Displaying items by tag: CRH
CRH enters race to buy Lafarge India
12 January 2016India/Ireland: CRH has decided to bid on the 11Mt/yr of cement assets up for sale by Lafarge India, according to local media. This follows CRH's acquisition of US$7bn of assets from Lafarge and Holcim in 2015 that were available as a result of their merger.
CRH is already present in India via its 50% stake in My Home Industries (MHI), which has 4.8Mt/yr of cement production capacity. In 2013, MHI acquired Sree Jayajothi Cements, which has 3.2Mt/yr of production capacity in the south of India.
CRH spent Euro8bn on acquisitions in 2015
11 January 2016Ireland: Irish building materials group CRH spent Euro8bn on acquisitions and disposed of Euro1bn worth of assets in 2015.
In a development strategy update, the company said that it made Euro430m from the sale of its clay and concrete products operations in the UK and its clay business in the US in 2015. It also gained about Euro530m through several additional divestments across Europe and the Americas. These included the sale of its 45% stake in French builders' merchant Doras and its 25% stake in Israeli cement producer Mashav. CRH had come under fire from some shareholders for retaining its stake in Mashav, as the company's cement has been used for a widely condemned security wall that divides Palestine and Israel.
During 2015, CRH completed 20 bolt-on acquisition and investment transactions. The company said that these deals, along with the acquisition of assets from Lafarge and Holcim, the CR Laurence acquisition and net deferred consideration payments, brought its development spend for 2015 to about Euro8bn.
"We are pleased with our progress in 2015, which brought cumulative proceeds from our multiyear divestment programme to almost Euro1.4bn, while our targeted bolt-on investments strengthened our existing businesses and complemented the major acquisition activity, which saw total acquisition spend of approximately Euro8bn in 2015," said CRH Chief Executive Albert Manifold. "Portfolio management, and in particular the reallocation of capital from lower growth areas into core businesses for growth, is a cornerstone of our value creation model."
LafargeHolcim says Australasian business is not up for sale
01 December 2015Australasia: LafargeHolcim has said that, despite what has been reported recently in the media, its Australian and New Zealand operations are not for sale.
LafargeHolcim recently announced a plan to divest almost US$5bn of assets in 2016 after posting unexpectedly weak third-quarter results. Speculation had emerged that it might exit from the Australasia region.
However, according to local media, an internal email sent to staff on 30 November 2015, Holcim Australia Chief Executive Mark Campbell said the company was 'not currently being sold,' but could not rule out an exit in the long term.
"I have checked whether the LafargeHolcim group had made a decision to sell the businesses in Australia and New Zealand and started a sale process without my knowledge and the answer I have received is 'no,'" said Campbell. "That said, organisations change focus over time and it is impossible to say that we will always be part of the LafargeHolcim group."
Australian-listed rivals, including Boral, Fletcher Building and Adelaide Brighton, are seen as potential acquirers, should the multinational giant choose to sell off its local arm. Ireland's CRH may also be interested. However, Morgan Stanley said that many of LafargeHolcim's local competitors might run into competition issues, given that the market is concentrated among several large players. "Should Adelaide Brighton fully participate, we cannot rule out that the 50% share in Cement Australia would be divested due to Australian regulations, given Adelaide Brighton's already strong share in cement," said Morgan Stanley Analyst James Rutledge. "While we think Fletcher Building is unlikely to be in a position to participate in industry consolidation, a change in owner that was less integrated into the region may be a positive for Fletcher Building at the margin," said Rutledge. "Given Boral's strong share in aggregates and the concrete market, we believe it will be difficult to participate in industry consolidation."
While Lafarge has a limited local presence in Australia and New Zealand, Holcim bought a string of Australian assets from Mexico's Cemex in 2009 for US$2bn and now boasts more than 350 sites nationwide.
Republic Cement plans expanded production
25 November 2015Philippines: Republic Cement Services Inc (RCSI) is considering building production facilities in Visayas and Mindanao following a government drive to improve the country's infrastructure.
According to RCSI president Don Lee, the move is in response to announcements made by the Department of Public Works and Highways (DPWH) that more projects were needed in the regions. "At this point, DPWH is more aggressive in visions, projects and allocations of the budget in Visayas and Mindanao," said Lee. The Public Works department, he said, needs to ensure that the local industry has enough capacity to serve the country's development needs. "It is sending us a reminder to be faster in having more cement capacity in Visayas and Mindanao." Lee said that expansions by cement companies are critical for sufficient raw material supplies for energy, water, telecommunications and transport projects. Included in RCSI's upcoming expansions are an 800,000t/yr grinding plant in Norzagaray, Bulacan that is expected to be operational early in 2016.
Lee said that the Cement Manufacturers' Association of the Philippines had reported a year-on-year cement demand increase of 18% in the third quarter of 2015. "I think that for the full year, we're about 13.5 – 14%. We have one of the healthiest cement markets in the world, driven by construction in infrastructure, individual homes and mid-high rise constructions," said Lee.
Lee said he was also confident that Republic Cement would be able to post above industry growth. "With our new capacity coming on and new shareholders, we are in a good position to develop new projects and continue to invest ahead of demand. Our two new parents are financially healthy," said Lee.
RCSI is a joint venture between Aboitiz Equity Ventures Inc and CRH. The two companies secured 99.09% ownership of Lafarge Republic Inc, which operates the Republic Cement brand, for US$530m.
CRH sues for return of files seized in competition inquiry
16 November 2015Ireland: CRH has gone to the High Court to seek the return of documents seized by the Competition and Consumer Protection Commission (CCPC) in a raid in May 2015.
The CCPC, supported by the Gardai (Ireland's police force), raided Irish Cement's offices as part of a probe into alleged abuse of its dominant position in the Euro50m bagged cement industry. CRH has denied the charges.
CRH has lodged court proceedings seeking a declaration that certain sections of the files seized by the CCPC were not related to the Irish Cement investigation. A spokesman for CRH said that it was seeking to have documents that were of no use to the CCPC returned to the company. "Irish Cement fully facilitated the inspection and is continuing to co-operate fully with the CCPC. In undertaking this inspection, the CCPC removed documents that are unrelated to Irish Cement and clearly outside the scope of its inspection. CRH and Irish Cement have issued proceedings to retrieve these documents from the CCPC," said a company spokesperson.
CRH to leave Belgard Castle headquarters
02 November 2015Ireland: CRH is leaving its Belgard Castle headquarters in Tallaght, Dublin, after 40 years. The company is moving to a former GlaxosmithKline building in Rathfarnham, Dublin, bringing together 250 staff now at Belgard Castle and Cabinteely, Dublin. It will continue to own Belgard Castle, an 18th-century building and will use it for group functions and facilities. The group office at Stone-mason's Way is undergoing refurbishment and will provide CRH with 'a world-class facility.' CRH expects to complete the new offices by the end of 2015.
Poland: A blueprint for the rest of Europe?
21 October 2015Gorazdze Cement has been approved this week by the local authorities to buy Duda Kruszywa and Duda Beton. Aggregate and concrete acquisitions are outside the remit of this column, but Poland still deserves attention as a European country that has seen construction growth in recent years.
Approval by the Polish Competition and Consumer Protection Office (UOKiK) for the Gorazdze purchase is relevant due to cartel fines that were issued to seven cement companies, including Gorazdze Cement, in 2013. At that time Lafarge had its fine absolved, Gorazdze's was reduced but the other producers had to pay 10% of their annual turnover. As part of the Duda purchase, Gorazdze is expected to sell a concrete unit in Olszowa to avoid market overlap.
Polish cement production hit a high of 18.6Mt in 2011 according to Polish Cement Association (SPC) data. In its annual report for 2011, Lafarge attributed the surge to European Union (EU) funding for infrastructure projects and a deficit in housing. The multinational cement producer reported a 27% increase in domestic sales that year. Since then production fell to a low of 14.5Mt in 2013 before picking up. Cement production for the first nine months of 2015 is a little ahead of 2014 year-on-year.
Poland's cement production capacity is 16.8Mt/yr. The industry comprises 11 cement plants that are run by eight producers. As mentioned in the Global Cement Lafarge-Holcim Merger report, the country already has two cement plants from a CRH subsidiary, Grupa Ożarów. This is pertinent because the country offers a view of how LafargeHolcim might act in competition with CRH in a national environment.
In 2014 CRH noted that cement volumes grew by 6% in the country and its Europe Heavyside sales increased by 4% year-on-year to Euro3.93bn. In the first half of 2015 CRH reported selling 'non-core' businesses from its Europe Heavyside division in Poland amongst other territories. It also reported that whilst a solid general economy and construction growth helped sales, it was under price pressure in all of its main product lines.
Interestingly, LafargeHolcim announced in late September 2015 that it was implementing a new three-year strategy in Poland. The plan is to offer its clients logistic, design and consulting services in addition to cement, concrete and aggregate sales. The choice of Poland to test this strategy in with its clear competition from CRH is instructive as this situation is now duplicated in several markets throughout Central and Eastern Europe. Lafarge too reported a 'competitive' environment in its first quarter results for 2015 before the merger with Holcim completed. Yet it noted that its cement volumes had contracted compared to the same period in 2014. This is in contrast to the SPC data for the first quarter of 2015 that suggests that cement production rose slightly compared to the same period in 2014. However, Lafarge did expect construction activity to pick up for the rest of 2015 due to infrastructure tenders based on a new EU infrastructure plan. SPC data on cement production suggests that this may be correct. LafargeHolcim's and CRH's cement plants are in slightly different parts of the country which may also explain reported differences in sales volumes in 2015.
So, we have a picture of CRH streamlining its business in Poland to help grow profits. LafargeHolcim, meanwhile, is broadening its offer with 'soft' businesses to complement its heavy divisions. The results will be worth watching.
UK: A pair of peregrine falcons nesting in a disused building at the former Westbury Lafarge Cement plant in Wiltshire will be protected even if the buildings are demolished, according to the Royal Society for the Protection of Birds (RSPB).
Owners of the site, Tarmac (now part of CRH), recently submitted a Prior Notification to Wiltshire Council to have the area demolished so that it could be used for other purposes. "We've worked with Tarmac nationally and we're working with them on this to ensure that the birds are not dramatically affected by any development work at the site," said Phil Sheldrake, a conservation officer from the RSPB. "They don't have a nest in the chimney, but they are nesting in another building on the site for the first time this year and have been roosting on the chimney. We have to make sure that if the buildings are demolished we can provide an alternative for them, such as a nest box that could be placed close to the site until a new building is built." Peregrine falcons are strictly protected under the Wildlife and Countryside Act after their numbers went into steep decline in the 1980s.
Mark Towe moves to CRH Americas
30 September 2015Ireland: CRH has announced that Mark Towe, currently President and Chief Executive of Oldcastle, will assume the new role of Chairman, CRH Americas. He will work with the Group Chief Executive to support performance and excellence programmes across the group. The appointment is effective from 1 January 2016. Towe will continue as an Executive Director on the Board of CRH.
CRH concludes final part of LafargeHolcim acquisition in Philippines
15 September 2015Ireland/Philippines: CRH has completed the Philippines element of its Euro6.5bn acquisition of certain Lafarge-Holcim assets and as such has now completed the entire deal.
On 2 February 2015, CRH announced that it had reached agreement to acquire certain assets from Lafarge and Holcim for a total enterprise value of Euro6.5bn. On 3 August 2015, CRH confirmed that the majority of the transaction was complete, with the exception of the operations in the Philippines. In a press release issued on 15 September 2015, CRH announced that the Philippines element of the transaction is now complete.