Displaying items by tag: Cementir Holding

Charah Solutions has been steadily building up its fly ash distribution business in recent years with an eye on the supplementary cementitious materials (SCM) market. This week it opened the third of its new series of SCM grinding plants, at Oxnard in California, US. The unit sticks out because it is focusing on grinding natural pozzolans. The plant will receive natural pozzolan by truck and rail and then use Charah’s patented grinding technology to produce pozzolan marketed under its MultiPozz brand. The previous plants in this series mentioned natural pozzolans but this is the first to promote it explicitly.

The change is potentially telling because global demand for granulated blast furnace slag (GBFS) outstrips supply. Both performance benefits and environmental regulations are pushing this. It’s a similar situation for fly ash, also driven by trends to close coal-fired power stations in some countries. As Charles Zeynel of SCM trading firm ZAG International explained in the March 2019 issue of Global Cement Magazine, “...volcanic pozzolans are a potential SCM of the future. This is gaining traction, but it’s slow progress at the moment. This will be the answer for some users in some locations.”

The problem though is that natural pozzolans are down the list of preferred SCMs for their chemical properties after silica fume, GBFS and fly ash. The first is expensive but the latter two were traditionally cheap and easy to obtain if a cement or concrete producer had access to a source or a distribution network. Natural pozzolans are very much subject to variations in availability.

It’s no surprise then that Charah is promoting natural pozzolans in a Californian plant given that state’s environmental stance. It’s unclear where Charah is sourcing their pozzolan from but they are not the only company thinking about this in the US. Sunrise Resources, for example, is working on the environmental permits for a natural pozzolan mine near Tonopah in Nevada. As it described in its company presentation, California and Nevada are the most affected states in the fly ash supply crisis because they are, “...at the end of the line when it comes to rail deliveries from power stations in central and eastern USA.” It also estimated that California used 0.9Mt of pozzolan in its cement production of which about 90% is fly ash. The state produced 9.6Mt in 2015. Other companies are also mining and distributing natural pozzolans in the US as the website for the National Pozzolan Association (NPA) lists. Although, if this line-up is comprehensive, then the field is still fairly select. Most of these companies are based in the west of the country.

One last thing to consider is that various groups are tackling a potential future lack of SCMs for the cement industry by making their own pozzolanic materials through the use of calcined clay. These groups include the Swiss-government backed LC3 project and Cementir’s Futurecem products. Using clay should bypass the supply issues with natural pozzolans but the cost of calcining it requires at the very least an investment to get started.

As concrete enthusiasts often point out, a variant of pozzolanic concrete was used by the Romans to build many of their iconic structures, some of which survive to the present day. To give the last word to the NPA, “What is old is new again: natural pozzolan is back!” If environmental trends continue and steel and coal plants continue to be shut then it might just be right.

Italy: Cementir Holding’s sales revenue fell by 4.2% in 2018 on a like-for-like basis due to poor performance in Egypt and Norway. Military operations in the Sinai impacted production in Egypt between February and May 2018 and bad weather in Norway affected the first quarter. However, it noted good results in Malaysia, Belgium and China.

On an adjusted basis its revenue rose by 4.9% to Euro1.2bn from Euro1.14bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7.1% to Euro239m from Euro223m. Grey and white cement sales volumes fell by 4.4% to 9.8Mt from 10.3Mt. Ready-mixed concrete volumes fell slightly to 4.9Mm³.

Italy: Cementir’s sales and earnings have benefited from new assets in the US as well as good performance in Belgium and China. Its sales revenue rose by 4.8% year-on-year to Euro893m in the first nine months of 2018 from Euro852m in the same period in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 5.2% to Euro163m from Euro155m. Its cement sales volumes fell by 1.8% to 7.52Mt from 7.66Mt. However, these figures take into account the company’s sale of its Italian operations.

Francesco Caltagirone Jr, chairman and chief executive officer, said, “In the first nine months of 2018 the EBITDA benefited on the one hand from the contribution of the US by Euro12.3m and from the improvement in Belgium and China, on the other it suffered the deterioration of earnings in Egypt due to the curfew introduced in February 2018 and the resulting stop of all transport activities until May 2018, in Norway due to bad weather in the first quarter, and in Turkey due to the economic and currency crisis getting worse in the month of August.”

In March 2018 the company purchased a controlling stake in Lehigh White Cement in the US from HeidlebergCement. It operates the company with Cemex as a junior partner. In October 2018 Cementir, through its subsidiaries, acquired an additional stake in Egypt’s Sinai White Cement increasing its share to 71.1% from 66.4% for Euro3.8m.

Italy: Cementir Holding’s net profit rose to Euro77m in the first half of 2018, a massive 400.5% increase compared to just Euro15.5m in the first half of 2017. Revenues increased by 5.7% to Euro588.5m from Euro556.9m in the first half of 2017. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved by 9.5% to Euro96m from Euro87.7m in the first half of 2017. The impact of the devaluation of the main foreign currencies against the Euro on the gross operating margin had a negative effect of Euro7.9m. At constant exchange rates, EBITDA in 2017 would have amounted to Euro103.9m.

Chairman and CEO Francesco Caltagirone Jr explained that the results were up compared to the first half of 2017 also on a like-for-like basis, without the effect of the acquisition of Lehigh White Cement Company in the United States. The improvement in the gross operating margins in Turkey, Belgium and China, offset the worsening results in Egypt, Norway, Malaysia and Denmark. The results were also negatively affected the unfavourable winter weather conditions in the first quarter in Scandinavia and Belgium, as well as the earlier timing of Ramadan in Turkey and Egypt.

Italy: Cementir’s sales and earnings have fallen following the divestment of its local business. Its sales dropped by 1.6% year-on-year to Euro242m in the first quarter of 2018 from Euro246 in the same period of 2017 when adjusted for the divestment. Earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 12.4% to Euro241m from Euro27.5m. Cement sales volumes increased by 4.1% to 2.08Mt from 2Mt.

“The exit of Cementir Italia group from the perimeter of consolidation and the improvement in Turkey and China offset the deterioration of results in Egypt caused by the curfew introduced in February 2018, the effects of harsh weather conditions in Scandinavian countries, and the fewer number of working days due to the early Easter holidays, which resulted in lower earnings in Norway and, to a lesser extent, in Belgium, Denmark, Sweden and Malaysia,” said the company in a results statement.

The group’s board of directors has also approved a business plan for 2018 to 2020 to recognise changes in its portfolio. In 2020 the group forecasts that the Nordic and Baltic countries and the US will generate about 72% of the group's revenue, while the Eastern Mediterranean area, including Turkey and Egypt, will generate 20% and the Asia Pacific area, including China and Malaysia, will account for around 6%.

US: Dan Harrington has been appointed as the head of Cementir Holding for its North America region. He will lead Cementir's newly formed Region North America, which comprised of the North American cement production and distribution operations of Lehigh White Cement and the group's existing US concrete products company, Vianini Pipe.

Harrington was previously the president and chief executive officer of Lehigh Hanson North America and he has served as the chairman of the Portland Cement Association (PCA). He holds a science degree from Pennsylvania State University, an MBA from Fairleigh Dickinson University and an MA and PhD in executive management from Claremont Graduate University.

US: Italy’s Cementir Holding has completed its acquisition of an additional 38.75% of Lehigh White Cement. It paid US$107m for the purchase. Following the deal Cementir holds a 63.25% stake in Lehigh White Cement and Cemex holds the remaining 36.75%. Cementir said that the acquisition would allow it to directly manage assets in the US in the core white cement business.

HeidelbergCement made Italy’s Cementir Holding its Valentine last week in the form of a deal for the Italian company to buy up the remaining shares in Lehigh White Cement in the US. Cementir takes control of the former joint venture by upping its share to 63.25% for US$107m and one of the other partners, Cemex, increases its share to 36.75% for US$34m. Despite making the announcement on Valentine’s Day HeidelbergCement then described the sale in fairly unromantic language, “As a niche product with small volumes, the standalone production of white cement does not fit to the strategic focus on efficiency of HeidelbergCement.” Maybe they could just send flowers to each other next year instead!

More seriously, this latest deal by Cementir is yet another intriguing evolution of the Italian multinational building materials producer. The company says it is the largest white cement producer in the world through subsidiaries like Aalborg Portland in Demark, Sinai White Cement in Egypt and Lehigh White Cement in the US. Its plant at El-Arish in Egypt is the largest white cement unit in the world. In 2016 it reported a white cement production capacity of 3.3Mt/yr from six plants in Denmark, Egypt, China, Malaysia and the US. Its volume sales of white cement were 2.2Mt at this time or a capacity utilisation rate of 67%. In the US it operates two white cement plants located in Waco, Texas and York, Pennsylvania with a total capacity of 0.26Mt/yr, as well as a distribution network throughout the country, which is also used to distribute white cement imported from its partners across North America. In 2017 Cementir produced 10.3Mt of Ordinary Portland (grey) Cement and white cement, a rise of 24.6% year-on-year from 8.25Mt in 2016. The boost was delivered by the acquisition of Compagnie des Ciments Belges. Like-for-like sales volumes increased by around 1.7% year-on-year.

Cementir left the Italian market in 2017 when it sold Cementir Italia to HeidelbergCement for Euro315m. As this column commented as the time (GCW320) the deal seemed cheap given that HeidelbergCement paid Euro315m for five integrated cement plants plus extras. However, Cementir appeared to actually make a profit on Sacci which it picked up cheaply in 2016.

Now HeidelbergCement has returned the favour by selling Cementir the controlling stake in Lehigh White Cement. The German cement producer may have grumpily rubbished the sale in its press release but the language makes one wonder whether this was a quiet part of the Cementir Italia deal in 2017. The white cement industry is miniscule compared to the OPC one but HeidelbergCement has just handed even more control of it to Cementir. From Cementir’s perspective this probably seems very efficient.

Italy: Cementir’s sales rose by 25% year-on-year to Euro1.29bn in 2017 from Euro1.03bn in 2016. The results benefited from Cementir’s acquisition of CCB Group and Cementir Sacci in 2016. Cementir subsequently agreed to sell Cementir Italia, including Cementir Sacci, to HeidelbergCement in late 2017.

Cementir’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 11.5% to Euro221m from Euro198m. Its total cement sales volumes rose by 26.6% to 12.8Mt from 10.1Mt. Sales volume increases were attributed to a change in the scope of consolidation in Belgium and Italy and ‘good’ performance in Denmark, Turkey, Egypt and Malaysia.

The Italian cement producer also announced with its financial results that it will expand its presence in the US by acquiring an additional 38.75% stake of Lehigh White Cement Company from HeidelbergCement, giving it a majority of 63%.

US: HeidelbergCement has announced that its subsidiary Lehigh Cement Company has signed an agreement to sell its 51% position in Lehigh White Cement Company to the minority shareholders Aalborg Cement Company and Cemex. Closing of the transaction is subject to customary conditions and is expected during the first quarter 2018. Authorisation by the Antitrust Authority has already been obtained.

Lehigh White Cement Company operates two plants in Waco, Texas and York, Pennsylvania with a combined production capacity of approximately 0.26Mt/yr.

“As a niche product with small volumes, the standalone production of white cement does not fit to the strategic focus on efficiency of HeidelbergCement,” said Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement. “The disposal is part of our global portfolio review and optimisation with the goal to generate additional cash flow in order to support our disciplined growth and increase shareholder returns.”

Cemex, via its US subsidiary, will increase its stake from 24.5% to 36.75% when the deal is completed. It will pay US$34.0m. Cementir, via Aalborg Cement, will pay US$107.m for the purchase of a further 38.75% stake. This will take its total share to 63.25% once the deal goes through.

"This acquisition gives us the opportunity to enter the direct management of assets in the US in a segment, that of white cement, which is our core business, strengthening our global leadership consistent with our development strategy," commented Francesco Caltagirone Jr, President and chief executive officer of Cementir Holding.