Global Cement News

India: Holcim has received approval from the Foreign Inevestment Promotion Board (FIPB) to merge holding firm Holcim India with its unit Ambuja Cements as part of a plan to restructure its India operations.

Holcim, which has majority stakes in two leading Indian cement makers, ACC and Ambuja Cements, announced in July 2013 its plan to consolidate operations in a cash and share deal in a two-step process, valued at about US$2296m. However, since Holcim's proposal is more than US$190m, it required approval of the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manamohan Singh.

Holcim said that as part of the restructuring process, Holcim India's over 50% stake in ACC will go to Ambuja and Holcim's stake in Ambuja will rise to 61.4% from a little over 50% following the merger of Holcim India with Ambuja.

Ambuja Cements would merge Holcim India through cash and share transactions. Ambuja will first acquire a 24% stake in HIPL for US$554.1m.

The third quarter results are in and signs of a recovery in the construction industry are present. Generally for the European producers, volumes of cement sold in the third quarter of 2013 have improved year-on-year compared to the figures for the first nine months of 2013. Although many of these third quarter sales changes are still negative it seems like the industry has turned a corner.

Lafarge reported that cement sales fell by 4% year-on-year to 102Mt for the first nine months in 2013. In the third quarter of 2013 sales remained stable year–on-year at 36.7Mt. Holcim saw its nine month sales fall by 3% to 104Mt while its third quarter sales remained stable at 36Mt. HeidelbergCement saw its nine month sales rise by 1% to 67.7Mt while its third quarter sales rose by 4% to 25.3Mt. Italcementi saw its nine month sales fall by 6% to 32.6Mt while its third quarter sales fell by 2% to 10.8Mt.

By region some of the differences between the European-based multinational cement producers have been telling. Lafarge, for example, is still down year-on-year on cement volumes sold in North America, denting the perceived wisdom of a strong North American recovery. However, profit indicators such as earnings before interest, taxes, depreciation and amortisation (EBITDA) have risen in that region, increasingly in the third quarter. Cemex and Holcim have done better in this region.

Notably, the unstable political situation in Egypt has also impacted the balance sheets for Lafarge and Italcementi. Lafarge reported that cement sales volumes fell by 27% for the first nine months of 2013, principally due to gas shortages, and 19% for the third quarter as the company started to substitute other fuels. Similarly, Italcementi saw overall cement and clinker sales drop by 11.2% in the nine months and 14% in the third quarter.

Meanwhile in China, Anhui Conch produced 86.2Mt for the nine months, a year-on-year increase of 12.1%. Overall revenues in China seem to have risen after decreases in 2012. Anhui Conch reported that its operating revenue rose by 15% to US$6.08bn for the first nine months and US$2.20bn for the third quarter of 2013. Analysts have pinned the return to profit to building in the country's eastern and southern provinces and the effects of government-led industry consolidation. Bucking this trend though, China National Building Materials (CNBM) saw its revenue rise by 37% to US$13.5bn for the first nine months of 2013 but its profit fell by 8.1% to US$542m.

Anhui Conch, Lafarge, Holcim, CNBM, Italcementi and HeidelbergCement all feature at the top of Global Cement's list of the 'Top 75 global cement companies' to be published in the December 2013 issue of Global Cement Magazine. Ahead of final publication we want to know whether readers agree with the rankings. Download our list (registration required) and let us know your comments by 1 December 2013.

Germany: Reinhold Festge, Managing Partner of Haver & Boecker, has been elected as the new president of the German Engineering Federation (VDMA) at a gathering of its members in Stuttgart on 18 October 2013. He succeeds Thomas Lindner of the Groz-Beckert KG in Albstadt who served as president of the VDMA since 2010. Karl Haeusgen and Carl Martin Welcker were elected as vice presidents.

Festge, born in 1945, originally trained as a doctor before he majored in Business Administration and then became managing director of Haver & Beumer Latinoamericana in Brazil. From 1985 to 1987 he served as the managing director of Haver Filling Systems in the US. In 1987 he became a partner of Haver & Boecker.

Festge is a member of the restricted board and sits on the main board of the VDMA. From 1998 to 2004 he was chairman of the VDMA professional association for construction and building material machinery. He was chairman of the VDMA state federation of North Rhine Westphalia from 2005 to 2011.

China: The board of directors of Anhui Conch has announced that Ji Qinying tendered his resignation as an executive director on 1 November 2013. A new executive director will be elected and appointed in due course.

Italy: Italcementi's revenue has dropped by 3.2% year-on-year to Euro1.06bn for the third quarter of 2013 from Euro1.10bn in the same period in 2012. However, earnings before income and taxes (EBIT) fell by 36% year-on-year to Euro108m for the third quarter of 2013 from Euro168m in 2012. The Italy-based multinational cement producer attributed the low revenue decline as a sign of slowing decline in Europe.

"Despite the stagnation in demand on the European markets, over the last four quarters, with the exception of March 2013, which was severely affected by the impact of bad weather on construction operations, the Italcementi Group has reported a positive trend in results for its industrial operations," said Giovanni Ferrario, Group Chief Operating Officer. He added that the group efficiency plan had helped the result despite the strong impact of the rise in energy prices in Egypt.

Sales of cement and clinker fell by 2.4% year-on-year in the third quarter of 2013 to 10.8Mt. By region sales fell in Europe, North Africa and the Middle East in the third quarter of 2013. Cement and clinker sales rose in North America and Asia. This trend was mirrored for the first nine months of 2013 also.