Displaying items by tag: Holcim
ACC launches Houses of Tomorrow in India
28 April 2022India: ACC has launched Holcim’s Houses of Tomorrow sustainable homebuilding initiative with the construction of a low CO2 home in Puducherry called Gratitude Villa. Projects Today News has reported that architect Trupti Doshi selected building materials to reduce CO2 emissions by 40% by comparison to conventional materials such as ordinary Portland cement (OPC). She opted for ACC’s Suraksha brand cement, fly ash bricks and ECOPact green concrete.
India: Adani Group has reportedly entered an advanced stage of discussions with Holcim over its possible acquisition of the latter's Indian cement operations. The Times of India newspaper has reported that Holcim subsidiaries Ambuja Cements and ACC together have a cement production capacity of 64Mt/yr. The value of their assets has a market cap of US$15.7bn.
India: The Directorate General of Mines Safety (DGMS) has named Ambuja Cements’ Rabriyawas cement plant as winner of its National Safety Award (Mines). Its winning initiatives include its Behaviour Based Safety training programme and Reward & Recognition employee engagement programme. Ambuja Cements said that the award confirms that Ambuja's Zero Harm policy has borne fruit.
Holcim US joins Carbon Capture Coalition
25 April 2022US: Holcim US has become the first cement producer member of the Great Plains Institute’s Carbon Capture Coalition. The coalition’s 78 participating members and 23 observer organisations collaborate to build federal policy support for economy-wide, commercial-scale deployment of carbon capture and related technologies. Holcim US is currently assessing the viability of commercial-scale carbon capture, with two studies underway, at its Portland cement plant in Colorado and its Ste. Genevieve cement plant in Missouri.
Region head North America Toufic Tabbara said “Being at the forefront of developing low carbon solutions requires continuous innovative thinking and partnerships. Our efforts are most effective when we can align and join forces with other companies and organisations across industries who share this same commitment. We are proud to be part of an organisation that is similarly focused toward more efficient, innovative and sustainable practices.”
Switzerland: Holcim recorded net sales of US$6.75bn in the first quarter of 2022, up by 20% year-on-year from US$5.62bn in the first quarter of 2021. The group’s recurring earnings before interest, taxation, depreciation and amortisation (EBIT) rose by 16% to US$643m from US$553m. The company has upgraded its outlook 2022 to a forecast of full-year net sales growth of at least 10%.
CEO Jan Jenisch said “I am very encouraged by the record start of the year, setting a solid foundation to our Strategy 2025 – Accelerating Green Growth.”
The first quarter of 2022 brought four new bolt-on acquisitions in addition to the group’s conclusion of its US$1.35bn Malarkey Roofing Products acquisition. The company says that it remains actively engaged in supporting humanitarian efforts in Ukraine.
Holcim has also published its industry-first Climate Report 2022. The report details the company’s progress towards achieving its sustainability targets under the four pillars of its Strategy 2025 – Accelerating Green Growth. Under the Accelerating Growth pillar, Holcim reached a total of 15 markets with its ECOPlanet reduced-CO2 cement range. Under Expanding Solutions & Products, it reduced the proportion of cement sales in its consolidated sales to 57% in 2021 from 60% in 2020. Its other pillars are Leading in Innovation and Sustainability and Delivering Superior Performance. In 2021, the company used 6.6Mt of recycled construction and demolition waste in its products, against a 2050 target of 10Mt.
Chief sustainability and innovation officer Magali Anderson said “On our net-zero journey, we are walking the talk at Holcim, taking clear science-driven action to win the race for climate.”
Could Holcim sell up in India?
20 April 2022This week’s big story has been that Holcim may be considering selling its business in India. Both the Economic Times newspaper and Bloomberg separately reported that the owner of Ambuja Cement and ACC has been holding early talks with local producers. The discussions have been described as exploratory and an eventual divestment is far from certain. The combined market value of both companies was placed at US$15bn, at the time that the story broke, making it one of the largest potential acquisitions in India. Holcim has refused to comment on the matter.
If it actually happened then the scale of this potential sale would be breathtaking. Holcim has been gradually slimming down since the merger between Lafarge and Holcim in 2015. The big divestments mostly came after the appointment of former Sika boss Jan Jenisch in 2017. Four integrated plants and other assets were sold in Indonesia for US$1.75bn in 2019, a 51% stake in three integrated plants and two grinding plants were sold in Malaysia for US$396m (also in 2019) and five integrated plants were approved for sale in Brazil for US$1.03bn in April 2022.
A complete divestment of Ambuja Cement and ACC in India would see 17 integrated plants and 14 grinding plants being sold with a production capacity of around 66Mt/yr. If any company did buy the lot in one go, at a stroke it would become the second-largest cement producer in the world’s second-largest second market. The nearest acquisition in the last decade that comes close to this was when CRH purchased 24 cement plants with a production capacity of 36Mt/yr from Lafarge and Holcim in 2015 for US$6.5bn.
2022 would certainly be a good time to sell up with both Ambuja Cement and ACC having reported strong sales and earnings figures in 2021 following the coronavirus-related lockdowns in 2020. Performance is even better compared to 2019. Ambuja Cement’s net sales and earnings before taxation, interest, depreciation and amortisation (EBTIDA) grew by 23% year-on-year to US$1.81bn and by 21% to US$420m respectively in 2021. ACC’s sales and operating EBITDA grew by 17% to US$2.07bn and 28% to US$393m respectively in 2021. However, ACC’s net sales growth was much lower compared to that in 2019. Ambuja Cement produced 25.9Mt of cement in 2021 with a production capacity of 31.5Mt giving it a utilisation rate of 82%. ACC produced 26.9Mt of cement in 2021 with a production of 34.5Mt/yr giving it a utilisation rate of 78%. Both of these rates are higher than the national cement sector rates forecast by analysts of up to 64% in the 2022 financial year. The corporate specifics of any sale are that Holcim owns a majority stake in Ambuja Cement, which in turn owns a majority stake in ACC. In other words: buy one, get the other.
One wider question here is whether there are still any companies and investors out there prepared to put money on this scale into a carbon-intensive industry with net-zero deadlines on the way. Ahead of the 2021 United Nations Climate Change Conference (COP26) in November 2021, India’s prime minister Narendra Modi pledged that his country would cut its emissions to net-zero by 2070. There’s plenty of time left to turn a profit, as cement kilns last about 50 years, but the risk of investing in a stranded asset is growing if the targets are honoured or even brought forward. As a recent Intergovernmental Panel on Climate Change (IPCC) report put it, “Cement and concrete are currently overused because they are inexpensive, durable, and ubiquitous, and consumption decisions typically do not give weight to their production emissions.” All of this suggests that buyers might well be more interested in purchasing parts of Holcim’s Indian operations rather than the whole bundle or breaking operations up further down the line. And that’s even before any competition concerns related to any local buyers are considered. Holcim, for its part, has shown with recent divestments, such as its business in Northern Ireland, that it isn’t necessarily against smaller piecemeal divestments. Negotiations, if they are indeed happening, will be closely guarded.
India: ACC’s earnings before taxation, interest, depreciation and amortisation (EBTIDA) fell by 26% year-on-year to US$83.1m in the first quarter of 2022 from US$113m in the same period in 2021. Net sales rose by 3% to US$566m from US$552m. Sales volumes of cement dropped by 3% to 7.71Mt but volumes of ready-mixed concrete grew by 5% to 0.87Mm3. The subsidiary of Ambuja Cement and Holcim said that its costs had been negatively affected by a global rise in fuel costs caused by ‘geopolitical events.’
The cement producer said that its new integrated plant at Ametha in Madhya Pradesh is scheduled to be commissioned in the fourth quarter of 2022. It commissioned an upgrade to its Tikaria grinding plant in Uttar Pradesh in February 2022. Waste heat recovery unit projects at its Jamul and Kymore plants are ‘on track’ and the board of ACC has approved the next phase of similar projects at its Chanda and Wadi plants.
US: Holcim US has successfully transitioned its 0.5Mt/yr Joppa, Illinois, cement plant to 100% Portland limestone cement (PLC) production. The plant will produce the company’s OneCem brand PLC. The producer says that the facility supplies cement to customers along the Mississippi from Minneapolis to the Gulf of Mexico and up the Ohio as far as Pittsburgh.
Plant manager Michel Klenk said “As a leader in our industry, it’s our responsibility to build a path for others to follow by setting the bar for product innovation and improvement. OneCem fits the bill as a low-carbon product that allows for sustained performance with lower emissions.”
Holcim considering selling Indian operations
14 April 2022India: Switzerland-based Holcim is reportedly in the early stages of selling its subsidiaries Ambuja Cement and ACC. The company has held discussions with JSW, Adani Group and others, according to sources who have spoken to the Economic Times newspaper. Multinational building material producers have also been approached. Holcim has not commented on what it described as ‘rumours.’ Ambuja Cement and ACC have a combined cement production capacity of 66Mt/yr
US: A fire has been contained within the alternative fuels system at Holcim US’ integrated Whitehall cement plant in Pennsylvania. Suppression systems were activated and then fire fighters attended the scene, according to the Express-Times newspaper. The plant has notified the US Mine Safety and Health Administration about the incident. No injuries have been reported and an investigation is ongoing. A fact sheet about the plant says that it uses 2m tires/yr as part of its alternative fuels mix. It uses coal and petcoke for 50% of its mix.