Displaying items by tag: Cemex
Germany: The member companies of the German Cement Works Association (VDZ) elected a new board of directors on 8 April 2014. After a three-year period of tenure, VDZ president, Gerhard Hirth of Schwenk Zement was again confirmed in office. HeidelbergCement's Christian Knell, Spenner Zement's Dirk Spenner and Cemex Deutchland's Eric Wittmann were elected as vice presidents.
"I would like to thank our member companies for their support over the previous years and I look forward to the pending tasks," said VDZ president Gerhard Hirth. After some difficult years for the German cement industry, he takes a positive view and expects the demand for cement to grow in 2014 due to the favourable trend in terms of building permissions for both residential and non-residential construction, as already indicated by the good figures from domestic cement deliveries during the few first months 2014.
"The agreement with regard to the EU state aid procedure on the Renewable Energies Act (EEG) surcharge is also a great relief for German cement manufacturers," said Hirth. The complete elimination of the so-called special equalisation scheme would have burdened companies with more than Euro30,000 of additional power costs per job. Hirth added, "However, the sharpened competition pressure from abroad, which can be seen from the increase in cement imports and the sinking exports, continues to present our industry with enormous challenges together with the compliance with climate protection goals and emission reductions."
The German Cement Works Association has campaigned for the interests and concerns of German cement manufacturers for more than 135 years. Currently, 20 German cement manufacturers are full members of the Association, which, together with a total of 49 cement plants and around 7300 employees, produce around 32Mt/yr cement and generate a turnover of Euro2.2bn.
Mexico: Cemex plans to develop a wind power project in Nuevo Leon state, Mexico with an investment of US$600m, according to chairman and CEO Lorenzo Zambrano. The project will consist of two wind farms that cost US$300m each, which could be installed within two years.
Cemex will use at least 10% of the power output and has identified potential customers that could purchase the remainder. The complex, dubbed Las Ventikas, is expected to generate energy savings of US$15m/yr for the company. Cemex could also install wind farms for its operations abroad, for example in the Philippines, where it is seeking a government permit for a project of this type.
Europe: A European court has rejected an appeal by members of an alleged cement cartel, including Holcim Deutschland, HeidelbergCement, Schwenk Zement, Holcim, Buzzi Unicem, Italmobiliare, Portland Valderrivas and various subsidiaries of Cemex. The companies have argued that the European Commission (EC) had exceeded its powers when it opened an investigation in 2008.
The cement manufacturers brought seven appeals forward, arguing that the EC had not given a sufficient explanation for the suspected infringements before pushing them to respond to a long series of questions in too short a time limit. The judges considered that the EC had judicially provided the required 'minimum degree of clarity.'
On the other hand, the court partially agreed with Schwenk Zement. It judged that the time limit of two weeks that the companies were given to identify all of their contacts, including informal ones, was inadequate.
Czech Republic: The Office for Protection of Competition (UOHS) of the Czech Republic has approved the merger of Cemex Czech Republic and Holcim Cesko within the country, according to UOHS chairman Petr Rafaj. The merger is part of Holcim and Cemex's European asset swap.
UK: Commissioning has started on the repaired plant at the flood-damaged Cemex cement works at South Ferriby, UK and production will be resumed imminently.
The breakthrough comes three months after the plant, which employs 150 staff, was put out of action by a tidal surge from the nearby River Humber. A Cemex spokesman said, "Commissioning has started on the cement mill, which has been upgraded and improved since the flood on 5 December 2013. It has been a very long and complex process but we hope production will resume very soon."
Normally the 76-year-old plant produces around 800,000t/yr of cement so the loss of production over three months will mount to 200,000t.
The local employees have been retained on full pay since 5 December 2013 when the tidal surge saw the River Humber burst its banks and swamp the plant with millions of litres of water. The most serious damage was caused to the site's electrical network.
Recovery in the European cement markets arrived slowly in 2013. Balance sheets at HeidelbergCement, Cemex, Italcementi, Vicat and Buzzi Unicem appear to have stalled into something less than the recovery that everybody wants. The picture is more stable in Western Europe but declining revenues have headed east.
The European Commission's Autumn 2013 Economic Forecast has summed it up well, predicting that the European Union's (EU) gross domestic product (GDP) would remain static in 2013. On the strength of the results seen so far that feels about right. The cement industry in Europe hasn't continued to decline but the 'recovery' is slow. Yet a recovery is happening on the strength of these financial results so far. Compared to some of the sales declines seen in 2012 this is good news.
With results from the big European-based cement producers Lafarge and Holcim due later in February 2014, here is a summary of the European situation.
HeidelbergCement's revenue has remained flat in 2013 at Euro13.9bn although its cement, clinker and ground-granulated blast-furnace slag (GGBS) sales volumes have risen by 2.6% to 91.3Mt. Compare this with the 8.7% bounce in revenue from 2011 to 2012. By region, the problem areas have now shifted from losses in Western and Northern Europe to losses in Eastern Europe and Central Asia. Market pickup in the UK has driven this turnaround, despite diminished sales volumes in Germany.
Similarly, Cemex's sales have also remained flat at US$15.2bn. Both of its European areas have improved their sales, with sales losses only reported for the Northern Europe region. Again, sales in the UK drove overall business with France starting to improve too.
Italcementi had it tougher in 2013 with its sixth consecutive drop in revenue since 2008. Just like HeidelbergCement, the problem regions for Italcementi have shifted east in 2013 from Western Europe to the group's Emerging Europe, North Africa and Middle East area. However Italcementi is losing revenue in Western Europe faster than HeidelbergCement, mainly due to the poor Italian market.
Elsewhere, Vicat reported that its consolidated cement sales fell by 4% to Euro1.11bn. Sales decline lessened in France and the rest of Europe even saw sales rise by 4% to Euro427m. Buzzi Unicem saw its cement sales volumes remain static in 2013 at 27.4Mt.
Overall it may not feel great but it's better than the cement industry news for Europe we've been used to in recent years. With the European Commission Economic Forecast suggesting a 1.4% rise in GDP in 2014, the next 12 months look more promising.
Mexico: Cemex has anounced that its consolidated net sales increased by 4% during the fourth quarter of 2013 to approximately US$3.9bn and increased by 2% for the whole of 2013 to US$15.2bn versus the comparable periods of 2012. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 4% during the fourth quarter of 2013 to US$642m and increased by 1% for the whole of 2013 to US$2.6bn versus 2012.
Cemex said that the increase in consolidated net sales was due to higher volumes in the US and its operations in the Mediterranean, Northern Europe, Asia and South, Central America and the Caribbean, as well as higher product prices in local currency terms in most regions. Operating earnings before other expenses in the fourth quarter increased by 30% to US$359m and increased by 17% to US$1.5bn for the full-year 2013.
Cemex reported a narrower controlling interest net loss of US$255m during the fourth quarter of 2013, down from a loss of US$494m in the same period of 2012. For the full-year 2013, controlling interest net loss improved to US$843m from a loss of US$913m in 2012.
Operating EBITDA during the fourth quarter increased by 4% to US$642m. For the full year 2013, operating EBITDA increased by 1% to US$2.6bn versus 2012. On a like-to-like basis and also adjusting for the pension plan effect, full-year 2013 operating EBITDA increased by 4%.
Fernando A González, Executive Vice President of Finance and Administration, said, "During 2013 we continued to deliver. This is our third consecutive year of EBITDA growth, driven by improvement in pricing and volume in most of our regions, the favorable operating leverage effect in the US and our continued initiatives to improve our operating efficiency."
The fourth quarter of 2013 by region
Net sales in Cemex's operations in Mexico decreased by 6% in the fourth quarter of 2013 to US$785m, compared with US$832m in the fourth quarter of 2012. Operating EBITDA decreased by 17% to US$247m versus the same period of 2012.
Cemex's operations in the US reported net sales of US$819m in the fourth quarter of 2013, up by 8% from the same period in 2012. Operating EBITDA increased to US$77m in the quarter, versus a US$13m profit in the same quarter of 2012.
In northern Europe, net sales for the fourth quarter of 2013 increased by 5% to US$1.1bn, compared with US$1.0bn in the fourth quarter of 2012. Operating EBITDA was US$79m for the fourth quarter, 1% lower than the same period of 2012.
Fourth-quarter net sales in the Mediterranean region were US$394m, 11% higher when compared to sales of US$354m during the fourth quarter of 2012. Operating EBITDA decreased by 5% to US$78m for the quarter versus the comparable period in 2012.
Cemex's operations in South, Central America and the Caribbean reported net sales of US$577m during the fourth quarter of 2013, representing an increase of 11% over the same period of 2012. Operating EBITDA increased by 15% to US$183m in the fourth quarter of 2013, from US$159m in the fourth quarter of 2012.
Operations in Asia reported a 4% decrease in net sales for the fourth quarter of 2013, to US$133m, versus the fourth quarter of 2012. Operating EBITDA for the quarter was US$32m, up by 12% from the same period of 2012.
Egypt: An Egyptian court has accepted an appeal by Assiut Cement to prevent the overrule of its privatisation in 1999. The case regarding the Cemex subsidiary has now been referred to an administrative court.
Two former Assiut employees, who were among workers to take an early-retirement package following the privatisation, brought a lawsuit against Assiut and certain Egyptian government representatives in 2011, seeking to annul the privatisation. The civil court ruled to annul the sale in 2012, but Assiut appealed. The civil appeals court accepted the appeal, overruled the first instance court and has referred the case to an administrative court, said Maher Al-Haffar, Cemex's vice president of corporate communications and investor relations.
"The process will start from the beginning, and the new court will have to hear the merits of the case," Al-Haffar said. Meanwhile, Egyptian cement operations are continuing and will continue normally, he added.
Mexico-based Cemex purchased a controlling stake in Assiut Cement in 1999 from Egypt's state-owned Metallurgical Industries Holding. It has since increased its cement production capacity to 5.4Mt/yr from 3.7Mt/yr and added ready-mix concrete, aggregates and housing developments to its cement operations. Assiut had sales of US$471m in 2012, equivalent to about 3.1% of Cemex's US$15bn in global sales.
UK: The Competition Commission (CC) has demanded that Lafarge Tarmac sell one of its cement plants in the UK to create a fifth cement company in the country to increase competition in the market. The CC also intends to increase competition in the supply chain for ground granulated blast furnace slag (GGBS) by forcing Hanson to sell one of its GGBS production facilities. The CC is also introducing measures to limit the flow of information and data concerning cement production and price announcements.
"We believe that the entry of a new, independent cement producer is the only way to disturb the established structure and behaviour in this market which has persisted for a number of years and led to higher prices for customers," said CC Deputy Chairman and Chairman of the Inquiry Group, Professor Martin Cave.
The measures follow a two year investigation which found that both structure and the conduct in the cement sector restricts competition by aiding coordination between the three largest producers: Lafarge Tarmac, Cemex and Hanson. Competition problems also arose from the UK having only one domestic producer of GGBS in the UK (Hanson) with exclusive rights to use the output of Lafarge Tarmac, the single domestic producer of granulated blast furnace slag (GBS), which is the main raw material input into GGBS. The CC estimates that the lack of competition for both of these issues may have cost UK customers up to Euro60m/yr.
The final report follows the publication of the CC's provisional findings in May 2013 and an Addendum to the provisional findings and its provisional decision on remedies in October 2013.
UK: Cement production is due to restart at Cemex's South Ferriby plant in February 2014. The 0.8Mt/yr cement plant was flooded on 5 December 2013 with water from the neighbouring Humber Estuary causing considerable damage to the site's electrical network, according to the Scunthorpe Evening Telegraph.
"From our other UK sources we have been able to ensure a continued supply to all of our customers since the flooding took place and will continue to do so, ensuring that all receive the excellent service they expect from Cemex UK," said a spokesperson for Cemex. "The work entailed clearing up the site from the debris and silt deposited by the flood water, drying out buildings and components and working closely with our insurers, developing and starting to implement a plan to get the plant back to production as soon as possible." Silos at the site were not damaged in the flooding.