Displaying items by tag: Cemex
Belgium: Environmental disclosure organisation CDP has listed Cemex, HeidelbergCement and Holcim among 200 companies on its 2021 Climate Change A List for actions to mitigate their CO2 emissions. Holcim’s Indian subsidiaries ACC and Ambuja Cements also received A ratings. Both ACC and Ambuja appeared on CDP’s 2021 Water Security A List, while Holcim scored an A-.
Chief executive officer Jan Jenisch said “Building on the launch of our nature-positive strategy this year, we set new and ambitious goals to achieve water security across our operations worldwide, with our colleagues from Ambuja in India leading the way. CDP’s rankings this year are a testimony to the tremendous work carried out by our 70,000 people around the world and a great encouragement for all of us to keep raising the bar.”
Cemex USA sells headquarters
29 November 2021US: Cemex USA has sold its headquarters in West Palm Beach, Florida for US$13.4m. The South Florida Business Journal newspaper has reported that the company will vacate the property in early 2022. It will relocate to a nearby smaller office. Cemex USA has occupied its current headquarters since 1983. According to sources quoted by the newspaper, it no longer requires the 20,000m2 space due to increased rates of remote working by staff.
Update on Holcim, November 2021
24 November 2021Holcim’s investors’ event last week confirmed the changes the company has been making to its sales mix. At its Capital Markets Day it revealed its commitment to expand the net sales of its Solutions & Products division to 30% of the group total by 2025. This division covers products such as roofing, mortar, precast concrete and asphalt. At the same time it is reducing the proportion of sales from its cement division. Graph 1, below, from a presentation given by chief executive officer Jans Jenisch, hints at what group may be aiming for: roughly a third of its sales from cement; a third from aggregates and ready mixed concrete; and a third from the Solutions & Products division in 2025.
Graph 1: Forecast growth of sales by Holcim’s Solutions & Products division to 2025. Source: Holcim Capital Markets Day 2021 presentations on website.
To give readers an idea of the scale of change in Holcim’s cement business since the merger with Lafarge in 2015, just look at the figures. In 2015 LafargeHolcim sold 256Mt of cement and it had a cement production capacity of 374Mt/yr. In 2020 it sold 190Mt of cement and it had a cement production capacity of 288Mt/yr. However, the ratio of sales from cement has remained consistent at just below 60%.
This all changed in January 2021 when Holcim announced it was buying roofing and building envelope producer Firestone Building Products for US$3.4bn. Instead of trimming down the business to make synergistic changes as it had been for the previous five years the group significantly changed its sales mix. As noted in ‘2021 in Cement’ in the December 2021 issue of Global Cement Magazine, Holcim remains the world’s largest non-Chinese cement producer. Yet its acquisitions in 2021 have consisted of ready-mixed concrete and aggregate companies in mature markets, and Firestone. Its divestments have been cement subsidiaries. Since 2019, and including the agreed Brazilian sale, planned to complete in 2022, the group has generated US$4.1bn in these divestments. Almost as if to reinforce this change of direction the group also switched its name to Holcim in May 2021.
Aside from the focus on expanding the scope of the Solutions & Products division over the next few years, the group said at its recent investors’ event that it wants to lead in sustainability and innovation. It also reminded investors that growth remains in building materials markets. Once Jenisch had established the potential the construction market has in the coming years it was all about so-called ‘green’ growth. On the sustainability side this includes promoting the group’s Science Based Targets initiative net-zero targets by 2050, pushing sales of its low-carbon concrete products and working on increasing the uptake of construction and demolition waste in Europe. The group has a target of reaching 25% or higher for sales of its ECOPact ready-mixed concrete product by 2025. Holcim reported Scope 1 CEM specific CO2 net emissions of 555kgCO2/t in 2020 and it has target of 475kgCO2/t by 2030. This is broadly in line with its peers. Cemex has also committed to 475kgCO2/t or lower and HeidelbergCement is currently aiming for 500kgCO2/t or lower by 2030.
Simultaneously promoting sustainability and growth in products that release CO2 during their manufacture is quite the balancing act for all cement producers. The way Holcim appears to be squaring this particular circle is by heading elsewhere. Back in January 2021 we asked whether Holcim would leave it with the Firestone acquisition or go further. This question has now been answered with Holcim’s intent to increase the share of its Solutions & Products to 30% by 2025. Other large cement producers don’t seem to be diversifying their sales mix at the same speed but similar strategic thinking along supply chains can be seen from the proposed buyer of LafargeHolcim Brazil, Companhia Siderúrgica Nacional (CSN) Cimentos. CSN is a steel manufacturer and buying cement assets gives it somewhere to use its slag. Fittingly, Holcim’s investors’ day ended with a night out at a museum holding an exhibition on the history of concrete. For now at least concrete looks set to remain a key part of the business.
Mexico: Cemex's Cemex Go online shopping platform has won the Best Internationalisation Strategy award at the Mexican eCommerce Awards 2021. Marketing company Marketing4eCommerce hosted the awards, which compared Mexico's ecommerce platforms across 10 categories. Cemex Go also received nomination in the Best Mobile Transactional App category.
Cemex said "With this distinction, Cemex Go increases its positioning as a reliable app, in addition to offering merchants an alternative to solve their business needs from a mobile phone."
Europe: US-based CASE Construction Equipment has won a contract to supply Cemex with a new fleet of backhoe and wheel loaders for its building solutions operations in the Czech Republic, France, Germany, Poland, Spain and the UK.
Europe regional mobile equipment fleet and category manager Craig Hooper said “As one of the world’s largest building solutions providers, Cemex is committed to leading on the path to a low carbon economy and is closely evaluating all areas of its business to make efficiency improvements. The vehicles we use as part of our work are a key part of this and we are pleased to have agreed this contract with CASE for these vehicles, which will provide a significant sustainability benefit to Cemex’s European operations. They incorporate advanced technology alongside lower fuel consumption due to an improved power to weight ratio. We look forward to working with CASE to explore other opportunities to enhance the eco-credentials of our fleet.”
Cemex secures US$3.25bn credit agreement
11 November 2021Mexico: Cemex has successfully closed a US$3.25bn syndicated credit agreement. The group said that it used the proceeds to repay its previous US$2.65bn facilities agreement. The new agreement will require repayment in November 2026. As the facility is worth 23% more than its previous one, the company said that it will have a stronger liquidity position than previously, resulting in a favourable company risk and credit rating situation.
CEO Fernando Gonzalez said "This new credit agreement represents a major milestone in our path to investment grade as it is our first major syndicated unsecured bank agreement since 2009. It showcases Cemex’s continued access to diversified funding sources while further aligning our financing strategy to our leadership in addressing climate change.” He added “We are starting a new chapter for the company where we shift our strategic balance a bit more towards growth and the advancement of our Climate Action goals.”
Colombia: Cemex Colombia has received a US$16.8m fine from the Colombian Directorate of National Taxes and Customs (DIAN) for irregularities in its 2012 income tax payment. The company reportedly made an improper imputation of its balance for the year. Cemex Colombia says that it will take the matter to court. It has until March 2022 to file a suit.
Cemex UK to sell four Scottish ready-mix concrete plants
05 November 2021UK: Cemex has agreed to sell its Cardenden, Dundee, Greenock and Perth ready-mix concrete plants to Tillicoultry Quarries. The company thanked its employees at the sites for their commitment. It said that the asset sale is part of a portfolio rebalancing strategy aimed at high growth metropolitan markets.
US Environment Protection Agency awards Energy Star to Cemex USA's Miami cement plant
03 November 2021US: The Environment Protection Agency (EPA) has awarded Cemex USA's Miami cement plant its 11th consecutive Energy Star or its on-going energy efficiency and sustainability efforts.
President Jaime Muguiro said "Sustainability and conservation are ingrained in our operations and our business, so we constantly seek opportunities to decrease our energy use and reduce environmental impacts." He added "Our team at our Miami cement plant is helping to set the standard for our industry, demonstrating what can be possible, and we are proud of their ongoing environmental performance and commitment."
Mexico: Cemex’s consolidated sales in the first nine months of 2021 were US$11bn, up by 5% year-on-year from US$9.4bn in the corresponding period of 2020. Its cement sales rose by 10% to 51.1Mt from 46.2Mt, while its ready-mix concrete volumes increased by 7% to 36.8Mm3 from 34Mm3. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) totalled US$2.24bn, up by 24% from US$1.81bn. Its gross profit was US$3.63bn, up by 18% from US$3.07bn. During the period, the group reduced its debt by 33% to US$8.98bn from US$13.3bn.
Cement volumes grew in all regions in every quarter of the year except the third, when they fell by 3% in Mexico and remained level year-on-year in Europe, the Middle East, Africa and Asia. The quarter brought an end to five consecutive quarters of double-digit year-on-year growth in bagged cement sales in Mexico. Mexican bulk cement sales meanwhile ‘accelerated in line with the formal sector recovery.’ The sharpest nine-month cement volumes growth was in South, Central America and the Caribbean, where sales rose by 19% year-on-year, followed by Mexico, with a rise of 12%.
CEO Fernando González said “We are pleased to report strong top-line growth, reflecting continued growth in demand for our products, coupled with an acceleration in pricing momentum. We are confident that our pricing strategy will more than compensate for the sudden runup in input cost inflation we have experienced.” He added “We remain optimistic regarding outlook, as most of our markets are operating at high capacity utilisation and sustainable midcycle levels that will be supported by monetary and fiscal stimulus, while others are just beginning an upcycle. Regarding our Future in Action initiative, we continue to advance on our climate action goals. During the quarter, we received validation from SBTi of our 2030 decarbonisation roadmap and joined the Race to Zero initiative. Our climate action agenda is a fundamental element of our medium-term strategy not only because it creates value for stakeholders, but because it is the right thing to do for future generations.”