Displaying items by tag: Holcim

Typical! We published a cement sector news review for 2024 in the December 2024 issue of Global Cement Magazine and a load of big important events happened afterwards. So, here is a roundup of some of the major stories that have taken place in the last two months of the year.

The TL:DR (too long; didn't read) version of ‘Global Cement News in 2024’ was: focus on the US market by the multinationals; cement joining the emissions trading scheme in China as the world’s largest market stagnates; continued rivalry between UltraTech Cement and Adani Group in India as that sector grows; markets in the Middle East and North Africa adjusting to higher exports; the drawn out divestment of InterCement in Brazil; lots of new plants in Sub-Saharan Africa reflecting demographic trends; and an emphasis on construction and demolition materials in Europe but one on aggregates in North America.

However, from November 2024 onwards… Donald Trump was re-elected as President in the US, Quikrete put in an US$11.5bn deal to buy Summit Materials, the United Nations Climate Change Conference (COP29) in Azerbaijan ended in acrimony, Gautam Adani was accused of fraud by a US court and Huaxin Cement said it was buying Holcim’s majority stake in Lafarge Africa for US$1bn. These have all been covered in previous editions of Global Cement Weekly. Check them out for more information. One can tell it’s been a busy tail-end to the year though when a US$600m agreement by Heidelberg Materials North America to buy Giant Cement Holding did not make the top five, admittedly selective, noteworthy news stories of the last two months of 2024. These stories also, roughly, followed the trends highlighted in the ‘Global Cement News in 2024’ article.

To reflect on the Adani story a few weeks later, nothing much seems to have occurred. Yet. The share price of various Adani Group companies fell when the US authorities made the announcement in late November 2024 but they have mostly regained much of their value since then. The consensus by Reuters, this week, was that the US prosecutors have a strong case backed up by documentation but extradition seems unlikely. Adani himself has made public appearances in India since the allegations surfaced. One minor consequence has been that Gautam Adani exited the US$100bn Bloomberg Billionaires Index in 2024. This is likely to have been caused, in part at least, by the allegations from Hindenburg Research in 2023 and the current legal problems from the US bringing down share prices. On the cement side of Adani Group it appears to have been business as usual so far. A large-scale investment in Rajasthan was announced in December 2024 and, this week, plans to merge subsidiaries Sanghi Industries and Penna Cement with Ambuja Cements were disclosed.

Another general trend that we haven’t covered much online have been changes in the Australian market. Last week, Cement Australia, a joint venture between Heidelberg Materials Australia and Holcim Australia, said it was acquiring the cementitious division of the Buckeridge Group of Companies (BGC) for US$800m. This follows CRH’s purchase of a majority stake in AdBri that was approved by the latter’s shareholders over the summer. Around the same time, Seven Group Holdings completed its acquisition of the remaining 28% stake in Boral that it did not already own. For more on the situation in Australia and New Zealand read the article in the January 2025 issue of Global Cement Magazine.

That’s it for 2024. Unless another massive news story in the cement sector gets announced in the next week-and-a-half.

Global Cement Weekly will return on Wednesday 8 January 2025

Germany: Capsol Technologies has signed a cooperation agreement with Holcim to deliver a CapsolGo carbon capture demonstration campaign at Holcim’s Dotternhausen plant in southern Germany. The CapsolGo campaign will test Capsol’s carbon capture technology using its hot potassium carbonate (HPC) solvent. Capsol Technologies will provide the demonstration as a turnkey solution, including testing and validation to supply critical data and insight into the technology.

Dieter Schillo, plant manager of Holcim (Süddeutschland), said “The CapsolEoP (End-of-Pipe) unit’s design, requiring no external steam supply and exhibiting low energy consumption, makes it an attractive option for our Dotternhausen plant.”

If successful, Holcim plans to deploy Capsol’s technology across multiple cement plants globally. This builds on a feasibility study conducted by Aggregate Industries UK, a Holcim subsidiary, for the Cauldon cement plant in Stoke-on-Trent. Testing at Dotternhausen will run for four months, starting in the second quarter of 2025.

France: Lafarge France, part of Holcim, will deploy the technology of the Swiss start-up Neustark on its Gennevilliers site. This means that around 1000t/yr of CO2 could be sequestered into recycled concrete.

Neustark’s principle consists of injecting the liquefied CO2 into recycled gravel. The gas then reacts with the calcium present and forms calcium carbonate crystals. It is thus transformed and can be stored indefinitely. Neustark has already deployed its technology at 22 sites in Europe, mainly in Switzerland and Germany.

The Gennevilliers plant already receives demolition concrete and transforms it into recycled aggregates used in ready-mix concrete gravel and road sub-bases. The site, which produces 80,000t/yr of recycled materials, will be able to transform around 1000t/yr of CO2, as Neustark's technology can store 10kg of CO2 per tonne of recycled demolished concrete.

US/Switzerland: Holcim has made progress on the capital market separation of its North American business, planning a 100% spin-off to be listed on the New York Stock Exchange. An additional listing on the SIX Swiss Exchange is planned for European investors. The spin-off is subject to shareholder approval at the Holcim Annual General Meeting on 14 May 2025 and expects to occur by the end of the first half of 2025, subject to customary approvals.

Huaxin Cement revealed this week that it is buying Holcim’s majority stake in Lafarge Africa for US$1bn. The moment marks a big step in the China-based cement producer’s international ambitions. It has been linked in the financial media to many divestments around the world in recent years. Yet this appears to be its largest acquisition so far and it adds to what is becoming a serious sized multinational business in Sub-Saharan Africa.

The details of the deal are that Holcim has agreed to sell its 83% share of Lafarge Africa to Huaxin Cement. Lafarge Africa operates four integrated cement plants in Nigeria at Sagamu and Ewekoro in Ogun State, at Mfamosing in Cross River State and the Ashaka Cement plant in Gombe State. It has a combined production capacity of 10.5Mt/yr. The transaction is expected to close in 2025 subject to regulatory approvals.

Holcim holds a relationship with Huaxin Cement that dates back to the late 1990s when it first bought a stake in the company. Following the formation of LafargeHolcim in the mid-2010s, Lafarge’s subsidiary Lafarge China Cement was sold to Huaxin Cement. At the end of 2023 Holcim reported that it owned just under a 42% share in the company. Huaxin Cement has also bought assets from Holcim as the latter company has divested subsidiaries over the last decade. In 2021 it bought Lafarge Zambia and Pan African Cement in Malawi from Holcim. This adds to other acquisitions in the region. In 2020 it purchased African Tanzanian Maweni Limestone from ARM Cement. Later in 2023 it picked up InterCement’s subsidiaries in Mozambique and South Africa. In addition, in October 2024 local media in Zimbabwe reported that the company was planning to build a grinding plant. Now, throw in the plants in Nigeria and Huaxin Cement is the second biggest cement producer in Sub-Saharan Africa after Dangote Cement.

Huaxin Cement said it had an overseas cement grinding capacity of just under 21Mt/yr at the end of 2023. However, this figure included plants in Cambodia, Kyrgyzstan, Nepal, Oman, Tajikistan and Uzbekistan. Data from the Global Cement Directory 2024 suggests that the company now has 10 integrated cement plants in Sub-Saharan Africa with a cement capacity of around 18Mt/yr. It also operates a number of grinding plants in these countries.

The Lafarge Africa deal is significant because a mainland China-based cement producer has finally hit the US$1bn window in merger and acquisition (M&A) activity overseas. Many potential acquisitions in the sector are linked by the press to Chinese companies these days. However, most of the activity to date has been of a plant-by-plant or piecemeal nature. Alternatively, these companies have been building their own plants around the world as part of the Belt and Road Initiative. Taiwan Cement Corporation (TCC) has spent more buying itself into Türkiye-based OYAK Cement since 2018 but it is headquartered in Taipei.

The question from here is how much further does Huaxin Cement plan to expand both in Africa and beyond? The obvious answer is that it will keep going given the state of the cement sector back home in China, the retreat of the western multinationals and the demographic trends in the region. World population growth is predicted to be fastest in Africa in the coming decades and demand for cement should follow. Outside of Africa, the ‘big’ one recently has been InterCement in Brazil. Unfortunately for Huaxin Cement though, InterCement extended its exclusivity deal with Companhia Siderúrgica Nacional (CSN) in November 2024. If the Lafarge Africa transaction completes then it will be the biggest deal yet and it will welcome a China-based cement company to the big league of international M&A. It may just be the start.

Nigeria: Holcim plans to sell Lafarge Africa to China-based Huaxin Cement for an equity value of US$1bn. The Switzerland-based building materials producer owns an 83% share of the subsidiary. The transaction is expected to close in 2025 subject to regulatory approvals.

Lafarge Africa operates four integrated cement plants in Nigeria at Sagamu and Ewekoro in Ogun State, at Mfamosing in Cross River State and the Ashaka Cement plant in Gombe State. It has a combined production capacity of 10.5Mt/yr. The company also holds a ready-mixed concrete production capacity of 0.4Mm3/yr. Its local recycling subsidiary, Geocycle, reported an alternative fuels thermal substitution rate of 37% in 2022.

Germany: Aumund and Holcim have demonstrated an electric linear calcination conveyor (eLCC) at Aumund’s headquarters in Rheinberg, Germany. Initial tests of the eLCC have reportedly demonstrated efficient thermal activation of clay through a combination of radiant heat and material circulation. In 2020, Aumund Fördertechnik teamed up with Holcim for a project focused on the electrical calcination of clay using an Aumund pan conveyor.

The company stated that the eLCC system is fully enclosed and insulated, minimising energy requirements and heat loss, with its compact design allowing for expansion of production capacities. It can operate with electrical heating elements powered by 100% renewable energy sources like wind or solar. The first industrial plant utilising this technology will be constructed in 2025.

Belgium: Holcim has selected the joint venture between BESIX and DENYS as the main contractor for the civil works of the upgrade at its Obour, Mons, plant. The GO4ZERO project will produce nearly 2.3Mt/yr of carbon-neutral cementitious materials by 2029. In a separate contract, BESIX’s subsidiary Franki Foundations is handling the deep foundations. Work began in August 2024 and will conclude in February 2025.

On 6 November 2024, Donald Trump appeared before followers in Florida, US, to declare victory in the 47th US presidential election. A sea of red baseball caps reflected the promise of the former president, now once again president-elect, to Make America Great Again. What Trump’s triumph means for the cement industry is not so straightforward. One lesson of President Trump’s 2017 – 2021 tenure as 45th president is that a Trump presidency comes with winners and losers.

Alongside the international heads of state posting their congratulations to Trump via social media was the Portland Cement Association (PCA), which represents US cement producers. In a post to LinkedIn, it took the chance to set out its priorities for the upcoming presidency, set to commence on 20 January 2025. These include collaborating on ‘market‐based initiatives’ to further reduce US cement’s CO₂ emissions, addressing ‘regulatory burdens’ that currently hinder the uptake of alternative fuels (AF) and ensuring favourable policies and funding for the use of alternative cements under federal transport programmes, which are up for renewal in 2026, as well as collaborating on carbon capture, utilisation and storage.

The post was suitably diplomatic for an organisation that will have to work with the incoming administration for the next four years. Reading the policy priorities against some of Trump’s campaign promises, however, they may be more pointed. As part of his plan to stimulate economic growth, Trump has proposed an unspecified reduction of the ‘regulatory burden’ of environmental standards. He also purports to want to replace renewables with increased use of fossil fuels – in direct opposition to the PCA’s goal to slash the US cement industry’s coal and petcoke reliance from 60% to 10% by 2050. The PCA’s stance is not merely ideological: its roadmap is founded on the legally-binding Paris Agreement on climate change mitigation. Trump, who considers the Paris Agreement a ‘disaster,’ has the stated aim of withdrawing the US from the treaty – for a second time!

The PCA included a positive note that “We can all agree that the ultimate goal of our industry and the government is to best serve the American people.” In case there were any doubt as to what it feels best serves those people, it concluded that it will work with all federal officials to help communities in the US to build ‘a more resilient, sustainable’ country.

Producers themselves, in the US and many other markets, had been finalising first-half or nine-month financial results when the Trump news broke. Now came half-anticipated strategy discussions – and a surprise: in market after market, trading in cement stocks opened on the up. Ireland-based CRH’s share price spiked by 15%, before settling on a rise of 6% day-on-day. Mexico-based Cemex’s rose by 7% and Switzerland-based Holcim’s by 5%. Investors, clearly, glimpsed opportunity in uncertainty for these US-involved operators.

Trump’s campaign successfully positioned him as the disruptive outsider, despite being the known (or, at least, known-to-be-unpredictable) quantity of the two candidates. His promise to Americans was increased affordability; to corporations, deregulation. Either way, he stands to overhaul the past four years’ policy on the economy. All of this may keep Wall Street high-ballers placing their bets on Cemex or CRH, or on Holcim North America after it eventually joins them on the New York Stock Exchange. The prospect of more money in homebuyers’ pockets is attractive, especially to allied sectors like property development, where Trump himself worked for over 40 years. The cement industry, meanwhile, will be taking a hard look at what the Trump proposition might mean for its market.

US Geological Survey (USGS) data tracks a favourable market trend under the present Biden Administration – to date – for a US cement industry that has also grown in production terms. Consumption was 120Mt in 2023, up by 14% over the three-year-period from 2020, while production was 91Mt, up by 4% over the same period. President Biden has signed into law two major pieces of legislation – the Inflation Reduction Act and Infrastructure Investment and Jobs Act – with a combined value of US$1.94tn in additional public spending, to President Trump’s none. However, the Republican president previously proposed investing an additional US$200bn in 2018.

Trump voters may have perused the USGS’ most recent monthly cement figures, for July 2024, before casting their votes. The figures recorded a 5.2% year-on-year decline in total cement shipments in the year-to-date, to 58.6Mt. Both Eagle Materials and Italy-based Buzzi noted a recent lack of growth in US sales volumes in their latest financial results. Another possibly alarming trend for the industry – and anyone with a protectionist mindset - is the growth of imports, which rose from 14.8Mt in 2019 to 26Mt in 2023.

A defining feature of Trump’s original presidency, alongside Covid-19 lockdown, was his still-ongoing trade wars. We can expect Trump to resume his roll-out of new tariffs as soon as he can. This might include cement plant equipment produced in other jurisdictions, such as the EU. Compared to the roster of goods he previously denied entry to the US, however, 26Mt/yr of cement will be less easy to wrangle with in a country with a domestic shortfall of 29Mt/yr.

Whatever happens in politics, the US cement sector remains very strong, with historied local ownership and some of the most innovative plants in the industry globally. Global players continue to seek to maximise their US-facing presence, as evidenced by Brazil-based Votorantim Cimentos’ contemplation of an initial public offering (IPO) for Votorantim Cimentos North America, announced on 7 November 2024. For the industry, the day-to-day grind – and pyroprocess – goes on.

After all, Trump did not enact many of his more disruptive proposals, such as building a Mexican border wall, after his win in 2016. See Global Cement’s analysis of that proposal here. But even this record is an unreliable guide for what to expect in 2025 – 2029. Not only did Trump himself win the popular mandate this time around, but his allies also gained majorities in the House of Representatives and Senate, comprising the US legislature. This betokens a different pace and scale of possible changes.

In 10 weeks’ time, the US cement sector will be lobbying an entirely new regime. Now is the time for it to prepare whatever arguments will appeal to incoming lawmakers to allow it make the best of such opportunities as may be available.

When we think about ‘up and coming’ regions for the global cement sector, Africa is high on many people’s lists. This is unsurprising given that Africa is the youngest continent on Earth, with a population set to boom to 2.5 billion by 2050 – or 1 in 4 of the global population for that year, according to the UN. This population, 1 billion higher than today, will drive rapid urbanisation. Cement capacities, currently around 350Mt/yr across the continent, will have to rise substantially to meet demand.

Filling part of this rise will be Amsons Group. This week it announced plans for a US$320m investment in a 1.6Mt/yr greenfield cement plant in Tanzania. It also promised a whopping US$400m to revamp Bamburi Cement in Kenya, should its existing US$180m bid for the Holcim subsidiary be accepted. Based on the numbers for Tanzania, this investment might be enough to take Bamburi Cement from 1.1Mt/yr to around 3Mt/yr, assuming similar project scope and equipment suppliers.

So, what is Amsons Group? Founded in 2000, Amsons is a Tanzania-based conglomerate with interests in construction, transport, flour, container depots, cement and concrete. It already operates Camel Cement, a grinding plant, in the Mbagala suburb of Dar es Salaam and it owns a 65% stake in the 1.1Mt/yr integrated Mbeya Cement plant, which it bought from Holcim in September 2023. The group’s website states that it emphasises local production of materials to reduce the nation’s reliance on imports. A greenfield cement plant fits right into that philosophy.

Looking at recent market trends, we see some positive news for Amsons. In Tanzania, cement production rose by 6.2% to 8Mt in 2023, according to the country’s Ministry of Industry. This followed a 9.7% rise in the prior year. Data is so far lacking for 2024. To the north, cement consumption ramped up strongly in Kenya in the second half of 2023, following a less than stellar start to the year. Thanks to a particularly strong June to September period, consumption finally ended 2023 around 0.8% higher than the previous year, at 9.6Mt. However, consumption tailed off in the final quarter. Worse, the first four months of 2024 - the most recent data available from the Kenya National Bureau of Statistics - saw a 10% decline in cement consumption relative to the same period of 2023, falling to 2.6Mt/yr.

As Africa lacks cement capacity compared to other regions, it is important to highlight that Amsons’ new plants will have to take on not just existing capacity in East Africa, but countries that export to the continent too. Indeed, this week Pakistan, a long-time agitator of South African cement producers, reported a year-on-year rise in exports for October 2024. Exports rose to 4.36Mt, a 9% increase compared to 4Mt in October 2023. This news comes amid precipitously falling domestic demand within Pakistan, with September 2024 shipments down by 22% year-on-year. It is also worth noting that Tanzania itself exported around 1.1Mt of cement to Rwanda, Burundi, Malawi, the DRC and Zambia in 2023. This figure will likely be higher in 2024, given the February 2024 launch of Huaxin Cement Tanzania Maweni Company’s 1.3Mt/yr plant in Mavini, which has a focus on exports.

This apparent abundance of existing capacity, plus exposure to imports, would appear to give an investor like Amsons Group pause for thought. However, it has committed to a total investment of US$900m. This is not small change. If we add in the money it paid for Mbeya Cement in September 2023 – the amount was not disclosed – Amsons will likely shell out more than US$1bn in just a few years. It is going ‘all in’ to become, in the words of its Managing Director Edha Nahdi, “one of the largest cement manufacturers in Kenya and Tanzania by 2030.” It will be very interesting to follow it on its journey.