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News GCW433

Displaying items by tag: GCW433

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Cemex changes its US profile

27 November 2019

Cemex pushed ahead yesterday and announced that it had sold the Kosmos Cement Company to Eagle Materials for around US$665m. It owns a 75% stake in the company, with Italy’s Buzzi Unicem owning the remaining share, giving it roughly US$449m once the deal completes. Proceeds from the sale will go towards debt reduction and general corporate purposes. The sale inventory includes a 1.7Mt/yr integrated cement plant in Louisville, Kentucky as well as seven distribution terminals and raw material reserves.

The decision to sell assets makes sense given Cemex’s financial results so far in 2019. It reported falling sales, cement volumes and earnings in the first nine months of the year although much of this was down to poor market conditions in Mexico. However, the US, along with Europe, was one of its stronger territories with rising sales. Earnings were impaired in the US, possibly due to bad weather in the southeast and competition in Florida, but infrastructure and residential development were reported to be promising.

Graph 1: Portland & Blended Cement shipments in 2018 and 2019. Source: United States Geological Survey (USGS). 

Graph 1: Portland & Blended Cement shipments in 2018 and 2019. Source: United States Geological Survey (USGS).

Graph 2: Change in imports of hydraulic cement & clinker to the US in 2018 and 2019 from selected countries. Source: USGS. 

Graph 2: Change in imports of hydraulic cement & clinker to the US in 2018 and 2019 from selected countries. Source: USGS.

United States Geological Survey (USGS) data also supports a picture of a growing US market. Shipments of Ordinary Portland Cement and blended cements grew by 2.4% year-on-year to 66.9Mt for the first eight months of 2019 from 65.4Mt in the same period in 2018. By region growth can be seen in the North-East, South and imports. Declines were reported in the West and Midwest. The states of Alabama, Kentucky, Tennessee – the area where the Kosmos plant is located – saw shipments grow by 4% to 4.77Mt from 4.58Mt. It is worth noting that Louisville is in the north of Kentucky near the border with Indiana, where shipments also grew.

The Portland Cement Association’s (PCA) fall forecast may also have helped Cemex’s decision. Ed Sullivan, PCA Senior Vice President and Chief Economist, said that he expected cement consumption in the US to continue growing in 2019 and 2020 but with a slowing trend into 2021 following general gross domestic product (GDP) predictions. The PCA’s view is that pent-up demand following the recession in 2008 was gone and the economy was gradually weakening. Crucially though it didn’t think a recession was impending. In this scenario Cemex might be taking a medium-term view with regards to the Kosmos Cement Company.

Another more general interesting data point from the USGS was the change in import origins to the US. Imports grew by 11.3% to 66.9Mt in January to August 2019. The top five importing countries and their overall share remained the same but there was some movement between them. Turkish and Mexican imports surged at the expensive of Chinese ones as can be seen in Graph 2. The go-to explanation for this would be the on-going US - China trade war. Cemex is a Mexican company with a strong presence in both the US and Mexico. This change in the make-up of the import market in the US may also have informed its decision to sell Kosmos Cement as it looked at the macro scale.

More generally the US market is looking buoyant in the short to medium term. Plants are being sold like Kosmos Cement to Eagle Cement and the Keystone cement plant in Bath, Pennsylvania to HeidelbergCement and a major upgrade project is underway on the new production line at the Mitchell plant in Indiana. In Cemex’s case, as ever with asset sales, the seller sometimes has to make the hard decision of whether to divest a plant in a growing region to help the business in other places that might not be doing so well. The growth of America’s largest locally owned producer, Eagle Cement, may also give cheer to the US’ current ‘America First’ administration.

Published in Analysis
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Fatick Hussain Al Balushi appointed as chief financial officer of Oman Cement

27 November 2019

Oman: Oman Cement Company has appointed Fatick Hussain Al Balushi as its chief financial officer (CFO). Fatick holds over 15 years of experience in the oil and gas and petrochemical industries. He worked for the Oman Oil Company and its subsidiary, the Salalah Methanol Company, in a variety of roles including financing manager for the ammonia project, head of finance and information technology (IT) and finance director. He is an alumni of the Sultan Qaboos University in Oman and the University of Leicester in the UK.

Published in People
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Khandakar Ataur Rahman Rifat appointed chief marketing officer of Metrocem Cement

27 November 2019

Bangladesh: Metrocem Cement has appointed Khandakar Ataur Rahman Rifat appointed as its chief marketing officer. He holds 25 years experience in the cement industry working for Aman Cement, Holcim Cement, Unique Cement, Cemex Cement, Hyundai Cement amongst other companies. He earned a BSS and a MSS from the University of Dhaka, an MBA in marketing from the World University of Bangladesh and a PhD in marketing from the same institution.

Published in People
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Dangote Cement director resigns

26 November 2019

Nigeria: Dangote Cement’s non-executive director Fideli Madavo has resigned from his position on the company’s board. Madavo represented the stakeholder Public Investment Corporation (PIC), South Africa’s state pension fund, where he is head of resources and portfolio manager for strategic and African listed investments. The company has not stated a reason for the change.

Published in People
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Cemex to sell Kosmos Cement plant in Kentucky to Eagle Materials

27 November 2019

US: Cemex says it has agreed to sell the Kosmos Cement Company to Eagle Materials for around US$665m. The Mexican company owns a 75% stake in the company and Italy’s Buzzi Unicem manages the remainder. It expects to receive US$499m from the transaction. This will be spent on debt reduction and for general corporate purposes. The sale includes the 1.7Mt/yr Kosmos integrated cement plant in Louisville, Kentucky as well as seven distribution terminals and raw material reserves.

“This is another key milestone in achieving our ‘A Stronger Cemex’ objectives. Now, closed or announced asset sales are in excess of US$1.3bn under this program. We are pleased with the continued favourable asset-divestment dynamics in our industry,” said Fernando A Gonzalez, chief executive officer (CEO) of Cemex.

Completion of the deal is subject to regulatory approval. It is expected to complete in the first quarter of 2020.

Published in Global Cement News
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CRH’s sales grow by 4% to Euro21.8bn so far in 2019

27 November 2019

Ireland: CRH’s sales revenue grew by 4% on a like-for-like basis to Euro21.8bn in the first nine months of 2019. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 7% to Euro3.2bn. Sales grew fastest in its European and American heavy materials divisions with earnings growth more pronounced in North America than in Europe. The group reported growth in ready-mixed concrete and cement sales in North America as it continued to consolidate Ash Grove into the business. Sales in Europe were generally good, although declining construction activity in the UK was noted due to market uncertainty related to the country’s attempt to leave the European Union. CRH also reported falling sales volumes in the Philippines due to a slowdown in infrastructure spending.

Published in Global Cement News
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Uzbekistan requests cement producers to set-up air pollution analysis stations

27 November 2019

Uzbekistan: The State Committee for Ecology and Environmental Protection plans to ask cement plants to establish sampling and analysis stations for sources of air pollution by the start of 2022. If they don’t the government will take measures up to and including suspension of production, according to the Trend News Agency. Uzbekistan was ranked in 16th place by AirVisual in a listing of the countries with the most air pollution in 2018.

Published in Global Cement News
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Belarusian cement producers to switch exports from Ukraine to European Union

27 November 2019

Belarus: Cement producers plan to switch imports from Ukraine to the European Union (EU). Architecture and Construction Minister Dmitry Mikulenok said that the decision was made due to tariffs in Ukraine, according to the Belarusian Telegraph Agency (BELTA). He said that the industry had moved away from exporting to Russia and that exports from Ukraine stopped in July 2019. He added that exports grew through the Belarusian Universal Commodity Exchange (BUCE) in 2018.

Prime minister Sergei Rumas also noted that the government was watching local cement companies to make sure they were meeting their state support provision terms. He cited falling exports, low production capacity utilisation and market inefficiencies as issues facing the sector. The government has proposed restructuring the debts held by cement companies.

Published in Global Cement News
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Eurocement’s Maltsovsky plant gains European cement certification

27 November 2019

Russia: Eurocement’s Maltsovsky integrated plant in Bryansk Region has gained European certification for its CEMI 52.5N, CEMI 42.5R and CEMII / A-S 42.5N products. Local testing and independent certification confirmed the new designation. Following an earlier certification for CEMI 42.5N the plant now hopes to grow its exports to the European Union.

Published in Global Cement News
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Iranian province invests in Iraqi cement plant

27 November 2019

Iraq: Iran’s Khuzestan province plans to invest in a US$35m cement plant project in Al-Emareh. Deputy Governor General for Coordinating Economic Affairs Nourollah Hassanzadeh said it was a joint initiative with Iraq, according to the Islamic Republic News Agency (IRNA). The project was launched in the mid-2010s and is reported to be in its ‘final’ stages. The Iranian province borders Iraq and it hopes to increase its international investment profile.

Published in Global Cement News
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