Displaying items by tag: GCW49

Given the legal scuffles over the Environmental Protection Agency's (EPA) emissions timetable it was nice to see this week how Ash Grove Cement is responding at its Midlothian plant in Texas. The plant is seeking tax breaks on potential upgrade work that it is planning to implement before the current 2013 deadline for the EPA legislation.

For those following the fight between the EPA and the US cement industry here is a recap on the story so far:

The EPA issued a national emission standard for hazardous air pollutants rule to reduce the sector's air toxics in September 2010, alongside a new source performance standard to cut criteria pollutant emissions. In May 2011 the EPA both partly granted and denied petitions from cement industry representatives and environmentalists. In December 2012 the US Court of Appeals for the District of Columbia remanded the cement air toxic rule back to the EPA, delaying the deadline for the cement industry to seek a rehearing or review. Then in April 2012 the cement industry agreed not to seek a rehearing if the EPA extended its deadline until September 2015. The EPA has now sent for the White House Office of Management & Budget (OMB) to review its proposed revisions to its emissions rules, ahead of a tentative 15 June 2012 deadline.

While the EPA and the cement sector continue to battle it out plants like Ash Grove can do little except keep an eye on the bottom line until the dust settles... in whatever legally mandated fashioned is eventually approved. The Global Cement Directory 2012 lists 22 wet and semi-wet kilns in the US. While some are mothballed, others are likely to be affected by the rules. While the arguments continue the upgrade timetables of these plants hangs in the balance.

France: Gérard Lamarche has been appointed as a director at Lafarge at its Ordinary General Meeting in Paris on 15 May 2012.

Lamarche graduated from the University of Louvain-la-Neuve with a Bachelor's degree in Economic Sciences and a specialisation in Business Administration and Management. He also completed the Advanced Management Program for Suez Group Executives at the INSEAD Business School.

He began his professional career in 1983 with Deloitte Haskins & Sells in Belgium, and became a mergers and acquisitions consultant in the Netherlands in 1987. In 1988, he joined the Venture Capital Department of Société Générale de Belgique as an investment manager. He became the special projects advisor to the president and secretary of the Suez board of directors in 1995 where he later became the group's senior vice president in charge of planning, control and accounts management. He was appointed senior executive vice president – finance of the Suez Group in March 2004, becoming executive vice president - finance of GDF SUEZ, and member of the management and executive committees of the GDF SUEZ Group in July 2008.

Lamarche is a director of Groupe Bruxelles Lambert (Belgium) and has been a managing director since January 2012. Lamarche is also a Director of Total and Legrand.

Denmark: FLSmidth, a supplier of engineering services and equipment to the cement and minerals industries, has kept its outlook for 2012 after first quarter profits rose less than forecast. The company said market trends remained favourable and that a rise in order intake confirmed its growth expectations.

FLSmidth said that it still expected full-year 2012 consolidated revenues of US$4bn, up from US$3.78bn in 2011, and an earnings before interest and tax (EBIT) margin of 9-10% against a 2011 margin of 9.9%. It is also aiming for a 2012 earnings before interest, tax and amortisation (EBITA) margin of at least 10%, against a 2011 margin of 10.9%. First-quarter earnings before interest and tax (EBIT) rose to US$57.7m in January to March 2012 from US$52.4m in the first quarter in 2011.

Nigeria: The Cement Manufacturers Association of Nigeria (CMAN) has disclosed that the sector is poised to receive US$11.4bn in investment as national output reaches at least 45Mt/yr by 2015.

The managing director of Lafarge Cement WAPCO, Joe Hodson, said at a CMAN forum in Lagos that the consumption of cement in Nigeria was currently inconsistent with the existing economic realities in the country and would inevitably rise. He stressed that the per capita consumption of cement in Nigeria was a fraction of that in Egypt providing a lot of potential for development. Hudson noted that, having grown local cement output in Nigeria from less than 10Mt/yr in 2008 to about 28Mt/yr in 2012, the sector had made significant effort to save scarce foreign exchange and helped to create many jobs. However Hudson called on the Federal Government to address a lack of affordable power, lack of transportation infrastructure and dearth of skilled manpower.

The Federal Government responded by stating that it was now set to release the final result of the concession exercise it conducted for three major road construction projects in the country, which are to be handed over to the private sector. These projects included the Second Niger Bridge linking Delta State and Anambra State, the Bridge over River Niger at Nupeku in Niger State and the expansion and upgrade of the Apakun-Murtala Muhammed International Airport Road in Lagos.

Kenya: Athi River Mining has posted a 17% rise in first quarter pretax profit to US$4.7m, helped by higher production and growing demand for cement for infrastructure projects.

Kenya's second-largest cement firm, the turnover of which jumped by 61% to US$32m for the quarter ending 31 March 2012, said it would recommend a share split of five for every one ordinary share and a name change to 'ARM Cement Limited' at an annual general meeting scheduled for 24 July 2012. The company also said in March 2012 that it planned to raise US$50m, equivalent to 13.6% of its total equity, through a six-year convertible loan from Africa Finance Corp to finance expansion of its clinker and cement plants later in 2012.

Portugal: Brazilian construction group Camargo Corrêa, which is trying to take over Portugal's top cement maker Cimpor, has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was 'unrealistic.'

Cimpor's board, which had earlier said the price of Euro5.50/share offered by Camargo was too low, said that a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to Euro1.00/share in dividends to Cimpor shareholders.

Camargo's unit Intercement responded that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed."

Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect Camargo to acquire Cimpor at some point. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control. The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a Euro78bn EU/IMF bailout for Portugal.

Previously, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands. The Portuguese government said that such a move would not help deleverage CGD.

US: Ash Grove Cement is seeking tax abatement for upgrade projects on its Midlothian plant in Texas. Plant manager Kevin Blankenship presented plans to the Ellis County Commissioner's Court on 14 May 2012.

Ash Grove needs to upgrade its plant in line with Environmental Protection Agency (EPA) regulations that will go into effect September 2013. The company is considering two options that will put the plant in compliance with the new regulations. The first option is to upgrade the plant enough so that it will comply with the new emissions standards. The second option is to fully modernise the plant by upgrading to a single dry kiln and shutting the other two existing wet kilns, a project that would cost US$130m. Since the presentation was not an agenda item at the meeting the court took no action.

The Midlothian plant has been in operation since 1966. Ash Grove currently intend to continue running the plant until 2050, but filed a request to shut the wet kilns in April 2012.

Italy: Buzzi Unicem has reported a widened net loss of Euro45.9m for the first quarter of 2012 from Euro32.8m for the same period in 2011, a drop of 29%. The producer, Italy's biggest cement maker by market value, blamed the performance on lower cement demand and the extremely cold winter in Europe.

Net sales fell by 1.3% year-on-year to Euro562.2m. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 47.6% to Euro22.4m. The net debt rose to Euro1.21bn at the end of March 2012 from Euro1.14bn at end of December 2011. Buzzi Unicem confirmed it expects to post in 2012 operating results similar to the ones booked in 2011.

Nigeria: Dangote Cement has reported a pre-tax profit of US$200m for the first quarter of 2012, an increase of 8.9% compared to the US$173m recorded for the same period in 2011.

Analysis of the Nigerian producer's unaudited financial results indicated that its operating profits rose by 13.7% to US$200m reflecting the higher proportion of locally manufactured cement compared to US$176m in 2011. Gross profit for the group was US$231m for the quarter compared to US$182m in 2011. The group achieved strong growth in revenue and profits in the first quarter, with revenues rising from US$345m to US$405m, an increase of 17.6%.

China: Irish building materials group CRH has said at its annual meeting that it planned to increase its stake in the Yatai cement business in China to 49% from 26% as part of a wider push into emerging markets.

Chief Executive Myles Lee said CRH was preparing to exercise an option, opening in January 2013, to raise the stake. "We are setting the scene at the moment for that and we are keen to increase that stake. Obviously in everything valuation is key, so it has to be at a valuation that makes sense for our shareholders," Lee said.