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Holcim Philippines prepares for demand in Luzon 09 May 2012
Philippines: Holcim Philippines is preparing a US$9.46m upgrade of its formerly closed Batangas mill to meet an anticipated rise in demand in Southern Luzon.
Upon its reopening in 2013, the grinding plant in Mabini, Batangas with an existing capacity of 7.7Mt/yr will have an additional 500,000t capacity. The mill had been decommissioned in 2003 amid weak cement demand.
"South Luzon is one of the fastest-growing areas in the country and we expect this growth to continue, fuelled by both public and private construction. We want to be sure we have the facilities ready to deliver volumes when and where these are needed," said Roland van Wijnen, Holcim chief operating officer said in the statement.
Holcim's Mabini plant will be its second facility in Batangas after the company's Calaca terminal, which the company reopened in 2011 in a bid to serve the southern Luzon market and facilitate cement transfers from Mindanao to Luzon, where demand is highest.
"Having facilities across the country from north Luzon to Mindanao gives Holcim the strong advantage of being near its markets. Our Mabini facility will help further strengthen the capability and accessibility in bringing our products to where our customers are," van Wijnen said.
Italcementi back in the red 08 May 2012
Italy: Italcementi has posted a net loss of Euro34.6m for the first quarter of 2012, compared with a net profit of Euro127.6m for the same period of 2011. The 2011 results benefited from the sale of Italcementi's operations in Turkey.
Revenues fell by 6.8% year-on-year to Euro1.07bn. Recurring earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 3.1% to Euro126.7m and EBITDA went down by 8.7% to Euro135.5m. Earnings before interest and tax (EBIT) slumped by a massive 41.4% to Euro21.3m.
Italcementi posted a pre-tax loss of Euro7.8m for the quarter compared with a pre-tax profit of Euro24m for the first quarter of 2011. Its net financial debt rose to Euro2.18bn on 31 March 2012 compared to Euro2.09bn at 31 December 2011.
Lafarge reports improved picture in Q1 04 May 2012
France: Lafarge has announced its financial results for the first quarter of 2012, which show a 'solid' rise in sales and operating results. Sales increased for the quarter, up by 5% to Euro3.35bn for the first quarter, driven by improved pricing across all product lines and higher cement volumes in emerging markets.
Earnings before interest, tax, depreciation and amortisation (EBITDA) and current operating income rose in the quarter, driven by higher activity in Middle East and Africa, Asia, Latin America and North America. It rose by 8% to Euro516m year-on-year. Lafarge also reported that it achieved Euro70m of cost savings and is on track to reach at least Euro400m for the whole of 2012.
"While the first quarter results traditionally represent a 'small' quarter and we remain cautious for the year, the group was encouraged by the higher revenues and EBITDA growth," said Bruno Lafont, Chairman and CEO of Lafarge. "We successfully launched our new cost reduction programme and it is positive that price actions are taking hold to address cost inflation.
"The group is focused on debt reduction, strict cost discipline, the maximisation of its cash flows and the achievement of at least Euro1bn of strategic divestments this year," continued Lafont. "The management reorganisation accelerates the group's actions towards efficiency and organic growth."
In North America Lafarge recorded an EBITDA loss of Euro46m, an 38% improvement on the Euro75m loss in the first quarter of 2011. In western Europe, its EBITDA was Euro94m, down by nearly a third on the same quarter of 2011 when the EBITDA was Euro151m. Central and eastern Europe recorded a loss in terms of EBITDA of Euro14m (compared to a Euro9m loss in 2011), Latin America recorded an EBITDA of Euro59m (Euro53m in 2011) and Asia had an EBITDA of Euro108m for the quarter (Euro85m in 2011). Lafarge's most profitable region was the Middle East and Africa, which saw a first quarter EBITDA of Euro315m.
Lafarge said that it continues to see cement demand moving higher and maintained its market growth estimate of 1-4% in 2012 compared to 2011. Emerging markets continue to be the main driver of demand for Lafarge, which said that it benefits from its well balanced geographic spread of high quality assets. The group also said that it expected higher pricing for 2012 and that cost inflation will increase at a lower rate than in 2011.
HeidelbergCement increases revenue in Q1 04 May 2012
Germany: HeidelbergCement (HC) has released its financial results for the first quarter of 2012, which show a mixed overall performance. Group revenue improved by 8% to Euro2.8bn, with a 5% increase in cement sales volumes despite colder winter weather in mainland Europe.
HC reported strong growth in its North American operation, where it described the early signs of an economic recovery that had been helped by a relatively warm winter. It also highlighted strong developments and further potential in Asia, especially in Indonesia.
The group's operating income before depreciation (OIBD) decreased by 16% to Euro214m, adversely impacted by increased energy, freight and maintenance costs. It partly recovered some of its margin by the implementation of price increases.
The company reported that its three-year FOX 2013 programme for financial and operational excellence led to an improvement in cash flow of Euro39m in the first quarter of 2012. The company says that it is well on track to achieving the targeted improvement of Euro850m over three years, saving Euro384m in 2011 alone.
"The development of demand in the first quarter confirmed our outlook for the 2012 financial year," said Dr Bernd Scheifele, chairman of HC's board. "In view of high energy costs, we will unabatedly continue our efforts to reduce costs and improve efficiency under the FOX 2013 programme and increase prices in our markets in a consistent way."
"Deleveraging remains the highest priority for us in order to regain our investment grade rating," continued Scheifele. "Thanks to our advantageous geographical positioning in attractive markets in both emerging and industrialised countries... HeidelbergCement is excellently positioned to benefit over-proportionally from the continued economic growth."
Who would buy Hope?
Written by Global Cement staff
02 May 2012
UK: If Tarmac and Lafarge go through with their proposed JV tie-up in the UK, Lafarge will be obliged to sell its long-established Hope plant in Derbyshire, in the heart of the Peak District National Park, as well as its top-quality limestone quarry and rail depot connections. The Competition Commission has indicated that it would like an 'outsider' to buy the package, which also includes significant other assets in aggregates and readymix. The question is, who might be interested to buy it?
The UK is now a mature market, which has contracted significantly over the last decade, so that heady growth is not a possibility. The competition authorities will ensure that there is real competition in the UK building materials markets, so that only 'normal' margins of 5-10% can be expected - rather than inflated cartel-like or oligopolistic margins of 20% and beyond. Given that the return on capital invested is going to be quite low, why would anyone want to commit their cash (or their credit) to buying into the UK construction materials market? Why not put your money into bio-tech, or telecomms or even into a micro-development bank in the developing world?
I guess that it is largely down to a calculation of risk versus reward (as usual). The rewards of investing in a cement plant and integrated building materials business in the UK may be (relatively) low, but then the risks are also low: the UK is a fairly safe bet for long-term moderate growth, with strong population growth and robust GDP per capita.
Who would buy? A company that wants to balance its portfolio (perhaps a company with most of its eggs currently in the fast-growth/developing world basket), is cash rich (or has access to cheap credit), which is already in cement and aggregates and which might wish to carry home some of the technical knowledge from the deal might be interested. Perhaps some of the Chinese state-owned enterprises or ambitious mid-tier companies from the Middle East would be interested. As ever though, whether a deal is done depends on the price asked - and in the end, the price asked might be too high for anyone.