Displaying items by tag: Holcim
2023 roundup for the cement multinationals
06 March 2024Cement producers appear to have doubled down on the lessons they learned in 2022 by seeking profits wherever they could in 2023, despite stagnant markets in certain key places. Even with sales volumes of cement going down for most of the multinational cement companies covered here, revenues and earnings rose through price rises or business realignment.
Heidelberg Materials can often be relied upon to sprinkle a bit less sugar on its financial commentary compared to some of its competitors. Thus it is always worth reflecting on what it says. In its view, “In 2023, high inflation rates across the globe, increased financing costs, and persistently high energy and raw material prices significantly impaired construction activity and thus demand for our building materials. The decline in demand in private residential construction, which was massive in some cases, could not be offset by a solid development in industrial commercial construction and infrastructure projects.” Other opinions are available.
Graph 1: Sales revenue from selected cement producers in 2022 and 2023. Source: Company reports. Note: Figures calculated for UltraTech Cement.
Heidelberg Materials is notably missing in Graph 2 (below), though as the company is likely to be holding back its cement sales volume numbers until it releases its full annual report for 2023 towards the end of March 2024. However, Holcim and Heidelberg Materials reached similar sales volumes of cement in 2022 and this looks likely to have continued in 2023, or even gone further. Holcim divested its India-based and Brazil-based operations in 2022 and Africa-based ones in South Africa, Tanzania and Uganda in 2023. Heidelberg Materials has also slimmed down, albeit at a slower pace, with the sale of its businesses in Southern Spain in 2022 and The Gambia in 2023. Note that CRH and Holcim have swapped places in terms of sales revenue from 2022 to 2023. 65% of CRH’s sales came from its Americas divisions.
The outlier here is UltraTech Cement. It increased its sales volumes as the India-based market continues to push forward. Dangote Cement, meanwhile, delivered a surprise with a fall in volumes, due to poor trading at home in Nigeria. Sales outside of Nigeria grew significantly though. A real key moment for the evolution of Dangote Cement as a multinational player will be when its sales, volumes and earnings outside of Nigeria surpass those from back home. It’s not there yet but it looks likely to happen in the next few years.
Graph 2: Cement sales volumes from selected cement producers in 2022 and 2023. Source: Company reports. Note: Figures calculated for CRH and UltraTech Cement.
The progress of the construction market in the US compared to elsewhere has wielded an outsized effect on balance sheets for companies. Signs of this have been apparent for several years but it really picked up in 2023 with CRH switching its primary listing to the US in September 2023 and then Holcim announcing that it is planning to spin-off its North American business (for more on this see GCW 645). Heidelberg Materials was asked during its analysts’ conference call for its 2023 financial results what its plans were for the US. Chair Dominik von Achten said he was against splitting the business off from the rest of the group but that all other options were on the table. Various media outlets have interpreted this to mean that an initial public offering in the US is a likely possibility.
What Cemex does with this situation, if anything, might be worth watching. The company is already North America-focused. Its key markets are in Mexico, the US and Europe, and it is already listed in Mexico and the US. Subsequently in 2023 the market in Mexico bounced back and operating earnings rose sharply in both Mexico and the US. Finally on this theme, Buzzi, the fifth largest cement producer in the US by capacity, may also face a similar dilemma to its peers about what to do with its largest earning business area.
The increasing dominance of the US market for western-based multinational cement producers may be accelerating a trend towards large regional companies everywhere. China-based cement players already dominate the top 10 list of the world’s largest cement producers by capacity. Companies from India and elsewhere are on the way to do likewise as they grow and concentrate on one geographic area. The situation in the US meanwhile is persuading the multinationals to do the same thing in reverse as they reconfigure themselves based on market demand. In financial terms, this may mean chasing growth in the US, learning to cope with high carbon prices in Europe or diversifying away from heavy building materials. Elsewhere, despite the proliferation of regional giants, such as the China-based cement companies, few seem keen to become truly multinational in a hurry, although opportunities, such as the ongoing sale of InterCement in Brazil or CRH’s acquisition of AdBri in Australia, are still present.
Global Cement Weekly will return to look at the large China-based cement companies when they release their financial results later in March 2024
Al Jabor Cement appoints Rizwan Khan as General Manager
06 March 2024Qatar: Al Jabor Cement has appointed Rizwan Khan as its General Manager.
He previously worked as the chief financial officer for Al Jabor Cement. Prior to this he held financial and analytical roles for LafargeHolcim in the UAE and Saudi Arabia from 2009. Earlier in his career he worked for Emirates Flight Catering from the late 1990s. Khan holds a master in business administration qualification with a focus on finance from the University of Bradford in the UK.
Al Jabor Cement has been an affiliate company to Holcim since 2003 when it formed a strategic partnership. It also uses the name Holcim Cement Qatar.
Lafarge Africa reports 2023 financial results
06 March 2024Nigeria: Lafarge Africa revealed its 2023 financial results, with profit dropping by 4.7% year-on-year to US$32.6m, compared to US$34.2m in 2022.
CEO Lolu Alade-Akinyemi said “The fundamentals of our business remain strong in spite of extremely challenging macroeconomic headwinds.”
Xavier Guesnu appointed as CEO of Lafarge France
28 February 2024France: Holcim has appointed Xavier Guesnu as the CEO of Lafarge France. He succeeds François Petry, who is leaving the group.
Guesnu started his international career at Legrand before joining Bain & Company in 2005. He joined Lafarge in 2010 as the head of strategic business development and mergers and acquisitions. Operational management roles followed first in eastern Canada as managing director from 2013, then as the managing director of Holcim Poland from 2018. He holds an engineering degree from the École des Mines de Paris.
Holcim publishes 2023 results
28 February 2024Switzerland: Holcim recorded a 7.5% drop in sales to US$30.6bn in 2023, ‘largely’ due to its divestment of its cement businesses in India and Brazil. On a like-for-like basis, its sales rose by 6.1%. The group’s earnings before interest and taxation (EBIT) rose by 0.2% to US$5.4bn, but by 15% like-for-like. It attributed this both to price rises and cost-saving measures in its cement and concrete operations. Net profit fell by 7.5% to €3.47bn, including a €1.7bn special gain from its Indian divestment. Holcim says that it implemented its Strategy 2025 – Accelerating Green Growth two years ahead of schedule.
Holcim España's Viver quarries expansion approved
26 February 2024Spain: Holcim España’s Viver quarries have received an Environmental Impact Declaration (EID) to expand from 13.5 to 37.5 hectares. This expansion will enable the company to extract 300,000t/yr of limestone to supply its Sagunto cement plant. The EID will allow the company to continue to operate the quarry until 2054.
Ignacio Arroyo appointed plant director at Aalborg Portland
21 February 2024Denmark: Aalborg Portland has appointed Ignacio Arroyo as its plant director.
Arroyo started his career working for Holcim in 1998 as a project manager at the Carboneras Plant in Spain. Other roles in Spain followed before he became the Operation Manager at the Yeles plant in 2012. He then worked as Technical Director and Plant Manager at Holcim’s National Cement Factory in Abu Dhabi, UAE. Subsequent roles included Plant Manager positions in Holcim Romania and Lafarge Canada.
UK: Aggregate Industries is preparing to build a new cement storage unit for deep sea shipping lines at the Port of Southampton. As part of a 20-year agreement, Aggregate Industries will be working with port owner Associated British Ports and industry-leading cargo handler Solent Stevedores, which will operate the new cement import unit. The site is intended to help the business maintain a continuous supply of lower CO2 cementitious products in the south and south west of England.
Matt Owen, Head of Supply Chain at Aggregate Industries Cement Division said “This is a significant project for us. It constitutes the first stage in a wider programme of planned investments over the short to medium term in deep sea imports designed to enable us to serve growing demand.” He continued, “The southern construction market remains buoyant with lots of major projects in the pipeline this year and beyond. Constituting one of the few deep-sea vessel facilities of its kind in the region, this facility will enable us to remain primed and ready to meet our customers rising demand for lower carbon solutions.”
Lafarge Canada producing 100% Portland limestone cement at St-Constant cement plant
19 February 2024Canada: Lafarge Canada has transitioned its St-Constant, Quebec, cement plant to the production of OneCem Portland limestone cement (PLC). The producer expects the transition to reduce the St-Constant cement plant’s CO2 emissions by 60,000t in 2024 alone.
Lafarge Canada (East) president and CEO David Redfern said "We are excited to take another crucial step in our sustainability journey. The transition to OneCem production at our St-Constant plant indicates Lafarge Canada's nonstop commitment to driving positive change within our construction industry. Our teams have been engaged in reducing our products’ environmental impact by embracing greener practices and materials."
Holcim México to install new grinding unit at Macuspana cement plant
14 February 2024Mexico: Holcim México will invest US$55m in the construction of a new cement mill at its Macuspana plant in Tabasco state. The producer says that the mill will increase the plant's cement capacity by 50% to 1.5Mt/yr. This will lead to an increase in the plant’s total workforce to 300 people.
General director Jaime Hill said "This investment in Tabasco reflects our firm conviction in the potential of the Mexican southeast and our commitment to the sustainable development of the region. Through this expansion, we will not only increase our capacity to supply the states of Tabasco, Chiapas, Campeche, Yucatán and Quintana Roo, but also reinforce our role in the decarbonisation of the construction industry, offering low-emission products like our cements from the ECOPlanet range."