Displaying items by tag: UK

US/UK: On 13 March 2015, HeidelbergCement completed the sale of its North American (excluding Western Canada) and UK building products business, Hanson Building Products, to Lone Star. The sale was originally announced on 24 December 2014. HeidelbergCement will receive more than Euro1.2bn, in addition to up to Euro95m payable in 2016, depending on business performance.

UK: Environment minister Mark H Durkan and Devendra Mody, industrial director at Lafarge Tarmac, have signed an agreement allowing the use of waste-derived fuels (WDF) at Lafarge Tarmac's cement plant in Cookstown, Northern Ireland. The plant, which employs 86 people, currently uses coal for approximately 95% of its fuel. The agreement will see Lafarge Tarmac substitute up to 35% of its coal with WDF.

"The agreement will turn environment issues from barriers to business into economic growth opportunities. The deal is that the Northern Ireland Environment Agency (NIEA) firmly regulates and reduces red tape. In turn, partner companies invest heavily in the environment," said Durkan. "Lafarge Tarmac is committing significant investment in the environment. In addition to many environmental benefits, it will reduce its carbon emissions from production by a minimum of 10%, equivalent to taking 6500 cars off the road. It will look at ways to reduce emissions from its transportation chain and has also committed to improving public access to rare geological features found in the Ballysudden Area of Sepcial Scientific Interest (ASSI), located in its Cookstown quarry and to work with key stakeholders to develop a renewable energy strategy and examine options for reducing packaging."

UK: Martin Langvad has been appointed as vice president of cement operations and technology (Northern Europe). Martin has worked for Cemex for 19 years and has more than 30 years experience in the cement industry. With the reorganisation of Cemex in Germany, he has taken over responsibility for cement production in the UK and will continue to be the head of the Northern Europe cement operations.

Philip Baynes-Clarke has taken over responsibility as plant director at Rugby cement plant. His previous role as plant director at the South Ferriby, Humberside plant has been taken by Jan Kristof Peters. Baynes-Clarke has been in the cement industry for 13 years and started at Rugby cement plant as a graduate process engineer.
Jan Kristof Peters has worked for Cemex Germany for five years, starting as a process engineer and more recently as a production manager at the Kollenbach plant. Prior to joining Cemex, Peters worked in the lime industry.

UK: SITA UK has completed the construction of its Solid Recovered Fuel (SRF) manufacturing plant at Malpass Farm in Rugby, Warwickshire. The plant will undergo a series of commissioning tests over the next few months before starting full-scale production of Climafuel SRF. This will be used to power the kiln at the adjacent Cemex UK Rugby cement plant.

The residual waste material arriving at the site will primarily be collected from commercial and industrial businesses across the region that would otherwise go to landfill. Once received on site any metals, plastics and paper will be extracted for recycling. Similarly, materials with a high chlorine content, which could damage the kiln, will also be extracted. Any residual waste material that is removed from the production process will be processed into refuse derived fuel (RDF) for use in waste-to-energy applications.

To produce the SRF, the remaining material is sifted, shredded and blended while being continuously analysed using infrared technology. This allows the plant operators to ensure that the fuel, which has a confetti-like consistency after processing, has the precise chemical composition and calorific value required by Cemex UK.

SITA UK's Head of Alternative Fuels, Andy Hill, said, "The residual waste material that will be delivered to this facility would have gone to landfill but, instead, we are going to take out anything that can be recycled and then turn what's left into a replacement fuel."

"We have been producing this fuel very successfully at our sister plant at Landor Street in Birmingham for the past couple of years, but this new facility implements the latest technology and will substantially increase our production capacity," continued Hill. "Between the two plants, we'll be producing around 250,000t/yr of Climafuel."

SITA UK is currently also investing in new SRF manufacturing facilities at the Port of Tilbury in Essex, which are currently under construction. SITA UK currently supplies SRF to CEMEX UK and to CEMEX Latvia.

CRH has made good on its intentions. This week it stumped up Euro6.5bn to buy assets from Lafarge and Holcim in four continents. The move follows preparation since at least May 2014 when the Irish building materials group announced a divestment programme. In October 2014 it announced that it would sell its brickwork division.

CRH is finding the cash through a mix of existing cash, debt and equity placing. Interestingly, back in 2012 an Irish stockbroking analyst who was interviewed reckoned that the company could spend up to Euro3.5bn on acquisitions whilst remaining within its banking agreements. Throw in the recent sales and planned divestments and the planned acquisition from LafargeHolcim doesn't seem like too much of a stretch for CRH.

If completed, the purchase will see CRH take on 24 cement plants with a production capacity of 36Mt/yr. As a back of the envelope calculation suggests the sale price of Euro6.5bn isn't far off the occasionally used price of US$200/t for western cement production. The deal also includes aggregates, ready mixed concrete and asphalt assets.

The purchase marks a change in CRH's buying strategy both in terms of scale and distribution. Much of CRH's previous acquisitions have been minority shareholdings that make it difficult to accurately report the company's position in the cement industry. For example, in our Top 100 Report CRH was reported to have a production capacity of 6.49Mt/yr for majority shareholdings with another 19.9Mt/yr for minority shareholdings. The new cement capacity being purchased blows this away because it more than doubles CRH's total capacity and it appears to be all majority owned. CRH thinks that this will propel it to become the world's third biggest building materials manufacturer after LafargeHolcim and Saint-Gobain, leapfrogging Cemex and HeidelbergCement in the process. Strangely there is no mention of the huge Chinese players in the top five manufacturers in CRH's acquisition presentation.

CRH has avoided buying plants in southern Europe but it is relying on the slowly improving growing UK market, where CRH will pick up four plants, to balance the risk. Elsewhere in Europe, the three Holcim plants in France have been suffering from continued low construction rates in that country and the two Lafarge cement plants in Romania are unlikely to have recovered from a production fall in 2013. Outside of Europe growth has been poor in Quebec in 2013 and 2014, where CRH is buying two plants from Holcim. Both Lafarge and Holcim have also seen a slowdown in Brazil. However, the Philippines does seem like a better bet for CRH, with solid cement volumes growth seen by Lafarge in 2013 and the first three quarters of 2014.

With CRH now looking like a company that wants to produce cement rather than one that owns parts of companies that produce cement, all eyes are on the construction markets. 14 of the 24 cement plants CRH are buying are in Europe. Buying at the bottom of a sustained production slump makes sense because the asking price will be low. However, has the bottom been reached yet?

UK: An American private equity firm, KKR, is in talks to buy a stake in one of Britain's biggest building materials companies. KKR is understood to have teamed up with CRH. Together, they will bid for Euro6bn of assets put up for sale by Holcim and Lafarge.

CRH is in a strong position to win the race for the LafargeHolcim assets, although it is likely to be hit by regional competition issues if it is successful. As a result, it is said to have held discussions with KKR about an agreement that would see the private equity firm take control of some divisions of Holcim and Lafarge to assuage regulatory concerns.
Insiders have said that KKR has shown particular interest in the British assets of LafargeHolcim, which include Lafarge Tarmac, allegedly worth Euro2.27bn.

UK: Lafarge Tarmac has agreed to sell land that once housed the UK's largest cement plant to allow the construction of a Euro2.56bn theme park.

The 1.37km² Swanscombe Peninsula site in Kent has been earmarked as the home for the proposed London Paramount Entertainment Resort after developer London Resort Holding Company agreed a deal to buy the land. The sale follows an announcement in May 2014 that the resort would be designated a 'nationally significant' project.

"We take a long-term view of our landholdings from mineral extraction to development and restoration; creating jobs, supporting communities and continuing responsible environmental stewardship," said Lafarge Tarmac chief executive Cyrille Ragoucy. "We are proud to be part of this exciting project. This is a fitting legacy for land which has been owned by Lafarge Tarmac for over 140 years."

The sale is expected to go through once planning permission for the scheme is granted. London Resort Holding has already held two stages of public consultation, involving more than 4000 local people. Two more stages are planned ahead of a submission to the Planning Inspectorate in Autumn 2015.

"With this agreement in place, the vision for Kent as the home of a nationally-significant, multi-billion pound entertainment resort employing thousands of people is moving closer to becoming a reality," said David Testa, executive director of London Resort Holding. "It further underlies our commitment to delivering the project and is welcome news as we continue to consultant and engagement with the local Dartford and Gravesham communities living near the site and more widely with our interested parties."

Ireland: CRH has revealed a 2014 acquisition and investment spend of Euro190m, reflecting the completion of 21 transactions. On the divestment front, the group completed 16 transactions and realised total disposal proceeds of Euro350m.

"In August 2014 we announced a multi-year Euro1.5 – 2.0bn divestment programme; the proceeds of Euro350m generated in 2014 demonstrate that this programme is well underway," said Albert Manifold, CRH chief executive. "With a refined portfolio focus, the group is now well-positioned to pursue acquisitions that are in line with our long-term growth strategy. The 21 transactions completed during 2014 primarily comprise bolt-on acquisitions for our existing operations in the Americas, together with the expansion of our builders merchanting network in Europe."

The disposal of CRH's 50% equity stake in Denizli Çimento, its only involvement in Turkey, was the largest single divestment in 2014, realising proceeds of Euro170m.

UK: Hope Construction Materials is investing Euro17.8m to boost production at its Hope Works cement plant. The upgrades include a completed 20,000t clinker store, a system to increase the plant's capacity to use waste-derived fuels and an internal upgrade of the plant's chimney, improvements to the way the raw materials are fed into the twin kilns and maintenance and refurbishment of a large section of one of the kilns.

"The installation of the new kiln shell section is a spectacular piece of engineering involving several teams and very careful planning. We are delighted with the way that this individual project has evolved and look forward to seeing the others progress to schedule... We are very excited to be involved in the largest investment programme on site for many years," said Hope Works Operations Manager Ed Cavanagh.

The announcement comes on Hope Construction Materials' second birthday. Hope has owned and operated the 85 year old cement plant since January 2013.

US/UK: HeidelbergCement has announced that it has entered into a definitive agreement with an American affiliate of Lone Star Funds to sell its North American and UK building products business for an aggregate purchase price of US$1.4bn. HeidelbergCement said that up to US$100m will be payable in 2016, depending on the performance of the business in 2015. The deal excludes HeidelbergCement's Western Canada business. HeidelbergCement expects the transaction to close in the first quarter of 2015.

The sale of Hanson Building Products is consistent with HeidelbergCement's strategy of focusing on processing and refining raw materials for its core products of cement and aggregates and further downstream activities, according to a HeidelbergCement spokesperson. HeidelbergCement will retain its Hanson units in the cement, crushed stone, sand and asphalt businesses in the UK.