August 2025

Spain: Cementos Molins plans to replace its managing director Joan Molins Amat, who has been in post since 1967. An executive outside the Molins family has been appointed to take over the role but no further details have been released. Joan Molins Amat, aged 73 years , will be named president of Cementos Molins, replacing his uncle Casimiro Molins Ribot, aged 93 years, who has held the position since 1945.

HeidelbergCement has been reportedly showing interest in South Africa and Mozambique this week following the opening of new production capacity in West Africa. The Germany-based cement producer has beefed up its presence in the region with the inauguration of a 1.5Mt/yr clinker plant in in Togo and a 0.7Mt/yr grinding plant in neighbouring Burkina Faso. An additional 0.25Mt/yr grinding plant in the north of Togo is also planned for commissioning in late 2016. Other new projects in Africa include a new 0.8Mt/yr grinding plant in Tanzania that was commissioned in October 2014 and a new 0.8Mt/yr grinding mill at the Takoradi grinding plant in Ghana.

HeidelbergCement has repeatedly stated that it is considering production capacity expansions in other African countries. It currently operates in Ghana, Benin, Liberia, Tanzania, Sierra Leone, Togo, Burkina Faso and the Democratic Republic of Congo. Mostly it's a network of grinding plants with actual clinker producing plants in Tanzania, the Democratic Republic of Congo, Gabon and Togo. Its presence covers a band across central sub-Saharan Africa. Moving out of this zone into southern Africa would start to give HeidelbergCement a truly continental presence. However, from Dangote to PPC to Lafarge Africa other players are hard at work building their own cement empires.

The wild card here is how involved Chinese firms are in this process. Chinese companies like Jidong Development are building their own cement plants like the Mamba Cement plant in South Africa or Gweru in Zimbabwe, where upgrades are currently taking place. More commonly though Chinese companies like Sinoma are building new African cement plants such as a new PPC cement plant in the Democratic Republic of Congo or a new United Cement Company of Nigeria Limited (Unicem) cement line in Nigeria or several Dangote projects.

As part of the commissioning process for HeidelbergCement's new clinker plant in Togo, the Chengdu Design and Research Institute of Building Materials Industry (CDI, part of Sinoma) has emphasised that it will transfer the maintenance responsibility to local Togolese workers. The fact that the CDI's chairman made a point of saying this underlines tensions about both existing and changing international business influences in the region. Contrast this with the more sympathetic way in which Dangote's expansions in Africa that are portrayed by local media. Or look at this week's announcement by Egypt's ASEC Engineering and Management to help run a cement plant in Ethiopia. There is no need for calming statements from ASEC.

Finally, after all the discussion of the effect of oil prices on alternative fuels usage by cement producers it is worth noting what HeidelbergCement stated in its February 2015 trading statement. Principally, a drop in the price of oil is expected to present a positive impact on costs and market demand for the group. HeidelbergCement generates 86% of group earnings before interest, taxes, depreciation and amortisation (EBITDA) in net oil importing countries. In these places lower oil prices means potentially faster GDP growth and greater infrastructure spending. It is also worth considering the impact lower oil prices might have on the group's total oil and diesel bull of Euro250m/yr.

HeidelbergCement's full annual results for 2014 are due to be published on 19 March 2015. Maybe they will be more forthcoming about its intentions in Africa then.

Czech Republic/Slovakia: The sale of Holcim's operations in the Czech Republic and Slovakia has prompted a series of management changes to Cemex's operations in those countries.

Hermann Dietrich has been appointed as Cemex's vice president for strategic planning in the Czech Republic and Slovakia. Henning Weber has become the vice president for operation and technology at the cement division, Mariusz Kostowski has been named as the trade and logistics director with the cement division and Justus Geiseler has been appointed as the BSO director. Lubos Merunka and Hana Fidrova, who have been named as the head of the stone aggregate division and the company lawyer respectively, both came to Cemex from Holcim after the asset handover.

Cemex's general director in the Czech Republic and Slovakia, Peter Dajko, has stated that the company is not planning any additional personnel changes in the foreseeable future.

On the face of it this week's 'news' that CRH expects to receive the regulatory decisions it needs on its Euro6.5bn purchase of Lafarge and Holcim's joint divestments without significant delay is not particularly ground-breaking. However, the press release helpfully suggests that the deal will proceed according to CRH's desired outcome and only needs to be rubber-stamped. This is not strictly the case, with approval required in the EU, Philippines, Brazil, Canada and Serbia.

So... this story could just be incidental 'puffery' and the timing irrelevant. However, if read in the context of the letter concerning the acquisition from CRH Chairman Nicholas Hartery to company shareholders, it makes for a far more interesting read. Issued on 20 February 2015, the letter notifies shareholders of CRH's planned Extraordinary General Meeting (EGM) on 19 March 2015 and it starts fairly innocuously. The Chairman recommends that shareholders approve CRH's resolution to proceed with the acquisition of the LafargeHolcim assets. He describes the strong overlap between the divestments and CRH's existing portfolio, as well as the financial reasons behind the move. So far, as expected.

However, later in the document, the language gets fairly heated, bordering on bizarre in places. Hartery says that CRH has given 'hell or high-water' commitments to Lafarge and Holcim regarding the purchase This language indicates the importance of the deal to the board and possibly the level of personal involvement in the process to this point.

'What has CRH done?' we are supposed to ask. Are we led to believe that CRH has, in poker parlance, gone 'all in?' Any shareholders that are in doubt as to the board's position need look no further than the section concerning 'break fees.' If CRH backs away from the deal for any reason, for example by failing to approve the resolution at the EGM, the company will have to give a combined Euro158m to Lafarge and Holcim. This would be a sizeable headache and CRH can take no chances.

Returning to CRH's press release, its timing is even more intriguing when we consider reports out of Switzerland this week. Swiss newspaper Sonntagszeitung reports that Holcim has considered offering its shareholders a 'sweetener' to win their approval for the merger. It says that this could involve 'creative methods' to sway its shareholders into backing the deal, including a generous special dividend or a share buyback. The paper reports that Holcim is wary of not securing investor approval for a capital increase for financing, which is required for it to satisfy its side of the deal.

Holcim's actions may in turn be motivated by Reuters reports from 23 February 2015, which state that analysts have seen a potential divergence in earnings outlooks between Lafarge and Holcim as a potential 'spanner in the works' of the deal. This is in response to Lafarge's apparent poor performance relative to Holcim in the fourth quarter of 2014. Reuters even refers to analysts' rumblings that the terms of the whole mega-merger may be up for renegotiation in light of this.

CRH has said that it is prepared to move hell and high water to buy the LafargeHolcim divestments, but will it be able to if there is no LafargeHolcim from which to divest?

The full letter to CRH shareholders and associated information about the proposed CRH acquisition of Lafarge and Holcim's proposed divestments can be seen here. 

India: Mangalam Cement has reported that Shri K K Mudgil, a non-executive independent director of the Company died on 20 February 2015 in New Delhi.

India: Shree Digvijay Cement Company has reported that Persio Morassutti has been appointed as a director. He will replaces Osvaldo Ayres Filho following his resignation.

Ukraine: Mykolaiv Cement has appointed its commercial director Andrii Zvyrynskyi as a board member. He replaces Ruslan Koliada who occupied the post since September 2013 and has now been dismissed. Zvyrynskyi will hold the position until the recall of his candidacy by the supervisory board or a general stockholders' meeting. Previously he had been the commercial director of Mondy Packaging Behs Ukraine.

Germany: Aumund Fördertechnik has announced that Robert Gruss has been appointed as its new Managing Director. He is responsible for sales, service and technology as well as for research and development. He has been in post since 1 November 2014. Gruss will also join Volker Brandenburg on the managing board.

Gruss, aged 49 years, joined Aumund from SMS Siemag AG. He started his professional career with SMS in 1995. For several years he worked in Italy, China and Belgium in managing positions.

During 2015 Aumund's president, Franz-W Aumund, will gradually retire from operational business. He will continue as managing director of Aumund Holding and as member of the advisory boards of the product and daughter companies. Primarily he will dedicate himself to steering and controlling the Aumund Group. Gruss will take over additional responsibilities from the managing Franz-W Aumund.

One of the compelling issues to emerge from the Global CemFuels conference last week in Dubai was how alternative fuel (AF) use by cement producers might change while oil prices are low. Dirk Lechtenberg, of MVW Lechtenberg hinged his overview talk on both low energy prices and the on-going Lafarge-Holcim merger. The unspoken implication was that Holcim and Lafarge are offloading cement plants that use increasingly unprofitable AF. Cement plants are increasingly being out-bid for AF by energy-from-waste plants and 'gate fees' are dwindling accordingly.

Here's how it works. CRH is buying nine plants from Lafarge and Holcim in western Europe and five in eastern Europe. These are plants with high AF substitution rates. For example, Holcim's plants in France and Belgium have a substitution rate of 50% using around 250,000t/yr of waste fuels. Similarly, the Lafarge Zement Wössingen cement plant has permits for a 60% AF rate.

Globally, Lafarge and Holcim had substitution rates of 17.2% and 12.8% in 2013. CRH had a substitution rate of 21.2% in the same year. Post merger LafargeHolcim is estimated to have a substitution rate of below 10% in 2015. Meanwhile CRH is estimated to have a rate over 30%. After establishing this, Lechtenberg demonstrated how a thermal substitution model might be affected by fluctuating coal prices whilst using a refuse-derived fuels (RDF) rate of 35%. Put the price of coal below US$55/t and the savings of using RDF vanish.

Other delegates at the conference pointed out various limitations in Lechtenberg's methodology and figures. External legislation such as a carbon tax can disrupt this model for example. However, once coal becomes cheap and abundant enough it will displace most AF on economic grounds due to its high calorific value. Very few waste fuels can beat it.

At the time of writing the Brent crude oil price is just below US$60/barrel following a steep decline since mid-2014. The Australian coal price, the world's biggest export hub, has seen a steady fall since 2011 hitting just over US$60/t in January 2015. However, how interconnected are the oil and coal price?

This is difficult to link because bulk energy consumers switch supply according to price and other variables such as which fuels they can actually use. That last point is important in this discussion because preparing a cement plant to use AF requires an investment cost. Meanwhile, energy producers vary production depending on how much profit they want to make. Throw in new energy sources such as waste fuels and fracking and the overall picture becomes messy as all of these factors and others (OPEC policy, legislation etc) interact. Low oil prices do not necessarily mean low coal prices. For example, one analyst looking at BP's Statistical Review of World Energy in 2014 concluded that oil and coal consumption hold an inverse relationship to each other. When the proportion used of one rises, the proportion used of the other falls, and vice versa.

With all of this in mind there is ambiguity over whether CRH has been handed a time bomb in terms of its new cement plants' energy policies. Given that widely assumed production costs for the major oil producing nations are mostly above the current cost of crude oil, if the producers are controlling the price, then it seems likely that the price can't stay this low on a sustained basis. However, the cost of coal is on a five year low also. Is this the new normal or a market blip?

Cement plants using AF have a capital expenditure cushion against changing their fuels mix in the short to medium term but it can only last so long. The longer fossil fuel energy prices remain low the longer CRH will make less money from the fuel strategy it will inherit at its new plants.

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Valentines Day 2015 (14 February 2015) saw the kick-off of India's first round of coal mine auctions - who said that the commercialisation of Valentines Day is a bad thing? For those not following the story, here's a brief summary of the key events that have led to the auctions:

Coal, the main fuel used for cement and power production in India, has been in short supply in recent years due to the shortcomings of state-owned Coal India Ltd (CIL), which produces around 80% of India's coal and owns 90% of its coal mines. In 2013-2014, CIL produced 462Mt of coal, missing a target of 482Mt. Demand is expected to reach 950Mt/yr by 2016 - 2017. Numerous cement plants have had to temporarily cease production due to inadequate coal supplies. This is in spite of India's estimated 302Bnt of coal reserves, more than enough to supply both the power and cement industries. Coalgate indeed!

On 24 September 2014, India's Supreme Court cancelled 214 of the 218 coal blocks that had been allocated since 1993. The blocks were for captive use by the cement, steel and power industries, but the allocation process had been accused of lacking transparency. Of the cancelled blocks, 12 belonged to cement companies. The re-allocation of the cancelled blocks commenced in December 2014, when 36 of the 98 viable coal blocks were allocated. A transparent auction process for 21 of the cancelled blocks for end-usage in power, cement and iron production started on 14 February 2015. In March 2015, a further 23 blocks will be auctioned. CIL was requested to steer clear of the bidding by the Indian government.

Reliance Cement and Jaiprakash Associates, as well as Aditya Birla Group's Hindalco Industries, have all won coal mines during the first three days of bidding. Prices ranged from US$22.5/t to US$45.9/t. UltraTech Cement and JSW Cement both placed bids, but have so far been beaten by rivals. There are still many opportunities for cement producers to win coal mines, although whether the locations are suitable is another matter.

With captive coal mines in hand for India's luckiest cement producers, fuel shortages should become a problem of the past. As India's coal-fired power companies are also bidding fiercely in the auctions, power supplies throughout the country should become more reliable. However, one only needs to look at Afghanistan's Ghori I cement plant to see that having a captive coal mine is not always the answer to fuel shortages; due to internal disputes and poor mining equipment, its coal mine production is poor and the plant operates only intermittently. Hopefully, any cement companies new to coal mining will invest in equipment wisely and ensure an efficient supply chain. As with any large purchase, or indeed Valentines Day, India's coal mine auctions are very much a case of caveat emptor...