Displaying items by tag: LafargeHolcim
Holcim Germany’s Beckum cement plant gains certificate from Concrete Sustainability Council
08 August 2018Germany: Holcim Germany’s Beckum cement plant has gained a silver sustainability certificate from the Concrete Sustainability Council (CSC). The company said that certificate is the highest that a cement plant can obtain. It certifies that the plant promotes transparency about the production process and supply chain as well as considering its impact upon the environment.
The company said that the unit is the first LafargeHolcim cement plant in the world to have CSC certification. It also plans to certify cement grinding plants and ready mix plants in Germany in the near future.
Lafarge Indonesia barge spills coal on beach in Aceh
08 August 2018Indonesia: A barge delivering coal to Lafarge Indonesia’s cement plant at Lhoknga, Aceh has spilled around 7000t coal on a beach in Northern Sumatra. The barge was delivering coal to the plant at the end of July 2018 when it ran aground, acccording to the Antara News Agency. Lawyers representing local environmental groups have demanded that the subsidiary of LafargeHolcim be legally responsible for the cleanup operation.
LafargeHolcim Algeria makes first export of clinker
03 August 2018Algeria: LafargeHolcim Algeria has exported 40,000t of clinker from the port of Oran. This is the company’s first export of clinker, following exports of cement carried out earlier in the year, according to the Algeria Press Service. The subsidiary of LafargeHolcim operates two cement plants in the country and it holds stakes in two others.
Lafarge Poland opens ash separation plant in Siekierki
03 August 2018Poland: Lafarge Poland officially opened the Siekierki ash separation plant in July 2018. The unit was developed with local power generation company PGNiG Termika. The plant uses technology from the US’ Separation Technologies, using its proprietry electrostatic process.
The unit converts fly ash into two products: ProAsh containing less than 5% flammable parts and HiCarbon fuel containing about 30 - 50% flammable parts. ProAsh ash is used as a construction product used in cement production, ready-mix concrete and prefabricated construction. HiCarbon is used as a fuel because it contains significant amounts of unburnt carbon and so it can be reused in furnaces.
The National Fund for Environmental Protection and Water Management (NFEP&WM) awarded the project a loan of around Euro9m. PGNiG Termika operates a 2078MW coal-power plant at Siekierki.
Cemex joins the divestment party
01 August 2018Cemex joined the divestment party this week with the news that it plans to sell up to US$2bn worth of assets by the end of 2020. Put that together with LafargeHolcim’s own divestment plan of selected assets worth up to US$2bn as part of its Strategy 2022 and there is potentially a lot of cement production infrastructure going on sale over the next few years.
Both companies say that they will start announcing the latest round of divestments in the second half of 2018. Prices vary considerably around the world - and remember this is not only cement - but at, say, US$250m per integrated plant that could amount to 16 units. That’s a big enough manufacturing base to build your very own cement production empire! So, which markets might the two companies be considering leaving?
Cemex’s weaker areas in its half-year report were its South, Central America and the Caribbean region and, to a lesser extent, its European region. The former reported falling sales, cement volumes and earnings. The latter reported falling earnings on a like-for-like basis with issues noted across cement, ready-mix concrete and aggregate business lines in the UK. Back in Central and South America, problems were noted in Colombia due to a 10% fall in cement sales in the first half. An important point to make here is that despatch figures from the National Administrative Department of Statistics (DANE) out this week suggest that Colombia’s overall cement market has picked up since April 2018 (see Graph 1), in contrast to Cemex’s experience. Panama, meanwhile, saw cement volumes wither by 22% due to the 30-day strike by construction workers. Other operations to consider for the chop might include Cemex Croatia, which the company attempted to sell to HeidelbergCement and Schwenk Zement in 2017, before the European Commission put an end to that idea.
Graph 1: Annual change of cement despatches in Columbia in 2017 and 2018. Source: DANE.
When asked directly during its second quarter results call which assets it was intending to sell, chief executive officer (CEO) Fernando Gonzalez didn’t answer on commercial grounds. What he did say though was that the company had faced ‘headwinds’ in the Philippines, Egypt and Colombia, particularly in relation to fuel prices. He also said that Cemex had finished its market analysis, that it knew exactly which assets it would like to sell already and that it was in ‘execution’ mode. In Gonzalez’s own words, “we do have a number of assets to be divested, either because they are low growth, or because they are not necessarily integrated to other business lines.”
As covered a couple of week ago, the obvious location for LafargeHolcim to exit is Indonesia. CEO Jan Jenisch continued to refuse to comment on rumours that the company was leaving the country during its second quarter results call. Yet, local production overcapacity, falling earnings and profits and an underperforming but still sparky market make it the ideal candidate. What Jenisch did reveal was that the country had ‘positive momentum.’ Perhaps more importantly he added, “We are not selling because we want to sell. We are selling for high valuations only.”
Other potential locations for LafargeHolcim to leave might include Brazil and parts of the Middle East and Africa. Brazil’s cement market recovery has been a few years coming and was delayed again by a truck drivers’ strike in May 2018. The Middle East Africa area was the worst performing region in LafargeHolcim’s mid-year results with problems noted in South Africa.
With all of this in mind we have a rough idea of what Cemex and LafargeHolcim might be considering selling. The obvious candidates for both companies seem to be solid markets that promise growth after a period of underperformance. Just like Colombia and Indonesia in fact. Looking at the track record for both of them in recent years Cemex has seemed to be more ready to sell individual plants such as the Odessa and Fairborn plants in the US to different buyers. LafargeHolcim for its part has generally gone for larger more complete sales of regional or country-based chunks of its business such as in Chile or Sri Lanka.
Finally, don’t forget that Cemex’s Fernando Gonzalez said in March 2018 that the company was considering acquisitions again after a decade of austerity. He mentioned an interest in India and in Brazil. If he meant that last one then maybe he should give LafargeHolcim’s Jan Jenisch a call.
Holcim Mexico to launch two new cement products
31 July 2018Mexico: Holcim Mexico is launching two new brands for the local market. Holcim Prefacem is targeted for precast concrete elements and Holcim Supercem, a Composite Class 40 Portland Cement, is aimed at ready-mix concrete plants. Both products were developed by the company’s Centre for Building Technological Innovation (CiTec ) and are being produced at its Ramos Arizpe plant. Holcim Prefacem and Holcim Supercem will be first available near to the Ramos Arizpe plant in the states of Chihuahua, Nuevo Leon, San Luis Potosi, Durango, Zacatecas, Tamaulipas and Coahuila.
"Innovation makes a difference. With the support of Holcim Mexico and LafargeHolcim worldwide, we aim to cover the needs of specific market segments, with products that enhance our clients’ profitability”, said Marco Maccarelli, Corporate Sales Director Cement and Retail of Holcim Mexico.
Switzerland: LafargeHolcim’s first half profit fell by 43% from Euro561.8m in 2017 to Euro320.3m in 2018. Sales rose by 2.7% to Euro11.45bn. Under new CEO Jan Jenisch, who took over in September 2017, the company has been slashing costs, announcing earlier in 2018 that it will close its head offices in Zurich and Paris and shed around 200 jobs as it aims to save Euro345.2m/yr by the end of first quarter of 2019.
Jenisch said he was pleased with the sales growth, particularly the acceleration during the second quarter, when sales increased by 5%, up from a 2.7% rate in the first three months of the year.
"Operational issues in some markets have been addressed and we expect to deliver increasing margins as we capture the upward trend in demand through the second half of 2018," said Janisch. "We had a couple of plants where I was not happy that the output was not in line with market demand. We have made sure we can maximise their output in the second half."
Sales were supported by strong growth in India, one of the company's largest markets, where its subsidiary Ambuja Cement posted a 27% increase in profit during the second quarter. However, losses in Africa weighed heavily on the firm, with the regional unit reporting a loss after being hit by higher finance charges and losses from its South African business.
Jenisch said that the Africa and Middle East region will remain tough, while adding that the company would press ahead with its disposal programme. It aims to raise about US$1.73m from selling cement plants."We are on track here. We have done our portfolio review and will hopefully announce something later this year," said Jenisch. "However, there is nothing I can talk about at this time."
Philippines challenging for LafargeHolcim
27 July 2018Philippines: Holcim Philippines, part of LafargeHolcim saw a 25% in its first half net profit to US$30.0m due to stiff competition and higher operating costs. In the second quarter its profit fell by about 25% year-on-year to US$16.3m. However, second quarter net sales improved by 18.5% year-on-year to US$189.5m.
"Our second quarter performance showed encouraging trends, which translated into significant sales growth on the back of strong building activity,” said Holcim Philippines’ President John Still. “However, rising costs of fuel, power and distribution combined with the Peso's depreciation against the US Dollar and tighter competition continued to impact our business performance in the second quarter.” Still was optimistic that the second half of 2018 would offer Holcim Philippines the opportunity to recover some of the lost ground, following the improvement between the first and second quarter and the underlying ‘robust building activity’ in the country.
India: Ambuja Cement sales have benefited from more infrastructure projects, improved sand availability and increased government spending. Its sales volumes of cement grew by 6% year-on-year to 26.9Mt in the first half of 2018 from 25.4Mt in the same period in 2017. Its net sales increased by 10% to US$1.89bn from US$1.72bn and its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 7% to US$328m from US$306m.
"Ambuja is well positioned to benefit from the upsurge in rural demand and the encouraging external environment. Our consistent customer-connect initiatives, pursuit of operational excellence and continued focus on the retail segment is helping us reduce the impact of rising cost pressures," said Ajay Kapur, managing director and chief executive officer (CEO) of Ambuja Cement.
Update on water conservation
25 July 2018Earlier this year South Africa’s PPC commented on the drought facing Cape Town. It said that cement manufacturing was not water intensive, that its operations were ‘totally’ self-sufficient from its own surface water sources with capacity for several months and that it was working with the local government which viewed construction as an important economic sector. Point made!
Water conservation is an established part of the sustainability toolkit for cement producers. Yet recent weather patterns in the Northern Hemisphere may also test how well companies are doing. Above average temperatures have been recorded this summer, in some places accompanied by unusually dry conditions. A news story this week about Cemex Colombia being fined for using water from a river shows one aspect of the problems that can face industrial users. Another story that we’ve covered previously has been the legal action taken against producers using water from a site near to the Katas Raj Temples in Pakistan.
Wet process cement manufacturing uses more water than dry process but even modern plants use water for cooling equipment and exhaust gases, in emission control systems such as wet scrubbers. In addition, quarrying and aggregate production may require water, and concrete production also needs water. Issues also arise with quarry dewatering and discharging water into rivers and the like. Global Cement Directory 2018 data indicates that, where known, about 10% of integrated cement plants still use a wet production method.
Graph 1: Specific water consumption by selected cement producers in 2017. Source: Corporate sustainability reports.
As Graph 1 shows there is some variation between the major cement producers with regards to how much water they use. They all operate with different types of equipment and production methods in different geographical locations so the difference between the companies is to be expected. A cement plant in northern Europe that normally experiences high levels of rainfall will have a different approach to water conservation than one, say, in a water stressed area like the Middle East. Incidentally, the definition used to define a water-stressed or scarce area is one where there is less than 1000m3/yr per person. One other point to note here is that each of the companies has a higher consumption figure than the 100 – 200L/t that the Cement Manufacturers' Association of the Philippines (CeMAP) reckoned that an average dry-process cement plant used when it was promoting water conservation back in 2013.
Looking at specific recent success stories, India’s UltraTech Cement reported a specific water consumption of 54L/t of clinker at its Star Cement plant in Dubai, UAE in 2016 – 2017 following a dedicated initiative at the site. An another milestone that UltraTech Cement was keen to point out in its last sustainability report was that three of 13 integrated plants had achieved water sufficiency though the use of the company’s 360° Water Management Model with its use of rainwater harvesting and recharging groundwater. These plants are not dependent on any groundwater or fresh water sources. The other larger cement producers all have similar water management schemes with reduction targets in place.
Climate change models generally predict hotter and wetter weather but changing weather patterns and growing populations are likely to impact upon water management and consumption. Given the integral nature of water in the cement production process, many cement producers have realised the importance of it and treat it as an input material like fuel or limestone. Hence the highlighting of water conservation in company sustainability reports over the last decade. The test for the success of these initiatives will be how producers cope in drought situations where they may be seen as being in competition with domestic users. Thankfully in PPC’s case, Cape Town avoided having to ration water to the general public, as the rains returned in the spring.