Displaying items by tag: Egypt
Whale Rock Cement eyes up export market
14 March 2019Namibia: Whale Rock Cement says it plans to start exporting cement to countries in Africa following the accreditation of its Cheetah Cement products with the Namibia Standards Institute and the South African Bureau of Standards. It hopes to send its exports to Mozambique, Congo and Ivory Coast, according to the Namibian Sun newspaper. The cement producer started producing clinker at its 1.2Mt/yr integrated plant near Otjiwarongo in late 2018. Prior to this it was importing clinker from Egypt.
Sinai Cement reduces loss in 2018
12 March 2019Egypt: Sinai Cement has reduced its net loss to US$17.6m in 2018 from US$20.4m in 2017. Its revenue decreased by 38% year-on-year to US$46.1m from US$74m, according to Mubasher. The company has blamed its financial results on the role of negative currency effects on imported fuel costs. Although this was partly offset by rising cement prices.
Egypt: Lafarge Egypt has been named as the sole cement supplier for base construction work by China State Construction Engineering (CSCE) for the Central Business District in the New Administrative Capital. The subsidiary of LafargeHolcim will supply its cement based on a framework of the long-term partnership between Lafarge Egypt and CSCEC to erect several high-rise buildings, including a tower that is set to be the tallest in Africa. It will use its Hydrocem Plus cement product for the project. Lafarge Egypt will also take part in the concrete pouring for the foundations.
"We are proud to hold such a long-term cooperation with CSCE for the construction of such a historical project and we value their trust in our products’ quality, which magnifies our capabilities in providing tailored and unique products and solutions to meet our customers' needs. Additionally our capability as a company helped us supply large quantities of cement in a short time which helped complete the pouring in 40 consecutive hours only," said Hussein Mansi, Chief Executive Officer of Lafarge Egypt.
Lafarge Egypt is also engaged in a number of projects in the New Administrative Capital project, including different types of concrete products and steel fibres.
Suez Cement turns to profit in 2018
06 March 2019Egypt: Suez Cement’s sales rose by 15% year-on-year for Euro375m in 2018 from US$326m in 2017. It reported a profit of Euro6.14m in 2018 compared to a loss of Euro57.2m in 2017, according to Mubasher.
Yingli Solar and Misr Asset Management to sell solar energy to Building Materials Industries
28 February 2019Egypt: China’s Yingli Solar and Misr Asset Management (MAM) are planning to build a 100MW solar plant in order to sell electricity to Building Materials Industries Company (BMIC). Technical and economic studies have been completed for the US$80m plant but final approval is still awaited, according to Egypt Daily. The project will also receive US$50m in finance from the Asian Development Bank. BMIC operates a 1.5Mt/yr integrated cement plant at Assiut.
Cementir sales down in 2018 due to issues in Egypt and Norway
15 February 2019Italy: Cementir Holding’s sales revenue fell by 4.2% in 2018 on a like-for-like basis due to poor performance in Egypt and Norway. Military operations in the Sinai impacted production in Egypt between February and May 2018 and bad weather in Norway affected the first quarter. However, it noted good results in Malaysia, Belgium and China.
On an adjusted basis its revenue rose by 4.9% to Euro1.2bn from Euro1.14bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7.1% to Euro239m from Euro223m. Grey and white cement sales volumes fell by 4.4% to 9.8Mt from 10.3Mt. Ready-mixed concrete volumes fell slightly to 4.9Mm3.
Cemex in 2018
13 February 2019Cemex was the first of the big multinational cement producers to release its fourth quarter results this week. Revenue, sales volumes of cement and gross profit were all up in single digits. Earnings growth was less impressive, with operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rising by 1% year-on-year on a like-for-like basis to US$2.56bn in 2018. This was a decrease of 1% in real terms. Cemex blamed this on rising energy costs and on lower earnings from its territories outside of Mexico and the US.
Figure 1: Breakdown of Cemex’s net sales in 2018 by region: Source: Cemex.
As Figure 1 shows, over three quarters of Cemex’s sales come from Mexico, the US and Europe. Elsewhere its presence is smaller but it does have plants in key countries like the Philippines and Egypt. The former, for example, saw its cement sales rise by 7% in 2018 bringing along the rest of the Asia, Middle East and Africa region into volume growth.
Some other non-financial results to consider lead with the good news that 2018 was the first year ever that Cemex has had without any employee fatalities. This probably doesn’t include contractors or third parties, we’ll have to wait for the next sustainability report to find out for sure, but this is undoubtedly a milestone. Another point of interest was the growth of Cemex Go, its online sales platform. In 2018 it was responsible for around 40% of the company’s sales volumes. Around 85% of its recurring clients use it and it has nearly 30,000 customers. The analytics alone from the system and the potential for further tailoring it towards both customer and company objectives sound promising. Lastly, Cemex was also keen to note its alternative fuels substitution rate of 27% in 2018.
In recent years the other metric that the analysts have been watching is Cemex’s debt. It dropped by 8% year-on-year to US$10.4bn in 2018 compared to a high of US$17.5bn in 2013. Its plan is to reach an ‘investment-grade’ balance sheet by 2020.
In this way Cemex has been ahead of the curve of the major European cement multinationals like LafargeHolcim and HeidelbergCement that have taken on ‘indigestible’ acquisitions more recently. Possibly behind all of these companies is CRH, which has steadily been growing in recent years through acquisitions. It made the headlines this week on the corporate side when Swedish so-called ‘activist investor’ Cevian bought what is thought to be around a 3% stake in the Irish company. The financial press thinks it’s after a seat on the board to try and influence CRH to focus on margins rather than its acquisition strategy. CRH’s EBITDA margin was 12% in 2017 compared to 23%, 19% and 19% for LafargeHolcim, HeidelbergCement and Cemex respectively. This is just one way of comparing these companies. CRH, for example, might be keen to promote how its other metrics like cash generation and return on capital employed perform compare favourably to its competitors.
The point though is that it has taken Cemex over a decade since its acquisition of Rinker to rebuild its finances. All being well, it stands ready to take advantage of whatever the cement market holds in the 2020s.
Arabian Cement Company to build US$5m solar project
17 January 2019Egypt: The Arabian Cement Company is to collaborate with the European Bank for Reconstruction and Development (EBRD) and Qatar National Bank (QNB) to build a solar power plant at its Suez cement plant. The banks are providing funding of over US$5m to support the project, according to the Daily News Egypt newspaper. The solar plant will be built in collaboration with Solarize Egypt. It is scheduled to start operation in the second quarter of 2019.
HeidelbergCement sale now on
16 January 2019More details from HeidelbergCement this week on its divestment strategy. It has sold its half-share in Ciment Québec in Canada and a minority share in a company in Syria. A closed cement plant in Egypt is being sold and it is working on divesting its business in Ukraine. Altogether these four sales will generate Euro150m for the group. Chairman Bernd Scheifele said that the company expects to rake in Euro500m from asset sales in 2018. It has a target of Euro1.5bn by the end of 2020.
In purely cement terms that is something like seven integrated plants. So the usual game follows of considering what assets HeidelbergCement might consider selling. The group offered a few clues in a presentation that Scheifele was due to give earlier this week at the Commerzbank German Investment Seminar in New York.
First of all the producer said that it was hopeful for 2019 due to limited energy cost inflation, better weather in the US, the Indonesian market turning, general margin improvement actions and sustained price rises in Europe. It then said that its divestments would focus on three main categories: non-core business, weak market positions and idle assets. The first covers sectors outside of the trio of cement, aggregates and ready-mix concrete. Things like white cement plants or sand lime brick production. Countries or areas it identified it had already executed divestments in included Saudi Arabia, Georgia, Syria and Quebec in Canada. Idle assets included depleted quarries and land.
The first obvious candidate for divestment could be the company’s two majority owned integrated plants in the Democratic Republic of Congo. These might be considered targets due to the political instability in the country. However, this is balanced by the potential long-term gains once that country stabilises. Alternatively, some of the plants in Italy seem like a target. The company had seven integrated plants, eight grinding plants and one terminal in 2018.
The presentation also pointed out the sharp rise in European Union (EU) Emissions Trading Scheme (ETS) CO2 emissions allowances, from around Euro5/t in 2017 to up to Euro20/t by the end of 2018. In late 2018 Cementa, a subsidiary of HeidelbergCement in Sweden, said it was considering closing Degerhamn plant due to mounting environmental costs. The group reckons it can fight a high carbon price through consolidation, capacity closure, higher utilisation, limited exports and pricing. It also pointed out that it is a technology leader in carbon reduction projects. It will be interesting to see how environmental costs play into HeidelbergCement’s divestment decisions.
Finally, a tweet by Sasja Beslik, the head of sustainable finance at Nordea, flagged up a few cement companies as being the worst companies for increasing CO2 emissions between 2011 and 2016. HeidelbergCement was 19th on the list after LafargeHolcim and CRH. Sure, cement production makes CO2 but it’s far from clear whether the data from MSCI took into account that each of these companies had expanded heavily during this time. In HeidelbergCement’s case it bought Italcementi in 2016. Cement companies aren’t perfect but sometimes there’s just no justice.
HeidelbergCement reports progress on divestments
14 January 2019Germany: HeidelbergCement says it has made good progress with its ‘portfolio optimisation’ process. The company closed the divestment of its 50% share in Ciment Québec and its minority participation in Syria in December 2018. In addition, a former cement plant area near Cairo in Egypt has been auctioned, and the divestment of its Ukrainian business has been signed. The divestments in Egypt and Ukraine are expected to complete in 2019. Altogether these divestments will have a value of Euro150m and are expected to have a ‘slightly’ positive effect on operating earnings before interest, taxation, depreciation and amortisation (EBITDA) in 2019.
“We deliver on our action plan and have accelerated our efforts to improve our portfolio and generate cash in order to speed up deleveraging,” said Bernd Scheifele, the chairman of the managing board of HeidelbergCement. The cement producer has a divestment target of Euro1.5bn by the end of 2020.