Displaying items by tag: Ireland

Russia/Kazakhstan/Ireland: Russian businessman Oleg Deripaska is holding talks to discuss selling up to 75% of his cement production company BaselCement to Ireland's Cement Roadstone Holdings (CRH). BaselCement CEO Vyacheslav Shmatov and CRH's press office declined to comment.

At present, BaselCement only has two operating facilities, one in Russia and the other in Kazakhstan. The company's plant in the Krasnoyarsk city of Achinsk produced 436,500t of cement in January to July 2011, up from 150,400t that it produced in the same period of 2010. BaselCement's plant in Kazakhstan produced 400,000t of cement in the whole of 2010.

The proposed deal could also include two cement plants with a combined annual production capacity of 3.5Mt/yr that are currently being built in the Ryazan and Novgorod regions. CRH has preliminarily estimated BaselCement's value at Euro550-600m (excluding its subsidiary BaselCement-Pikalyovo). BaselCement is forecast to have a net profit of Euro45.8m in 2011.

Ireland: The Irish cement industry stands to make windfall profits of up to Euro50m 'at the taxpayers' expense,' according to sources familiar with the EU's emissions trading scheme (ETS). The sources estimate that companies such as CRH, Quinn Cement and Lagan Cement have made Euro26m over the past five years from the over-allocation of carbon credits by the government.

The sources estimate that the cement industry stands to make a further Euro25m when the next round of carbon credits is allocated under the ETS. The government allocates a certain amount of emission permits to companies for free. The idea is that polluting companies would buy credits in the market if they exceeded the permitted amount of emissions.

This system is known as 'cap-and-trade' but an initial over-allocation arose, partly because of the construction bust which meant that firms did not produce as much cement as expected. The sources said the transfer was a waste of public funds at a time when the exchequer was financially stressed. They also argued that the effect was to distort the market in favour of making cement.

The estimate of the scale of the subsidy comes after the Economic and Social Research Institute (ESRI) noted earlier in 2011 that the current EU ETS provided potentially large windfall gains for certain industries, such as electricity generation and cement production. The ESRI argued that such windfall gains should be recaptured by society through the tax system.

A spokesman for Cement Manufacturers Ireland did not dispute the figures, saying that the industry had invested millions of Euros in new technology upgrades to become one of the most efficient in Europe. "The current recession was not predicted when allowances were allocated under rules proposed by the Commission," he said.