Displaying items by tag: Ireland
CRH reports steady improvement in third quarter
21 November 2017Ireland: CRH’s like-for-like group sales for the third quarter of 2017 rose by 3%, boosted by continued underlying growth in the Americas, although some operations were hit by adverse weather. CRH, which is in the final stages of buying US-based Ash Grove Cement for Euro2.98bn, added that it continues to expect another year of progress in 2017, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than Euro3.2bn. This is 2.2% higher than the Euro3.13bn EBITDA it saw during 2016.
Group sales for the nine months as a whole were Euro20.7bn, an increase of 2% compared to the same period if 2016. EBITDA for the nine months was also 2% higher at Euro2.43bn.
PPC said to be on shopping list for CRH
13 October 2017South Africa: Ireland’s CRH is considering making a bid for PPC according to unnamed sources quoted by Bloomberg. However, no final decision has been made and neither CRH nor PPC have commented on the matter. Following an offer made by Fairfax Financial Holdings in September 2017, PPC said that it had received two other offers. Nigeria’s Dangote Cement publicly admitted that it was in talks with PPC but it later withdrew from the bidding process.
CRH enlarges its North American cement presence
27 September 2017The last week marked a step change to the US industry with the news that Ireland’s CRH has agreed to buy Ash Grove Cement. The latter is the largest remaining cement producer still owned by an American company. Its history dates back 135 years to its founding in 1882, with links to the Sunderland family for over a century. Following the acquisition, each of the top five cement producing firms in the US will be operated by multinational corporations based in foreign countries.
Although this scenario is not new to many other countries around the world, it is rare for a nation with a cement industry of this scale. The US is the third biggest cement producer worldwide. Out of the top ten cement producing nations Global Cement Magazine identified in its Top 100 Report 2017 feature in December 2016 only Egypt doesn’t have a local company to match the multinationals. China has China National Building Material (CNBM), for example and India has UltraTech cement and so on and so forth.
The actual sale covers Ash Grove Cement’s eight cement plants and 23 cement terminals, as well as its ready mix concrete and aggregate businesses, for US$3.5bn. Altogether its cement plants have a production capacity of 9.5Mt/yr and this really puts into contrast the Cementir Italia deal last week. HeidelbergCement has agreed to buy that company for around Euro57/t. CRH is buying Ash Grove Cement for US$368/t. That’s more that five times as much!
To be fair they are very different markets, with Italy’s cement sector consolidating near the bottom of a business cycle and the US growing with some promise. For comparison with other recent US acquisitions, CRH is offering to pay about the same as Summit Materials did to Lafarge for a cement plant and seven terminals in mid-2015. Other than that a few of the more recent transactions have been between US$200 – 300/t. The gradual price inflation for cement production capacity indicates that there is confidence in the US cement market.
In terms of CRH’s enhanced presence in North America following the completion of the deal, it currently operates two cement plants in the US: the American Cement Sumterville plant in Florida, a joint venture with Elementia, and the Trident plant in Montana. The CRH US division also runs five terminals in the Midwest and Northeast. This compliments Ash Grove Cement’s presence in the West, Midwest and South. Throw in CRH’s Canadian cement plants in Ontario and Quebec and CRH has the makings of a seriously strong cement business in North America. The only obvious impediment could be the close proximity of the CRH Trident plant and the Ash Grove Cement Montana City plant. Both are in Montana within 115km of each other and they are the only integrated plants in the state. A Federal Trade Commission arranged divestment in this location seems likely.
Ash Grove Cement’s chairman Charlie Sunderland, described CRH as his company’s biggest customer when the acquisition was announced. Buying Ash Grove Cement fills in one more piece in CRH’s construction materials puzzle in North America. Its American divisions have generated more than half of its revenue since at least 2014 dominating asphalt, aggregate and ready mix concrete markets. Yet it has lacked a cement market presence to match this. This changes when the deal with Ash Grove Cement completes.
CRH buys Ash Grove Cement for US$3.5bn
21 September 2017US: Ireland’s CRH has agreed to buy Ash Grove Cement for US$3.5bn. The American cement producer operates eight cement plants across eight US states, combined with ready mix concrete, aggregates and associated logistics assets across the US midwest. Once shareholder and regulatory approval is obtained the deal is expected to complete by the end of 2017.
"Ash Grove is an excellent addition to CRH's portfolio of businesses across North America as we seek to deploy our capital into high quality businesses that enhance our global asset base and provide opportunities to create shareholder value. We welcome the Ash Grove team to CRH and look forward to further developing our longstanding relationship as part of one company," said Albert Manifold, chief executive of CRH.
Before the purchase agreement Ash Grove Cement was the largest domestically-owned cement producer in the US. The company has operated for 135 years and over a century of this time it has been run by the Sunderland family.
Irish Cement’s alternative fuels hearing gets underway
30 August 2017Ireland: On 29 August 2017 an oral hearing began to hear submissions regarding plans by Irish Cement to use alternative fuels for energy in its plant in Limerick. The company is seeking to move away from using fossil fuels as a main source of material in its cement kiln in Mungret and to use recovered waste and tyres instead.
A number of local residents and members from action group Limerick Against Pollution (LAP) held a protest outside the hearing. LAP spokesperson Tim Hourigan said that residents were concerned about the possible release of toxins from the proposed process and that they were opposed to it going ahead. The hearing was also attended by local businessman and racehorse owner JP McManus, who said he was ‘concerned’ about the plans.
Representatives from Irish Cement told the hearing that the proposal would improve the long-term viability of the plant as well as help to reduce CO2 emissions and the plant’s reliance on imported fossil fuels. The hearing is expected to last until Friday 1 September 2017.
CRH’s European Heavyside division stagnates so far in 2017
24 August 2017Ireland: CRH’s sales revenue from its Europe Heavyside division, which includes cement production, fell by 2% year-on-year to Euro3.35bn in the first half of 2017 from Euro3.41bn in the same period of 2016. The group described the situation in Europe as ‘stabilising,’ with market recovery reported in Ireland, France, Finland and Poland. However, its earnings before interest, taxation, depreciation and amortisation (EBITDA) remained static at Euro352m. Overall the group’s sales rose by 2% to Euro13bn and its EBITDA rose by 5% to Euro1.18bn.
"We have had a satisfactory start to 2017 with stabilising trends in key European markets and EBITDA growth in the Americas,” said chief executive Albert Manifold. “For the second half of the year, despite currency headwinds and continuing challenging conditions in the Philippines, we expect a continuation of the first half momentum experienced in Europe and EBITDA growth in the Americas, which will result in another year of progress for the group."
The group’s America Materials division’s sales rose by 6% to Euro3.17bn and its EBITDA rose by 15% to Euro288m. It reported that residential and non-residential demand increased and that publicly funded infrastructure activity remained stable in the US. However, its cement volumes fell by 1% due to declines in Ontario and Quebec, although this was partly offset by increases in the US market. In Asia the group’s sales fell by 11% to Euro244m in part due to lower sales volumes of cement in Philippines with falling prices and higher fuel and power costs.
Irish producers warn over green energy levy
16 August 2017Ireland: A proposed Euro100m rise in Ireland’s green energy levy threatens the recovery in construction, according to building materials suppliers. The Commission for Energy Regulation (CER) wants to increase the Public Service Obligation (PSO) levy on electricity bills by Euro104m to Euro496.5m from October 2018 to support renewable energy developers and peat-fired power plants.
However, cement and concrete manufacturers, whose businesses face high-energy bills, have warned the regulator that such a move could hit jobs and endanger the recovery in construction. In a submission to the commission, manufacturer Kilsaran International said that, "Irish electricity prices are among the highest in Europe and the yearly increases in the PSO levy only serve to undermine the cost base and competitiveness of Irish companies, thereby limiting the potential for growth and job creation.”
Many other companies in the industry submitted versions of the same letter to CER analyst Gráinne Black, pointing at the likely cost of the increase to their businesses and its implications for job creation.
According to the CER large energy users, which include cement and concrete producers, will pay Euro234.2m of the Euro496.5m total. The charge guarantees the price paid for electricity to wind farms, other renewable energy producers and peat-fired plants. It is meant to implement government policy to support green electricity generation.
Maeve Carton to retire from board of CRH
02 August 2017Ireland: Maeve Carton plans to retire as Group Transformation Director of CRH and from its board on 31 August 2017. Since joining CRH in 1988, Maeve has held a number of senior financial roles prior to joining the board as Finance Director in May 2010. She was appointed Group Transformation Director in January 2016.
Irish financier reported to have stake in Ecocem
05 June 2017Ireland: The Times has reported that financier Dermot Desmond is believed to have taken a stake in Ecocem Materials, the fast-growing low-carbon cement maker founded by Irishman Donal O'Riain and backed by French construction materials giant Saint-Gobain. It is understood that IIU, Desmond's private equity company, moved in recent weeks to acquire as much as 11% of the company.
Founded in 2003, Ecocem manufactures cement from granulated blast-furnace slag, a byproduct of steel production. The company had sales of Euro63m in 2015, according to its most recent accounts.
Ireland: The Environmental Protection Authority is investigating Irish Cement’s plant in Limerick following an alleged ‘blowout’ of dust from the plant in early April 2017 that effected parts of Limerick city. The cement producer said that it had repaired a clinker conveyor following an inspection, according to the Irish Examiner newspaper. Previously Irish Cement admitted to dust emissions in 2015 that led to it compensating local residents with free car washes. The company is also appealing to the government to allow it to burn alternative fuels at the site despite local opposition.