Displaying items by tag: Huaxin Cement

Nepal: Construction of the Huaxin Cement Narayani plant being built at Benighat Rorang Rural Municipality in Dhading has resumed following a flood in July 2019. The deluge damaged worker dormitories, plant structures being built and an access road to the site, according to the Republica newspaper. 400 Chinese workers and 300 local workers are working on the site. Another 600 Chinese workers will be added soon. The company aims to start production at the unit from June 2020.

No overarching theme this week but rather four changes of note in different markets. The first is Lehigh Hanson’s agreement to buy the integrated Bath plant in Pennsylvania, US, from Giant Cement, a subsidiary of Mexico’s Elementia. Lehigh Hanson, a subsidiary of Germany’s HeidelbergCement, plans to pay US$151m for the 1.1Mt/yr unit giving it a cost of US$137/t of cement capacity. That’s a similar price that Elementia paid when it acquired Giant Cement in 2016. The Mexican conglomerate paid US$220m for a 55% stake in 2016 for three cement plants with a combined production capacity of 2.8Mt/yr or US$143/t.

The purchase by HeidelbergCement draws a line following problems selling its business activities in Ukraine. The group blamed a drop in profit in the first half of 2019 on this. Since then though it has been linked to a takeover of UltraTech’s stake in Emirates Cement, the owner of the 0.5Mt/yr Emirates grinding plant in Dhaka, Bangladesh. Buying a cement plant in North America, its second most lucrative region after Western and Southern Europe, looks set to be a wise investment.

The timing here is interesting given that Elementia, the building materials company partly-owned by ‘Mexico’s richest man,’ Carlos Slim, has been steadily expanding in recent years. As stated above it only acquired Giant Cement in 2016. However, its net sales and earnings fell in the second quarter of 2019 caused by a market contraction in Mexico affecting all of its businesses. Sales from its cement businesses in the US and Central America grew but they fell by 6% at home in Mexico. Elementia said that proceeds from the sale of the Bath plant will be used for debt repayment and ‘general’ corporate purposes. Notably, Ricardo Naya Barba, the president of Cemex Mexico, has also described the local market as ‘difficult’ this week, in comments reported upon by local media.

Meanwhile in Africa, China’s Huaxin Cement purchased Maweni Limestone from Athi River Mining (ARM) Cement in Tanzania as part of the latter’s on-going administration process. Local press reported the transaction as costing US$116m and subject to regulatory approval. This one’s interesting because it shows a major Chinese cement producer buying related assets outside of China. This is likely part of the country’s Belt and Road Initiative to develop industry and infrastructure around the world and to give its overproducing industries new markets. Perhaps the surprise here is that Huaxin Cement hasn’t gone after the rest of Kenya’s ARM Cement… yet.

The other African news story of note this week was the confirmation that Singapore’s International Cement Group (ICG)’s intended purchase of Schwenk Namibia had failed. This deal was announced in March 2019 but it later ran into trouble when the Singapore Exchange blocked the proposed acquisition in June 2019 on the grounds that ICG didn’t appear to have the money to pay for it.

Lastly, Yamama Cement announced that it wants to sell its Production Lines 1-5, which have a daily clinker production capacity of 5600t/day. The producer previously temporarily shut down the lines in 2017 and it has been planning to build a new cement plant. Since then though it has faced shrinking sales and profits in the tough Saudi Arabian market.

The takeaway from all of this is that, despite the doom and gloom of a world producing too much clinker, some cement companies are targeting growth in specific territories. Sometimes these schemes succeed, as in the case of HeidelbergCement and Huaxin Cement, and sometimes they don’t, as ICG has found out. Heavy building materials like cement are costly to move around so a plant or assets in the right place at the right time can make a fortune.

Tanzania/China: China’s 100Mt/yr-capacity Huaxin Cement has bought Maweni Limestone from the Kenyan-based Athi River Mining (ARM) Cement. Huaxin has stated that this first incursion into East Africa is ‘integral to its broader strategy’ of expansion in emerging markets. It adds the Tanzanian producer of Rhino cement to its burgeoning portfolio of overseas assets including cement plants in Tajikistan, Uzbekistan, Cambodia and Nepal.

Uzbekistan: Uzbekistan’s cement imports totalled US$105.6m over the six months to 30 June 2019, up by 32.3% from 2018.

Chinese investment in Uzbek domestic cement production saw two cement plants of 1.2Mt/yr and 2.4Mt/yr capacity enter development in 2018. Huaxin Cement’s Zafarabad plant is expected to become operational in December 2019, with Gansu Hengya Cement’s Kattakurgan plant also due to enter operation in the coming months.

Nepal: The parliamentary Public Accounts Committee (PAC) has accused the Huaxin Cement Narayani plant being built at Benighat Rorang Rural Municipality in Dhading of ignoring the project’s Environment Impact Assessment (EIA) report. Members of the committee visited the site two months ago following complaints, according to the Republica newspaper.

It found that an 11km access road to the site had encroached upon a river. The company had used sand and stones from the river and used the materials to build the road. The road’s construction has also disrupted local agricultural irrigation canals. A flood at the site of the cement plant was reported in July 2019. An irregular deal to lease land to the joint venture was also reported.

Nepal: Flooding has damaged the Huaxin Narayani Cement plant being built at Benighat Rorang Rural Municipality in Dhading. Rising water from the Malekhu River caused around US$90,000 damage to the construction site, according to the Himalayan Times newspaper. The deluge wrecked a storeroom and swept away five vehicles. Work on the US$137m project started earlier in 2019.

China: Huaxin Cement emitted 1.4Mt of CO₂ equivalent in 2018. About 60% of this came from process emissions from making clinker and about 30% came from burning fossil fuels. Additional emissions arose from electrical consumption.

The cement producer says that it implemented a variety of emission control and sustainability initiatives in 2018. These included improving its energy saving management, rollout of waste-heat recovery systems and other plant upgrades. It is also promoting so-called ‘green’ products. In January 2019 its Huaxin Fortune brand 42.5R grade Ordinary Portland Cement obtained low carbon product certification from the China Quality Certification Center.

Uzbekistan: China’s Huaxin Cement has held a ground breaking ceremony for a new 1.5Mt/yr cement plant it is building in Jizzakh region. The project has an investment of US$150m and it is scheduled to start operation in March 2020.

China: Huaxin Cement’s sales revenue rose by 33% year-on-year to US$887m in the first quarter of 2019 from US$669m in the same period in 2018. Its net profit nearly doubled to US$150m from US$78.7m.

China: Huaxin Cement’s sales revenue rose by 32% year-on-year to US$4.09bn in 2018 from US$3.11bn in 2017. Its net profit grew by nearly 150% to US$772m from US$309m. Its cement sales volumes increased by 3% to 70.7Mt and its ready-mix concrete (RMX) sales increased by 11% to 3.56Mm³. By region is operating revenue grew in all domestic regions, except for Jiangxi.

During 2018 the cement producer completed its acquisition of Chongqing Lafarge Shui On Cantian Cement. Its Tibet Shannan Third Phase 3000t/day and Shigatse Second Phase 3000t/day project were put into operation. In total the group added 4.77Mt/yr of cement production capacity in 2018. In its future risk analysis it said that production capacity reduction in the cement industry is ‘yet to be improved and that the ‘fundamental contradiction’ of the overcapacity has not been solved.

Switzerland’s LafargeHolcim’s runs Huaxin Cement as a joint venture. The company operates almost 200 subsidiaries in nine provinces in China as well units in Tajikistan and Cambodia. It has a cement production capacity of 100Mt/yr, RMX capacity of 23.3Mm³/yr and an aggregate capacity of 25Mt/yr.