Displaying items by tag: India

Votorantim Cimentos released its half-year results this week giving us the opportunity to assess how well some of the larger cement producers are doing so far 2024. The general picture from the western multinational cement companies has been one of sluggish sales in the first half of the year but respectable earnings. So, for example, both Holcim and CRH were reporting static sales or revenue but earnings increases of over 10%. Heidelberg Materials and Cemex noted similar situations.

Graph 1: Sales revenue for selected multinational cement producers in the first half of 2024 and the first half of 2023. Source: Company financial reports.

Holcim was keen to play up that its net sales actually rose on a local currency basis. However, its recurring earnings before interest and taxation definitely rose, by 12% year-on-year to €2.33bn. Net sales were down in both North America and Europe, the group’s main two regions, but earnings were strong in both. Sales revenue for cement and aggregates may have been down across the group but earnings were up sharply. No such luck for ready-mixed concrete though, with both sales and earnings down overall. Another trend to watch is that sales and earnings were both up in the group’s Solutions & Products division. This part of the business has been growing due to merger and acquisition activity, and it is nearly the group’s second largest division after Europe.

CRH reported similar things overall. However, it has been busy selling off its Europe-based lime business, finishing the acquisition of its new assets in Texas and buying a majority stake in Australia-based AdBri. Its Americas Materials Solutions division reported both increasing revenues and earnings in the second quarter of 2024, at least, and the acquisitions in Texas helped too. Revenue in its Europe Materials Solutions division fell by 5% on an organic basis and this was blamed on subdued markets in Western Europe and poor weather.

Heidelberg Materials had a tougher time of it in the first half of 2024, with revenue down by 5% to around €10bn. It attributed the falling revenue to decreasing sales volumes across all business lines. It described its second quarter as follows, “The pressure on volumes is largely attributable to prolonged weak activity in the construction industry and adverse weather conditions in individual core markets. Active cost and price management largely offset the impact.” For clinker and cement this was noticed prominently in Europe despite volumes increasing in North America and Asia-Pacific. However, its result from current operations rose slightly. One reason for this appeared to be a ‘significant’ fall in material costs including energy.

Similarly, Cemex’s net sales were flat but its operating earnings were positive. Drilling down between its main geographical markets revealed a strong market in Mexico, a stable one in the US and declines in Europe, Middle East, and Africa (EMEA). In the US Cemex apportioned falls in cement and ready-mix concrete sales volumes to “...difficult weather conditions, a softening residential sector, portfolio rationalisation, competitive dynamics in certain micro markets and timing of several large projects.” Operating earnings were also hit by higher maintenance costs. In its EMEA region the trend was downwards but this was due to volume declines in Western Europe and geopolitical issues in the Middle East.

Votorantim Cimentos’ net revenue and adjusted earnings were down slightly in the first half of 2024 stemming from softer results in North America and Brazil in the first quarter. Revenue in Brazil was flat for the half year after a better second quarter. Revenue in North America though was hit by a slowdown in demand although price rises staved off some of this. Meanwhile, the group’s Europe, Africa and Asia region reported higher revenue due to higher volumes in most places.

Finally, UltraTech Cement is the odd company out in this group. The size of its annual revenue earns it a place in the list but it is more like some of the large China-based cement companies because it mostly sticks to one territory: India in this case. Yet, its revenue rose by nearly 6% to €4.2bn in the first half of 2024, making it the best performer in this article’s grouping. Domestic sales volumes increased at a similar rate in the April - June 2024 quarter. Similar to Heidelberg Materials, UltraTech Cement also reported that its energy costs fell by 17% year-on-year mainly due to reduced fuel prices. Its profit didn’t grow by much especially but the company is racing against Adani Cement to build capacity. It added 8.7Mt/yr alone in the April - June 2024 period compared to 13.3Mt/yr in its entire 2024 financial year that ended in March 2024.

The picture from the companies covered above suggests that the US market may have cooled for some since 2023. Despite this the earnings have mostly held up and cement companies enthusiasm for the market remains high led by Holcim’s impending market spin-off. Europe has been mixed, with declines in the west and stronger markets towards the east. Energy costs have finally fallen following the market shock when Russia invaded Ukraine in 2022 and this is helping earnings. That last point may be universal here given that it has affected both western multinationals and a large regional player such as UltraTech Cement. That’s it for now. In a future week Global Cement Weekly will take a look at how well the large China-based cement companies have done in so far in 2024.

India: Prism Johnson has appointed Raakesh Jain as Executive Director & CEO (Cement) with effect from 17 August 2024. His appointment will last for three years until mid-2027. He will succeed Vivek K Agnihotri, who has resigned.

Jain holds 30 years of experience in the building material industry working as the CEO of the cement division of Prism Johnson from late 2021. Before this he was the Chief Sales Officer for Nuvoco Vistas. Earlier in his career he spent nearly a decade with Lafarge India in sales roles. Before this he held sales positions for the white cement division of UltraTech Cement from the late 1990s onwards. He is a commerce graduate from Devi Ahilya University and holds a master of business administration in Marketing from Vikram University.

Uzbekistan: Shriram EPC, a subsidiary of India-based conglomerate SEPC, has been awarded a US$325m contract from JV Ohongron Sement to build a 3Mt/yr greenfield cement plant in Urgaz Village, Akhangaran District, reports NDTV Profit. Shriram EPC will handle design, engineering, project management, civil works, supply, erection, testing and commissioning at the plant. The project will be completed over the next 30 months, according to an exchange filing.

India: Thiruvananthapuram city Corporation has conducted a trial run of its refuse-derived fuel (RDF) plant at Sanmathi Park, Chala. The plant processes up to 1t/day of legacy waste, which is hard to segregate, to produce fuel for cement plants. The plant processes 40kg of materials per 15-minute cycle. Currently, non-recyclable materials are sent to Tamil Nadu cement plants. The government plans to establish at least one RDF plant per district as a permanent solution.

India: Kaushalya Logistics (KLL) has launched a new cement depot in Ahmednagar, Maharashtra, enhancing its logistics services for Adani Cement. The depot will handle approximately 120,000t/yr of cement, supporting ACC and Ambuja Cement brands.

KLL has also introduced a new vertical in freight forwarding under full truck load services, commencing operations with VMS Equipment, a group company of construction equipment manufacturer ACE.

Managing director Uddhav Poddar said “We are thrilled to start this new association with Adani group with a new depot in Ahmednagar. Our collaboration with Adani Cement showcases our cement logistics capabilities, and our entry into the freight forwarding market marks a pivotal step in our growth strategy.”

India: Ambuja Cements will invest US$190m to establish a 6Mt/yr grinding plant in Warisaliganj, Bihar. The project is scheduled in three phases, with the first phase of 2.4Mt/yr costing US$131m, according to the company. The plant has secured environmental clearance and land allocation for potential future expansions, The Telegraph India reports. The project will reportedly create 250 direct jobs and 1000 indirect jobs and will contribute US$30m/yr to Bihar’s economy. It is targeted for completion by December 2025.

Pranav Adani, director of Adani Enterprises, said “This investment aligns with the state government’s development programmes and our growth plans. The cement industry is witnessing healthy volumes due to the government’s infrastructure thrust, and Ambuja Cements is well positioned to support sustainable infrastructure development in the country.”

India: JK Lakshmi Cement board has approved a corporate restructuring to merge three subsidiaries: Udaipur Cement Works, Hansdeep Industries and Trading, and Hidrive Developers and Industries. The merger is due for completion on 1 April 2025.

India: JSW Cement has entered the competition to acquire a 38% stake in Orient Cement from the CK Birla Group, against UltraTech Cement and Adani Group. UltraTech Cement is reportedly in advanced discussions with CK Birla, having proposed a share price range of US$4.18 - 4.48, which places the enterprise value at US$872m-931m. The Adani Group has also expressed interest in acquiring Orient Cement, although their negotiations have been hindered by valuation disputes and environmental clearance issues.

India: The board of Shiva Cement has approved plans to build a 1Mt/yr cement grinding plant at Sambalpur in Odisha. The unit will be built with Bhushan Power and Steel at one of its operating sites. As part of the deal Shiva Cement, a subsidiary of JSW Cement, has the option to buy the plant for US$45m. Approval from the Odisha Industrial Infrastructure Development Corporation and other relevant governmental authorities will be required to set up the plant.

India: UltraTech Cement, a subsidiary of Aditya Birla, has purchased a 33% stake in India Cements for US$472m. UltraTech now controls a 55% stake and plans to make an open offer for a further 20% at US$4.66 per share. The transaction, subject to regulatory approvals, values India Cements at approximately US$1.39bn and could increase UltraTech's holding to 75.49%, according to The Northlines news.