Displaying items by tag: Philippines
San Miguel Northern Cement order two mills from Loesche
18 September 2018Philippines: San Miguel Northern Cement has ordered two mills from Germany’s Loesche for a new 5000t/day production line at its Sison plant in Pangasinan. The scope of supply includes two complete grinding plants: a type LM 56.4 mill for cement raw material and a type LM 35.3 D for sub-bituminous coal.
Loesche will supply a majority of the electro-technical components for the line and the automation systems including its LM Master product. It will be responsible for the plant engineering and the supply of filters and blowers. The new line will use also A-Tec’s Hurriclon technology for de-dusting the raw mills.
Delivery of the order is scheduled for the start of 2019.
Holcim Philippines to Build Build Build
03 September 2018Philippines: Holcim Philippines is reported to be considering additional clinker lines in line with the government's ‘Build Build Build’ infrastructure initiative. The LafargeHolcim subsidiary is already in the process of undertaking national expansion from 10Mt/yr in 2018 to 12Mt/yr in 2019.
CRH first half results dented by poor weather
23 August 2018Ireland: CRH’s financial results for the first half of 2018 have been negatively affected by poor weather in Europe and North America. Its sales revenue rose by 1% year-on-year to Euro11.9bn in the reporting period. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 1% to Euro1.13bn from Euro1.12bn.
“We have had a good first half, despite significant weather disruption in Europe and North America in the first quarter. Construction markets continued to recover and pricing gathered momentum in key European markets, while there was solid volume and price growth against a positive economic backdrop in the Americas,” said chief executive Albert Manifold. He added that the company was experiencing ‘challenging’ conditions in the Philippines.
Eagle Cement’s income up as costs mount
09 August 2018Philippines: Eagle Cement’s income rose in the first half of 2018, while its input costs also increased due to rising fuel prices and negative currency effects. Its net income grew by 4.6% year-on-year to US$43.8m from US$41.9m in the same period in 2017. Its net sales rose by 9.8% to US$155m from US$141m. The company operates an integrated plant at Barangay Akle, San Ildefonso in Bulacan and a cement grinding plant at Limay in Bataan.
Cemex joins the divestment party
01 August 2018Cemex joined the divestment party this week with the news that it plans to sell up to US$2bn worth of assets by the end of 2020. Put that together with LafargeHolcim’s own divestment plan of selected assets worth up to US$2bn as part of its Strategy 2022 and there is potentially a lot of cement production infrastructure going on sale over the next few years.
Both companies say that they will start announcing the latest round of divestments in the second half of 2018. Prices vary considerably around the world - and remember this is not only cement - but at, say, US$250m per integrated plant that could amount to 16 units. That’s a big enough manufacturing base to build your very own cement production empire! So, which markets might the two companies be considering leaving?
Cemex’s weaker areas in its half-year report were its South, Central America and the Caribbean region and, to a lesser extent, its European region. The former reported falling sales, cement volumes and earnings. The latter reported falling earnings on a like-for-like basis with issues noted across cement, ready-mix concrete and aggregate business lines in the UK. Back in Central and South America, problems were noted in Colombia due to a 10% fall in cement sales in the first half. An important point to make here is that despatch figures from the National Administrative Department of Statistics (DANE) out this week suggest that Colombia’s overall cement market has picked up since April 2018 (see Graph 1), in contrast to Cemex’s experience. Panama, meanwhile, saw cement volumes wither by 22% due to the 30-day strike by construction workers. Other operations to consider for the chop might include Cemex Croatia, which the company attempted to sell to HeidelbergCement and Schwenk Zement in 2017, before the European Commission put an end to that idea.
Graph 1: Annual change of cement despatches in Columbia in 2017 and 2018. Source: DANE.
When asked directly during its second quarter results call which assets it was intending to sell, chief executive officer (CEO) Fernando Gonzalez didn’t answer on commercial grounds. What he did say though was that the company had faced ‘headwinds’ in the Philippines, Egypt and Colombia, particularly in relation to fuel prices. He also said that Cemex had finished its market analysis, that it knew exactly which assets it would like to sell already and that it was in ‘execution’ mode. In Gonzalez’s own words, “we do have a number of assets to be divested, either because they are low growth, or because they are not necessarily integrated to other business lines.”
As covered a couple of week ago, the obvious location for LafargeHolcim to exit is Indonesia. CEO Jan Jenisch continued to refuse to comment on rumours that the company was leaving the country during its second quarter results call. Yet, local production overcapacity, falling earnings and profits and an underperforming but still sparky market make it the ideal candidate. What Jenisch did reveal was that the country had ‘positive momentum.’ Perhaps more importantly he added, “We are not selling because we want to sell. We are selling for high valuations only.”
Other potential locations for LafargeHolcim to leave might include Brazil and parts of the Middle East and Africa. Brazil’s cement market recovery has been a few years coming and was delayed again by a truck drivers’ strike in May 2018. The Middle East Africa area was the worst performing region in LafargeHolcim’s mid-year results with problems noted in South Africa.
With all of this in mind we have a rough idea of what Cemex and LafargeHolcim might be considering selling. The obvious candidates for both companies seem to be solid markets that promise growth after a period of underperformance. Just like Colombia and Indonesia in fact. Looking at the track record for both of them in recent years Cemex has seemed to be more ready to sell individual plants such as the Odessa and Fairborn plants in the US to different buyers. LafargeHolcim for its part has generally gone for larger more complete sales of regional or country-based chunks of its business such as in Chile or Sri Lanka.
Finally, don’t forget that Cemex’s Fernando Gonzalez said in March 2018 that the company was considering acquisitions again after a decade of austerity. He mentioned an interest in India and in Brazil. If he meant that last one then maybe he should give LafargeHolcim’s Jan Jenisch a call.
Philippines: Big Boss Cement is considering procuring a mill for its new US$215m plant project from European equipment manufacturers including Denmark’s FLSmdith, Germany’s Gebr. Pfeiffer and Germany’s Loesche. Ishmael Ordonez, vice-president of the cement producer, said that a vertical roller mill would take up less space than the horizontal mill it was currently using from a Chinese supplier, according to Inside International Industrials. The company is set to start production at a new plant in Porac in Pampanga in August 2018. However, it is planning to expand the production capacity at the unit based on anticipated demand.
Philippines challenging for LafargeHolcim
27 July 2018Philippines: Holcim Philippines, part of LafargeHolcim saw a 25% in its first half net profit to US$30.0m due to stiff competition and higher operating costs. In the second quarter its profit fell by about 25% year-on-year to US$16.3m. However, second quarter net sales improved by 18.5% year-on-year to US$189.5m.
"Our second quarter performance showed encouraging trends, which translated into significant sales growth on the back of strong building activity,” said Holcim Philippines’ President John Still. “However, rising costs of fuel, power and distribution combined with the Peso's depreciation against the US Dollar and tighter competition continued to impact our business performance in the second quarter.” Still was optimistic that the second half of 2018 would offer Holcim Philippines the opportunity to recover some of the lost ground, following the improvement between the first and second quarter and the underlying ‘robust building activity’ in the country.
Philippines: Global Ferronickel is considering building a cement plant to take advantage of the government’s rapid infrastructure development programs.
Company president Dante Bravo said that its Cagdianao mine showed potential for limestone, according to the Philippine Star newspaper. The mining company is considering options to maximize the investment from its reserves.
Taiheiyo Cement to expand San Fernando plant
26 June 2018Philippines: Japan’s Taiheiyo Cement plans to expand its San Fernando plant in Cebu. The cement producer has allocated US$65m for a new unit and equipment for the site, according to the Manila Bulletin newspaper. Cement production will be increased to 16,350t/day from 7350t/day at present. In addition, another US$68m has been assigned to upgrade the plant’s dust collectors to filters. The plant could also import cement from Japan and South Korea. The upgrade has been organised to meet the government’s ‘Build, Build, Build’ infrastructure development program.
Republic Cement to expand production
25 June 2018Philippines: Republic Cement has signed an agreement with its parent company Aboitiz Group to provide structural and mechanical upgrades to its plants at Bulacan and Cebu. The projects are scheduled to be completed by mid-2019, according to the Philippine Star newspaper. The cement producer is also considering increasing the clinker and cement production capacity at its plants at Teresa and Batangas, and increasing cement production at Iligan. The company is a joint venture run by Ireland’s CRH and local partner Aboitiz Group.