Displaying items by tag: Terminal

US: The Portland Cement Association (PCA) has announced the winners of its 2023 Safety Innovation and Chairman's Safety Performance Awards.

The Safety Innovation Award Program recognises companies that have developed innovative practices, projects and programs that improve safety at cement plants in the US. Entries are judged in five areas: innovation, ease of use and ease of construction, effectiveness and risk prevention. The recipients were:

• Distribution: Continental Cement, Continental Port Allen Terminal, Chesterfield, Missouri
• Quarry: CalPortland Company, CalPortland Oro Grande Plant, Oro Grande, California
• Pyroprocessing: GCC of America, GCC Tijeras Plant, Tijeras, New Mexio
• General Facility: Mitsubishi Cement Corporation, Mitsubishi Cushenbury Plant, Lucerne Valley, California

The Chairman’s Safety Performance Awards are given to member cement plants that did not have a reportable injury or illness during the year. Fifteen plants achieved this in 2023, which represented more than 10% of all active cement facilities in the US and its territories. The recipients were:

• Argos USA, Atlanta, Georgia
• Argos USA, Newberry, Florida
• Argos Puerto Rico Corp, Dorado, Puerto Rico
• Ash Grove Cement Company (CRH), Durkee, Oregon
• Ash Grove Cement Company (CRH), Midlothian, Texas
• Buzzi Unicem USA, Chattanooga, Tennessee
• Buzzi Unicem USA, Maryneal, Texas
• CalPortland Company, Rillito, Arizona
• GCC of America, Odessa, Texas
• Heidelberg Materials, Bellingham, Washington
• Martin Marietta Materials, New Braunfels, Texas
• Martin Marietta Materials, Midlothian, Texas
• Martin Marietta Materials, Tehachapi, California
• National Cement Company of California, Kern, California
• St Marys Cement (Votorantim), Detroit, Michigan

The core of the Caribbean cement industry consists of the Dominican Republic (with 5.9Mt/yr in integrated capacity), Cuba (4.7Mt/yr) and Jamaica (3.5Mt/yr). Haiti and Trinidad & Tobago also command small, single integrated plants, while there are numerous grinding plants and cement terminals along the region’s extensive coastlines. The industry has been the subject of new commercial and capital expenditure-related announcements in the past fortnight. Regarding the Caribbean’s cement producers, these developments seem to lack a single clear direction.

Caribbean market leader Cemex revealed that it was considering selling up in the region’s largest market, the Dominican Republic, on 1 September 2023. Bloomberg cited unnamed sources stating that the Mexico-based cement giant hired financial services JPMorgan Chase to explore the possible divestment of local subsidiary Cemex Dominicana. Exactly one year had passed since Cemex completed its sale of Cemex Costa Rica and Cemex El Salvador to Guatemala-based Cementos Progreso for US$329m. Sources clued in on the latest development reportedly expect Cemex Dominicana to command a selling price three times greater than the Central American divestments combined.

Cemex has discussed its scattered disposal of global assets since 2019 as a strategic realignment towards its main markets, in particular those in North America and Europe. On this understanding, the Caribbean straddles an invisible line between Cemex’s strategic core in North America and Central America on its periphery.

Just to the north of the line lies Jamaica. There, Cemex subsidiary Caribbean Cement will expand its Rockfort cement plant by 30% to 1.3Mt/yr through a US$40m upgrade, scheduled for completion in early 2025. Late last week, Caribbean Cement told investors that the upgrade will equip the plant with new equipment, including a new dosing system. The producer expects this to help the Rockfort plant to further increase its alternative fuel (AF) substitution rate. It co-processed 5.6% AF in its kiln during the first half of 2023, more than double its first-half 2022 substitution rate of 2.7%. Caribbean Cement began exporting cement to Turks and Caicos on 16 September 2023, and plans to increase its shipments there and elsewhere. Managing director Yago Castro reassured Jamaicans that Caribbean Cement would also continue to help meet domestic demand.

Currently, Caribbean Cement and fellow Jamaican producer Cement Jamaica compete in the domestic market against imports, including some cement from Dominican Republic-based Domicem. This enters the country via Buying House Cement’s Montego Bay terminal. Montego Bay Cold Storage, an affiliate of Buying House Cement, shared plans for a second, US$8m cement terminal in the city earlier in 2023. The facility is expected to help meet growing demand from residential and hospitality sector construction.

More new production capacity is soon to come online in the form of a 1.23Mt/yr grinding plant in the Dominican Republic. Cemento PANAM will own and operate the plant, while Germany-based Gebr. Pfeiffer will supply a 3750 C-4 vertical roller mill via engineering, procurement and construction contractor CBMI Construction.

In a market where the nearest cement exporter is only a short sail over the horizon, producers have to compete fiercely for their market shares, even at home. Disputes over Caribbean Community member states’ rights to protect domestic cement production have gone as high as the Caribbean Court of Justice. It ended Barbados-based Rock Hard Cement’s hopes of resuming exports to Trinidad & Tobago last year.

The Caribbean’s cement producers will be acutely aware of Cementos Argos’ planned expansion of its north-facing Cartagena, Colombia, cement export facility, hot on the heels of a previous, US$42m expansion. The South American giant says that it is targeting the US, where it anticipates an upcoming construction boom. Caribbean countries present other possible markets for producers like Cementos Argos, yet their cement industries might equally emulate any successes it enjoys in the US. Like Argos in Colombia, Jamaica’s Caribbean Cement is part of a group with an existing presence in the US. Its on-going investments in the Rockfort plant signal a readiness to catch the trade winds rapidly picking up in the Caribbean.

The big US news this week has been that Summit Materials and Argos USA are planning to merge their operations. The new organisation will operate six integrated cement plants with a production capacity of 8.4Mt/yr, based on Global Cement Directory 2023 data. The companies say that this will make them the fourth biggest cement producer in the country, at 11.8Mt/yr, based on grinding capacity, and the largest domestically-owned operator. Additionally, the combined entity will also hold just under 5Bnt of aggregate reserves, 224 ready-mixed concrete (RMX) plants and 32 asphalt plants.

The deal is expected to close in the first half of 2024 subject to the usual regulatory clearances and shareholder approval. At this point Argos should own approximately 31% of the new company and Summit Materials’ shareholders will be the majority owner. Although, if we remember anything from the Lafarge-Holcim merger from nearly a decade ago, it is that if the share prices between the two companies diverge too much in the next six months then that proportion may change. In simple terms that split for Argos USA is in the region of where one might expect it to be given that Argos USA made 39% of the combined revenue for both itself and Summit Materials in 2022 and 28% of the combined earnings.

The two companies complement each other well for the purposes of forming a new heavy building materials concern. Summit Materials reported revenue of US$2.41bn in 2022, with 30% deriving from its aggregates businesses, another 30% coming from RMX and about 20% from paving. Cement generated US$341m, or 14%, of total revenue. By contrast Argos USA reported revenue of US$1.57bn in 2022 from a business just concerning cement and concrete. Geographically, Summit Materials’ integrated plants are in the Midwest, in Iowa and Missouri respectively, and its cement terminals follow the Mississippi River from Minneapolis to New Orleans. Notably, it made the point in the merger announcement that the deal would reduce the seasonality of its cement business. Argos USA’s plants and terminals are mostly spaced out in the Southern states with its plants in Alabama, Florida, South Carolina and West Virginia.

It goes against recent trends for a US-based company to be increasing its share in the domestic cement market, although it has resorted to teaming up with a Colombia-based one to do so. Usually it is foreign-headquarted companies making moves in the US. For example, Ireland-based CRH is in the final stages of switching its primary listing to the New York Stock Exchange. Its head Albert Manifold described the US construction market as going through a “golden age” earlier in the year whilst trying to sell the stock market move at the company’s annual general meeting. Meanwhile, there have been various smaller acquisitions such as Peru-based UNACEMs’ agreement to buy the Tehachapi cement plant in California from Martin Marietta Materials in August 2023.

Given the ongoing importance of the North American market for the international cement producers it is not surprising that merger and acquisition activity has been taking place. Each of the four largest US-based cement producers performed well in the first six months of 2023, increasing both revenue and earnings significantly. However, the picture is mixed. The Portland Cement Association (PCA) forecast at the start of 2023 that cement consumption would decline in the second half of 2023 due to a worsening general economic outlook. The downturn was estimated to be brief though as interest rates were expected to dip and infrastructure spending to rise in 2024. Half-year data from the United States Geological Survey (USGS) supported this view as shipments reached an estimated 51.0Mt, a slight decrease from the same period in 2022. The cement companies have made money so far in 2023 partly by raising their prices. Yet, some segments of the residential homebuilding market have also driven demand despite the general economic picture.

One last thing to consider is how much thought was given to the carbon risk of forming a new heavy building materials company in a developed economy in the 2020s. Sustainability receives a mention in Summit Materials’ investor presentation in the form of current achievements such as switching to blended cements or reducing fossil fuel usage but there is no suggestion that any serious investment to curtail process emissions is expected any time soon. However, one could make the case that the enlarged company might benefit from synergistic effects if it were forced to spend more on CO₂ emission reduction. This proposed merger concerns two existing organisations teaming up rather than new equity entering the arena. In this context it will be worth noting whether the next cement industry merger or acquisition in the US or Europe will involve existing companies or new entrants.

US: Holcim US has rebranded its businesses in Boston, Massachusetts, to unite them under the Holcim name. Resources News has reported that Lafarge Cement, which operates the Charlestown cement terminal, as well as building materials producer Aggregate Industries, will rebrand as Holcim US.

Holcim US’ Northeast and Great Lakes regional senior vice president and general manager Domenico D'Aqui said "With the integration of local legacy operations into Holcim, the Boston area will see expanded benefits of construction projects made from innovative materials, such as ECOPact reduced-CO₂ concrete, that not only build needed infrastructure but also meet ambitious sustainability targets."

Dominican Republic: Cemex is considering selling its subsidiary Cemex Dominicana according to Bloomberg. The Mexico-based group is reportedly working with JPMorgan Chase & Co on a potential divestment worth over US$1bn. Proceedings are at an early stage, with Cemex starting to talk to interested parties to assess potential interest.

Cemex has been operating in the Dominican Republic since 1995 when it acquired Cementos Nacionales. It runs the integrated 2.4Mt/yr San Pedro de Macorís cement plant. It also has ten concrete plants, three sea terminals, two aggregate quarries and a gypsum mine. It employs 1500 people directly. Cemex sold its subsidiaries in Costa Rica and El Salvador to Cementos Progreso for US$329m in 2022.

Indonesia: Hongshi Indonesia Tonga Cement has commissioned the first phase of its new cement plant in East Kutai, East Kalimantan. At this phase of its development, the plant has a capacity of 4Mt/yr. It holds 1Bnt of limestone reserves and is equipped with a 50,000t marine terminal. The plant is situated over 250km away from the site of Indonesia’s upcoming new capital city, Nusantara, also in East Kalimantan. Hongshi Indonesia Tonga Cement plans to subsequently raise the plant’s capacity to 8Mt/yr.

US/Colombia: Colombia-based Cementos Argos is carrying out expansions to two cement plants in South Carolina and West Virginia. While not specifically named, these would appear to be the 1.1Mt/yr Harleyville and 1.8Mt/yr Martinsburg cement plants. The producer says that the expansions will increase its cement capacity in the eastern US by 450,000t/yr.

Additionally, Cementos Argos plans to expand the capacity of its Cartagena cement terminal in Colombia by 35% to 4Mt/yr. The producer says that this will serve as a platform for subsequent growth. It is targeting the US market, where an expansion is also underway at its import facility in Houston, Texas. The Cartagena terminal achieved its current capacity following a recent US$42m expansion.

Gambia: Heidelberg Materials has sold its business in the Gambia to iron and steel products company B5 Plus. The business consists of the Banjul cement terminal. Heidelberg Materials says that it will continue to supply West African customers through its operations in Benin, Burkina Faso, Ghana, Liberia and Togo. The company sold its subsidiary in Sierra Leone in 2021.

Philippines: Taiheiyo Cement Philippines plans to install a second production line at its 0.8Mt/yr San Fernando cement plant in Cebu. The Philippines Department of Trade and industry says that the new line will more than double the plant’s capacity to 3Mt/yr. It will also entail an upgrade to reduce its total energy-related CO2 emissions by 10%. The Philippine Daily Enquirer newspaper has reported that the producer will additionally build a 700,000t/yr terminal at Calaca in Batangas. The facility will cost US$68.4m. Altogether, the company expects its growth plans to generate 2000 new jobs in the Philippines. The Philippines government has committed 6% of gross domestic product (GDP) to infrastructure investments annually.

Taiheiyo Cement Philippines previously indicated in August 2022 that the San Fernando cement plant might eventually expand to a capacity of 5Mt/yr. At that time, it expected to commission the new Line 2 in May 2024.

Special trade representative to the Philippine Trade and Investment Centre in Tokyo, Dita Angara-Mathay, said "The company's latest announcement materialises its plans to expand to Luzon from its long-time base in the Visayan region."

Mexico: The Mexican ambassador to the US is due to make US-based Vulcan Materials an offer of US$390m to sell a 2400 hectare parcel of land in Quintana Roo to the government. The land includes a disused limestone quarry and the Riviera Maya cement terminal, which is currently used by Cemex. The government's Ministry of the Environment ordered the closure of the quarry in May 2022, when it also banned Vulcan Materials from despatching limestone.

Mexican President López Obrador said that Vulcan Materials 'shouldn't reject the offer.' He added "We’ll buy everything from them, we’ll pay immediately and we’ll turn 2000 hectares into a natural protected area. They’ll be able to say "We’re contributing to stopping climate change." And we’ll only keep one part, to carry out an ecotourism development with a cruise ship pier.”

Associated Press News has reported that Vulcan Materials has filed a valuation showing the land to be worth US$1.9bn.