Displaying items by tag: Italcementi
Italy: Italian cement producer Italcementi plans to stop production at three of its Italian cement plants, bringing the total of its dormant plants in the country to nine. Italcementi director general Giovanni Battista Ferrario made the announcement at a shareholders' meeting, blaming the move on overcapacity in the face of a huge slump in domestic demand
The company expects to save Euro110m through the closures as part of an efficiency drive. It posted losses of Euro362m in 2012, most of it due to poor Italian demand. Lay-offs for over a quarter of Italian staff were announced in December 2012. It said the Italian market "continues to be marked by productive over-capacity compared to a demand that has dropped to the levels last seen at the end of the 1970s."
Italcementi had 17 operational plants in 2012. It has since then sold one and halted production at five others. However, CEO Carlo Pesenti told the meeting that the company plans to invest up to Euro150m on upgrades at its Rezzato plant and has plans to develop its Calusco plant.
West China Cement profit drops 24% in 2012
21 March 2013China: West China Cement has reported that its gross profit fell by 23.7% to US$109m in 2012 from US$142m in 2011. The Chinese cement producer attributed the shortfall on a decreasing selling price, increases in electricity costs and higher overheads due to lower productivity.
The company's revenue rose by 10.5% to US$567m from US$513m. Earnings before interest, taxes, depreciation and amortisation (EBIDTA) fell by 9% to US$170m from US$187m. Cement sales volumes rose by 22% to 14.3Mt in 2012 from 11.7Mt in 2011.
In its annual report West China Cement reported that it is consolidating its position as the largest cement producer in Shaanxi Province as well as expanding into Xinjiang Province, where economic and infrastructure growth promoted by the Chinese government's Western Development Policy remains a key feature of the 12th Five-Year Plan. For 2013 the company expects the recovery in infrastructure demand in the second half of 2012 to continue. However, increased overall capacity in Xinjiang Province is expected to continue impacting upon cement prices in that region.
Three of the big multinational cement producers - HeidelbergCement, Cemex and Italcementi - have already released preliminary reports for 2012. Here's what they tell us.
Geographically, performances in the Americas and Asia propped up balance sheets. Europe, however, continued to ruin the party in 2012.
In its Western and Northern Europe section HeidelbergCement saw a 3.9% decrease in sales of cement and clinker to 21.3Mt from 22.1Mt in 2011. However this was still higher than the sales in 2010 of 19.7Mt.
Cemex's Northern Europe section witnessed a 13% drop in overall net sales to Euro3.05bn. Its Mediterranean section did worse, with a 15% drop in net sales to Euro1.08bn. Both declines were similar to the falls in cement volumes in these regions. Italcementi watched its Central Western Europe region plummet by 16.1% to 16Mt.
To demonstrate the comparative exposure to Western Europe, 25% of HeidelbergCement's sale volumes came from Western Europe and 35% of Italcementi's sale volumes came from Western Europe. Cemex hasn't released any figures for sales of cement in its preliminary results but overall in cement, aggregates and concrete, 37% of its sales came from its two European regions.
HeidelbergCement noted that demand for construction materials remained stable in Germany and Northern Europe. However it weakened in the UK and the Netherlands. By contrast Cemex noted a decrease in cement volumes for the year in Germany although it became stable by the fourth quarter. For the UK it had the same experience as HeidelbergCement, with a similar downturn in France and Poland. In its Mediterranean region Cemex recorded a whopping 40% decrease in cement volumes. Although light on detail, Italcementi pointed out a 25% drop in cement consumption in Italy and a 8% drop in France and Belgium.
In November 2012 the European Commission forecast that gross domestic product (GDP) would fall by 0.3% in the European Union (EU) in 2012. Broadly in line with the national situations reported above, Germany's GDP is forecast to have risen in 2012; the UK's, the Netherlands', Belgium, Italy and Spain's GDPs looks to have fallen in 2012. Curiously though, both France and Poland were forecast to have improving GDPs in 2012. HeidelbergCement and Cemex's experiences suggest that this didn't happen in the French construction industry. The (next) light at the end of the tunnel for 2013 is that EU regional GDP growth is forecast to become positive again.
With Lafarge and Holcim due to release their annual report for 2012 in late February 2012, we'll revisit this topic in a few weeks time.
Italcementi revenue falls by 3.8% to Euro4.48bn in 2012
06 February 2013Italy: Italcementi has reported that its revenue fell by 3.8% to Euro4.48bn in 2012 from Euro4.68bn in 2011. It blamed the fall on the continued effects of the economic crisis on demand for construction materials in Western Europe.
Sales volumes of cement and clinker principally fell in the group's Central & Western Europe region, by 16.1% to 16Mt in 2012. Volumes also fell by 4.5% to 14.9Mt in the group's Emerging Europe, North Africa and Middle East region. North America grew by 0.3% to 4.2Mt and Asia grew by 8% to 10.1Mt. Notably sales volumes increased across all regions in the fourth quarter of 2012.
Revenue by business line for cement and clinker fell by 3% to Euro2.90bn in 2012 from Euro2.99bn in 2011. Revenue by geographical area for the group's two declining regions represented 76% of the group's total of Euro4.48m in 2012.
In its press release the Italian based multinational cement producer added that it reduced its net financial debt by approximately Euro100m in 2012 to Euro1.99bn, helped by cash flow improvements and an investment policy focused on industrial and environmental efficiency. It added the during 2012 the group introduced measures to rationalise its production network. These include the '2015 Project' for the Italian market, announced in December 2012, which will have a positive annual effect of approximately Euro40m when fully implemented.
Italcementi announces lay-off schemes for 26% of Italian staff
14 December 2012Italy: The Italian cement maker Italcementi has prepared a plan to reorganise its activities in Italy, to be implemented in 2013 and 2014. It envisages layoff schemes for up to 665 employees.
At present the company employs 2500 staff, of whom two-thirds are employed at its production sites. The remainder work at the company's headquarters in Bergamo.
The plan, dubbed 'Project 2015,' aims to rationalise the industrial and distribution structure of the group and reorganise the central structures and commercial network. The plan targets to reduce costs by around Euro40m/yr.
Vertical rumour mill: Jaypee Group takeover tales
05 December 2012Step forward UltraTech Cement into the vertical rumour mill! The Indian cement producer is the latest company reported as wanting to buy Jaypee Group's cement business in Gujarat. It follows Italcementi, Aditya Birla and CRH, who announced in October 2012 that negotiations had been 'terminated' as the parties had been unable to agree terms.
This time the asking price has risen, with Ultratech allegedly offering US$160-165/t and Jaypee holding out for US$180-185/t. Whilst UltraTech hasn't publicly confirmed the move, it pointedly hasn't denied it either. The Aditya Birla Group subsidiary only commented to the Bombay Stock Exchange that it had not issued any press releases on the subject. Aditya Birla Group itself was reported in October 2012 as pursing interest at US$130/t for Jaypee's 9.8Mt/yr operations in Gujarat and Andhra Pradesh.
Given the number of rumours and cash-rich CRH's very public failure to strike a deal it seems likely that Jaypee has a specific price in mind and it's sticking to it. Prasad Baji of Edelweiss Securities stated in a television interview with CNBC-TV18 that he thought that the cement industry cycle was starting to look up. Crucially he predicted that India's capacity utilisation was set to rise from its current level of 78% to 82% despite price declines in the current quarter.
This is in sharp contrast with Fitch Ratings which rated the Indian cement industry with a negative outlook at the start of 2012 and reports in late May 2012 that capacity ultilisation had actually fallen from 76% to 71%. Since then ICRA Research reported in late September 2012 that it expected Indian capacity ultilisation to stick to 76% for 2012 with prices showing 'resistance' in some regions to cost increases due to rising input costs.
With all this in mind it seems likely that UltraTech will join the growing list of Jaypee's spurned buyers when it fails to reach terms or when the rumours simply fizzle out. However if UltraTech does strike a deal the Indian industry will be the one to watch in 2013. According to data in the Global Cement Directory 2013, an acquisition of nearly 10Mt/yr production capacity would boost UltraTech's capacity to 62Mt/yr making it the 12th largest cement company in the world.
Italcimenti investing Euro160m in Bulgarian cement plant
05 December 2012Bulgaria: Italian cement group Italcimenti will install a new 4000t/day cement production line at its Bulgarian subsidiary Denya Cement. The company is investing Euro160m and the completion date is scheduled to be 2015.
Italcementi hires KHD for Rezatto upgrade
23 November 2012Germany: Italcementi has awarded KHD a contract to upgrade and redevelop its Brescia Rezzato plant in Italy. The upgraded plant, situated in the environmentally sensitive Lake Garda region, will have to adhere to strict environmental requirements.
Italcementi has selected KHD's Clean Technology for the upgrade. It includes a KHD COMFLEX® SC 18 – 3250 system for raw material grinding, a Two-Pier PYRORAPID® Kiln 3000t/day 4.4m x 52m, a PFC PYRFLOOR® clinker cooler 635 AW and a Low NOX 5 stage Preheater 7950 PR.
KHD will also supply additional environmental equipment including selective catalytic reduction systems, a gas conditioning tower, selective non catalytic reduction systems, as well as special filter systems to reduce SOX. KHD will install much of the equipment whilst the existing kiln continues to operate.
The Rezzato plant, built in 1964, was designed by former Italcementi chairman Giampiero Pesenti, father of current Italcementi CEO Carlo Pesenti, during his tenure as an engineer. The project is scheduled to be finished in 2014, in time for Italcementi's 150th anniversary.
Grim and grimmer: European cement production so far in 2012
14 November 2012The 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.
Italcementi’s nine month profit crashes by 92%
08 November 2012Italy: Italcementi's net profit for the first nine months of 2012 has fallen by 92% to Euro17.1m from Euro213m in the same period in 2011. The Italian cement major blamed the on-going crisis in western Europe and new competition in Egypt and Morocco.
Italcementi's revenue for the year to 30 September 2012 fell by 4.4% to Euro3.39bn from Euro3.55bn. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell by 11.6% to Euro517m from Euro584m. For the third quarter of 2012, year-on-year decreases in revenue and EBITDA were similar to the year-to-date results. However, the company's net profit fell by 34.7% to Euro16.3m from Euro25m.
Italcementi's 'Central Western Europe' region sold 12.2Mt of cement during the first nine months of 2012, a drop of 16.8% compared to the same period in 2011. The 'Emerging Europe, North Africa and Middle East' region sold 11.1Mt, a drop of 4.9%. North America remained flat with 3.2Mt sold. Asia posted a rise of 7.1% with 7.6Mt sold.
In its report Italcementi singled out significant cement and clinker sales improvements in India and Thailand. Despite declining volumes in Egypt the company pointed out that as the country's political situation stabilises, the strengthening upturn in consumption could offer opportunities for improvements in group operations on the main market in the North Africa and the Middle East.
In its outlook the company called for greater caution given an intensification of decline in demand in the third quarter of 2012. It also mentioned that, in addition to completing the investments and efficiency measures planned during the year, the company is preparing new measures to 'significantly' reduce operating costs.