Displaying items by tag: US
Buzzi Unicem USA collaborates in Electrified Thermal Solutions’ thermal battery pilot
16 February 2024US: Buzzi Unicem USA is among industrial partners collaborating with Electrified Thermal Solutions in the development of its Joule Hive Thermal Battery for industrial heat decarbonisation. The partners plan to launch a commercial-scale pilot of the battery in San Antonio, Texas, in association with the Southwest Research Institute. The project is supported by US$171m in funding from the US Department of Energy. The battery delivers heat of up to 1800°C from energy from renewable sources.
Buzzi Unicem USA president and chief executive officer Massimo Toso said “Cement production is known as a hard to abate industrial sector in large part because of the high temperatures required. Electrified Thermal Solutions’ Joule Hive Thermal Battery is the first industrial heat decarbonisation solution we have identified that could potentially enable us to cost-effectively and completely eliminate the use of fossil fuels in our heating processes and achieve our corporate decarbonisation goals.”
Electrified Thermal Solutions chief executive officer Daniel Stack said “We believe the breadth and depth of involvement from our industrial partners like Buzzi Unicem USA was critical to demonstrate to the Department of Energy just how valuable the Joule Hive Thermal Battery will be for industrial decarbonisation, and we are grateful for their partnership.” Stack added “Southwest Research Institute’s engineering support and world-class industrial demonstration facilities signalled to the Department of Energy that our technology will be developed, built, operated, tested and evaluated to the highest standards.”
Vicat reports full-year sales growth in 2023
14 February 2024France: Vicat recorded consolidated sales of Euro3.94bn in 2023, up by 8% year-on-year from Euro3.64bn in 2022. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) were Euro740m, up by 30% from Euro570m. The producer's energy costs declined by 10% to Euro596m. Vicat noted ‘strong’ growth in sales across all regions except Kazakhstan and India, and in earnings in the US. Its cement volumes rose by 6.3% overall, but contracted in Egypt, France, Senegal and Switzerland.
CRH acquires Martin Marietta Materials’ South Texas business
13 February 2024US: CRH has completed its acquisition of a portfolio of cement and ready-mix concrete assets from Martin Marietta Materials for US$2.1bn. The portfolio includes the 2.1Mt/yr Hunter cement plant in Comal County, Texas.
Buzzi grows sales in 2023
12 February 2024Italy: Buzzi recorded consolidated sales of Euro4.32bn in 2023, up by 8.1% from Euro4.32bn in 2022. This came in spite of a 7% year-on-year drop in the company’s cement sales volumes, to 26.3Mt. In its domestic market of Italy, Buzzi raised its sales by 13% to Euro818m. In the US, sales grew by 9.5% to Euro1.74bn, in Mexico by 33% to Euro1.03bn, in Germany by 9.2% to Euro872m, in the Czech Republic and Slovakia by 1.8% to Euro205m, in Poland by 11% to Euro157m and in Ukraine by 43% to Euro85.6m. On the other hand, Buzzi’s sales fell by 5.6% in Luxembourg and the Netherlands, to Euro214m, by 2% in Russia to Euro285m, and by 1.6% in Brazil to Euro394m.
The company said “The increasingly evident effects of monetary restriction, the worsening of consumer and business confidence, and the uncertainties dictated by the growing geopolitical tensions in Ukraine and the Middle East continue to weigh on the international economic framework. In fact, in the last part of 2023, global economic activity weakened further, with international trade contracting in the third quarter.”
US: The Department of Transportation has announced a US$5m initiative to investigate the use of steel slag in cement and concrete. This will take the form of a collaboration between the Department of Transportation and a selected US-based steel producer and university partner. The initiative seeks to reduce CO2 emissions in the production of building materials. Prospective participants may view the grant opportunity here.
Transport secretary Pete Buttigieg said "We're proud to make this funding available to help develop the next generation of construction materials so that the future of our transport infrastructure is more resilient, more sustainable and made in America.”
Robert Hampshire, deputy assistant secretary for research and technology and chief science officer, said “This funding initiative will develop and advance innovative materials and technologies that support the nation’s goals to decarbonise the transportation sector by 2050, strengthen resilience of the nation’s transportation infrastructure, and address adverse environmental impacts created by the transportation system.”
Cemex reports sales growth in 2023
09 February 2024Mexico: Cemex reported sales of US$17.4bn in 2023, up by 8% year-on-year from 2022 levels. Meanwhile, the group’s operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 20% to US$3.35bn. The producer said that strong product pricing in all markets and slowing costs inflation compounded the positive effects of its growth investment strategy. On a consolidated basis, Cemex’s cement sales volumes fell by 6% to 51.7Mt from 55.1Mt. They rose by 3% in Mexico but fell by 10% in Europe, Middle East, Africa and Asia, by 3% in South and Central America and the Caribbean and by 13% in the US.
Chief executive officer Fernando González said "I am pleased to announce that 2023 is a great year for our company where we delivered not only great results and recovered from the extraordinary inflationary pressures of the last few years, but also continued executing against our ambitious decarbonisation commitments, reducing our CO2 emissions by 4% year-on-year and by 13% since 2020. Despite the significant macro challenges of the last four years, we have proven not only the resilience of our business model but also our ability to pivot and adjust rapidly to changing global conditions. This foundation gives us additional flexibility in capital allocation, where we continue to accelerate investments in our bolt-on growth strategy, initiate a sustainable return programme for shareholders and bolster our capital structure."
US: The Portland Cement Association (PCA) has voiced its concerns over the Environmental Protection Agency (EPA)'s newly finalised standard for particulate matter 2.5 (PM2.5). The new standard reduces the level of particulate matter below 2.5μm diameter permitted in flue gas emissions to 9μg/m3 from 12μg/m3. The PCA says that it is concerned that the new rule may restrict US cement producers’ operations and ‘further complicate’ their efforts to achieve net zero emissions by 2050.
President and CEO Mike Ireland said “This new rule strikes at the heart of the US cement industry's ability to deliver on the Biden Administration's infrastructure goals, as it would lead to fewer hours of operation at plants, which would mean layoffs, as well as less American cement and concrete at a time when the country needs more.” He added “The previous EPA standard on particulate matter emissions — arrived at by government officials working with industry — significantly drove down those emissions by 37% over the last 20 years. This downward trend would have continued without the new standard imposed."
However, EPA administrator Michael Stanley Regan said that the updated standard will prevent 4500 premature deaths and 290,000 lost workdays annually by 2032. Regan said “We do not have to sacrifice people to have a prosperous and booming economy.”
How much could Holcim be worth?
07 February 2024We return this week to look at Holcim’s decision to separate and list its business in North America. This is big news because the region delivered nearly a third of the group's earnings in 2022 and a quarter of its net sales. The building materials market in North America has shown considerable potential for Holcim and other companies in recent years. The question then is why would Holcim want to divest this wealth generating potential from the rest of the business? The answer lies in how much Holcim US could be worth in the future.
The group announced at the end of January 2024 that it is working towards a full capital market separation and US listing of its North American business. The transaction will be run as a spin-off with the intention of benefiting all of the company’s present shareholders. The intention is to create the “leading pure-play North American building solutions company,” with the US listing expected to complete in the first half of 2025. The new company will be run separately and independently to the rump of ‘non-US Holcim’ with its own management structure and directors. Crucially, non-US Holcim itself does not intend to have any cross-shareholding in the new company. Holcim’s current chief executive officer Jan Jenisch will focus on his role as chair from May 2024 with the appointment of Miljan Gutovic. Jenisch will then lead the work on spinning-off the US business before later, possibly, taking a senior position at one of the resulting companies, according to his comments at an investors and analysts’ conference.
Holcim says it is doing this to maximise the return to its shareholders. This dodges the question, given that public companies partly exist to do this anyway, so the decision may be more about generating value for shareholders in the short term rather than, say, increasing value for both shareholders and stakeholders by building a bigger business empire. Jenisch explained the decision as a natural evolution of the company’s strategy and he repeatedly described himself as “the first servant of the shareholders.” The divestment should make both companies more valuable through corporate reorganisation rather than buying new companies or making new products. The other thing to consider is that Holcim's shareholders have not been shy in making their requirements known going back to the arguments over the share split when Lafarge and Holcim merged in 2015 and the subsequent battle for the direction of the group.
A spin-off is a form of corporate divestment where a parent company creates a subsidiary as a separate entity with its own management structure and it distributes the shares in the new company between its existing shareholders. Typically it is seen as a good option for the shareholders of the original company compared to other types of divestment such as a split-off, an equity carve out or a straight sale. The benefits include generating proceeds from the divestment, simplifying the corporate structure, increasing the value of both companies and there are tax advantages too. The risk of going for a spin-off though is that the new company may start with operational or financial issues as it starts going solo. It may also have difficulty dealing with market preconceptions about what the new organisation is like based on the parent.
Jenisch said that the group had considered going for an initial public offering for the North American business but had decided that this was riskier. Holcim expects and hopes that the value of the two companies will be higher separately than as they are at present as part of one company. Hence, its investor presentation describing the spin-off was full of plenty of arguments positioning how strong the US business is and could be. Chief financial officer Steffen Kindler also pointed out during the investor conference that one of the reasons the company opted for a full separation was to better secure Standard and Poor's (S&P) listing criteria, another sign that the plan is targeted towards securing as much value as possible. The company is targeting net sales of over US$20bn/yr by 2030 for its North American business.
The strength of the US market in recent years has been evident from the actions of other companies in the building materials sector. Ireland-based CRH moved its primary listing to the US in 2023 due to its high proportion of earnings from the country and the potential in the future from “continued economic expansion, a growing population and significant construction needs.” Another big recent transaction in the sector was the merger of the US operations of Summit Materials and Cementos Argos that completed in early 2024. The diverging prospects of the US economy versus Europe have been driving this trend. Listing on a US exchange can also give companies potentially higher valuations along with access to a larger market and easier connections to private equity to help fund expansion.
With this in mind Holcim’s decision to do something with its North America operations makes sense as it helps the company to increase the return to its shareholders, grow the business and remain competitive. The dominance of the US market on Holcim’s balance sheet is increasingly making the company a US one but without the advantages of being locally based. A spin-off suits the Milton Freedman dictum that companies only exist to maximise shareholder return but there is always a debate to be had about how to actually do this. Splitting Holcim’s growth-based US business from the more sustainability-minded European one ties into this for example, as differences in corporate social responsibilities grow between the regions.
Finally, on an emotional level giving up a key business area feels like a wrench to the status quo. Holcim will no longer be the largest cement producer outside of China once the separation completes. We await further details on how the two companies will be connected following the split… but change is coming.
Monarch Cement and Evergy Energy Solutions to build 20MW solar power plant at Humboldt cement plant
02 February 2024US: Monarch Cement and Evergy Energy Solutions plan to build a 20MW solar project in Humboldt, Kansas. The project is scheduled to commence in early 2024, and will serve as a ‘benchmark for integrating renewable energy in business operations,’ according to the partners.
Monarch Cement president Kent Webber said “The board of directors and management of Monarch Cement are extremely excited about this win-win venture, where we are making a giant movement toward achieving our 2050 carbon neutrality goals, being socially responsible and providing a more than significant return on investment to our shareholders." He added "Evergy Energy Solutions has done an incredible job of leading and providing solutions at every obstacle. We couldn't be happier with Evergy Energy Solutions’ performance, professionalism and command of the subject."
Vietnamese cement sales to rise in 2024
02 February 2024Vietnam: Financial management company SSI Securities Corporation says that it expects Vietnam’s cement consumption to ‘bottom out’ in the first quarter of 2024, before recovering ‘gradually’ throughout the rest of the year. Việt Nam News has reported that the anticipated recovery is the outcome of intensified investments in infrastructure by the Vietnamese government, beginning in late 2023. The cement sector also anticipates growing demand from export markets, including Australia, the US, Africa and South and Central America, as it lowers its reliance on exporting to China. Challenges persist in the form of protective measures or stricter standards in other markets, including the Philippines and Europe.