Displaying items by tag: GCW189

Mexico: Cemex expects its Ventika wind power project in the northeastern state of Nuevo Leon to start operations between April and June 2016, according to Luis Farias Martinez, vice president of Energy and Sustainability. The construction of the project, which was initiated in the middle of 2014, is about half complete.

The Ventika project, comprised of two 126MW wind farms, is located some 128km from Nuevo Leon's capital city of Monterrey and approximately 56km from the US border. The project requires investments of a total US$650m, which will come from US investment company Fisterra Energy, majority owned by funds managed by Blackstone Group, Cemex and other private investors. The investments are structured as 75% debt and 25% capital investment, of which Cemex has provided 5%.

Martinez, who is also head of the newly-established Cemex Energia, added that the Ventika project, as well as all previous Cemex projects, are fully independent and are not included in Cemex Energia's plans to develop 1000MW renewable power projects in Mexico by 2020 in cooperation with Pattern Energy Group.

Europe: Holcim's cement and clinker sales fell by 10.5% in Croatia and by 5.4% in Serbia in 2014. In Croatia, sales prices rose by 0.5%, while in Serbia, they rose by 0.3%. In contrast, Holcim's cement and clinker sales rose by 7.8% in Romania and by 2.4% in Bulgaria. In Romania domestic prices fell by 1.2%, while they rose by 1.1% in Bulgaria.

India: The Competition Commission of India (CCI) has requested that LafargeHolcim divest some of its units, including limestone reserves, to prevent a monopoly in eastern India.

When Lafarge and Holcim initially announced their intention to merge operations in April 2014, they proposed a series of asset divestments in countries where they had a significant market share, but India was not among them.

After prima facie investigations by the CCI revealed that the combination would likely have an appreciable adverse effect on competition, especially in eastern India, the CCI launched, what it calls, Phase II investigations. It put the merger proposal in public scrutiny under Section 29(3) of the Competition Act, 2002 and invited comments from stakeholders including competitors. The CCI has now stated that the merger proposal is fine, but certain assets must be divested in eastern India.

According to local media, the assets can be sold to a company that is not a competitor. LafargeHolcim has 30 days to respond to the CCI's suggestions.

Switzerland: Holcim has announced better-than-expected results for 2014, including higher cement sales volumes and higher net sales. It has also announced that its non-controlling interest of 27.5% in its joint venture Siam City Cement Public Company Limited is available for sale.

Cement sales volumes in 2014 exceeded those in 2013 due to a stronger economy in North America and growth momentum in some emerging markets such as India, the Philippines, Indonesia and Mexico, offsetting a challenging situation in Latin America. Consolidated cement sales were up by 1% year-on-year to 140Mt. In the fourth quarter of 2014, cement volumes decreased slightly by 0.6% to 34.4Mt.

Holcim's net sales grew by 3% on a like-for-like basis. Growth mostly resulted from price improvements in many regions, particularly in North America, against the backdrop of a favorable market environment and in Latin America in response to cost inflation. An unfavorable currency effect of 5.2% and negative changes in consolidation structure impacted the consolidated net sales performance in 2014, which was down by 3.1% to Euro17.8bn.

Like-for-like operating earnings before interest, taxes, depreciation and amortisation (EBITDA) adjusted for merger and restructuring costs of Euro128m increased by Euro200m or 5.5% in 2014. Consolidated operating EBITDA however was down by 3.8% to Euro3.49bn mainly as a result of negative currency effects and merger and restructuring related costs.

In 2014, operating profit adjusted for merger and restructuring costs of Euro139m went up by Euro232m or 10.6% year-on-year. Consolidated operating profit, however, was down by 1.7% at Euro2.16bn. Net income increased by 1.5% to Euro1.51bn. In 2014, net financial debt was Euro8.97bn, Euro170m up from Euro8.79bn mainly due to an unfavorable currency impact of Euro233m.

During the fourth quarter of 2014, Holcim's consolidated net sales increased year-on-year by 1.9% to Euro4.53bn. Operating EBITDA reached Euro935m, up by 6.5% year-on-year. Adjusted for merger and restructuring costs booked in the quarter of Euro52m, like-for-like operating EBITDA growth reached Euro103m or 11.8%. Operating profit increased by 6.9% to CHF 598 million. Excluding merger and restructuring costs of Euro53.9m, operating profit growth reached Euro101m or 19.2%. Net income was up markedly by 43.5% to Euro426m.

Holcim expects that the global economy will continue its gradual recovery in 2015. Key construction markets of Holcim in countries like the USA, India, Indonesia, Mexico, Colombia, the UK and the Philippines are expected to be the main growth drivers. Europe overall is expected to have 'flat' development. Latin America will continue to face uncertainties in countries such as Argentina and Brazil, but should show slight growth in 2015. The Asia Pacific region is expected to grow, although at a modest pace. Africa and the Middle East is expected gradually to improve. Cement volumes should increase in all group regions in 2015 with the exception of Europe.

Pakistan: Mian Mansha's DG Khan Cement Ltd plans to build a US$300m plant near Karachi as economic growth boosts demand. This marks its first plant build since 2007. The new plant near Hub, west of Karachi, will produce 2 - 2.5Mt/yr of cement. Construction is targeted for completion late in 2018. The plant will be financed 40% through internal cash and the rest through debt, said Niazi.

"There will be a shortage domestically in three years if there is 10%/yr growth in demand," said CFO Inayat Ullah Niazi. DG Khan's two cement plants have operated near full capacity for the past two years. Pakistan's output is projected to expand by 43% in the year that ends on 30 June 2015 and 47.5% in the following fiscal year.

DG Khan Cement announced a net income of US$33.3m for the first six months of its financial year, which ended on 31 December 2014, up by 27% compared to US$26.2m in the same period of 2013. The company's earnings surged by 93% quarter-on-quarter to US$22m during the second quarter of its financial year. With stable off-take and prices, revenue increased by 2% year-on-year to US$124m during the first half of the fiscal year because of an improved sales mix. Revenues jumped by 18% quarter-on-quarter to US$66.8m during the second quarter.
"The earnings were significantly above our estimates due to higher-than-estimated other income and lower-than-expected taxation charges," said DG Khan.

Canada: Former Quebec premier Pauline Marois has announced the go-ahead of McInnis Cement's cement plant project in Port-Daniel-Gascons, Gaspé. Opposition parties and environmentalists have slammed the Couillard government for approving the US$1.1bn project without a review by Quebec's environmental bureau. The McInnis Cement plant could top the list of industrial polluters in the province.

The provincial government plans to exempt the project from an assessment by the Bureau des Audiences Publique sur l'Environnement (BAPE), Quebec's advisory office of environmental hearings. The company has said that the project shouldn't be subject to an environmental review because it was submitted in May 1995, a month before the law requiring such an assessment came into effect.

In 2014, the Marois government announced that Quebec would invest US$350m in the project. The plant will release 1.7Mt/yr of greenhouse gases (GHG), according to an evaluation by a Canadian engineering consultant firm. The greenhouse gas output would make it the top industrial polluter in Quebec.

Mexico: Cemex has created an energy division, Cemex Energia, to take advantage of Mexico's landmark energy reform and launch power projects that could provide up to 5% of Mexico's electricity requirements within five years.

Cemex has struggled with a large debt load and cost-cutting since an ill-timed US$16bn takeover of Australian rival Rinker in 2007, when the US housing market nosedived. In recent years, Cemex has been slashing costs and has looked to sell assets to regain a coveted investment grade rating. Cemex executives are hopeful that Mexico's energy reform will be a lucrative new path.

"We are very enthusiastic about Mexico's energy sector future and we will leverage on our experience in developing projects that benefit the country," said Cemex CEO Fernando Gonzalez.

Cemex will invest US$30m in Cemex Energia in the next five years. Cemex has also signed a joint venture agreement with Pattern Energy Group Inc, which owns wind power projects, to create 1GW of renewable power in Mexico in the next five years. Pattern said that new legislation in Mexico, which mandates that 35% of Mexico's power must come from renewable sources by 2024, prompted it to expand.

US/Australia: James Hardie chief executive Louis Gries said that the pace of the US housing recovery is underwhelming and remains below expectations as he reported an 11% rise in its third quarter 2015 adjusted profit to US$48.6m. Gries said that James Hardie has managed to increase prices on some product lines despite the slower-than-expected rebound in new home building in the world's biggest economy.

"We have higher volumes in all of our businesses and our average price is up in the US. The US housing market is still pretty flat for new construction. Housing starts are well below what you'd expect three to four years into a recovery," said Gries.
Despite on-going muted building in the US, where James Hardie derives about 80% per cent of its revenue, the company is going ahead with big capacity expansions at its Plant City, Florida, plant and at plants in Cleburne, Texas and Carole Park in Queensland, Australia. In the first nine months of its 2015 financial year, which ended on 31 December 2014, James Hardie spent US$154.3m on capacity expansions and new land acquisitions in New South Wales, Australia and Tacoma, Washington, USA. Some capacity expansions have been delayed pending a pick up in conditions.

James Hardie's net operating profit in the quarter that ended on 31 December 2014 rose by 17% year-on-year to US$108m. Revenue rose by 10% to US$388m. James Hardie expects full-year adjusted net operating profit to be between US$210 - 222m. In its Asia Pacific business, James Hardie expects strong growth in the Philippines due to momentum in high rise developments and a push into the commercial building market. The Australian and New Zealand businesses are both expected to improve on the back of strong new home building and a rebound in repairs and remodelling in Australia.

James Hardie has a legacy asbestos liability to compensate victims suffering asebestos-related diseases from use of the company's former products. It pays 35% of its operating cash flow into the independently-run Asbestos Injuries Compensation Fund (AICF). In the first nine months of its financial year, asbestos claims were 11% higher than actuarial expectations. On 1 July 2014, James Hardie paid US$113m to the AICF.

India: Day six of India's coal block auctions, on 19 February 2015, saw UltraTech Cement win the Bicharpur mine in Madhya Pradesh, which has 29.1Mt of coal reserves, for a bid of US$48.3/t. UltraTech beat ACC, Hindalco Industries, Jaypee Cement and OCL India, among others.

Aditya Birla Group's Hindalco Industries won the Gare Palma IV-5 block for US$56.3/t. The mine has estimated extractable reserves of 42.4Mt. It beat a number of rivals, including Ambuja Cement. Jindal Power Ltd won the Gare Palma IV-2 and 3 coal mines in Chhattisgarh, which have extractable coal reserves of 156Mt, for an estimated US$270m.

Canada: McInnis Cement has reached an agreement with the Centre québécois du Droit de l'Environnement (CQDE) regarding the proceedings filed in August 2014 against the Environment Minister, aimed at invalidating McInnis Cement's authorisation certificate for its cement plant project in Port-Daniel–Gascons. McInnis Cement and the CQDE have agreed to create an environmental subcommittee and to pursue discussions in a mediation process that will address three issues:

1. The monitoring of greenhouse gases (GHG) from the cement plant and McInnis Cement's efforts to reduce GHG;

2. The monitoring of McInnis Cement's performance in complying with the National Emission Standards for Hazardous Air Pollutants (NESHAP) standards with regards to the emission of contaminants;

3. The monitoring of McInnis Cement's compliance with the protocol agreed to with Fisheries and Oceans Canada concerning the protection of marine mammals.

In addition to the CQDE, the Conseil régional de l'Environnement de la Gaspésie-Îles-de-la-Madeleine and Nature-Québec have been invited to the mediation process, as well as the Ministère du Développement durable, de l'Environnement et de la Lutte aux Changements climatiques. The work of the enlarged forum will ensure a long-term dialogue around the future cement plant and is part of McInnis Cement's sustainable development values.

"From day one of Lafarge's filing of the request, McInnis Cement stated that it was a maneuver to slow the arrival of a competitor in the market. The withdrawal of the environmental groups is leaving Lafarge alone in the legal proceedings and highlight its non-competitive purpose," explained Christian Gagnon, CEO of McInnis Cement. "McInnis Cement is aware of its carbon footprint and is committed to gradually reducing its GHG. In this context, we choose the path of dialogue, opting for a mediation with environmental groups about this global issue," said Gagnon.