Displaying items by tag: FCC

Spain: FCC spin-off company Inmocemento plans to start trading shares on the Spanish Stock Exchanges from 12 November 2024. The cement and real estate business is expected to have a market value of €1.93bn, according to Reuters. FCC said in October 2024 that it had transferred related assets to Inmocemento. This included most of the assets from subsidiaries FCYC and Cementos Portland Valderrivas, in addition to FCC's cement plants and the share it owns in real estate developers Realia and Metrovacesa. All FCC shareholders received a number of shares in Inmocemento proportional to their holdings in FCC. Plans for the spin-off were first reported in May 2024.

Cemex announced last week that it will stop producing clinker at its Lloseta plant in Mallorca. Grinding activity at the site will continue, along with the shipment of bagged and bulk cement products. The company has framed the closure as part of its decarbonisation plans. The dismantling of the two preheater towers at the plant is scheduled to take place by the end of 2030. Cemex said that it will take this long to allow the cement plant to continue operating, as well as a neighbouring hydrogen unit and other nearby industrial units. The status of the Lloseta plant has been in question before. It was closed in early 2019 due to reduced cement demand and mounting European CO₂ emissions regulations. However, it reopened in 2021.

Readers may recall that Cemex España participated in the Power to Green Hydrogen Mallorca project. Land by the Lloseta cement plant was used to hold solar panels and a solar-powered hydrogen unit. Other partners in the project included energy suppliers Enagás and Redexis and renewable power and infrastructure company Acciona, among others. When the unit was commissioned in early 2022, it said it was the first solar power-to-green hydrogen plant in Spain. The link between Cemex and hydrogen is noteworthy given the cement company’s adoption of hydrogen injection as part of its alternative fuels strategy. Interestingly, Acciona planned to use a blockchain method to certify that hydrogen produced at the site was made using renewable energy sources. Heidelberg Materials also plans to use the same process to verify its evoZero brand of net-zero cement products in 2025. Another recent sustainability sector news story in Spain is the commissioning by Çimsa of a 7.2MW solar plant supporting its Buñol white cement plant in Valencia. The new installation is expected to supply about 18% of the plant’s energy needs.

On the corporate side of things, FCC revealed in mid-May 2024 that it was preparing to spin-off its cement and real estate subsidiaries into a new company called Inmocemento. The cement part of this is Spain-based Cementos Portland Valderrivas. The move is intended to bolster the values of the different parts of the business. The proposal will be put to FCC’s shareholders in late June 2024, with any resulting action taking place by the end of the year. The decision to separate FCC’s cement assets is reminiscent of the financial engineering Holcim has proposed with its US business. However, in this case the driver does not appear to be the disparity between the European and US stock markets.

Graph 1: Domestic consumption and exports of cement in Spain, 2013 - 2023. Source: Oficemen.

Market data was also out this week from Oficemen, the Spanish cement association. Domestic cement consumption grew year-on-year in April 2024 but the year so far is looking weaker with consumption from January to April 2024 down by 4.5% year-on-year to 4.65Mt. This is below Oficemen’s forecast for 2024 where it expected a stagnant situation. However, there are eight more months to go. In 2023 cement consumption fell by 3% to 14.5Mt and exports declined by 7.5% to 5.2Mt. The association blamed continued underinvestment in both the public and private sectors due to economic instability since the Covid-19 pandemic. Graph 1 above shows the wider situation in the Spanish cement market over the last decade. The share of exports has declined and local consumption rebounded after 2020 but has declined since then.

These news stories provide a snapshot of what’s been happening in Spain recently in the cement sector. Oficemen’s prediction for 2024 is gloomy but local consumption has risen over the past 10 years. Exports have fallen but the cement association has started to spin the country’s decarbonsiation drive as a potential positive for the industry’s competitiveness generally. It’s hard to discern right now but there might be an advantage for an export-focused country that conforms to European standards in the future if it can hold onto its capacity. Admittedly, that’s a big if. This thinking along sustainability lines could be seen earlier in May 2024 when Cementos Molins Group rebranded itself as Molins. It described the rebranding as a bid to represent the wider range of construction products it manufactures and sells beyond cement. Oficemen has also pointed out that the local market has room for development given the relatively low cement consumption per capita in Spain compared to its peers. So, whatever happens next, there is likely to be room for improvement in the cement market.

Spain: The Mexico-based owner of the Spain-based cement producer FCC, Carlos Slim, is reportedly planning to spin-off its cement and real estate assets into a separate business. The new entity, to be known as Inmocemento, would then be listed on the Madrid stock market, according to Reuters. Slim directly owns around 12% of FCC and controls a further 76% of the company through investment vehicles Inversora Carso and Operadora Inbursa.

Inmocemento would take FCC's cement plants, the majority stake it owns in the real estate developer Realia and a minority stake in Metrovacesa. Current FCC shareholders would receive Inmocemento stakes equivalent to their holdings in FCC.

FCC currently owns assets in different industries such as construction, water and sewage, waste management, cement and real estate. FCC's cement units reported revenues of €614m in 2023, while income from real estate was €254m. Together, these sectors represented 9% of FCC's revenue. It operates its cement business via the Cementos Portland Valderrivas subsidiary.

FCC said in a financial disclosure that its board believes that the move would boost shareholder value as the new and existing companies are likely to be worth more apart than together.

Spain: FCC’s sales rose by 17% year-on-year to €9.03bn in 2023. Meanwhile, the company’s earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 17% to €1.53bn. The company reported a profit growth of 88% to €591m, following the stabilisation of its main business areas, particularly in cement. The cement business registered a 19% increase in turnover. The business includes Cementos Portland Valderrivas.

Spain: Cementos Portland Valderrivas (CPV) has appointed Jaime Rocha Font as its chief executive officer (CEO). He succeeds Pedro Carranza Andressen in the post, according to Alimarket-Construcción. Rocha Font is currently the CEO of Mexico-based Elementia and he will continue to hold this position. Elementia owns a controlling share of Fomento de Construcciones y Contratas (FCC), the parent company of CPV.

Rocha Font has been the head of Elementia since 2020. Prior to this he was the head of Elementia’s cement division, including subsidiaries Cementos Fortaleza and Giant Cement in the US, from 2015. He also held the position of president of the National Cement Chamber of Mexico between 2019 and 2022. Earlier in his career he spent over 20 years working for Holcim from 1992. He holds a degree in civil engineering from the Universidad Pontificia Católica de Chile and a master's degree in international economics from the Université Libre de Bruxelles amongst other qualifications.

Spain: FCC subsidiary Cementos Portland Valderrivas has completed its acquisition of global investment company KKR's Andalusian business, including its subsidiary Surgyps. Surgyps operates an 800,000t/yr grinding plant in Jerez de la Frontera, Cádiz. The business filed for bankruptcy in 2010, but continued to operate the plant under a government concession, lasting until 2031.

The El Economista newspaper has reported that Cementos Portland Valderrivas said "With this operation, the group complements its position in Andalusia by taking a decisive step in our commitment to reduce the carbon footprint of cement."

The group controls six integrated cement plants across Spain, with a total capacity of 9.9Mt/yr.

Spain: Sustainability Observatory's Decarbonisation 2022 report has named FCC, Cemex and Holcim on a list of Spain's top 10 CO₂ emitters. Construction conglomerate FCC, parent company of Cementos Portland Valderrivas, was the seventh largest contributor the country's CO₂ emissions during the year. Mexico-based Cemex placed joint eighth with energy provider Iberdrola at 2.4Mt-worth of CO₂ emissions in 2021, followed by Switzerland-based Holcim with 2Mt.

Spanish CO₂ emissions grew by 5.1% year-on-year in 2021, and by 3% across industries subject to emissions credit trading, which include the cement sector. Together, the top 10 emitters accounted for 57% of these industries' emissions, and 19% of total national emissions.

Spain: The board of directors at Spanish construction group FCC will propose in the following days the appointment of Juan Bejar CEO to replace Baldomero Falcones who occupied the position for five years, according to Spanish business newspaper Expansion.

At present Bejar is a chairman at FCC's subsidiary Cementos Portland Valderrivas and Globalvia, in which FCC is a partner of Bankia. He was also a chairman at Citigroup Infrastructure Management and CEO at Ferrovial Infraestructuras and Cintra.

The new CEO will take his position in a moment when FCC is focused on a restructuring process, aimed at meeting the fall of the traditional business, the difficulties of the cement subsidiary and Austrian unit Alpine as well as the need to repay Euro1.6bn debt.

Spain/US: The head of Fomento de Construcciones y Contratas SA (FCC), Baldomero Falcones Jaquotot, has said that a planned sale of US-based Giant Cement Holding Inc. has been delayed while the Spanish construction giant deals with the debt refinancing of Cementos Portland Valderrivas (CPV). FCC owns nearly 70% of CPV, which in turn owns Giant. FCC had previously planned to sell Giant by the end of the first quarter of 2012. Falcones added there has been one bidder for the US cement unit. FCC spokesman Jose Manuel Velasco Guardado said CPV is keeping, 'all options open for Giant.'

FCC is currently focusing on CPV's efforts to renegotiate Euro1.5bn in gross debt. Around 46% of the debt is due to be repaid in 2012 and 48% is due in 2013. Portland is also crafting a new business plan that may include plant closures in Spain. Falcones said that CPV was in 'a good situation' as it discusses a new debt repayment timeline with its banks, while looking to 'increase its cash situation.'

With Spain's economy in poor shape, FCC is trying to increase the portion of its revenues originating from overseas to more than 65% in three years time from 52% in 2011. Falcones said FCC might be inclined to make overseas acquisitions sooner than later in order to take advantage of the Euro's relative strength and is also eyeing growth opportunities in Latin America, Asia, the Middle East and central and eastern Europe.

In Spain, FCC is owed more than Euro2bn from local and regional governments for past services rendered. Falcones said that he expects most of it to be paid in May and June 2012 after the central government set up a new credit line to help cash-strapped regions and municipalities to pay off their debts.

The Spanish government is benefiting from much improved financing conditions after local banks tapped the European Central Bank's Long-Term Refinancing Operations to purchase government debt.Falcones is confident that the full amount will be paid. "If I get Euro1.5-2.0bn, I will be very happy," he said. "It doesn't mean we won't get the rest. That will take more time."

Spain: Fomento de Construcciones y Contratas (FCC) closed 2011 with an attributable net profit of Euro108.2m, down 64.1% year-on-year. The slump was explained by the poor performance of FCC's cement producer Cementos Portland Valderrivas. Total sales went down by 1.3% to Euro11.76bn, while earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 8.3% to Euro1.25bn. Net debt stood at Euro6.28bn at the end of 2011, down 19% from a year earlier.