Displaying items by tag: HeidelbergCement
Germany: HeidelbergCement said that its profits would be hit by about Euro30m in the second quarter of 2013 due to a fine for infringement of cartel rules. HeidelbergCement said that the fine, a total of Euro161.4m for cartel infringements during the years 1990 to 2002, would not affect its earnings outlook.
Bold moves from HeidelbergCement
20 March 2013Somebody at HeidelbergCement is brave. Making an investment in a cement market characterised in 2012 by job losses and carbon taxation takes some nerve. Yet this is exactly what HeidelbergCement has done with the announcement that it plans to take joint control of Cement Australia with Holcim.
So what's in it for Holcim and HeidelbergCement?
Opportunity and foreign supply chains to minimise the carbon tax seem to be the main reasons. With Holcim's 2012 financial performance dragged down by Europe and Africa, its cost reduction programme, the 'Holcim Leadership Journey,' continues into 2013. Australia, as one of the few disappointing spots in the producer's Asia-Pacific region, is an obvious asset to sell. By contrast, HeidelbergCement reported growth in its operating income in 2012.
With regards to supply chains, both Boral and Adelaide Brighton – Cement Australia's competitors in Australia – acted to seize foreign clinker supplies in 2012. As they are multinationals, Holcim and HeidelbergCement have ready-built supply chains. Figures from the Global Cement Directory 2013 show that Holcim holds a cement production capacity of 9.7Mt in Indonesia, 5.75Mt in the Philippines and 0.55Mt in New Zealand. HeidelbergCement hold 16.5Mt in Indonesia. Despite regular annual high performance and regular capacity growth in the cement industry in Indonesia and the Philippines, having the option to export excess clinker to nearby Australia must be enticing.
For Holcim, minimising risk may be a key factor in their decision to reduce their share in Cement Australia. Holcim dodged mentioning the country's cement performance in its 2013 outlook although it did report an overall volume decrease across all its business lines in 2012. Boral expects its sales volumes to remain flat in the first six months of 2013, with pricing challenged by the high Australian Dollar and low sea freight prices. Adelaide Brighton expects its demand for cement to continue coming from South Australia, Western Australia and the Northern Territory. Adelaide Brighton also took pains to point out the carbon tax will hit its 2013 profits by US$6m, nearly 4% of its 2012 profit. Going 50-50 with HeidelbergCement shares the risks for Holcim as well as the profits.
Holcim faces the same dilemma that Lafarge faced in mid-2012 when it sold two cement plants in the US. It needs to sell assets to cut costs and raise capital but it also needs to pick assets to sell that won't boost its competitors too much. The on-going recovery in the US building industry suggests at present that Lafarge may have made a poor choice in North America. Holcim's decision suggests that they aren't expecting a recovery in Australia anytime soon.
Australia: Swiss cement maker Holcim has announced plans to operate Cement Australia as a joint venture (JV), in which both Holcim and Germany's HeidelbergCement AG will hold equal 50% stakes. Holcim will therefore sell 25% of its stake in Cement Australia to HeidelbergCement for an undisclosed amount. The move has already been approved by the Austrian authorities, according to Holcim.
Cement Australia operates two cement plants and a grinding station in the east and southeast of Australia and in Tasmania with a total cement capacity of 4.2Mt/yr. In addition, a new grinding station in Port Kembla with an annual capacity of 1.1Mt/yr is expected to go online in 2013.
Hanson’s EcoPlus reduces use of Ordinary Portland Cement
20 March 2013UK: Building materials producer Hanson, a UK-based part of Germany's HeidelbergCement, has launched a new range of quality concretes designed to reduce the CO2 emissions associated with construction projects. The EcoPlus range contains Hanson Regen, a sustainable substitute for Ordinary Portland Cement (OPC) in concrete. Hanson Regen is a ground granulated blastfurnace slag (GGBS) and can replace up to 70% of the OPC content. Replacing 1t of OPC with 1t of Regen in EcoPlus concrete reduces the embodied CO2 by around 850kg.
Paul Lacey, Hanson's head of sustainability and marketing, said, "EcoPlus is designed to help engineers, specifiers and contractors meet current and future environmental legislation. Our online carbon calculator shows the CO2 savings that can be made by specifying one of our eight standard EcoPlus mixes, which are suitable for foundations, pavements and structural projects. We can also design and supply bespoke mixes."
Using Regen in EcoPlus also improves the durability of structures, particularly where sulphates and chlorides are an issue, and gives a lighter, more aesthetically pleasing colour to the concrete.
Getting into Africa
13 March 2013If you have any spare cement this week – send it to Ghana!
First, HeidelbergCement announced plans for a new cement mill on the coast at Takoradi. Then, Dangote officially started to export cement to the west African nation.
HeidelbergCement's strategy in the region is telling because it is starting to head inland. The press release on Ghana indicated that the German-based cement producer intends to expand its capacity to 4.4Mt/yr by late 2014. This follows a recent announcement that HeidelbergCement are building their first grinding plant in Burkina Faso, directly north of Ghana. Previously the producer imported cement there. Now it intends to build a US$50m plant with a production capacity of 0.65Mt/yr.
Since most of HeidelbergCement's existing infrastructure in the region is based on the coast, building a plant in a landlocked nation - Burkina Faso - is a huge vote of investor confidence in west Africa. "In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement in the statement accompanying the Ghana expansion.
The move also provides a clue as to how competitive the cement market is becoming in territories near the coast in Africa. Currently HeidelbergCement holds a mostly coastal presence in western Africa, in Benin, Democratic Republic of the Congo, Gabon, Ghana, Liberia, Sierra Leone and Togo. It has four cement plants and nine grinding plants. Its cement business made a year-on-year increase in revenue of 12% to Euro612m in 2012.
Roughly calculated, HeidelbergCement is paying US$77/t in Burkina Faso compared to US$38/t in Ghana to build its new production capacity. HeidelbergCement must be paying double for a reason.
Meanwhile, Dangote Cement announced on the same day (11 March 2013) that a fleet of cement trucks were heading to Ghana. Already the Nigerian cement producer holds a cement terminal with a bagging capacity of 1.5Mt/yr in the country. Dangote intends to start exporting 5000t/week of cement. Its eventual target is 5000t/day when the logistics are in place, or up to 1.8Mt/yr. Not a bad start in unloading Dangote's self-declared overcapacity of 20Mt/yr in Nigeria upon the neighbouring nations in the Economic Community of West African States (ECOWAS).
HeidelbergCement to expand capacity to 4.4Mt/yr in Ghana
11 March 2013Ghana: HeidelbergCement is constructing a new cement mill with a capacity of 0.8Mt/yr at its grinding plant in the port city of Takoradi. The investment of US$30m also includes the construction of a clinker silo, a new cement silo and the installation of cement bag packing and dispatch facilities. Commissioning of the new mill is scheduled for late 2014.
"The construction of the new cement mill in Ghana is another project in the context of our strategy of expanding our clinker and cement capacities in growth markets. In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement. Ghana now holds the company's largest capacity in west Africa.
In November 2012 HeidelbergCement inaugurated a new 1Mt/yr cement mill at its grinding plant in Tema, some 25 km east of the capital city of Accra. Upon completion of the new mill at Takoradi, HeidelbergCement's total cement production capacity in Ghana will be 4.4Mt/yr.
Burkina Faso: Germany's HeidelbergCement, together with local partners, is constructing a new US$50m cement grinding plant with a capacity of 0.65Mt/yr near the Burkina Faso capital city of Ouagadougou.
"The construction of the new cement grinding plant is part of our strategy of expanding our clinker and cement capacities in growth markets," said Dr Bernd Scheifele, Chairman of the group's managing board. "These include, in particular, the countries of sub-Saharan Africa. For many years, we have exported cement to Burkina Faso from our grinding plant in Togo. Our new plant will strengthen our position in the country as well as in the whole region."
In the future HeidelbergCement's grinding facilities in Burkina Faso and the neighbouring countries of Togo, Benin and Ghana, will also receive their clinker from the a clinker plant in Togo. This facility will be commissioned in early 2015.
It is expected that the grinding plant project will stimulate improvement in local infrastructure and housing. It is expected to create more than 100 jobs at the plant, with even more indirect jobs locally. The project is to be conducted within the framework of a joint venture between HeidelbergCement and local partners and will be commissioned in late 2014.
Production begins at two new HeidelbergCement India plants
18 February 2013India: HeidelbergCement India has successfully completed and commissioned two projects in Damoh district in central India, with production starting today at both facilities. It has increased production at its Narsingarh, Madhya Pradesh, plant from 1.2Mt/yr to 3.1Mt/yr. In Imlai it has taken its cement capacity from 1Mt/yr to 2Mt/yr.
HeidelbergCement India said that the expanded capacity will enable the company to increase its market share in central India, where the company's brand 'mycem' is already a premium brand.
Three of the big multinational cement producers - HeidelbergCement, Cemex and Italcementi - have already released preliminary reports for 2012. Here's what they tell us.
Geographically, performances in the Americas and Asia propped up balance sheets. Europe, however, continued to ruin the party in 2012.
In its Western and Northern Europe section HeidelbergCement saw a 3.9% decrease in sales of cement and clinker to 21.3Mt from 22.1Mt in 2011. However this was still higher than the sales in 2010 of 19.7Mt.
Cemex's Northern Europe section witnessed a 13% drop in overall net sales to Euro3.05bn. Its Mediterranean section did worse, with a 15% drop in net sales to Euro1.08bn. Both declines were similar to the falls in cement volumes in these regions. Italcementi watched its Central Western Europe region plummet by 16.1% to 16Mt.
To demonstrate the comparative exposure to Western Europe, 25% of HeidelbergCement's sale volumes came from Western Europe and 35% of Italcementi's sale volumes came from Western Europe. Cemex hasn't released any figures for sales of cement in its preliminary results but overall in cement, aggregates and concrete, 37% of its sales came from its two European regions.
HeidelbergCement noted that demand for construction materials remained stable in Germany and Northern Europe. However it weakened in the UK and the Netherlands. By contrast Cemex noted a decrease in cement volumes for the year in Germany although it became stable by the fourth quarter. For the UK it had the same experience as HeidelbergCement, with a similar downturn in France and Poland. In its Mediterranean region Cemex recorded a whopping 40% decrease in cement volumes. Although light on detail, Italcementi pointed out a 25% drop in cement consumption in Italy and a 8% drop in France and Belgium.
In November 2012 the European Commission forecast that gross domestic product (GDP) would fall by 0.3% in the European Union (EU) in 2012. Broadly in line with the national situations reported above, Germany's GDP is forecast to have risen in 2012; the UK's, the Netherlands', Belgium, Italy and Spain's GDPs looks to have fallen in 2012. Curiously though, both France and Poland were forecast to have improving GDPs in 2012. HeidelbergCement and Cemex's experiences suggest that this didn't happen in the French construction industry. The (next) light at the end of the tunnel for 2013 is that EU regional GDP growth is forecast to become positive again.
With Lafarge and Holcim due to release their annual report for 2012 in late February 2012, we'll revisit this topic in a few weeks time.
India: Heidelberg Cement India has received approval to set up a waste heat recovery (WHR) power plant at its clinker plant at Narsingarh, Damoh District in Madhya Pradesh. The proposed plant will produce approximately 12.15MW of power from the available waste heat of pyro-processing system of all three lines at the unit. The project cost is estimated to be in the range of US$26.9m to US$27.8m and it is expected to be operational in January 2015.