Displaying items by tag: Switzerland
Switzerland: Holcim increased its consolidated sales by 17% year-on-year to US$15.3bn in the first half of 2022 from US$13.1bn in the first half of 2021. Its recurring earnings before interest and taxation (EBIT) were US$2.26bn, up by 9.6% from US$2.06bn. Cement sales volumes fell by 3.7% to 95.3Mt from 99Mt, and decreased in all regions except North America, where they rose by 9.6% to 10Mt. Meanwhile, the sharpest drop was in Holcim’s home region of Europe, where cement sales fell by 9.5% to 20.1Mt from 22.2Mt. Group operating profit rose by 15% to US$2.15bn from US$1.86bn, while its net debt rose by 7.5% to US$13.9bn from US$12.9bn.
Holcim called market conditions “volatile,” but forecast net sales growth of 10% year-on-year on in 2022, upgraded from 8%. It also expects to end the year with accelerated progress towards its 2025 sustainability targets, positive growth in its recurring EBIT and a free cash flow above US$3.12bn.
Chief executive officer Jan Jenisch said “Our record results, from net sales to recurring EBIT and earnings per share, are setting solid foundations to deliver our Strategy 2025 - Accelerating Green Growth.”
Building CO2 infrastructure in Europe
20 July 2022It’s been a good week for carbon capture projects in Europe with the announcement of who the European Union (EU) has selected for a grant from its Innovation Fund. 17 large-scale projects have been pre-selected for the Euro1.8bn being doled out in the second round of awards. On the cement and lime sector side there are four projects. These include projects at Holcim’s Lägerdorf cement plant in Germany, HeidelbergCement’s Devnya Cement plant in Bulgaria, Holcim’s Kujawy plant in Poland and Lhoist’s Chaux et Dolomites du Boulonnais lime plant in France. Large-scale in this instance means projects with capital costs over Euro7.5m. To give readers some sense of the scale of the projects that the EU has agreed to pay for, if the funding was shared out equally between the current bunch, it would be a little over Euro100m per project. This is serious money.
Devnya Cement’s ANRAV carbon capture, utilisation and storage (CCUS) project in Bulgaria has received little public attention so far so we’ll look a little more closely at this one first. No obvious information is available on what capture technology might be in consideration at the plant. HeidelbergCement’s leading experience in carbon capture technology at cement plants gives it a variety of methods it could use from a solvent scrubbing route to something less common. What the company has said is that, subject to regulatory approval and permitting, the project could start to capture 0.8Mt/yr of CO2 from 2028.
What has also been revealed is that the project is linking up via pipelines to a depleted part of the Galata gas field site in the Black Sea. Oil and gas company Petroceltic Bulgaria is a partner and the aim of the project is to start a CCUS cluster in Eastern Europe. with the potential for other capture sites in Romania and Egypt to join in. This is noteworthy because much of the focus for the burgeoning cement sector CCUS in Europe so far has been on usage on local industrial clusters or storage in the North Sea.
The other new one is the Go4ECOPlanet project at Holcim’s Kujawy plant in Poland. Lafarge Cement is working with Air Liquide on the project. The latter will be providing its Cryocap FG adsorption and cryogenics technology for direct capture of flue gas at the plant. The transportation of the CO2 is also interesting here as it will be by train not pipeline. Liquid CO2 will be despatched to a terminal in Gdańsk, then transferred to ships before being pumped down into a storage field under the North Sea.
Turning to the other two grant recipients, the Carbon2Business project plans to capture over 1Mt/yr of CO2 using a second generation oxyfuel process at Holcim Deutschland’s Lägerdorf cement plant. This project is part of a larger regional hydrogen usage cluster so the captured CO2 will be used to manufacture methanol in combination with the hydrogen. Finally, Lhoist’s project at a lime plant in France is another team-up with Air Liquide, again using the latter’s Cryocap technology. The capture CO2 will be transported by shared pipeline to a hub near Dunkirk and then stored beneath the North Sea as part of the D'Artagnan initiative. Around 0.61Mt/yr of CO2 is expected to be sequestered.
The key point to consider from all of the above is that all of these projects are clear about what is happening to the CO2 after capture. The days of ‘carbon capture and something’ have thankfully been left behind. CO2 transportation infrastructure is either being used or built and these cement plants will be feeding into it. This will inevitably lead to questions about whether all these new CO2 networks can support themselves with or without EU funding but that is an argument for another day.
Finally, in other news, four residents from the Indonesian island of Pulau Pari started legal proceedings against Holcim last week for alleged damages caused by climate change. Industrial CO2 emissions are unquestionably a cause of this along with other sources but what a court might think about this remains to be seen. Yet, it is intriguing that the plantiffs have decided to go after the 47th largest corporate emitter rather than, say, one of the top 10. Regardless of how far the islanders get this is likely not to be last such similar attempt. If the case does make it to court though it seems likely that Holcim will mention its work on CCUS such as the two projects above. Only another 200-odd cement plants in Europe to go.
Switzerland: Indonesian citizens of Pulau Pari have launched a legal case against Holcim in Switzerland for its contribution to climate change. Holcim operated in Indonesia from 1971 through its subsidiary Holcim Indonesia, which Semen Indonesia acquired from the group in 2019. Pulau Pari faces increased climate change-induced flooding, including two floods in 2020. Four residents have launched the present case against Holcim for damages, funding for flood defences and positive measures towards further group CO2 emissions reduction. Indonesia-based environmental organisation Walhi, Swiss Church Aid (HEKS) and the European Center for Constitutional and Human Rights (ECCHR) are supporting the case.
Hoffmann Green Cement Technologies launches Swiss joint venture with construction company
06 July 2022Switzerland: Hoffmann Green Cement Technologies has launched a new joint venture with a Switzerland-based construction industry partner. Hoffmann Green Cement Technologies will hold a minority stake in the new subsidiary, which will produce its reduced-CO2 clinkerless cement at an upcoming plant. The producer says that the unit will apply the vertical production model of its existing H2 plant in France.
Co-founders of Hoffmann Green Cement Technologies Julien Blanchard and David Hoffmann said "After signing our first contract outside France more than a year ago, we are proud to accelerate our international development through a licensing model for Hoffmann Green technologies and processes. The opening of this first subsidiary in Switzerland proves the attractiveness of our carbon-free solution without clinker outside our borders, and constitutes a structuring step in the development of Hoffmann Green."
Switzerland: Holcim has announced a partnership with Norman Foster Foundation with the aim of turning emergency housing into resilient homes. The collaboration will leverage Holcim's concrete expertise to develop reusable designs. Holcim says that it will focus on innovations such as low-carbon concrete, lightweight prefabricated support structures and green cements for soil stabilisation.
Chief executive officer Jan Jenisch said “Currently, we have over 80m people who have been forced to flee their homes around the world. Emergency shelters can be more than just a roof over their head: they should offer people the dignity and safety of a home. We are excited to collaborate with the Norman Foster Foundation to put our solutions as well as our expertise in affordable housing to work to achieve this goal.”
Admixture markets in the US
25 May 2022More mergers and acquisition news emerged this week in the shape of potential buyers for Sika’s US admixtures business. Reporting from Bloomberg revealed that Holcim, HeidelbergCement and Turkey-based Sabancı Holding had all made it, amongst other unnamed companies, to a second round of bidding for the assets. Sika then confirmed this to the Finanz und Wirtschaft newspaper and added that the sale would also relate to Canadian assets as well. The intention here is to bypass the risk of a lengthy competition investigation in the US.
Switzerland-based Sika announced in November 2021 that it had signed a deal to buy MBCC Group from Lone Star Funds, a global private equity firm, for Euro5.2bn. At the time of the announcement Sika said that the transaction was subject to regulatory approval but it added that it was ‘confident’ that all required clearances would be obtained with closure planned for the second half of 2022. Known competition probes are now pending in the UK, Australia and New Zealand. A previous piece from Bloomberg suggested that internal analysis by Sika found that the company might need to divest operations with annual sales of around US$160m with a value of US$400m. However, the latest update suggests a value of up to US$1bn. The US represented US$1.71bn or 18% of Sika’s total group sales in 2021. Sika’s information to shareholders to let them know about the MBCC acquisition in November 2021, showed that MBCC had sales of around US$966m in the Americas in 2021 with 36 production plants. Overall, not just in the US, the deal is expected to change Sika’s technology mix from 40% concrete and cement systems to 49%, with most of the additions coming from concrete applications.
Divestments were always likely in an acquisition this large between competitors with shared geographies. What is interesting here to the cement sector is that the three named interested parties are all cement producers. Holcim is perhaps the least surprising given its size, pivot towards light building materials and the fact that its current head, Jan Jenisch, used to run Sika. If anyone knows how much an admixture company is worth, it’s the guy who ran one five years ago! HeidelbergCement does not have such a large light building materials business footprint but it is demonstrably interested in making heavy building material production more sustainable. Also, as the world’s second largest western multinational cement producer it is likely to be interested in an input market for some of its end products. Sabancı Holding is the outlier in this grouping with a more regional grey cement business based in Turkey, an international white cement business and a diverse set of business interests including finance and energy. Although, even as the smallest of the bunch, it still reported sales revenue of over US$9bn in 2021. One notable absence from the potential contenders list for Sika USA is Cemex. Its Urbanisation Solutions division, which produces admixtures among other products, reported sales of US$1.9bn in 2021 or 13% of the group’s total revenue. US$558m of this was made in the US.
The wider context in the North American admixture market is that the announcement of Sika’s deal with MBCC in November 2021 was followed about a month later when Saint-Gobain said it had entered into a deal to buy GCP Applied Technologies. This followed Saint-Gobain’s acquisition of Chryso in October 2021. However, Saint-Gobain said that the GCP deal would strengthen its position more in North America. Readers can find out more about Saint-Gobain’s ambitions here.
The final word at this stage should go on Lone Star Funds, the current owner of MBCC. Lone Star Funds bought the construction chemicals business from BASF for Euro3.17bn in September 2020. At the time the acquisition closed Saori Dubourg, a member of the board of executive directors of BASF, said “Lone Star has been a professional partner in this transaction and is committed to the future success of the business.” If the reporting is correct, Lone Star Funds is now selling the same business for over Euro5bn. There are two takeaways to consider at this point. One is that the perceived value of products that make cement and concrete more sustainable are growing. The other is that Lone Star Funds timed its acquisition of MBCC from BASF very well.
Switzerland: Holcim recorded net sales of US$6.75bn in the first quarter of 2022, up by 20% year-on-year from US$5.62bn in the first quarter of 2021. The group’s recurring earnings before interest, taxation, depreciation and amortisation (EBIT) rose by 16% to US$643m from US$553m. The company has upgraded its outlook 2022 to a forecast of full-year net sales growth of at least 10%.
CEO Jan Jenisch said “I am very encouraged by the record start of the year, setting a solid foundation to our Strategy 2025 – Accelerating Green Growth.”
The first quarter of 2022 brought four new bolt-on acquisitions in addition to the group’s conclusion of its US$1.35bn Malarkey Roofing Products acquisition. The company says that it remains actively engaged in supporting humanitarian efforts in Ukraine.
Holcim has also published its industry-first Climate Report 2022. The report details the company’s progress towards achieving its sustainability targets under the four pillars of its Strategy 2025 – Accelerating Green Growth. Under the Accelerating Growth pillar, Holcim reached a total of 15 markets with its ECOPlanet reduced-CO2 cement range. Under Expanding Solutions & Products, it reduced the proportion of cement sales in its consolidated sales to 57% in 2021 from 60% in 2020. Its other pillars are Leading in Innovation and Sustainability and Delivering Superior Performance. In 2021, the company used 6.6Mt of recycled construction and demolition waste in its products, against a 2050 target of 10Mt.
Chief sustainability and innovation officer Magali Anderson said “On our net-zero journey, we are walking the talk at Holcim, taking clear science-driven action to win the race for climate.”
Switzerland: Jura Cement has commissioned a regenerative thermal oxidation system at its Wildegg plant. The air pollution control system, supplied by Dürr, was installed to meet anticipated lower gas emission limits for carbon monoxide, hydrocarbons, and ammonia (NH3).
Switzerland: The latest report from the Intergovernmental Panel on Climate Change (IPCC) has informed policymakers that the best current route to reduce carbon emissions from cement production is through the increased use secondary cementitious materials and by encouraging the development and uptake of carbon capture. Alternatively, the development of new chemistries for building materials could help the situation but this is not expected in the short to medium term.
The report noted that 12Gt of CO2 equivalent was released directly and indirectly in 2019 from buildings and emissions from cement and steel use for building construction and renovation. These emissions included indirect emissions from offsite generation of electricity and heat, direct emissions produced onsite and emissions from cement and steel used for building construction and renovation. In sections of the IPCC report yet to be finally approved the authors said, “Cement and concrete are currently overused because they are inexpensive, durable, and ubiquitous, and consumption decisions typically do not give weight to their production emissions.”
Overall, the report concluded that average annual global greenhouse gas emissions from 2010 to 2019 were at their highest levels in human history but the rate of growth had slowed. The IPCC has called on “immediate and deep emissions reductions across all sectors” for any chance for society to limit global warming to 1.5°C. To do this global greenhouse gas emissions would have to peak before 2025 at the latest and be reduced by 43% by 2030. However, even if this did occur, it would take until the end of the 21st century for the temperature threshold to be stabilised.
UAE: Switzerland-based ABB has carried out an upgrade of the control system for UltraTech Cement subsidiary Star Super Cement at the company's Dubai grinding plant. The supplier says that it installed its ABB Ability 800xA distributed control system (DCS) across three grinding units at the facility. The DCS will communicate between the plant and the company's Ras Al Khaimah clinker plant. ABB previously supplied electric and automation engineering services for the Ras Al Khaimah plant in 2012.
ABB Process Industries global cement lead Max Tschurtschenthaler said that Star Cement's operations will benefit from improved operator visibility, easier maintenance and reduced downtime due to the new systems.