
Displaying items by tag: GCW337
Realignment of the South Korean cement industry continues
24 January 2018Asia Cement has completed its purchase of Halla Cement this week for US$723m. The deal has created the third largest cement producer in South Korea with a cement production capacity. This includes one integrated plant at Okgye, three slag grinding plants and a distribution network.
Graph 1: Cement producers in South Korea by cement production data from 2016. Chart includes mergers in 2017 and 2018 to represent current market share. Source: Korea Cement Association.
The Halla Cement transaction marks an on-going consolidation process in the local industry. 2017 proved a busy year with the purchase of Daehan Cement by Ssang Yong Cement and Hyundai Cement by Hanil Cement. Assuming the dust has settled this now leaves Ssang Yong Cement and its new subsidiary in the lead by cement production data from 2016 with 12.9Mt or a 23% market share, Hanil Cement next with 12.4Mt or a 22% share and Asia Cement with 10.8Mt or a 19% share. Overall the country produced 56.7Mt of cement in 2016, according to Korea Cement Association data. The remainder of production is shared between six producers.
Fears that the construction industry may have been about to slow down might have prompted Glenwood Private Equity and Baring Private Equity Asia to sell Halla Cement a little earlier than expected. However, they don’t appear to have done too badly out of this. The two private equity firms that bought Halla Cement from LafargeHolcim in 2016 seem to have made a cool US$180m on the deal. At the time it was reported in the local press that they paid US$542m for the cement producer. Glenwood Private Equity was the lead investor followed by Baring Private Equity Asia. They bought Lafarge Halla Cement in May 2016 and then were looking for buyers a year later in August 2017.
Cement consumption in South Korea has followed a rollercoaster path since 1992 hitting a high of 61.7Mt in 1997 and a low of 43.7Mt in 2014. It then rose to 55.8Mt in 2016. The consolidation behaviour by the cement producers suggests either a poor performing market or an uncertain one. Since the gap between the peak and the trough is more than Halla Cement’s production capacity no wonder its private equity owners were keen to get shot of it at the first sign of trouble. So let’s end with the words of Han Chul Kim, Managing Director of Baring Asia, from the time of the purchase from LafargeHolcim in 2016: "We couldn’t imagine a more solid platform from which to access the growth opportunities in the Korean market in the coming years.”
Samson Materials appoints Dale Lockley as managing director
24 January 2018UK: Samson Materials has appointed Dale Lockley as its managing director. He joined the subsidiary of Aumund in 2016 as Senior Project Manager and later worked as Program Delivery Manager. Lockley is a trained mechanical engineer with over 20 years of experience working within and leading international multidisciplinary teams and developing materials handling technologies of worldwide operating companies, including more than seven years as managing director.
Rexa appoints Geoff Hynes as president
24 January 2018US: Rexa has appointed Geoff Hynes as its president and chief executive officer (CEO). He succeeds Sam Lalos. Hynes has worked for Rexa for his entire career in a variety of roles, including Factory Assembly, Direct and Regional Sales, Aftermarket Manager, International Sales Manager and Director of Sales.
Other appointments include Robert Sass’ promotion to Director of Customer Support. Michael Murphy has become the Director of Sales and Marketing and Nicholas Lalos has been appointed as a Marketing Manager.
Rexa manufactures actuators and drives for a variety of industries including the mining and power generation sectors.
US: Vortex has appointed Lyndon Flower as a Business Development Manager for its USA & Canada division. His focus will be on working with manufacturers’ representatives, regional and territory sales managers, and industry specialists to further expand the sales of Vortex products in the dry bulk material handling industry. Previously, Flower served as vice president and general manager at A&J Mixing International for 18 years until the company was acquired by Smico in 2015. Since then, he has been focused on sales and marketing efforts for the A&J Mixing line.
Tetsuya Horimoto appointed as managing director of new Schmersal subsidiary in Japan
24 January 2018Japan: Tetsuya Horimoto has been appointed as the managing director of Schmersal Group’s new subsidiary in Japan, Schmersal Japan. He succeeds Tekashi Kabe who ran the group’s sales office in Tokyo. Horimoto is an electronic engineer with management experience at companies in the automation sector. He is also a TÜV-certified Functional Safety Engineer. The company, which operates switchgear and control device products, will continue operating out of its Tokyo office.
SCG Cement sees sales growth in 2017 despite sluggish market
24 January 2018Thailand: SCG Cement’s sales revenue rose by 3% year-on-year to US$5.5bn in 2017. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 6% to US$705m. The cement producer reported that overall domestic Ordinary Portland Cement demand fell by 5% in 2017 due to a slow recovery in the private sector. Total domestic consumption of cement was around 37.5Mt 2017 and exports rose to 4Mt from 3.7Mt in 2016.
Thanh Thang Cement spending US$35m on third production line
24 January 2018Vietnam: Thanh Thang Cement is spending US$35m to towards developing a third production line at its cement plant in Thanh Nghi, Ha Nam. The government has agreed the investment at the 2.3Mt/yr unit over the 2021 – 2025 period, according to the Đầu tư newspaper. A second production line at the site was inaugurated in July 2017.
ACC says that petcoke import ban will raise cement prices
24 January 2018India: Neeraj Akhoury, the managing director and chief executive officer of ACC Cement, says that a ban on imported petcoke to the National Capital Region will increase the cost of cement. Akhoury told the Business Standard newspaper that the cement producer would be able to cope with the restriction through the use of alternative fuels. The Environment Ministry put the ban into effect on 19 January 2018 to control air pollution. This follows a relaxation of a temporary ban on petcoke in December 2017 by the Supreme Court to the cement industry.
Nepalese cement producers ordered to reduce prices
24 January 2018Nepal: The Department of Supply Management and Protection of Consumers Interest (DSMPCI) has ordered cement producers to reduce their prices within three days. Following a survey the DSMPCI found that the price of cement had risen by 10 – 16% in recent weeks despite input costs, such as raw materials and transportation costs, only growing by 7 – 9%, according to the Republica newspaper. The department has issued its directive via the Nepal Cement Manufacturers' Association.
Construction of new cement grinding plant in Uzbekistan starts
24 January 2018Uzbekistan: Construction work has started on Popcement’s new grinding plant in the Pap district of Namangan region. The US$50m plant will have a production capacity of 0.5Mt/yr, according to Uzbekistan Daily. The project is expected to be completed in September 2018. It is a joint venture between Uzbek, Chinese and Saudi Arabian investors.