Displaying items by tag: Holcim

US President Donald Trump threatened tariffs on imports from Canada, China, Mexico and the European Union this week. Tariffs to Canada and Mexico were announced on 1 February 2025 and then paused for a month to allow for negotiations. Ones to China have been implemented. Tariffs to the European Union have been proposed but nothing has happened yet. What does this mean for the cement sector?

Graph 1: Imports of cement and clinker to the US. Source: USGS. Estimated data for 2024.

The data suggests that whacking 25% tariffs on cement imports from Canada and Mexico would have an impact. The US imported 26.5Mt of cement and clinker in 2023. Based on United States Geological Survey (USGS) data from January to October 2024, imports in 2024 have fallen by 8% year-on-year but they still represent a large chunk of consumption. Türkiye has been the biggest source of imports over the last five years but Canada has been the second biggest supplier. Together with Mexico, it provided over a quarter of imports in 2023. A similar share is expected in 2024. Greece, a country in the EU, has also been present in the top five importing countries to the US during this time.

The Portland Cement Association (PCA) reinforced this view. In a carefully worded statement it took pains to point out alignment with the intentions behind the tariffs, such as appreciating that the administration was open to negotiation and appeared to be flexible. However, it warned that the moves could adversely affect energy and national security, delay infrastructure projects and raise costs. It pointed out the import share from Canada and Mexico, adding that this represented nearly 7% of the US’ cement consumption. It noted which states were the main entry points for cement imports from the two countries. Finally, it highlighted the high level of consumption (36%) that imports from Canada might account for in northern states such as New York, Washington and so on. Meanwhile, Mexico’s National Chamber of Cement (CANACEM) warned that the proposed actions might trigger a ‘competitiveness crisis’ in the US.

Holcim’s CEO, by contrast, nonchalantly told Reuters that he didn’t expect any impact by tariffs on his business. Miljan Gutovic described the group’s US operations as a local business with production happening in the country and equipment and spare parts all being sourced locally. This optimistic view is likely to be influenced by the company’s impending spin-off of its US business. The listing in the US remains scheduled for the first half of 2025 with no complications expected from tariffs.

Clearly, implementing tariffs on imports of cement and clinker from Canada and Mexico could cause a shortage in the US in the short term. This, in turn, could lead to higher prices for consumers in the US. This potential effect would be pronounced in border regions that are reliant on imports. It is worth noting that a number of production lines in both Mexico and Canada have previously been mobilised to meet the export market to the US. These lines would likely be mothballed if tariffs were to be implemented, unless they could find other markets. In the medium term though, as the World Cement Association (WCA) pointed out this week, the world produces too much cement. So it looks likely that the US cement market would adjust to a new equilibrium. Taxing imports from the EU would have a similar effect. Although it seems like it would be less pronounced for the US cement market unless it was in conjunction with tariffs to Canada and Mexico. It would certainly be bad news for cement producers in Greece.

Cement producers in the US look set to benefit from tariffs as demand for their products and prices could increase. There is a risk that too sudden a change to the import market could cause adverse market effects through shortages. Many of these companies are multinational groups with headquarters in foreign countries. However, the strength of the US market compared to elsewhere has prompted some of these businesses to become more ‘American’ through listing in the US or focusing merger and acquisition activity in North America.

At this point we’re stuck in a half-way house place where import tariffs have been threatened and negotiations are pending. The relatively muted stock market reaction to the tariffs and Trump’s swiftness in enacting pauses suggest that it is brinkmanship by the US administration. If this situation continues for any length of time then it will likely have an effect all of its own. In which case don’t expect any export-focused investment by cement companies in Canada and Mexico any time soon.

Egypt: Lafarge Egypt has appointed Khaled El Dokani as its CEO.

El Dokani has worked for Holcim group since 2004. He started his career with the building materials manufacturer as the chief financial officer of Lafarge Algeria. He became the Country Manager for Qatar in 2016. This was followed by Country CEO roles in Iraq, Nigeria and the GCC (UAE, Qatar & Oman). He holds a bachelor's degree in commerce and accounting from Alexandria University.

UAE: Lafarge UAE has appointed Ali Saad as its CEO.

Saad previously worked as the General Manager - UAE from 2023. He started his career working for Lafarge Canada. Financial management roles followed with Unisource Canada and Cemena in Bahrain before he joined Holcim group in 2010. He worked as the chief financial officer in Iraq and then held general management positions in Iraq, Jordan and the UAE. Saad is a graduate in finance and strategic management from McGill University in Canada. He also holds a Master of Business Administration (MBA) from the University of Quebec in Montreal, Canada.

US: Holcim’s CEO Miljan Gutovic says he does not expect any effects of proposed US tariffs upon his company. "I don't really see any impact, because our business is a local business (in the US)," said Gutovic in an interview with Reuters. "We are producing locally, we are sourcing the equipment, the spare parts locally, so how is this going to affect us? I do not see it." He added that the proposed tariffs were also unlikely to pose any problems to the group’s planned spin-off of its business in the US. The listing of its North America-based business is remains scheduled for the first half of 2025.

The US government proposed tariffs upon imported goods from Canada and Mexico in early February 2025 but these have been paused for one month. Tariffs on China are set to start on 4 February 2025. US President Donald Trump has also spoken about implementing tariffs on the EU.

Northern-Ireland based cement producer Cemcor said this week that it has completed trials of a calcined clay cement product called CalcinX. The company started its trials in 2023 and it has been supported by Queen’s University Belfast and funding from Innovate UK. Work with commercial partners has involved precast concrete paving manufacturer Tobermore producing paviours made from 50% CalcinX as a CEM II replacement and Moore Concrete has also manufactured precast units using 50% CalcinX as a CEM I replacement. So far over 3000t of CalcinX has been produced in a number of industrial-scale trials.

David Millar, the managing director of Cemcor, mentioned his company’s plans for calcined clay in June 2022 when he was interviewed by Global Cement Magazine. The company that became Cemcor bought the Cookstown cement plant and a few other assets from Holcim at the start of 2022. It then changed its name to Cemcor in November 2022. At the time of the interview the company was looking to “...develop new value-added products, including low-CO₂ options. This will allow us to use the same amount of clinker to produce more cement.” Millar couldn’t give away too many details at the time, however calcined clay was cited specifically. It was also noted that the company had the right material in its quarry and that it was already working with partners on it.

Amongst all the other decarbonisation options available for cement plants, a slow trickle of calcined clay projects keep being announced. In January 2025, for example, thyssenkrupp Polysius said it had secured a front-end engineering design contract from Circlua for the construction of the world’s largest activated clay plant in Brazil. This project in Para state will have a capacity of 3000t/day, will use renewable energy sources and will “improve the CO₂ footprint in cement production.” CBMI Construction also officially launched a flash calcination clay project in Tangshan, Hebei province in China. In December 2024, Vicat signed an agreement with the US Department of Energy (DOE) Office of Clean Energy Demonstrations to develop the Lebec Net Zero (LNZ) project at its Lebec cement plant in California. This includes plans to produce calcined clay-based cement. Earlier in the autumn of 2024 Portugal-based Cimpor said it was preparing to convert a kiln at its Souselas plant to produce calcined clays, AVIC International Beijing and KHD said that they had secured a deal to build a 900t/day clay calcination plant for Ciments de l'Afrique (CIMAF) in Burkina Faso, and Holcim Česko said it was going to construct a calcined clay processing line at the Čížkovice cement plant in the Czech Republic.

One news story that stuck out in the autumn was the progress of a collaboration between Aumund and Holcim towards developing an electric linear calcination conveyor (eLCC). The two companies started work on the project in 2020 intending to look at the electrical calcination of clay using an Aumund pan conveyor. Initial tests of the eLCC reportedly demonstrated efficient thermal activation of clay through a combination of radiant heat and material circulation. The eLCC system is fully enclosed, insulated, has a compact design and can operate using electrical-powered renewable sources. The first industrial plant utilising this technology is scheduled for construction in 2025. Calcined clay technology and products by other industrial suppliers are available. The work by Aumund and its competitors show they are watching this market closely.

OneStone Consulting’s Joe Harder has found that only 14 clay calcination plants were operational worldwide in 2023 with a production capacity of just under 3.5Mt/yr. These are based in Latin America, Europe and Africa. In an article previewing a market report in the February 2025 issue of Global Cement Magazine, Harder predicts that by 2035 there will be 79 clay calcination plants with a capacity of just under 21Mt/yr. A steady growth of over 20 new plants annually is also expected subsequently from 2035 to 2050 as cement producers seek cost-effective ways to reduce their clinker factor. He identified installation costs, a lack of knowledge about clay-based cements, trouble obtaining mining rights and policy issues amongst other issues as holding back the use of clay calcination.

The current expectation is that calcined clay usage in the cement industry will be a minority option. Yet the size of global cement production can make a production share of, say, 3 - 8% a viable option for both cement manufacturers and equipment suppliers. The adoption of new cement products and standards can also take a long time and this clouds predictions of how far clay can go in the cement industry. At this point in the calcined clay story it is time to keep track of the new projects being set up.

Joe Harder will present a talk entitled ‘Calcined clay market trends by 2035’ at the Global FutureCem Conference taking place in Istanbul in early February 2025

Spain: Holcim, Enagás and gas supplier Saggas have announced the ‘CO2necta’ project, a joint decarbonisation initiative that will capture, transmit and store over 0.56Mt/yr of CO₂. The project will involve the construction of a CO₂ capture plant at Holcim's Sagunto plant in Valencia. Captured CO₂ will be transported through Enagás infrastructure to the Saggas terminal in the Port of Sagunto, where it will be liquefied and then shipped for geological storage.

Holcim revealed the board members for its proposed North America business this week. Former group CEO Jan Jenisch was confirmed as the designated chair and CEO. He will be joined by nine directors chosen from sectors including construction, manufacturing, industrial operations and financial services. Notably, current Holcim director Jürg Oleas will be joining Jenisch at the new company. He previously worked as the head of GEA Group and had senior stints at ABB and the Alstom Group.

The group’s decision to split its business in North America from that in the rest of the world has been presented as a piece of financial engineering designed to increase earnings, margins and increase the value of the business. Markets in the US and Europe have diverged in recent years, with the former growing and the latter slowing in comparison. Splitting the business should, in theory, allow both companies to grow at their own pace. However, the spin-off company in North America will remain linked to Europe as it will be listed at both the New York Stock Exchange and the SIX Swiss Exchange. The latter is for the benefit of European investors. The separation is expected by the end of the first half 2025, subject to shareholder and customary approvals.

Naturally, other companies are also chasing growth in North America. Titan Cement announced this week that its US-based subsidiary, Titan America, has filed a registration statement with the Securities and Exchange Commission as part of a proposed initial public offering (IPO). Yet, the company said that the offering is subject to market conditions. As such it couldn’t say when it might happen, how big it might be or much else. Back in May 2024 the group said it was going to list Titan America in the US to “...facilitate the group’s and Titan America’s future growth and unlock new opportunities.” The IPO was intended to be of a minority stake without creating any large-scale tax issues. At this time the transaction was planned to be completed in early 2025.

Titan’s sales share in North America has remained similar from 2018 to 2023 at around 55%. Holcim’s, by comparison, grew to 39% in 2023 from 22% in 2018. This is due to big acquisitions in the US such as Firestone Building Products in 2021 as it built up its lightweight building materials segment. The size of the two companies’ operations in North America are also different. Holcim reported net sales in the region of over US$11bn in 2023. Titan reported net sales of just under US$1.5bn.

Ireland-based CRH moved its stock market listings to the US earlier than both Holcim and Titan. It completed the transition of its primary listing to the New York Stock Exchange in mid-2023, although it too retains a listing in Europe, at the London Stock Exchange in its case. Yet analysts have started to wonder whether the company might spin-off its businesses outside the US. As reported by the Irish Times, Bank of America analysts reckon that the non-US parts of the company now represent only 16% of the US$82bn concern. For sanity’s sake this is still a US$10bn-plus sized company! Although other commentators did wonder why CRH might have bought assets in Australia in 2024 if it was seriously considering making changes on this scale anytime soon.

Despite all this attention on the US and North America by some of the multinational cement producers, it is worth remembering that markets change over time. Europe may not look so hot right now but it is unlikely to stay like this. The head of Heidelberg Materials, for example, said in early 2024 that his company wasn’t planning a split in the US because it was focusing on decarbonisation. This may prove prescient in the longer term if Europe sticks to its sustainability goals. FInally, the US isn’t the only place where cement companies are attempting to build their value in growth markets. It was also reported this week that JSW Cement had obtained approval from the Securities and Exchange Board of India to proceed with its IPO.

Switzerland/US: Holcim is progressing towards the planned listing of its North American business and has designated its future board members. The board will comprise 10 members and will become effective following the execution of the spin-off, expected in the first half of 2025, subject to shareholder and customary approvals.

Jan Jenisch, current chair of Holcim and its former CEO from 2017 to 2024, has been designated chair and CEO of the new business. Jenisch will remain Holcim’s chair until the Annual General Meeting on 14 May 2025.

The Board will include nine independent directors: Theresa Drew, Nicholas Gangestad, Dwight Gibson, Holli Ladhani, Michael McKelvy, Jürg Oleas, Robert Rivkin, Katja Roth Pellanda, and Cristina Wilbur.

Kenya: Holcim has completed the divestment of its Kenyan operations by selling its entire 58.6% stake in Bamburi Cement to Amsons Group. The transaction has resulted in cash proceeds of over US$100m for Holcim, according to the company's press release.

Greece: Heracles, part of the Holcim Group, has signed a front-end engineering design contract (FEED) with Air Liquide for CO₂ capture, liquefaction, storage and dispatch facilities at the Heracles plant in Milaki, as part of the Olympus carbon capture and storage (CCS) project. The project will enable the plant to capture and store 1Mt/yr of CO₂ and is scheduled for full operation in 2029. The captured CO₂ will be liquefied and transported by sea to the offshore sequestration facility in Prinos in the northern part of the Aegean Sea.