Displaying items by tag: roofing

India: CK Birla Group’s fibre cement roofing subsidiary HIL has agreed to acquire Fast Build Blocks for US$8.22m in a ‘slump sale.’ Fast Build Blocks produces autoclaved aerated concrete (AAC) blocks in Cuttack, Odisha. Press Trust of India News has reported that HIL is using the acquisition to establish a leadership position in the Eastern Indian market.

India: Visaka Industries has commissioned a new line at its Raebareli asbestos cement roofing sheets plant. Indiainfoline News Service has reported that the line has a capacity of 100,000t/yr.

There have been a couple of acquisitions of note this week in the north-western US and Holcim has picked up another building solutions company. To find out how the latter relates to former photography products producer Kodak, read on.

Starting with the north-western US, HeildelbergCement announced that it finalised the acquisition of Corliss Resources, a large family-owned aggregates and ready-mixed concrete company, for an undisclosed sum. The purchase includes major aggregate operations with sales volumes of about 2Mt/yr and reserves and resources of about 170Mt and four ready-mixed concrete (RMX) plants selling about 0.3Mm³/yr in the Greater Seattle area.

Global Cement normally sticks to cement but Holcim did something similar last week. It completed the acquisition of Cowden, another ready-mixed concrete and aggregate producer based in Bellingham in Washington state. This sale includes two RMX plants, eight aggregate facilities and a hauling fleet. Again, there was no word of the price.

Both the HeildelbergCement and Holcim purchases in the north-western US fit the selective bolt-on approach both companies have favoured in recent years. Looking specifically at the US, the United States Geological Survey (USGS) reported that estimated production for consumption of construction sand and gravel grew by 7% year-on-year to 753Mt in the first nine months of 2021. Estimated total construction aggregate production rose by 5% to 1.9Gt. Within the country, Washington’s sales of construction aggregates increased by 16% to 33Mt, the third largest rate by state nationally. Meanwhile, cement shipments for the country grew by 4% to 79.9Mt although they actually fell by 3% in Washington. This compares to annual growth of 2.8% in cement consumption in 2021 that the Portland Cement Association (PCA) was forecasting for the Pacific region of the US in the middle of 2021.

Holcim has been snapping up aggregates or RMX assets in established markets throughout 2021. These include US-based Marshall Concrete Products in December 2021, US-based Utelite Corporation in September 2021, Germany-based Heinrich Teufel in July 2021, the aggregates business and two RMX plants from Greece-based Halyps in May 2021 and Edile Commerciale and Cemex Rhone Alpes in Italy and France in February 2021. At the same time HeidelbergCement was mainly divesting itself of aggregates and RMX assets. It sold Halyps to Holcim and later in the same month agreed to sell its US West region to Martin Marietta Materials for US$2.3bn. The deal included cement, aggregates, RMX and asphalt businesses in California, Arizona, Oregon and Nevada. This covered two of its cement plants, with the exception of the 1.5Mt/yr Permanente cement plant in California, related distribution terminals, 17 active aggregates sites and several downstream operations. This makes the acquisition of new aggregate and RMX assets in Washington by HeildelbergCement interesting as we can see the company adjusting to its new market position. Although subsidiary Lehigh Hanson does not have a cement plant in the state it does operate a terminal in Seattle as well as other aggregate and RMX operations. North across the border in Canada though it still runs the integrated Delta Cement plant and terminal near Vancouver.

Returning to Holcim’s other acquisition this week brings us to Holcim’s target to expand the net sales of its Solutions & Products division to 30% of the group total by 2025 as part of its plans to decarbonise. This week it took one more step towards this goal with an agreement to buy France-based PRB Group, a manufacturer of coatings, insulations, adhesives and flooring systems. Global Cement Weekly has covered this topic a few times but, to recap, it started in January 2021 when Holcim announced it was buying roofing and building envelope producer Firestone Building Products for US$3.4bn. Various other related acquisitions have followed including an agreement to buy US-based Malarkey Roofing Products in December 2021.

How any of this relates to Kodak is as follows. Holcim’s predecessor Lafarge previously owned a major business away from cement, concrete and aggregates, namely gypsum. The gypsum wallboard business, like roofing, emits far less carbon than clinker production. In 2010 Lafarge’s gypsum business constituted nearly 9% of group revenue and it described itself as the third largest company in the sector worldwide. This was divested in the early 2010s in response to debts accrued by Lafarge’s acquisition of Orascom Cement in 2008. A decade later this decision appears to be the opposite of Holcim’s current strategy and indeed much of the cement sector’s current attempts to lower its carbon risk.

Kodak infamously filed for bankruptcy in 2012 after failing to move from analogue photography products to the digital market. The question cement company strategists should be asking themselves is whether their sector faces the same kind of disruption from the government and investment response to climate change. Lafarge apparently didn’t think so 10 years ago. Its successor Holcim does.

US: Holcim has signed an agreement to acquire Malarkey Roofing Products for US$1.35bn. The transaction will be financed with cash and it is expected to complete in the first quarter of 2022. The Switzerland-based construction materials group said that the acquisition would fit well with its Firestone Building Products subsidiary and that the purchase would position it as a full roofing provider. Malarkey Roofing Products has forecast net sales of US$600m and earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$120m in 2020.

Jan Jenisch, the chief executive officer of Holcim, said “We are off to a strong start to our ‘Strategy 2025 – Accelerating Green Growth’ with the acquisition of Malarkey Roofing Products, expanding our Solutions & Products business to become a global leader in roofing systems.” He added “Our companies are highly complementary with many upsides.”

Malarkey Roofing Products was founded by Herbert Malarkey in 1956 and has its headquarters in Portland, Oregon. It provides products for the residential roofing market from roofing shingles to ice and water barriers. It operates production plants in Oregon, California and Oklahoma.

Switzerland: Holcim has launched its Strategy 2025 – Accelerating Green Growth plan to become a global innovative and sustainable building solutions leader. Under the plan, the group will expand its solutions and products sales to account for 30% of consolidated sales by 2025. During the three-year period, it aims to deliver continuous group sales growth of 3 – 5% and over-proportional recurring earnings before interest, taxation, depreciation and amortisation (EBIT) growth on a like-for-like basis. It is also targeting a 10% return on invested capital (ROIC), cash conversion of 45% and leverage below 1.5x.

As part of the new strategy, the group will aim to recycle 75Mt of materials, including 10Mt of construction waste, in its products in 2022 – 2024. It aims to invest Euro476m in green capital expenditure (CAPEX) and link 40% of its financing agreements to its sustainable performance.

Chief executive officer Jan Jenisch said “We delivered what we promised with our Strategy 2022 one year in advance, setting strong foundations for our next era of growth. With our new level of performance, we have the firepower to invest in solutions and products to make it 30% of our company, while leading the way in green building solutions from ECOPact green concrete to energy-efficient roofing.” He added “With our Accelerating Green Growth strategy, we are ready to seize the opportunities ahead on our way to becoming the global leader in innovative and sustainable building solutions.”

Australia: Boral has sold its roofing and masonry business to private equity firm Lutum. Quarry Magazine has reported that Boral will retain ownership of its Emu Plains, New South Wales, concrete roofing plant and other ‘relevant infrastructure’ to support its on-going building materials operations.

Australia: Boral has agreed to sell its roof tiles business to private equity company Lutum and other investors. The Australian newspaper has reported that the deal is part of Boral’s exit out of building materials markets in Australia.

LafargeHolcim took what appeared to be a surprising decision this week when it announced it was buying roofing and building envelope producer Firestone Building Products (FSBP). The deal raises eyebrows because it seems to be a departure from the building material producer’s previous dedication to its three major pillars: cement, aggregates and ready-mixed concrete. Yet, it follows the logic of sticking to safer markets both geographically and in terms of sustainability.

First some background. Originally, Global Cement was following the auction for FSBP via its sister publication Global Insulation. Reporting from Bloomberg in December 2020 focused on more obvious bidders such as Ireland-based insulation producer Kingspan and roofing products producer Standard Industries. However, Kingspan has been struggling publicly with fallout from the Grenfell Tower fire inquiry in the UK. Despite not formally supplying any of its products for the tower block in London, it has become embroiled in the allegations of a general culture of cheating safety tests for foam board-based insulation products. At the almost the same time that it dropped out of the FSBP bidding, its chief executive officer (CEO) Gene Murtagh apologised for ‘process shortcomings’ that had been highlighted by the ongoing inquiry. Make of this what you will. No word on why Standard Industries left proceedings but it also seems to part of a consortium trying to take over US-based chemical producer WR Grace. All of this is relevant because, from publicly-available sources, LafargeHolcim appeared to emerge out of nowhere to snaffle up FSBP. However, it seems ludicrous that a company with a revenue of around Euro25bn in 2019 could simply pull something like Euro2.8bn out of its pocket at the last minute. It’s likely it was quietly in the bidding process the whole time.

Back in the early 2010s Lafarge was busy selling off its major ‘non-core’ assets like its gypsum business in the wake of picking up debts from acquisitions like cement-producer Orascom in the Middle East. This then turned into a string of divestments following the merger with Holcim to try and shore up the business along with a general pivot towards concrete as the key end-product as sustainability concerns gathered pace. Producing cement remains a major part of LafargeHolcim’s business but a focus on the whole lifecycle of concrete is vital as a hedge against the high process emissions associated with making clinker. Cement factories run the risk of becoming so-called stranded assets depending on future government regulations.

In its acquisition statement LafargeHolcim played up the sustainability credentials of buying FSBP. It noted that up to 60% of buildings’ energy is lost through roofs and that FSBP’s products help to reduce this. Then it made the link that FSBP’s technologies and products complement LafargeHolcim’s sustainable building solutions like its ECOPact green concrete and its EcoLabel sustainable product range. Later, when LafargeHolcim CEO Jan Jenisch spoke to US broadcaster CNBC he described the move as a ‘perfect fit’ for his company’s goal, “to be the most sustainable and most innovative building materials supplier in the future.” The geographical point of the acquisition hasn’t been dwelt on as much as sustainability but no doubt buying a business based in the US with revenue of US$1.8bn is seen as being far safer than buying, say, a similar concern in East Asia.

Investing in a business that sells products that reduce energy loss in the building envelope follows the trend of the moving sustainability-related risk along the supply chain from cement to concrete and beyond. Ultimately consumers will have to pick up the true carbon price of their buildings, but if building materials producers buy more of the envelope they can spread this cost more thinly and hopefully build up the market in the process. One can also imagine it fitting with the mindset of CEO Jan Jenisch, the former boss of Sika, a company that sells speciality chemicals across a wide range of markets. The real test here is whether LafargeHolcim will buy more companies in the wider building materials sector or if other heavy building materials producers will copy them. If so then the days of heavy building material producers sticking to the three pillars of cement, aggregates and concrete may be numbered.

US: LafargeHolcim has signed an agreement to buy Firestone Building Products from Bridgestone Americas for US$3.4bn. The company said that the new subsidiary recorded estimated net sales of US$1.8bn and earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$270m. The group will finance the deal through cash and debt. It said that the acquisition is a milestone in its transformation to become the ‘global leader in innovative and sustainable building solutions.’

Chief Executive Officer Jan Jenisch said, “I am excited to be entering the highly attractive roofing business. With Firestone Building Products we are strengthening our biggest market, the US, while also building a global growth and innovation platform for the company. Today’s milestone is a strategic leap on our journey to become the global leader in innovative and sustainable building solutions to build a world that works for people and the planet. I have great respect for the high-calibre leadership and expertise of the Firestone Building Products’ team and look forward to welcoming them into the LafargeHolcim family.”