Displaying items by tag: Plant

Cementos Argos announced this week that it is starting the process for an initial public offering (IPO) for its US business. It said that this had followed several months of consideration by its board of directors. Getting listed on the New York Stock Exchange is expected to help the company ‘optimise’ its capital structure and promote growth, due in part to the recent approval of the US$1Tn Infrastructure Bill in the US and a general positive cycle expected for the local construction materials sector over the next decade.

Argos’ decision to go public in the US comes hot on the heels of several recent attempts in Colombia to buy stakes in two of the major shareholders of Grupo Argos, the parent company of Cementos Argos and Argos USA. First, Grupo Gilinski tried to buy a majority stake in Grupo Nutresa in early November 2021. Then, at the end of November 2021, Grupo Gilinski put in an offer for a large minority share, up to 32%, of Grupo SURA.

Argos, Nutresa and SURA are all part of a highly interconnected group of companies known as the Grupo Empresarial Antioqueño (GEA), which each own stakes in each other. In part this structure helps to prevent hostile takeover attempts. However, Grupo Gilinski appears to be trying to challenge this, in the eyes of some market observers. Grupo Argos is the next obvious target for such an attempt after Nutresa and SURA. In response Grupo Argos has said that it won’t take part in Grupo Gilinski’s public acquisition offer to buy shares in Nutresa (it owns around 10% itself). Instead it has accelerated its plans for Argos USA and also wants to consolidate its interests in road and airport concessions, energy and real estate into a single entity, also to be listed in New York. All of this can be seen as action intended to make any further moves by Grupo Gilinski on GEA harder. Corporate tussles between Grupo Gilinski and GEA also hark back to a long-running legal dispute from the late 1990s over the formation of Bancolombia.

It is reasonable for the US subsidiary of Cementos Argos to want to raise funds from an IPO. The business has gradually been expanding over the last 15 years or so. First it acquired ready-mix concrete operations in the southern US from 2005. Then it purchased two integrated cement plants from Lafarge in 2011, at Roberta in Alabama and Harleyville in South Carolina respectively. This was followed by the integrated Newberry plant in Florida from Vulcan Materials in 2014, along with two grinding units in Florida. Finally, it picked up the integrated Martinsburg plant in West Virginia from HeidelbergCement in 2016. More recently it has been divesting some of its concrete plants in the US. At present Argos USA is the ninth largest cement producer in the country by cement production capacity.

Its cement sales volumes have grown by 4.5% year-on-year to 4.6Mt in the first nine months of 2021 and earnings before interest, taxation, depreciation and amortisation (EBIDA) rose by 25% to US$239m although sales revenue dipped very slightly to US$1.09bn. Ready-mixed concrete sales volumes have also fallen, by 12% to 3.98Mm³. The growth has been attributed to both residential and commercial markets and the Infrastructure Bill is expected to keep demand brisk for the next few years. Looking at the wider picture, cement generated about 64% of Grupo Argos’ revenue in 2020, its biggest share after energy generation and a concessions business. A third of Cementos Argos’ revenue so far in 2021 came from the US.

It’s fascinating to glimpse what may be some of the inner corporate workings of Grupo Argos and the various things it has to consider for its US cement business. The US subsidiary is clearly a major earner for it with a buoyant future. The Portland Cement Association (PCA) was forecasting cement consumption growth of nearly 8% in 2021 and 2% in 2022 in its summer summary and that was before the infrastructure bill made it into law. Further expansion in the US by Argos is to be expected and the planned IPO underlines this. Meanwhile whether this and other actions are enough to stymie Grupo Gilinski remain to be seen.

Zimbabwe: Industry and Commerce Minister Sekai Nzenza says that the government will continue to issue cement import permits until local production returns to normal. The situation has been blamed on a breakdown at Lafarge Zimbabwe’s cement plant, according to the Herald Zimbabwe newspaper. The company is importing cement from Zambia to compensate. A roof collapse over the mill at Lafarge Zimababwe’s Manresa plant was reported in October 2021.

Argentina: Loma Negra has inaugurated the second production line at its L’Amalí cement plant. The El Cronista newspaper has reported that the InterCement subsidiary invested US$350m in the line, which expands the plant’s capacity by 40%. It previously started up the new line’s kiln in June 2021 but was later forced to suspend all clinker production at the plant due to a union dispute. It previously said it was close to commissioning the grinding mill and despatch unit for the line in August 2021.

Zambia: Huaxin Cement has concluded its acquisition of Holcim's Zambian business. The business consists of a 75% stake in Lafarge Zambia. The company is reported to have a total value of US$150m. Both Chinese and Zambian competition authorities have now approved the deal.

Holcim's chief executive officer Jan Jenisch said "This divestment is another step in our transformation to become the global leader in innovative and sustainable building solutions, giving us the flexibility to continue investing in attractive growth opportunities. Huaxin has been a trusted partner for many years and we see the company as an ideal owner to further develop the business in Zambia."

In 2020 and the first 11 months of 2021, the Switzerland-based group received US$3.1bn from divestments.

Tanzania: Huaxin Cement has commissioned the grinding system at its Maweni Limestone plant near Tanga. The China-based company acquired the company from Athi River Mining (ARM) Cement in mid-2020. It then invested US$145m on an upgrade to the unit and started trial clinker production in June 2020. The upgraded plant has a production capacity of 1.6Mt/yr. Huaxin Cement says this is the first time it has directly produced cement in Africa rather than exporting it there.

France: Hoffmann Green Cement Technologies plans to expand its low-CO2 cement’s presence in and beyond France through the establishment of 15 – 20 new licenced plants before 2030. The Les Echos newspaper has reported that the company plans to raise Euro25m, of which it will invest Euro15.7m in international licencing contracts for its technology. In 2026, it expects the contracts to derive 10Mt of its revenues, 7.7% of its target for the year.

Nepal: China-based Hongshi Group has received clearance from the Nepal Rastra Bank to invest US$125m into Dang Cement. Hongshi Group owns an 85% stake in the cement producer, according to the Republica newspaper. The remaining 15% stake is owned by Shivam Cement. The investment will be used to build a 6000t/day production line at Dang Cement’s plant in Dang region. The project was previously approved by the Investment Board Nepal in late 2020 for commissioning in late 2023.

North Korea: Manpho cement plant has increased its production capacity by 20% through ‘technical innovations.’ Korean News Service has reported that the installation of new equipment in the plant’s kiln line also improved clinker quality.

Nigeria: Finland-based Wärtsilä has secured another contract for the supply of a 70MW dual-fuel gas-fired power plant to BUA Cement, this time for the upcoming Line 3 of its Obu cement plant in Edo state. The Sun newspaper has reported that the line and a new fourth line at Sokoto cement plant will bring the company’s total cement capacity to 17Mt/yr when commissioned in 2022. BUA Cement is scheduled to commission the Sokoto cement plant’s new Line 3 in November 2021.

Chair Abdul Samad Rabiu said “Currently, we have phased out the use of coal across our factories and are now shifting to gas-powered plants. As we ramp up our capacity, there is need to complement it with efficient power supply and Wärtsilä’s technology has been found to be durable and uniquely aligned with our vision for more efficient power generation at all our production locations.”

Indonesia: China-based China National Building Material (CNBM) International Engineering has commissioned a 2.1Mt/yr cement plant at Grobogan, Semarang, in Central Java for GITI Group. The 6000t/day project was ignited and started production in mid-November 2021. Work on the US$350m project originally started in late 2017. GITI Group is a conglomerate based in Singapore principally known for tire manufacture.