Displaying items by tag: Brazil
CSN receives Holcim Brazil acquisition approval
07 April 2022Brazil: The General Superintendence of the Administrative Council for Economic Defence (CADE) has approved CSN’s takeover deal with Holcim for the latter’s Brazilian business. The América Economía newspaper has reported that the US$1.03m deal covers five cement plants, among other assets.
Holcim has said that its Latin America region remains strategically important within its global operations.
Votorantim Cimentos increases earnings and sales in 2021
01 April 2022Brazil: Votorantim Cimentos recorded a 37% year-on-year rise in its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$1.10bn in 2021. Its sales rose by 33% to US$4.71bn, while its profit more than tripled to US$2.1bn. The group’s sales grew in all of its regions. Its cement volumes totalled 37.2Mt, up by 15% from 2020 levels. Its capital expenditure (CAPEX) investments grew by 30% year-on-year to US$317m. It commissioned a new production line at its Pecém grinding plant in Brazil and continued to work on an upgrade to Cementos Artigas’ Sayago grinding plant in Uruguay, scheduled for completion in 2022. It also completed its acquisition of Spain-based Cementos Balboa.
Cement operations, logistics and adjacent businesses director Osvaldo Ayres Filho, who was serving as group CFO during 2021, said “We had a record financial performance in 2021, despite the challenging environment due to the ongoing effects of the pandemic and global inflationary pressure.” He added that the producer also made ‘significant strategic moves.’
InterCement fights inflation with price rises in 2021
23 March 2022Brazil: InterCement’s sales revenue grew by 33% year-on-year to US$1.69bn in 2021 from US$1.28bn in 2020. Its cement and clinker sales volumes rose by 6.2% to 20.1Mt from 18.9Mt. All operating regions were reported to have growing volumes. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 37% to US$470m from US$343m. The group said that, although input costs kept rising in 2021, it offset this with price increases.
Brazil: Votorantim Cimentos has appointed Bianca Nasser as its chief financial officer (CFO) and investor relations director. She succeeds Osvaldo Ayres Filho, who will remain in the company as the Director of Cement, Logistics and Adjacent Business Operations.
Nasser worked for Petrobras from 2002 to 2019, eventually becoming the Executive Manager of Corporate Finance and Treasury. She subsequently became the CFO and investor relations officer at BNDES. She is a graduate in economics from the Universidade Federal do Rio de Janeiro and holds a master’s degree in administration and finance from the Pontifical Catholic University of Rio de Janeiro.
Brazilian cement sales rise to 64.7Mt in 2021
14 January 2022Brazil: The Brazilian National Cement Industry Association (SNIC) has recorded cement sales of 64.7Mt by Brazilian cement producers in 2021, up by 6.6% year-on-year from 2020 levels. Home construction work, property development and infrastructure building all contributed to the rise. Capacity utilisation rose to 69% from 65% across the country’s 94Mt/yr, 91-plant cement network.
Update on Holcim, November 2021
24 November 2021Holcim’s investors’ event last week confirmed the changes the company has been making to its sales mix. At its Capital Markets Day it revealed its commitment to expand the net sales of its Solutions & Products division to 30% of the group total by 2025. This division covers products such as roofing, mortar, precast concrete and asphalt. At the same time it is reducing the proportion of sales from its cement division. Graph 1, below, from a presentation given by chief executive officer Jans Jenisch, hints at what group may be aiming for: roughly a third of its sales from cement; a third from aggregates and ready mixed concrete; and a third from the Solutions & Products division in 2025.
Graph 1: Forecast growth of sales by Holcim’s Solutions & Products division to 2025. Source: Holcim Capital Markets Day 2021 presentations on website.
To give readers an idea of the scale of change in Holcim’s cement business since the merger with Lafarge in 2015, just look at the figures. In 2015 LafargeHolcim sold 256Mt of cement and it had a cement production capacity of 374Mt/yr. In 2020 it sold 190Mt of cement and it had a cement production capacity of 288Mt/yr. However, the ratio of sales from cement has remained consistent at just below 60%.
This all changed in January 2021 when Holcim announced it was buying roofing and building envelope producer Firestone Building Products for US$3.4bn. Instead of trimming down the business to make synergistic changes as it had been for the previous five years the group significantly changed its sales mix. As noted in ‘2021 in Cement’ in the December 2021 issue of Global Cement Magazine, Holcim remains the world’s largest non-Chinese cement producer. Yet its acquisitions in 2021 have consisted of ready-mixed concrete and aggregate companies in mature markets, and Firestone. Its divestments have been cement subsidiaries. Since 2019, and including the agreed Brazilian sale, planned to complete in 2022, the group has generated US$4.1bn in these divestments. Almost as if to reinforce this change of direction the group also switched its name to Holcim in May 2021.
Aside from the focus on expanding the scope of the Solutions & Products division over the next few years, the group said at its recent investors’ event that it wants to lead in sustainability and innovation. It also reminded investors that growth remains in building materials markets. Once Jenisch had established the potential the construction market has in the coming years it was all about so-called ‘green’ growth. On the sustainability side this includes promoting the group’s Science Based Targets initiative net-zero targets by 2050, pushing sales of its low-carbon concrete products and working on increasing the uptake of construction and demolition waste in Europe. The group has a target of reaching 25% or higher for sales of its ECOPact ready-mixed concrete product by 2025. Holcim reported Scope 1 CEM specific CO2 net emissions of 555kgCO2/t in 2020 and it has target of 475kgCO2/t by 2030. This is broadly in line with its peers. Cemex has also committed to 475kgCO2/t or lower and HeidelbergCement is currently aiming for 500kgCO2/t or lower by 2030.
Simultaneously promoting sustainability and growth in products that release CO2 during their manufacture is quite the balancing act for all cement producers. The way Holcim appears to be squaring this particular circle is by heading elsewhere. Back in January 2021 we asked whether Holcim would leave it with the Firestone acquisition or go further. This question has now been answered with Holcim’s intent to increase the share of its Solutions & Products to 30% by 2025. Other large cement producers don’t seem to be diversifying their sales mix at the same speed but similar strategic thinking along supply chains can be seen from the proposed buyer of LafargeHolcim Brazil, Companhia Siderúrgica Nacional (CSN) Cimentos. CSN is a steel manufacturer and buying cement assets gives it somewhere to use its slag. Fittingly, Holcim’s investors’ day ended with a night out at a museum holding an exhibition on the history of concrete. For now at least concrete looks set to remain a key part of the business.
Loesche buys Dynamis
24 November 2021Brazil: Germany-based Loesche says that it has acquired burner manufacturer Dynamis for an undisclosed amount. The engineering company was founded in 2003 and its products include the D-Gasifier, the D-Flame Burner, the D-Igniter, and the D-HotGas. Dynamis said it was excited by the opportunities that the agreement with Loesche would bring.
Brazil: Members of the Brazilian National Cement Industry Association (SNIC) have committed to a 34% reduction in the CO2 emissions of their cement production to 375kg/t by 2050 from 564kg/t in 2019. Ten cement producers including Cimento Tupi, CSN Cimentos, InterCement and Votorantim signed the commitment. With the industry's forecast rate of growth in cement production capacity, this will result in possible total CO2 emissions of 45Bnt in 2050 compared to 36.7Bnt in 2020.
Planned CO2 emissions reduction investments before 2032 are US$637m across the industry.
Brazil: Votorantim Cimentos’ revenue grew by 37% year-on-year to US$2.95bn in the first nine months of 2021 from US$2.15bn in the same period in 2020. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 67% to US$758m from US$455m. Cement sales volumes rose by 18% to 27.8Mt from 23.5Mt. The cement producer benefitted from strong growth in the first half of 2021, particularly in Brazil, although this has slowed somewhat. Notable acquisitions by the company so far in 2021 include an agreement to buy both Cementos Balboa and FYM’s Southern business in Spain and the completion of a deal to take control of McInnis Cement in Canada.
Overall the group’s net revenue rose by 32% to US$8.81bn from US$6.67bn. Its adjusted EBITDA grew by 70% to US$2.14bn from US$1.26bn. Cement-based revenue represented 44% of the total. The group attributed its result in the third quarter of 2021 to higher commodity prices and sales volumes.
Holcim increases nine-month sales, earnings and profit in 2021
29 October 2021Switzerland: Holcim’s consolidated sales rose by 16% year-on-year to Euro18.7bn in the first nine months of 2021 from Euro16.1bn in the first nine months of 2020. The company’s recurring earnings before interest and taxation (EBIT) rose by 33% to Euro3.3bn from Euro2.48bn. Its operating profit rose by 38% to Euro3.11bn from Euro2.26bn.
The group increased its cement sales by 7.8% to 150Mt from 139Mt. Volumes in Asia Pacific were 51.7Mt, up by 17% from 44.2Mt; volumes in Europe were 35Mt, up by 4.1% from 33.7Mt; volumes in Middle East Africa were 27.2Mt, up by 11% from 24.5Mt; volumes in Latin America were 20.5Mt, up by 18% from 17.3Mt and volumes in North America were 15.1Mt, up by 1.5% from 14.9Mt.
CEO Jan Jenisch said “I’m pleased that we have achieved a record quarter of profitable growth once again. I congratulate my teams for their exceptional resilience as they continue to successfully navigate the challenges posed by the pandemic in a dynamic business environment. On the back of their performance we have revised our recurring EBIT growth guidance from 18% to at least 22% on a like-for-like basis.” He continued “Most importantly, our colleagues have kept their focus on our key long-term value creation drivers to become the global leader in innovative and sustainable building solutions. We are picking up momentum in our strategic portfolio transformation, with the divestment of our business in Brazil, the announcement of nine bolt-on acquisitions so far this year and the expansion of our Firestone GacoFlex range from Mexico to Colombia and Ecuador.”