Displaying items by tag: Acquisition
United States Lime & Minerals acquires Mill Creek Dolomite
15 February 2022US: United States Lime & Minerals has announced its acquisition of Mill Creek Dolomite from InterRock Minerals. The value of the deal was US$6.4m.
Eco Materials Technologies launches US$525m green bond issue
14 February 2022US: Eco Materials Technologies has finalised its US$1.05bn acquisition of Boral’s US fly ash business and launched an oversubscribed US$525m green bond issue. The issue will help it to become a global green cement production leader, according to the group. The Australian Financial Review newspaper has reported that subscriptions were four times the available bonds.
ACC buys Kannur limestone block
11 February 2022India: ACC has announced its successful purchase at auction of the Kannur limestone block mineral reserve in Wadi, Kalaburagi District, from the Karnataka government. The producer plans to use the block to supply limestone for its Wadi cement plant.
Update on Spain, February 2022
09 February 2022The data on cement consumption for 2021 in Spain is out this week and it looks promising. As the national cement association Oficemen explained, last year was the sector’s best for over a decade, nearly reaching 15Mt consumption and exceeding the figure in 2019 before the Covid-19 pandemic started. Oficemen also singled out particular strong performance in December 2021. It now expects this growth trend to continue into 2022 with a forecast of 5% to 15.6Mt predicted based on both domestic and infrastructure segments.
Graph 1: Cement consumption in Spain, 2012 – 2021. Source: Oficemen.
The Spanish cement industry reached a peak consumption of over 50Mt in the late 2000s before hitting a near-50 year low in the 2010s in the wake of the 2008 financial crisis. The market then started to recover in the second half of the 2010s until Covid-19 came along. A report on the Spanish cement market to the start of 2021 that lays out the situation can be found in the February 2021 issue of Global Cement Magazine. The larger news stories since then have been Votorantim Cimentos’ growth in the market through its acquisitions of FYM and Cementos Balboa, and Çimsa Çimento’s final completion of its deal to buy the Buñol white cement plant from Cemex. Each of these stories involve an integrated cement plant changing ownership.
Looking back at Oficemen’s summary describing 2012 depicts a much different dwindling market. However, one commonality it shares with the association’s roundup for 2021 is that it complains about the country’s disadvantage in electricity costs compared to its neighbours. Back in 2012 this was framed as holding back exports. As Oficemen noted at the time it exported 5.9Mt of cement in 2012, less than half the 13Mt it exported in 1983. Jump forward to 2021 and exports are now 6.8Mt. Energy is still a key issue though. Now Oficemen’s president, José Manuel Cascajero Rodríguez, says that the sector’s production costs have increased by 25% since the latest round of electricity price rises began. He then compares the cost of energy intensive industry in Spain unfavourably against France and Germany and calls for a structural change in the Spanish electricity market to make prices more predictable. Cement producers elsewhere in Europe and beyond may share Oficemen’s concerns regard unpredictable energy prices over the last six months but electricity has been a particular issue for Spain for a long time. To take one recent local example, in November 2021 Cementos Cosmos said it was planning to scale down the production of clinker at its Córdoba cement plant as a result of the high cost of electricity.
The other issue that gets raised in Oficemen’s 2021 summary is competition from cement importers outside the European Union (EU) and the necessity of a border carbon adjustment mechanism (CBAM) to take in account carbon taxation for producers within Europe. To jump back a bit, back in May 2021 the EU Emissions trading Scheme (ETS) reached Euro50/t. Then in December 2021 Cembureau, the European cement association, published a calculation predicting that if the EU ETS CO2 cost made it to Euro90/t then this could represent 12 - 15% of the production costs of cement producers. Well, as readers will have guessed, the EU ETS beat Euro90/t on 2 February 2022 and then rose to Euro96.7/t on 7 February 2022. Answers in an email for when readers think the EU ETS price will top Euro100/t.
All of the above feeds neatly into the week’s other big Spanish news story: Cemex and Synhelion have successfully produced clinker from concentrated solar radiation at a pilot unit at the Very High Concentration Solar Tower of IMDEA Energy near Madrid. It’s early days yet as the process needs to be scaled up but, make no mistake, this is a big story. An interview with the team behind Cemex and Synhelion’s solar concentration project can be found in the December 2020 issue of Global Cement Magazine for more information. The SOLPART (Solar-Heated Reactors for Industrials Production of Reactive Particulates) project in France did similar research a few years ago but it didn’t reach the 1500°C target required to reach the sintering phase where clumps of clinker form. US-based Heliogen has been trying to industrialise concentrated solar energy but not much has been heard about its cement-industry ambitions since it said it reached temperatures of about 1000°C in 2019.
The relevance of an eventual full-scale concentrated solar unit for the entire production line or just the preheater and/or calciner at a cement plant in Spain makes considerable sense. At a stroke energy costs are reduced, diverted to a renewable source and any desired CO2 capture becomes, in theory, easier and cheaper. Cemex said in the interview with Global Cement Magazine that the tentative next step would be a pilot unit at a cement plant, although, candidate plants could be in the US or Mexico, as well as Spain. Another side of the drive to cut energy and carbon costs can also be seen in a couple of photovoltaic solar projects supplying cement plants that were announced in 2021 for Spanish plants run by Cemex and Cementos Cosmos.
We leave the Spanish cement sector in a growth phase but with plenty of challenges ahead, not least from electricity costs and the mounting cost of carbon. Yet in common with other countries in Europe the industry faces a high-wire balancing act between staying economically viable and inching towards net zero. It’s conceivable that an industrial scale concentrated solar unit at a cement plant in Spain by 2030 might steady the wobbles along the way.
Lafarge Cement Malawi rebrands as Portland Cement Malawi
08 February 2022Malawi: Lafarge Cement Malawi, which Huaxin Cement acquired from Holcim in December 2021, has renamed itself Portland Cement Malawi.
The Nyasa Times newspaper has reported that company secretary Constance Musopole said "Portland Cement Malawi will remain the home of our trusted brands which include DuraCrete, SupaSet, Kumanga and Khoma. We wish to inform the general public that the reputable legacy and the superior quality of goods and services that have been built over 65 years of existence in Malawi will indeed continue and also improve.” She added "Huaxin is among the 10 largest cement manufacturing companies globally with 115Mt/yr in capacity. We are excited to begin this new chapter in the legacy of the company."
EIM Capital acquires Bonna Sabla
07 February 2022France: Private equity firm EIM Capital has acquired precast concrete products company Bonna Sabla from Consolis. The producer says that the new ownership will help it to capitalise on its commercial, economic and social situation through an ecological, energy and technological transition.
Chief executive officer Eric Lobbé said “We have the right teams and set of manufacturing facilities in France to pursue and develop our drainage precast solutions through well-known brands as Bonna Sabla, MPB and ABM. To be a pure player will allow us to capture significant organic growth opportunities, as well as being ready for future acquisitions. We will keep on pushing innovation to serve our customers.”
Orient Cement agrees to pay more for AMPSolar Systems stake
02 February 2022India: Orient Cement’s board of directors has approved a change to the company’s agreement for the acquisition of a 26% stake in renewables company AMPSolar Systems. Indiainfoline News Service has reported that the producer will now pay US$556,000 for the stake, up by 2.7% from the US$541,000 it previously negotiated in December 2020.
AMPSolar Systems recently commissioned its new 13.5MW solar power plant.
Update on Uzbekistan, January 2022
26 January 2022An acquisition in Uzbekistan by Russia-based Akkerman Cement this week highlights resurgence in the local market.
The subsidiary of USM has just purchased a majority stake in Akhangarancement with the help of financing from Gazprombank. No value for the acquisition has been disclosed. However, the move follows the sale of Russia-based Eurocement to Smikom in early 2021. Then in June 2021 Eurocement sold off its majority stake in Akhangarancement to Cyprus-based Lamanka Enterprises for US$53m. Now, as part of the sale to Akkerman Cement, the start of a new 2.5Mt/yr dry process production line at Akhangarancement in 2021 has also been highlighted. As for Akkerman Cement’s interest in become a multinational cement producer, it said that, “The investment in Akhangarancement, like all USM investments in Uzbekistan, is primarily aimed at the development of this country, the small homeland of Alisher Usmanov, the main shareholder of USM.”
Aside from any potential sentimental yearnings from a billionaire, the Akhangarancement deal follows a few developments in the Uzbek market in recent months. At the start of January 2022 the state assets management agency UzAssets agreed to sell the government’s majority stake in Qizilqumcement for US$174m to United Cement Group (UCG). This was a significant move locally given the size of UCG in the Central Asian states. UCG operates two integrated plants and one grinding unit in Uzbekistan. The acquisition of Qizilqumcement’s 3.4Mt/yr plant now makes UCG the largest cement company by production capacity in the country. It has also been building a new production line, like Akhangarancement, with commissioning last reported as scheduled as sometime in 2022.
Finally, the other recent development in Uzbekistan occurred in December 2021 when China-based Anhui Conch announced that it had started building a new 2.5Mt/yr cement plant in the Akhangaran district in Tashkent. The project has a price tag of US$200m.
Graph 1: Cement production in Uzbekistan, 2016 – 2020. Source: State Committee of the Republic of Uzbekistan on Statistics.
In early 2021 the government suspended tariffs on cement imports and this was then later extended into late 2022. President Shavkat Mirziyoyev says he signed the decree to keep house prices low. Subsequently, imports grew by 26% year-on-year to 2.2Mt in the first nine months of 2021. The main importers were Kazakhstan (44%), Tajikistan (25%) and Kyrgyzstan (25%). Graph 1 above shows recent annual production trends over the last five years. So far in 2021, to September 2021, overall domestic cement production rose by 17% to 9.08Mt. In 2020 annual production was about the same as the country’s production capacity of 10.3Mt/yr.
The mixture of Russian and Chinese companies involved with the recent plant acquisitions and new projects chimes with the general position of the Uzbek economy and its geographical position between the larger economies of Russia and China. For example, January 2022 data from the Uzbek State Statistics Committee showed that bilateral trade with Russia overtook that with China in 2021 for the first time since 2014. The two countries have had similar trade turnover with Uzbekistan over this period. Since the mid-2010s the national economy has liberalised and investment by foreign companies into industries like cement reflects this. The sale of Qizilqumcement also shows the further movement of state assets into private ownership. With apparent production utilisation closing to 100% and the government encouraging imports, it’s a good time to be a cement producer in Uzbekistan. Accordingly, foreign cement companies are investing.
Orascom acquires Orascom Trading
26 January 2022UAE/Egypt: Orascom Construction, a UAE-based engineering and construction contractor, has acquired Orascom Trading, an Egypt based provider of heavy machinery equipment, including equipment for the global cement sector.
Akkerman Cement buys majority stake in Akhangarancement
25 January 2022Uzbekistan: Russia-based Akkerman Cement has acquired a 98.6% stake in Akhangarancement. Gazprombank provided a loan to the subsidiary of USM to support the deal after previously supporting Akkerman Cement’s acquisition of its Gornozavodsk plant in 2018. Eurocement started selling its majority stake in Akhangarancement in early 2021 prior to its own acquisition by Smikom later in the year. No value for the latest Akkerman Cement deal has been disclosed.
“The investment in Akhangarancement, like all USM investments in Uzbekistan, is primarily aimed at the development of this country, the small homeland of Alisher Usmanov, the main shareholder of USM. All the profit that will be generated here will remain in Uzbekistan and will be directed to the socio-economic development of the republic. We see great potential in this. A growing population, demand for quality new housing, and in the long term support for consumer demand through mortgage lending, all this will contribute to the growth of cement consumption,” said Anton Selyavko, chairman of the board of directors of Akkerman Cement. He added that growth in Uzbekistan might not be easy due to production overcapacity and high levels of imports from Kazakhstan, Kyrgyzstan and Tajikistan but that Akkerman Cement had experience of this from the Russian market.
Founded in 2002 Akkerman Cement was previously known as the South Ural Mining and Processing Company. It operates two integrated cement plants in Russia, at 2.3Mt/yr unit at Novotroitsk and a 2Mt/yr unit at Gornozavodsk, and 12 terminals including sites at Ekaterinburg, Izhevsk, Kazan, Moscow, Orenburg, Perm, Samara, Tumen and Ufa. The company also runs metal and lime divisions. Akhangarancement reportedly started a new 2.5Mt/yr dry process production line in late 2021.