Displaying items by tag: Holcim

Switzerland: Swiss-based multinational building materials producer Holcim has announced that Wolfgang Reitzle will take over as chairman in 2014. To ensure continuity, current chairman Rolf Soiron has been proposed for re-election at the annual general meeting of 17 April 2013. Also at the meeting the board of directors will propose the election of Hanne Birgitte Breinbjerg Sørensen and Anne Wade to the board of directors of Holcim.

Sørensen is currently the CEO of Maersk Tankers based in Copenhagen, one of the world's largest tanker operators. She holds an MSc in Business Economy from the University of Aarhus.

Wade, an investor with extensive experience in capital markets, was the Senior Vice President and Director of an investment management company, Capital International, based in London from 1995 to 2012. She graduated with a BA from Harvard University and holds a Master of Science from the London School of Economics.

In addition the board of directors is proposing the re-election of Beat Hess for a three year term. He is currently deputy chairman of the board of directors. Markus Akermann and Peter Küpfer are no longer available for re-election. Christine Binswanger has resigned from the board effective from the date of the meeting.

With the annual results for 2012 in from Lafarge, Holcim and CRH we now return to look at how the European markets coped.

Holcim summed up the mood perfectly in its media release on its annual results for 2012. First it pushed the big positive (net sales up overall) but then finished its first (!) sentence with: '...despite the difficult economic environment in Europe.'

Overall in Europe, Lafarge saw its cement volumes fall by 9% to 29.6Mt from 32.5Mt. Notably sales volumes fell significantly in Spain and Greece, by 26% and 37% respectively.

Holcim saw its cement volumes fall by 2% in Europe to 26.3Mt from 26.8Mt. There were specific country figures from Holcim but it did comment that the 'severe crisis' in southern Europe had 'contaminated' economies further north such as a France, Benelux, Germany and Switzerland.

CRH was less candid about its cement business in Europe although it did report that its sales revenues fell by 10% to Euro2.69bn in 2012 from Euro2.99bn in 2011. Notable losses occurred in Poland (11% volume decline), Ireland (17% decline) and Spain (30% decline).

These figures compare against a 4% decline in volumes in Western and Northern Europe to 22.1Mt from 21.3Mt by HeidelbergCement, a 13% drop in overall net sales to Euro3.05bn in Cemex's Northern Europe section and a 16% drop in volumes to 16Mt from Italcementi in its Central Western Europe region.

The question to ask at this point is how HeidelbergCement and Holcim managed to suffer smaller losses compared to everybody else. Less exposure to southern Europe is one answer. Depressingly though they both suffered similar drops in profit indicators such as earnings before interest, taxes, depreciation, and amortisation (EBITDA) to the others (20% and 33% respectively).

Both Holcim and CRH are expecting continued tough conditions in Europe in 2013. However, both companies are mildly optimistic that the worst has passed, with talk of the work of the European Central Bank supporting peripheral Eurozone economies showing some effect. Lafarge doesn't even mention Europe in its outlook.

As mentioned in Global Cement Weekly #87 on 13 February 2013, EU regional GDP growth is forecast to become positive in 2013. Everybody is going to be watching the European quarterly results for the cement majors in 2013 very carefully indeed. In the meantime all every cement producer with a presence in Europe can do is to carry on cutting costs.

US: The board of directors of Holcim (US) has appointed Filiberto Ruiz to serve as the company's president and chief executive officer. Ruiz's appointment also includes serving as president and chief executive officer of Aggregate Industries US, a Holcim Group Company.

Additionally, Bernard Terver, currently a member of the Holcim Ltd Executive Committee, formerly president and chief executive officer of Holcim (US) and Aggregate Industries US, has been named chairman of the board.

Ruiz has served as the company's deputy chief executive officer since August 2012 and has been with the company for more than 26 years, holding a range of general management, manufacturing and sales and marketing positions both within and outside of the US.

Terver has been president and chief executive officer of Holcim (US) since October 2008 and Aggregate Industries US since 2010. He has more than 30 years' experience in the cement and mineral components industry both in the US and internationally.

Just before the end of 2012 Holcim sold shares in companies it owned in Thailand and Guatemala. It reduced its stake in Siam City Cement Company (SCCC) in Thailand from 36.8% to 27.5% and it sold its entire 20% minority stake in Cementos Progreso in Guatemala. For the sale of these two share packages Holcim received approximately Euro310m.

This is interesting given that Asia-Pacific was the Switzerland-based multinational's biggest sales area in 2011 and because sales of cement rose by 6% in Latin America in 2011. Similarly in 2012 from January to September the two regions propped up the group's profits. Why would Holcim sell stakes into two of its most profitable regions?

In its third quarter report in 2012 Holcim repeatedly described Thailand as 'encouraging' following floods in 2011. It added that it had focused increasingly on the cement market in the country and strengthened its position in neighbouring countries that resulted in lower clinker exports.

According to the Global Cement Directory 2013 SCCC has a capacity of 31Mt/yr, 65% of Thailand's total capacity of 48Mt/yr. SCCC predicted in December 2012 that domestic cement demand would increase by 5-10% in 2013. The company is currently planning to build new plants in Indonesia and Cambodia and is considering investing in Myanmar. In Indoniesia Holcim is the third biggest producer after Semen Gresik and HeidelbergCement subsidiary Indocement.

Meanwhile in Central America, Cementos Progreso was the sole producer in Guatemala with 2.5Mt/yr from two plants. This was set to double with the commissioning of a third plant towards the end of 2012. However, Holcim retains seven plants in southern Mexico (12Mt/yr), both of El Salvador's plants (2Mt/yr) and a plant in Costa Rica (1Mt/yr).

With Holcim's strong presence in Central America and the North American market reviving leaving Guatemala makes sense with the group's debt reduction programme in mind. The situation in Thailand is more complex, so unsurprisingly Holcim has reduced its stake rather than leaving completely. SCCC's expansion plans outside of Thailand suggest, that although growing, the market is maturing. In one such potential expansion target, Indonesia, Holcim is already a major producer.

In its press release announcing the sales in Thailand and Guatemala, Holcim attributed the decision to its ongoing debt reduction programme. As part of its 'Leadership Journey' the group intends to save Euro1.25bn by the end of 2014. Other savings in 2012 included reducing management in Europe, layoffs and closures in Australia, a plant closure in Hungary, further delays on the decision to build a new plant in New Zealand and layoffs in Spain. The management changes in Europe alone contributed a Euro99m chunk of Holcim's target saving of Euro124m for 2012.

Yet it's worth considering that a week after the sales of its shares Holcim's subsidiary in India, Ambuja Cements, announced investments of Euro277m in India. Perhaps the best way to save money is to make more money.

As 2012 draws to a close the challenges posed by the Australian carbon tax to the Australian cement industry are starting to show. First, Holcim Australia announced it was to lay off 150 staff. Then Boral released the news that it was planning to cut 90 jobs at its Waurn Ponds cement plant.

Following years of debate the Gillard government introduced the Clean Energy Act in July 2012. Heavy polluters were initially charged US$23/t of CO₂ emitted, more than twice the cost of similar schemes in Europe where it is US$10/t. A key criticism of the scheme was that it would damage the Australian domestic cement industry with cheap imports. However the Australian government cushioned the move with compensation packages for major polluters, including cement producers, currently set to last five years.

Although the Australian cement industry hasn't totally collapsed, with the loss of 1800 jobs as the Australian Federal Opposition warned of in 2011, imports have been favoured in recent months. Boral's suspension of clinker production at Waurn Ponds will increase imports. The change will result in 25-30% of Boral's clinker being imported. It's worth noting that Boral pointed out in its press release that this was 'in-line' with the Australian industry.

Adelaide Brighton, the country's third biggest producer after Holcim and Boral, may not have laid anybody off but it has secured a 10-year supply of foreign clinker. On 5 December 2012 the building materials producer announced that it was going to a buy a 30% stake in Malaysian white clinker and white cement producer, Aalborg Portland Malaysia. In the accompanying press statement the company's chief financial officer explicitly blamed the carbon tax as one of the reasons for the acquisition.

Whether the job losses at Boral and Holcim can be totally blamed on the carbon tax remains to be seen. Boral's second-half profit for the year ending 30 June 2012 suffered a fall of 59% to US$35.7m. Holcim noted weaker demand outside of mining regions for the third quarter of 2012. By contrast, Adelaide Brighton reported steady gains in its half-year report for 2012 although cement sales only increased 'marginally'. Elsewhere in its report Adelaide Brighton stated that it would cope with the impact of the carbon tax by reducing reliance on domestic manufacturing. These can hardly be comforting words for the Australian cement industry.

The results are in from the European cement majors and the news from the Mediterranean producers is grim. A common phrase found in most of these financial reports was the 'challenging economic environment' in western Europe. Here's what this means.

In Spain, Cemex saw its net sales in its Mediterranean region (consisting mainly of Spain) slump by 17% to Euro1.10bn. Cementos Portland Valderrivas (CPV) posted a loss of Euro83m for the first nine months of 2012, almost 10 times the loss for the same period in 2011. In July 2012 the Spanish cement association Oficement noted that demand had fallen by 60% year-on-year.

In Italy, Italcementi reported a 92% crash in net profit, to Euro17.1m, for the first nine months of 2012, and a drop in revenue of 4%, to Euro3.39bn, for the first nine months of 2012. Buzzi Unicem reported a 21% decline in sales volumes of cement and clinker, and a drop in sales of 15% to Euro430m. Vicat reported that Italian sales across all its business lines were down by 9% for the year.

By contrast, beleaguered Greek producer Titan has finally started to show a (slight) increase in its revenue. It has been able to report a second consecutive quarter where turnover has risen year-on-year. Although Titan's net profit for the same period still plummeted by 96% to Euro2m.

Elsewhere progress of a kind is being made despite the ongoing European slump, mainly due to profitable assets held outside of western Europe.

Lafarge reported that its overall sales were up by 4% to Euro4.39bn in 2012 so far. Yet its income has fallen by 44% to Euro332m and its profits are suffering from its restructuring programme. In western Europe Lafarge noted that cement volumes were down by 11% to 12.5Mt so far in 2012 and that sales were down by 9% to Euro2.43bn.

Holcim reported a 5% increase in overall net sales and a 7% increase in operating profits to Euro1.57bn. In western Europe Holcim's sales volumes were down by 4.6% (like-for-like) to 20.1Mt and sales were down by 6% to Euro3.68bn.

HeidelbergCement reported a 2.5% increase in overall sales but pre-tax profits have fallen by 5% to Euro601m. HeidelbergCement's revenue from its cement business in western and northern Europe was down by 5% to Euro1.3bn. Buzzi Unicem reported overall flat sales at Euro2.15bn but net profit rose by 50% to Euro85m. Despite this Buzzi Unicem reported a drop of 8.5% in Germany.

Vicat reported little change in sales at Euro1.73bn for the year so far. Vicat's financial reporting made it hard to tell how much was lost in Europe but French cement sales were noted as being down by 12%. Cemex's sales volumes were down by 13% in northern Europe, with net sales down by 15% to Euro3.09bn. Italcementi's cement sales volumes in central and western Europe fell by 16.8% to 12.2Mt.

Of the major producers only Lafarge failed to state the obvious in its outlook about western Europe: that sales will continue to decline in 2012 and 2013. If Titan has set the bar for how much more pain the other European producers have yet to face then conditions are likely to get worse. Get ready for even more 'challenges' in 2013.

Serbia: Claudiu Soare has been appointed the chief executive officer of Holcim Serbia. Soare, aged 42, has been a member of the Holcim Romania team since 2000 and afterwards he became project manager at Holcim Services EMEA (Europe, the Middle East and Asia) in Madrid.

Soare started with Holcim in the ready mixed concrete and aggregates division (RMX & AGG) as a Project Manager in 2000. In 2007 he became technical manager RMX & AGG and in 2011 he moved to Holcim Services EMEA, a shared service centre based in Madrid, Spain. Soare holds a Master degree in Electro-Mechanical Engineering and a MBA.

US/Switzerland: Holcim US has announced that its president and CEO, Bernard Terver, will join the executive committee of the company's parent Holcim Ltd.

As part of the 'Holcim Leadership Journey,' an initiative which streamlines and strengthens operations, Terver will also assume responsibility for the new group region of North America, comprising Holcim US, Holcim Canada, Aggregate Industries (US) and Aggregate Industries UK. Filiberto Ruiz will serve as deputy chief executive officer of Holcim (US) and Aggregate Industries US. Prior to his promotion, Ruiz was senior vice president of sales and marketing for Holcim US.

"I'm confident that these management changes will reinforce our commitment to customer excellence and to the development of our employees as they become the next generation of leaders," said Bernard Terver, president and CEO of Holcim US. "Filiberto's experience makes him an excellent choice for this new role and I am looking forward to collaborating as the company advances."

"I am honoured to have been appointed to lead US operations," said Filiberto Ruiz, deputy chief executive officer of Holcim (US) and Aggregate Industries US. "Holcim US and Aggregate Industries US are solid organisations and I look forward to continuing to build on the work that has taken place under Bernard's leadership."

Terver has been president and CEO of Holcim US since October 2008 and Aggregate Industries US since 2010. In the same year he also became area manager. He joined Holcim in 1994 when his employer CEDEST was acquired by Holcim France. In 1999, he became chief executive officer of Holcim Colombia and in 2003 was appointed area manager for the Andes nations, Central America and the Caribbean.

Ruiz began his career with the Holcim Group in 1986 as electrical supervisor with Holcim Apasco in Mexico, later becoming plant manager. In 1999 he became regional vice president for manufacturing at Holcim US. He returned to Holcim Apasco as cement operations, vice president and moved back to Holcim US in 2006 as senior vice president for manufacturing. He has been in his current role, senior vice president for sales and marketing, since 2010.

US: Holcim US has announced that Filiberto Ruiz will serve as its deputy chief executive officer of Holcim and Aggregate Industries US as part of its 'Leadership Journey.' Prior to his promotion, Ruiz was senior vice president, sales & marketing for Holcim US.

Ruiz began his career with the Holcim Group in 1986 as electrical supervisor with Holcim Apasco, Mexico, later becoming plant manager. In 1999, Filiberto became regional vice president, manufacturing for Holcim US. He returned to Holcim Apasco as cement operations, vice president, and moved back to Holcim US in 2006 as senior vice president, manufacturing. He has been in his current role, senior vice president, sales & marketing, since 2010.

Switzerland: As part of its 'Holcim Leadership Journey', the Swiss cement multinational has announced a series of personnel changes to save at least Euro1.25bn by 2014.

The group's Europe region (excluding the UK) will be consolidated and led by current member of the Holcim Executive Committee Roland Köhler. The North America and UK region will report to Bernard Terver who has been appointed member of the Holcim Executive Committee.

Corporate functions that directly contribute to the programme to strengthen customer excellence and cost leadership will be led within the newly created project management office for the 'Holcim Leadership Journey' by Urs Bleisch. He has been appointed corporate functional manager and member of the senior management of Holcim. He will be reporting directly to the CEO of Holcim, Bernard Fontana.

Member of the Holcim executive committee Urs Böhlen will leave the executive committee and act as an advisor to the CEO of Holcim until his retirement in 2013. Members of the executive committee Benoît-H. Koch and Patrick Dolberg will leave the group.