Displaying items by tag: Cemex

Spain: Cemex España, the Spanish subsidiary of Mexican cement company Cemex, plans to cut around 390 jobs. This represents 22% of its 1740 current employees. The company has attributed its decision to flagging cement consumption in Spain, amid continued ecomonic turmoil, austerity measures and unemployment.

News from Mexico and the US over the past week confirms the contrasting fortunes of the cement industry in the 'Old World' and the 'New World,' of Europe and North America. First, Cemex reported a significantly reduced loss of US$203m in its third quarter, compared with a loss of US$730m in 2011. However, the firm's European units again faired worse than other regions. 

The European problem is not limited to Cemex, but while much of the continent has seen a poor 2012 so far, North America appears to be in the midst of a construction renaissance. HeidelbergCement estimates US cement sales growth of 8-11% in 2012. In Mexico, a strong and growing industry, it has also been announced that the Mexican billionaire Carlos Slim had partly financed a new US$300m plant in Mexico, due to go into production early in 2013.

In light of this apparent upward trend in North America, it is surprising that France's Lafarge has agreed to sell two more of its US cement plants, this time to Eagle Materials. If the Eagle deal is approved, it will represent (along with the May 2011 sale of Lafarge's Roberta and Harleyville plants to Cementos Argos) a continued and substantial reduction in Lafarge's presence in the US. In under 18 months, Lafarge will have offloaded four plants, taking its total from 12 to eight.

Lafarge's decision to sell to Eagle seems like an attempt to meet its own debt-reduction schedule. Yet to do this it may be losing important territory in North America. This can't have been an easy decision.

Mexico: Cemex has reduced its year-on-year net loss in the third quarter of 2012 due to steady sales and an increase in operating cash flow. However, the Mexican cement conglomerate has confirmed that over 1000 jobs will leave the company by December 2013.

The Mexican conglomerate reported a net loss for the quarter of US$203m, compared with a loss of US$730m in the third quarter of 2011. It noted a 13% increase in earnings before interest, taxes, depreciation and amortisation (EBITDA) to US$730m from US$671m in the same quarter in 2011. Sales fell by 2% in dollar terms to US$3.9bn as a result of weaker currencies but rose by 2% from 2011 when adjusted for currency fluctuations. Consolidated cement sales volumes fell by 2% to 17.1Mt. Operating profit rose by 35% to US$410m.

"An improvement in pricing and volume in several of our regions as well as the continued success of our transformation effort has led to the highest operating EBITDA margin in three years," said Fernando Gonzalez, executive vice president of finance and administration.

Cemex generated EBITDA of US$27m in the US, a second consecutive quarter of positive cash flow in that market as sales rose by 12% from 2011 to US$826m. In Mexico, sales were 2% higher at US$875m, and EBITDA rose by 9% to US$313m. Sales rose in Central and South America and in Asia, although they were lower in both northern and southern Europe.

Gonzalez also said that IBM will be hiring around 450 Cemex workers, or 1% of its global staff, in a previously announced outsourcing deal. Another 675 people, or 1.5% of its workforce, will be made redundant. The staff downsizing is expected to be completed by December of 2013.

Mexico: Based on results for the months of July and August 2012 and preliminary estimates for the month of September 2012, the Mexican cement giant Cemex currently expects to report an improvement in its like-for-like net sales and earnings before tax, depreciation and amortisation (EBITDA) its 2012 third quarter results, on a consolidated basis.

Cemex expects that net sales for the quarter will decline by approximately 2%, although net sales on a like-to-like basis, which considers currency fluctuations, are expected to grow by approximately 3%. It expects its operating EBITDA to grow by about 9% and operating EBITDA, on a like-to-like basis, is expected to grow by approximately 13%.

The expected improvements are broadly in line with improvements seen in the first half of 2012 compared to the first half of 2011.

UK/Lativa: Recycling and resource management company, SITA UK, has signed a three-year contract to supply 180,000t of solid recovered fuel (SRF) to Cemex in Latvia. The fuel will be produced by processing residual commercial waste in a purpose-built facility at Ridham Docks in Kent. Once processed, the SRF material will be used as a fossil-fuel replacement at a Cemex plant in Broceni, southern Latvia.

"We have invested over Euro7.53m developing a new processing facility to produce and bale SRF at Ridham. This brand new, purpose-built facility was commissioned in August 2012 and we are sending our first shipment to Latvia in September 2012," said Andy Hill, head of organics and alternative fuels, at SITA UK.

SITA UK uses residual commercial waste, which has a higher calorific value and lower moisture content than municipal waste. Its facility in Ridham can process up to 50t/hr. The company has a one year trans-frontier shipment permit to export the SRF to Cemex in Latvia.

Earlier in April 2012, SITA UK and Cemex announced their intention to develop two waste recycling plants to produce alternative fuel for Cemex's Rugby plant in Warwickshire. SITA UK, a subsidiary of Suez Environment, is a recycling and resource management company employing over 6000 staff with a turnover in excess of Euro879m/yr.

Philippines: Cemex has announced that it is planning to expand the cement production capacity of its APO plant in the Philippines by 1.5 Mt/yr. Through an investment of approximately US$65m, the company will increase production and strengthen its distribution network to better serve high-demand areas throughout the country. The increase is expected to be operational by the first quarter of 2014.

With this new investment, Cemex says that it will keep pace with the Filipino market's rapid growth. The country registered a GDP growth of 6.1% in the first half of 2012, according to its National Statistical Coordination Board. The Metropolitan Manila Development Authority has begun multiple infrastructure projects as the country recovers from damage caused by extreme weather conditions.

"Infrastructure development has been one of the constant needs of the country and it has to be addressed with urgency," said Pedro Palomino, president of Cemex in the Philippines. "We are proud to be a part of the development of the Philippines and wish to be a long-term partner on its path to a prosperous, sustainable future."

Egypt: An Egyptian court has ordered that the sale of Assiut Cement Company to Cemex be annulled. The plant will be returned to the Egyptian government as it was sold for less than its fair value. The court also ruled that all workers forced to retire after the sale may return.

Cemex bought 90% of the state owned factory in 1999 for US$580m in cash and assumed debt and currently owns a 96% stake. Under the court ruling, Cemex would be responsible for all the financial obligations its Egyptian business incurred since 1999. Cemex plans to contest the ruling and appeal the court's decision.

Coal ash seems to be in short supply in the Philippines. Lafarge Republic has signed a deal with a local energy producer to buy coal ash from a new 600MW coal plant.

Although the cost of the deal was not announced, the agreement will run from when the plant starts operation until 2019. This move follows a similar arrangement by Cemex Philippines in June 2012. In that instance Cemex agreed to purchase coal ash from the 200MW Kepco SPC Power Corp plant in Naga, Cebu for US$0.95/t.

Distinctively both arrangements were set up in conjunction with local government. For the Lafarge deal part of the agreement involved donating at least 10,000 bags of cement per month for use in various infrastructure projects of the province. Bataan governor Enrique Garcia put the value of the deal at US$1.19m/yr. For the Cemex deal the Cebu Provincial Government signed the agreement. In November 2009 Cebu Province and Kepco entered into an Ash Disposal Agreement, where Cebu Province was granted exclusive rights to the ash produced by the power plant.

Adding to the suspicion that the Philippines lacks sufficient coal ash, back in the autumn of 2011, the Cement Manufacturers' Association of the Philippines (CeMAP) asked the Department of Trade and Industry (DTI) to impose mandatory quality standards on raw materials, such as coal ash. This followed accusations by CeMAP that poor quality coal ash might be behind complaints from contractors working on infrastructure projects. In 2009 a DTI profile on the cement industry placed the demand for Portland cement at 73% and the demand for pozzolan cement at 27% of the total.

Cement sales in the Philippines have been steadily growing over the last decade. Lafarge Republic announced in August 2012 that it was increasing its capacity to just below 9Mt/yr in 2013. Around the same time CeMAP released data showing that sales were up 20% year-on-year for the first half of 2012. The local industry reported combined sales of 15.6Mt in 2011. Previous to this, Holcim Philippines announced the US$9.46m upgrade to a previously closed mill in Batangas.

US: Jose Llontop has joined Giant Cement as its new CEO and president. He joins the company with 14 years of experience in the industry. Previously he has held senior level positions at Cemex, including being the regional president for a US$1bn sales operation for countries in Central Eastern Europe and being the president of Cemex Egypt.

"Llontop is a professional with a long and successful career in the cement industry, who has held positions of high responsibility in different countries and achieved excellent results," said Juan Bejar, chairman and CEO of Cementos Portland Valderrivas, the Spanish company that owns Giant.

Llontop received his undergraduate degree in mechanical engineering from the University of Virginia, Charlottesville, VA, completed his MBA at Rice University, Houston, Texas, USA, and attended the Harvard Business School's General Manager Program in Cambridge, Massachusetts, USA.

Llontop served as chairman of the Cemex supervisory board in Austria and as vice chairman of the Cemex board in Egypt. Since 2010 Llontop was the president of Saudi Readymix, and the senior vice president of Building Materials for Alturki Group in Al Khobar, Saudi Arabia.

Mexico: Mexico's cement giant CEMEX has released its financial results for the second quarter of 2012. These show total consolidated net sales of US$3.9bn during the period, a 1% rise on a like-to-like basis compared to the second quarter of 2011. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 11% during the quarter to US$702m. On a like-to-like basis operating EBITDA increased by 22% in the same period.

Cemex attributed the increase in consolidated net sales on a like-to-like basis to higher prices in local currency terms in all of its regions. It reported that infrastructure and residential sectors were the main drivers of demand in most of its markets.

Net sales in Cemex's operations in Mexico decreased by 14% in the second quarter of 2012 to US$833m compared with US$968m in the second quarter of 2011. Operating EBITDA decreased by 4% to US$300m versus the same period of 2011. The groups's operations in the US reported net sales of US$795m for the quarter, up by 15% year-on-year. Here its operating EBITDA increased to US$27m, comparing favourably to a loss of US$17m in the same quarter of 2011.

In Northern Europe, net sales for the second quarter of 2012 decreased by 18% to US$1.10bn, compared with US$1.34bn in the second quarter of 2011. Operating EBITDA was US$122m for the quarter, a 19% fall from 2011. Second-quarter net sales in the Mediterranean region were US$384m, 20% lower compared to the US$477m taken during the second quarter of 2011. Operating EBITDA decreased by 23% to US$96m for the quarter compared to the same quarter in 2011.

Cemex's operations in South & Central America and the Caribbean reported net sales of US$529m during the second quarter of 2012, representing an increase of 20% over the same period of 2011. Operating EBITDA increased by 58% to US$189m in the second quarter of 2012 from US$120m in the second quarter of 2011. Operations in Asia reported a 10% increase in net sales year-on-year to US$142m compared to the second quarter of 2011. In this region its operating EBITDA was US$30m, up by 35% from the same period of 2011.

Fernando A González, Executive Vice President of Finance and Administration, said, "We are pleased with our 22% growth in operating EBITDA on a like-to-like basis, on back of a 1% growth in consolidated net sales. This is the highest EBITDA generation since the third quarter of 2009 and the fourth consecutive quarter with a year-over-year EBITDA increase. We are particularly pleased with the quarterly performance of our operations in the United States, South & Central America and the Caribbean and Asia regions."