Displaying items by tag: Brazil

France: Vicat’s sales were reduced in 2019 by poor markets in Turkey and, to a lesser extent, Switzerland and Egypt. Its sales fell by 1% year-on-year to Euro2.74bn in 2019 from Euro2.58bn at constant scope and exchange rates. Its cement sales volumes dropped by 2% to 22.4Mt from 22.8Mt but its concrete volumes grew by 1.1% to 9.1Mm³ from 9.0Mm³. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased slightly to Euro156m.

“Strong growth in France, the US, Africa and Kazakhstan helped offset difficult market conditions in Turkey and Egypt. Furthermore, in line with our strategy of targeted acquisitions, the purchase of Ciplan in Brazil, in January 2019, allowed the group to continue its international growth in a region offering strong potential by integrating teams and assets of the highest quality,” said chairman and chief executive officer (CEO) Guy Sidos.

The group performed well in France, the US and Italy, especially due to the acquisition of Ciplan in Brazil. Sales in Turkey suffered from a generally poor economic situation. Competition in Egypt and a downturn in the precast concrete market in Switzerland caused problems in these countries respectively.

Tunisia: Brazil’s Votorantim Cimentos has ordered a clinker cooler and clinker roller crushers from Turkey’s Fons Technology International for an upgrade to its 1.2Mt/yr integrated Jbel Oust plant. Votorantim has been present in Tunisia since 2012 where it sells cement under the Jbel Oust brand.

Austria: RHI Magnesita, the leading global supplier of refractory products and solutions, is adding a new member to its Executive Management Team. Ticiana Kobel, 49, will join RHI Magnesita as Executive Vice President and General Counsel.

“We are really happy to have Ticiana Kobel on board,” said Stefan Borgas, CEO of RHI Magnesita. “With her more than 20 years of experience in different positions providing legal insight on a global scale, leading legal departments and making strategic decisions in legal and governance matters at multinational companies, she perfectly fits the needs of our global company and will be an asset in the future development of our success.”

Kobel, who completed a law degree with an emphasis in corporate law and an LLM in international economic law and European law in Lausanne and Geneva, Switzerland, has gained valuable management skills in a wide range of global business branches, leading legal departments in the manufacturing industry, the aviation industry, the technology industry, the service sector and the engineering industry. She has been in charge of crucial projects pertaining to all legal matters, such as spin-offs, entity sales, potential acquisition targets and corporate governance issues, and assisted with the design and implementation of compliance functions, mergers and acquisitions and partnerships.

Spain: Brazil-based Votorantim Cementos’ Spanish subsidiary Cementos Cosmos celebrated seven years, equating to 540,000 working hours, without injury at its 0.9Mt/yr integrated Córdoba cement plant in Andalusia on 15 January 2019. Cementos Cosmos Córdoba plant manager José de la Vega said, “This reflects the initiatives that the company has put in place to promote the safety of the workforce.”

Brazil: Brazil has reported a growth in annual sales volumes for the first time since 2014. Producers sold 54.5Mt of cement – up by 3.5% from 52.8Mt in 2018 and exceeding SNIC president Paulo Camillo Penna’s January 2019 forecast of 3.0% growth. Penna has predicted a 3.6% increase to 56.5Mt in 2020. Valor newspaper has reported that Penna bases his assumption on favourable interest rates and low inflation of the Brazilian real as well as the government’s implementation of anticipated industrial policies favourable to production.

Brazil: Ireland-based CRH has engaged the US-based bank Citigroup to seek buyers for its Brazilian business, which consists of the integrated 0.7Mt/yr Arcos plant and 0.6Mt/yr Cantaglo plant and the 1.0Mt/yr Santa Luzia grinding plant, according to the Brazilian Valor newspaper. CRH acquired the assets from Holcim and Lafarge at the time of the merger of the Swiss and French companies.

Brazil: Refractory products supplier RHI Magnesita has announced a raft of investments totalling Euro300m in addition to its annual Euro120m maintenance expenditure. The investment will cover projects in all its operating regions, including a new raw materials plant in Austria and ‘significant’ expansions to its Contagem complex in Brazil and Cuttack non-basic brick plant in India. It further stated that it will ‘build secondary raw material sorting, cleaning and production capabilites’ to absorb waste streams.

It’s the end of the year so it’s time to look at trends in the sector news over the last 12 months. It’s also the end of a decade, so for a wider perspective check out the feature in the December 2019 issue of Global Cement Magazine. The map of shifting production capacity and the table of falling CO₂ emissions per tonne are awesome and inspiring in their own way. They also point towards the successes and dangers facing the industry in the next decade.

Back on 2019 here are some of the main themes of the year in the industry news. This is a selective list but if we missed anything crucial let us know.

European multinationals retreat

LafargeHolcim left the Philippines, Malaysia and Indonesia, HeidelbergCement sold up in Ukraine and reduced its stake in Morocco and CRH is reportedly making plans to leave the Philippines and India, if local media speculation can be believed. To be fair to HeidelbergCement it has also instigated some key acquisitions here and there, but there definitely has been a feel of the multinationals cutting their losses in certain places and retreating that bit closer to their heartlands.

CRH’s chief executive officer Albert Manifold summed it up an earnings meeting when he said, “…you're faced with a capital allocation decision of investing in Europe or North America where you've got stability, certainty, overlap, capability, versus going for something a bit more exotic. The returns you need to generate to justify that higher level of risk are extraordinary and we just don't see it.”

The battle for the European Green Deal

One battle that’s happening right now is the lobbying behind the scenes for so-called energy-intensive industries in Europe as part of the forthcoming European Green Deal. The cement industry is very aware that it is walking a tightrope on this one. The European Union (EU) Emissions Trading Scheme (ETS) CO₂ price started to bite in 2019, hitting a high of Euro28/t in August 2019 and plant closures have been blamed on it. The rhetoric from Ursula von der Leyen, the new president of the European Commission, has been bullish on climate legislation and the agitation of Greta Thunberg internationally and groups like Extinction Rebellion has kept the issue in the press. Cembureau, the European Cement Association, is keen to promote the industry’s sustainability credentials but it is concerned that aspects of the proposed deal will create ‘uncertainty and risks.’ Get it wrong and problems like the incoming ban on refuse-derived fuel (RDF) imports into the Netherlands may proliferate. What the Green Deal ends up as could influence the European cement industry for decades.

The managed march of China

Last’s week article on a price spike in Henan province illustrated the tension in China between markets and government intervention. It looks like this was driven by an increase in infrastructure spending with cement sales starting to rise. Cement production growth has also picked up in most provinces in the first three quarters of 2019. This follows a slow fall in cement sales over the last five years as state measures such as consolidation and peak shifting have been implemented. The government dominates the Chinese market and this extends west, as waste importers have previously found out to their cost.

Meanwhile, the Chinese industry has continued to grow internationally. Rather than buying existing assets it has tended to build its own plants, often in joint ventures with junior local partners. LafargeHolcim may have left Indonesia in 2018 but perhaps the real story was Anhui Conch's becoming the country's third biggest producer by local capacity. Coupled with the Chinese dominance in the supplier market this has meant that most new plant projects around the world are either being built by a Chinese company or supplied by one.

India consolidates but watches dust levels

Consolidation has been the continued theme in the world's second largest cement industry, with the auction for Emami Cement and UltraTech Cement’s acquisition of Century Textiles and Industries. Notably, UltraTech Cement has decided to focus its attention on only India despite the overseas assets it acquired previously. Growth in cement sales in the second half of 2019 has slowed and capacity utilisation rates remain low. Indian press reports that CRH is considering selling up. Together with the country's low per capita cement consumption this suggests a continued trend for consolidation for the time being.

Environmental regulations may also play a part in rationalising the local industry, as has already happened in China. The Indian government considered banning petcoke imports in 2018 in an attempt to decrease air pollution. Later, in mid-2019, a pilot emissions trading scheme (ETS) for particulate matter (PM) was launched in Surat, Gujarat. At the same time the state pollution boards have been getting tough with producers for breaching their limits.

Steady growth in the US

The US market has been a dependable one over the last year, generally propping up the balance sheets of the multinational producers. Cement shipments grew in the first eight months of the year with increases reported in the North-Eastern and Southern regions. Imports also mounted as the US-China trade war benefitted Turkey and Mexico at the expense of China. Alongside this a modest trade in cement plants has been going on with upgrades also underway. Ed Sullivan at the Portland Cement Association forecasts slowing growth in the early 2020s but he doesn’t think a recession is coming anytime soon.

Mixed picture in Latin America

There have been winners and losers south of the Rio Grande in 2019. Mexico was struggling with lower government infrastructure spending hitting cement sales volumes in the first half of the year although US threats to block exports haven’t come to pass so far. Far to the south Argentina’s economy has been holding the cement industry back leading to a 7% fall in cement sales in the first 11 months of the year. Both of these countries’ travails pale in comparison to Venezuela’s estimated capacity utilisation of just 12.5%. There have been bright spots in the region though with Brazil’s gradual return to growth in 2019. The November 2019 figures suggest sales growth of just under 4% for the year. Peru, meanwhile, continues to shine with continued production and sales growth.

North and south divide in Africa and the Middle East

The divide between the Middle East and North African (MENA) and Sub-Saharan regions has grown starker as more MENA countries have become cement exporters, particularly in North Africa. The economy in Turkey has held back the industry there and the sector has pivoted to exports, Egypt remains beset by overcapacity and Saudi Arabian producers have continued to renew their clinker export licences.

South of the Sahara key countries, including Nigeria, Kenya and South Africa, have suffered from poor sales due to a variety of reasons, including competition and the local economies. Other countries with smaller cement industries have continued to propose and build new plants as the race to reduce the price of cement in the interior drives change.

Changes in shipping regulations

One of the warning signs that flashed up at the CemProspects conference this year was the uncertainty surrounding the new International Maritime Organistaion (IMO) 2020 environmental regulations for shipping. A meeting of commodity traders for fuels for the cement industry would be expected to be wary of this kind of thing. Their job is to minimise the risk of fluctuating fuel prices for their employers after all. Yet, given that the global cement industry produces too much cement, this has implications for the clinker and cement traders too. This could potentially affect the price of fuels, input materials and clinker if shipping patterns change. Ultimately, IMO 2020 comes down to enforcement but already ship operators have to decide whether and when to act.

Do androids dream of working in cement plants?

There’s a been a steady drip of digitisation stories in the sector news this year, from LafargeHolcim’s Industry 4.0 plan to Cemex’s various initiatives and more. At present the question appears to be: how far can Industry 4.0 / internet of things style developments go in a heavy industrial setting like cement? Will it just manage discrete parts of the process such as logistics and mills or could it end up controlling larger parts of the process? Work by companies like Petuum show that autonomous plant operation is happening but it’s still very uncertain whether the machines will replace us all in the 2020s.

On that cheery note - enjoy the winter break if you have one.

Global Cement Weekly will return on 8 January 2020

Spain: The European Union of Aggregates Producers has granted two Sustainable Development Awards to Brazil’s Votorantim Cimentos for its El Toril quarry restoration plan and cave conservation plan for the Cova Eirós mine, which provided raw materials for clinker produciton at its 0.7Mt/yr integrated Oural plant. Votorantim Cimentos has partnered with the University of Santiago de Compostela to facilitate archaeological study of Cova Eirós, where 50,000-year-old findings have been made. Meanwhile at El Toril, the pit will be filled, levelled and enhanced for fertility so that it may resume its previous use as arable land.

Brazil: Markets in Brazil and North America have supported Votorantim Cimentos’ sales so far in 2019, despite setbacks in Turkey and Latin America. Its sales revenue rose by 2% year-on-year to US$907m in the first nine months of 2019 from US$891m in the same period in 2018. Overall sales volumes of cement fell slightly to 8.4Mt. The cement producer’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 5% to US$188m from US$199m, with declines reported in all operation regions except North America.