Displaying items by tag: GCW538

We start 2022 with the news that Cemex is selling up to Cementos Progreso in Costa Rica and El Salvador. On 20 December 2021 Cemex announced that it was selling one integrated cement plant, one grinding plant, seven ready-mix concrete plants, one aggregate quarry and one terminal in Costa Rica and one terminal in El Salvador. The sale is valued at around US$335m with an expected completion date in the first half of 2022 subject to regulatory approval.

This sale is noteworthy because it concerns Mexico-based Cemex selling off assets in its ‘back yard’ of Central America. Once the sale completes it will retain operations in Panama, Nicaragua, Guatemala and Colombia under its Cemex LatAm subsidiary. It will also continue to operate in the Caribbean in the Dominican Republic, Jamaica and Puerto Rico. Previous divestments by Cemex over the last five years or so have tended to focus on piecemeal (or bolt-off) divestments in the US and Europe. This latest sale could be viewed in a similar way if Central America and the Caribbean are seen as a region rather than individual countries. For its part Cemex describes the divestment as part of its ‘Operation Resilience’ plan to optimise its global portfolio.

Why it chose to sell up in Costa Rica is curious given that Cemex LatAm’s cement sales volumes for the region were reported as ‘flat’ in 2019 with the exception of Colombia and El Salvador. 2020 was then a shock, like almost everywhere else, as coronavirus caused disruption reducing sales volumes. 2021 saw recovery in all of Cemex LatAm’s national markets over the first nine months. Notably, both Cemex’s revenue and operational earnings in Costa Rica grew when comparing the first nine months of 2019, before the pandemic, to the same period in 2021, unlike Colombia and Panama. For the third quarter of 2021 Cemex said that growing cement sales volumes in Costa Rica had been driven by infrastructure and housing sectors. It also added that “Our cement footprint in the country is also a very relevant component of our regional trading network. We continued exporting during the quarter, mainly to our operations in Nicaragua.” In may be coincidence but it was interesting timing to add a comment like that.

From Cementos Progreso’s perspective the new assets in Costa Rica and El Salvador are part of an ongoing expansion phase outside of its home base. At home in Guatemala the company operates three integrated plants. The third, the San Gabriel plant, started up in 2019. In the same year the company purchased Cemento Interoceanico and its grinding plant in Panama. Then in July 2021 the group commissioned its new Belmopan grinding plant in Belize as part of its Cementos Rocafuerte subsidiary. The new proposed acquisitions in Costa Rica and El Salvador start to fill in the gaps in Cementos Progreso’s network between Guatemala and Panama. The price seems on the high side for a 0.9Mt/yr integrated plant and a 0.9Mt/yr grinding unit. Yet the associated quarry, concrete plants, terminals and, crucially, the location may have made it one well worth paying. For comparison Peru-based Unacem agreed to purchase a grinding plant from CBB in Chile this week for around US$30m. Back in 2013 Lafarge sold assets in Honduras, including an integrated plant and a grinding unit, to Cementos Argos for Euro232m.

Both parties may do well out of this transaction. Cemex continues to show that it is fully prepared to sell assets anywhere as it sharpens up its operations. Cementos Progreso meanwhile is turning itself into a regional player to watch.

Saudi Arabia: Saudi Cement has appointed Khalid Abdulrahman Al-Rajhi as the chair of its board of directors. The term started at the beginning of January 2022 and has a duration of three years to the end of 2024. Other appointments include Mohammed Abdulkarim Al-Khereiji as vice-chairman and Mohammed Ali Al-Garni as secretary of the board of directors.

Zimbabwe: Lafarge Cement Zimbabwe appointed Geoffrey Ndugwa as chief executive officer (CEO) in mid-December 2021. He succeeds Precious Murena, who stepped down in September 2021.

Ndugwa was previously the CEO for Lafarge Malawi from late 2019. He brings experience in the cement industry spanning over 17 years working in various capacities across Africa. Some of his notable appointments include being the Commercial Director for Bamburi Group in Kenya, the General Manager Innovation and Marketing for Lafarge WAPCO Nigeria, the General Manager for Bamburi Special Products in Kenya, the Head of Business Support for Barclays Bank of Uganda and the Sales Manager for Hima Cement in Uganda.

Ndugwa holds a master’s degree in Business Administration from Heriot-Watt University in the UK, a post graduate diploma in marketing from the Chartered Institute of Marketing in the UK and a Civil Engineering degree from the University of East London.

Uzbekistan: The state assets management agency UzAssets has agreed to sell the Uzbek government’s 87% stake in Qizilqumcement for US$174m, according to the UzDaily newspaper. Under the terms of the deal, United Cement Group will maintain the plant’s personnel and the level of their pay, implement the approved modernisation programme and continue to provide training, support social projects in Navoi region and organise events in the community.

Afghanistan: The acting deputy prime minister of the interim government in Afghanistan hosted talks between investors from Afghanistan and Russia on 4 January 2021. Anadolu News Agency has reported that the investors plan to collaborate on the establishment of a new cement company.

Acting deputy culture and information minister Zabiullah Mujahid tweeted that the meeting covered the establishment of cement plants‘in detail’. He added that the government will strive to establish investor-friendly laws.

Pakistan: All Pakistan Cement Manufacturers Association (APCMA) members dispatched 27.5Mt of cement in the first half of the 2022 financial year, down by 4.1% year-on-year from 28.6Mt in the first half of the 2021 financial year. The News International newspaper has reported that exports fell by 32%during the period to 3.39Mt from 5.02Mt.

Saudi Arabia: Qassim Cement has entered into a preliminary agreement with China-based Chengdu Design & Research Institute of Building Materials Industry (CDI) for the engineering, supply and construction of a cement mill at its integrated Buraydah plant. The new mill will have a production capacity of 300t/hr. The project is budgeted at around US$40m and it has an implementation period of 15 months. More binding detailed contracts are expected to be signed by mid-January 2022.

The cement company also plans to appoint a consultant to define the scope of work and identify contractors to build a 30MW solar unit near the Buraydah plant. It said that the company would not incur any capital or operational expenditure as the payment would be based on actual consumption. The solar unit project is part of the country’s Saudi Vision 2030 strategic framework to reduce dependence on oil.

Sri Lanka: Insee Cement plans to spend US$56m on an upgrade to its Galle grinding plant in Southern Province. The project will add an additional 1Mt/yr of production capacity to the 1.4Mt/yr unit, according to the Daily News newspaper. Commissioning is scheduled by the end of 2023. The company’s integrated plant at Puttalam and its grinding plant at Galle have reportedly been running at full utilisation since mid-2020 to meet high local demand.

China: Huaxin Cement and Hunan University have started a pilot production line that uses flue gas from a cement production line to manufacture concrete bricks. The process, being tested at the Huaxin Wuxue Industrial Park in Hubei Province, absorbs CO₂ from the flue gas and uses the heat of the gas to cure the bricks, according to the Xinhua News Agency. The average compressive strength of the bricks is above 15MPa. It is estimated that a production line with a brick output of 100m/yr could absorb 26,000t/yr of CO₂.

Argentina: Welding Alloys Argentina has manufactured and delivered a key set of wear parts for the classifier section of an FLSmidth OK 36.4 type vertical roller mill installed at an unnamed cement plant. The parts were manufactured at a workshop in San Nicolás near Buenos Aires.

They included a new 5000mm diameter by 2760mm high fine separator section complete with full set of vanes. The section was manufactured in two halves for later assembly on the customer’s site with vanes made from 13 sheets of 6+4 Hardplate 100 and flanges from 16mm 450HB through hardened plate. Also included were the lower cone section manufactured from eight sheets of 8+6 Hardplate 100, the upper cone section from 11 sheets of 10+4 Hardplate 100 and the discharge tube manufactured from 8+5 Hardplate 100, all flanged with 450HB through hardened plate.