Displaying items by tag: US

US: Zanini Renk has received a repeat order from St. Marys Cement for four additional gearboxes at its Charlevoix, Michigan plant. In 2016, St. Marys Cement's Charlevoix plant began a US$130m upgrade to expand the plant's infrastructure. The project scope included adding a new finish mill, an additional kiln and a new coal grinding system. The 2016 upgrade at St. Marys Cement expanded the Charlevoix plant’s cement capacity from 1.4Mt/yr to 2Mt/yr.

The initial order for a Zanini Renk gearbox was for installation in its vertical roller mill. Zanini Renk completed the gearbox installation in 2022. The first new gearbox has been in operation since January 2023 and the other two new gearboxes will be delivered at the end of November 2024. Installation is expected to be completed by March 2025 and by April 2025.

US: Heidelberg Materials North America has entered into a definitive purchase agreement to acquire Giant Cement Holding, a cement producer on the US East Coast focused on using refuse-derived fuels, for US$600m. The acquisition will reportedly strengthen Heidelberg Materials’ cementitious footprint in the Southeastern US and New England markets and help to contribute to its circular offerings and decarbonisation efforts.

The transaction’s assets in the Southeastern US include an integrated cement plant with a capacity of 800,000t/yr in Harleyville, South Carolina, a network of four cement terminals in Georgia and South Carolina, and a joint venture deep-water import terminal in Savannah, Georgia. Assets in the New England area comprise a cement and slag terminal in Newington, New Hampshire, and a deep-water import terminal in Boston, Massachusetts. The transaction also includes Giant Resource Recovery, an alternative fuel recycling business with four facilities in the Eastern US. The transaction is expected to be completed in the first quarter of 2025 and to contribute around US$60m in earnings by interest, taxation, depreciation and amortisation in the first year of operation.

US: Eagle Materials has awarded thyssenkrupp Polysius a contract for the modernisation and expansion of its Laramie, Wyoming cement plant. The modernisation project will result in an expansion of the plant's manufacturing capacity to approximately 1.1Mt/yr of cement. The project also includes the installation of an alternative fuel substitution system. The modernisation of the cement plant is expected to deliver benefits such as cost reductions, achieved with lower-cost alternative fuels and natural gas, simplified maintenance and improved operational efficiencies. The production expansion from the new finish mill will supplement the grinding capacity of the existing plant, which already operates with an integrated polysius booster mill. The polytrack ECO cooler will facilitate heat recovery and clinker cooling while improving process reliability. The project, which has received primary regulatory approvals, is slated to commence immediately [in November 2024], with construction scheduled for completion by the second half of 2026.

Many readers will be aware that Gautam Adani was accused of fraud by a US court this week. In a brief statement, Adani Group said that the allegations were “baseless and denied.” The indictment relates to a solar power project, but what does this mean for Adani Group’s cement businesses?

The charges by the US Department of Justice allege, following an investigation, that Gautam Adani, Sagar Adani and Vneet Jaain, executives of India-based renewable-energy company Indian Energy Company, committed “...securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements.” A number of other individuals have also been accused, along with the two Adanis and Jaain, of participating in a US$250m bribery scheme to Indian government officials connected to a large-scale solar energy project. The indictment related to the period 2020 - 2024 and further alleges on several occasions that “Gautam Adani personally met with an Indian government official to advance the bribery scheme.” The Securities and Exchange Commission (SEC) has also started a connected civil case.

The problem here is that the indictment has rocked the value of Adani Group’s subsidiaries and reduced the credit ratings of some of them. This in turn will make it harder for these companies to raise money in the future for expansion. Various reports in the media said that the group’s companies had lost something in the region of US$30bn as stock prices fell by around 20%. They have since rallied somewhat. And lest we forget, Adani Group has some serious expansion plans. In the cement sector, it is targeting a production capacity of 140Mt/ yr by 2028. Recent transactions include Ambuja Cement’s purchase of Penna Cement for US$1.25bn in August 2024 and a planned acquisition announced in October 2024 of a 47% stake in Orient Cement for US$451m. The group was also linked in the local media to a bid to buy Heidelberg Materials’ India-based business in October 2024.

All of this comes with a price. International credit ratings agency S&P put Adani Ports, Adani Green Energy and Adani Electricity on a downgrade warning. Then, Fitch Ratings and Moody’s followed. Moody’s, for example, downgraded its outlook for seven Adani Group companies to ‘negative’ from ‘stable’ but it affirmed ratings on them. It commented that the allegations “could have a broader credit impact on all rated Adani group issuers” and that they would “likely weaken the Adani group’s access to funding and increase its capital costs.” It added that its actions recognised “...the possibility of broader weaknesses in the governance structure across the rated Adani group entities as well as potential operational disruptions, including on their capital-spending plans, while legal proceedings are going.” The decision by the ratings agencies does not appear to have directly affected Adani Group’s cement companies, Ambuja Cements or ACC, so far. The group may get lucky here given that these companies focus on the domestic market. Thus their credit ratings may remain more buoyant, regardless of what happens next.

As with a number of other global issues at the moment, the outcome of the recent US presidential election may also play into this case. Attorney Ravi Batra told the Press Trust of India that the incoming Trump administration might view the Adani charges as so-called ‘lawfare.’ This is where legal processes are used to target a nation’s economic or other opponents. In addition the current chair of the SEC, Gary Gensler, announced his intention to step down from the role in January 2025. It seems unlikely that the Trump administration might intervene in a legal case involving a foreign company accused defrauding US citizens but the possibility of realpolitik playing a role shouldn’t be totally discounted.

This is the second major international scandal overhanging Adani Group since the disclosures by Hindenburg Research back in early 2023. Those allegations were relatively easy to shrug off given that its accuser was an investment research firm with a reputation for using its findings for short selling shares. Hindenburg Research was not a neutral bystander. This time round, the US judicial system has become involved and the consequences are bigger both reputationally and from any potential legal outcome. In the short term, the credit implications for Adani Group as a whole are becoming apparent. Various companies and countries have stalled or cancelled planned investments. However, the cement business is smaller than the group’s power and transport concerns. It also operates domestically. We’ll have to wait and see what the wider implications for Adani Group are. The first thing to watch for the cement business will be any effect on its expansion plans.

US: Quikrete has entered into a definitive agreement to buy Summit Materials for a total enterprise value of US$11.5bn. The deal will add Summit Materials’ aggregates, cement and ready-mixed concrete business to Quikrete’s concrete and cement-based products business to create a vertically integrated business in North America. Quikcrete’s acquisition offer was first revealed in late October 2024. The transaction is expected to close in the first half of 2025 subject to shareholder approval at Summit Materials, regulatory approvals and other customary conditions.

Will Magill, CEO of Quikcrete, said “We are thrilled to welcome Summit into the Quikrete family.” He added, “This acquisition represents a significant milestone in our journey to expand our capabilities and geographic presence.”

Colombia-based Cementos Argos is Summit Materials’ largest shareholder with a 31% stake. It has agreed to vote all of its shares in Summit’s common stock in favour of the transaction. Cementos Argos says will generate a cash value of around US$2.9bn from the sales of its shares.

India/US: Shares in Gautam Adani-led conglomerates fell by 20% on 21 November 2024 after prosecutors in the US filed bribery charges against Adani and his associates. They allege a US$250m payoff to Indian officials to secure solar power contracts. Adani, along with seven co-defendants, including his nephew Sagar Adani, is accused of paying the bribes to secure contracts for what would become India's largest solar power project, projected to generate US$2bn in profits over the next 20 years.

The companies affected in the share fall included the Life Insurance Corporation of India (LIC), which holds stakes in seven Adani companies, including ACC and Ambuja Cement, as well as Adani Enterprises, Adani Ports, Adani Green Energy, Adani Energy Solutions and Adani Total Gas.

Adani Group has denied the allegations, calling them ‘baseless.’

The mood music for this year’s United Nations Climate Change Conference (COP29) in Azerbaijan has been poor. Despite this though the decarbonisation prospects for the cement sector are looking rosier than other industries.

First, the negatives. People are starting to question whether the COPs are fit for purpose. Donald Trump’s election as President-Elect in the US before the event started pretty much set the tone given that he intends to withdraw from the Paris climate agreement. Again. Azerbaijan's President Ilham Aliyev described his country’s natural gas resources as a “gift from God” following reports that, once again, COP national delegates had been caught promoting fossil fuel deals. France and Argentina also withdrew their lead negotiators for differing political reasons. Meanwhile, there has been increasing lobbying against carbon capture from the environmental sector. In short the view is growing that carbon capture is a delaying tactic by fossil fuel companies rather than a viable solution. This poses a threat to the cement sector because its current net zero roadmaps require carbon capture.

The World Cement Association’s CEO Ian Riley asked in a statement whether there might be “...a shift toward negotiations driven by the major emitters - China, the US, India, Russia, and Saudi Arabia.” However he observed that none of these countries yet seem ready to lead on the climate agenda globally.

Now, the positives. Cement CO₂ sector emissions may have continued to fall in 2023. The Global Carbon Project published its Global Carbon Budget 2024 in mid-November 2024. It predicts that global fossil CO₂ emissions will rise by 0.8% year-on-year in 2024 with emissions from coal, oil and gas still mounting. However, emissions from cement producers are expected to fall by 0.8%. This trend started in 2022. It appears to be due to declines in China, the US and the EU but, notably, not in India. It’s worth commenting here that this decline may be principally down to the parlous state of the real estate market in China, but there is also a lot of decarbonisation work happening. We’ll take a win where we can.

Next, the Global Cement and Concrete Association’s two big announcements at COP29 have been the publication of its Cement Industry Net Zero Progress Report 2024/25 and the launch of international definitions for low carbon cement and concrete. The progress report proffers a nifty update on how well it’s going. Short version: 23% reduction in emissions intensity since 1990; lots going on; plenty more to do.

One of those issues that require attention is low-carbon procurement. Hence those international definitions. This may seem like an abjectly boring topic but never underestimate the power of standards upon building materials. This should help support governments, policy makers and the private sector to set low carbon procurement rules. Since governments are among the biggest buyers of building materials worldwide, both directly and indirectly, this is intended to start speeding up decarbonisation by driving demand for existing lower carbon cement and concrete products. Whether this is the tool that cracks the global adoption of low carbon building materials remains to be seen. Yet the long lead time it took the Portland Cement Association (PCA) in the US, for example, to promote the use of Portland Limestone Cement is both instructive and inspirational. It can be done and it can deliver results.

COP29 has been described as the ‘finance COP’ because the representatives are hoping to set a new global climate finance target. This target, or new collective quantified goal (NCQG), is seen as one of the summit's main outcomes. It is intended to replace the existing US$100bn goal that is due to expire in 2025. However, the question of how much each country pays has predictably caused disagreements between developed, developing and those countries in between. All of this is well above the ‘paygrade’ of the cement sector but is crucial to what happens next, because it’s going to get expensive. Establishing regional carbon capture infrastructure requires serious funding. Time will tell whether COP29 can actually further this aim. The arguing continues.

On 6 November 2024, Donald Trump appeared before followers in Florida, US, to declare victory in the 47th US presidential election. A sea of red baseball caps reflected the promise of the former president, now once again president-elect, to Make America Great Again. What Trump’s triumph means for the cement industry is not so straightforward. One lesson of President Trump’s 2017 – 2021 tenure as 45th president is that a Trump presidency comes with winners and losers.

Alongside the international heads of state posting their congratulations to Trump via social media was the Portland Cement Association (PCA), which represents US cement producers. In a post to LinkedIn, it took the chance to set out its priorities for the upcoming presidency, set to commence on 20 January 2025. These include collaborating on ‘market‐based initiatives’ to further reduce US cement’s CO₂ emissions, addressing ‘regulatory burdens’ that currently hinder the uptake of alternative fuels (AF) and ensuring favourable policies and funding for the use of alternative cements under federal transport programmes, which are up for renewal in 2026, as well as collaborating on carbon capture, utilisation and storage.

The post was suitably diplomatic for an organisation that will have to work with the incoming administration for the next four years. Reading the policy priorities against some of Trump’s campaign promises, however, they may be more pointed. As part of his plan to stimulate economic growth, Trump has proposed an unspecified reduction of the ‘regulatory burden’ of environmental standards. He also purports to want to replace renewables with increased use of fossil fuels – in direct opposition to the PCA’s goal to slash the US cement industry’s coal and petcoke reliance from 60% to 10% by 2050. The PCA’s stance is not merely ideological: its roadmap is founded on the legally-binding Paris Agreement on climate change mitigation. Trump, who considers the Paris Agreement a ‘disaster,’ has the stated aim of withdrawing the US from the treaty – for a second time!

The PCA included a positive note that “We can all agree that the ultimate goal of our industry and the government is to best serve the American people.” In case there were any doubt as to what it feels best serves those people, it concluded that it will work with all federal officials to help communities in the US to build ‘a more resilient, sustainable’ country.

Producers themselves, in the US and many other markets, had been finalising first-half or nine-month financial results when the Trump news broke. Now came half-anticipated strategy discussions – and a surprise: in market after market, trading in cement stocks opened on the up. Ireland-based CRH’s share price spiked by 15%, before settling on a rise of 6% day-on-day. Mexico-based Cemex’s rose by 7% and Switzerland-based Holcim’s by 5%. Investors, clearly, glimpsed opportunity in uncertainty for these US-involved operators.

Trump’s campaign successfully positioned him as the disruptive outsider, despite being the known (or, at least, known-to-be-unpredictable) quantity of the two candidates. His promise to Americans was increased affordability; to corporations, deregulation. Either way, he stands to overhaul the past four years’ policy on the economy. All of this may keep Wall Street high-ballers placing their bets on Cemex or CRH, or on Holcim North America after it eventually joins them on the New York Stock Exchange. The prospect of more money in homebuyers’ pockets is attractive, especially to allied sectors like property development, where Trump himself worked for over 40 years. The cement industry, meanwhile, will be taking a hard look at what the Trump proposition might mean for its market.

US Geological Survey (USGS) data tracks a favourable market trend under the present Biden Administration – to date – for a US cement industry that has also grown in production terms. Consumption was 120Mt in 2023, up by 14% over the three-year-period from 2020, while production was 91Mt, up by 4% over the same period. President Biden has signed into law two major pieces of legislation – the Inflation Reduction Act and Infrastructure Investment and Jobs Act – with a combined value of US$1.94tn in additional public spending, to President Trump’s none. However, the Republican president previously proposed investing an additional US$200bn in 2018.

Trump voters may have perused the USGS’ most recent monthly cement figures, for July 2024, before casting their votes. The figures recorded a 5.2% year-on-year decline in total cement shipments in the year-to-date, to 58.6Mt. Both Eagle Materials and Italy-based Buzzi noted a recent lack of growth in US sales volumes in their latest financial results. Another possibly alarming trend for the industry – and anyone with a protectionist mindset - is the growth of imports, which rose from 14.8Mt in 2019 to 26Mt in 2023.

A defining feature of Trump’s original presidency, alongside Covid-19 lockdown, was his still-ongoing trade wars. We can expect Trump to resume his roll-out of new tariffs as soon as he can. This might include cement plant equipment produced in other jurisdictions, such as the EU. Compared to the roster of goods he previously denied entry to the US, however, 26Mt/yr of cement will be less easy to wrangle with in a country with a domestic shortfall of 29Mt/yr.

Whatever happens in politics, the US cement sector remains very strong, with historied local ownership and some of the most innovative plants in the industry globally. Global players continue to seek to maximise their US-facing presence, as evidenced by Brazil-based Votorantim Cimentos’ contemplation of an initial public offering (IPO) for Votorantim Cimentos North America, announced on 7 November 2024. For the industry, the day-to-day grind – and pyroprocess – goes on.

After all, Trump did not enact many of his more disruptive proposals, such as building a Mexican border wall, after his win in 2016. See Global Cement’s analysis of that proposal here. But even this record is an unreliable guide for what to expect in 2025 – 2029. Not only did Trump himself win the popular mandate this time around, but his allies also gained majorities in the House of Representatives and Senate, comprising the US legislature. This betokens a different pace and scale of possible changes.

In 10 weeks’ time, the US cement sector will be lobbying an entirely new regime. Now is the time for it to prepare whatever arguments will appeal to incoming lawmakers to allow it make the best of such opportunities as may be available.

Italy: Buzzi’s net sales decreased by 4% year-on-year to €3.18bn in the first nine months of 2024 from €3.30bn in the same period in 2023. Its cement and ready-mixed concrete sales volumes fell by 6% to 18.8Mt and by 8% to 7.74Mm³ respectively. The group attributed the declines to a “…challenging market environment in Central Europe and the lack of recovery in Italy and the US during the summer.” However, sales were up in Poland and the Czech Republic.

Italy: Cementir Holding has blamed a fall in earnings in the first nine months of 2024 on “lower results achieved in all geographical areas except Egypt.” It added that sales had fallen due to a decrease in volumes in some places and negative currency effects in Türkiye and Egypt. The group’s revenue fell by 5% year-on-year to €1.24bn in the first nine months of 2024, from €1.30bn in the same period in 2023. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 9% to €296m from €326m. Sales volumes of cement and clinker remained stable at 7.98Mt. It noted that volumes increases were reported in Türkiye and, to a lesser extent, in Malaysia and the US. However, volumes of ready-mixed concrete rose by 5% to 3.33Mm³ from 3.18Mm³.

Francesco Caltagirone Jr, chair and CEO, said “The results for the first nine months of 2024 are in line with our expectations and, after several quarters of contraction, signs of a market turnaround in some geographies are emerging in the third quarter of 2024. We are strengthening our competitive position through initiatives such as: the investment on Kiln 4 in Belgium, the restart of the second line in Egypt, the acquisition in concrete in Nordic & Baltic, a new limestone quarry in Malaysia, and the repurchase of a large part of the minority interest in our Egyptian subsidiary, to prepare ourselves for any upcoming market opportunities”.