Displaying items by tag: Egypt

News has been dripping out slowly over the last few months about which assets HeidelbergCement is planning to divest. This week reporting from Bloomberg suggested that the German-based building materials producer might be seriously considering selling one or more integrated plants in Spain. The idea is reportedly part of a wider review of its portfolio in the country with the possible inclusion of cement plants at San Sebastian and Bilbao at a future date also. A proposed price of Euro300m for the national business was put forward by the sources to the reporters but it is unclear how many cement plants that figure includes.

HeidelbergCement announced in July 2020 that it had reduced the value of its total assets by Euro3.4bn following a review. It blamed this on reduced demand for building materials due to the coronavirus pandemic and the devaluation of its Hanson subsidiary in the UK, in part related to the UK’s exit from the European Union. A divestment plan followed at its Capital Markets Day event in September 2020 when it said it was simplifying its country portfolio and prioritising the strongest market positions. To this end it said it was setting up a watch list of underperforming assets to keep an eye on.

Over the next few months a number of corporate reorganisations and actual confirmed divestments occurred as well as plenty of speculation. HeidelbergCement-controlled Suez Cement started to acquire a 100% stake in its own subsidiary, Tourah Portland Cement, in September 2020. Suez Cement then sold its majority stake in Kuwait-based Hilal Cement in late January 2021. This week HeidelbergCement Bangladesh informed the local stock exchange that it is planning to amalgamate its subsidiary Emirates Cement.

Signs that European reviews had taken place could be seen later in the autumn of 2020. In November 2020 the Italian press picked up on rumours that HeidelbergCement was planning to move subsidiary Italcementi’s research centre from Bergamo, Lombardy, to Heidelberg in Baden Württemberg. Whether this was ever a serious proposition or not, this appeared to have been avoided in early February 2021 when an Italian union said it had agreed with Italcementi to keep the research centre in Italy as well as a preserving jobs generally. Meanwhile, also in November 2020, France-based subsidiary Ciments Calcia announced a major upgrade at its integrated Airvault cement plant but along with the conversion of two other integrated plants into a grinding unit and a terminal respectively, and changes at the French headquarters at Guervill.

Just before Christmas the bigger speculations started to appear in the press, with a story suggesting that HeidelbergCement was considering selling assets in California, US, with a target price of US$1.5bn for three integrated plants and associated concrete and aggregate units. That story is particularly beguiling given Cemex’s decision this month to reopen a kiln in Mexico to supply cement to the southwest US to meet shortages (See GCW 493)! Incidentally, readers should also note the story this week about a shortage of natural gas exports from Texas, US, that has caused cement plants in northern Mexico to shut down. This week, as mentioned at the start, has seen Spain added to the list of places that HeidelbergCement might be considering selling up in. The Spanish market like Italy has been rationalising heavily over the last decade particularly as export markets have dwindled. Oficemen, the Spanish cement association, reported that domestic cement consumption fell by 10% year-on-year to 13.3Mt in 2020 from 14.7Mt in 2019. On top of this Oficemen has repeatedly warned of the threat that CO₂ emissions prices pose for its members’ exports.

Group chairman Dominik von Achten told Reuters this month that the company plans to sell the first of the five assets in early-to-mid 2021. Of course he wouldn’t say where, except for adding that the company would stay in ‘rock solid’ markets like Northern Europe. Indonesia has been seen as a candidate for disposal by analysts, likely due to local production overcapacity levels and LafargeHolcim’s own departure in Indonesia 2018. All Von Achten would say on the matter was that Indonesia was an ‘important’ market for the group. Whether it’s seen as important for reducing company debt or building value remains to be seen. HeidelbergCement hasn’t exactly been shy about saying what they are doing over the last half year or so but they are only going so far and they won’t comment on speculation. So in the meantime we must wait to find out more.

Egypt: Misr Beni Suef Cement has ended a contract with Arab Swiss Engineering Company (ASEC). In April 2019 the companies signed a contract for ASEC to provide technical management at the producer’s plant. Reuters News has reported that the cement company will now undertake the operation of its production lines.

Italy: Cementir Holding recorded revenues from sales and services of Euro1.22bn in 2020, up by 1% year-on-year from Euro1.21bn in 2019. Cement and clinker volumes rose by 13% to 10.7Mt from 9.49Mt. Volumes registered the sharpest increase in Turkey, of 39%. Ready-mixed concrete (RMX) volumes grew by 7.8% to 4.4Mm³ from 4.1Mm³. The company maintained its 2019 earnings before interest, taxation, depreciation and amortisation (EBITDA) levels of Euro264m. It said that an improvement in performance in Turkey, Denmark, Egypt, China and Sweden balanced out negative effects on earnings in Belgium, US and Malaysia.

Chair and chief executive officer Francesco Caltagirone said, “In 2020, despite the serious pandemic, the group showed significant resilience with a 13% increase in cement volumes sold and revenue reaching the historical record. On a recurring basis, EBITDA increased by 2%, EBIT was up by 4% and yearly cash generation was Euro119m."

Under Plan 2021 – 2023 Industrial Plan, the company says that it envisages sales growth of 20% to Euro1.47bn and EBITDA growth of 29% to Euro340bn in 2023 compared to 2020 figures. It said that digitalisation investments begun in 2019 will contribute an expected Euro15m to EBITDA in 2023. As part of its sustainability commitments it has set a CO₂ emissions reduction target of around 30% by 2030, with emissions below 500kg/t of grey cement. However, it said that under the future European Taxonomy criteria white cement emissions are not included.

The group is planning to invest around Euro107m from 2021 to 2023 on sustainability and digitalisation. This includes a the construction of a new calcination plant in Denmark for the production of its Futurecem product and, the installation of wind turbines with an installed capacity of 8.4MW. It is also planning to increase the alternative fuels substitution rate at its integrated Gaurain plant in Belgian to 80% from 40% and invest in the use of natural gas and biogas in some of its plants.

Kuwait: HeidelbergCement subsidiary Suez Cement has sold its 51% majority stake in Hilal Cement. Decypha News has reported the new owner of the stake as Silver Share Real Estate. Boodai Group retains 44% of the remainder of shares.

Egypt: Cement Engineering and consultancy company ASEC has appointed Ashraf El-Kahky as its managing director. It follows the retirement of Khaled El-Sebaie, who has been in post for eight years. El-Sebaie will continue to work for the company as a technical consultant.

El-Kahky joined ASEC Group as the Group Chief Financial Officer in September 2019. He brings over 30 years of experience from roles in financial management, risk management, strategic planning and restructuring, having previously held leading roles in several national and multinational organisations.

Egypt: The US-based International Centre for Settlement of Investment Disputes (ICSID) has ruled in favour of the Egyptian government in a compensation case raised by Spain-based Cementos La Unión concerning its Arabian Cement Company (ACC) subsidiary. The El Economista newspaper has reported that the company sought US$286m in compensation, due to the Egyptian government’s decision to retroactively impose new activity and electricity licences shortly after ACC built a new integrated cement plant in Suez Governorate. Cementos La Unión argued that the additional licences breached a bilateral agreement between Spain and Egypt covering investments that were already in place.

The company said that it will continue to pursue its claim, which is also progressing in Egypt.

Egypt: Metallurgical Industries Holding has sold its 18% stake in Egyptian Tourah Portland Cement for just under US$3m. Mubasher has reported that Arab African International Securities (AAIS) acted as broker for the transaction.

In October 2019, the Financial Regulatory Authority (FRA) approved HeidelbergCement subsidiary Suez Cement’s mandatory tender offer (MTO) for 100% acquisition of Egyptian Tourah Portland Cement for around US$33m.

Egypt: Cement sales rose by 10% month-on-month to 3.8Mt in September 2020, the highest figure since April 2020. However, year-on-year sales for the month fell by 12.5%, according to the Daily News Egypt newspaper. Naeem Research said that cement demand remains 15% below where the market should be due to the coronavirus pandemic. The local cement production capacity utilisation rate is estimated to be 56%.

Egypt: South Valley Cement’s first-half sales were US$12.5m in 2020, down by 21% year-on-year from US$15.9m in the first half of 2019. Arab Finance News has reported that the company’s net loss fell by 31% to US$4.45m from US$6.43m. South Valley Cement was last profitable in 2018, when it recorded a full-year net profit of US$0.65m.

Egypt: The Financial Regulatory Authority (FRA) has approved HeidelbergCement and Simon France subsidiary Suez Cement’s mandatory tender offer (MTO) for acquisition of a 100% stake in Egyptian Tourah Portland Cement for US$32.7m. Daily News Egypt has reported that the FRA also approved a change to Suez Cement’s ownership, with HeidelbergCement France acquiring a 33% stake in the company.