Displaying items by tag: Acquisition
Mozambique: Singapore’s Compact Metal Industries has failed to buy a majority stake in a partially built cement plant at Salamanga, Bela Vista in Maputo Province. Compact Metal Industries was planning to pay US$30m for a 51% stake in the plant in a deal with SPI and Guhavam, according to the Business Times of Singapore newspaper. The arrangement would have also seen Compact Metal Industries settle the project’s debts to suppliers and contractors to a value of US$55m.
Vicat buys majority stake in Ciplan
05 October 2018Brazil: France’s Vicat Group has acquired a majority share in Cimento Planalto (Ciplan). It has signed a binding agreement to buy a 65% share for Euro290m through a reserved capital increase. Ciplan will use the proceeds of the share to settle the ‘vast majority’ of its existing debt. Vicat noted that the transaction will be debt funded and its closing is subject to the fulfilment of ‘certain’ conditions.
Ciplan operates a 3.2Mt/yr integrated plant at Sobradinho in Bahia near to Brasilia. It also runs nine ready-mixed concrete plants and five aggregates quarries.
Vicat says that this acquisition is intended to support its targeted external growth and geographical diversification strategy. In order to ‘capture’ the Brazilian market the company plans to leverage an industrial asset base, strong brand awareness, abundant quarry reserves and a competitive position in its local markets.
LafargeHolcim increases stake in Holcim Azerbaijan
01 October 2018Azerbaijan: LafargeHolcim has increased its stake in Holcim Azerbaijan to 76% from 66%. The move followed the decision by the European Bank for Reconstruction and Development (EBRD) to sell its 10% equity stake in the cement producer, according to ABZ News. Remaining shares in company are held by individual shareholders.
Schenck Process buys Process Components
01 October 2018UK: Germany’s Schenck Process has acquired Process Components and its subsidiaries, including Kemutec Group in the US, with its brands Kemutec, Kek-Gardner, Mucon and PPS Air Classifier Mills from EPIC Private Equity. Process Components is a UK-based designer and manufacturer of powder processing and handling equipment, components and spare parts, serving the Chemical, Food, Pharmaceutical and Environmental industries.
The product portfolio of Process Components includes the brands: Kek-Gardner - founded in 1860, recognised for milling and sieving as well as mixing and blending technology; PPS Air Classifier Mills - founded in 1980; Mucon - founded in 1946, known for Iris Valves; and Kemutec - founded in 1980, known for powder processing equipment and systems.
“The acquisition of Process Components with its very well established product lines, a large installed base as well as a great reputation of its brands Kek-Gardner, PPS Air Classifier Mills, Mucon and Kemutec enriches the expertise and capabilities of Schenck Process. We are delighted to add key process steps in the area of mixing, milling and classification for our customers,” said Jay Brown, President Food, Chemicals & Plastics at Schenck Process.
Anthony Goodwin, managing director of Process Components will continue to lead the business following the takeover. No value for the purchase has been disclosed.
Vicat confirms talks with Ciplan
21 September 2018Brazil: France’s Vicat has confirmed that it is in talks with Ciplan. Local newspaper Valor Econômico revealed that Vicat was in the ‘final stages’ of buying the cement producer. Ciplan was founded in 1968 and it operates an integrated plant at Sobradinho in Bahia near to Brasilia.
Buzzi bags a Brazilian bargain… and beyond
12 September 2018The Federación Interamericana del Cemento (FICEM) held its 2018 technical congress in Panama City last week and was attended by Global Cement. We’ll run a full write-up of the event in the October 2018 issue of Global Cement Magazine. The short version is that the conference was technically good but, from our perspective, it could have done with more regional analysis. Given that the event is for the local industry this is not a big issue as most of the delegates will know their own markets inside out and many were happy to discuss just this when asked. Likewise, FICEM’s in-house publication also included plenty of local data.
The nearest the presentations came to this was a global overview of the cement industry by Arnaud Pinatel of On Field Investment Research ahead of a market report the analysts are about to release. Although it covered the global cement industry the key local news was that the Latin American sector’s production capacity had grown by 3% from 2010 to 2018 but that prices had fallen in this time. The forecast suggested that cement sales volumes were expected to grow by 3% in 2019 - supported by Brazil, Peru and Bolivia - but that prices were also expected to fall by 1%, mainly due to issues in Argentina.
That last point is especially interesting over the last week because the Argentine cement body, the Asociación de Fabricantes de Cemento Portland (AFCP), released its figures last week to reveal that cement despatches rose by 4.2% year-on-year for the first eight months of 2018. However, at the same time the general news broke that the International Monetary Fund (IMF) was providing an emergency loan to support the country’s economy. The government was keen to shore up confidence in the economy and attributed the growth in the cement sector to the ‘most ambitious infrastructure plan in history.’
Only last year in 2017 the industry was riding a construction boom with cement shortages, new production capacity announced and the initial public offering of Loma Negra. Bailouts from the IMF don’t fit this picture of the poster boy for the South American construction industry. And, if a financial correction is pending, the new capacity that has been ordered may arrive at a bad time. This is a pretty worrying situation.
Meanwhile, across the Uruguay River into Brazil something long expected and hopefully more encouraging has occurred: the acquisition of cement plants. Italy’s Buzzi Unicem revealed that it had struck a deal to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m. The arrangements cover two integrated plants: one 2.4Mt/yr unit at Sete Lagoas in Minas Gerais and a 1.7Mt/yr unit at Pitimbu in Paraíba. Buzzi has also added an option to buy the other half of the business until 2025.
It’s hard to place a value on the sale, but it looks as if Buzzi has picked up the capacity for just under US$100/t, subject to future variation on how well the company does. At that price though this a low figure and a bargain for Buzzi. Given the pain the Brazilian cement industry had been through in recent years some form of traction is welcome. Unfortunately, Grupo Ricardo Brennand has surely lost money on the deal given that the two plants were commissioned in 2011 and 2015 respectively. The complexity of the financial arrangements suggest that Ricardo Brennand is fighting to stay in the game if and when the recovery comes. If Buzzi has moved in then this suggests that it thinks it will make their money back and that it reckons that the bottom of the construction industry trough has been reached. A Brazilian take on this situation would be fascinating.
With these kinds of events happening the same week as the FICEM technical congress it really shows how vibrant and varied the region’s cement industry is. Next year’s conference will surely be even more interesting as market events in Brazil, Argentina and other countries develop.
Buzzi buys 50% stake in Brazilian player
07 September 2018Brazil: Italy’s Buzzi Unicem has announced that it has reached an agreement to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m. BCPAR operates two integrated cement plants, one in the north east state of Paraíba and one in the south east state of Minas Gerais. The Minas Gerais plant started operations in May 2011 and has an annual production capacity of 2.4Mt/yr of cement. The Paraíba plant was commissioned in August 2015 and it has a capacity of 1.7Mt/yr. Buzzi Unicem will retain the right to buy the remaining 50% of BCPAR from Ricardo Brennand until 1 January 2025.
Buzzi Unicem said in a press release that the agreement reached allows it to extend its industrial operations to the largest economy in South America and improve the geographical diversification of its regional presence. Buzzi Unicem believes that the current downturn in the Brazilian economy, and in particular of the local cement industry, can be positively resolved, starting from 2019. It adds that Brazil's key macroeconomic data concerning cement production are encouraging. The population is expected to grow at an average rate of 1.1%/yr and per capita cement consumption is currently at its lowest levels in years.
Cemex on course to sell Vencemos do Amazonas stake
07 September 2018Brazil: Cemex Latam Holdings (CLH), the subsidiary of Mexican cement company Cemex in Central and South America and the Caribbean region, together with its subsidiary Corporacion Cementera Latinoamericana, expect to finalise the sale of Brazilian cement producer Cimento Vencemos Do Amazonas (CVDA) for around US$30m by the end of 2018. On 25 May 2018, the pair agreed to sell all of the shares they own in CVDA to Brazilian cement company Votorantim Cimentos.
LafargeHolcim snaps up Denver ready-mix producer
03 September 2018US: LafargeHolcim has acquired Metro Mix, LLC, a leading provider of ready-mix concrete in the Denver metropolitan area in Colorado. With Metro Mix, LafargeHolcim reports that it has further strengthened its position in the United States, where it is already present with operations in cement, ready-mix concrete, aggregates and asphalt.
Jan Jenisch, CEO of LafargeHolcim, said, “This is our fourth acquisition this year, in line with our Strategy 2022 - 'Building for Growth'. Metro Mix's operations are highly complementary to our existing footprint and will allow us to gain a larger share in a growing market with immediate commercial and operational synergies. I very much welcome all employees of Metro Mix to our company.”
Metro Mix operates two ready-mix concrete plants and reported net sales of around US$30m in 2017.
CRH to build up Euro7bn cash pile
24 August 2018Ireland: CRH has said that is looking to build up a ‘cash pile’ of Euro7bn. It says it will use the funds for anything from acquisitions to share buybacks. Finance director Senan Murphy said the company was showing the market that it is ‘not just a one-trick pony that just does acquisitions.’ The money will be the cash left over after spending on capital expenditure, interest, tax and other payments.
"There are a number of options where that money can be deployed, and we will deploy it wherever it creates the most value for shareholders," said Murphy. "We can reinvest it in our business, we can invest it in acquisitions, we can continue on with buybacks or we can increase the level of dividends."
The company posted a 1% rise in revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) year-on-year in the first half of 2018. It expects EBITDA in the second half to be ahead of that seen in the second half of 2017.