Displaying items by tag: US

Argentina/US: Loma Negra aims to generate up to US$800m in an initial public offering in Argentina and the US. Around US$700m of the money raised will go to its parent company Brazil’s InterCement, according to Reuters. InterCement is selling a 32% stake in the company to pay its debts. Subsequently it will hold a 57% stake in the Argentine cement producer. No schedule for the transaction has been disclosed.

US: Summit Materials has offered US$3.8bn to buy Ash Grove Cement, according to Reuters. The board of Ash Grove Cement has described the proposal as ‘superior’ to the US$3.5bn bid made by Ireland’s CRH in September 2017. It has extended its so-called ‘shop window’ consideration period with CRH to 20 October 2017.

Thailand: Siam Cement Group (SCG) has signed a deal to import 155,000t of coal from the US for its cement plants in Thailand and elsewhere in the Association of Southeast Asian Nations (ASEAN). Kalin Sarasin, a senior SCG executive and chairman of the Thai Chamber of Commerce and Board of Trade, made the announcement following an official visit to the US by Prime Minister Prayut Chan-o-cha, according to the Nation newspaper.

SCG will buy 100,000t of US coal in the first contract and a second contract will be for 55,000t to test the quality. Subsequently, the cement producer may buy more coal. At present, SCG imports around 6Mt/yr coal from Indonesia and Australia. The US coal will be used to substitute some of the Indonesian supply, which has been imported due to a higher demand for coal for power stations.

US: Douglas C Rauh has resigned as the Executive Vice President and Chief Operating Officer of Summit Materials with effect from 30 December 2017. Tom Hill, the company’s President and Chief Executive Officer, will act as Interim Chief Operating Officer while the building materials company searches for a replacement. During the recruitment period, the three Executive Vice Presidents of the company’s operating segments Tom Beck (Cement Segment), Shane Evans (West Segment) and Damian Murphy (East Segment) will report directly to Hill.

US: WeissLaw is investigating the proposed sale of Ash Grove Cement to Ireland’s CRH on the grounds of whether the board acted to maximise shareholder value prior to the deal. Citing an article by financial markets research company Seeking Alpha the law firm says it is exploring whether rising demand for cement due to expected government infrastructure spending, the company’s high market share in certain regions and its recent growth in operating earnings were fully taken into account when valuing the company. CRH and Ash Grove Cement announced the US$3.5bn deal in late September 2017.

US: Ireland’s CRH is close to agreeing a purchase of Suwannee American Cement from Votorantim Cimentos and Anderson Columbia. The deal is valued at US$750m, according to sources quoted by Bloomberg. However, this is an extremely high value for a single cement plant sale in the US. Suwannee American Cement operates a 1Mt/yr plant at Branford in Florida.

Canada: Representatives of US and Canadian cement industry unions have met in Toronto. International Brotherhood of Teamsters from the US and Canada, the United Steelworkers from Canada and the US, the International Brotherhood of Boilermakers and the Fédération de l’Industrie Manufacturière from Canada attended the third meeting of the North America Cement Network, according to the IndustriAll Global Union. The participants exchanged ideas about over collective bargaining issues, the current situation in the cement industry and the latest developments in deals such as the CRH purchase of Ash Grove.

The last week marked a step change to the US industry with the news that Ireland’s CRH has agreed to buy Ash Grove Cement. The latter is the largest remaining cement producer still owned by an American company. Its history dates back 135 years to its founding in 1882, with links to the Sunderland family for over a century. Following the acquisition, each of the top five cement producing firms in the US will be operated by multinational corporations based in foreign countries.

Although this scenario is not new to many other countries around the world, it is rare for a nation with a cement industry of this scale. The US is the third biggest cement producer worldwide. Out of the top ten cement producing nations Global Cement Magazine identified in its Top 100 Report 2017 feature [LINK] in December 2016 only Egypt doesn’t have a local company to match the multinationals. China has China National Building Material (CNBM), for example and India has UltraTech cement and so on and so forth.

The actual sale covers Ash Grove Cement’s eight cement plants and 23 cement terminals, as well as its ready mix concrete and aggregate businesses, for US$3.5bn. Altogether its cement plants have a production capacity of 9.5Mt/yr and this really puts into contrast the Cementir Italia deal last week. HeidelbergCement has agreed to buy that company for around Euro57/t. CRH is buying Ash Grove Cement for US$368/t. That’s more that five times as much!

To be fair they are very different markets, with Italy’s cement sector consolidating near the bottom of a business cycle and the US growing with some promise. For comparison with other recent US acquisitions, CRH is offering to pay about the same as Summit Materials did to Lafarge for a cement plant and seven terminals in mid-2015. Other than that a few of the more recent transactions have been between US$200 – 300/t. The gradual price inflation for cement production capacity indicates that there is confidence in the US cement market.

In terms of CRH’s enhanced presence in North America following the completion of the deal, it currently operates two cement plants in the US: the American Cement Sumterville plant in Florida, a joint venture with Elementia, and the Trident plant in Montana. The CRH US division also runs five terminals in the Midwest and Northeast. This compliments Ash Grove Cement’s presence in the West, Midwest and South. Throw in CRH’s Canadian cement plants in Ontario and Quebec and CRH has the makings of a seriously strong cement business in North America. The only obvious impediment could be the close proximity of the CRH Trident plant and the Ash Grove Cement Montana City plant. Both are in Montana within 115km of each other and they are the only integrated plants in the state. A Federal Trade Commission arranged divestment in this location seems likely.

Ash Grove Cement’s chairman Charlie Sunderland, described CRH as his company’s biggest customer when the acquisition was announced. Buying Ash Grove Cement fills in one more piece in CRH’s construction materials puzzle in North America. Its American divisions have generated more than half of its revenue since at least 2014 dominating asphalt, aggregate and ready mix concrete markets. Yet it has lacked a cement market presence to match this. This changes when the deal with Ash Grove Cement completes.

US: Votorantim Cimentos is selling its 50% stake in Suwannee American Cement based in Florida. The sale is intended to focus Votorantim’s portfolio and reduce its debts according to the Valor Econômico newspaper. The effects of Hurricane Irma are expected to increase the selling time. Votorantim operates the 1Mt/yr Suwannee cement plant in Branford with Anderson Columbia. The cement producer supplies markets in Florida and Georgia.

US: Lafarge North America, a subsidiary of LafargeHolcim, has officially opened the upgrade to its Ravena cement plant in New York. The upgrade work took three years at a reported cost of US$300m.

“By modernising the plant, we have transformed it into an efficient, competitive and state-of-the-art facility that will allow us to meet the growing needs of our customers and remain a strong partner to the community for the foreseeable future,” said John Stull, chief executive officer (CEO) US Cement, LafargeHolcim. He added that the plant has supplied cement for high profile projects, including the Tappan Zee bridge reconstruction and One World Trade Center Memorial.

Upgrade work focused on building a new clinker production line to modernise the previously wet process plant. Following the work the plant now has a clinker production capacity of 2Mt/yr with improved emissions levels and higher operational performance.