Displaying items by tag: GCW494

News has been dripping out slowly over the last few months about which assets HeidelbergCement is planning to divest. This week reporting from Bloomberg suggested that the German-based building materials producer might be seriously considering selling one or more integrated plants in Spain. The idea is reportedly part of a wider review of its portfolio in the country with the possible inclusion of cement plants at San Sebastian and Bilbao at a future date also. A proposed price of Euro300m for the national business was put forward by the sources to the reporters but it is unclear how many cement plants that figure includes.

HeidelbergCement announced in July 2020 that it had reduced the value of its total assets by Euro3.4bn following a review. It blamed this on reduced demand for building materials due to the coronavirus pandemic and the devaluation of its Hanson subsidiary in the UK, in part related to the UK’s exit from the European Union. A divestment plan followed at its Capital Markets Day event in September 2020 when it said it was simplifying its country portfolio and prioritising the strongest market positions. To this end it said it was setting up a watch list of underperforming assets to keep an eye on.

Over the next few months a number of corporate reorganisations and actual confirmed divestments occurred as well as plenty of speculation. HeidelbergCement-controlled Suez Cement started to acquire a 100% stake in its own subsidiary, Tourah Portland Cement, in September 2020. Suez Cement then sold its majority stake in Kuwait-based Hilal Cement in late January 2021. This week HeidelbergCement Bangladesh informed the local stock exchange that it is planning to amalgamate its subsidiary Emirates Cement.

Signs that European reviews had taken place could be seen later in the autumn of 2020. In November 2020 the Italian press picked up on rumours that HeidelbergCement was planning to move subsidiary Italcementi’s research centre from Bergamo, Lombardy, to Heidelberg in Baden Württemberg. Whether this was ever a serious proposition or not, this appeared to have been avoided in early February 2021 when an Italian union said it had agreed with Italcementi to keep the research centre in Italy as well as a preserving jobs generally. Meanwhile, also in November 2020, France-based subsidiary Ciments Calcia announced a major upgrade at its integrated Airvault cement plant but along with the conversion of two other integrated plants into a grinding unit and a terminal respectively, and changes at the French headquarters at Guervill.

Just before Christmas the bigger speculations started to appear in the press, with a story suggesting that HeidelbergCement was considering selling assets in California, US, with a target price of US$1.5bn for three integrated plants and associated concrete and aggregate units. That story is particularly beguiling given Cemex’s decision this month to reopen a kiln in Mexico to supply cement to the southwest US to meet shortages (See GCW 493)! Incidentally, readers should also note the story this week about a shortage of natural gas exports from Texas, US, that has caused cement plants in northern Mexico to shut down. This week, as mentioned at the start, has seen Spain added to the list of places that HeidelbergCement might be considering selling up in. The Spanish market like Italy has been rationalising heavily over the last decade particularly as export markets have dwindled. Oficemen, the Spanish cement association, reported that domestic cement consumption fell by 10% year-on-year to 13.3Mt in 2020 from 14.7Mt in 2019. On top of this Oficemen has repeatedly warned of the threat that CO₂ emissions prices pose for its members’ exports.

Group chairman Dominik von Achten told Reuters this month that the company plans to sell the first of the five assets in early-to-mid 2021. Of course he wouldn’t say where, except for adding that the company would stay in ‘rock solid’ markets like Northern Europe. Indonesia has been seen as a candidate for disposal by analysts, likely due to local production overcapacity levels and LafargeHolcim’s own departure in Indonesia 2018. All Von Achten would say on the matter was that Indonesia was an ‘important’ market for the group. Whether it’s seen as important for reducing company debt or building value remains to be seen. HeidelbergCement hasn’t exactly been shy about saying what they are doing over the last half year or so but they are only going so far and they won’t comment on speculation. So in the meantime we must wait to find out more.

Philippines: Horia Adrian has been appointed as the president and chief executive officer (CEO) of Holcim Philippines. He succeeds John Stull will be reassigned to another position within LafargeHolcim Group after three years in the post.

Adrian is a graduate of the masters degree programme in business administration at Anjou University in South Korea and of the bachelors and masters programme in mechanical engineering at ‘Dunărea de Jos’ University in Galați in Romania. He joined the LafargeHolcim Group in 2000 as a project manager for Holcim Romania’s Ready-mix and Aggregates Division. Between 2004 and 2010 he was the sales, marketing and logistics director, and respectively the CEO, of Garadagh Cement in Azerbaijan. He later became the CEO of Romania and Market Head Emerging Europe in 2018.

Sweden: HeidelbergCement subsidiary Cementa has appointed Matilda Hoffstedt as the manager of its integrated Slite plant. She will succeed the current plant manager, Fred Grönwall, in June 2021. Grönwall has been in post since 2018 and will leave the company.

Hoffstedt holds a master's degree in science from Uppsala University and started working for HeidelbergCement in 1998. She worked as a supervisor and project manager at Slite until 2010. Later she ran operations at the Skövde plant for 10 years until 2020 and is currently working as Manager Technical Support for HeidelbergCement Northern Europe.

Canada: Progressive Planet Solutions has appointed Randy Gue and Chris Halsey-Brandt to its advisory board. The company is developing pozzolan-based supplementary cementitious material (SCM) products. It operates its Z1 Zeolite quarry in Cache Creek, British Columbia and is working on other projects also in the province.

Gue will advise on introducing Progressive Planet's developing products into the marketplace with the initial focus on markets for PozGlass SCM. Randy spent 17 years with Lafarge Canada as the Director of Business Development and Resource Recovery where he led Lafarge's Western North American initiative to reduce variable operating costs by developing business-to-business relationships primarily related to the recovery and reuse of wastes and by-product streams from industries and institutions.

Halsey-Brandt will assist in financial analysis of the first PozGlass SCM manufacturing plant and will also assist in evaluating opportunities to grow the company through strategic acquisitions. He is both a chartered professional accountant (CPA) and a chartered business valuator (CBV). At present Halsey-Brandt owns and operates a successful food processing business. Prior to becoming an entrepreneur, he was a partner at Blair Mackay Mynett Valuations, an independent firm in Vancouver providing business valuation services.

Australia: Adbri’s revenue fell by 4% year-on-year to US$1.15bn in 2020 from US$1.20bn in 2019. Underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 3% to US$216m from US$222m. Despite construction growth in Western Australia, cement volumes were reported as being down by 7.1%. The company said that clinker volumes dropped by 23% due to lower offtake by its Sunstake Cement joint venture partner Boral. It added that the impact of the coronavirus pandemic had been ‘well managed’ and that all sites remained operational.

“In the context of the challenging operating environment, the financial outcomes we delivered for the 2020 financial year are better than we had expected and reflect the successes of our cost-out and business improvement programs. Adbri also benefitted from improving demand in the Western Australian market during the period which offset slowing demand in east coast markets, particularly in New South Wales,” said Nick Miller, Adbri’s chief executive officer.

South Korea: Ssangyong Cement has announced a planned name change to Ssangyong C&E. The Korea Herald newspaper has reported that the ‘C’ stands for cement while the ‘E’ stands for environment. Besides signalling its move into new industries driven by green value-creation, the new name is intended to reflect the company’s existing values. Since the beginning of 2016, it says it has spent US$90m/yr on environmental upgrades to cement production. Shareholders will finalise the change on 25 March 2021.

Ssangyong Cement chair Hong Sa-seung said, “For the past 60 years, we have led Korea’s cement industry and contributed to country’s industrialisation and economic development. With the know-how we have gathered from the cement business, we seek to expand our business to environmental businesses.”

Chile: Melón has signed an electricity supply contract with Enel Generación. The contract covers the supply for its La Calera, Puerto Montt and Ventanas cement plants, and its San Bernardo aggregates quarry, until 2043, according to the La Tercera newspaper. All energy supplied under the contract will come from renewable sources. There is also the possibility of expanding the scope of the contract.

General Manager Iván Marinado said, “Our commitment to the sustainability of our operations is permanent. We have state-of-the-art technologies, we work together with our carriers in programmes to reduce logistical impact and energy efficiency, and we have a solid co-processing strategy for the use of alternative fuels (AF) and raw materials. Today we are happy to take a new step and start the use of renewable energies, as a concrete and effective example of our concern to contribute to the environmental improvement of the localities where we operate.”

India: Odisha police have successfully shut down a fake cement operation in Jagatpur. The New Indian Express newspaper has reported that the unit was producing fake cement using various raw materials including marble dust and artificial colours. The unit had reportedly been in operation since as early as 2015.

Assistant police commissioner Amarendra Panda said, “The factory and the go-down have been sealed. The investigation is on to ascertain since when the factory was operational, the source of raw materials and the destinations or shops where the products were supplied. It is also being ascertained whether the owner of the unit is part of a racket engaged in manufacturing adulterated cement.” This is the third fake cement unit uncovered in the city since late 2020.

Pakistan: Medics took three protestors from the site of a hunger strike outside a cement plant in Hattar, Khyber Pakhtunkhwa, to hospital in Haripur. The News International newspaper has reported that nine fired workers won a case before the National Industrial Relations Commission (NIRC) to be reinstated to their jobs at the plant. When not given back their jobs, they began the hunger strike on 17 February 2021.

The cement company said that it is appealing the NIRC’s decision.

Bestway Cement, Dewan Hattar Cement and Mustehkam Cement all operate cement plants in Hattar.

Germany: HeidelbergCement’s preliminary results show a 5% decline in revenue on a like-for-like basis to Euro17.6bn from Euro18.9m. Cement volumes fell by 3% to 122Mt from 126Mt. Its result from current operations before depreciation and amortisation (RCOBD) rose by 6% to Euro3.71bn from Euro3.58bn. Revenues and cement volumes declined in all regions except Africa-Eastern Mediterranean Basin, where revenues rose by 7% and volumes rose by 10%, and Northern and Eastern Europe-Central Asia, where revenues rose by 3%.

The group attributed the general decline to the impacts of the coronavirus on construction’s activity levels, and therefore demand for building materials. A ‘significant improvement’ in results in the second half of 2020 resulted from its own cost-saving programmes and the economic recovery in mid-2020. The producer implemented a major carbon capture and storage (CCS) scale-up in the form of its LEILAC (Low Emissions Intensity Lime And Cement) collaborative project. Throughout the year, it reduced its debt by Euro1.5bn.

Dominik von Achten, chair of the managing board said, "We closed the 2020 financial year with a top result. We were able to not only reach but exceed our forecast for all key figures. The key to this success was the good operational performance across our market regions and business lines. We managed to more than compensate for the coronavirus-related decline in sales volumes through consistent spending discipline. This is a great result of the entire HeidelbergCement team, of which I am very proud. My thanks therefore go to all employees for their extraordinary commitment in the past year."