Displaying items by tag: US

US/Switzerland: Holcim has made progress on the capital market separation of its North American business, planning a 100% spin-off to be listed on the New York Stock Exchange. An additional listing on the SIX Swiss Exchange is planned for European investors. The spin-off is subject to shareholder approval at the Holcim Annual General Meeting on 14 May 2025 and expects to occur by the end of the first half of 2025, subject to customary approvals.

US: Sublime Systems has completed negotiations with the US Department of Energy for a US$87m grant to build a ‘clean’ cement manufacturing plant in Holyoke, Massachusetts. The company will now commence site engineering, design and permitting. The Holyoke plant will demonstrate full-scale operations of its cement manufacturing process when production begins in 2026. Sublime Systems expects to create 70 - 90 jobs once its new plant is operational.

Vietnam: Thailand-based Siam Cement Group (SCG) says it is expanding the production of its SCG Low Carbon cement product in southern Vietnam. It plans to export up to 8000t/day of the product to the US, Canada, and Australia, as well as supplying local green-procurement projects, according to the Vietnam Business Forum. The company says its low-carbon cement reduces CO₂ emissions by up to 20%, compared to regular products, through the use of alternative fuels, renewable energy sources and installing waste heat recovery (WHR) units at its plants. SCG formally launched SCG Low Carbon Super Cement in the country in July 2024.

US: Zanini Renk has received a repeat order from St. Marys Cement for four additional gearboxes at its Charlevoix, Michigan plant. In 2016, St. Marys Cement's Charlevoix plant began a US$130m upgrade to expand the plant's infrastructure. The project scope included adding a new finish mill, an additional kiln and a new coal grinding system. The 2016 upgrade at St. Marys Cement expanded the Charlevoix plant’s cement capacity from 1.4Mt/yr to 2Mt/yr.

The initial order for a Zanini Renk gearbox was for installation in its vertical roller mill. Zanini Renk completed the gearbox installation in 2022. The first new gearbox has been in operation since January 2023 and the other two new gearboxes will be delivered at the end of November 2024. Installation is expected to be completed by March 2025 and by April 2025.

US: Heidelberg Materials North America has entered into a definitive purchase agreement to acquire Giant Cement Holding, a cement producer on the US East Coast focused on using refuse-derived fuels, for US$600m. The acquisition will reportedly strengthen Heidelberg Materials’ cementitious footprint in the Southeastern US and New England markets and help to contribute to its circular offerings and decarbonisation efforts.

The transaction’s assets in the Southeastern US include an integrated cement plant with a capacity of 800,000t/yr in Harleyville, South Carolina, a network of four cement terminals in Georgia and South Carolina, and a joint venture deep-water import terminal in Savannah, Georgia. Assets in the New England area comprise a cement and slag terminal in Newington, New Hampshire, and a deep-water import terminal in Boston, Massachusetts. The transaction also includes Giant Resource Recovery, an alternative fuel recycling business with four facilities in the Eastern US. The transaction is expected to be completed in the first quarter of 2025 and to contribute around US$60m in earnings by interest, taxation, depreciation and amortisation in the first year of operation.

US: Eagle Materials has awarded thyssenkrupp Polysius a contract for the modernisation and expansion of its Laramie, Wyoming cement plant. The modernisation project will result in an expansion of the plant's manufacturing capacity to approximately 1.1Mt/yr of cement. The project also includes the installation of an alternative fuel substitution system. The modernisation of the cement plant is expected to deliver benefits such as cost reductions, achieved with lower-cost alternative fuels and natural gas, simplified maintenance and improved operational efficiencies. The production expansion from the new finish mill will supplement the grinding capacity of the existing plant, which already operates with an integrated polysius booster mill. The polytrack ECO cooler will facilitate heat recovery and clinker cooling while improving process reliability. The project, which has received primary regulatory approvals, is slated to commence immediately [in November 2024], with construction scheduled for completion by the second half of 2026.

Many readers will be aware that Gautam Adani was accused of fraud by a US court this week. In a brief statement, Adani Group said that the allegations were “baseless and denied.” The indictment relates to a solar power project, but what does this mean for Adani Group’s cement businesses?

The charges by the US Department of Justice allege, following an investigation, that Gautam Adani, Sagar Adani and Vneet Jaain, executives of India-based renewable-energy company Indian Energy Company, committed “...securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements.” A number of other individuals have also been accused, along with the two Adanis and Jaain, of participating in a US$250m bribery scheme to Indian government officials connected to a large-scale solar energy project. The indictment related to the period 2020 - 2024 and further alleges on several occasions that “Gautam Adani personally met with an Indian government official to advance the bribery scheme.” The Securities and Exchange Commission (SEC) has also started a connected civil case.

The problem here is that the indictment has rocked the value of Adani Group’s subsidiaries and reduced the credit ratings of some of them. This in turn will make it harder for these companies to raise money in the future for expansion. Various reports in the media said that the group’s companies had lost something in the region of US$30bn as stock prices fell by around 20%. They have since rallied somewhat. And lest we forget, Adani Group has some serious expansion plans. In the cement sector, it is targeting a production capacity of 140Mt/ yr by 2028. Recent transactions include Ambuja Cement’s purchase of Penna Cement for US$1.25bn in August 2024 and a planned acquisition announced in October 2024 of a 47% stake in Orient Cement for US$451m. The group was also linked in the local media to a bid to buy Heidelberg Materials’ India-based business in October 2024.

All of this comes with a price. International credit ratings agency S&P put Adani Ports, Adani Green Energy and Adani Electricity on a downgrade warning. Then, Fitch Ratings and Moody’s followed. Moody’s, for example, downgraded its outlook for seven Adani Group companies to ‘negative’ from ‘stable’ but it affirmed ratings on them. It commented that the allegations “could have a broader credit impact on all rated Adani group issuers” and that they would “likely weaken the Adani group’s access to funding and increase its capital costs.” It added that its actions recognised “...the possibility of broader weaknesses in the governance structure across the rated Adani group entities as well as potential operational disruptions, including on their capital-spending plans, while legal proceedings are going.” The decision by the ratings agencies does not appear to have directly affected Adani Group’s cement companies, Ambuja Cements or ACC, so far. The group may get lucky here given that these companies focus on the domestic market. Thus their credit ratings may remain more buoyant, regardless of what happens next.

As with a number of other global issues at the moment, the outcome of the recent US presidential election may also play into this case. Attorney Ravi Batra told the Press Trust of India that the incoming Trump administration might view the Adani charges as so-called ‘lawfare.’ This is where legal processes are used to target a nation’s economic or other opponents. In addition the current chair of the SEC, Gary Gensler, announced his intention to step down from the role in January 2025. It seems unlikely that the Trump administration might intervene in a legal case involving a foreign company accused defrauding US citizens but the possibility of realpolitik playing a role shouldn’t be totally discounted.

This is the second major international scandal overhanging Adani Group since the disclosures by Hindenburg Research back in early 2023. Those allegations were relatively easy to shrug off given that its accuser was an investment research firm with a reputation for using its findings for short selling shares. Hindenburg Research was not a neutral bystander. This time round, the US judicial system has become involved and the consequences are bigger both reputationally and from any potential legal outcome. In the short term, the credit implications for Adani Group as a whole are becoming apparent. Various companies and countries have stalled or cancelled planned investments. However, the cement business is smaller than the group’s power and transport concerns. It also operates domestically. We’ll have to wait and see what the wider implications for Adani Group are. The first thing to watch for the cement business will be any effect on its expansion plans.

US: Quikrete has entered into a definitive agreement to buy Summit Materials for a total enterprise value of US$11.5bn. The deal will add Summit Materials’ aggregates, cement and ready-mixed concrete business to Quikrete’s concrete and cement-based products business to create a vertically integrated business in North America. Quikcrete’s acquisition offer was first revealed in late October 2024. The transaction is expected to close in the first half of 2025 subject to shareholder approval at Summit Materials, regulatory approvals and other customary conditions.

Will Magill, CEO of Quikcrete, said “We are thrilled to welcome Summit into the Quikrete family.” He added, “This acquisition represents a significant milestone in our journey to expand our capabilities and geographic presence.”

Colombia-based Cementos Argos is Summit Materials’ largest shareholder with a 31% stake. It has agreed to vote all of its shares in Summit’s common stock in favour of the transaction. Cementos Argos says will generate a cash value of around US$2.9bn from the sales of its shares.

India/US: Shares in Gautam Adani-led conglomerates fell by 20% on 21 November 2024 after prosecutors in the US filed bribery charges against Adani and his associates. They allege a US$250m payoff to Indian officials to secure solar power contracts. Adani, along with seven co-defendants, including his nephew Sagar Adani, is accused of paying the bribes to secure contracts for what would become India's largest solar power project, projected to generate US$2bn in profits over the next 20 years.

The companies affected in the share fall included the Life Insurance Corporation of India (LIC), which holds stakes in seven Adani companies, including ACC and Ambuja Cement, as well as Adani Enterprises, Adani Ports, Adani Green Energy, Adani Energy Solutions and Adani Total Gas.

Adani Group has denied the allegations, calling them ‘baseless.’

The mood music for this year’s United Nations Climate Change Conference (COP29) in Azerbaijan has been poor. Despite this though the decarbonisation prospects for the cement sector are looking rosier than other industries.

First, the negatives. People are starting to question whether the COPs are fit for purpose. Donald Trump’s election as President-Elect in the US before the event started pretty much set the tone given that he intends to withdraw from the Paris climate agreement. Again. Azerbaijan's President Ilham Aliyev described his country’s natural gas resources as a “gift from God” following reports that, once again, COP national delegates had been caught promoting fossil fuel deals. France and Argentina also withdrew their lead negotiators for differing political reasons. Meanwhile, there has been increasing lobbying against carbon capture from the environmental sector. In short the view is growing that carbon capture is a delaying tactic by fossil fuel companies rather than a viable solution. This poses a threat to the cement sector because its current net zero roadmaps require carbon capture.

The World Cement Association’s CEO Ian Riley asked in a statement whether there might be “...a shift toward negotiations driven by the major emitters - China, the US, India, Russia, and Saudi Arabia.” However he observed that none of these countries yet seem ready to lead on the climate agenda globally.

Now, the positives. Cement CO₂ sector emissions may have continued to fall in 2023. The Global Carbon Project published its Global Carbon Budget 2024 in mid-November 2024. It predicts that global fossil CO₂ emissions will rise by 0.8% year-on-year in 2024 with emissions from coal, oil and gas still mounting. However, emissions from cement producers are expected to fall by 0.8%. This trend started in 2022. It appears to be due to declines in China, the US and the EU but, notably, not in India. It’s worth commenting here that this decline may be principally down to the parlous state of the real estate market in China, but there is also a lot of decarbonisation work happening. We’ll take a win where we can.

Next, the Global Cement and Concrete Association’s two big announcements at COP29 have been the publication of its Cement Industry Net Zero Progress Report 2024/25 and the launch of international definitions for low carbon cement and concrete. The progress report proffers a nifty update on how well it’s going. Short version: 23% reduction in emissions intensity since 1990; lots going on; plenty more to do.

One of those issues that require attention is low-carbon procurement. Hence those international definitions. This may seem like an abjectly boring topic but never underestimate the power of standards upon building materials. This should help support governments, policy makers and the private sector to set low carbon procurement rules. Since governments are among the biggest buyers of building materials worldwide, both directly and indirectly, this is intended to start speeding up decarbonisation by driving demand for existing lower carbon cement and concrete products. Whether this is the tool that cracks the global adoption of low carbon building materials remains to be seen. Yet the long lead time it took the Portland Cement Association (PCA) in the US, for example, to promote the use of Portland Limestone Cement is both instructive and inspirational. It can be done and it can deliver results.

COP29 has been described as the ‘finance COP’ because the representatives are hoping to set a new global climate finance target. This target, or new collective quantified goal (NCQG), is seen as one of the summit's main outcomes. It is intended to replace the existing US$100bn goal that is due to expire in 2025. However, the question of how much each country pays has predictably caused disagreements between developed, developing and those countries in between. All of this is well above the ‘paygrade’ of the cement sector but is crucial to what happens next, because it’s going to get expensive. Establishing regional carbon capture infrastructure requires serious funding. Time will tell whether COP29 can actually further this aim. The arguing continues.