Displaying items by tag: Brazil
Cement sales in Brazil grow in April 2024
09 May 2024Brazil: Cement sales in April 2024 totalled 5.1Mt, up by 12% year-on-year. Compared to March 2024, sales rose by 4%, as reported by the National Cement Industry Union (SNIC). April 2024 sales have increased following a forecasted rise despite earlier climate-related impacts.
President of SNIC, Paulo Camillo Penna, said "After two consecutive years of falling sales and idle capacity of around 35%, the Brazilian cement industry hopes to reverse this performance, influenced by progress in housing and infrastructure projects. The sector is betting on the growing use of cement and concrete in road and urban paving, as municipalities and states such as Santa Catarina, Paraná, Goiás, Maranhão, Ceará, São Paulo and the Federal District are leading the way in the use of these inputs."
InterCement signs exclusivity contract with CSN
03 May 2024Brazil: InterCement, part of the Camargo Correa Group, has now signed an exclusivity contract with Companhia Siderúrgica Nacional (CSN). CSN is interested in acquiring its operations in Brazil and Argentina. The contract is effective until 12 July 2024 and is part of efforts to address the company’s debt, which the market estimates at over US$1.5bn. The contract also involves the potential purchase of shares representing 100% of its capital. The value of the transaction is part of current negotiations, but it is reportedly valued at around US$700m, according to CE Noticias Financieras News.
InterCement operates plants in Argentina, Brazil, Paraguay and Egypt, as part of Camargo Correa's cement business divestment plan. Previously, in June 2023, InterCement divested its subsidiaries in Mozambique and South Africa.
Brazil: Votorantim Cimentos has inaugurated its first unit in Brazil for Viter, its agricultural inputs business, and Verdera, its sustainable waste management business. Located in Itaperuçu, the unit comprises a new Verdera waste crushing plant and an agricultural limestone production line for Viter. This initiative is part of a US$785m investment programme.
Verdera's Itaperuçu facility has a capacity of 48,000t/yr, tripling its previous capability, and is equipped with technology for sustainable waste treatment. The waste processed at the plant will be converted into clean energy for cement production at Votorantim's plant in Rio Branco do Sul, using co-processing technology developed by Votorantim in Brazil in 1991. Viter's new line will increase agricultural limestone production in Paraná. The Itaperuçu plant, along with the existing Rio Branco do Sul unit, brings Viter's total capacity to 1.5Mt/yr of agricultural limestone in Paraná. The new plant features filters for emission control and utilises biomass as a renewable energy source.
Brazil: Votorantim Cimentos has made progress in reducing its carbon footprint, reporting embodied CO₂ emissions of 556kg/t of cement produced in 2023, a 4% year-on-year decrease. The company aims to reach a target of 475kg of CO₂/t by 2030, aligning with the Science Based Target initiative standards.
The company's decarbonisation strategy involves four stages: co-processing, which involves substituting fossil fuel with biomass and waste; use of cementitious materials to replace clinker; enhancing energy efficiency and use of renewable energy; and developing new technologies and materials, including carbon capture. In 2023, Votorantim Cimentos achieved a 31% global thermal substitution rate through co-processing, an increase from 26.5% in 2022, with a goal of reaching 53% by 2030. The clinker factor was reduced to 72.8% in 2023 from 73.9% in 2022. This reduction means a decrease in emissions, with a target clinker factor of 68% set for 2030. Additionally, 35.1% of the electricity consumed by Votorantim Cimentos in 2023 came from renewable sources, an increase from 22.9% in 2022, with an aim of 45% by 2030.
Álvaro Lorenz, global director of sustainability, institutional relations, product development, engineering, and energy at Votorantim Cimentos, said "The most competitive and sustainable companies will be those with the lowest emissions. In all countries where we operate, we are committed to advancing in our decarbonisation journey, in line with our goal of producing carbon-neutral concrete by 2050."
Votorantim Cimentos’ environmental efforts were recognised with an A score by CDP and a Top-Rated Industry company distinction by Sustainalytics in the Latin American building materials sector. The company also announced a US$989m investment to further reduce its CO₂ emissions. This includes a project at Salto de Pirapora to increase thermal substitution, with expected completion by 2028. Votorantim Cimentos has also started constructing a solar energy complex in Paracatu, with an estimated capacity of 470MWp.
Brazil: Companhia Siderúrgica Nacional (CSN), Votorantim Cimentos and China-based Huaxin Cement have all submitted ‘virtually’ identical bids for InterCement's assets in Brazil. Valor International News has reported that Huaxin Cement may be the bidder that best 'pleases' InterCement. As a would-be market newcomer, its acquisition of the business would not require investigation by the Administrative Council for Economic Defence (CADE).
For rival bidder CSN, growth in Brazil would shape its planned initial public offering of its local cement subsidiary CSN Cimentos later in 2024. The group reportedly plans to appoint current CFO Marcelo Ribeiro as CEO of CSN Cimentos.
How to sell InterCement in Brazil
28 February 2024InterCement confirmed this week that it is accepting bids for its sale. The local financial press had been covering InterCement’s progress towards this since the autumn when it was reported that it appointed BTG Pactual to manage the sale.
The Valor Econômico newspaper then revealed this week that Companhia Siderúrgica Nacional (CSN), Votorantim and China-based Huaxin Cement had all submitted bids. InterCement admitted that it had received offers but didn’t say from who, and pointed out that no deal had been signed yet. Valor said that Votorantim was part of a consortium including Polimix (parent company of Mizu Cimentos) and Buzzi. However, Votorantim issued a statement affirming its involvement but pointing out that it was acting alone and not part of a consortium. Finally, Valor reported that InterCement is looking to raise at least US$1.2bn from the sale of its business in Brazil. In Argentina, Loma Negra confirmed what its parent company, InterCement, was doing. La Nación newspaper also reckoned that the parent company might be looking for over US$700m for the subsidiary.
Rumours that InterCement was looking to sell assets have swirled around since the early 2010s when InterCement picked up the Brazil-based assets of Cimpor and Votorantim bought the international ones. The local market then collapsed giving InterCement a hard time, although when it started to rally in the late 2010s the talk turned to a potential initial public offering. More recently the focus has been on InterCement’s high level of debt and pending maturation dates. It publicly said it was working towards a new capital structure in May 2023 and various debt negotiations followed. By the end of the third quarter of 2023 it reported debts in debentures and senior notes of just under US$1.6bn. It signed a deal to sell its subsidiary in Egypt in January 2023 to an unspecified buyer and then divested its operations in Mozambique and South Africa to Huaxin Cement for just over US$230m in December 2023.
It is noteworthy that InterCement has gone public about its divestment intentions now, given previous coverage in the local press and the poor state of its finances in 2023. In November 2023, for example, Valor reported that CSN had hired Morgan Stanley to represent it in a dispute over the sale. At this time Huaxin Cement plus Titan, Buzzi, Polimix and Vicat were all said to be interested. CSN was also said to be waiting until the results of the presidential election in Argentina first before committing to any deal. Yet InterCement said nothing about what was going on at this time.
The other issue is whether InterCement wants to sell its assets in one big piece or in sections. This would be of particular interest to Votorantim, and CSN to a lesser extent, since they control 30% and 20% of the cement market respectively, according to Valor. Data based on cement production capacity data from the Global Cement Directory makes the gap between the two companies wider since Votorantim holds 46% compared to CSN’s 9%. The point here is that the local competition regulator, the Administrative Court of the Brazilian Administrative Council of Economic Defence (CADE), would be more likely to intervene if it determined that one company might be about to distort the market. Clearly this could happen if Votorantim struck a deal to buy InterCement but there might also be issues regionally with CSN or indeed some of the other local cement producers. Alternatively, Votorantim might be interested in buying Loma Negra instead. All InterCement has said on the matter is that it is “evaluating strategic alternatives, such as private placement, merger, or partnership with a strategic player, or even a potential divestment.”
Any potential sales of InterCement would be the biggest adjustment to the Brazilian cement sector since CSN bought Holcim Brazil for just over US$1bn in mid-2022. There appear to be plenty of potential vendors for both the businesses in Brazil and Argentina but whether InterCement sells its assets in one big lump or in separate pieces may be an issue almost as important as the price, given the competition concerns. Finally, could this be the first major China-based acquisition in the cement sector in South America? Huaxin Cement demonstrated willingness to buy plants from InterCement in Africa in 2023 and it has been linked in the current auction. Unlike previous talk of InterCement selling up, this time it seems serious given the divestments in Africa and the scale of the debt. An outcome seems likely in the coming months.
Brazil: Companhia Siderúrgica Nacional (CSN), Huaxin Cement and Votorantim Cimentos have all bid for InterCement’s Brazilian business, Valor Online News has reported. The source stated that Votorantim Cimentos is leading a consortium alongside Italy-based Buzzi and concrete producer Polimix Concreto, however the Brazilian cement market leader denied this, stating that its offer is ‘individual and independent.’ Both Votorantim Cimentos and CSN Cimentos are reportedly considering making initial public offerings (IPOs).
Votorantim Cimentos said “The company clarifies that it is not part of nor leads any consortium within the auction process. To date, its offer remains under evaluation by the respective seller and, therefore, no documents have been signed with any counterparty that generate an obligation or firm commitment for the acquisition of the assets that were the subject of the offer.”
Buzzi grows sales in 2023
12 February 2024Italy: Buzzi recorded consolidated sales of Euro4.32bn in 2023, up by 8.1% from Euro4.32bn in 2022. This came in spite of a 7% year-on-year drop in the company’s cement sales volumes, to 26.3Mt. In its domestic market of Italy, Buzzi raised its sales by 13% to Euro818m. In the US, sales grew by 9.5% to Euro1.74bn, in Mexico by 33% to Euro1.03bn, in Germany by 9.2% to Euro872m, in the Czech Republic and Slovakia by 1.8% to Euro205m, in Poland by 11% to Euro157m and in Ukraine by 43% to Euro85.6m. On the other hand, Buzzi’s sales fell by 5.6% in Luxembourg and the Netherlands, to Euro214m, by 2% in Russia to Euro285m, and by 1.6% in Brazil to Euro394m.
The company said “The increasingly evident effects of monetary restriction, the worsening of consumer and business confidence, and the uncertainties dictated by the growing geopolitical tensions in Ukraine and the Middle East continue to weigh on the international economic framework. In fact, in the last part of 2023, global economic activity weakened further, with international trade contracting in the third quarter.”
Votorantim Cimentos achieves top CDP climate rating
07 February 2024Brazil: Votorantim Cimentos has earned an A the CDP Climate Change 2023 Questionnaire. This achievement reflects the producer's leadership in climate change performance and transparency. Between 1990 and 2022, Votorantim Cimentos reduced its CO2 emissions per tonne of cement produced by 24%.
Global director of sustainability, institutional relations, product development and engineering Álvaro Lorenz said "Earning the highest score from CDP is something we are very proud of. We work daily to achieve our goals in line with our 2030 Sustainability Commitments and the UN Sustainable Development Goals. Tackling the negative effects of climate change is at the core of our strategy and we recognise the role, importance and relevance of our decarbonisation journey."
Brazil: Secil subsidiary Supremo Secil Cimentos will invest US$20.3m in an upcoming expansion of its Adrianópolis cement plant. Commencing in July 2024, the expansion will raise the plant’s clinker capacity by 10% and enable it to increase its alternative fuel (AF) substitution rate from 25 – 30% to 40%, and eventually to 50% by 2030. To date, AF use at the plant has reduced its cumulative consumption of petcoke by 100,000t.
CEO Paulo Nascentes highlighted the transformative impact of the Adrianópolis plant on its host community, with its initial investment of US$176m and a subsequent US$41.7m in previous upgrades to date. "One of the reasons why the Paraná government allowed the plant was because Adrianópolis was very neglected. The arrival of Supremo transformed the city," he said.