Displaying items by tag: Cemex
Cemex to invest US$22.8m in the Dominican Republic
20 June 2014Dominican Republic: Cemex is carrying out investments of US$22.8m in the Dominican Republic. They include US$18.4m of improvements to its San Pedro de Macoris cement plant and US$4.35m for various activities to strengthen the business. Among the investments will be a waste heat recovery (WHR) system to generate 7MW of electricity, improvements in the calcination system to cut Cemex's carbon footprint, purchases of equipment to increase bagging efficiency by 30% and more trucks to make its concrete mixer fleet the largest of its Caribbean operations at 110 units. Cemex is also involved in housing projects to ease the country's shortage.
UK: Repairs to the flood-damaged Cemex UK cement plant at South Ferriby are said to be making 'good' progress according to Cemex UK. The 0.8Mt/yr plant was flooded by a tidal surge from the River Humber in early December 2013.
Partial production started in April 2014 and a Cemex UK spokesman has reported to the Scunthorpe Evening Telegraph that they plan on resuming full production later in 2014. Repair efforts are now focusing on the kiln systems and the two raw mills and coal mills. Cemex UK has declined to comment on how much the repairs have cost although it is rumoured to have cost as much as Euro14m. The plant employs 150 people and contributes Euro 12.5m/yr to the economy of North Lincolnshire.
Colombia: Cemex is pursuing alternative energy sources, including landfill biogas, wind and solar energy, for its operations in Colombia. It has planned some US$50m of projects for the next five years. The company will look for partners among financial entities and investment funds, according to Edgar Angeles, Cemex's vice president of operations for Central, South America and the Caribbean.
Since the elaboration of Colombia's law on renewable energy, Cemex has been studying projects of this type. The law allows companies to invest in their own power supply and to sell any surplus on the wholesale market. Cemex wants to guarantee 100% of its power supply, compared to 65% now. It already has three small hydroelectric stations and a gas-fired plant in Colombia's Junin, Bucaramanga and Ibague municipalities.
The creation of Lafarge Africa, the clearance of the Cemex West acquisition by Holcim in Germany and the sale of Lafarge's assets in Ecuador all hint at the scale of business that LafargeHolcim will command when it comes into existence. Despite the media saturation of coverage on the merger the implications in developing markets are still worthwhile exploring, especially in Latin American and Africa.
In sub-Saharan Africa, Lafarge is merging its cement companies in Nigeria and South Africa to create Lafarge Africa. Analysts Exotix have described the move as, 'the birth of a leading player on a continental scale'. Indeed, if Lafarge wanted to grow Lafarge Africa to encompass its many other African cement producing subsidiaries it could hold at least 17 integrated cement plants (including plants in north Africa) with a cement production capacity of at least 40Mt/yr in 10 countries and infrastructure in others. That puts it head-to-head with Dangote's plans to meet 40Mt/yr by the end of 2014 through its many expansion projects. Following these two market leaders would come South African-based cement producer PPC with its expansion plans around the continent.
Meanwhile across the Atlantic in Latin America the Lafarge-Holcim merger threatens Cemex. Unlike in Africa where Lafarge has a ubiquitous but disparate presence, Lafarge and Holcim's cement assets are more evenly scattered around the Caribbean, Central and South America. In terms of cement production capacity Cemex and Lafarge-Holcim will both have around 30Mt/yr, with Cemex just in front. The next biggest cement producers in Latin America will be Votorantim (present mainly in Brazil) with just over 20Mt/yr and Cementos Argos (Columbia) with about the same. This includes some new acquisitions in the United States for the growing Columbian producer. In Ecuador Lafarge and Holcim held over 50% of the market share, hence the sale by Lafarge of its assets to Union Andina de Cementos for US$553m.
Depending on how well the merger integrates the two companies, corals the various subsidiaries and implements strategic thinking the merger could just create business as usual with little disruption to the existing order. Yet in both continents the merger has the opportunity to shake up and reinvigorate the cement markets as existing players suddenly discover serious new competition and react accordingly.
Africa has a population of 1.1bn and it had a Gross Domestic Product (GDP) of US$2320/capita in 2013. South America had a population of 359m in 2010 and a GDP of US$8929/capita. This compares to US$27,250/capita in Europe and US$54,152/capita in the US. The economic development potential for each continent is humongous. Post-merger, LafargeHolcim will be first or second in line for some of this potential in Latin America and Africa.
Germany: Holcim has received unconditional clearance by the European Commission (EC) for its proposed acquisition of Cemex West in Germany. The decision follows a detailed Phase II review by the EC. Closing of the transactions is expected for the second half of 2014.
The acquisition in Germany is part of Holcim's strategic portfolio optimisation in Europe that includes a series of transactions together with Cemex, which is separate from the intention to merge with Lafarge.
Holcim said that the decision marks a further milestone towards the optimisation of its strategic portfolio in Europe, which was announced in 2013. It will allow Holcim to create value through an optimised footprint in north-western Germany. It will also allow it to further improve the service and support of existing and new customers.
The transaction includes one cement plant and two grinding stations with a total cement production capacity of 2.5Mt/yr, one slag granulator, 22 aggregates locations and 79 ready-mix concrete plants. They would be combined with Holcim's existing Northern German operations.
Germany: The European Commission (EC) is expected to give the green light to Holcim's planned acquisition of Cemex's German operations without conditions, according to Reuters, which cited two knowledgeable sources.
The transaction is part of several interconnected deals between the companies that were agreed in August 2013. The EC is currently examining the agreement to determine whether it could threaten competition and prompt price hikes. Its decision is due by 8 July 2014.
Under the terms of the agreement, Cemex will combine its cement, ready-mix and aggregates operations in Spain with those of Holcim and will hold a 75% stake in the enlarged firm. In addition, Cemex will take over Holcim's operations in the Czech Republic. Holcim will spend a total of Euro70m in cash on the deals.
In April 2014 the EC started an in-depth probe into Cemex's deal with Holcim in Spain and is due to unveil its decision until 5 September 2014. The local anti-trust watchdog approved the transaction in the Czech Republic in March 2014.
Spain: Cemex has opened a new distribution centre in Rubi, Catalonia. Cemex Spain CEO Jaime Ruiz de Haro and Rubi Mayor Carme Garcia cut the ribbon on the new facility. The centre will distribute cement and other construction materials.
"We are the top producer of white cement in the world and the number three producer of grey cement. Centres like this allow us to get closer (to our customers) and improve our offerings," said Ruiz de Haro.
Cemex expects sales to hit Euro250m in 2014 in Spain. It employs about 200 people in the country.
Additional management adjustments at Cemex
23 May 2014Mexico: Further management changes have been implemented at Cemex, including the inclusion of six executive vice presidents, instead of five. The six vice presidents will report directly to the director general, Fernando Gonzalez, with the position of executive vice president of finance to be filled by Jose Antonio Gonzalez.
Juan Pablo San Agustín will continue as executive vice president of strategic planning and business development, while Maher Al-Haffar has been appointed as executive vice president of investor relations, corporate communications and public affairs. Luis Hernandez will continue as executive vice president of organisation and human resources, as well as security and administrative services, while he will also be responsible for processes, IT, innovation, global service organisation (GSO), the securities funding corporation (VMO) and the Neoris project. Ramiro Villarreal will remain head of legal affairs, taking up the position of executive vice president of legal, while he will continue as secretary of the board of directors. Mauricio Doehner has been appointed as executive vice president of corporate affairs and business risk management.
No changes have been made at the regional director level. Cemex executives have also expressed a desire to recover investment grade at the firm, lost during the crisis in 2009.
Mexico: Cemex has announced that it has promoted its chief financial officer (CFO), Fernando Gonzalez, to chief executive. Gonzalez replaces Lorenzo Zambrano, who died suddenly on Monday 12 May 2014. It also named Rogelio Zambrano, a cousin of the late executive, as its new chairman. Lorenzo Zambrano had been chief executive since 1986 and chairman since 1995.
"We will stay focused on creating value for all of our stakeholders," said Rogelio Zambrano in a statement. "I am very optimistic about Cemex's future." He has been a member of the Cemex board since 1987 and president of the company's finance committee since 2009.
Fernando Gonzalez joined the company in 1989 and held senior positions in a number of regions before being named executive vice president for finance and administration several years ago. "We are encouraged by the positive outlook and the improving business environment in the markets where we operate," he said in the release.
The board's decision to replace Lorenzo Zambrano from within the company is likely to reassure investors of continuity at Cemex, which is seeing a recovery in earnings after the recent economic crisis led the highly leveraged firm to refinance debt, sell assets and lay off around 10% of its workforce. The speed at which the board has responded is also likely to instill confidence.
After taking over the company, Zambrano embarked on a rapid and ambitious international expansion that transformed Cemex from a regional producer into a global supplier of cement and building materials, borrowing heavily to acquire companies and aggressively paying down debt.
Mexico: The board of Cemex may soon decide on a new CEO to replace the late Lorenzo Zambrano, who died of heart failure in Madrid on 12 May 2014. A funeral Mass was held on 14 May 2014.
Directors are likely to hold a meeting in the next few days, according to CFO Fernando Gonzalez. "The board meeting should occur this week," said Gonzalez. "What I can't tell you is the result." A swift decision by directors on a new CEO may reassure investors about the course of Cemex after Zambrano's three-decade tenure. He led the company to the top of the regional industry with US$29bn of acquisitions and became one of Mexico's best-known CEOs, while leaving no publicly anointed successor. Gonzalez, Cemex's CFO, is the odds-on favourite to succeed Zambrano according to analysts.
Gonzalez said that he didn't know whether the board would consider hiring a leader from outside of the company and that major shifts in the business are unlikely. "Cemex's strategy should be maintained," he said. "The strategy is to participate in the global market of the building materials industry." Gonzalez, who isn't a director, said that only the board knows the details of Cemex's succession planning. Even if the board meets this week, there's no guarantee it will make a final decision on new leadership.