Displaying items by tag: Votorantim Cimentos

The agreement this week by Ciments du Maroc to buy two production projects from Anouar Invest Group marks a consolidation phase in the local market. The subsidiary of Germany’s HeidelbergCement has struck a deal to acquire Atlantic Cement’s 2.2Mt/yr integrated plant project in Settat province and the Les Cimenteries Marocaines du Sud (CIMSUD) 0.5Mt/yr grinding plant at Laâyoune, which was only recently commissioned.

Graph 1: Cement sales and production capacity in Morocco, 2013 - 2018. Source: L’Association Professionnelle des Cimentiers (APC) & Global Cement Directory 2019.

Graph 1 gives an impression of the market conditions the cement producers have faced over the past five years. Cement sales hit of a high of 16.1Mt in 2011 following increasing growth in the 1980s, 1990s and 2000s. Cement sales have since wilted, while production capacity has increased pushing down the capacity utilisation rate. The capacity utilisation dropped below 55% in 2018, using Global Cement Directory 2019 data, although other sources have placed it at around 60%.

Local production is dominated by two multinational producers, LafargeHolcim (LafargeHolcim Maroc) and HeidelbergCement (Ciments du Maroc), and a local company, Ciments de l’Atlas (CIMAT). CIMAT is owned by Addoha Group and it also operates Ciments de l'Afrique (CIMAF) with plants across West Africa. A fourth player, Asment de Témara, run by Votorantim, also operates an integrated plant.

LafargeHolcim Maroc’s turnover fell by 2% year-on-year to US$837m in 2018 along with a drop in consolidated net income of 18% to US$201m. It attributed this to lower sales and growing petcoke costs. Ciments du Maroc’s turnover fell slightly to US$419m but its net profit rose by 3% to US$108m. This followed a generally positive year in 2017 due to a strong second half of the year. It blamed the instability on a poor real estate market. CIMAT managed to raise its sales in 2018 by 6% to US$300m and its income by 1.4% to US$90.7m.

Anouar Invest Group’s decision to sell up may mean that its attempt to break into the cement market has failed. Who can blame it given the market conditions. Although, who knows, HeidelbergCement may have made it a great offer. HeidelbergCement’s gambit is also interesting because, in February 2019, it reduced its stake in Ciments du Maroc by 7.8% to 54.6% signalling less confidence in the country.

Yet, cement sales started to improve in the first quarter of 2019 with consecutive month-on-month improvements. Neither is Anouar Invest Group the last company to try its luck with cement production in Morocco. In June 2019 FLSmdith announced that TEKCIM had ordered a US$45m cement plant from it and Société Générale des Travaux du Maroc. The grinding unit has a production capacity of 1.2Mt/yr. Clearly, despite a market with production overcapacity, companies are sensing opportunities with the cement grinding model.

India: Cement producers and the World Business Council for Sustainable Development (WBCSD) have launched the Indian Cement Sector SDG Roadmap. The planning framework uses the United Nation’s (UN) sustainable development goals (SDG) to set a series of goals in energy and climate, people and communities, the circular economy and natural resource management. It is intended to contribute to the UN’s 2030 Agenda for Sustainable Development.

This initiative has been convened by nine cement companies: ACC, Ambuja Cement, CRH, Dalmia Cement (Bharat), Heidelberg Cement, Shree Cement, Orient Cement, UltraTech Cement, Votorantim Cimentos. It is also partially funded by the Swiss Agency for Development and Cooperation (SDC).

Notable goals from the roadmap include promoting railway and waterway transport networks, improving transport safety, increasing the use of blended cements and encouraging the use of alternative fuels. The framework also plans to increase the number of women in the indsutry workforce at every level from entry to board.

Brazil: Votorantim Cimentos’ revenue rose by 5.5% year-on-year to US$615m in the first quarter of 2019 from US$683m in the same period in 2018. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) more than doubled to US$143m from US$52.2m. Its sales volumes of cement fell by 5% to 6.4Mt from 6.7Mt. It attributed the increase in revenue to its results in Brazil and Latin America, as well as positive currency effects.

Brazil: Votorantim Cimentos plans to spend around US$50m on upgrading its 0.2Mt/yr grinding plant at Pecém in Ceará. It will increase the unit’s production capacity by 0.8Mt/yr. The official announcement was made during a meeting between Camilo Santana, the governor of Ceará, and the board of Votorantim.

Brazil: Votorantim Cimentos plans to open a limestone grinding plant at Nobres. in Mato Grosso state to produce agricultural lime. The unit will have a production capacity of 0.7Mt/yr, according to the Valor newspaper. Once the new plant is opened in the second quarter of 2019 the company will have a total agricultural lime production capacity of 4.5Mt/yr.

The initiative is part of the building materials group’s plans to diversify its business. For the agricultural lime market it is targeting Central-West, Central-North and Northeast parts of Brazil. The Nobres plant can also produce 0.25Mt/yr of limestone filler for farm use. Following the upgrade to the Nobres plant it will be able to produce 0.75Mt/yr of dolomitic and calcitic limestone. These limestone products both have agricultural applications as soil nutrients.

India: Private equity company True North has purchased a 54% stake in Shree Digvijay for a reported US$17m from Brazil’s Votorantim Cementos. Other companies bought the rest of Votorantim’s 75% share in the business, according to Bloomberg. True North signed a deal to buy the cement producer in late 2018. Shree Digvijay operates an integrated cement plant at Jamnagr in Gujarat.

Brazil: Votorantim Cimentos’ revenue rose by 15% year-on-year to US$3.26bn in 2018 from US$2.82bn in 2017. Its sales volumes of cement increased slightly to 30.9Mt from 30.6Mt. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 51% to US$677m from US$477m. Despite a 1.2% drop in cement demand in Brazil, the group managed to raise its revenue. The cement producer said that its revenue growth in 2018 was affected by markets in Brazil and the US and positive currency depreciation effects.

Brazil: Eduardo Mazzilli de Vassimon has been announced as the president of Votorantim. He will succeed Raul Calfat on 1 May 2019 following a transition period in April 2019. Calfat has worked for Votorantim since 1992 when it acquired Papel Simão. He later became chairman of the board of directors in 2014.

Vassimon, a 60-year old, graduated in business administration at the Escola de Administração de Empresas de São Paulo (FGV EAESP) and in economics at the School of Economics, Business and Accounting of the University of São Paulo (FEA USP) with a postgraduate degree at EAESP and at the HEC business school in France. He has worked for more than 30 years in the financial market, including for Itaú-Unibanco. His last position was as director general at Itaú-Unibanco's wholesale bank and president of Itaú BBA.

US: Brazil’s Votorantim Cimentos has acquied United Materials, a producer of aggregates, concrete and building materials, for an undisclosed amount. The purchase was conducted by its subsidiary Votorantim Cimentos North America. United Materials operates four ready-mix concrete plants, one aggregate quarry and two building materials units in the western part of New York state. It has around 140 employees.

Brazil: Votorantim Cimentos has started shipping cement from its Aracaju terminal in Sergipe state to its Manaus terminal in Amazonas state to expand its business in the north of the country. It purchased the Manaus unit from Cemex in 2018, according to the Valor Economico newspaper. A 20,000t cement carrier will be used exclusively for the project.