Displaying items by tag: Cemex
Colombia: Cemex Latam has dismissed its Vice President for Planning and the General Attorney for its Latin American and Colombian units following an investigation into US$20m payments related to a cement plant being built in Maceo, Antioquia Province, Colombia. In addition, the unit’s chief executive officer has resigned in connection to the probe, according to Bloomberg.
The South American subsidiary of Cemex found payments of about US$20m had been made to a non-government individual for land and mining rights, and benefits related to a tax-free area where the Maceo cement plant is being constructed, according to a regulatory filing released by the Colombian financial regulator. Cemex has informed the Colombian prosecutors of the results of its internal probe.
US: Cemex has signed a definitive agreement for the sale of its 1Mt/yr Fairborn, Ohio cement plant, a cement terminal in Columbus, Ohio and a cement bagging operation to Eagle Materials for US$400m. Cemex will use the proceeds of the sale to reduce its debts and for general corporate purposes. The closing of the deal is subject to regulatory approval. The divestiture is expected to be completed during the fourth quarter of 2016.
"Our strategy has been to grow the cement side of our business. The Fairborn plant extends our US cement system and connects but does not overlap with the market reach of our existing plants. This high-quality cement plant is a compelling fit with our strategic objectives and our criteria for new investment. These assets will allow us to participate more fully in the US construction industry and further positions the company in target US heartland growth markets," said Dave Powers, Eagle Materials President and Chief Executive Officer.
Spain: The National Commission for Markets and Competition (CNMC) has issued total fines of Euro29.2m to 23 cement companies for involvement in a cartel between 1999 and 2014. Among the companies are Cementos Portland Valderrivas, with a Euro10.2m fine, Cemex Spain with a Euro5.8m fine and Holcim Spain, with a Euro4.4m fine, according to the Cinco Días newspaper.
The CNMC’s investigations have shown that the companies coordinated the exchange of commercial information, market sharing and price fixing between 1999 and 2014 in three distinct geographical areas in the north, centre and south of the country. Notably, the southern region examined the companies used email and WhatsApp mobile phone application to share sensitive information.
US: The Cemex Lyons Cement Plant has been recognised by the Portland Cement Association (PCA) with its 2016 Energy and Environment Award for Land Stewardship. Representatives from the Lyons, Colorado unit accepted the award on 31 August 2016 at the PCA’s annual Fall Congress meeting in Chicago.
The Lyons plant’s land-stewardship program for 2015 included limiting invasive plants and weeds and cultivating native plants to attract local wildlife and migrating birds, an effort that was launched at the facility in 2008. The plant also optimised its quarry roads to limit fugitive dust emissions and improve energy efficiency and employee productivity. The plant has previously been recognised by the Wildlife Habitat Council for its diverse environmental programs, including increasing areas dedicated to pollinator plantings and native species to 2.33 acres. On Earth Day, plant employees installed bee boards, bat houses and bird nests.
“Cemex is committed to sustainable practices throughout our operations and to building a better future for our communities through environmental initiatives. We are very proud of our Lyons team and their commitment to land stewardship, and it’s truly an honour to be recognized by the PCA for those efforts,” said Cemex USA president Ignacio Madridejos.
The PCA created the Energy & Environmental awards program in 2000. The PCA awards are given annually to recognise environmental and community relations efforts by cement plants throughout North America. The program is open to any cement manufacturing plant in the region.
Mexico: Cemex has announced that Mexico’s Secretariat of Environment and Natural Resources has granted the company an Honourable Mention for the 2016 National Award of Ecological Merit. This award is the country’s most important environmental recognition and was presented to CEMEX for its conservation and restoration efforts under the company’s El Carmen Conservation Program.
Cemex earned this recognition in the Business Category for its contribution to the restoration, conservation, and increased population of endangered species such as the bighorn sheep, the pronghorn antelope, and the golden eagle. Thanks to El Carmen’s preservation initiatives, other species with considerably increased populations include the desert mule deer, the white-tailed deer, and the black bear — the largest population of this species of bear in Mexico.
“We are very proud to receive this recognition. It encourages us to continue our work to preserve the extraordinary biodiversity of our planet,” said Fernando A. Gonzalez, CEO of Cemex. “Our 15 years of continuous commitment to El Carmen underscores the key role that sustainability plays in our company’s strategy.”
Cemex’s El Carmen Conservation Program celebrates 15 years of work conserving the unique biodiversity of the border region within the states of Coahuila, Mexico, and Texas, USA. Comprising over 140,000 hectares, the El Carmen ecological reserve is one of the most biodiversity rich areas in North America and one of the five great wilderness ecosystems in the world.
US: Cemex and Grupo Cementos de Chihuahua (GCC) have amended the terms of a sale of assets to GCC previously announced in early May 2016. The assets being sold by an affiliate of Cemex to an affiliate of GCC in the US have changed and mainly consist of Cemex’s cement plant in Odessa, Texas, two cement terminals and the building materials business in El Paso, Texas and Las Cruces, New Mexico. Cemex’s cement plant in Lyons, Colorado and cement terminal in Florence, Colorado are no longer part of the assets being sold to GCC. Upon closing of this transaction GCC will pay Cemex US$306m.
The sale is subject to customary closing conditions, including approval from the US competition authorities and GCC’s shareholders, as well as GCC obtaining financing to purchase the assets. The deal is expected to be completed before the end of 2016.
Mexico: The board of directors of Grupo Cementos de Chihuahua (GCC) has proposed a new corporate structure to simplify GCC’s controlling shareholder structure and make such structure clearer to investors. The restructuring, if approved by GCC’s shareholders, will consist of a merger between two entities controlling GCC into GCC, in which GCC would be the surviving entity.
Once the corporate restructuring is finalised, GCC’s principal direct shareholder will be Cancem, which will hold a majority and controlling interest in the shares of GCC. In addition, as a result of the proposed corporate restructuring, if approved by GCC’s shareholders as proposed, Cemex will own a direct stake equal to 23% of the outstanding share capital of GCC and a minority stake in Camcem. Cemex has expressed that it expects to hold its interest in Camcem as a long-term investment and will therefore remain an indirect minority shareholder of GCC.
The proposed corporate restructuring has been approved by the Mexican competition regulator, the Comisión Federal de Competencia Económica, and will require the approval of GCC’s shareholders to be completed.
LafargeHolcim was the last major European cement producer to release its second quarter financial results last week. The collective picture is confused. Cement sales volumes have risen but sales revenue have fallen.
Most of the producers have blamed negative currency effects for their falls in revenue during the first half of 2016. Holding a mixed geographical portfolio of building materials production assets has kept these companies afloat over the last decade but this has come with a price. The recent appreciation of the Euro versus currencies in various key markets, such as in Egypt, has hit balance sheets, since the majority of these firms are based in Europe and mostly use the Euro for their accounting. Meanwhile, sales volumes of cement have mostly risen for the companies we have examined making currency effects a major contributor.
Graph 1 - Changes in cement sales volumes for major non-Chinese cement producers in the first half of 2016 compared to the first half of 2015 (%). Data labels are the volumes reported in 2016. Source: Company reports.
As can be seen in Graph 1, sales volumes have risen for most of the producers, with the exception of LafargeHolcim. Despite blaming shortages of gas in Nigeria for hitting its operating income, LafargeHolcim actually saw its biggest drop in sales volumes in Latin America by 13.2% year-on-year to 11.8Mt. The other surprise here was that its North American region reported a 2.7% fall to 8.8Mt with Canada the likely cause. Vicat deserves mention here for its giant boost in sales volumes due to recovery in France and good performance in Egypt and the US, amongst other territories.
Graph 2 - Changes in sales revenue for major non-Chinese cement producers in the first half of 2016 compared to the first half of 2015 (%). Data labels are the sales reported in 2016. Source: Company reports.
Overall sales revenue for these companies presents a gloomier scenario with the majority of them losing revenue in the first half of the year, with most of them blaming negative currency effects for this. Titan is included in this graph to show that it’s not all bad news. Its growth in revenue was supported by good performance in the US and Egypt. Likewise, good performance in Eastern Europe and the US helped Buzzi Unicem turn in a positive increase in its sales revenue. They remain, however, the exception.
Looking at sales revenue generated from cement offers one way to disentangle currency effects from performance. Unfortunately, only about half of the companies looked at here actually published this for the reporting period. Of these, LafargeHolcim reported a massive rise that was probably due to the accounting coping with the merger process that finalised in 2015. Of the rest - HeidelbergCement, Italcementi and Vicat – the sales revenue from each company’s cement businesses fell at a faster rate than overall sales. Like-for-like figures here would help clarify this situation.
Meanwhile, a mixed global patchwork of cement demand is focusing multinational attention on key countries with growing economies like Egypt and Nigeria. Both of these countries have undergone currency devaluation versus the Euro and are facing energy shortages for various reasons. The exposure of the multinational cement producers to such places may become clearer in the second half of the year.
US: A person has died at the Kosmos Cement plant in Louisville, Kentucky. Local police told the WDRB local television station that the male victim was aged in his 30s or 40s and was pronounced dead on the scene. Officials say the death was a workplace accident involving a pulley system.
US: The Environmental Protection Agency (EPA) and the Department of Justice (DOJ) have agreed a settlement with Cemex, under which the company will invest approximately US$10m to cut air pollution at five of its cement plants to resolve alleged violations of the Clean Air Act. Under the consent decree lodged in the District Court for the Eastern District of Tennessee, Cemex will also pay a US$1.69m civil penalty, conduct energy audits at the five plants, and spend US$150,000 on energy efficiency projects to mitigate the effects of past excess emissions of nitrogen oxides (NOx) from its facilities.
“This settlement requires Cemex to use state-of-the-art technology to reduce harmful air pollution, improving public health in vulnerable communities across the South and Southeast,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to tackling clean air violations at the largest sources, cutting the pollutants that cause respiratory illnesses like asthma.”
The five Cemex cement plants affected by the deal are located in Demopolis in Alabama, Louisville in Kentucky, Knoxville in Tennessee and New Braunfels and Odessa in Texas. The Knox County, Tennessee and Louisville, Kentucky air pollution control authorities participated in this settlement. Cemex is required to install pollution control technology that will reduce emissions of NOx and establish strict limits for sulphur dioxide (SO2) emissions. The cement producer will install and continuously operate a selective non-catalytic reduction system for controlling NOx at the five plants and meet emission limits that are consistent with the current best available control technology for NOx. EPA estimates this will result in NOx emissions reductions of over 4000t/yr. Each facility will also be subject to strict SO2 emission limits.
This settlement is part of EPA’s National Enforcement Initiative to control harmful emissions from large sources of pollution, which includes cement plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from cement plant settlements under this initiative will exceed 75,000t/yr once all the required pollution controls have been installed and implemented.
The settlement is subject to a 30-day public comment period and final court approval.