Displaying items by tag: Cemex
Caribbean Cement Company to expand production
27 March 2024Jamaica: Caribbean Cement Company's first phase of its expansion project is set for completion in 2025. The expansion will increase cement production by 30%.
Managing director Jorge Martinez said "When completed, this project will further reduce our CO₂ emissions and deliver increased output from 2600 to 2850t/day of clinker to meet the increased local demand for cement. We will also have the capacity to explore options for exporting to other countries within the Caribbean community. These exports will benefit Jamaica’s economy through foreign currency income."
The US$40m plant expansion in Rockfort, Kingston is financed by the company, with 150 workers already on the project. The expansion was announced in 2022 and aims to strengthen Jamaica's cement industry, reduce import reliance and support the regional construction sector. It will also support parent company Cemex's sustainability targets, including CO₂ emission reduction and optimisation of heat consumption in cement production, as part of its Future in Action programme.
Mexico/Spain: Cemex has entered a partnership with energy transition investor White Summit Capital to develop projects that will contribute to its 2050 net-zero objectives. The partnership focuses on decarbonising operations and circularity, including reducing its cement’s clinker factor, optimising its fuel mix and transforming refuse into energy.
Sergio Menéndez, president of Cemex Europe, Middle East, Africa & Asia, said “We are pleased to have entered this collaboration with White Summit Capital and are excited to explore how together we can develop innovative solutions to decarbonise Cemex Europe operations and further strengthen our circularity positioning.”
DMCI Holdings may acquire Cemex Holdings Philippines
18 March 2024Philippines: DMCI Holdings is considering the acquisition of Cemex Holdings Philippines. Reuters has reported that the deal is valued at around US$715m. DMCI Holdings Chairman Isidro Consunji expressed optimism about the potential acquisition, but did not specify a completion timeline. DMCI Holdings is exploring diversification into new industries, with cement identified as a strategic addition.
S&P upgrades Cemex to Investment Grade
14 March 2024Mexico: Standard & Poor's (S&P) has raised Cemex's long-term global scale issuer credit rating to Investment Grade (BBB-). The upgrade is attributed to Cemex's robust financial and operating performance, effective deleveraging strategy, and adaptable capital allocation.
The upgrade to Investment Grade marks a significant achievement for Cemex, reflecting its record results and consistent financial performance over several years.
"Achieving an investment-grade credit rating from S&P is a very important milestone for Cemex," said CEO Fernando A González. In 2023, Cemex reported a 25% growth in EBITDA and more than a doubling in Free Cash Flow after maintenance capex.
S&P also elevated Cemex's national scale issue-level rating in Mexico from mxAA to mxAA+.
José María Barroso appointed as CEO of CANACEM
13 March 2024Mexico: The National Cement Chamber (CANACEM) has appointed José María Barroso as its CEO. He will follow on from Jaime Hill Tinoco, the head of Holcim México, in the role, according to the El Financiero newspaper. Barroso’s tenure will cover the 2024 – 2025 period.
Barroso is a graduate of the Instituto Tecnologico de Merida in Yucatan and he also holds a master’s degree in international trade form the same institution. He holds over 40 years of experience in the cement sector working both nationally and internationally for Cemex. He joined Cementos Moctezuma in 2010 as its Sales Director before becoming its Director General in 2018.
2023 roundup for the cement multinationals
06 March 2024Cement producers appear to have doubled down on the lessons they learned in 2022 by seeking profits wherever they could in 2023, despite stagnant markets in certain key places. Even with sales volumes of cement going down for most of the multinational cement companies covered here, revenues and earnings rose through price rises or business realignment.
Heidelberg Materials can often be relied upon to sprinkle a bit less sugar on its financial commentary compared to some of its competitors. Thus it is always worth reflecting on what it says. In its view, “In 2023, high inflation rates across the globe, increased financing costs, and persistently high energy and raw material prices significantly impaired construction activity and thus demand for our building materials. The decline in demand in private residential construction, which was massive in some cases, could not be offset by a solid development in industrial commercial construction and infrastructure projects.” Other opinions are available.
Graph 1: Sales revenue from selected cement producers in 2022 and 2023. Source: Company reports. Note: Figures calculated for UltraTech Cement.
Heidelberg Materials is notably missing in Graph 2 (below), though as the company is likely to be holding back its cement sales volume numbers until it releases its full annual report for 2023 towards the end of March 2024. However, Holcim and Heidelberg Materials reached similar sales volumes of cement in 2022 and this looks likely to have continued in 2023, or even gone further. Holcim divested its India-based and Brazil-based operations in 2022 and Africa-based ones in South Africa, Tanzania and Uganda in 2023. Heidelberg Materials has also slimmed down, albeit at a slower pace, with the sale of its businesses in Southern Spain in 2022 and The Gambia in 2023. Note that CRH and Holcim have swapped places in terms of sales revenue from 2022 to 2023. 65% of CRH’s sales came from its Americas divisions.
The outlier here is UltraTech Cement. It increased its sales volumes as the India-based market continues to push forward. Dangote Cement, meanwhile, delivered a surprise with a fall in volumes, due to poor trading at home in Nigeria. Sales outside of Nigeria grew significantly though. A real key moment for the evolution of Dangote Cement as a multinational player will be when its sales, volumes and earnings outside of Nigeria surpass those from back home. It’s not there yet but it looks likely to happen in the next few years.
Graph 2: Cement sales volumes from selected cement producers in 2022 and 2023. Source: Company reports. Note: Figures calculated for CRH and UltraTech Cement.
The progress of the construction market in the US compared to elsewhere has wielded an outsized effect on balance sheets for companies. Signs of this have been apparent for several years but it really picked up in 2023 with CRH switching its primary listing to the US in September 2023 and then Holcim announcing that it is planning to spin-off its North American business (for more on this see GCW 645). Heidelberg Materials was asked during its analysts’ conference call for its 2023 financial results what its plans were for the US. Chair Dominik von Achten said he was against splitting the business off from the rest of the group but that all other options were on the table. Various media outlets have interpreted this to mean that an initial public offering in the US is a likely possibility.
What Cemex does with this situation, if anything, might be worth watching. The company is already North America-focused. Its key markets are in Mexico, the US and Europe, and it is already listed in Mexico and the US. Subsequently in 2023 the market in Mexico bounced back and operating earnings rose sharply in both Mexico and the US. Finally on this theme, Buzzi, the fifth largest cement producer in the US by capacity, may also face a similar dilemma to its peers about what to do with its largest earning business area.
The increasing dominance of the US market for western-based multinational cement producers may be accelerating a trend towards large regional companies everywhere. China-based cement players already dominate the top 10 list of the world’s largest cement producers by capacity. Companies from India and elsewhere are on the way to do likewise as they grow and concentrate on one geographic area. The situation in the US meanwhile is persuading the multinationals to do the same thing in reverse as they reconfigure themselves based on market demand. In financial terms, this may mean chasing growth in the US, learning to cope with high carbon prices in Europe or diversifying away from heavy building materials. Elsewhere, despite the proliferation of regional giants, such as the China-based cement companies, few seem keen to become truly multinational in a hurry, although opportunities, such as the ongoing sale of InterCement in Brazil or CRH’s acquisition of AdBri in Australia, are still present.
Global Cement Weekly will return to look at the large China-based cement companies when they release their financial results later in March 2024
Cemex launches clinker micronisation method
05 March 2024Mexico: Cemex has launched a new process called clinker micronisation, developed at its Research and Development Center in Switzerland. The method enables cement producers to lower the clinker factor of their cement by up to 50%, while maintaining its strength. It also offers the additional benefit of allowing concrete users to reduce the proportion of cement in their mixes.
CEO Fernando González said “We are finding new ways to boost our decarbonisation roadmap in the production of cement and concrete. We remain committed to achieving our ambitious 2030 decarbonisation goals on the path to becoming a Net Zero company by 2050.”
Cemex to issue US$322m in sustainable bonds
19 February 2024Mexico: Cemex will issue US$322m-worth of long-term sustainability-linked bonds on 20 February 2024. Noticias Financieras News has reported that the issuance will take place in two series: one of US$117.3m, with a 2.6-year floating rate, and one of US$205.3m, with a 6.6-year floating rate. HSBC will act as the intermediary.
Cemex said “The net proceeds from the reopening of the issues will be used to repay debt, seeking to accelerate the path to an investment grade credit rating."
Cemex and Orcan Energy extend waste heat recovery partnership
15 February 2024Mexico/Germany: Cemex and waste heat recovery (WHR) systems developer Orcan Energy plan to scale up WHR technologies supplied by Orcan Energy at multiple Cemex sites globally. This new multi-site portfolio approach extends an existing partnership, through which the companies trialled Orcan’s systems for electricity generation at Cemex Deutschland’s Rüdersdorf cement plant in Germany.
Cemex’s Europe, Middle East, Africa and Asia regional president Sergio Menéndez said “We already have an initial collaboration with Orcan. Based on the modularity of their solution, Orcan offers the flexibility of both installation and contracts. Thanks to this crucial flexibility, we can adapt to any upcoming changes in our plants. The approach enables us to reduce carbon emissions right now without limiting ourselves in implementing any future technologies such as carbon capture, utilisation and storage. This partnership will help us achieve our sustainability targets and contribute to our aim to use all available heat.”
Orcan Energy’s chief executive officer Andreas Sichert said “We are looking forward to entering this large-scale decarbonisation partnership with Cemex after our initial cooperation in Germany. This step is a testament to Cemex’s forward-looking strategy and the company’s commitment to achieving net zero. For Orcan Energy, this is another milestone in scaling the business internationally with global enterprises. We are proud to be the partner of choice for the cement industry. Our large footprint across the industry shows the economic capability and the technical excellence of our modular and flexible solution, especially in view of uncertain future economic and regulative developments.”
Cemex reports sales growth in 2023
09 February 2024Mexico: Cemex reported sales of US$17.4bn in 2023, up by 8% year-on-year from 2022 levels. Meanwhile, the group’s operating earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 20% to US$3.35bn. The producer said that strong product pricing in all markets and slowing costs inflation compounded the positive effects of its growth investment strategy. On a consolidated basis, Cemex’s cement sales volumes fell by 6% to 51.7Mt from 55.1Mt. They rose by 3% in Mexico but fell by 10% in Europe, Middle East, Africa and Asia, by 3% in South and Central America and the Caribbean and by 13% in the US.
Chief executive officer Fernando González said "I am pleased to announce that 2023 is a great year for our company where we delivered not only great results and recovered from the extraordinary inflationary pressures of the last few years, but also continued executing against our ambitious decarbonisation commitments, reducing our CO2 emissions by 4% year-on-year and by 13% since 2020. Despite the significant macro challenges of the last four years, we have proven not only the resilience of our business model but also our ability to pivot and adjust rapidly to changing global conditions. This foundation gives us additional flexibility in capital allocation, where we continue to accelerate investments in our bolt-on growth strategy, initiate a sustainable return programme for shareholders and bolster our capital structure."