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LafargeHolcim to sell assets in nine more countries 14 June 2016
Switzerland: LafargeHolcim plans to sell assets in nine additional countries as part of its post-merger divestment programme, according to the Financial Times. The announcement follows a portfolio review. However, LafargeHolcim did not name the locations of the proposed sales. In March 2016 the group released details of sales in South Korea and Saudi Arabia and plans to merge its operations in Morocco. This followed plans to generate Euro3.16bn from divestments in 2016.
South Africa: PPC’s revenue has fallen slightly, by 1% year-on-year, to US$293m in the first six months that ended on 31 March 2016 from US$296m in the same period in 2015. The group’s operating profit fell by 3% to US$47.7m from US$49.2m. It attributed the fall in revenue to lower selling prices of cement in South Africa and falling revenues in Zimbabwe and Botswana.
By business line, PPC’s cement division in South Africa reported that its revenue fell by 5% to US$155m. It noted that cement volumes improved ‘marginally’ due to sales volume growth in the coastal regions following reduced imports and demand from infrastructure projects. However, inland provinces such as a Gauteng and the Limpopo area were negatively affected to increased competition. Outside of South Africa its cement division’s revenue rose by 6% to US$85.5m. Despite sales declines in Zimbabwe and Botswana, the group’s new 0.6Mt/yr plant in Rwanda was commissioned in the second half of 2015.
The group’s lime division also reported that its revenue in all territories fell by 12% to US$24.9m.
The group also provided an update on its on-going projects. A US$280m 1Mt/yr cement plant in the Democratic Republic of the Congo was reported 83% complete in March 2016 with ‘hot’ commissioning scheduled for late 2016. A US$85m cement mill in Harare, Zimbabwe was reported 70% complete in March 2016 with plant commissioned planned for the end of 2016. Finally, a US$170m 1.4Mt/yr cement plant in Ethiopia remains scheduled to be commissioned in the second quarter of 2017.
Indonesia: Semen Indonesia is planning to spend up to US$100m in 2016 to buy foreign cement companies outside of Indonesia to grow its revenue, a company official has told Reuters. Agung Wiharto, the company's corporate secretary, attributed the move to local competition. He didn’t mention which countries the cement producer is considering. Semen Indonesia’s revenue fell slightly year-on-year to US$2.01bn in 2015.
Egypt: Chengdu Design & Research Institute of Building Materials Industry, a subsidiary of Sinoma, has been awarded a Euro1.05bn order to build six 6000t/day cement plants from the Equipment Bureau of the Ministry of Defence. The scope of the turkey contract includes construction of six new integrated cement production lines, operation and maintenance of two 5775t/day cement production lines of Phase II of GOE ARISH and the six Beni Suef cement production lines under the contract for three years. The order represents around 15% of Sinoma’s turnover in 2015.
Brazil: Jose Otavio Carneiro de Carvalho, president of the National Union of the Cement Industry (SNIC), estimates that the Brazilian domestic market will decrease by 12% in 2016, according to the Folha newspaper. SNIC data shows that cement sales fell by 11% year-on-year to 61Mt/yr for the June 2015 to May 2016 period from 69Mt in the previous year. Sales so far in 2016 have fallen by 14% to 23Mt for the January to May 2016 period from 27Mt from the previous year. SNIC have suggested that demand will only resume from 2017 and that companies may be holding back investment to ensure it.