Displaying items by tag: Cemex
Colombia: Cemex Latam, the Latin American subsidiary of Cemex, intends to enter dialogue with the Regional Autonomous Corporation of Antioquia (Corantioquia) to revoke its environmental permit for Maceo cement plant project. Corantioquia has requested that the permit from Central de Mezclas, a subsidiary of CHL, be returned to the CI Calizas y Minerales, according to the El Colombiano newspaper. The government agency has removed the clearance on procedural grounds and over the mining rights in the area.
US: Grupo Cementos de Chihuahua (GCC) has completed its purchase of a selection of assets from Cemex for US$306m. The assets consist of a cement plant located in Odessa in Texas, two cement distribution terminals located in Amarillo and El Paso in Texas and concrete, aggregates, asphalt and building materials businesses in El Paso, Texas and Las Cruces, New Mexico. The acquisition comprises all facilities, equipment and inventories. The purchase was financed with internal funds and an unsecured loan of US$254m.
“This acquisition represents a significant advance in our strategy of sustainable cement growth in the US, in markets contiguous to those of GCC ́s geographic footprint. With these assets and colleagues joining the company, we will enhance the competitive advantage of our logistics system, expand our product portfolio and optimise our operations by sharing best practices,” said Enrique Escalante, chief executive officer of GCC.
US: Cemex USA’s Victorville cement plant in California has been awarded Wildlife Habitat Council (WHC) Conservation Certification for work towards sustainability, environmental-protection and land-stewardship. The WHC presented the Victorville plant with the certification on 3 November 2016 during a ceremony at the 2016 WHC Conservation Conference in Baltimore. The designation means that all Cemex USA’s cement plants are now WHC-certified. WHC focuses on healthy ecosystems and connected communities. Cemex now has 18 WHC-certified sites in North America, of which fifteen are in the US
Cemex’s WHC Conservation Certification programs are mainly focused on habitat restoration and sustainability. In 2013, two wind turbines were commissioned at the Victorville plant. The plant also earned its fifth Energy Star certification earlier in 2016 for reducing its energy use and environmental impact and the Mojave Desert Air Quality Management District awarded Cemex USA’s Victorville plant operation the 2015/2016 Exemplar Award.
"This plant has persevered through good times and bad: two world wars, three different owners and countless upgrades to its facilities and equipment. Through all of the changes, two things have remained constant: a commitment to safety and a commitment to producing a high-quality product," said Hugo Bolio, Cemex USA’s Executive Vice President of Cement Operations and Technology. The Victorville Cement Plant was established in 1916 and was upgraded in 1997 and 2001. It has a production capacity of 3Mt/yr.
Jamaica: Peter Donkersloot Ponce has been appointed as the general manager of Caribbean Cement Company with effect from 7 November 2016. He replaces Alejandro Varés Leal who was originally appointed in May 2015 subject to an agreement between Caribbean Cement’s owner Trinidad Cement and Cemex. However, Varés Leal has taken up a promotion with Cemex. In accordance with the Agreement, Ponce was proposed by Cemex to replace Varés Leal.
Mexico: Cemex’s net sales have fallen by 2% year-on-year to US$10.5Bn in the first nine months of 2016 from US$10.7Bn in the same period in 2015. However, in a like-for-like basis adjusted for ongoing operations and currency fluctuations its sales rose by 5%. Its gross profit rose by 3% to US$3.65bn and its operating earnings before interest, taxation, depreciation and amortisation (EBTIDA) rose by 9% to US$2.14bn. It attributed the rise in sales on a like-for-like basis to higher prices in local currency terms and higher volumes in Mexico and its European and Asia, Middle East & Africa regions.
“During the third quarter, we continued to deliver strong underlying operational and financial results by remaining focused on the variables we can control. Our year-to-date operating EBITDA grew 17% on a like-for-like basis, with a 5% growth in sales. This was the highest year-to-date EBITDA growth in a decade,” said the group’s chief executive officer, Fernando A Gonzalez.
Overall, the cement producer saw its cement volumes rise by 1% to 50.8Mt from 50.1Mt. Its net sales on a like-for-like basis and sales volumes rose in most of its operating regions except for South, Central America and the Caribbean and Europe.
Colombia: The broker named in an internal probe by Cemex Latam has defended his involvement with relation to the purchase of land and mining rights for a cement plant project in Maceo, Antioquia in comments to the La Republica newspaper. Eugenio Correa, representing Calizas y Minerales, says that he has only received US$6.85m from Cemex despite claims by Cemex that he is holding US$20.5m in funds for the project. He adds that Cemex conducted at least 25 visits from its engineers, lawyers and accountants at the Maceo site between July 2011 and December 2015 keeping it up to date on the project’s progress.
Correa says that he originally signed a memorandum of understanding with Cemex for the sale of 340 hectares, economic free zone and the mining rights for US$22.20m in August 2012. He adds that the contract was extended in April 2016 to June 2019. In late September 2016 Cemex dismissed several senior staff members in relation to the project and the subsidiary’s chief executive resigned.
Mexico: Grupo Kopar has won first place at the Cemex Integrate Supplier’s Innovation Program. Three ideas for innovation and their contribution to the company, the communities where it operates, and the environment were recognised from a field of 28 suppliers at Cemex Mexico’s Supplier’s Day 2016. The awards were presented at a ceremony at Monterrey on 12 October 2016.
The ideas submitted, which mainly focused on providing more efficient processes, products and services, were subjected to an evaluation and voting process directed by a group of 20 executives and experts from different areas of the company. Additionally, 40 companies earned the OHSAS 18001:2008 Standard and were recognised as ‘Health and Safety Certified Suppliers.’
Grupo Kopar came first with its idea for a high efficiency valve for dust collectors. The project consisted of making more efficient dust collectors by redefining the pulse filter cleaning valve system by migrating from traditional diaphragm valve technology to efficient Mac spool valves. Grupo Kopar supplies pneumatic and motion control components, with applications ranging from pneumatic valves and cylinders to robots.
Second place was awarded to Equipos y Explosivos del Noreste for its idea for a low-density blasting agent. Its agent is made from a different fuel than the one currently used, offering a cost reduction and improved results for the displacement and fragmentation of each quarry blast. Equipo y Explosivos del Noreste has been present in the mining and construction explosives market since 1989, providing high-quality technology in all of its products.
Third place was won by Vidmar for its automatic bag weigher CWB 25-50. The system is designed to perform automatic random cement bag weight sampling without human intervention to improve health and safety conditions. Vidmar is a specialised engineering group with more than 30 years of experience. It is a global specialised supplier in the industrial weight and automation field.
The European Commission’s decision to investigate Duna-Dráva Cement’s (DDC) purchase of Cemex Croatia sticks out in a busy news week. There have been a few noteworthy news stories this week from the Indonesian government making preparations to fight overcapacity, LafargeHolcim retreating from Chile, Cemex restructuring its management in Colombia after investigations into a land deal and the announcement of merger plans between two of the larger refractory manufacturers. Yet the commission’s probe is a response to what may be in effect a ‘land grab’ by DDC. How on earth did HeidelbergCement and Schwenk, the joint-owners of DDC, think they were going to pass this one past the relevant competition bodies?!
As the commissions describes it, the “proposed transaction would combine Cemex Croatia, the largest producer in the area, and DDC, the largest importer.” So far, so bad. Then add the observation that Cemex Croatia and LafargeHolcim control all the cement terminals in ports along the Croatian coast. Cemex has three cement plants in the south of the country with no nearby competition. Giving the owners of DDC those assets ties up the market southern Croatia nicely. Understandably, the European Commission has concerns.
Croatia has five cement plants. LafargeHolcim runs a 0.45Mt/yr plant at Koromačno and Nasicecement run a 0.6Mt/yr plant at Nasice. Cemex’s three plants are all in the south near Split within about 10km of each other. When Global Cement visited in late 2014 Cemex Croatia told us that the plants were so close together that the company considered them as one plant. The sites also share one quarry for their raw materials. Only one of three plants, Sv Juraj the largest, has a bagging unit and Sv 10 Kolovoz was mothballed due to poor market demand. Together the plants have a cement production capacity of 1.92Mt/yr. This gives Cemex 65% of the market by production capacity.
Describing the three plants as one certainly makes sense for a company that might have been considering selling them. However, it is a fair comment given the close proximity of the plants to each other and the joint-capacity below that of some of the larger single site multi-kiln plants around the world. In this sense, the real questions for the European Commission will be how much of a dent to competition will it make to hand over the area’s main importer to the area’s main producer?
Graph 1: Cement consumption in Croatia, 2011 - 2015 (Mt). Source: Croatian Bureau of Statistics.
Looking at the national cement market since 2011 in Graph 1 using data from the Croatian Bureau of Statistics, sales volumes fell to a low in 2013 and have picked up since then, although not to the same levels. Prior to this cement sales halved from 2008 to 2013. Under these kinds of conditions Nexe Grupa, the owner of Nasicecement, filed with pre-bankruptcy settlements in 2013. HeidelbergCement expressed interest in the cement assets around this time, although nothing eventually happened. Imports of cement grew by 11% year-on-year to 312,000t in 2015 from 280,000t in 2014. This compares to a 1% increase to 2.36Mt in domestic cement sales in 2015.
As the commission suggests, combining the region’s biggest producer and its biggest importer seems like a recipe for reduced competition and inflated prices. This could be mitigated, in theory, if DDC decided to flood the region with imports from HeidelbergCement’s new assets from Italcementi once it completes its purchase of that company. Although a dominant player in a region undercutting its own prices seems far fetched. Theoreticals aside, it seems very unlikely that the European Commission will let the purchase go ahead without taking some sort of action.
European Commission starts investigation into HeidelbergCement and Schwenk's joint acquisition of Cemex Croatia11 October 2016
Croatia: The European Commission has opened an investigation to check whether the proposed acquisition of Cemex Croatia by HeidelbergCement and Schwenk is in line with the European Union (EU) Merger Regulation. The commission has concerns that the proposed takeover may reduce competition for grey cement in Croatia. It will make its decision by 23 February 2017.
"The construction sector, like any other sector, needs competition. As cement is an essential part of the sector we need to make sure that consolidation does not lead to higher prices for construction companies and ultimately consumers in Croatia," said commissioner Margrethe Vestager.
The commission has concerns regarding the supply of grey cement in southern Croatia, including Dalmatia in particular, where Cemex Croatia operates three cement plants in Split and faces competition from DDC's imports from Bosnia and Herzegovina, which is not an EU member. The proposed transaction would combine Cemex Croatia, the largest producer in the area, and DDC, the largest importer. The commission's initial investigation indicates that the proposed transaction may remove a significant competitor from an already concentrated regional market.
The remaining actual or potential suppliers may exercise only limited competitive pressure on the merged entity because of the transport costs to reach southern Croatia. Additionally, the domestic cement suppliers Cemex Croatia and LafargeHolcim control all the cement terminals in ports along the Croatian coast. The commission has preliminary concerns that the transaction may strengthen the market power of Cemex Croatia in southern Croatia and result in price increases for grey cement.
HeidelbergCement and Schwenk plan to acquire, via their joint subsidiary DDC, assets in Croatia and Hungary that currently belonging to Cemex. The Hungarian part of the transaction as been referred to the Hungarian competition authority, so the commission's investigation will focuses on the acquisition of Cemex's Croatian assets.
Colombia: Cemex has made organisational changes at Cemex LatAm and Cemex Colombia following senior management dismissals and the resignation of the unit’s chief executive officer in connection to investigations into a land deal in Maceo. The cement producer said the changes would ‘enhance the level of leadership, administration and corporate governance practices.’
The board of directors of Cemex LatAm has decided to split the roles of chairman of the board of directors of Cemex LatAm, chief executive officer of Cemex LatAm and director of Cemex Colombia. Additionally, a new chairman of the board of directors of Cemex LatAm, director of Cemex Colombia, and director of planning of Cemex LatAm have been appointed. The new appointments are effective immediately.
Juan Pablo San Agustin has been appointed chairman of the board of directors of Cemex LatAm. He will also remain as executive vice president of strategic planning and new business development of Cemex. He is a member of Cemex’s executive committee.
Jaime Muguiro Domínguez has been confirmed as chief executive officer of Cemex LatAm. He will also remain as president of Cemex South, Central America and the Caribbean and is also a member of Cemex’s executive committee.
Ricardo Naya Barba has been appointed director of Cemex Colombia.
Francisco Aguilera Mendoza has been appointed director of planning of Cemex LatAm, and will be appointed director of planning of Cemex Colombia in the coming days.
Cemex added that all of the newly appointed executives have ‘significant’ international operating management experience and on average have each close to 20 years of working experience within Cemex.