UAE: Lafarge Emirates has ordered a Jetflex Plus burner for its Fujairah cement plant from FLSmidth. Thierry Terriere, the plant manager, and Simon Jensen, head of FLSmidth Middle-East, signed the contract.

“As the business has shifted towards using low-cost fuels with high-quality clinker, we have made an ambitious decision and chosen the best option on the market – this next generation burner from FLSmidth," Sohail Qaiser, Process Manager at Lafarge Emirates Cement. He added that the company expects a ‘significant’ change in its fuel mix cost as well as a more sustainable kiln operation.

FLSmidth says that the Jetflex Plus burner is the first to be installed in the LafargeHolcim Group and that the company was selected for procurement and supervision of the installation of it. The burner product has rotatable jet air nozzles allowing for optimal adjustment of the flame as well as the low NOx emissions for various fuel types and operating conditions.

The relationship between the companies dates back to 2007 when FLSmidth built the 7500t/day Fujairah plant for Orascom.

Spain: Cemex España has submitted a proposal to the local government to extract a total of 15Mt of limestone from its Can Negret quarry near to its Lloseta cement plant in Majorca. The proposal will run until 2032, according to the Ultima Hora newspaper. The company was previously granted a concession at the quarry in 1982.

Myanmar: Three local activists have been arrested for protesting against a new cement plant being built at Patheingyi Township in Mandalay Region. In late July 2018 local residents marched on environmental grounds from Mandalay to Nay Pyi Taw in protest against the construction of a 5000t/yr coal-fired cement plant in Dahattaw Village-tract, Patheingyi Township, according to the Asia News Network. However, police intervened and started legal action against some of the protestors.

Germany: ThyssenKrupp has decreased its earnings forecast for its 2017 – 2018 financial year due to the poor performance of its Industrial Solutions division. The division is expected to report a negative adjusted earnings before interest and taxation (EBIT) of Euro200m in the third quarter of the year due to higher expected total costs, particularly for a cement plant in Saudi Arabia and two other industrial projects. The group said that the number of major projects in the cement and fertiliser sector had decreased ‘considerably,’ partly due to the production overcapacity in the cement market.

"It is important to me to call it what it is. The results of our analysis at Industrial Solutions are anything but satisfying. The structure of plant construction must be adjusted to the changed market conditions in order to achieve a turnaround and finally become competitive again. We must act swiftly here," said Guido Kerkhoff, chairman of the executive board of ThyssenKupp. The group has proposed focusing its Industrial Solutions division on small and medium-sized projects and targeting plant construction on the higher-margin service business.

In mid-2017 the group announced plans to reorganised its Industrial Solutions division, including the decision to cut 1500 jobs in operational areas.

Cemex joined the divestment party this week with the news that it plans to sell up to US$2bn worth of assets by the end of 2020. Put that together with LafargeHolcim’s own divestment plan of selected assets worth up to US$2bn as part of its Strategy 2022 and there is potentially a lot of cement production infrastructure going on sale over the next few years.

Both companies say that they will start announcing the latest round of divestments in the second half of 2018. Prices vary considerably around the world - and remember this is not only cement - but at, say, US$250m per integrated plant that could amount to 16 units. That’s a big enough manufacturing base to build your very own cement production empire! So, which markets might the two companies be considering leaving?

Cemex’s weaker areas in its half-year report were its South, Central America and the Caribbean region and, to a lesser extent, its European region. The former reported falling sales, cement volumes and earnings. The latter reported falling earnings on a like-for-like basis with issues noted across cement, ready-mix concrete and aggregate business lines in the UK. Back in Central and South America, problems were noted in Colombia due to a 10% fall in cement sales in the first half. An important point to make here is that despatch figures from the National Administrative Department of Statistics (DANE) out this week suggest that Colombia’s overall cement market has picked up since April 2018 (see Graph 1), in contrast to Cemex’s experience. Panama, meanwhile, saw cement volumes wither by 22% due to the 30-day strike by construction workers. Other operations to consider for the chop might include Cemex Croatia, which the company attempted to sell to HeidelbergCement and Schwenk Zement in 2017, before the European Commission put an end to that idea.

Graph 1: Annual change of cement despatches in Columbia in 2017 and 2018. Source: DANE.

When asked directly during its second quarter results call which assets it was intending to sell, chief executive officer (CEO) Fernando Gonzalez didn’t answer on commercial grounds. What he did say though was that the company had faced ‘headwinds’ in the Philippines, Egypt and Colombia, particularly in relation to fuel prices. He also said that Cemex had finished its market analysis, that it knew exactly which assets it would like to sell already and that it was in ‘execution’ mode. In Gonzalez’s own words, “we do have a number of assets to be divested, either because they are low growth, or because they are not necessarily integrated to other business lines.”

As covered a couple of week ago, the obvious location for LafargeHolcim to exit is Indonesia. CEO Jan Jenisch continued to refuse to comment on rumours that the company was leaving the country during its second quarter results call. Yet, local production overcapacity, falling earnings and profits and an underperforming but still sparky market make it the ideal candidate. What Jenisch did reveal was that the country had ‘positive momentum.’ Perhaps more importantly he added, “We are not selling because we want to sell. We are selling for high valuations only.”

Other potential locations for LafargeHolcim to leave might include Brazil and parts of the Middle East and Africa. Brazil’s cement market recovery has been a few years coming and was delayed again by a truck drivers’ strike in May 2018. The Middle East Africa area was the worst performing region in LafargeHolcim’s mid-year results with problems noted in South Africa.

With all of this in mind we have a rough idea of what Cemex and LafargeHolcim might be considering selling. The obvious candidates for both companies seem to be solid markets that promise growth after a period of underperformance. Just like Colombia and Indonesia in fact. Looking at the track record for both of them in recent years Cemex has seemed to be more ready to sell individual plants such as the Odessa and Fairborn plants in the US to different buyers. LafargeHolcim for its part has generally gone for larger more complete sales of regional or country-based chunks of its business such as in Chile or Sri Lanka.

Finally, don’t forget that Cemex’s Fernando Gonzalez said in March 2018 that the company was considering acquisitions again after a decade of austerity. He mentioned an interest in India and in Brazil. If he meant that last one then maybe he should give LafargeHolcim’s Jan Jenisch a call.

Nigeria: The Cement Company of Northern Nigeria (CCNN) has appointed Khairat Abdulrazaq-Gwadabe and Shehu Abubakar as independent directors. It has also appointed Abbas Ahmad Gandi as a non-executive director of the company, according to the This Day newspaper.

Abdulrazaq-Gwadabe is a barrister and a solicitor of the Supreme Court of Nigeria and the managing partner of A Abdulrazaq & Co, a legal firm. She obtained a B.A in European Studies and Spanish from the University of Wolverhampton, UK and the Universidad Complutense in Madrid, Spain. She holds an LL.B from the University of Buckingham, UK and was called to the Nigerian Bar in 1986. She also holds a Masters Degree in Law (LL.M) from the University of Lagos. From 1999 to 2033 she was the senator for the Abuja Federal Capital Territory constituency.

Abubakar has worked for the banking industry from 1987 to 2017, recently retiring as an executive director of Keystone Bank. He has also been a director
on the boards of Global Bank of Liberia and KBL Health Care. He holds a B.Sc. (Business Management) from Usman Danfodio University, Sokoto and an MBA from Ahmadu Bello University, Zaria.

Gandi qualified as a chartered secretary from the Chelmer Institute of Higher Education, Chelmsford, UK. Amongst a career spanning two decades he worked as the Director General (Permanent Secretary) in the Sokoto State Civil Service. He was elected as a member of Constituent Assembly for the 1989 Constitution of the Federal Republic of Nigeria. On his return from the Constituent Assembly he was appointed as sole administrator/chairman of Yabo Local Government Council in Sokoto State.

US: Calgon Carbon has appointed Steve Schott as its president and chief executive officer (CEO) with effect from 3 August 2018. Schott will replace Randy Dearth, who announced he was leaving the company after six years.

Schott joined Calgon Carbon in 2007 as Executive Director of Finance. In 2010 he was promoted to Vice President and Chief Financial Officer with responsibility for all corporate financial functions. In 2015 he was promoted to Executive Vice President, Advanced Materials, Manufacturing, and Equipment. In this role, he also has responsibility for the company’s European operations, where Calgon Carbon is known as Chemviron.

Prior to joining Calgon Carbon, Schott spent eight years at DQE, a conglomerate whose primary business was electric energy. During his tenure, he held various positions including Controller, Vice President of Finance and Chief Financial Officer. Schott also spent 15 years at Deloitte & Touche where he was a senior manager in the auditing practice. He holds a B.S. in Business Administration from Duquesne University.

Pakistan: Lucky Cement’s profit has fallen as its cost of sales including coal, other fuels and packing materials have risen. Its standalone profit after tax fell by 10.9% year-on-year to US$98.3m in the financial year that ended on 30 June 2018 from US$110m in the same period in 2017. Its gross sales rose by 9.4% to US$543m from US$497m. Cement and clinker sales volumes rose by 9.3% to 7.82Mt from 7.15Mt with increases in both local and export sales.

India: The Industries Department of Himachal Pradesh is preparing to allow construction work to start at a new cement plant at Sikridhar in the Chamba district in September 2018. The project is a long running scheme from the local government that was first mooted in 2002, according to the Times of India newspaper. The project has been linked to various companies previously including Jaiprakash Associates.

Philippines: Big Boss Cement is considering procuring a mill for its new US$215m plant project from European equipment manufacturers including Denmark’s FLSmdith, Germany’s Gebr. Pfeiffer and Germany’s Loesche. Ishmael Ordonez, vice-president of the cement producer, said that a vertical roller mill would take up less space than the horizontal mill it was currently using from a Chinese supplier, according to Inside International Industrials. The company is set to start production at a new plant in Porac in Pampanga in August 2018. However, it is planning to expand the production capacity at the unit based on anticipated demand.