Displaying items by tag: Intercement

Portugal: Cimpor has appealed a judgement by the Supreme Administrative Court cancelling permits to burn alternative fuels at its Souselas cement plant. The North Central Administrative Court cancelled the environmental licences, originally granted by the former Environment Minister Nunes Correia, in March 2016.

Paraguay: Matias Cardarelli has been appointed the director of Yguazu Cementos, a joint-venture between Intercement and Concret Mix. Yguazu Cementos has a 0.4Mt/yr cement grinding plant with in Villa Hayes. Previously, Cardarelli worked for Ford Motors and Zurich Financial Services. He joined Intercement in Argentina in 2008.

Portugal: Cimpor has reported a loss of Euro71.2m in 2015 down from a net profit of Euro27.2m in 2014. Sales fell by 4.3% to Euro2.49bn from Euro2.60bn. Cement and clinker sales volumes fell by 6% to 28.1Mt from 30Mt. Like its parent company InterCement, the cement producer attributed the loss to an economic downturn in Brazil and unfavourable exchange rates.

Brazil: InterCement made a loss of Euro43.7m in 2015. In 2014 it made a profit of Euro50.1m. Its revenue fell by 4% to Euro2.49bn from Euro2.6bn. It attributed the loss to an economic downturn in Brazil and unfavourable exchange rates.

“This was undoubtedly a challenging year for InterCement, particularly due to the macroeconomic situation in Brazil, which accounts for about 35% of the cement production, the largest contribution within the company. The scenario was even more complex, as coupled with the economic downturn in the largest market where it operates, InterCement faced average unfavourable exchange rates,” said CEO Ricardo Fonseca de Mendonça Lima in a statement.

He added that the company’s decrease in earnings before interest, taxes, depreciation and amortisation (EBITDA) margin remained high in the international cement market at 20.8%. EBITDA fell by 18.2% to Euro518m in 2015. The cement producer reported that overall cement and clinker sales fell by 6.1% to 28.1Mt in 2015 from 30Mt in 2014.

By region, InterCement has temporarily suspended it grinding plants at Jacarei and Suape and its clinker kiln at João Pessoa in Brazil to cut costs. By contrast its plants in Argentina were working a full capacity in 2016. Co-processing developments were noted in Egypt and Portugal. The Alhandra cement plant in Portugal was the first unit in the company to beat a 50% co-processing monthly rate. A production decline was reported in Cape Verde and operational difficulties in Mozambique led to a kiln stoppage.

Brazil: Intercement's Cimpor, part of the Camargo Corrêa group, has announced that its US$145m project to build a plant in Itaiacoca, Parana, is suspended. The decision was made due to the ongoing economic crisis in Brazil. The Ponta Grossa plant had been announced in 2011 and was set to have an initial production capacity of 1.2Mt/yr of cement and create 1000 jobs. The company has not disclosed any details about a new timetable for the project, but has confirmed that it is still in plans for expansion in the coming years.

Brazil: InterCement has sold two quarries, Guarulhos and Barueri, in São Paulo state to Polimix Concreto for US$25m. The sale includes the properties, assets and exploration rights of both quarries.

The quarry sales follows a sale of a 16% stake in Yguazu Cementos (Paraguay) for US$35m that was announced on 21 December 2015. In that sale InterCement retained a 51% stake in Yguazu Cementos to retain control of the subsidiary. The remaining share capital share capital was held by InterCement's Paraguayan partner Concret Mix.

Together both sales form part of a set of initiatives to strengthen InterCement's capital structure and increase its profitability. As part of its announcement the company highlighted the stoppage of underused plants, the divestment of concrete units in Brazil, the sale of non-strategic assets, pricing reviews and reduction of costs and expenses.

Nine-month financial results from the major Brazilian cement producers have been reported this week and they are not looking good. The local construction market is weak and cement sales volumes are down. This has been blamed on a 30% shrinkage of real estate financing and a 20% decrease in infrastructure works.

Votorantim has seen its cement sales volumes drop by 4% year-on-year to 26.7Mt for the first nine months of 2015. InterCement has seen its cement and clinker sales volumes drop by 7.2% to 21.1Mt. LafargeHolcim has reported unspecified declines in its cement sector in its disappointing third quarter results.

Overall, the Sindicato Nacional Da Indústria Do Cimento (SNIC) - Brazil's cement industry body, has reported that domestic cement sales fell by 7.7% to 49.2Mt for the period. Particular sales drops by region have been observed in the Midwest (5.8Mt, -11.2%) and the Southeast (22.8Mt, -9.4%). That last region, Southeast, is pertinent given that it contains the country's biggest cement producing state, Minas Gerais.

Votorantim has been pointing out all year that its costs are soaring due to issues in Brazil. Maintenance costs, energy-related costs and the impact of the depreciation of the Brazilian Real on petcoke were all hitting costs. Net revenue has grown so far in 2015, with a growth of 5% to US$2.75bn, mainly due to the company's geographic spread outside of Brazil.

InterCement has noted that new cement production capacity in north-eastern and southern markets have reduced its sales volumes and prices by 1.7%. It too has experienced a rise in energy costs, pegged to the US Dollar. To act against this InterCement is implementing adjustment measures including suspending production at two grinding units and the closure of concrete units.

Alongside this Camargo Corrêa, the Brazilian construction group that owns InterCement, has been planning to sell a stake in InterCement to pay off debt since at least mid-2015. At the time local media reported that Camargo Corrêa planned to sell 10 – 18% of Intercement for between US$648m and US$1.17bn. CEO Vitor Hallack confirmed this week that Camargo Corrêa is still looking for a buyer. In the meantime it has extended US$536m of its short-term debt.

All of this is mirrored by wider economic woes in the country. In October 2015 the International Monetary Fund projected a 3% drop in real Gross Domestic Product (GDP) in 2015. The situation has been blamed on a wider world economy, the slowing Chinese economy and internal factors.

Back on cement, in July 2015, SNIC announced that domestic cement demand could contract by 10 - 15% in 2015 and that consumption could fall to around 60Mt in 2016. Brazil's cement production capacity currently stands at 70.75Mt/yr. Perhaps not coincidentally LafargeHolcim announced a 'portfolio optimisation' in its third quarter results with asset sales of US$3.5bn in 2016. Brazil may be on that list.

For more information on the Brazilian cement industry look out for our report in the December 2015 issue of Global Cement Magazine

Brazil: Brazilian construction group Camargo Corrêa is prepared to sell assets to help reduce its US$6.38bn debt, according to CEO Vitor Hallack.

"We put up US$2.41bn to acquire cement manufacturer Cimpor in 2012, which became InterCement. It was a strategic option to double our size in Brazil and increase our international presence," said Hallack. Brazil's economy, however, has negatively impacted the company's plans.

To resolve matters, Camargo Corrêa has extended US$536m of its short-term debt. After negotiating with banks, its obligations have been extended to 66 months from 12 months. Moreover, assets in two companies could be sold off if the price is right and the opportunities arise. The company could sell off textile group São Paulo Alpargatas and seek partners for InterCement, according to Hallack, who reiterated that the company's energy firm CPFL Energia and transportation infrastructure arm CCR will not be sold.

India: Brazilian cement major Votarantim Cimentos, InterCement Austria Holding and Camargo Corrêa have settled a case with the Securities and Exchange Board of India (SEBI) for alleged violation of takeover protocols regarding Shree Digvijay Cement. They have paid over US$115,000 in settlement charges.

SEBI had initiated adjudication proceedings against the three companies over the violation of provisions Substantial Acquisition of Shares and Takeovers (SAST) regulations. It was alleged that the entities failed to comply with certain provisions of the SAST regulations while making an open offer for acquisition of 36.7 million shares, representing a 26% stake in Shree Digvijay Cement.

Mozambique: Cimentos de Mocambique, part of Intercement, has concluded the installation of kiln filters at its cement plant in Matola, Maputo. The company invested US$10m in the equipment to reduce air pollution levels in the area.