Displaying items by tag: Holcim
FLSmidth selected for Ada plant modernisation
20 August 2014US: FLSmidth has been selected to supply the major equipment for the modernisation of the Holcim (US) Ada plant in Oklahoma. The modernisation of the pyro process is expected to deliver lower emissions of nearly all air pollutants while anticipating an increase in the plant's production capacity.
The contract includes a dryer crusher, a single stage preheater with an ILC-calciner, a dedusting cyclone, a ROTAX-2® kiln, a kiln bypass system, a Duoflex® kiln burner and an FLSmidth® Cross-Bar® cooler. With the installation of two new FLSmidth dust collectors, the project will significantly improve the plant's ability to reduce emissions of particulate matter.
The parties have decided not to disclose the value of the contract.
UK/Singapore: The private equity firm CVC Capital Partners is in discussion with Singapore's Government Investment Corporation (GIC) about a combined bid for assets being sold by Holcim and Lafarge as they prepare to merge, according to Sky News. CVC is also understood to be talking to other state investment funds about the proposed deal.
At least two other private equity groups have been formed to bid for the divestments that Holcim and Lafarge are preparing to sell. Blackstone has teamed up with Cinven and the Canada Pension Plan Investment Board. BC Partners and Advent International are also preparing a joint bid. Initial offers are understood to be due in September 2014.
Holcim India fined US$11m for tax evasion
11 August 2014India: Delhi Government's Revenue Department has fined Holcim India US$11m for evasion of stamp duty. It also directed the company to pay stamp duty of US$36m and a penalty of US$11m within 30 days for violation of stamp duty. Collector of Stamps (HQ) Lalit Mohan told local media that Holcim India had violated the payment of stamp duty with the merger of Ambuja Cement.
"The stamp duty on the merger order is payable at the rate of 3% on the total amount of US$1.2bn which comes out to be US$36m... The company is required to adjudicate or pay stamp duty within a period of one month which it failed to do," said Lalit Mohan in the order.
In its submission to the Revenue Department, Holcim India stated that there was no transfer of movable and immovable assets from transferor company (Ambuja Cement) with transferee company (Holcim) except shares held by transferor company in other companies have been transferred to transferee company. Subsequently the company did not see itself as liable for stamp duty.
Holcim Indonesia’s profit dips as construction projects slow
06 August 2014Indonesia: Holcim Indonesia has posted a slight dip in its net profit in the first half of 2014, which it attributed to rising costs and a slowdown in the construction and property sectors.
Sales in the first half of 2014 grew by 10% year-on-year to US$426m, stronger than the 7% growth reported for the same period of 2013 when compared to 2012. Despite the sales increase, Holcim fell short of boosting its net profit, which dropped by 3.8% to US$38.1m from US$39.6m in the same period of 2013.
On 1 May 2014, the Indonesian government raised electricity rates by 38.9% or 64.7%, depending on businesses' power needs. The increases, however, will be gradual until the end of 2014. Holcim, which must deal with a 64.7% increase in electricity rates, recorded an increase in costs of sales to US$292m, while its operating costs went up by 15.9% to US$61.6m. In addition, its first half foreign exchange losses surged to US$2.34m, compared with US$871,000 in the same period of 2013.
Holcim has gradually increased its selling prices since late 2013 to mitigate its rising expenses. Along with other industry players, Holcim also had to bear weaker property and construction demand, which saw project delays as a result of legislative and presidential elections, as well as unfavourable regulations and macroeconomic conditions.
Holcim Indonesia's president director Eamon Ginley said that, despite a number of obstacles in 2014, the company was optimistic that it would at least secure a higher annual revenue compared to 2013's figure, assisted by a boost in capacity from its Tuban facilities in East Java. The company has invested US$800m to construct two 1.7Mt/yr capacity cement plants, Tuban 1 and Tuban 2. Tuban 1 began operating in October 2013. Tuban 2 is due to commence operations in the first quarter of 2015.
Lafarge and Holcim announce Brazilian divestment details
05 August 2014Brazil: Lafarge and Holcim have announced further details on their proposal for comprehensive divestments in Brazil as part of their planned mega-merger to create LafargeHolcim.
As announced on 7 July 2014, and to anticipate potential competition authorities' requirements, the joint Divestment Committee has agreed to propose to Brazilian competition authority CADE a package of high-quality assets from both Holcim and Lafarge. This will include three integrated cement plants and two grinding stations that share a combined capacity of 3.6Mt/yr. Also included is one ready-mix concrete plant in the south east of the country.
These proposed divestments have been presented to CADE in the context of pre-filing negotiations and will now be subject to review and further discussion until a final decision is reached with the authority.
The divestment process will be carried out in the framework of the relevant social processes and on-going dialogue with the employee representatives' bodies and will be conducted in parallel to discussions with the competition authorities and potential buyers. The divestment process will be completed subject to the closing of the merger between Holcim and Lafarge.
A Lafarge and Holcim joint statement said that Brazil is an important market for the future LafargeHolcim Group and that the company will remain committed to the country, serving customers from a network in cement, aggregates and ready-mix concrete.
Russia: Russia's Federal Antimonopoly Service (FAS) has made a decision to extend the consideration period for Holcim's application for the right to direct the following businesses: OAO Lafarge Cement (Moscow), FIANT LLC (Moscow), Lafarge Aggregates & Concrete LLC (Republic of Karelia), Drilling and Blasting Company LLC (Republic of Karelia), Bolshoy Massiv Quarry LLC (Republic of Karelia) and Tekhnobud Klesovsky Quarry of Non-Metallic Minerals LLC (Ukraine). The right to direct the businesses would stem from Holcim's acquisition of 66% of the shares in Lafarge.
Lafarge is licensed for the production, storage and application of industrial explosive materials, being engaged in the activities provided for by Article 6 of the Federal Law on Procedures for Foreign Investments in Business Entities of Strategic Importance for the National Defense and State Security. Therefore, Lafarge qualifies as a business entity of strategic importance for the national defence and state security. Therefore, the deal applied for requires prior approval as provided for by Russia's investment law.
Germany: HeidelbergCement has reported that its profit for the second quarter of 2014 declined to Euro233m from Euro368m in the same period of 2013. However, earnings before interest and income taxes (EBIT) grew to Euro527m from Euro511m in 2013. Revenues for the quarter were Euro3.57bn, down from Euro3.59bn in 2013. HeidelbergCement's cement and clinker sales volumes rose by 4% to 22.3Mt compared to 21.4Mt during the second quarter of 2014.
HeidelbergCement announced that it plans to start a process to divest its building materials unit in September 2014 and expects to conclude the sale quickly. Potential buyers include private equity funds, not industrial enterprises, according to Bernd Scheifele, HeidelbergCement's CEO. Scheifele added that HeidlerbergCement would consider buying assets to be sold by Lafarge and Holcim, except for assets located in the UK and Germany.
LafargeHolcim: A half-time reality check?
30 July 2014It has been another week of financial results from the global cement industry, with big hitters Lafarge and Holcim reporting what some might call 'concerning' numbers for the first half of the year. Both cement producers are, of course, making preparations ahead of their proposed merger, which could come to pass within 12 months, all being well. But are things well?
In the first half of 2014, Lafarge saw its earnings before interest, tax, depreciation and amortisation (EBITDA) decrease by 2%, with sales down by 5%. Lafarge noted that its shrinking size, this week highlighted by the sale of its Pakistani assets, and adverse exchange rate effects did not help matters. CEO Bruno Lafont was up-beat in asserting that North American and European markets would see improvements over the rest of 2014. Meanwhile, things are slightly better at Holcim, which reported an increased EBITDA (albeit just by 0.2%) as well as like-for-like sales that were up by 4.8% compared to the first half of 2013. However, its increased sales volumes and revenues could not prevent a fall in net income.
If one takes these results together, the first half of 2014 seems to been one of general stagnation for the future LafargeHolcim. It is important to remember that even more asset sales are inevitable, mainly from the weaker performer Lafarge. We are left to ponder how the new LafargeHolcim will perform in 12 months time.
At present, without serious improvement across all world economies, it is likely that LafargeHolcim (and other multinational producers) will continue to be on relatively shaky ground post-merger. The reality is that many of the promising markets that the company will serve are no longer rapidly-growing emerging economies, but are instead caught up in lower-than-expected growth (for example in Indonesia, India, China and Brazil), political disputes (for example in Algeria, Thailand, Eastern Ukraine and the Middle East) and other damaging events (for example the Ebola outbreak in West Africa). The global economy is certainly 'uneven,' as Holcim's CEO Bernard Fontana said in Holcim's results statement, but it also seems to be getting more uneven. Simple geographical and income groupings for countries, for example 'Far East = Profit,' are becoming increasingly out of date.
Navigating such a rapidly-changing world is, in one sense, less difficult for larger companies than smaller ones because risk can be spread over a much wider range of economies. However, larger companies are also slower to react to changes and the appropriateness of their responses may not be ideally tailored to individual markets. When LafargeHolcim comes to be, it will likely suffer also due to the inherent difficulties of merging two such large firms that may not see eye-to-eye on all issues. This will have to be done without some of its best assets and a lot of its 'run-time' will be dedicated to the merging process. In such an environment it is easier to be distracted from its main tasks: is it possible that this effect is already becoming apparent? As Lafarge and Holcim's latest results show, there is little room for deterioration in their results.
There is a key question: Is the LafargeHolcim first half EBITDA slide a sign of poor markets or related to preparations for the merger that shareholders will tolerate as they anticipate future riches? Will LafargeHolcim be profitable in the long-run?
Philippines: Holcim Philippines has posted a net profit of US$38.0m for the second quarter of 2014, slightly higher than the US$37.4m reported for the same period of 2013, with sales on pace to meet internal targets amid robust demand from the construction industry. Revenue was US$203m during the second quarter of 2014, up from US$188m for the same period of 2013.
This brought first half 2014 net profit to US$76.6m, up from US$70.3m in the first half of 2013, while revenue for the period was US$389m, compared with US$355m in 2013. Holcim Philippines' president and CEO, Eduardo A Sahagun, said that the company is 'on track' with its 8% short-term sales growth target, as well as its 5% to 6% sales growth target for the long term.
"On top of the sustained government and private sector spending, we now see some major private-public partnership projects being implemented in the metropolis, hence, our strong sales," said Sahagun. "We were able to meet this demand due to our ability and commitment to keep the market supplied during this period of robust growth." Other factors that contributed to the company's growth were 'full-swing' construction during the summer months and post-calamity construction in the Visayas Region.
Holcim, which has a local market share of around 34%, is currently in the process of merging with Lafarge, which has a share of around 28%. Sahagun said that the merger might be finalised by May 2015, resulting in a combined market share of 62% in the Philippines.
Lafarge reports 2% fall in EBITDA
25 July 2014France: Lafarge has posted another drop in quarterly sales and profit, mainly due to adverse exchange rates and its shrinking scale as it sheds assets to trim debt. It said that its planned merger with Holcim is on track and that its banks would give detailed information 'in the coming days' to potential buyers regarding the assets it plans to sell.
Lafarge's earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 2% to Euro812m in the second quarter of 2014 as sales fell by 5% to US$3.37bn. Lafarge said that it expected a smaller impact from adverse foreign exchange rates on its performance in the second half of 2014, after a drop in both sales and EBITDA in the second quarter. Lafarge aims to bring debt below Euro9bn in 2014 and confirmed that it expected cement demand to grow by 2 - 5% in its main markets.
"The situation in North America is improving, growth continues in emerging markets and we see the first signs of recovery in Europe," said Lafarge's chief executive Bruno Lafont. He cited Poland, the UK and Greece as countries showing improvement. However, the construction sector remains subdued in France.