Displaying items by tag: Heidelberg Materials

Boral announced this week that it had secured around US$15m from the Australian government towards decarbonisation upgrades at its Berrima cement plant in New South Wales. The funding will go towards the company’s own investment in a kiln feed optimisation project. A new specialised grinding circuit and supporting infrastructure at the site is intended to increase the proportion of alternative raw materials (ARM) from 9% to 23% to decrease the amount of limestone the kiln uses. The use of more ARMs should also enable the unit to reduce its energy intensity. Boral plans to use ARMs including granulated blast furnace slag, steel slag, cement fibre board, fly ash and fine aggregates from recycled concrete. Commissioning and full operation of the changes are scheduled for 2028.

The Berrima plant officially opened its last set of changes, including a chlorine bypass unit, in December 2024. This was done to allow the plant to reach a thermal substitution rate (TSR) of 60% by the end of 2027. At the end of 2024 the company said it had a TSR of 30% having risen by 20% from 2023. Another similar decarbonisation project at the plant is a carbon capture and storage demonstration pilot trial involving the recarbonation of construction and demolition waste.

Parent company SGH said in its annual report for 2024 that Boral was continuing to advocate for a carbon border adjustment mechanism (CBAM) to prevent carbon leakage and that it had taken part in the ongoing government review on the issue. This lobbying was visible earlier in March 2025 when the Cement Industry Federation (CIF) publicly addressed the government on the issue ahead of its next budget. It asked that carbon leakage be addressed in the form of an import tax to protect the local cement and lime sector. Cement and lime imports from Thailand, Malaysia, Indonesia, Vietnam and Japan are particularly seen as an issue. The government review into carbon leakage started in 2023 and is due to report back at some point in 2025, most likely after the parliamentary election in May 2025.

Another big sector news story to note is the ongoing acquisition of the cementitious division of the Buckeridge Group of Companies (BGC) by Cement Australia that was revealed in December 2024. Unsurprisingly, the European Commission (EC) approved the deal in late March 2025. Cement Australia’s parent companies Holcim and Heidelberg Materials are headquartered in Europe, but the EC concluded that the planned transaction was unlikely to dampen competition in Europe. The verdict of the Australian Competition and Consumer Commission (ACCC) is likely to be far more telling. It closed taking submissions on the proposed deal in late February 2025 and plans to release an update in May 2025.

The ACCC’s market inquiries letter reported that Cement Australia wants to run BCG Cement. However, under the acquisition proposal, BGC Quarries and BGC Asphalt will be acquired and operated by a new 50:50 joint venture between Holcim and Heidelberg Materials, which will operate as a production joint venture in respect of aggregates. Holcim and Heidelberg Materials have suggested taking four ready-mixed concrete (RMC) plants each in the greater Perth area. Finally, one RMC plant at Wangara could be divested due to the close proximity of existing plants run by Holcim and Heidelberg Materials. Whether this is what actually happens remains to be seen.

Finally, Holcim flagged-up Australia this week as one of the regions it intends to derive ‘profitable growth’ from after the planned spin-off of the US business. This approach is in line with the hunt by the big building materials companies for new growth markets as the cost of merger and acquisition activity in the US has risen. CRH, for example, bought a majority stake in AdBri in mid-2024. Further merger and acquisition activity in the cement sector in Australia seems less likely given its relative small size. Yet the higher economic growth forecast for the country compared to Europe is likely to keep multinationals interested.

Australia/Europe: The European Commission (EC) has approved a deal that will see Heidelberg Materials and Holcim acquire joint control of Australian business BGC Cementitious via their joint venture Cement Australia. BGC Cementitious, the cementitious division of the Buckeridge Group of Companies, is active in the cement, concrete, quarrying, asphalt and transportation sectors. The EC concluded that the planned deal would not hurt competition given the limited impact on the European Economic Area. The transaction includes, among others, the Kwinana Cement plant in Western Australia. Financial details of the deal were not disclosed.

UBE Mitsubishi Cement recently released an update on its commercial scale demonstration using ammonia as a fuel at its Ube plant. It is currently testing the use of ammonia in both the cement kiln and calciner at the site. It has set the aim of reaching a 30% coal substitution rate with ammonia in the cement kiln by the end of March 2025. It has described the project as a world first. Planned future work includes running ammonia combustion tests alongside post-consumer plastics.

The company announced the three-year project in mid-2023. Utilities company Chubu Electric Power has been working on it and UBE Corporation has been supplying the ammonia for the test. The scheme dates back to before Mitsubishi Materials and Ube Industries merged their cement businesses in 2022. Ube Industries previously took part in a government research project looking at the topic, running combustion tests and numerical analysis in small industrial furnaces.

Another ammonia research project in the cement sector was revealed in 2024 by Heidelberg Materials in the UK. The company was awarded just under €0.40m in funding by Innovate UK through its UK Research and Innovation (UKRI) fund, together with engineering consultants Stopford and Cranfield University. The 12-month feasibility study aimed to assess the use of ammonia as a hydrogen carrier and evaluate the most economical method of on-site ammonia cracking to generate hydrogen for use by clinker kilns. It also intended to investigate the various tiers of the UK's existing ammonia supply chain network for the suitable transportation, offloading and storage of ammonia.

The UK project explained that it was looking at ammonia as a hydrogen carrier due to its high volumetric energy density. This, potentially, makes ammonia easier and cheaper to store and transport than hydrogen. It pointed out that storing and transporting hydrogen is difficult and the chemical is expensive. It also noted that the volumetric energy density of ammonia is 45% higher than that of liquid hydrogen. The benefit of switching to a zero-carbon fuel was that it could cut CO₂ emissions by the cement and concrete sector in the UK by 16%.

The attraction of ammonia to the cement industry is similar to that of hydrogen. Both are versatile chemicals that can be produced and used in a variety of ways. The production processes and supply chains of both chemicals are linked. The Haber–Bosch process, for example, uses hydrogen to manufacture ammonia. It can also be cracked to release the hydrogen. When used as fuels neither release CO₂ emissions directly. This comes down to the method of production. Like hydrogen, there is a similar informal colour scheme indicating carbon intensity (Grey, Blue, Green and Turquoise). Despite the advantages listed above, the disadvantages of using ammonia include toxicity and NO_x emissions, as well as the fact that there is little experience of using ammonia as a fuel. The worldwide ammonia market was bigger by volume in 2023 with production of just under 200Mt compared to hydrogen production of just under 100Mt.

Back in Japan, the national government has been promoting the use of ammonia technology for the power generation sector. It added ammonia to the country’s national energy plan in the early 2020s following research on running power plants with a mixture of ammonia and coal. The ambition is to build up levels of ammonia co-firing at power plants, develop the necessary technology and grow supply chains. This, it is hoped, will broaden, diversify and decarbonise the domestic energy mix and pull together a new international market too. Unfortunately, this strategy has had criticism. One study by BloombergNEF in 2022 estimated, for example, that the electricity cost of Japan-based power stations switching to firing ammonia by 2050 would be more expensive than generation from renewables such as solar or wind.

This explains why the ammonia project by UBE Mitsubishi Cement is leading the way. The interest by a European cement company shows that others are thinking the same way too. Yet again, the potential decarbonisation solution for cement is likely to lead towards more complex industrial supply chains. The next steps to watch will be whether a cement plant in Japan actually starts to co-fire ammonia on a regular basis and if any more ammonia projects pop up elsewhere around the world.

Bosnia and Herzegovina: Heidelberg Materials Cement BiH recorded a net profit of US$28.2m in 2024, up by 37% year-on-year. Total sales rose by 25% to US$99.9m. Domestic sales revenue increased by 30% to US$62.7m, while foreign market sales rose by 36% to US$4.5m, the company said in its annual report.

France: Heidelberg Materials has ordered an MVR 5000 C-4 vertical roller mill from Gebr. Pfeiffer for its Airvault plant to grind ultra-fine Portland cement. The mill will be equipped with an SLS 4500 VC classifier to produce 145t/hr of Portland cement at a fineness of 4500cm²/g. The design allows for high-efficiency grinding and lower CO₂ emissions by reducing clinker content in blended cements. The contract is managed by China-based contractor CBMI. Commissioning is expected in the first half of 2026.

Germany: Heidelberg Materials has reported stable group revenues of €21.2bn in 2024, with its result from current operations (RCO) rising by 6% year-on-year to €3.2bn. Geographically, revenues remained steady at €9.5bn in Europe, increased by 2% year-on-year in North America to €5.3bn, declined by 4% in the Asia-Pacific region to €3.5bn, and remained stable at €2.3bn in the Africa-Mediterranean-Western Asia region.

The company states that it is ‘optimistic’ about the current year, and expects demand to stabilise in 2025, forecasting a RCO of €3.25bn - 3.55bn. It will release its full annual report at the end of March 2025.

Cement producers based in North America and Europe reported stable revenues and growing earnings in 2024. Revenue growth at scale could be found in India and Sub-Saharan Africa. Notably, India-based UltraTech Cement’s sales volumes of cement surpassed those of Holcim’s. Yet, the European-headquartered multinationals were mostly happy due to increased earnings. Holcim lauded record performance in 2024, for example, and Heidelberg Materials reflected upon “a very good financial year.” This review of financial results looks at selected large heavy building materials companies, outside of China, that have released financial results so far.

Graph 1: Sales revenue from selected cement producers in 2023 and 2024. Source: Company reports. Note: Figures calculated for UltraTech Cement, consolidated data from Ambuja Cement used for Adani Cement.

Holcim’s net sales may have dropped on a direct basis from 2023 to 2024 but its focus is on earnings. Its recurring earnings before interest and taxation (EBIT) rose by 4% year-on-year to US$1.31bn in 2024 from US$1.26bn in 2023. And the changing nature of where its earnings come from in recent years has led to the impending spin-off of the US business, scheduled to occur by the end of the first half of 2025. The company will be called Amrize and will be listed on the New York Stock Exchange, with an additional listing on the SIX Swiss Exchange. By product line, sales were down for cement, ready-mixed concrete (RMX) and aggregates, but they were up for the group’s Solutions & Products division. Despite this earnings were up for all four product lines. By region sales fell in North America, Europe and Asia, Middle East & Africa. They rose in Latin America. For reference, North America and Europe are the group’s two biggest segments.

Heidelberg Materials’ sales revenue remained stable in 2024 on a direct basis, although it dipped slightly on a like-for-like comparison. Its result from current operations before depreciation and amortisation (RCOBD) grew by 6% to US$3.4bn. Geographically, revenue in Europe and Asia Pacific fell. RCOBD increased, notably, by 19% to US$4.80bn in North America. It grew everywhere else apart from Africa-Mediterranean-Western Asia. As is becoming customary for Heidelberg Materials, it made a point of highlighting its sustainability progress. This includes demonstrating progress towards its sustainable revenue target and reminding markets that the delivery of its first carbon captured net-zero cement evoZero product is planned during 2025. The group plans to release its 2024 full annual report at the end of March 2025.

Graph 2: Cement sales volumes from selected cement producers in 2023 and 2024. Source: Company reports. Note: Annualised sales volumes provided for CRH, figures calculated for UltraTech Cement.

CRH’s strength in North America gave it both rising revenues and earnings. Sales revenue from its Americas Materials Solutions division reported 5% growth to US$16.2bn in 2024. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) sprung up by 22% to US$3.75bn. Revenue growth was attributed to price increases and acquisitions. Earnings growth was pinned on growth across all regions, pricing, cost management, operational efficiency and gains on land asset sales. Despite this, reported volumes in the division were down in 2024. The group’s International Solutions division performed more in line with its competitors, with revenue down slightly but earnings up. Lastly, CRH’s annualised sales volumes of cement grew in 2024. This is likely primarily due to the group’s acquisition of assets in Australia.

Cemex had a tougher time of it in 2024, compared to the previous three companies, with both sales revenues and earnings down. Sales and earnings were down on a direct basis for each of its three main regions – Mexico, the US, and Europe, Middle East, and Africa - although the picture was better in Mexico on a like-for-like basis. Sales volumes of cement, RMX and aggregates were either static or down in each of these areas. In the US the group may have been unlucky as it took an earnings hit from four hurricanes and a deep freeze in Texas. Group earnings improved in the fourth quarter of 2024. In spite of this it introduced ‘Project Cutting Edge’ in February 2025, a three-year, US$350m cost saving exercise.

The first takeaway from UltraTech Cement’s performance in 2024 is that a second (mainly) national producer has overtaken the multinationals. This happened with several China-based cement producers over the last decade. Now it has occurred in India with Ultratech Cement. It reported sales volumes of 120Mt in the 2024 calendar year. Shifting to the Indian financial calendar, Ultratech Cement ‘s revenue rose slightly in the nine months to 31 December 2024 but its new profit fell by 19% year-on-year to US$458m. Local press has blamed this on weak price realisations despite sales volumes growing. At the same time its energy costs have fallen so far in its 2025 financial year. Adani Cement, meanwhile, reported strong growth in both revenue and earnings in the 12 months to 31 December 2024. It too is likely to become one of the world’s largest cement producers by sales volumes by 2030, outside of China, if it follows-through on its expansion targets.

Finally, Dangote Cement reminded us all what growth really looks like as the Nigerian market started to rebound. Sales revenue increased by 62% to US$2.39bn and EBITDA by 56% to US$591m. Despite high domestic interest rates in Nigeria the group managed to grow its sales volumes of cement. Elsewhere in Sub-Saharan Africa sales volumes declined a little due to bad weather conditions in Tanzania and election uncertainties in Senegal and South Africa.

The importance of the US market for many multinational cement producers continued in 2024. However, this reliance on one place can carry risks, as Cemex’s results seem to suggest. Another reminder of this occurred this week when the US government imposed 25% tariffs on Canada and Mexico. The Portland Cement Association said in a statement, “The US cement industry would like to work with the administration to address federal laws and regulations that prevent American cement companies from increasing production, making it necessary for the US to import some 20% of its total cement consumption annually - including from Canada and Mexico.” Elsewhere, markets are changing as mega-markets such as India and Sub-Saharan Africa unleash their potential. China-based Huaxin Cement, for example, may start to gain a place on international round-ups like this one in 2025 when it completes its acquisition of Lafarge Africa.

Sweden: Heidelberg Materials has successfully operated a 300kW plasma-heated cement kiln at its Slite cement plant, which it claims is the first of its kind. The producer has achieved 54 hours of continuous operation, with 60% CO₂ concentration in the flue gas. The aim is to reach 99%.

The kiln is part of the ELECTRA project, which aims to replace traditional combustion processes with electricity-based solutions, like plasma. The project consists of 17 partners from 8 countries.

Project manager Bodil Wilhelmsson said "It looks very promising. We started the tests at the end of last year and can now say with certainty that this is the right way to go: we will be able to produce clinker with plasma."

Fuel-related CO₂ emissions from cement production are eliminated because no fuel needs to be used in the production process. Instead, CO₂ is heated to over 5000°C, where it becomes a plasma jet that heats the material in the kiln.

Wilhelmsson added "The absence of fuel in the process means that there is no ash in the product. This means that a parameter that could affect the quality of the product if it fluctuates is no longer considered. So, it looks like the quality of the clinker can actually be slightly higher in this process."

Heidelberg Materials plans to build a 1MW kiln in Skövde cement plant in 2026, where further tests will continue.

Alpacem said this week that it had completed its acquisition of the Fanna cement plant near Pordenone. The 0.66Mt/yr integrated plant and a number of ready-mixed concrete plants became part of the Austria-headquartered group at the start of February 2025. Alpacem now has three integrated plants, with units at Wietersdorf in Austria and Anhovo in Slovenia, in addition to Fanna.

The deal dates back to mid-2023 when Alpacem said it had signed an agreement with Buzzi. In return Buzzi was set to receive a 25% stake in Alpacem Zement Austria. Prior to this the two companies had a strategic partnership in Austria and Slovenia that dated back to 2014. At the time of the agreement Buzzi held a 25% share in each of two Alpacem subsidiaries: Salonit Anhovo in Slovenia; and W&P Cementi in Italy. The Fanna plant was originally owned by Cementizillo before it was bought by Buzzi in 2018.

Also this week, Federbeton warned that the high cost of gas would add €80m/yr to the cost of cement production. Nicola Zampella, General Manager of Federbeton and the cement association AITEC, noted that local energy costs would reduce the competitiveness of producers against imports from outside of the European Union (EU). This ties into comments Stefano Gallini, the president of Federbeton, made in December 2024 when he highlighted the growing share of imports from outside the EU.

Federbeton raised the issue in its annual report for 2023, showing that imports rose to a 19% production share in 2023. Italy produced 18.8Mt of and imported 3.6Mt of cement and clinker in 2023. This is its highest level of imports for at least a decade. Over the same period the country’s cement exports, as a share of production, have remained steady at around 10 - 11%. In 2023 Türkiye was the biggest source of imports (25%) followed by Greece (17%), Slovenia (17%), Tunisia (12%) and Algeria (10%).

Graph 1: Cement production, imports and exports in Italy, 2019 - 2023. Source: Federbeton.

It is worth recalling that the cement sector in Italy used to be larger before it started consolidating in the late 2000s. Italcementi was acquired by Germany-based Heidelberg Materials. Operations by Sacci, Cementir and Cemenzillo were all bought out too. Local cement production reached a high of 47.9Mt in 2006 before it stabilised at around 20Mt/yr from 2015 onwards.

In its preliminary results for 2024, out this week too, Buzzi reported that the construction market In Italy probably shrank in 2024 due to a poor residential housing market. However, the cement company managed to keep its local net sales stable by raising prices and focusing on exports. Despite this, it noted a drop in cement and concrete sales volumes at the end of 2024. More data on the construction market in Italy may emerge when Heidelberg Materials releases its 2024 financial results at the end of February 2025.

The backdrop to this has been a rise in gas prices in Europe towards the end of 2024 as the EU ‘emergency’ price cap finished on 31 January 2025. Around the same time the EU is preparing to reveal information on its Clean Industry Deal towards the end of February 2025. Plus, the first active phase of EU Carbon Border Adjustment Mechanism (CBAM) is preparing to enter into force from the start of 2026. Each of these issues has implications for the cement sector in Italy as the location associations have been highlighting. One question will be whether the Clean Industry Deal can help producers cope with mounting energy prices. Another will be whether CBAM will change the proportion of imports for countries like Italy or will the sources of the imports simply change. Plenty to consider for the year ahead.

US: Heidelberg Materials North America has signed a binding agreement with Giant Cement’s multiple minority shareholders to acquire the producer outright. Noticias Financieras News has reported that Heidelberg Materials North America will pay approximately US$600m for the business. Giant Cement is scheduled to fully shut its Thomaston, Maine, cement plant in early 2025.

Giant Cement belongs to Spain-based Cementos Portland Valderrivas, with a 45% stake, Mexico-based Cementos Fortaleza (41%) and Mexico-based Trituradora y Procesadora de Materiales Santa Anita (14%).