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Heidelberg Materials’ reaction to changes in the law in Hungary received attention this week in the German press. The government introduced its Act on Hungarian Architecture in March 2023 that will enable it to set production levels and prices upon foreign-owned cement producers when the new legislation takes force in July 2023. An unnamed executive at the Germany-based Heidelberg Materials told Der Spiegel that, "These regulations represent a complete violation of all rules of the European single market.” They added that the Hungarian government appeared to be trying to force the producer to sell up. The report further alleges that the owners of Duna-Dráva Cement, Heidelberg Materials and Schwenk Zement, also received an offer to buy them out in mid-2022 from an individual with links to Prime Minister Victor Orbán.

This latest move to corral the cement sector in Hungary follows a number of recent changes in legislation. Notably, Decree 404 was introduced in July 2021. This set a 90% tax on the ‘excess’ profits of cement, plaster, chalk, gravel, sand, clay, lime and gypsum producers with the stated intention of wanting to prevent rising prices. The government set a threshold price for cement of Euro56/t at the time. At the same time it also blocked exports of cement and other raw materials of declared strategic importance unless affected companies had registered with the Ministry of the Interior. The European Commission (EC) responded to a parliamentary question on the matter in November 2021 saying that it had sent a formal letter to Hungary informing it that it was breaching some parts of the Treaty on the Functioning of the European Union (EU) on the free movement of goods. Although it noted that the new law also affected exports outside the EU, which was beyond the EC's remit. It added that the so-called ‘mining royalties’ did not seem to breach EU tax law.

Concerns over these issues between Hungary and Germany also surfaced in October 2022 when Orbán met with the German Chancellor Olaf Scholz. At this time Thomas Spannagl, the head of Schwenk Zement, said that the windfall profit tax in Hungary had a "serious negative" impact on business and that importers were not affected in the same way.

Heidelberg Materials’ subsidiary Duna-Dráva Cement is the largest cement producer by production capacity in Hungary with two integrated plants at Beremend and Vác. Together they have a production capacity of 2.8Mt/yr, according to the Global Cement Directory 2023, or about 70% of the country’s active national capacity. Heidelberg Materials reported that its result from equity accounted investments fell by 27% year-on-year to Euro262m in 2022 from Euro356m in 2023 due to a decline in earnings particularly in China and Hungary. This compares to a 4% drop to Euro3.74bn in its result from current operations before depreciation and amortisation across the whole business. Despite this it also noted that Hungary’s overall economic output had grown by 5% in 2022.

Just before the new laws affecting cement companies starting arriving in mid-July 2021, the Hungarian Competition Authority started an investigation into a “drastic” increase in raw material prices. This followed a warning a year earlier in 2020 that it had started competition supervision proceedings against the three main market participants: Duna-Dráva Cement, Lafarge Cement and CRH. All three are foreign-owned companies.

Lafarge Cement Hungary operates the Kiralyegyháza plant and it is due to change its name to Holcim in May 2023. Its predecessor companies, Holcim and Lafarge, also used to run plants at Hejocsaba and Lábatlan before the merger in 2015. However, the Hejocsaba plant ran into legal problems between Holcim and another investor, shut in 2011 and was later forcibly taken over by the other party in 2014. Today the plant operates as Hejőcsabai Cement- és Mészipari (HCM) but cement production is reportedly yet to restart nearly a decade later and Holcim says that legal proceedings are still ongoing. The Lábatlan plant, meanwhile, closed for good in the early 2010s. CRH took over some of Holcim’s other operations in Hungary in 2015 at the same time as the formation of LafargeHolcim but does not run any cement plants in the country at present. It does own cement plants in nearby countries that are able to supply the Hungarian market as well as running 19 concrete units. It describes itself as the “number two player” in the local market. It wasn’t specific on Hungary in its financial results for 2022 but it did describe sales in its Europe East region as being ahead of 2021, “due to a strong focus on commercial actions to offset significant cost inflation.”

Construction costs in Hungary do appear to have grown faster than other European countries in the second half of 2021 as the country came out of the coronavirus pandemic. However, the country's anti-immigrant labour stance may have also contributed to the situation, in addition to the high-energy prices and supply chain bottlenecks experienced elsewhere. In addition, cement companies are also capable of monopolistic behaviour. For example, Duna-Dráva Cement’s proposed acquisition of Cemex Croatia was blocked by the EC back in 2017 on competition grounds. However, given how international the cement industry has become, it is surprising to see this kind of treatment from a government within the European Union.

Thailand: Siam City Cement has appointed Ramjan Sachdeva as its group chief financial officer. He succeeds Mark Anatol Schmidt in the role.

Prior to this he was the Group Head Internal Audit and Compliance for Siam City Cement in Thailand and the Group Commercial Director for mining company Vedanta in India. Earlier in his career he spent eight years working for Holcim in India in procurement and audit roles, as well as for Nestlé.

Sachdeva holds a degree in mechanical engineering from the Thapar Institute of Engineering & Technology in India and a master of business administration qualification from the University of Leicester in the UK.

Germany: Flender has appointed Christian Terlinde as its group chief financial officer (CFO), with effect from 1 July 2023. He will succeed group chief executive officer Andreas Evertz in the post, who has been working in the role on an interim basis.

Terlinde is currently the CFO at Germany-based commercial vehicle supplier Jost Werke. Prior to this, he held positions included CFO at Benteler Automotive and finance and controlling roles at Mahle Group and EON.

Egypt: Reliance Heavy Industries (RHI) has appointed Sameh Saleh as its chief executive officer. He holds over 30 years of experience in the cement sector in both plant operation and engineering. Notably he worked for Arabian Cement for 10 years as a plant manager and then its chief operations officer. He later managed the company’s alternative fuels subsidiary Egypt Green. Other notable placements include those with Tabuk Cement, RHI and the Arab Swiss Engineering Company (ASEC).

Sameh Saleh trained in mechanical engineering at Cairo University. He later gained a qualification in project management and an executive master of business administration degree from the American University in Cairo.

Austria: RHI Magnesita has appointed Peter Steinkellner as Head of Technical Marketing Cement & Lime for Europe, CIS & Türkiye. He has held a number of marketing roles for the refractory producer since 2015. Prior to this he worked Lafarge for seven years as a quality engineer.

Mexico: Vulcan Materials is reportedly preparing to launch new legal action against the government of Mexico. The government supported an alleged illegal entry by Cemex into the company's Punta Venado cement terminal on 14 March 2023. The cement producer is engaged in existing lawsuits against the government for compensation worth a total sum of US$1.9bn. It originally sued the government for US$529m in 2019. Local press has reported that the producer previously filed a subordinate claim to its suit for incursions onto its mining operations in Quintana Roo in mid-2022. The latter supplied limestone to Vulcan Materials' US operations.

Spain: Italy-based CICSA Group has concluded a deal to acquire chains supplier CADERSA. CADERSA serves the Iberian and Central and South American markets, including the cement industry. CICSA Group said that the acquisition will 'complete' its range of chain solutions for bulk materials handling applications. It noted CADERSA's 'deep' expertise, ranging from round steel link chains to pin and bush chains.

The group said "Through this operation, we leverage clear synergies and great product complementarity, while accessing new markets and new industries."

Europe: Cemex has launched its latest packaging design for its Vertua reduced-CO₂ product range at the Low Carbon World exhibition in Paris, France. The new design incorporates products' scores across five 'sustainability attributes:' emissions reduction, energy efficiency, conservation of water, recycled content and design optimisation. Cemex will now deploy the design across Europe by June 2023.

Cemex's Europe, Middle East and Africa regional president Sergio Menendez said “Cemex is attuned to the need to focus on all aspects that can make a product more sustainable - not just achieving a lower carbon footprint. With the updated classification system for Vertua, customers can now more easily identify which of our products leverage the cutting-edge technology and innovation that will enable them to overcome the challenges they are currently facing in construction and renovation." Menendez concluded "The enhanced Vertua brand represents a more ambitious and stronger approach: from a group of low carbon products to a family of products and solutions that encompass more sustainable attributes and contribute to our company vision of building a better future.”

Nigeria: Authorities in Seme Customs Area say that Nigeria's exports of cement to Togo fell 75,000t below its target for 2022. The Sun newspaper reported that Nigeria-based Dangote Cement faced intense competition in the Togo market, leading to the shortfall for the year.

Argentina: Holcim Argentina has announced the launch of its Young Leaders youth professional development programme in its host provinces of Córdoba, Buenos Aires, Jujuy and Mendoza. The programme seeks to identify 15 'innovative, curious and results-oriented' young talents with qualifications and experience in the area of industrial, mechanical, electrical and chemical engineering, business administration, marketing, architecture or logistics. Those chosen will occupy eight-month placements at the company, beginning on 15 May 2023. There, they will manage projects under the guidance of a tutor.

Holcim Argentina's head of talent and development Claudia Vitale said "Young Leaders is specially designed to accelerate young professionals' growth by placing them in a high-performance team. It is an excellent opportunity for personal and professional development in a global industry-leading company."