![](/templates/proglobalmedia-main/images/globe-blue-whitebg.gif)
Displaying items by tag: UK
Who would buy Hope?
02 May 2012UK: If Tarmac and Lafarge go through with their proposed JV tie-up in the UK, Lafarge will be obliged to sell its long-established Hope plant in Derbyshire, in the heart of the Peak District National Park, as well as its top-quality limestone quarry and rail depot connections. The Competition Commission has indicated that it would like an 'outsider' to buy the package, which also includes significant other assets in aggregates and readymix. The question is, who might be interested to buy it?
The UK is now a mature market, which has contracted significantly over the last decade, so that heady growth is not a possibility. The competition authorities will ensure that there is real competition in the UK building materials markets, so that only 'normal' margins of 5-10% can be expected - rather than inflated cartel-like or oligopolistic margins of 20% and beyond. Given that the return on capital invested is going to be quite low, why would anyone want to commit their cash (or their credit) to buying into the UK construction materials market? Why not put your money into bio-tech, or telecomms or even into a micro-development bank in the developing world?
I guess that it is largely down to a calculation of risk versus reward (as usual). The rewards of investing in a cement plant and integrated building materials business in the UK may be (relatively) low, but then the risks are also low: the UK is a fairly safe bet for long-term moderate growth, with strong population growth and robust GDP per capita.
Who would buy? A company that wants to balance its portfolio (perhaps a company with most of its eggs currently in the fast-growth/developing world basket), is cash rich (or has access to cheap credit), which is already in cement and aggregates and which might wish to carry home some of the technical knowledge from the deal might be interested. Perhaps some of the Chinese state-owned enterprises or ambitious mid-tier companies from the Middle East would be interested. As ever though, whether a deal is done depends on the price asked - and in the end, the price asked might be too high for anyone.
UK: The UK Competition Commission (CC) has announced that Anglo American plc (via UK subsidiary Tarmac) and Lafarge will have to sell a significant portfolio of operations, paving the way for entry by a new competitor into the UK cement market, before their proposed construction materials joint venture can go ahead.
In February 2012, the CC provisionally ruled that the proposed joint venture between Anglo American and Lafarge could damage competition in certain markets for construction materials. In its final report, the CC has reiterated its concern that the joint venture would increase the danger of coordination in the market for bulk cement and would reduce competition in local and national markets for other products including aggregates, asphalt and ready-mix concrete.
Anglo American and Lafarge will now be required to sell an extensive package of operations including:
• Lafarge's cement plant in Hope, Derbyshire as well as the nearby Dowlow quarry and three linked rail depots.
• A substantial network of readymix concrete plants, representing well over half of the proposed joint venture's readymix concrete capacity.
• Six aggregate quarries as well as Tarmac's share of two quarries owned through its Midlands Quarry Products joint venture with Hanson and one rail
depot.
• Two asphalt plants as well as Tarmac's share of five plants owned through Midlands Quarry Products joint venture.
The CC further stated that the sale would have to be completed before the joint venture would be allowed to proceed.
Cemex to build two waste recycling plants in UK
23 April 2012UK: Cemex is planning to start building two new waste recycling plants in the UK later in 2012. As part of the project up to 30 new jobs operating a site in Rugby, Warwickshire will be created.
Cemex is working with recycling management company Sita UK to produce the alternative fuel, Climafuel, which is made out of domestic, commercial and industrial waste. It plans to build two new waste recycling plants, one in Birmingham and the other in Malpass Farm, next to its existing Rugby cement plant. Work is due to start later in 2012 with an opening date set for 2014. The Birmingham plant is due to start operation later in 2012 and it will also provide fuel for the Rugby Cemex plant.
Together, the two plants will be able to produce and supply up to 250,000t of Climafuel to Rugby which is currently permitted to use up to 65% Climafuel in its fuel mix. A current application to the Environment Agency could see this increase to 80%.
Dan Panormo, Cemex's renewable energy manager, said "With the fuel coming from within a 30 mile radius of the cement plant from Birmingham and subsequently from Malpass Farm, it guarantees the environmental credentials of this alternative fuel."
Dangote Cement targets London for listing
02 April 2012UK: Aliko Dangote plans to list his US$11bn cement business, Dangote Cement, on the London Stock Exchange in 2013. Dangote is cited by the Financial Times as saying he intends to free-float a 20% stake in Dangote Cement to finance its rapid expansion.
"We want to list in London next year. By then the upside to our business will be much bigger than today," Dangote is quoted as saying.
Morgan Stanley and JPMorgan have been appointed as co-leads for the London share issue. Dangote is cited as saying the company was on track to meet the corporate governance requirements for a premium listing, and that he would give up his current role as chairman.
Chris Searle, Partner at BDO LLP commented, "If this IPO goes ahead, it will give London a significant credential that will hopefully attract other African companies at a time when Africa is one of the fastest growing regions in the world and will further cement London's status as the most international stock market in the world."
Searle added that the decision reflects a realisation by Dangote that it must improve its corporate governance. He also expressed surprise that the free float was 20%. Under current rules, the UK Listing Authority has set a minimum free float requirement of 25% for companies seeking to obtain a listing on the London Stock Exchange.
Safety First
07 March 2012Lafarge UK has scored a notable success recently at its Cookstown Works reaching 10 years without a lost-time injury (LTI). It has emerged that this is the longest a Lafarge Group plant anywhere in the world has gone without a LTI. Cookstown also set the record the previous year in 2011, showing how far ahead it is of the rest of the group.
LTIs are generally defined as any work related injury or illness which prevents a worker from doing any work the day after the accident. Another similar measure is Lost Time Injury Frequency Rate (LTIFR), which takes into account hours worked by staff.
For example, in April 2011 Global Cement Magazine interviewed the safety manager at the Ste. Genevieve plant in Missouri, USA. He revealed a rate of zero lost-time incidents rate over the last 1.2 million-man hours and no LTIs over the last 700 days. Through construction the plant employed 2300 personnel and then 200 operational employees when it went live. By comparison Cookstown employs only 80 workers. Its LTIFR will be much lower.
The Mineral Products Association recorded a 81% reduction in LTIs between 2004 and 2009 for the UK cement industry. It has since set itself the further target to halve the LTIFR between 2009 and 2014. As of 2009 the UK LTIFR for direct employees was 3.59 per million hours worked. The MPAs target LTIFR for 2014 is 1.79 or lower.
Regardless of how you present the figures the Cookstown Plant LTI achievement is impressive. The challenge, as ever, lies in bettering it.
UK: Lafarge UK is celebrating the achievement of one of its UK cement production sites, which has reached the milestone of 10 years without a lost-time injury (LTI). Workers at the Cookstown Works in County Tyrone, Northern Ireland, have not suffered any injury that prevents an employee or contractor returning to work the next day since 2002.
Thanks to a strong team commitment to safety, the achievement has put Cookstown Works in the Lafarge Group's record books. Of the company's 170 cement production sites across the world, this is the longest any site has gone without a LTI.
Commenting on the major achievement, Cookstown Works manager William McGuckne said, "This is a proud moment for the team. Through continued hard work and constant vigilance on safety in all aspects of our operation, we have managed to maintain our safety performance and achieve this fantastic record. A culture of assessing risks, proceeding with care and looking out for each other has helped us contribute to the Lafarge Group's ultimate goal of zero harm to any of our employees or contractors."
Lafarge UK president Dyfrig James added, "My congratulations go to the whole Cookstown Works team of employees and contractors for achieving this world first for Lafarge's cement business."
Commission flattens Lafarge-Tarmac joint-venture
21 February 2012UK: The UK Competition Commission has decided provisionally that the proposed joint venture between Anglo American plc and Lafarge SA in the UK could damage competition in certain markets for construction materials.
In February 2011 Anglo American, through its UK subsidiary Tarmac Ltd, and Lafarge announced a proposal to establish a 50:50 joint venture, to which each of them would contribute the bulk of their construction materials businesses in the UK. The two parties' main overlapping activities in relation to the joint venture are in the production and supply of cement, aggregates, asphalt and ready-mixed concrete. The Office of Fair Trading referred the case to the Competition Commission on 2 September 2011.
Now the Competition Commission has reported that the joint venture could lead to a substantial lessening of competition in the markets for the supply of bulk cement, rail ballast, high-purity limestone (when used for flue-gas desulphurisation), primary aggregates for construction applications in 23 local markets, asphalt in two local markets and ready-mixed concrete in seven local markets.
"We have a number of concerns about this joint venture," said Roger Witcomb, chairman of the Anglo/Lafarge Inquiry Group. "In bulk cement there are currently only four UK producers and there is evidence that the market is not as competitive as it could be. Prices and profit margins haven't been affected in the way we would have expected following the big falls in the demand for cement in the past few years."
Although the Commission has not reached a view on whether or not there has been coordination in the bulk cement market, Witcomb said there were concerns that the proposed tie-up would increase the susceptibility of this market to co-ordination. "Some of the reasons for this arise from the proposed combination of the cement businesses and some from the increased vertical integration that would result from the combination of their ready-mixed concrete businesses," he said. "Lafarge currently have a relatively small ready-mixed concrete business, while Tarmac have a relatively large one."
Witcomb continued, "We are now consulting on the possible actions we could take in response to the reductions in competition we have found, bearing in mind the close links that exist between the different product markets."
As well as the summary of provisional findings, the Competition Commission has published a notice of possible remedies, outlining ways that the potential anti-competitive effects of the joint venture could be prevented. It will issue a final report no later than 1 May 2012.
UK construction slows in January 2012
07 February 2012UK: A report by Markit/CIPS has shown that the UK construction industry as a whole experienced a slow down in January 2012. Jason Heath, a construction specialist at Bibby Financial Services said, "The latest Markit/CIPS survey highlighted that the construction sector slowed down in January 2012. Although the numbers indicate a fall in productivity, the survey also revealed that construction managers and owners are feeling optimistic for the first time in eight months."
"This optimism is perhaps down to construction firms having a particularly successful December 2011, potentially due to milder weather conditions and infrastructure projects commencing, which surprised economists who had predicted a decline towards the end of 2011," he continued. "In order to retain this positive outlook, the government needs to make funding the construction industry a priority by making it more accessible to firms so this sector can continue to provide a vital contribution to the UK economy," concluded Heath.
Worker killed at Cemex plant in Rugby
18 January 2012UK: A worker was killed in an industrial accident at the Cemex plant in Rugby in the early hours of this morning.
A spokesman for the plant confirmed that a man working for a sub-contractor was killed at the plant and emergency services attended the scene. Police officers and the Health and Safety Executive are currently at the site investigating what happened. Another man suffered a broken arm in the incident and had to be taken to hospital for treatment.
Cemex community affairs manager Ian Southcott said, "Regrettably one person has died and our thoughts and sympathies are with their family and friends. Cemex is cooperating fully with all of the investigations taking place." Southcott refused to reveal any more details about the accident while investigations are on-going.
The cement plant is currently in its annual shutdown period for regular maintenance. There are a number of contractors working on the site as a result. In December 2011 Cemex was fined for a worker's death in 2008 at the same plant.
MPA publishes Sustainable Development Report
14 December 2011UK: The Mineral Products Association (MPA), which covers the cement and lime industries in the UK, has released its 3rd Sustainable Development Report, which shows the continued progress of its members in the realms of health and safety, carbon emissions, biodiversity, nature conservation and resource efficiency. It highlighted that, while growth prospects are uncertain and markets remain 20% to 40% below pre-recession levels, its members continue to be committed to stringent sustainability targets.
Highlights from the report include the planting of 1 million trees in the UK by MPA member since 2005 and a drop in direct carbon dioxide emission from cement production in 2010. The ratio of land prepared for quarrying to that which was restored to nature was 0.8:1. The report also showed the extent of the slump in UK cement demand. The UK consumed just 158kg/capita of cement in 2010 against the European average of 404kg/capita.
Nigel Jackson, Chief Executive MPA, said, "Our third Sustainable Development Report shows where we have gained considerable ground. For example, there is a growing awareness of the contribution that good building design can make to sustainability and how the use of concrete can significantly reduce the whole life energy performance of buildings through thermal mass benefits."
However, the MPA used the report to reiterate its stance on certain government policies. It believes that the government should not impose excessive costs on energy intensive industries, such cement and lime, which could drive the supply of essential and indigenously available resources overseas. "The MPA believes that genuine sustainable development demands that UK industries and supply chains are both resource efficient, where our industry is best in class in Europe, and also financially sustainable."