus was likely on those key markets closer to home. Yet cement sales in Brazil peaked in 2014 before the national economy were hit by falling commodity and oil prices that contributed to a recession as well as the Petrobras political crisis. Sales bottomed out in 2018 and have been building steam since. Now is certainly the time to consider departure with a good price given the National Cement Industry Union’s (SNIC) glowing data for September 2020.

For Buzzi Unicem, the proposed acquisition represents the next step on its multinational ambitions, pushing Brazil into its fifth biggest territory in terms of cement production capacity after Italy, the US, Mexico and Germany. Its timing was good in September 2018, when it agreed to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m, because local sales were finally starting to pick up. Once again Buzzi Unicem has also picked up cement production assets for a capacity price just below US$100/t. This time it faces a similar balance of uncertainty with the Brazilian cement industry reporting continuing growth but facing an uncertain future from the economic effects, locally and worldwide, from the coronavirus pandemic.

One point to note here is that as part of its deal with Grupo Ricardo Brennand in 2018, Buzzi Unicem had the right to buy the remaining 50% of BCPAR from Grupo Ricardo Brennand until 1 January 2025. Presumably, though, the option to buy Grupo Ricardo Brennand out of BCPA remains valid. This makes it interesting that Buzzi Unicem chose further expansion over consolidation of its existing business. Four years remain for it to buy the rest of BCPAR if it wants to.

Given the concentration of the Brazilian business in the south-east of the country it seems unlikely that the acquisition would be turned down since the enlarged BCPAR will hold a production base behind larger producers like Votorantim or InterCement. However, Cimento Nacional’s Sete Lagoas plant and CRH Brazil’s Matozinhos plant are both close in Belo Horizonte and this may cause concerns. Now it’s over to the Brazilian regulators to approve or decline the deal and the various parties to finalise.

Brazil/US/Vietnam: FCT Combustion has released details on new burner projects it is involved with. Selected projects include the commissioning of Gyro-Therm burners for Kilns 1 and 2 for use with natural gas, coal, petcoke and solid alternative fuels at Lehigh Cement’s Evansville plant in Pennnsylvania in the US. The supply also included the burner management system, valve trains, fans and other accessories.

The company is also working on an upgrade to the hot gas generator at Votorantim Cimentos’ Vidal Ramos plant in Santa Catarina, Brazil. Also in this country it is supplying Turbu-Jet AF burners with blowers, ignition and flame detection systems to CSN Cimentos’ Arcos plant in Minas Gerais.

Finally, in Vietnam the burner supplier is to provide a Turbu-Jet AF burner firing low calorific value coal with fuel oil to Vinacomin’s Quan Trieu Cement plant.

Brazil: Mineração Belocal, a subsidiary of Belgium’s Lhoist, has purchased L-Imerys, a lime producer that operates a plant at Doresópolis in Minas Gerais. L-Imerys is a subsidiary of France’s Imerys, according to the Diário do Comércio newspaper. The 0.4Mt/yr lime plant was inaugurated in 2013. The sales is depending on approval by the relevant competition bodies. No value for the acquisition has been disclosed.

Brazil: LafargeHolcim has launched a marketing campaign for its Cimento Montes Claros cement brand in six states and the Federal District. The campaign is intended to increase brand recognition and improve its relationship with customers in Minas Gerais, Pernabuco, Bahia, Paraiba, Rio Grande do Notre, Goias and the Federal District, according to the Sags website. The campaign includes television and radio coverage, advertising on transport networks and social media spots. The campaign is planned to run until December 2017.

Brazil: The Sempertrans division of the Semperit Group and the Agudio brand of Leitner have started operation of their ‘flyingbelt’ conveying system, a combination of ropeway and conveyor belt, at the LafargeHolcim cement plant in Barroso, Minas Gerais. The conveying belt is suspended on ropes connecting a limestone quarry to the plant. It can convey 1500t/hr of limestone at a height of up to 36m. The 7km belt is the longest of its kind in the world.

"With the Agudio ‘flyingbelt’ we have installed a very innovative bulk materials transportation system. The Sempertrans conveyor belt not only overcomes - at great height - terrain that can only be accessed with difficulty, it also transports material efficiently and in an environmentally-friendly way. More than 40 truck journeys are saved every hour," said Thomas Fahnemann, CEO of Semperit Group.

The order was produced in the Sempertrans plant in France and shipped to Brazil. The electricity consumption of the new conveyor equipment is only around one third of that of conventional ropeway systems and, instead of the previous maximum of 400t/hr, 1500t/hr of limestone can now be transported.