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Update on Switzerland
10 January 2018Recent data from Cemsuisse, the Swiss Cement Industry Association, shows that cement shipments fell by 2.8% year-on-year to 4.3Mt in 2017. The local industry has fluctuated from a high of just below 4.7Mt in 2011 with various peaks and troughs since then as can be seen in Graph 1. The current drop has been blamed on a poor start and end to 2017 despite some rallying activity in the third quarter.
Graph 1: Cement deliveries in Switzerland, 2010 – 2017. Source: Cemsuisse.
The local industry tends to get overlooked somewhat due to its modest size, its geographically landlocked position and its exclusion from the European Union (EU) despite being surrounded by member states. This is a mistake though because the territory offers lessons on how a developed cement industry can function and co-exist with a large neighbour. In Switzerland’s case it has access to the EU market through a series of bilateral agreements that provide parity with EU legislation. After a potential crisis over immigration following a local referendum in 2014, Switzerland and the EU came to an agreement in 2016 that softened the labour rules for foreigners. Pertinent to the cement industry, the EU and Switzerland signed a deal to link emissions trading systems in 2017. It is currently anticipated to come into force in 2019. Trading in the EU may come at the price of free movement of labour but emissions trading parity will also help to protect Switzerland’s cement plants.
The country has a cement production capacity of 4.3Mt/yr according to Global Cement Directory 2017 data. This divides into three plants operated by LafargeHolcim, two by Ireland’s CRH’s local subsidiary Jura Cement and one by Vigier Cement, a subsidiary of France’s Vicat. Most of these plants are around the 0.8Mt/yr mark, with the exception of Jura’s smaller Cornaux plant.
After a strong performance in 2016 with growing cement sales volumes, LafargeHolcim started 2017 with continued positive cement sales but this failed to compensate for low aggregate sales and falling ready-mix (RMX) concrete sales. CRH reported a similar experience that it blamed on poor weather at the start of the year and a competitive environment. This then led to an 8% fall in cement sales in the first nine months of 2017 with RMX sales and operating profit down too. Vicat’s experience in the country followed that of its competitors, with cement sales rising slightly over the first three quarters but concrete and aggregate sales dropping. Among other reasons it blamed the situation on the completion of road and civil engineering projects.
Cembureau, the European Cement Association of which Cemsuisse is a member, forecast a stable year in 2017 following the wind-down of infrastructure projects with support from the housing sector. However, it then expected the market to soften as demographic trends saw slower growth in population reduce housing demand. This state appears to have arrived early. On the plus side though the industry’s sustainability credentials have grown as the split between truck and train transport of cement hit its highest ratio in favour of rail in 2017 at 53%. The trend switched from truck to train in 2013 and it hasn’t looked back since then.
As a mature economy in the heart of Europe, Switzerland generally pops up in the industry news as the home of the world’s largest non-Chinese cement multinational, LafargeHolcim. That company’s headquarters are in Jona and Holcim had its headquarters in Holderbank. LafargeHolcim’s single largest shareholder, with an 11% share, is the Swiss billionaire Thomas Schmidheiny, who inherited his portion of the family business. He notably called for a better deal for Holcim during the merger negotiations between Lafarge and Holcim in 2015 and boardroom struggles have dogged the combined company ever since. Consideration should also be granted to the country’s other engineering and construction industry related multinationals such as ABB, Sika and the like. By the numbers Switzerland has a case for being one of the world’s most important nations for the cement industry.
New plant management posts announced at Lehigh Cement
10 January 2018US: Lehigh Cement has made three appointments to the management of its Mitchell cement plant at Allentown in Pennsylvania.
Quentin McGahey, former plant manager at the Mitchell cement plant, has been appointed as Vice President, Cement Operations Northeast, based in Allentown, Pennsylvania. McGahey joined Lehigh Cement Company in 2016 and has more than 22 years of experience in mining and cement manufacturing. McGahey also served as an army officer before beginning his civilian career.
Jerry Miller, former assistant plant manager at the Mitchell plant, is now plant manager at the unit. Miller joined the company in 1980 and has more than 37 years of cement production and management experience at the company’s facilities in Indiana, Pennsylvania and Iowa.
Cody Hall, former safety manager at the Mitchell plant, is now assistant plant manager. Hall joined Lehigh Cement Company in 1995 and has more than 21 years of cement industry and management experience.
Pablo Libreros appointed managing director of aggregates division by Aggregate Industries
10 January 2018UK: Aggregate Industries has appointed Pablo Libreros as the managing director of its aggregates division. Libreros joined Aggregate Industries in 2017 as Director of Growth and Innovation from the LafargeHolcim Group, where he was previously chief executive officer (CEO) for its Costa Rica business. Prior to this he held various senior roles, including Logistics Director and Supply Chain Director, within the group’s Brazil division.
US: Summit Materials has appointed Karl H Watson Jr as its chief operating officer and executive vice president. He suceeds Douglas C Rauh.
Watson holds over 25 years of experience in the construction materials industry. In 2017, he served as President, Cement & Southwest Ready Mix at Martin Marietta Materials. Prior to joining Martin Marietta, Watson served in various leadership positions at Cemex, including President, Cemex USA. Prior to Cemex's acquisition of Rinker Group, Watson held various executive positions at Rinker in both the US and Australia.
Watson is currently on the board of directors of the Texas Aggregates & Concrete Association and on the executive committee of the Portland Cement Association where he served as the vice chairman from 2013 to 2015. He is a past chairman of the National Ready Mix Concrete Association and the Florida Concrete and Products Association and was on the board of directors of the National Stone, Sand and Gravel Association from 2007 to 2011. Watson has a Bachelor's of Science degree in Business Administration from Palm Beach Atlantic University.
Germany: Schenck Process has appointed Keith Cochrane as chairman and Harry Kenyon-Slaney as a member of its Advisory Board. The appointments follow the completion of Blackstone’s acquisition of the measuring and process technology equipment company.
Cochrane is currently the interim chief executive officer (CEO) of Carillion, prior to which he served as the CEO of the Weir Group, a manufacturer of highly-engineered products and services for the minerals, oil and gas and power industries. He joined Weir as Finance Director in July 2006 and was appointed CEO in November 2009. In 2015, Cochrane was appointed as the UK Government’s Lead Non-Executive Director for the Scotland Office and Office of the Advocate General. He is a Chartered Accountant and a member of the Institute of Chartered Accountants of Scotland. Cochrane was elected a Fellow of the Royal Society of Edinburgh and appointed CBE in 2016.
Kenyon-Slaney is currently Non-Executive Chairman at Gem Diamonds having been appointed in June 2017. He holds over 33 years of experience in the mining industry, principally with Rio Tinto. Until 2015, Kenyon-Slaney was a member of the Group Executive committee of Rio Tinto where he held the roles of CEO of Energy, and before that CEO of Diamonds and Minerals. Kenyon-Slaney also serves as a senior advisor to McKinsey & Co.
In addition, Lionel Assant, Juergen Pinker and Saleh Panahi, all of Blackstone, have been appointed to the Advisory Board.
Motion Industries makes appointments
10 January 2018US: Motion Industries has made three appointments to its management with effect from 11 December 2017.
Randy Breaux has been promoted to Executive Vice President of Marketing, Distribution, and Purchasing. In 2016, he was promoted to his most recent position of Senior Vice President of Marketing, Distribution, and Purchasing. He joined Motion Industries in 2011 as Senior Vice President after over 20 years at Baldor Electric.
Kevin Storer has been promoted to Executive Vice President of US Operations and President of MI Mexico, and will maintain responsibility for all field branch sales in the US and Mexico. He began his career with Motion Industries in the West Group in 1987 before being promoted in 2016 to his most recent position as Senior Vice President of US Operations and President of MI Mexico.
Mark Stoneburner has been promoted to Senior Vice President of Industry Segments and Business Development. He joined Motion Industries in 2016 as Corporate Account Vice President - Industry Segments, bringing with him 33 years of industry experience. Stoneburner will continue to share responsibility for merger and acquisition (M&A) strategy.
Motion Industries is an industrial parts distributor of bearings, mechanical power transmission, electrical and industrial automation, hydraulic and industrial hose, hydraulic and pneumatic components, industrial products, safety products, and material handling. It is a subsidiary of Genuine Parts Company based in the US.
New production line starts at Attock Cement’s Hub plant
10 January 2018Pakistan: A new production line at Attock Cement’s Hub plant in Balochistan has started operation. The line has a cement production capacity of 1.2Mt/yr and it increases the company’s total production capacity to 3Mt/yr. The line was first announced in 2015 at a cost of US$120m. Loesche provided a cement mill for the project in 2017 under contract from the Hefei Cement Research & Design Institute.
Bangladesh: Lafarge Holcim Bangladesh has completed its purchase of Holcim Cement Bangladesh for US$60.2m. The deal includes three cement grinding mills with a total production capacity of 2.2Mt/yr. Lafarge Holcim Bangladesh, formerly known as Lafarge Surma Cement, is a joint venture between LafargeHolcim, Cementos Molins and other local partners.
Vicem’s sales rise by 3% to 26.6Mt in 2017
10 January 2018Vietnam: The Vietnam Cement Industry Corporation’s (Vicem) cement sales rose by 3% year-on-year to 26.6Mt in 2017. 23.6Mt of cement and clinker were sold locally and 3Mt were exported, a drop of 3%, according to the Viet Nam News newspaper. In 2018 the state-owned cement producer plans to produce 19.7Mt of clinker, a rise of 2%, and to sell over 28Mt of cement and clinker, a rise of 4%. The company intends to focus on ‘high-efficiency’ products to reach this target.
Ambuja Cement ranks seventh in Dow Jones Sustainability Index
10 January 2018India: Ambuja Cement has been ranked seventh in the Construction Material category of the Dow Jones Sustainability Index (DJSJ) 2017. The subsidiary of LafargeHolcim was invited to participate in the DJSI Emerging Markets Index and beat its score from 2016. Each year about 2500 global companies, listed on the stock exchange, belonging to about 59 economic sectors, are invited to participate in the DJSI.