Displaying items by tag: Cementos Argos

Honduras: Cementos Argos Honduras has commissioned a 1.6GWh/yr solar power plant at its Choloma grinding plant in Río Blanquito. Grupo Argos’ energy subsidiary Celsia built the plant, which consists of 2160 photovoltaic modules. The La República newspaper has reported that the installation cost US$1.2m. It will supply 25% of the Choloma grinding plant’s energy consumption, and reduce its total CO₂ emissions by 23%.

Cementos Argos Honduras CEO Luis Eduardo Tovar said "This partnership marks a significant milestone in our efforts to address climate change and revitalise our ecosystems, while generating significant impact in communities with new employment and investment opportunities.”

The core of the Caribbean cement industry consists of the Dominican Republic (with 5.9Mt/yr in integrated capacity), Cuba (4.7Mt/yr) and Jamaica (3.5Mt/yr). Haiti and Trinidad & Tobago also command small, single integrated plants, while there are numerous grinding plants and cement terminals along the region’s extensive coastlines. The industry has been the subject of new commercial and capital expenditure-related announcements in the past fortnight. Regarding the Caribbean’s cement producers, these developments seem to lack a single clear direction.

Caribbean market leader Cemex revealed that it was considering selling up in the region’s largest market, the Dominican Republic, on 1 September 2023. Bloomberg cited unnamed sources stating that the Mexico-based cement giant hired financial services JPMorgan Chase to explore the possible divestment of local subsidiary Cemex Dominicana. Exactly one year had passed since Cemex completed its sale of Cemex Costa Rica and Cemex El Salvador to Guatemala-based Cementos Progreso for US$329m. Sources clued in on the latest development reportedly expect Cemex Dominicana to command a selling price three times greater than the Central American divestments combined.

Cemex has discussed its scattered disposal of global assets since 2019 as a strategic realignment towards its main markets, in particular those in North America and Europe. On this understanding, the Caribbean straddles an invisible line between Cemex’s strategic core in North America and Central America on its periphery.

Just to the north of the line lies Jamaica. There, Cemex subsidiary Caribbean Cement will expand its Rockfort cement plant by 30% to 1.3Mt/yr through a US$40m upgrade, scheduled for completion in early 2025. Late last week, Caribbean Cement told investors that the upgrade will equip the plant with new equipment, including a new dosing system. The producer expects this to help the Rockfort plant to further increase its alternative fuel (AF) substitution rate. It co-processed 5.6% AF in its kiln during the first half of 2023, more than double its first-half 2022 substitution rate of 2.7%. Caribbean Cement began exporting cement to Turks and Caicos on 16 September 2023, and plans to increase its shipments there and elsewhere. Managing director Yago Castro reassured Jamaicans that Caribbean Cement would also continue to help meet domestic demand.

Currently, Caribbean Cement and fellow Jamaican producer Cement Jamaica compete in the domestic market against imports, including some cement from Dominican Republic-based Domicem. This enters the country via Buying House Cement’s Montego Bay terminal. Montego Bay Cold Storage, an affiliate of Buying House Cement, shared plans for a second, US$8m cement terminal in the city earlier in 2023. The facility is expected to help meet growing demand from residential and hospitality sector construction.

More new production capacity is soon to come online in the form of a 1.23Mt/yr grinding plant in the Dominican Republic. Cemento PANAM will own and operate the plant, while Germany-based Gebr. Pfeiffer will supply a 3750 C-4 vertical roller mill via engineering, procurement and construction contractor CBMI Construction.

In a market where the nearest cement exporter is only a short sail over the horizon, producers have to compete fiercely for their market shares, even at home. Disputes over Caribbean Community member states’ rights to protect domestic cement production have gone as high as the Caribbean Court of Justice. It ended Barbados-based Rock Hard Cement’s hopes of resuming exports to Trinidad & Tobago last year.

The Caribbean’s cement producers will be acutely aware of Cementos Argos’ planned expansion of its north-facing Cartagena, Colombia, cement export facility, hot on the heels of a previous, US$42m expansion. The South American giant says that it is targeting the US, where it anticipates an upcoming construction boom. Caribbean countries present other possible markets for producers like Cementos Argos, yet their cement industries might equally emulate any successes it enjoys in the US. Like Argos in Colombia, Jamaica’s Caribbean Cement is part of a group with an existing presence in the US. Its on-going investments in the Rockfort plant signal a readiness to catch the trade winds rapidly picking up in the Caribbean.

US: Cementos Argos, the cement company controlled by Colombia-based Grupo Argos, has entered into a definitive agreement with Summit Materials, under which they will combine their operations in the US. The platform will have a diversified portfolio and a nationwide geographic presence in complementary markets and high-growth urban areas. It will be present in 30 states.

Summit Materials currently operates across aggregate, cement, concrete, and other businesses in the building materials industry, with assets that include 217 aggregate mines, two cement plants along the Mississippi River and approximately 84 concrete plants.

Argos North America has four integrated cement plants, two grinding stations, 140 ready-mix concrete plants, and a distribution network of eight maritime ports and 10 inland terminals.

The agreement will see Cementos Argos receive approximately US$1.2bn and 54.7 million common shares in Summit Materials. This will make it the largest shareholder in Summit Materials, with a 31% stake. The combination will create a company with combined revenues in excess of US$4bn with approximately US$1bn in earnings before interest, tax, depreciation and amortisation (EBITDA). It will be the fourth-largest cement making portfolio in the US, with a capacity of 11.6Mt/yr. It will also be among the largest aggregates and concrete producers. The two companies expect the combination to unlock estimated annual synergies of at least US$100m, with significant realisation within two years.

Juan Esteban Calle, the chief executive officer (CEO) of Cementos Argos, stated, "This combination reaffirms our commitment to growth in the US market while realising and optimising our intention to list the US business on the New York Stock Exchange as the most efficient way to unlock the fundamental value of Cementos Argos' assets and businesses in that country. Being an active player in a publicly-traded leading building materials platform, with a significant component of aggregates and cement on the world's most attractive market, is a pivotal step in the value generation strategy we launched months ago with the SPRINT program for the benefit of all our shareholders. Cementos Argos' participation in Summit Materials will continue to provide our shareholders with significant exposure to the US market."

Anne Noonan, President and CEO of Summit Materials, said, “Our combination with Argos USA marks a significant milestone as we execute against and accelerate our materials-led portfolio strategy. The transaction will extend our geographic reach into high growth markets, creating a leading cement position nationwide, and bring together two talent-rich organisations to innovate and deliver value-added solutions for our customers."

The transaction is expected to close in the first half of 2024, subject to required regulatory approvals and customary closing conditions.

US/Colombia: Colombia-based Cementos Argos is carrying out expansions to two cement plants in South Carolina and West Virginia. While not specifically named, these would appear to be the 1.1Mt/yr Harleyville and 1.8Mt/yr Martinsburg cement plants. The producer says that the expansions will increase its cement capacity in the eastern US by 450,000t/yr.

Additionally, Cementos Argos plans to expand the capacity of its Cartagena cement terminal in Colombia by 35% to 4Mt/yr. The producer says that this will serve as a platform for subsequent growth. It is targeting the US market, where an expansion is also underway at its import facility in Houston, Texas. The Cartagena terminal achieved its current capacity following a recent US$42m expansion.

Colombia: Cementos Argos reported first-half sales of US$6.71bn for 2023, up by 25% year-on-year. Wet weather in the US and a slowing residential construction market in Colombia contributed to a 2.7% drop in cement sales to 7.9Mt. The company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 45% to US$1.3bn, while its net profit rose by 56% to US$179m.

President Juan Esteban Calle said "In the first half of 2023 we achieved relevant milestones that demonstrate our commitment to generating value for our shareholders and other stakeholders. The progress in the execution of our share price recovery initiative, the growth in revenues and the expansion in the profitability margins of the businesses in our main markets motivate us to continue working every day to generate value for all our stakeholders."

Colombia: Cementos Argos sold 3.9Mt of cement during the first quarter of 2023, down by 0.6% year-on-year. This contributed to a 12% rise in its consolidated revenues to US$721m. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 42% to US$127m.

President Juan Esteban Calle said "In the first quarter of the year we experienced a stable market dynamic in most of the territories in which we are present, sequential improvements in costs, especially in fuels, energy and, in some cases, raw materials and mixed macroeconomic signals that keep us optimistic about medium-term trends." He added "Beyond the constant challenging conditions, we continue to take forceful steps toward our goal of creating value for the company, our investors, customers and other stakeholders."

Colombia: Cementos Argos has introduced a share price recovery programme at the same time it has released its financial results for 2022. It plans to spend around US$50m on a share buy-back program. Its sales revenue rose by 24% year-on-year to US$2.37bn from US$1.92bn. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7% to US$422m from US$396m. However, its net income dropped by 14% to US$81.7m from US$95.5m due to mounting financial expenses. Its cement sales volumes fell by 3.7% to 16.2Mt in 2022 from 16.8Mt in 2021.

The group blamed the decline in cement sales volumes on problems in the Haitian market as well as lower trading volumes to the Caribbean and Central America region. Sales volumes of cement and revenue grew in the US but earnings fell. In Colombia, local cement sales volumes fell but were boosted overall by exports.

Colombia: The Science-Based Targets Initiative (SBTi) has validated Grupo Argos Subsidiary Cementos Argos’ CO₂ emissions reduction goals. Cementos Argos aims to reduce its Scope 1 and Scope 2 CO₂ emissions in line with a well-below 2°C climate change scenario by 2030. Its strategy includes increasing co-processing of alternative fuel (AF), reducing its cement’s clinker factor, optimising its heat and electricity consumption, investing in cleaner technologies, increasing the share of renewable power it uses and diversifying its product range to include more low-carbon products.

Colombia: Grupo Argos announced its purchase of US$2.49m-worth of shares in Cementos Argos. The purchase accounts for 0.3% of the subsidiary's share capital. At the start of 2022, Grupo Argos held a 59% majority stake in the cement producer. The next biggest single shareholders were investment services company AFP y Cesantías Protección, with 8%, and pension fund management company SAFP Porvenir, with 6.3%.

Colombia: Cementos Argos has reported record sales and earnings before interest, tax, depreciation and amortisation (EBITDA) in the first nine months of 2022. Sales for the period reached US$1.73bn, with EBITDA reaching US$306m. In terms of shipments, Cementos Argos delivered 12.3Mt of cement, 2% less than in the first nine months of 2021. It delivered 5.8Mm³/yr of concrete, a year-on-year rise of 9%.

Juan Esteban Calle, president of the company, said "We are excited to deliver positive results to our shareholders that show that the strategies we are implementing, in terms of deleveraging, efficiency, network integration logistics and price recovery, are bearing fruit. Amid strong inflationary pressures in all markets, we were able to expand profitability and margins versus last year."

During the third quarter of 2022 the company saw revenues of US$414m in the US market, an increase of 23% compared to the third quarter of 2021. Its EBITDA in the US for the quarter increased by 26% to US$77m. It said that 'solid' demand helped it to increase cement sales volumes by 6% to 1.6Mt, while concrete sales rose by 4% to 1.1Mm³.

In its native Colombia, revenues reached US$143m, a year-on-year increase of 11%, with EBITDA at US$32.1m. During the three-month period, cement shipments remained stable, while the concrete business has continued its sustained recovery, supported by infrastructure and formal housing projects. The company highlighted that exports from Cartagena grew by 37% to reach 319,000t, the highest quarterly figure in the company's history.

In the Caribbean and Central America revenues rose by 8% year-on-year in the third quarter of 2022 to reach US$136m, with EBITDA stable year-on-year at US£31m. However, cement shipments decreased by 13% to 1.0Mt. Cementos Argos said that this was partly due to serious social disruption in Haiti, as well as a change of government in Honduras and scheduled maintenance in the Dominican Republic. However, the company saw a 59% increase in concrete shipments to 77,000m³.