Displaying items by tag: US
Cemex amends US asset sale to Grupo Cementos de Chihuahua
30 August 2016US: Cemex and Grupo Cementos de Chihuahua (GCC) have amended the terms of a sale of assets to GCC previously announced in early May 2016. The assets being sold by an affiliate of Cemex to an affiliate of GCC in the US have changed and mainly consist of Cemex’s cement plant in Odessa, Texas, two cement terminals and the building materials business in El Paso, Texas and Las Cruces, New Mexico. Cemex’s cement plant in Lyons, Colorado and cement terminal in Florence, Colorado are no longer part of the assets being sold to GCC. Upon closing of this transaction GCC will pay Cemex US$306m.
The sale is subject to customary closing conditions, including approval from the US competition authorities and GCC’s shareholders, as well as GCC obtaining financing to purchase the assets. The deal is expected to be completed before the end of 2016.
North with Cementos Argos
23 August 2016Cementos Argos’ deal to buy the Martinsburg cement plant in West Virginia from HeidelbergCement makes a lot of sense. After all, the Colombian-based cement producer has seen its US cement assets perform well so far in 2016 with a cement sales volumes increase of 29% year-on-year to 1.99Mt and an overall sales revenue boost of 19.7% to US$700m. Compare that to the challenges the company has faced so far this year on its home turf in Colombia. There, cement sales volumes fell by 15.5% to 2.47Mt and sales revenue fell slightly to US$465m.
Argos has picked up the Martinsburg cement plant and eight cement terminals in the surrounding states for US$660m. The sale was mandated by the US Federal Trade Commission as one of the conditions of HeidelbergCement’s purchase of Italcementi including its US subsidiary Essroc, the current owner of the plant.
Symbolically, the purchase takes Argos right up to the Mason–Dixon line, the old survey line sometimes used to describe the dividing line between the so-called ‘north’ and ‘south’ in the US. The cement plant is south of the line in West Virginia but some of the cement terminals are firmly in the north-east. Outside of the company’s home turf in Colombia it has a maritime presence around the Gulf of Mexico. Although Martinsburg is inland, the new terminals in Norfolk, Virginia and Baltimore push Argos’ distribution network up the east coast. This could potentially push Argos into conflict with the subject of last week’s column, McInnis Cement, a Canadian cement plant under construction with eventual aspirations to sell its cement to the US.
Back in the US specifically the new plant will bring Argos’ total of integrated cement plants to four, joining Roberta in Alabama, Newberry in Florida and Harleyville in South Carolina. All together the producer will have a production capacity of around 6Mt/yr in the US following the acquisition. Back in 2014 when Global Cement visited Martinsburg the plant was distributing its cement about 60:40 via truck and rail. At that time the plant was shifting cement in an area from central Ohio eastwards to western Pennsylvania and south to southern Virginia, as well as in North Carolina.
Argos has paid US$300/t for Martinsburg’s production capacity of 2.2Mt/yr. As ever determining the cost of the terminals proves difficult. This compares to the US$267t/yr that Grupo Cementos de Chihuahua (GCC) paid to pick up two plants from Cemex in May 2016 or the US$375/t that Summit Materials paid Lafarge for a cement plant and seven terminals in July 2015. Previous Argos purchases in the US were around US$220 – 250/t for deals with Lafarge and Vulcan in 2011 and 2014 respectively. It is also worth considering that Essroc upgraded Martinsburg significantly in 2010 to a dry-process kiln and that the site has a waste-to-solid-fuel plant from Entsorga due to become operational in 2017.
The purchase of Martinsburg by Argos seems like an obvious move. It predicts a compound annual growth rate of 5.4% for cement consumption in the American states it operates within between 2016 and 2020. However, this may be optimistic given that the Portland Cement Association’s chief economist Ed Sullivan has downgraded his consumption forecasts for the US as a whole to 3.4% from 5% as he waits for the recovery to really kick in. The southern US states have also recovered faster since a low in 2009 than the northeastern ones. The purchase marks a new chapter in Cementos Argos’ expansion strategy
US: The Essroc cement plant in Speed, Indiana has lots its appeal to burn alternative fuels. Local government officials have decided that the plant will have to apply for rezoning to order to burn hazardous waste, comprising solvents, paints and other chemicals along with coal, according to the Washington Times newspaper.
“I’m disappointed in the decision, but I’m confident that we’ve got other means to obtain the required authorisation to continue with the project,” said Jeremy Black, the plant manager.
Local residents who are suing the plant have accused Essroc of misleading them regarding which fuels the company intends to burn. Essroc have denied the claim.
US: HeidelbergCement, through its subsidiaries Essroc and Lehigh Hanson, has entered into a definitive agreement with Argos USA, a subsidiary of Cementos Argos, to sell its Martinsburg, West Virginia cement plant and eight related terminals. The disposal was required by the Federal Trade Commission (FTC) to address competition concerns arising from its acquisition of Italcementi. The agreement is subject to the approval of the FTC and other customary closing conditions. The transaction purchase price is US$660m on a cash and debt-free basis. HeidelbergCement expects the transaction to close in the fourth quarter of 2016.
“With the disposal of the Martinsburg plant we have successfully finalised our disposal programme in the context of the Italcementi acquisition,” said Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. “Together with the disposals of the non-core assets and the Belgium assets of Italcementi we have exceeded our Euro1bn target on disposal proceeds and thereby further improved the net financial position of HeidelbergCement.”
Martin Marietta elects new board members
17 August 2016US: Martin Marietta Materials has elected two new directors to its board. John J Koraleski, former Chairman of the Board of Directors and CEO of Union Pacific Corporation, was elected to Martin Marietta's Board of Directors on 15 August 2016. Koraleski, aged 65 years, also served as Executive Chairman of the Board of Directors for Union Pacific from February 2015 until his retirement in September 2015. Koraleski will serve on Martin Marietta's Audit Committee, Management Development and Compensation Committee, and Executive Committee.
At its Annual Meeting of Shareholders in May 2016, Donald W Slager was elected to Martin Marietta's Board of Directors. Slager, aged 54 years, is President and CEO of Republic Services, as well as a member of its Board of Directors. Slager will serve on Martin Marietta's Finance Committee and Ethics, Environment, Safety and Health Committee.
The two new directors fill the seats previously held by Frank H Menaker, Jr and Richard A Vinroot, both of whom reached the mandatory retirement age provided in Martin Marietta's bylaws. They were not eligible for election at the 2016 Annual Meeting of Shareholders and retired from the Board after 23 and 20 years of service to the company, respectively.
Martin Marietta's 10-member Board of Directors now consists of nine outside directors.
US: The Federal Trade Commission (FTC) has approved a final order settling charges, following a public comment period, that the proposed US$4.2bn merger of German cement producer HeidelbergCement and Italian producer Italcementi would likely be anticompetitive. Under the order, first announced in June 2016, the companies are required to divest to an FTC-approved buyer an Essroc cement plant and quarry in Martinsburg, West Virginia; seven Essroc terminals in Maryland, Virginia, and Pennsylvania; and a Lehigh terminal in Solvay, New York. At the buyer’s option, the order also requires the merged company to divest two additional Essroc terminals in Ohio.
Fatality at Kosmos Cement plant
10 August 2016US: A person has died at the Kosmos Cement plant in Louisville, Kentucky. Local police told the WDRB local television station that the male victim was aged in his 30s or 40s and was pronounced dead on the scene. Officials say the death was a workplace accident involving a pulley system.
Cemex to cut emissions at five plants in US
28 July 2016US: The Environmental Protection Agency (EPA) and the Department of Justice (DOJ) have agreed a settlement with Cemex, under which the company will invest approximately US$10m to cut air pollution at five of its cement plants to resolve alleged violations of the Clean Air Act. Under the consent decree lodged in the District Court for the Eastern District of Tennessee, Cemex will also pay a US$1.69m civil penalty, conduct energy audits at the five plants, and spend US$150,000 on energy efficiency projects to mitigate the effects of past excess emissions of nitrogen oxides (NOx) from its facilities.
“This settlement requires Cemex to use state-of-the-art technology to reduce harmful air pollution, improving public health in vulnerable communities across the South and Southeast,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to tackling clean air violations at the largest sources, cutting the pollutants that cause respiratory illnesses like asthma.”
The five Cemex cement plants affected by the deal are located in Demopolis in Alabama, Louisville in Kentucky, Knoxville in Tennessee and New Braunfels and Odessa in Texas. The Knox County, Tennessee and Louisville, Kentucky air pollution control authorities participated in this settlement. Cemex is required to install pollution control technology that will reduce emissions of NOx and establish strict limits for sulphur dioxide (SO2) emissions. The cement producer will install and continuously operate a selective non-catalytic reduction system for controlling NOx at the five plants and meet emission limits that are consistent with the current best available control technology for NOx. EPA estimates this will result in NOx emissions reductions of over 4000t/yr. Each facility will also be subject to strict SO2 emission limits.
This settlement is part of EPA’s National Enforcement Initiative to control harmful emissions from large sources of pollution, which includes cement plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from cement plant settlements under this initiative will exceed 75,000t/yr once all the required pollution controls have been installed and implemented.
The settlement is subject to a 30-day public comment period and final court approval.
US: Dust Control Technology (DCT) has appointed Laura Stiverson as its president. She joined the firm in 2008 and has been the general manager for five years. Stiverson has been cited as instrumental in developing a number of the company’s products, including the OdorBoss family of machines and the Fusion equipment design.
Incorporated in 2004, DCT supplies open-area dust suppression equipment for applications in recycling, demolition, waste and scrap handling, mining, slag and ash management, coal processing, landfills and other industries. Headquartered in Peoria, Illinois, the company supplies its dust and odour control products to customers around the world.
US: Eagle Materials’ sales revenue from cement has risen by 19% year-on-year to US$116m in the first quarter of its 2017 financial year, which ended on 30 June 2016, from US$98m in the same period in 2015. Overall company revenue rose by 1.5% to US$298m from US$285m. Cement sales volumes rose by 4% to 1.25Mt from 1.20Mt.