Displaying items by tag: AITEC

Alpacem said this week that it had completed its acquisition of the Fanna cement plant near Pordenone. The 0.66Mt/yr integrated plant and a number of ready-mixed concrete plants became part of the Austria-headquartered group at the start of February 2025. Alpacem now has three integrated plants, with units at Wietersdorf in Austria and Anhovo in Slovenia, in addition to Fanna.

The deal dates back to mid-2023 when Alpacem said it had signed an agreement with Buzzi. In return Buzzi was set to receive a 25% stake in Alpacem Zement Austria. Prior to this the two companies had a strategic partnership in Austria and Slovenia that dated back to 2014. At the time of the agreement Buzzi held a 25% share in each of two Alpacem subsidiaries: Salonit Anhovo in Slovenia; and W&P Cementi in Italy. The Fanna plant was originally owned by Cementizillo before it was bought by Buzzi in 2018.

Also this week, Federbeton warned that the high cost of gas would add €80m/yr to the cost of cement production. Nicola Zampella, General Manager of Federbeton and the cement association AITEC, noted that local energy costs would reduce the competitiveness of producers against imports from outside of the European Union (EU). This ties into comments Stefano Gallini, the president of Federbeton, made in December 2024 when he highlighted the growing share of imports from outside the EU.

Federbeton raised the issue in its annual report for 2023, showing that imports rose to a 19% production share in 2023. Italy produced 18.8Mt of and imported 3.6Mt of cement and clinker in 2023. This is its highest level of imports for at least a decade. Over the same period the country’s cement exports, as a share of production, have remained steady at around 10 - 11%. In 2023 Türkiye was the biggest source of imports (25%) followed by Greece (17%), Slovenia (17%), Tunisia (12%) and Algeria (10%).

Graph 1: Cement production, imports and exports in Italy, 2019 - 2023. Source: Federbeton.

It is worth recalling that the cement sector in Italy used to be larger before it started consolidating in the late 2000s. Italcementi was acquired by Germany-based Heidelberg Materials. Operations by Sacci, Cementir and Cemenzillo were all bought out too. Local cement production reached a high of 47.9Mt in 2006 before it stabilised at around 20Mt/yr from 2015 onwards.

In its preliminary results for 2024, out this week too, Buzzi reported that the construction market In Italy probably shrank in 2024 due to a poor residential housing market. However, the cement company managed to keep its local net sales stable by raising prices and focusing on exports. Despite this, it noted a drop in cement and concrete sales volumes at the end of 2024. More data on the construction market in Italy may emerge when Heidelberg Materials releases its 2024 financial results at the end of February 2025.

The backdrop to this has been a rise in gas prices in Europe towards the end of 2024 as the EU ‘emergency’ price cap finished on 31 January 2025. Around the same time the EU is preparing to reveal information on its Clean Industry Deal towards the end of February 2025. Plus, the first active phase of EU Carbon Border Adjustment Mechanism (CBAM) is preparing to enter into force from the start of 2026. Each of these issues has implications for the cement sector in Italy as the location associations have been highlighting. One question will be whether the Clean Industry Deal can help producers cope with mounting energy prices. Another will be whether CBAM will change the proportion of imports for countries like Italy or will the sources of the imports simply change. Plenty to consider for the year ahead.

Italy: The Italian Competition Authority (AGCM) has reduced a fine against Cementi Rossi by 20% to Euro4.6m. The fine relates to a penalty of Euro184m levied against a number of cement producers and the Italian Cement Association (AITEC), according to the Il Sole 24 Ore newspaper. The original fine of Euro5.8m was reduced following an appeal to the AGCM.

More movement in Italy this week with Buzzi Unicem’s purchase of three cement plants from HeidelbergCement. Buzzi acquired the Testi integrated cement plant at Greve and the Borgo San Dalmazzo and Arquata Scrivia grinding plants in Piedmont. No value for the transaction was disclosed but HeidelbergCement trumpeted that it was ‘well on our way’ to reach its target of Euro1.5bn of disposals by the end of 2020. This follows last week’s purchase of Cemitaly's Spoleto cement plant in Perugia by Colacem. Cemitaly, in case readers don’t know, is another of HeidelbergCement’s Italian subsidiaries.

Upon completion of these deals, Buzzi Unicem will own 10 integrated plants and five grinding plants in Italy. It continues the company’s consolidation drive in Italy from mid-2017 when it bought Cementizillo and two of its integrated plants for the knock down price of up to Euro125m.

The two other leading cement producers are now Germany’s HeidelbergCement with its local subsidiaries (led by Italcementi) and Colacem. HeidelbergCement has 10 integrated plants and 10 grinding plant. Colacem has seven integrated plants and one grinding plant. All three companies have integrated production capacities of around 9 – 14Mt/yr. Since 2012 the market has shifted from six major producers to three. Sacci, Cementir and Cemenzillo have left the field following acquisitions by their competitors. Italcementi was taken over by HeidelbergCement in 2016.

Graph 1: Cement production in Italy, 2006 – 2017. Source: Italian Cement Association (AITEC).

Data from the Italian Cement Association (AITEC) shows that the impetus for this consolidation trend was the reduction in Italian cement production to 19.3Mt in 2017 from a high of 47.9Mt in 2006. Despite this though the country still has a total production capacity of 37.7Mt/yr, according to Global Cement Directory 2019 data, giving it an utilisation rate of just over 50%. Production picked up again in the north and central regions of Italy in 2017 but this was insufficient to counter declines in the south and Italy’s islands. Exports have held steady in this time at around 2 – 3Mt/yr but this represents a doubling share of production from 5% in 2006 to 10% in 2017. Production has been steadily dwindling year-on-year since 2006 but domestic consumption rallied a little to 18.7Mt in 2017.

The Italian government instituted its ‘Industry 4.0’ policy in early 2017 to boost competitiveness. This included modest growth forecasts of 1%. International Monetary Fund (IMF) data shows that the country managed gross domestic product (GDP) growth of 0.9% in 2018. Yet, Buzzi Unicem reported like-for-like net sales contraction of 0.9% in 2018. HeidelbergCement was more circumspect in its reporting on Italy for 2018 but it did describe a ‘moderate’ increase in sales volumes of cement excluding its acquisitions.

With the IMF diagnosing the Italian economy as ‘weak’ and cutting its growth forecast to 0.1% in 2019 the prospects aren’t looking encouraging for the cement sector. AITEC data placed cement consumption at 309t/capita in 2017. This is on the low side for Western European standards suggesting that, although more consolidation could be coming, the market may also be down too. Its not great news for cement producers but the Italian market is edging ever closer to recovery.

Italy: Appeals by Italian cement producers to the judiciary of Lazio against fines imposed by the Italian Competition Authority (AGCM) has been deferred to June 2018. Italcementi, Buzzi Unicem, Colacem, Cementir, Sacci, Holcim, Cementirossi, Barbetti, Cementeria di Monselice, Cementizillo, Calme, Moccia, TSC and the Italian Cement Association (AITEC) were penalised more than Euro184m in July 2017 for allegedly coordinating sales prices and agreeing market share from June 2011 to January 2016, according to the ANSA news agency. The majority of the fine was levied on Italcementi and Buzzi Unicem at around Euro84m and Euro60m respectively. Itacementi started appealing against the sanctions in August 2017.