Displaying items by tag: GCW370

The Federación Interamericana del Cemento (FICEM) held its 2018 technical congress in Panama City last week and was attended by Global Cement. We’ll run a full write-up of the event in the October 2018 issue of Global Cement Magazine. The short version is that the conference was technically good but, from our perspective, it could have done with more regional analysis. Given that the event is for the local industry this is not a big issue as most of the delegates will know their own markets inside out and many were happy to discuss just this when asked. Likewise, FICEM’s in-house publication also included plenty of local data.

The nearest the presentations came to this was a global overview of the cement industry by Arnaud Pinatel of On Field Investment Research ahead of a market report the analysts are about to release. Although it covered the global cement industry the key local news was that the Latin American sector’s production capacity had grown by 3% from 2010 to 2018 but that prices had fallen in this time. The forecast suggested that cement sales volumes were expected to grow by 3% in 2019 - supported by Brazil, Peru and Bolivia - but that prices were also expected to fall by 1%, mainly due to issues in Argentina.

That last point is especially interesting over the last week because the Argentine cement body, the Asociación de Fabricantes de Cemento Portland (AFCP), released its figures last week to reveal that cement despatches rose by 4.2% year-on-year for the first eight months of 2018. However, at the same time the general news broke that the International Monetary Fund (IMF) was providing an emergency loan to support the country’s economy. The government was keen to shore up confidence in the economy and attributed the growth in the cement sector to the ‘most ambitious infrastructure plan in history.’

Only last year in 2017 the industry was riding a construction boom with cement shortages, new production capacity announced and the initial public offering of Loma Negra. Bailouts from the IMF don’t fit this picture of the poster boy for the South American construction industry. And, if a financial correction is pending, the new capacity that has been ordered may arrive at a bad time. This is a pretty worrying situation.

Meanwhile, across the Uruguay River into Brazil something long expected and hopefully more encouraging has occurred: the acquisition of cement plants. Italy’s Buzzi Unicem revealed that it had struck a deal to buy a 50% stake in the Brazilian company BCPAR from Grupo Ricardo Brennand for Euro150m. The arrangements cover two integrated plants: one 2.4Mt/yr unit at Sete Lagoas in Minas Gerais and a 1.7Mt/yr unit at Pitimbu in Paraíba. Buzzi has also added an option to buy the other half of the business until 2025.

It’s hard to place a value on the sale, but it looks as if Buzzi has picked up the capacity for just under US$100/t, subject to future variation on how well the company does. At that price though this a low figure and a bargain for Buzzi. Given the pain the Brazilian cement industry had been through in recent years some form of traction is welcome. Unfortunately, Grupo Ricardo Brennand has surely lost money on the deal given that the two plants were commissioned in 2011 and 2015 respectively. The complexity of the financial arrangements suggest that Ricardo Brennand is fighting to stay in the game if and when the recovery comes. If Buzzi has moved in then this suggests that it thinks it will make their money back and that it reckons that the bottom of the construction industry trough has been reached. A Brazilian take on this situation would be fascinating.

With these kinds of events happening the same week as the FICEM technical congress it really shows how vibrant and varied the region’s cement industry is. Next year’s conference will surely be even more interesting as market events in Brazil, Argentina and other countries develop.

Spain: Votorantim Group has appointed Alan Svaiter as the chief executive officer (CEO) of Votorantim Cimentos España. He succeeds Jorge Wagner, who has been promoted to the role of CEO of Votorantim Cimentos Europe, Asia and Africa. In his new position Svaiter heads a subsidiary running four cement plants, two mills, 29 concrete plants, eight aggregate operations and one mortar plant. He also directs a team of more than 500 people.

Svaiter, a Brazilian national, joined Votorantim Group in 2008. After leading the logistics of its cement division for two years he was appointed the director of Engemix, the company’s concrete business in Brazil. In 2014 he became director of the supply chain of the cement group for the entire Brazilian market.

Svaiter, a production engineer trained at the Pontifical Catholic University of Rio de Janeiro, holds a master's degree from the INSEAD business school. He started his professional career working for the Ambev brewery before joining the mining company Vale.

Paraguay: The government has appointed Javier María Rodríguez as the president of Industria Nacional del Cemento’s (INC). He succeeds César Bogado, who was the interim president of the state-owned cement producer, according to the La Nación newspaper. Julio Ullón, the head of the civil cabinet, welcomed Rodríguez to the role and urged the new administration to, ‘continue to win national demand.’

UK: Peter Cornell will join the Board of Breedon Group as an independent non-executive director on 1 October 2018. He is a Partner in Metric Capital, a Special Situations Fund targeting mid-sized companies throughout Europe with approximately Euro2bn of assets currently under management.

Prior to founding Metric Capital with his two partners in 2011, Peter was a Managing Director at Terra Firma, one of Europe's leading private equity firms. He formerly spent more than 20 years with international law firm Clifford Chance, latterly as Global Managing Partner.

Peter is currently non-executive Chairman of Grant Thornton and Lexington Consultants, a professional service firm consultancy. He is also a non-executive director of Schroders Limited, F&C Commercial Property Holdings Limited and IE Business School in Madrid.

Argentina: Carlos Casado has become the new Director of Operations at Holcim Argentina. He previously held positions for Holcim and LafargeHolcim in Europe, Asia and Latin America. He will be based in Córdoba and will control plants in Córdoba, Jujuy, Mendoza and Buenos Aires. Casado is an industrial engineer from the Polytechnic University of Valencia, Spain, who has 17 years of experience in the LafargeHolcim group.

Australia: Cement fibreboard maker James Hardie has picked its president of international operations Jack Truong to succeed Louis Gries as its new President and CEO. Dr Truong, who currently heads the firm's Asia Pacific fibre cement business and the Europe building products unit, will become global president and CEO for a six-month transition period as Mr Gries winds down his 13-year spell in charge. A former chief executive of Electrolux North America, Dr Truong has held his current role since April 2017.

“Jack offers the ideal combination of commercial expertise, operational excellence, and leadership in order to continue to grow the business and maintain the industry-leading performance, across the multiple geographies established by Louis over a long period," said chairman Michael Hammes.

India: The National Council for Cement and Building Materials (NCCBM), has appointed Mahendra Singhi, Group CEO of Dalmia Cement (Bharat) Ltd as its new Chairman. Mr Singhi has been a part of the board of Governors of NCCBM since 2013.

Commenting on the occasion, NCCBM Director General, Ashutosh Saxena, said, "We are fortunate to have someone of Mr Singhi’s calibre and experience to lead NCCBM. We are at a critical phase of development of our centres of excellence and we need renewed leadership to successfully implement our research, strengthen our technology initiatives and take advantage of the opportunities ahead for sustainable development of cement and construction sector. Mahendra Singhi is a technology visionary with a proven track record of execution. Furthermore, as a member of NCCBM’s board of governors for the past five years, he has a deep understanding of its capabilities and potential."

A prominent figure in the Indian manufacturing industry, Mahendra Singhi has played a prominent role in the growth and development of the country’s cement sector over the last 40 years. Beginning in 1978 with Birla Group, he has held leadership positions with major cement companies: Shree Digvijay Cement, UltraTech Cement and Shree Cement, in various capacities. He led Shree Cement before his present appointment. He serves as co-chair of the Cement Sustainability Initiative (CSI) in India and Vice-President of Cement Manufacturer’s Association (CMA).

On his appointment Mahendra Singhi said, "I am really honoured to be trusted with the top job at NCCBM, after successfully completing five wonderful years of association with the council. It has been a tremendously rewarding journey over the years of my work in the cement industry. It would be my utmost endeavour to promote research and scientific work connected with waste to wealth, cement and building materials trade and industry and I am certain that together with NCCBM, we will make huge strides and carry out many ambitious projects to make impact on society worldwide."

Egypt: Helwan Cement has agreed to sell its white cement plant in Minya Governorate to Emmar Industries. The transaction is planned to take place following the de-merger of the white cement unit from the rest of the company. The subsidiary of HeidelbergCement and Suez Cement said that the sale was part of its plan to restructure the business and improve its financial position. The company previously said it had received bid for the white cement plant in June 2018.

Egypt: The Ministry of Public Business Sector has shut down the National Company for Cement due to mounting losses. Hisham Tawfik, the Minister of Public Business, said that the plant’s losses had reached Euro43m in the last year, according to Egypt Today magazine. Its creditors include the Gas Company and the Egyptian Electricity Company.

The company’s registration with the local stock exchange was closed in August 2018. The government is now intending to sell its stocks in the Suez Cement Company and Al-Nahda Company. The company’s assets will then be sold. The minister said that workers aged 50 years or more will receive redundancy and that younger workers will be moved to other cement companies.

The cement producer reported mounting losses in recent years due to higher production costs. Reportedly, the cost of producing one ton of cement was 60% higher than the average comparable cost of its competitors. In addition the company was paying its workers twice the average wage than other state-owned businesses.

Japan: Taiheiyo Cement says that an earthquake that took place in early September 2018 in Hokkaido has had a limited effect upon its business. No injuries to employees were reported. Cement production at its Kamiiso plant is continuing using in-house power generation although the unit is working on saving energy. The 6.7 magnitude earthquake has caused widespread disruption on the island, including knocking out local power generation.