Global Cement News

India: Rajesh Kapadia has resigned from Prism Cement as its chairman and non-executive, non-independent director. The resignation takes immediate effect. Kapadia cited poor health for his decision.

Another week and another massive Indian cement industry deal. This week Nirma has won the bidding for the assets of Lafarge India that LafargeHolcim is selling. Before we get too carried away though, the diversified conglomerate entered into a letter agreement with LafargeHolcim on 7 July 2016 to pay US$1.4bn for three cement plants and two grinding plants with a total cement production capacity of 11Mt/yr.

It is worth noting that this is only a letter agreement. LafargeHolcim signed one previously with Birla Corporation for some of the same assets in August 2015. Unfortunately, an ambiguous amendment to the Mines and Minerals (Development and Regulation) (MMDR) Act struck in January 2015 made it unclear how easily mineral rights could be transferred with an industrial plant sale. After much likely internal squabbling Lafarge India said it was selling all of its assets in January 2016 followed by threats of legal action by Birla.

Some commentators in the Indian media have flagged the new deal as expensive for Nirma. It will be paying US$127/t for the new capacity compared to the US$118/t that UltraTech Cement is offering Jaiprakash Associates for its laboured deal. The Nirma deal comprises integrated cement plants at Sonadih in Chattisgarh, Arasmeta in Chattisgarh and Chittorgarh in Rajasthan, and cement grinding plants at Jojobera in Jharkhand and Mejia, West Bengal. Other assets include 63 ready mix concrete plants, two aggregate plants and a blending unit.

However, unlike UltraTech, Nirma is a relatively new entrant in the cement industry. Its main industries are in detergents and soda ash manufacture. It invested US$194m in a 2.28Mt/yr cement plant in Rajasthan that was commissioned in November 2014. It also ran into environmental issues over a proposal to build a new cement plant at Mahuva in Gujarat. One report compiled under request by the Indian Supreme Court in 2011 cited the presence of Asiatic lions as a reason for concern!

Lions aside, Nirma may be paying over the odds for its new cement business but it will gain a bigger presence in the industry quickly and diversify from its other existing industries in which it faces fierce competition. The Lafarge India plants are mostly in eastern Indian states compared to Nirma’s plant in Rajasthan in the west, giving it a reasonable geographic spread.

Nirma reportedly plans to finance the purchase through a leveraged buyout and the Mint business newspaper has described this as the largest transaction of its kind in India to date. The risk here will be how the Indian cement market plays out in the short term. LafargeHolcim reported that its cement volumes fell in 2015, although this has since picked up in the first half of 2016. UltraTech did better in its 2015 – 2016 financial year but it reported a slow construction market. Longer-term demographic trends suggest that the cement industry will grow, especially in the east of the country. With this in mind it may be a while before Nirma’s cement business roars.

Germany: Michael Höllermann and Johan P Cnossen are to join the management board of the Industrial Solutions division of ThyssenKrupp with effect from 1 August 2016. Höllermann, aged 51 years, CEO of the Regional Headquarters South America since 2012, will be the new Chief Human Resources Officer (CHRO). Johan P Cnossen, aged 56 years, who joined Industrial Solutions on 1 May 2016 as head of the transformation office for the implementation of ‘planets’, will hold the new position of Chief Operating Officer. The appointments are part of the ‘planets’ program reorganisation of the group’s Industrial Solutions business area.

With the appointments, Jens Michael Wegmann, CEO of the Industrial Solutions business area since 15 October 2015, has now filled all board positions. The new CFO, already in place since 1 June 2016, is Stefan Gesing. Also on the board is Dr Hans Christoph Atzpodien, who will focus on the management of Marine Systems.

Germany: Eric Jaschke has been appointed Chief Financial Officer (CFO) at Schenck Process Group with effect from 1 July 2016. Jaschke will preside over the Schenck Process Group’s global financial organisation, working closely with Andreas Evertz, President and Chief Executive Officer (CEO). Jaschke has already fulfilled the role of CFO on a provisional basis since October 2015.

Jaschke started his career at Schenck Process in 1999 as a specialist for international controlling. In this capacity he focused on building and advancing a management information system. He was CFO of Schenck Process Australia from 2006 to 2007 and became Managing Director of the company in Australia at the start of 2008. Jaschke returned to Germany in 2012 and led the Business Unit Heavy in Darmstadt, one of the four core Business Units of Schenck Process.

Jaschke holds a master’s degree in business administration at the Macquarie Graduate School of Management in Sydney, Australia. He gained his bachelor’s degree at the Baden-Württemberg Cooperative State University in Mannheim, Germany.

Switzerland: LafargeHolcim has appointed Alessandra Girolami as the group’s new Head of Investor Relations from 1 September 2016. Girolami will report to group chief financial officer Ron Wirahadiraksa. She replaces Michel Gerber, who will leave the group.

Girolami joins LafargeHolcim from the Carrefour Group, where she has been in Investor Relations since 2005 and Head of Financial Communications and Investor Relations since 2014. She began her career at ABN AMRO as a sell-side analyst. Girolami graduated from ESCP Europe with a major in finance and holds a postgraduate degree in Applied Economics from the Institut d’Etudes Politiques in Paris.