Displaying items by tag: Vulcan

Mexico: President Andrés Manuel López Obrador has accused the US government of funding environmentalists' challenges to the government's planned Tren Maya tourist railway project. AP News has reported that López Obrador has declared the project a matter of national security.

Cemex is currently embroiled in a dispute with Vulcan Materials subsidiary Sac-Tun over use of the latter's Punta Venado terminal in Quintana Roo. The terminal sits along the planned route of the Tren Maya line. The Mexican State Prosecutor's Office supported Cemex's re-entry into the terminal on 14 March 2023. The government previously rejected Sac-Tun's application to renew its quarrying licence for its quarry at the site of the terminal.

For more on this story, read our Global Cement Weekly analysis.

A dispute between Cemex and Vulcan Materials over the use of a terminal in Quintana Roo state heated up this week as the two companies publicly argued over the situation. US-based Vulcan Materials went to the press to say that the Mexican police had forced entry into the facility south of Cancun, run by its subsidiary Calica, with orders to allow a Cemex ship to discharge cement. Vulcan denied that the authorities had any legal basis for the action and said that it was an illegal occupation. Cemex then responded with a press release explaining that the two companies had held a previous contractual relationship for joint-usage of the terminal until the agreement broke down in late 2022. It says it was granted an injunction by a local court to continue using the terminal while legal proceedings carry on.

The disagreement over the use of the Punta Venado terminal dates back to at least 2018 when Vulcan initiated a North American Free Trade Agreement (NAFTA) arbitration claim over alleged planning and environmental issues in relation to a nearby quarry. Dialogue continued, but Calica’s operations in the area were shut down by the government in May 2022. Subsequently, Vulcan’s total volumes of shipped aggregates fell by 6% year-on-year to 54Mt in the fourth quarter of 2022, partly due to the closure.

Unfortunately, the argument has become increasingly politicised with Mexican president Andres Manuel Lopez Obrador criticising Vulcan for its environmental record and US senators using the Vulcan case as an alleged example of Mexico treating US companies unfairly. Some media commentators have also noted that the Mexican government is promoting a number of large-scale infrastructure schemes in the region, including the Tren Maya project, a new 1500km train line around the Yucatan peninsula, which would link tourist towns such as Cancún with historical sites like Palenque.

Graph 1: Grey cement production in Mexico, 2018 - 2022. Source: National Institute of Statistics and Geography (INEGI).

Data from the National Institute of Statistics and Geography (INEGI) shows that rolling annual cement production in Mexico peaked at around 43Mt in late 2018 before falling to 39Mt in mid-2020. It later recovered to a peak of just under 46Mt in mid-2021. It has since dropped a little to mid-2022 and then started to trend upwards again. The nominal cement production capacity in Mexico is 60Mt/yr according to the Global Cement Directory 2023. Yet, the actual production capacity has been reported in local press as being 42Mt/yr, lower than the annual cement production of 43.9Mt in 2022. In February 2023 it was reported that the Mexican government was taking steps to 'implement import facilities' to support more cement being imported. This was due to shortages in certain states particular in the south-west of the country.

Cemex’s net sales in Mexico grew by 11% to US$3.84bn in 2022 and this was attributed partly to tourism-related construction in ‘the peninsulas.’ Holcim noted ‘market softness’ for cement in the country but reported growth for concrete due to infrastructure projects such as the Tren Maya. Cemento Moctezuma’s net sales rose by 2.6% to US$878m. Despite rising sales, both Cemex and Cemento Moctezuma reported falling earnings in 2022.

The dispute between Cemex and Vulcan Materials overlaps with wider trends on how and where the Mexican cement market is developing following a lull in the late 2010s. Production is growing in certain parts of the country, particularly in the Yucatan peninsula due to various infrastructure projects and tourism-related demand. However, the overall economic environment appears to have decreased earnings for some producers. However Cemex said that this was starting to correct itself in late 2022, as prices caught up with inflation. Portraying the Cemex - Vulcan situation in nationalistic terms is unhelpful, especially since Cemex made more money in the US than Mexico in 2022! However, this may be yet another example of more isolationist economic policies along the same lines as the US Inflation Reduction Act.

Mexico: Cemex says that it is within its rights to have continued using the Punta Venado terminal in Quintana Roo beyond the expiry of its contract with owner Sac-Tun at the end of 2022. Cemex says that it obtained an injunction to continue using the facilities after it began to have difficulty accessing them in late 2022. It subsequently obtained a contempt of court order against Sac-Tun when it tried to prevent it from accessing the terminal.

The Mexican State Prosecutor's Office supported Cemex's re-entry into the Punta Venado terminal on 14 March 2023.

Mexico: US-based Vulcan Materials has accused Cemex of illegally entering and unloading materials at its Punta Venado terminal in Quintana Roo. Vulcan Materials' subsidiary Sac-Tun operates the terminal, which serves its nearby Playa del Carmen quarry. Sac-Tun previously provided handling and unloading services at the terminal for Cemex, under a contract which expired on 31 December 2022. A local court ruled in favour of Cemex in the dispute over its continued use of the facilities on 5 March 2023. A high court intervened with an injunction in favour of Vulcan Materials on 16 March 2023.

Vulcan Materials now plans to take further legal action, according to Forbes. It is currently engaged in another legal dispute against the Mexican government for the latter's refusal to renew Sac-Tun's licence to operate the Playa del Carmen quarry. The producer is seeking damages of US$78.9m. The government said that the quarry had ceased to operate in line with requirements under its environmental impact licence and local land use plans.

US: Aggregate producer Vulcan Materials Company has agreed to buy US Concrete for US$1.29bn.The transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2021, subject to US Concrete shareholder approval, regulatory clearance and other customary closing conditions.

Tom Hill, Chairman and chief executive officer of Vulcan Materials Company, said, "US Concrete is an important Vulcan customer in a number of key areas, and this transaction is a logical and exciting step in our growth strategy as we further bolster our geographic footprint.”

US Concrete runs 27 aggregates operations serving California, Texas and the Northeast US. It shipped 12.6Mt of aggregates in 2020. Vulcan also said that the acquisition represented a ‘natural’ addition to Vulcan's business. The deal also adds US Concrete’s ready-mixed concrete operations to Vulcan's existing concrete business.

US: Vulcan Materials has elected Michael Wilson to its board of directors. He will serve on the Audit and Safety, Health and Environmental Affairs Committees of the construction aggregates producer. Wilson is the president and chief executive officer (CEO) of Ingevity Corporation and a member of Ingevity's board of directors. Ingevity is a global supplier of specialty chemicals, carbon materials and engineered polymers. With the addition of Wilson, Vulcan's 10-member board consists of nine independent directors.

US: The US Customs and Border Protection plans to start awarding contracts by mid-April 2017 for a proposed border wall with Mexico. The agency says it will request bids on or around 6 March 2017 and that companies would have to submit ‘concept papers’ to design and build prototypes by 10 March 2017, according to the Associated Press. Finalists must then submit offers with their proposed costs by 24 March 2017. No details on where construction will start or how much it will be cost have been released.

Estimates for the cost of a 2000-mile border wall vary significantly. The Government Accountability Office estimates it would cost on average US$6.5m/mile for a pedestrian fence and US$1.8m/mile for vehicle barriers. However, an internal Homeland Security Department report prepared for department secretary John Kelly places the bill at about US$21m according to an anonymous source quoted by the Associated Press. It proposes that existing barriers built during the George W Bush administration be extended first in stages.

The cost of the wall will depend on the height, materials and other specifications of the project. Granite Construction, Vulcan Materials and Martin Marietta Materials are all likely to be potential bidders and Mexico’s Cemex is also likely to benefit from any increase in demand for construction materials in the region.

US: Vulcan Materials has elected David P Steiner to its board of directors. Steiner will serve on Vulcan's Safety, Health and Environmental Affairs Committee and the Governance Committee. Steiner most recently served as chief executive officer of Waste Management from 2004 to 2016, a North American waste management services company that covers collection, transfer, recycling and resource recovery services as well as landfill disposal. He currently serves on the board of directors of FedEx Corporation.

Vulcan also announced that Elaine L Chao has stepped down from the Board after being confirmed by the US Senate to serve as US Secretary of Transportation. Secretary Chao joined Vulcan's Board in February 2015.

US: Vulcan Materials has appointed Stan Bass, Michael Mills, Jerry Perkins and Brock Lodge to its management team.

Stan Bass, aged 54 years, formerly Senior Vice President, West, with responsibility for Vulcan’s Western and Mountain West Divisions, has been named to the new position of Chief Growth Officer for the company. Michael Mills, aged 55 years, formerly Senior Vice President & General Counsel, has been named to the new role of Chief Administrative Officer. Jerry Perkins, aged 46 years, formerly Assistant General Counsel and Corporate Secretary, has been named General Counsel and Corporate Secretary, succeeding Michael Mills. Brock Lodge, aged 43 years, formerly Vice President & General Manager of Vulcan’s Western Division that includes all operations in California, has been promoted to President of that Division.

Bass, as Chief Growth Officer, will be responsible for leading the company’s business development, commercial excellence and strategic growth initiatives. Mills as Chief Administrative Officer will be responsible for the executive oversight of the non-financial, administrative functions of the company.

US: Vulcan Materials' 2014 fourth quarter earnings surged on continued growth in aggregates shipments and stronger average selling prices. The company has also been expanding through a string of deals. Vulcan reported that it spent US$322m for bolt-on acquisitions during 2014.

"Strong momentum in the latest quarter bodes well for 2015, a year in which we expect a continued recovery in demand for our products and, importantly, an improving pricing and margin environment," said Chief executive Tom Hill. "Although aggregates demand remains well below normal levels, this steady and gradual improvement is a further indication of construction activity recovery," said Hill.

Vulcan reported a profit of US$38m in the fourth quarter of 2014, up from US$9.1m in the same period of 2013. Revenue during the period increased by 11% to US$755m. Vulcan said that the latest results benefited by around US$7m as the result of lower diesel fuel costs, mostly in its aggregates business.