Displaying items by tag: Lafarge
Fighting for the crumbs
24 September 2014A significant amount of recent news has come from the fallout from the proposed LafargeHolcim merger. Lafarge and Holcim, as well as a raft of global cement producers, are stepping up activity and those outside the deal are starting to jostle for position. They will want to take advantage of the many opportunities to snap something up from the long list of assets to be sold.
First up, Turkey's Sabançi Holding has been reported to be investigating the LafargeHolcim divestments, although the actual targets were not reported. There are none on offer in Turkey itself but potential Sabançi interests could lie in nearby Romania, Serbia or Hungary. Of course, it isn't possible to rule out any wider ambitions.
Next we have Elementia, which has acquired Lafarge's former stake in their Mexican joint venture, prior to the announcement of its initial public offering there. In Singapore, CVC Partners and the Government entered discussions over the purchase of assets. It was earlier agreed by the Singaporean competition authorities that Lafarge and Holcim would be able to merge due to them being relatively small players in that market.
Meanwhile, in the UK and the US, HeidelbergCement is positioning itself via share deals in its subsidiary Hanson Building Products so that it may bid for the LafargeHolcim divestments in the US and UK. Hanson Building Products has filed for an Initial Public Offering in the US in preparation for HeidelbergCement to sell it later in the year. This sounds like a case of HeidelbergCement focusing on its core markets of cement.
There have also been moves by Lafarge and Holcim, most notably their approach this week to the European Union (EU) prior to the merger. The multinationals plan to iron out possible EU concerns over the merged company's market power before filing for approval of the deal, the step that starts an EU review.
Activity seems to be hotting up ahead of the LafargeHolcim merge and it will only intensify. It will be interesting to see which other multinational and regional players decide to 'show their hand' through the rest of the merger process. There are many more assets in Austria, France, Germany, the UK, Canada, Mauritius, the Philippines and Brazil to be divided up before the LafargeHolcim merger can be completed.
Lafarge to open 4000t cement silo in the Seychelles
24 September 2014Seychelles: Lafarge is constructing a 4000t cement silo in the Seychelles in partnership with the Sri Lankan engineering company Dynamic Technologies. The silo will be built in Sri Lanka and shipped to the Seychelles. Lafarge and Dynamic Technologies developed a similar facility in Mayotte, an overseas department of France, earlier in 2014.
Lafarge to sell 53% Mexican joint venture stake to Elementia
22 September 2014Mexico: Lafarge has announced plans to sell its 47% stake in its Mexican cement business to Mexico's Elementia SA de CV for US$225m in cash. Lafarge and Elementia operate three cement plants in Mexico, with the former owning 53% of their joint venture. The transaction is pending regulatory clearance and has to fulfil a number of customary closing conditions. Lafarge said that the proceeds from the sale would be used to reduce the company's net debt.
Holcim and Lafarge enter talks with EU to expedite merger
19 September 2014Europe: Holcim and Lafarge are holding talks with the European Union (EU) in a bid to obtain fasterapproval of their merger plan. Holcim and Lafarge plan to iron out possible EU concerns over the merged company's market power before filing for approval of the deal, the step that starts the EU's review.
Addressing EU issues at an early stage may allow regulators to approve the deal without opening an in-depth probe, which could add about four months to the process. The companies announced a wave of divestments in July 2014 in an attempt to ward off regulatory obstacles. Planned sales are weighted toward Europe, cutting exposure of both companies to the slower-growing region. European plants earmarked for divestment include sites in Austria, France, Germany and Romania. Under the EU's merger-review process, most deals are cleared at the first hurdle.
Bruno Roux appointed president and CEO for Lafarge Eastern Canada
19 September 2014Canada: Bruno Roux has been appointed president and CEO for the Eastern Canada business unit of Lafarge Canada. His appointment is effective from 15 September 2014 and he succeeds Bob Cartmel. Cartmel will remain with the Lafarge Group, assisting with the LafargeHolcim merger.
In his new role, Roux will serve as Lafarge's senior leader for all market areas and product lines in Ontario, Quebec and the Atlantic provinces. Roux will also join the Board of Directors of Lafarge Canada. Roux's responsibilities include all operational, sales, marketing and functional elements of the cement, aggregates and ready-mix concrete product lines. He will lead these teams from the Eastern Canada head office in Toronto.
"I am very excited for the opportunity to lead an extremely talented team in Eastern Canada," said Roux. "I am looking forward to working with our customers, architects and other stakeholders in achieving our ambition of building better cities."
Roux most recently held the position of president and CEO of Lafarge's operations in Poland. A native of France, Roux is a graduate of l'École Nationale Supérieure d'Arts et Métiers.
Lafarge sells Russian cement plant to Buzzi Unicem to cut debt
16 September 2014Russia: Lafarge SA has sold one of its Russian cement plants to Buzzi Unicem as part of its effort to cut debt. The Ural Cement plant in Korinko, Chelyabisnk was sold for Euro104m. Lafarge aims to reduce its debt to below Euro9bn from Euro11.2bn. The plant sale requires regulatory approval.
Arcadis to manage Lafarge’s Ravena cement plant modernisation
08 September 2014US: Arcadis, a natural and built asset design and consultancy firm, has announced that it will oversee the construction on a multi-million dollar modernisation project set to transform Lafarge North America's Ravena cement plant in New York State into one of the most advanced dry-kiln facilities in the country.
Arcadis will oversee the replacement of the existing 50-year old kiln, supporting Lafarge's commitment to quickly implement industry-leading mercury emissions caps. The improvements will further reduce SO2 and mercury emissions by an additional 20% over the next three years.
Slated for completion in 2016, the construction will create hundreds of jobs and retain over 100 current positions. Arcadis will coordinate all aspects of construction, including locating and purchasing materials, oversight of up to eight contracting companies, overall schedule coordination, management of materials and security of the site.
LafargeHolcim merger approved in Singapore
05 September 2014Singapore: Lafarge and Holcim have received approval from the Competition Commission of Singapore (CCS) to merge their businesses in the country.
Holcim (Singapore) and Lafarge Cement Singapore overlap in the manufacture and supply of ready-mix concrete and grey cement. Under Singapore's Competition Act, firms are not allowed to merge if the resulting entity could lead to a substantial lessening of competition in any market. However, Lafarge and Holcim argued that they would not have substantial market power after the merger. Grey cement is also imported to Singapore by Holcim primarily for its own consumption and is supplied to third parties only to a limited extent, they said.
After a public consultation exercise, the CSS issued its decision that 'The transaction is unlikely to lead to substantial competition concerns in Singapore.' This was because the firms are not major players in Singapore, despite being major names in overseas markets. The CSS added, "There is significant localised competition in the relevant overlapping markets in Singapore."
There are also alternative suppliers that can meet any additional demand for ready-mix concrete, thereby limiting the market power of the merged companies. With a number of suppliers in the market, cooperation among firms to raise prices will be harder as well, according to the CSS.
Malaysia: Scientists have discovered a new snail species on a limestone hill known as Kanthan in Malaysia. They have named the species, which is only 2-3mm in diameter, 'Charopa lafargei,' after Lafarge Malaysia, the cement producer that owns the hill.
As Kanthan is the only place that this species has been observed, Charopa lafargei was immediately classed as 'critically endangered' in the IUCN Red List for Endangered Species. This means that its future is effectively in the hands of Lafarge, which purchased the hill to make cement. The scientists decided to name the snail after Lafarge for this reason, although it is not clear if or how the name will affect the future actions of the producer.
"I'm not aware of a species threatened with extinction that has been given the name of the company that can determine whether it goes extinct or survives," said Tony Whitten from Fauna & Flora International.
The new snail is not the only endemic species found on the hill. Kanthan is also home to nine plant species that are on Malaysia's Red List of Endangered Plants. One critically endangered spider, one gecko and two other snails that are also found only on Kanthan.
Pakistan cement export wars return to South Africa
27 August 2014South African authorities have started a new investigation into imports of cement from Pakistan. This time the inquiry will examine trade dumping allegations made by local producers including Afrisam, Lafarge, NPC Cimpor and PPC.
The application made by the cement producers provided evidence that the difference between the price of cement (the dumping margin) in Pakistan and for imports from Pakistan in 2013 was 48%. Or, in other words, the price of Pakistan cement imported to South Africa was nearly half that of what is was being sold for in the country that it was actually produced in.
The data submitted to the International Trade Administration Commission of South Africa comes from a report by Genesis Analytics on Pakistan cement prices in 2013 and tax information from the South African Revenue Service. Neither source is readily available for more detailed analysis here but data released by XA International Trade Advisors suggests that cement imports from Pakistan rose to 1.1Mt/yr in 2013 and at a value of US$59m. Roughly, this gives a price of US$55/t. This compares to an average price of US$90/t, from the All Pakistan Manufacturers' Association for the first nine months of the 2012 – 2013 Pakistani fiscal year, giving a dumping margin similar to the allegation by the South African cement producers.
Separate industry sources quoted by the Pakistan media on the story reported that the country supplies 1.5 - 1.6Mt/yr of cement to South Africa, its biggest export market, receiving a revenue of US$125m. Although this suggests a dumping margin lower than the one presented to the authorities it is still high.
Other information of note in the investigation notification is that the Pakistan cement imports are only competing heavily with the local bagged cement market in the Southern African Customs Union, which also includes neighbouring Botswana, Lesotho, Namibia and Swaziland. The notification discounts bulk cement imports from Pakistan as being 'prohibitively' expensive suggesting that the Pakistan cement producers have no import infrastructure in southern Africa or that something else is stopping them. For example, the country's market leader for production, Lucky Cement, has export facilities in Karachi with silos and automatic ship loaders. Yet it's only 'brick-and-mortar' presence overseas are projects building an integrated plant in the Democratic Republic of the Congo and a grinding plant in Iraq.
It may also be worth considering that South African industry newcomer Sephaku Cement hasn't joined the dumping allegation. The Dangote subsidiary was set to start producing clinker in late August 2014. This is out of character considering how prominent the Nigerian-based cement producer has been in campaigning against imports to its home nation. However, the Aganang plant in Lichtenburg, North West Province is over 700km from the coast and presumably safe from foreign imports at present.
One final question occurs. How are Pakistan cement producers able to dump bagged cement on the South African market at prices lower than what they are selling it for at home? If individual producers sold their excess at home at a lower price they could potentially undercut their competitors and make a profit. There are many barriers, from input costs to industry structural issues and other reasons that may be preventing this. However, if the South African cement producers succeed in their latest attempt to block imports from Pakistan it may add more impetus to remove such barriers.