
Displaying items by tag: California
Cemex to restart CPN cement plant’s Line 2
08 March 2022Mexico: Cemex says that it plans to restart Line 2 at its CPN cement plant in Sonora State. The line has a capacity of 0.8Mt/yr. Cemex will invest US$29m in restarting it, bringing its total recent investments in the CPN plant to US$44m. It previously invested US$15m in a restart of the plant’s 1Mt/yr Line 1 in 2021. When operational in mid-late 2022, Line 2 will join the existing line in supplying cement to Arizona, California and Nevada in the US.
Cemex USA president Jaime Muguiro said “Many cement customers in the western US have been impacted by tight supply constraints for several months, and at Cemex, we are proactively looking for opportunities to further alleviate those conditions and enrich customer experiences by enhancing how we operate while utilising our global reach.” He continued “Customers require more cement to keep pace with the region’s growth, and we want to ensure they have stable and steady access to the high-quality materials that are essential to meet their needs.”
US: The former Lehigh Hanson Redding cement plant is the subject of a new acquisition deal. Martin Marietta has now agreed to sell the plant, which is in California, and related cement terminals to CalPortland for US$250m. The deal also covers 14 ready-mix concrete locations. The parties have also established arrangements for any future agreement for the sale of Martin Marietta’s Tehachapi cement facility and its related cement distribution terminals. Martin Marietta acquired both plants from Lehigh Hanson in October 2021.
CalPortland’s parent company Taiheiyo Cement said that the acquisition will enable it to build a supply system to meet the growing demand for cement in northern California, Oregon and Nevada. It added that the Redding Plant is an important plant in northern California, which its expects can improve customer satisfaction through an investment to develop more efficient systems. The company concluded “As a result, we expect steady growth in revenue and profits for Taiheiyo Cement’s US cement and ready mixed concrete businesses, which in turn will contribute to the achievement of the medium-term management plan from fiscal years 2022 to 2024.”
US: The supervisor of Santa Clara County in California has ordered a report by the county council setting out a plan for the acquisition of Lehigh Hanson’s Santa Clara cement plant and its associated quarry. If successful in acquiring the property, the administration would close down all operations there. The Mercury News has reported that the council will have until mid-May 2022 to produce its report. The supervisor called the facilities a ‘historical anachronism’ and said that the land, situated in the county’s Silicon Valley light industry region, might be used for housing.
US: Cement companies in the US produced 57.8Mt of clinker in the first nine months of 2021, in line with production in the corresponding period of 2020. Cement shipments including imports rose by 4.2% year-on-year to 79.9Mt from 76.7Mt, according to the United States Geological Service (USGS). The lead cement consuming states by total shipments were Texas, California and Florida. Texas received 11.4Mt of cement (14% of the national total), down by 8.5% from 12.4Mt, California received 8.19Mt (10%), up by 7.8% from 7.6Mt and Florida received 5.4Mt (6.8%), up by 5.6% from 5.11Mt.
Californian governor commits to net-zero cement CO2 strategy by 2045
29 September 2021US: California Governor Gavin Newsom has signed a bill requiring the California Air Resources Board (CARB) to develop a plan by mid-2023 for the state’s cement producers to achieve net zero emissions of greenhouse gases by the end of 2045 at the latest. A 40% reduction compared to 2019 levels would also be required by the end of 2035 with interim targets set beforehand. CARB will also be obliged to ‘define a metric for greenhouse gas intensity,’ monitor emissions data, set a baseline to measure emissions reduction progress, evaluate measures to support market demand and financial incentives to encourage the production and use of low-carbon cement amongst other actions.
US: Cemex USA’s Victorville cement plant in California has won the Portland Cement Association (PCA)’s Chairman’s Safety Performance Award 2021 in the Large category. The award recognises top safety performance. The Victorville cement plant previously won the award in 2019 and 2020. Cemex USA says that the plant recorded zero incidents in 2020. Earlier in 2021, it surpassed four years without a lost time injury to any employee or contractor.
President Jaime Muguiro said “Safety is our top priority, and Victorville cement plant is demonstrating that Zero4Life is possible. We are proud of the continued commitment of our team, and their achievement is a great example of what can happen when everyone is dedicated to safety and works together to look out for one another.”
US: The California Senate has voted in favour of a proposed bill which will require the State Air Resources Board to develop a plan for the state’s cement producers to achieve net zero emissions of greenhouse gases by the end of 2045. A 40% reduction compared to 2019 levels would also be mandated by the end of 2035. The Natural Resources Defense Council (NDRC), an environmental advocacy group that is sponsoring the bill, has called for measures such as requiring public construction projects to use reduced-CO2 cement and establishing purely performance-based specifications for legally defining cement to be adopted by the eventual strategy if the bill passes into state law. The proposed bill will next move to the California State Assembly as part of the local legislative process.
HeidelbergCement sells up in western US
26 May 2021HeidelbergCement confirmed the rumours this week with the announcement that it was selling assets in the western US to Martin Marietta for US$2.3bn. The deal covers subsidiary Lehigh Hanson’s US West region cement, aggregates, ready-mixed concrete and asphalt businesses in California, Arizona, Oregon and Nevada. This includes two of its cement plants, with the exception of the 1.5Mt/yr Permanente cement plant in California, related distribution terminals, 17 active aggregates sites and several downstream operations. The companies expect to conclude the deal by 2022 but naturally it is subject to approval by competition bodies.
Well, this is a big one considering that one of the catalysts for the group’s divestment plan was the reduction of the value of its total assets by Euro3.4bn in July 2020 following a review. Depending on the exchange rate, the value of the divestment to Martin Marietta covers half to two thirds of that amount. Group chairman Dominik von Achten later told the media in February 2021 that the company was planning to sell the first of the five assets in early-to-mid 2021. However, cement isn’t the full story here since Lehigh Hanson operates three integrated plants in California and seven terminals. So, by elimination, the Tehachapi and Redding plants are the ones that are being sold along with some combinations of the terminals. Both of those plant have production capacities of around 0.8Mt/yr. Unless the terminals being sold have been valued highly, then the majority of the deal appears to encompass some or all of the 25-odd aggregate sites, 15 asphalt sites and 30 ready-mix concrete sites the company operates in the four states.
On the cement side it doesn’t seem unreasonable at face value for the authorities to allow Martin Marietta to take over most of Lehigh Hanson’s business in the region since it should broaden competition from a production angle. Instead of five companies in California with integrated plants, there will be six. For Martin Marietta, the deal also carries the feel of unfinished business in the region since it briefly held a cement business there for around a year in the mid-2010s. It acquired Texas Industries (TXI) in July 2014 and then sold the cement business in California to CalPortland in September 2015.
Both companies are pursuing different strategies. HeidelbergCement says it is hunkering down on its other four North American regions – the US Midwest, Northeast and South, plus Canada - through selected ‘bolt-on’ acquisitions and plant upgrades. Martin Marietta says it wants to take advantage of long term demand trends such as increased state infrastructure investment in California and Arizona and private-sector growth. It also reassured shareholders with its version of the acquisition/divestment story by saying it was going to generate value the same way it did previously with TXI. It’s a small thing but the acquisition also sees the US’ largest domestic cement producer increase its production base. The top five North American cement producers will remain controlled by companies headquartered in Europe but it is a step towards regionalism.
As for who’s right, in the short term, the west coast region looks good. The area included some of the best performing states in 2020 in terms of growth in cement consumption year-on-year in 2020 with the exception of Oregon. In its winter forecast the Portland Cement Association (PCA) attributed growth in the Mountain region of the US (including Nevada) to underlying economic fundamentals and favourable demographic trends, although it expected this to slow down in 2021. In the Pacific region it forecast consumption to grow modestly in 2021 due to residential construction. As if to underline the current situation, Cemex decided to recommission a kiln in Mexico in February 2021 to cope with cement shortages and project delays in California, Arizona and Nevada.
In the face of these figures HeidelbergCement’s decision to sell suggests either it dangled a juicy proposition with good short term prospects in front of the buyers or its long term projections are pointing elsewhere. Selling up, yet holding onto its largest cement plant in the region, also smacks of hedging its bets. No doubt it will be holding on to a few terminals too. On the other hand, it would be very interesting indeed to know what part, if any, HeidelbergCement’s internal carbon price played in its decision to divest in the western US. California has the country’s biggest carbon emissions trading scheme (ETS). If say, legislators suddenly decided to follow the price trend of the European Union’s ETS then things might look different.
US: HeidelbergCement subsidiary Lehigh Hanson has agreed to sell its assets in its US West region to Martin Marietta for US$2.3bn. The transaction includes the sale of its business activities in cement, aggregates, ready-mixed concrete and asphalt in California, Arizona, Oregon and Nevada, with the exception of the Permanente cement plant and quarry. The sale includes two cement plants with related distribution terminals, 17 active aggregates sites and several downstream operations. The companies expect to conclude the deal by 2022 subject to regulatory approval.
“The sale of our US West region activities is a major step in our portfolio optimisation as part of our ‘Beyond 2020’ strategy,” said Dominik von Achten, chairman of the managing board of HeidelbergCement. “We are simplifying our portfolio in North America and prioritising on the strongest market positions.” Chris Ward, president and chief executive officer of Lehigh Hanson added, “We will accelerate the build-out of our positions in the four key regions Canada, Midwest, Northeast and South through selected bolt-on acquisitions and capacity expansion projects in the future.”
Lehigh Hanson and Fortera to install carbon capture and storage system at Redding cement plant in California
12 March 2021US: Lehigh Hanson has signed a collaboration agreement with materials technology company Fortera. Under the agreement, the companies will establish a carbon capture and storage (CCS) system at the producer’s 0.8Mt/yr integrated Redding Cement plant in Shasta district, California. The system will produce a cementitious material for use in concrete production. The material will be the first of its kind to be produced at a cement plant.
"This collaboration with Lehigh Hanson will prove the commercial scalability, the quality of the final product, and the competitive economics of the Fortera process," said Ryan Gilliam, chief executive officer and co-founder of Fortera. He added that the Fortera process (ReCarb) has been designed to utilise the existing cement infrastructure, from the quarry to the kiln, but with less CO2 emissions, lower energy, and lower processing temperatures, leading to 60% lower CO2 emissions per tonne of product.