Displaying items by tag: Cementos Argos
Colombia: Cementos Argos has raised US$750m from the preferred shares-issuance in the local and international markets, according to a letter to the Colombian financial services watchdog Superfinanciera. The share-issuance was oversubscribed, with demand amounting to US$1.18bn from more than 14,000 Colombian and international investors.
Of the interested investors, 65% were local investors and 35% were from abroad. Additionally, 58% of the interested parties were institutions and 42% were individuals. The proceeds from the transaction will be used by the company to support its growth in the cement and concrete industry.
How much is an American cement plant worth?
03 October 2012Eagle Materials has picked up two cement plants in the US from Lafarge with a combined capacity of 1.6Mt/yr for US$446m. The deal also included six distribution terminals, two aggregates quarries, eight ready-mix concrete plants and a fly ash business.
Following our column in August 2012 following an acquisition in India we decided to ask a similar question: how much are American cement plants worth?
Eagle's acquisition now increases its presence in the Midwest and South Central regions of the US, giving it a rough line of plants across the country nearly connecting Lake Michigan to the Gulf of Mexico. As shown in our industry report on the US between 2005 and 2011 cement consumption fell in both the states the plants are located in. Missouri's consumption fell by 45% from 2.82Mt to 1.56Mt, just above the US national average. By contrast Oklahoma's consumption only fell by 11%, from 1.6Mt to 1.43Mt, the fourth smallest decline in the country.
However, Eagle has demonstrated financial health in contrast to the US sector as a whole, reporting a 21% rise in total revenue in the quarter to 30 June 2012 and a 60% rise in operating earnings year-on-year in the quarter to 31 March 2012. The combined operations at the two plants generated about US$178m in revenue during the year ending in June 2012. By contrast Eagle Materials' revenue totalled US$529m during the same period. The plants' additional capacity will increase Eagle's total by about 60%.
Lafarge are still thinking big though, with the proviso that Eagle will supply certain Lafarge operations with cement for four to five years, as well as an agreement with a Lafarge affiliate to supply low-cost alternative fuels to the acquired operations. According to its 2011 annual report North America comprised 11% of Lafarge's cement sales. Lafarge's sales in the US remained flat in 2011. In that year the company's capacity was 12.8Mt with a 12% market share. This picture has started to change in 2012 with a reduced loss in earnings before interest, tax, depreciation and amortisation (EBITDA) in the first quarter followed by volume and sales increases of above 10% in the second quarter.
Back in June 2011 Cementos Argos picked up two plants from Lafarge in Roberta, Alabama and Harlyville, South Carolina for US$760m with a combined capacity of 2.7Mt/yr. As with the Eagle deal the sale included a number of peripheral assets including a clinker mill, cement mixer lorries and a marine port.
Cementos Argos recently put the world average at US$250m/t when publicising the expansion of its Rioclaro plant. The European Cement Association reports the figure at being above US$200m/t on its website. In August 2012, at the time of the potential CRH acquisition in India, the cost of Indian cement production capacity was placed at US$110/t-US$120/t.
Perhaps the question we should ask is how much is a US cement plant worth when it used to belong to Lafarge. Both the Cementos Argos sale and the Eagle deal worked out at US$280/t including all the ancillaries. The actual question we should ask is why has Lafarge chosen these specific plants to sell to a competitor in the US market?
Cementos Argos announces new internal structure
30 May 2012Colombia: Cementos Argos has announced the appointment of four new vice-presidents following of internal reorganisation. Following the promotions Jorge Mario Velasquez, president of Argos, commented that the moves had met the right balance of youth and experience.
Juan Luis Munera, a commercial law attorney with seven years service with Argos, has been appointed to vice president for legal and sustainability. Carlos Horacio Yusty, an engineer specialising in industrial management systems with 16 years service with Argos, has been appointed to vice president of finance. Mauricio Ossa, a business manager with 15 years service with Argos, has been appointed regional vice president of the company's Caribbean operation. Tomas Restrepo, currently vice president of innovation with five years service with Argos, will serve as regional vice president of Argos' Colombian units.
Cemargos appoints new chairman
09 May 2012Columbia: Columbia's largest cement company, Cementos Argos (Cemargos), has named Jorge Mario Velásquez as its chairman.
A civil engineer with over 30 years' experience in cement, Velásquez replaces José Alberto Vélez, who remains at the head of parent company Grupo Argos. The changes are part of the company's ongoing corporate restructuring process, which includes splitting off non-cement assets to its investment arm, Inversiones Argos.
Argos sees significant improvement in first quarter
30 April 2012Colombia: Colombia's Grupo Argos has announced that its consolidated net profit in the first quarter of 2012 was US$125m, a fourfold increase from that seen in the first quarter of 2011. The group said that it had seen a surge in growth in its most significant business areas, namely cement and electricity. The group, which has a 61% stake in Cementos Argos, said that its earnings before interest, taxes, depreciation and amortisation, were US$250m.
Cementos Argos funds Ceratech
21 June 2011US/Colombia: Ceratech, Inc., a producer of alternative, non-OPC cementitious materials, has accepted another strategic equity investment, this time from Colombian cement powerhouse Cementos Argos. The Ceratech investment follows Argos' recent expansion of its US presence through a USD 760m purchase of Lafarge assets in the south east of the country. The strategic investment will help Argos meet its goal of building a competitive advantage based on sustainability and innovation.
Ceratech's manufacturing process produces technologically advanced, more durable, 'sustainable cements' comprising 95% waste fly ash generated by electric utilities. Its production does not generate any CO2 and the product is well-positioned for adoption by contractors, distributors and companies that are looking for new solutions that better conform to green building initiatives.
The two companies will cooperate to develop and distribute Ceratech's cement through Argos' established ready mix channels throughout the mid-Atlantic, southeastern and southwestern US markets.
"This strategic investment being made by Argos shows how important innovative, sustainable construction products are to the industry," stated Jon Hyman, CEO of Ceratech. "Ours is the only cement on the market composed of more than 90% fly ash. As the industry's only carbon-free cement, we exceed the requirements for green building practices such as USGBC's LEED rating system."