Displaying items by tag: GCW265
North with Cementos Argos
23 August 2016Cementos Argos’ deal to buy the Martinsburg cement plant in West Virginia from HeidelbergCement makes a lot of sense. After all, the Colombian-based cement producer has seen its US cement assets perform well so far in 2016 with a cement sales volumes increase of 29% year-on-year to 1.99Mt and an overall sales revenue boost of 19.7% to US$700m. Compare that to the challenges the company has faced so far this year on its home turf in Colombia. There, cement sales volumes fell by 15.5% to 2.47Mt and sales revenue fell slightly to US$465m.
Argos has picked up the Martinsburg cement plant and eight cement terminals in the surrounding states for US$660m. The sale was mandated by the US Federal Trade Commission as one of the conditions of HeidelbergCement’s purchase of Italcementi including its US subsidiary Essroc, the current owner of the plant.
Symbolically, the purchase takes Argos right up to the Mason–Dixon line, the old survey line sometimes used to describe the dividing line between the so-called ‘north’ and ‘south’ in the US. The cement plant is south of the line in West Virginia but some of the cement terminals are firmly in the north-east. Outside of the company’s home turf in Colombia it has a maritime presence around the Gulf of Mexico. Although Martinsburg is inland, the new terminals in Norfolk, Virginia and Baltimore push Argos’ distribution network up the east coast. This could potentially push Argos into conflict with the subject of last week’s column, McInnis Cement, a Canadian cement plant under construction with eventual aspirations to sell its cement to the US.
Back in the US specifically the new plant will bring Argos’ total of integrated cement plants to four, joining Roberta in Alabama, Newberry in Florida and Harleyville in South Carolina. All together the producer will have a production capacity of around 6Mt/yr in the US following the acquisition. Back in 2014 when Global Cement visited Martinsburg the plant was distributing its cement about 60:40 via truck and rail. At that time the plant was shifting cement in an area from central Ohio eastwards to western Pennsylvania and south to southern Virginia, as well as in North Carolina.
Argos has paid US$300/t for Martinsburg’s production capacity of 2.2Mt/yr. As ever determining the cost of the terminals proves difficult. This compares to the US$267t/yr that Grupo Cementos de Chihuahua (GCC) paid to pick up two plants from Cemex in May 2016 or the US$375/t that Summit Materials paid Lafarge for a cement plant and seven terminals in July 2015. Previous Argos purchases in the US were around US$220 – 250/t for deals with Lafarge and Vulcan in 2011 and 2014 respectively. It is also worth considering that Essroc upgraded Martinsburg significantly in 2010 to a dry-process kiln and that the site has a waste-to-solid-fuel plant from Entsorga due to become operational in 2017.
The purchase of Martinsburg by Argos seems like an obvious move. It predicts a compound annual growth rate of 5.4% for cement consumption in the American states it operates within between 2016 and 2020. However, this may be optimistic given that the Portland Cement Association’s chief economist Ed Sullivan has downgraded his consumption forecasts for the US as a whole to 3.4% from 5% as he waits for the recovery to really kick in. The southern US states have also recovered faster since a low in 2009 than the northeastern ones. The purchase marks a new chapter in Cementos Argos’ expansion strategy
South Africa: Modilati Gustav Mahlare is to retire from Sephaku Holdings at its annual general meeting (AGM) to be held in September 2016. Mahlare has served on the company’s board as chairman of the audit and risk committee for three consecutive terms. He is not eligible for re-election. MJ Janse van Rensburg has been recommended to replace Mahlare. Her appointment will be subject to shareholder approval at the AGM.
Janse van Rensburg has served as the Chief Financial Officer and, later, Chief Executive Officer at the Trans Caledon Tunnel Authority between 1994 and 2008. Prior to this she worked as a non-executive director for the Bond Exchange of South Africa, the Airports Company of South Africa, the Johannesburg Water Department and Denel, during which time she also fulfilled the role of a member or chairman of the respective audit committees. She is currently a non-executive director of the Development Bank of South Africa and a non-executive member of the Credit Committee overseeing Africa and India at First National Bank.
Sephaku Holdings holds a 36% stake in Sephaku Cement. The remainder is held by Nigeria’s Dangote Cement.
Hanson Cement promotes Mark Hickingbottom and Andy Simpson
23 August 2016UK: Hanson Cement has appointed Mark Hickingbottom as its national commercial director for bulk cement and Andy Simpson as its national commercial director – packed. The appointments follow the recent retirement of commercial director Keith Ellis.
Hickingbottom has sales and marketing experience within Hanson’s bulk cement team, as well as a degree in Business Management. He is an associate member of The Institute of Concrete Technology and has spent over 12 years at Hanson delivering strategic plans across its product range.
Simpson, previously responsible for sales of all Hanson’s packed products, will build on developing trading relations with merchant customers as well as working with internal teams. He has over 15 years’ experience with Hanson and holds a degree in Business Studies.
CNBM and Sinoma start merger preparations
23 August 2016China: The Assets Supervision and Administration Commission has announced the reorganisation of the China National Building Materials Group Corporation (CNBM) and China National Materials Group Corporation (Sinoma). The commission did not provide further details on the merger.
CNBM is the world's major non-metal materials manufacturer, and cement equipment and engineering service provider, with total assets over US$64.5bn. Sinoma is also an industry leader in the construction materials industry. China has started accelerating the reorganisation of its SOEs to improve their competitiveness.
Anhui Conch focuses on overseas markets as profits fall
23 August 2016China: Anhui Conch’s net profit has fallen by 29% year-on-year to US$506m in the first half of 2016 from US$710m in the same period in 2015. Its revenue fell slightly to US$3.61bn from US$3.65bn. It sold 128Mt of cement in the period, a rise of 11% year-on-year, but falling prices reduced its revenue. By region the sales were up overseas and in Central China but they fell in East China and South China. The group blamed the fall in profit on an economic downturn and intense market competition.
During the reporting period three clinker production lines at PT Conch South Kalimantan Cement, Myanmar Conch Cement and Yingjiang Yunhan Cement and seven cement-grinding units at Ganzhou Conch Cement and Guangxi Sihegongmao were put into operation. The group’s clinker and cement production capacities have increased by 4.6Mt/yr to 240Mt/yr and by 8.1Mt/yr to 300Mt/yr respectively. Four waste heat recovery systems have also been commissioned, adding 25.5MW capacity.
International projects in Indonesia and Myanmar have completed construction and started operation during the reporting period. The group’s Merak grinding mill project in Indonesia is continuing as scheduled with trial operation planned for the second half of 2016. Preliminary work on projects in Laos and Cambodia and research for future projects in Russia and Turkey is also continuing.
India: Reliance Infrastructure has completed the sale of its 100% shareholding in Reliance Cement to Birla Corporation, part of MP Birla Group. The US$715m deal, valued at US$140/t of cement production capacity, was announced in February 2016. The transaction has now completed following the transfer of shares and receipt of sale consideration. Proceeds of the sale will be used by Reliance Infrastructure to pay off its debts.
BASF opens admixtures plant in Sri Lanka
23 August 2016Sri Lanka: BASF has opened its first production plant for admixtures at Sapugaskande near Colombo. The plant will produce standard and custom-made performance-based construction chemicals under the Master Builders Solutions brand. These include concrete admixtures product ranges such as MasterGlenium, MasterPolyheed, MasterRheobuild and MasterPozzolith. The site is supported by an office, warehouse and testing laboratory.
“Asia Pacific is one of the fastest growing markets globally and South Asia is a strategic growth engine of this market. With the new admixture plant in Colombo, we will now be able to rapidly supply our customers with admixtures for all cement and aggregate types, whether their construction projects are located in the capital or in remote areas,” said Himanshu Kapadia, Vice President, Market Management, Construction Chemicals Asia Pacific, BASF, at the inauguration of the new plant on 19 August 2016.
Burkina Faso: Intercem has released details of a cement grinding plant that it is building with Kanis International Group for Cimasso in Bobo Dioulasso. The order is the third contract between Kanis International and Intercem and it is the largest such order in Intercem’s history. The contract was agreed in March 2016 and groundbreaking of the 6500t/day plant took place in late May 2016. No value for the order has been disclosed.
Intercem’s scope of supply for Cimasso comprises the engineering, the supply of mechanical and electrical equipment of exclusively European origin, the project management and the supervision of erection as well as the commissioning. The order includes: train unloading station for clinker; truck unloading for lime and additives; storage of 100,000t of clinker and raw materials; raw material shed and dosing station; 6500t/day cement grinding plant with vertical roller mill; four 4000t cement silos; and, 8000t/day loading of cement bags, including a truck loading station.
China: Huaxin Cement’s has made a net loss of US$20.5m in the first half of 2016 compared to a net profit of US$4.29m in the same period of 2015. Its sales revenue fell by 14% to US$361m from US$420m. The cement producer attributed its decline in net profit and operating costs to a fall in cement prices.
Cement Association of Canada supports province climate plan
22 August 2016Canada: The Cement Association of Canada has congratulated the province of British Columbia on the release of its Climate Leadership Plan. The plan describes how industry can assist the government in meeting its 2050 targets. The association welcomes the commitment of the provincial government to mandate the use of Portland-limestone cement (PLC) in concrete used in the construction of public infrastructure projects. Using PLC is expected to deliver a 10% reduction in greenhouse gas emissions compared to the use of ordinary Portland cement.
“With today's release of the Climate Leadership Plan, the province of British Columbia has laid out a framework to work collaboratively with individuals, local governments, business and industry in finding ways to address climate change,” said Michael McSweeney, President and CEO of the Cement Association of Canada.