Displaying items by tag: Strategy
Holcim Russia envisions 15% emissions reduction by 2030 and carbon neutral cement production by 2050
05 October 2021Russia: Holcim Russia has committed to realising a 15% CO2 emissions reduction in its cement production between 2019 and 2030 to 475kg/t from 561kg/t. It plans to further reduce its cement’s CO2 emissions to 453kg/t by 2050, and to implement further measures to ensure its net carbon neutrality at that time.
Corporate relations director Vitaly Bogachenko said “The company's goal is to drastically reduce carbon emissions, and there are two working solutions for this. The first is the use of alternative fuels (AF) obtained from different types of waste: residues of municipal solid waste after sorting and extraction of all useful fractions from them, used tyres and others. The presence of biomass in them makes such fuels carbon neutral, so emissions during production are significantly reduced. The second solution is to replace carbon intensive raw materials. For example, instead of limestone, we use slags. The 'recipe' for cement is completely different: thanks to the new composition and the lower temperature during the firing process, the carbon footprint in the production of cement is reduced.”
Californian governor commits to net-zero cement CO2 strategy by 2045
29 September 2021US: California Governor Gavin Newsom has signed a bill requiring the California Air Resources Board (CARB) to develop a plan by mid-2023 for the state’s cement producers to achieve net zero emissions of greenhouse gases by the end of 2045 at the latest. A 40% reduction compared to 2019 levels would also be required by the end of 2035 with interim targets set beforehand. CARB will also be obliged to ‘define a metric for greenhouse gas intensity,’ monitor emissions data, set a baseline to measure emissions reduction progress, evaluate measures to support market demand and financial incentives to encourage the production and use of low-carbon cement amongst other actions.
Holcim acquires Polcalc and Utelite Corporation
27 September 2021Poland/US: Holcim has announced two new acquisitions in the area of raw materials and aggregates. In Poland, it has acquired granulated calcium carbonate producer Polcalc. The company employs 78 people. In the US, the group has acquired Utah-baed Utelite. The company produces lightweight aggregates and employs 40 people.
CEO Jan Jenisch said “We are pleased to welcome the employees of Utelite and Polcalc and look forward to their experience and capabilities. These two bolt-on acquisitions strengthen our presence in two important growth markets while contributing to Holcim’s overall strategy to expand our range of low-carbon products and solutions.”
Federbeton publishes cement industry decarbonisation strategy
22 September 2021Italy: The Italian cement association Federbeton has launched its comprehensive plan for cement industry decarbonisation in line with the EU’s European Green Deal target of a 55% reduction in CO2 emissions between 1990 and 2030 and carbon neutrality by 2050. The strategy entails Euro4.2bn of total new investments andEuro1.4m/yr of extra operating costs across the industry. This will cover the adoption of transition technologies and the large-scale application of carbon capture and storage (CCS). The association says that while some such actions, such as alternative fuel (AF) substitution,are immediately available, others require further development. The sector’s primary fuel is petcoke, mainly imported from the Gulf of Mexico. As such, Federbeton has identified the 100% replacement of all fossil fuels with ‘low-carbon impact’ alternatives as a means of reducing the industry’s carbon footprint by 12% achievable in the short term. Renewable green hydrogen use can cut a further 3% of CO2 emissions, an energy transition to renewable sources can cut 5%, clinker factor reduction can cut 10%, alternative raw materials in clinker can cut 6%, CCS can cut 43%, supply chain and logistics changes can cut 16% and the optimisation of construction can cut the remaining 5%.
President Roberto Callieri said “The cement and concrete supply chain wants to be one of the protagonists of the ecological transition.” He added “Only with adequate and immediate support tools will it be possible to prevent the impoverishment of the industrial fabric, preserve the competitiveness of the supply chain and prevent relocation. Last but not least, a new environmental culture must be shared, based on dialogue and no longer on the preconceived opposition to any choice of industry.”
Cemex UK relaunches pallet recovery service
09 September 2021UK: Cemex UK has relaunched its used pallet collection service. The scheme aims to reduce timber waste in its supply chain, according to the company. It forms part of its Future in Action – Committed to Net Zero CO2 climate action strategy. Its partner ELM will collect stockists’ pallets free of charge for refurbishment and return to Cemex UK. It will reuse all repaired pallets and recycle those damaged beyond repair.
Packed cement sales manager Graeme Barton said “We want to make life easier for our merchants to work with us to reduce waste. We’d like to make pallet recovery part of the standard delivery process, as many pallets still end up in landfill. It is increasingly costly to dispose of pallet waste and there is far greater value to be gained by recycling and reuse. Rising timber costs, combined with pallet shortages, means there is a heightened need to conserve and maintain pallets throughout the supply chain. Recovery is considerably more cost effective than buying new replacements.” He added “Pallets are a standard format in transporting building products and contribute a significant financial and environmental cost which needs to be captured by the user. We saw a similar situation with supermarkets and plastic bags, but we’d rather not wait for legislation to enforce this; we’d really like to make a difference now with preventative action. The pallet recovery service is regenerative by design and aims to support the key principals of the circular economy to benefit business, society and the environment. If we all pull together it will have a significant impact across the whole supply chain.”
Lafarge Africa tops Nigerian gender diversity index
24 August 2021Nigeria: Lafarge Africa has ranked first on PWR Advisory’s Nigerian Exchange Top 20 companies for gender diversity. 46% of the group’s board seats are female-occupied, up from 40% in 2020.
Chair Adebode Adefioye said “Lafarge Africa's commitment to female representation at the board and management rank and file level is unwavering. Our diversity and inclusion targets, which align with our sustainability strategy, set us apart and are a clear indication of our resolve to continue on this trajectory for more extraordinary outcomes. We remain resolutely committed.”
California Nevada Cement Association releases plan for Californian cement industry carbon neutrality by 2045
31 March 2021US: The California Nevada Cement Association (CNCA) has published a plan for the Californian cement industry to meet its target of carbon neutrality by 2045. The plan consists of three pathways, namely: a reduction in process emissions including by alterations to clinker factor and type of additives; an increase in alternative fuel (AF) substitution; and a switch to renewable energy. The association said that the aims are achievable by close stakeholder coordination, constructive public policy engagement and a situational approach based on a flexible portfolio of pathways.
MPA updates biodiversity strategy
02 December 2020UK: The Mineral Products Association (MPA) has launched an updated version of its biodiversity strategy, first published in 2013. The new strategy “commits the MPA and its members to continuing to take a positive approach to nature conservation and recovery, leaving behind more and better quality habitats than before mineral extraction and a net gain in biodiversity wherever possible, through site selection, management, restoration and aftercare,” according to the association. It sets out the commitment under eight actions, which include “monitoring to identify what works best and inform future work, sharing and celebrating good practice and successes throughout the industry, influencing policy and using our assets to engage and educate.”
Chief executive officer (CEO) Nigel Jackson said, “The minerals industry is uniquely placed to contribute to conservation and enhancement of biodiversity and has an unrivalled legacy compared to other industrial sectors. I am immensely proud of what our members have achieved and excited about what they can and will do in the future. It is high time that our significant contributions are properly recognised by policy and decision makers, to help provide our members with the support to continue doing what they do best. I believe we may be the only business sector that has been actively contributing to nature recovery at scale for so long that our strategy is unique. I will not rest until government, particularly the Department for Environment, Food and Rural Affairs (DEFRA), acknowledges that environmental expertise and action is not the sole preserve of non-governmental organisations (NGOs) and activists. Our members have built a significant legacy and have vast practical experience of working in and with the environment to enhance and protect nature. We don’t just talk a good game, we deliver it on the ground.”
HeidelbergCement presents Beyond 2020 business strategy
18 September 2020Germany: HeidelbergCement has presented a new business strategy, involving an accelerated climate action plan, called Beyond 2020. Under the Strategy, the company will aim to reduce its specific carbon dioxide (CO2) emissions by 10% to 525kg/t of cement by 2025 from 585kg/t in 2019. Its financial targets over the period are “a significant increase in earnings before interest, taxation, depreciation and amortisation (EBITDA) margin by 300 basis points and return on invested capital (ROIC) to clearly above 8%. The group says that it will target a leverage ratio between 1.5 and 2 times its result from current operations in 2020.
Chief executive officer (CEO) Dominik von Achten said, “We see climate change and digitalisation as the two central challenges of the future for society and for our company. As one of the world's leading building materials producers, we have the ambition and the innovative strength to actively shape this change in a pioneering role. At the same time, we see further optimisation potential in our plants and processes. Ecology and economy are not contradictory. Our new medium-term targets for 2025 illustrate this claim.”
Cemex gets resilient
16 September 2020Cemex’s transition from a multinational building materials producer to a regional one continued this week with the launch of its ‘Operation Resilience’ strategy. The plan is a stew of coronavirus response, earnings growth, debt reduction, portfolio sharpening and sustainability measures. Yet the intent to “construct a portfolio more weighted towards the US and Europe” marks a public confirmation of the company’s direction in recent years.
Chart 1: Geographic breakdown of Cemex’s revenue in the first half of 2020. Source: Cemex.
This direction of travel for the company has at least two threads that can be seen in the announcements surrounding its new strategy. The first covers the geographical spread of its current portfolio of assets. European countries and the US represented a little under half of Cemex’s revenue in the first half of 2020 as can be seen in the chart above. So focussing on these territories makes sense from an existing portfolio perspective, especially if growth has continued throughout the coronavirus crisis, as is the case in the US. In the general information accompanying its new strategy it broke down revenue by business line so far in 2020 as cement (42%), concrete (41%) and aggregates (17%).
To be fair to Cemex, its decision to focus on certain geographical regions mirrors recent moves at other multinational producers like LafargeHolcim and CRH. The former (mostly) sold its operations in South-East Asia in 2018 and 2019. Albert Manifold, the chief executive officer (CEO) of the latter, memorably favoured the safe and stable earnings of investing in assets in Europe or North America over doing so in somewhere ‘more exotic’ in an earnings meeting in 2019. However, Cemex doesn’t seem overly wedded to sticking to assets in Europe and/or the US either. It recently decided to mothball its South Ferriby integrated cement plant in the UK and sold a plant owned by its Kosmos Cement subsidiary in the US earlier in the year. Fernando A González, the chief executive officer (CEO) of Cemex, confirmed this in the questions and answer session after the strategy launch on 10 September 2020. When asked whether the company was considering selling assets in Asia and Latin America he replied that Cemex was open to divestments in Latin America or in the Mediterranean or in Asia but that driving down debt was the motivator, not coronavirus.
Debt is the other factor that has been persuading Cemex to focus on the US and Europe. It has been the smell clinging to its decisions over the last decade since its poorly timed acquisition of Rinker in 2007. The company stuck out with a high debt to earnings ratio when this column looked at the state of the major cement producers as the coronavirus lockdowns started in Europe: hence all the talk of paying down debt in its ‘Operation Resilience’ strategy. The company now hopes to whittle its net leverage down to at most 3x by 2023. At the same time as this market-calming announcement, it is in the process of changing some of its credit agreements such as extending a US$1.1bn loan from 2022 to 2025. It has also priced another US$1bn worth of senior secured bonds this week in its ongoing drive to raise more funds. This reliance on loans may explain why Cemex has shrunk back towards ‘safe’ markets over the last decade.
Cemex isn’t alone in cooing out market-calming noises as the coronavirus crisis continues. Buzzi Unicem has done the same thing this week for example. Yet, these announcements are instructive because they show what’s on the minds of these companies at least, or what they think investors want them to be thinking about. In Cemex’s case it could be summarised as: make more money more efficiently, cut debt and try to factor sustainability into all of this. Note, however, that as dominance in both industry and geopolitics heads east, Cemex is sticking to the west.