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Court annuls information request by European Commission into cement company competition probe 11 March 2016
Europe: The European Court of Justice has annulled a request for information by the European Commission into several cement producers in a cartel probe. The judgement could restrict the competition watchdog's investigative powers, according to reporting by the Wall Street Journal.
The commission opened an antitrust investigation in late 2010 looking at the activities of Cemex, Holcim, Lafarge, HeidelbergCement and others. Originally the cement companies were suspected by the commission of colluding with rivals to fix prices and share markets in Austria, Belgium, the Czech Republic, France, Germany, Italy, Luxembourg, the Netherlands, Spain and the UK. However, the investigation was closed in mid-2015 due to insufficient evidence. Since then the cement producers have challenged the commission’s right to ask for the level of detail they requested. The ruling overturns a 2014 decision by the EU's General Court, which said the commission questionnaires were justified.
Magnesita revenue rises by 18% to US$937m in 2015 11 March 2016
Brazil: Magnesita’s revenue has risen by 18% year-on-year to US$937m in 2015 from US$796m in 2014. Its net loss decreased to US$294m in 2015 from US$27m in 2014. The company described 2015 as a year ‘marked by a challenging economic environment globally.’ It noted a drop in steel production in the US due to high imports, currency effects and the poor economy in Brazil.
The manufacturer’s production volumes of refractories fell by 6.9% to 958,000t in 2015 from 1.03Mt in 2014. However, its sales revenue from its refractories business rose by 15.6% to US$816m from US$706m. Although the majority of Magnesita’s refractory sales were to the steel industry, its sales volumes to other industries, including cement, fell faster in 2015 by 11.7% to 133,000t. This decrease was mainly attributed to the decline of the Brazilian cement industry and by lower demand for cement in Venezuela. Despite this, sales volume growth of 15% was reported in Middle East and Africa led by Saudi Arabia and Egypt.
Titan sales rise by 20.7% to Euro1.4bn in 2015 11 March 2016
Greece: Titan’s turnover grew by 20.7% year-on-year to Euro1.14bn in 2015 from Euro1.16bn in 2014. Its net profit rose by 9.1% to Euro33.8m from Euro30.9m. The cement producer attributed the result to growth in the US market.
Despite rising turnover in the fourth quarter of 2015 the group reported a net loss of Euro2.4m down from a net profit of Euro0.4m in the fourth quarter of 2014. This was due to its subsidiary Titan America suspending construction of a cement plant in Castle Hayne, North Carolina, resulting in a Euro12.4 impairment charge due to the suspended investment.
By region the group reported that its total turnover for Greece and Western Europe in 2015 fell by 5.6% to Euro269m, mainly due to the continued depression in the construction market in Greece. Turnover in the US grew by 45% to Euro680m, supported by a growing residential housing market particularly in the south east of the country. In Southeastern Europe turnover remained static at Euro209m. In Egypt cement demand grew by 5% but low prices in the second half of the year reduced profits. Turnover increased by 22.3% to Euro241m in this territory.
Group net debt rose by Euro81m in 2015 to Euro621m, due to high capital expenditure in 2015, the acquisition of a minority stake in Antea in Albania and the strengthening US Dollar.
US: Titan America has cancelled the construction of a cement plant in Castle Hayne, North Carolina. It said it made the decision on economic reasons. Supply and demand balances in the specific regional markets did not support the cost of building a plant.
“Our decision to suspend construction on the cement plant in Castle Hayne is driven by basic project economics,” said Bill Zarkalis, Titan America’s CEO. “The pace of demand growth in the specific markets does not seem adequate to justify the addition of substantial new production capacity - more so because the costs to construct a new cement plant in the United States have risen substantially in the past few years. Finally, the overall risk profile of the project has worsened as new coastal capacity in North Carolina could be vulnerable to cement imports, considering the strong US Dollar, the global cement supply situation and low ocean freight costs.” He added that Titan is committed to long-term growth in the US and that the group is investing over US$250m between 2014 and 2016.
Titan America serves its North Carolina market from its Roanoke cement plant in Virginia, with an integrated logistics network of cement distribution terminals, warehouses and more than twenty ready-mix concrete plants. No jobs in any of Titan America’s existing operations are expected to be affected by the decision to cancel the Castle Hayne cement plant.
Philippines: Cemex Philippines has started proceedings to sell a minority stake in its assets. The subsidiary of Cemex has filed a registration statement with the Securities and Exchange Commission (SEC) of the Philippines and the Philippine Stock Exchange. Subject to obtaining approvals from both bodies it will then sell a minority interest in the company’s cement manufacturing assets in the Philippines, the company said in a statement.
Cemex runs two integrated cement plants in the country, the Solid Cement Plant in Rizal and the APO Cement Plant in Cebu. The decision to sell shares of assets in the Philippines is part of Cemex’s wider asset divesture plant.