Displaying items by tag: restructuring
FLSmidth to sell cement equipment business
30 January 2024Denmark: FLSmidth says that its plans to sell its cement business. The business provides FLSmidth’s processing equipment and services for cement plants around the globe. FLSmidth will now explore its possible divestment options in order to ‘maximise’ the business’ ‘full potential,’ while also serving to strengthen the supplier’s remaining mining business’ market-leading position in its sector.
Chair Tom Knutzen said “I am truly proud of what we have achieved with our cement business for more than 140 years. I firmly believe the business is well positioned for future success and that it has a significant role to play in the decarbonisation of cement. However, when reviewing the long-term options for FLSmidth as a business, for our customers and for our shareholders, we have concluded that a separation of ownership could be beneficial for both the mining and cement businesses. Unlocking the full potential of the cement business requires substantial investments and dedicated management attention, which we believe will be more easily achieved under a different ownership than FLSmidth’s.”
Chief executive officer Mikko Keto said “Our cement business has shown robust performance and good strategic progress over past years. This gives me great comfort in the cement business’ ability to continue its positive journey, also – and maybe even more so – under another ownership than FLSmidth’s. We have a clear ambition of further strengthening our market-leading position in mining, and we see tremendous long-term opportunities for the business backed by strong industry fundamentals and a positive long-term market outlook. Consequently, today’s decision of exploring divestment options for our cement business constitutes a key step in unlocking the full long-term potential of both the mining and cement businesses.”
FLSmidth's cement business reports sales of US$871m in 2023
30 January 2024Denmark: FLSmidth's cement business recorded preliminary, unaudited sales of US$871m in 2023, down by 59% year-on-year from US$2.14bn in 2022. The business contributed 25% of the group’s consolidated sales of US$3.5bn. FLSmidth had a total order intake for the year of US$3.11bn, toward which the cement business contributed US$711m (23%). The supplier said that its results were in line with guidance. It now expects its cement business to generate US$580 – 653m (19 – 23%) of total group sales of US$2.9 – 3.12bn in 2024.
FLSmidth said “We expect the short-term outlook for the cement industry to remain impacted by macroeconomic uncertainty. The guidance for 2024 reflects the ongoing execution of the GREEN’26 strategy, continued business simplification and product portfolio pruning, including the expected closing of sale of the MAAG gears and drives business during the first quarter of 2024.”
China: China National Building Material (CNBM) plans to rearrange shareholding in Sinoma Cement between its subsidiaries. On 4 December 2023, fellow CNBM subsidiary Sinoma International Engineering agreed to buy US$174m-worth of shares in Sinoma Cement. Upon completion of this, Sinoma International Engineering and New Tianshan Cement will together buy US$975m-worth of shares. Following these subscriptions, Sinoma Cement’s share capital will rise by 67%, to US$436m. New Tianshan Cement’s total stake in the company will be 60%.
The group’s first-half 2023 interim report recorded Sinoma Cement as a 100% subsidiary of New Tianshan Cement.
Gansu Qilianshan Cement to issue shares
31 October 2023China: China National Building Material (CNBM) says that its subsidiary Gansu Qilianshan Cement has issued shares. Reuters has reported that CNBM stated the reason for the issuance is ‘asset acquisition’ as part of the group’s on-going restructuring.
InterCement may sell Brazilian business
06 October 2023Brazil: InterCement has hired BTG Pactual to help explore ‘capitalisation alternatives’ as part of a proposed restructuring, possibly involving the sale of the group’s Brazilian business. Valor International News has reported that Companhia Siderúrgica Nacional (CSN) Cimentos has signalled its interest in acquiring the business, while Votorantim Cimentos may group together with other cement companies to make a bid. This would entail a division of the assets in order to conform to Brazilian competition laws.
InterCement successfully secured a postponement for payment of its outstanding bank debt in September 2023. It owes net debt of US$1.5bn up to 2027, including a senior note of US$548m due in May 2024. InterCement operates 12.2Mt/yr worth of cement capacity, and produced 8.7Mt of cement in 2022.
Barbados: Arawak Cement has ceased clinker production at its St Lucy cement plant. The facility will continue to operate as a grinding plant. Loop News has reported that the company now seeks to lay off 70% of the plant's staff. Negotiations between the producer and the Barbados Workers' Union are reportedly in 'advanced' stages.
In its previous restructuring in 2016, Arawak Cement offered voluntary separation packages to employees. At that time, 'unfavourable economic conditions globally and in the region' necessitated cost reduction.
China Communications Construction Company receives approval to restructure and fund Gansu Qilianshan Cement
13 March 2023China: The State-owned Assets Supervision and Administration Commission (SASAC) has granted its subsidiary China Communications Construction Company (CCCC) approval to restructure. Reuters has reported that, under the plans, the company will transfer supporting finances to China National Building Material (CNBM) subsidiary Gansu Qilianshan Cement. Additionally, there will be a spin off and listing of CCCC subsidiaries CCCC First Highway Institute and CCCC Second Highway Institute.
Jiangnan-Onoda Cement suspends operations
28 February 2023China: Taiheiyo Cement subsidiary Jiangnan-Onoda Cement suspended its production and sale of cement on 28 February 2023. Its Japan-based parent company said that it decided to suspend operations due to the 'tougher competitive environment' in China. This came about due to other producers' capacity expansions and 'advances in technical capabilities.' The suspension is in line with Taiheiyo Cement's strategy for the construction of a new business portfolio in Asia, under which it plans to expand its footprint in Southeast Asia and develop its logistics network.
Star Cement restructures wholly owned subsidiaries
06 February 2023India: The board of directors of Star Cement has approved the sale of shares in two of its subsidiaries to a third subsidiary, Star Cement Meghalaya. Star Cement Meghalaya will acquire 40% stakes in Meghalaya-based Star Cement (I) and Assam-based Star Cement North East.
Neither Star Cement (I) nor Star Cement North East has yet to commence cement production. Parent company Star Cement is currently building two new grinding plants in Northeast India, where it is the market leader. The group also announced plans for a new 3Mt/yr clinker line in June 2022.
Lafarge Cement Zimbabwe becomes Khayah Cement
17 January 2023Zimbabwe: Lafarge Cement Zimbabwe has rebranded to Khayah Cement amidst its on-going corporate restructuring. The Sunday News has reported that Khayah Cement is in the process of reconstituting its board of directors and board committees.