Displaying items by tag: US

Cementos Argos announced this week that it is starting the process for an initial public offering (IPO) for its US business. It said that this had followed several months of consideration by its board of directors. Getting listed on the New York Stock Exchange is expected to help the company ‘optimise’ its capital structure and promote growth, due in part to the recent approval of the US$1Tn Infrastructure Bill in the US and a general positive cycle expected for the local construction materials sector over the next decade.

Argos’ decision to go public in the US comes hot on the heels of several recent attempts in Colombia to buy stakes in two of the major shareholders of Grupo Argos, the parent company of Cementos Argos and Argos USA. First, Grupo Gilinski tried to buy a majority stake in Grupo Nutresa in early November 2021. Then, at the end of November 2021, Grupo Gilinski put in an offer for a large minority share, up to 32%, of Grupo SURA.

Argos, Nutresa and SURA are all part of a highly interconnected group of companies known as the Grupo Empresarial Antioqueño (GEA), which each own stakes in each other. In part this structure helps to prevent hostile takeover attempts. However, Grupo Gilinski appears to be trying to challenge this, in the eyes of some market observers. Grupo Argos is the next obvious target for such an attempt after Nutresa and SURA. In response Grupo Argos has said that it won’t take part in Grupo Gilinski’s public acquisition offer to buy shares in Nutresa (it owns around 10% itself). Instead it has accelerated its plans for Argos USA and also wants to consolidate its interests in road and airport concessions, energy and real estate into a single entity, also to be listed in New York. All of this can be seen as action intended to make any further moves by Grupo Gilinski on GEA harder. Corporate tussles between Grupo Gilinski and GEA also hark back to a long-running legal dispute from the late 1990s over the formation of Bancolombia.

It is reasonable for the US subsidiary of Cementos Argos to want to raise funds from an IPO. The business has gradually been expanding over the last 15 years or so. First it acquired ready-mix concrete operations in the southern US from 2005. Then it purchased two integrated cement plants from Lafarge in 2011, at Roberta in Alabama and Harleyville in South Carolina respectively. This was followed by the integrated Newberry plant in Florida from Vulcan Materials in 2014, along with two grinding units in Florida. Finally, it picked up the integrated Martinsburg plant in West Virginia from HeidelbergCement in 2016. More recently it has been divesting some of its concrete plants in the US. At present Argos USA is the ninth largest cement producer in the country by cement production capacity.

Its cement sales volumes have grown by 4.5% year-on-year to 4.6Mt in the first nine months of 2021 and earnings before interest, taxation, depreciation and amortisation (EBIDA) rose by 25% to US$239m although sales revenue dipped very slightly to US$1.09bn. Ready-mixed concrete sales volumes have also fallen, by 12% to 3.98Mm³. The growth has been attributed to both residential and commercial markets and the Infrastructure Bill is expected to keep demand brisk for the next few years. Looking at the wider picture, cement generated about 64% of Grupo Argos’ revenue in 2020, its biggest share after energy generation and a concessions business. A third of Cementos Argos’ revenue so far in 2021 came from the US.

It’s fascinating to glimpse what may be some of the inner corporate workings of Grupo Argos and the various things it has to consider for its US cement business. The US subsidiary is clearly a major earner for it with a buoyant future. The Portland Cement Association (PCA) was forecasting cement consumption growth of nearly 8% in 2021 and 2% in 2022 in its summer summary and that was before the infrastructure bill made it into law. Further expansion in the US by Argos is to be expected and the planned IPO underlines this. Meanwhile whether this and other actions are enough to stymie Grupo Gilinski remain to be seen.

US: France-based Saint-Gobain has entered into a deal to buy GCP Applied Technologies for around US$2.3bn. It said the move was a ‘decisive’ step in helping it to become a leader in construction chemicals with total sales of over Euro4bn. It is also expected to promote the group’s strategy as leader in light and sustainable construction. Saint-Gobain expects to conclude the deal by 2023 and will finance the acquisition through cash on its balance sheet.

Benoit Bazin, the chief executive officer of Saint-Gobain, said, “The acquisition of GCP is an excellent and significant step for Saint-Gobain to further reinforce its worldwide leadership in construction chemicals and strengthen its geographic presence in North America and emerging markets, both objectives being at the core of our ‘Grow & Impact’ strategic plan.” The proposed purchase follows Saint-Gobain’s acquisition of Chryso, another constructions chemicals company, for Euro1.02bn in October 2021.

GCP Applied Technologies is a global producer of specialty construction chemicals with approximate revenues of US$1.0bn/yr, 50 manufacturing plants in 38 countries and it employs around 1800 employees. It manufactures cement additives, concrete admixtures and products for infrastructure and commercial and residential waterproofing.

US: Australia-based Boral has agreed to sell its US fly ash business to Eco Material Technologies for US$755m. The parties expect to conclude the transaction by the start of 2023. The proceeds of the sale will add to Boral’s surplus capital.

Boral’s chief executive officer Zlatko Todorcevski said “Together with the sale of our North American building products business and our stake in Meridian Brick, we will have divested the North American businesses for more than US$3bn.” He added “This is a significant milestone that supports our strategy to refocus on our construction materials business in Australia.”

US: Cementos Argos plans to begin trading publically in mid-late 2022 with the launch of an initial public offering (IPO) on the New York Stock Exchange.

The company said “The listing in the US will contribute to the purpose of fully capturing the business value of the company, optimising the capital structure and obtaining the necessary resources to continue executing the growth strategy that the company plans to achieve in that country as a result of the recent approval of the Bipartisan Infrastructure Law for US$1tn and the positive cycle expected for the construction materials industry in the residential, commercial and civil works segments during the next 10 years.”

US: ASGCO has launched its Grizzly Screw-Splice, a conveyor belt splicing and fastening system. The splice is available in various rubber compounds with a tensile strength of up to 1650PIW. The supplier says that the product is stronger, wears less and has a lower-profile silhouette than traditional metal fasteners for conveyor belts. It features self-tapping and self-drilling screws that uphold the toughness of the conveyor belt by passing through the belt carcass instead of creating holes.

US: 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.

France/US: Vicat Group has signed a Euro250m financing agreement taking the form of a private placement with US investors. The first tranche of the agreement covers Euro100m, with a maturity of 10 years, at a fixed rate of 1.27%. The second tranche is for Euro150m, with a maturity of 15 years, at a fixed rate of 1.57%. The group says it will use the funding to strengthen the liquidity of its balance sheet, extend the overall maturity of its debt and reduce its average debt ratio.

US: The Environment Protection Agency (EPA) has fined Lehigh Cement’s Mason City plant in Iowa US$198,000 for alleged violations of the Clean Air Act. The agency alleges that the company exceeded Clean Air Act emissions limits, failed to submit required reports to the state and failed to conduct required testing of equipment. The EPA also determined that air pollution from the facility may affect nearby overburdened communities. Under the terms of the settlement with the EPA, Lehigh Cement is required to conduct additional air emissions testing to demonstrate ongoing compliance with the Clean Air Act.

France: Vicat has reiterated its CO₂ emissions reduction target of 55% between 1990 and 2030 and reaffirmed its 2050 carbon neutrality commitment. The company says that its will invest Euro800m in transitioning to lower-CO₂ cement production between 2021 and 2030 in order to meet the 2030 target. It said that eight US and European cement plants with ‘limited decarbonisation standards’ currently generate 67% of its earnings before interest, taxation depreciation and amortisation (EBITDA).

US: Inhabitants of Ravena, New York, have reported a ‘gritty, sticky, dusty’ residue in areas of the town to mayor Bill Misuraca. The residents described the apparent dust spill as ‘more stubborn to remove’ than on previous occasions.

LafargeHolcim US, which operates the Ravena cement plant in the town, contacted the mayor about the issue, stating “We take all concerns and complains about the plant very seriously and aim to operate in a manner that causes zero harm to employees, contractors, customers, and most of all, local residents, in keeping with our core values.” It added "The plant will be working with the New York Department of Environmental Conservation (DEC) to collect data on the type and source of these materials."