Displaying items by tag: Lafarge

World: Avantha Group's Compton Greaves (CG) has signed a global supply agreement with Lafarge for electrical motors. This agreement positions CG as one of the select few preferred global suppliers for Lafarge.

CG is one of the few global motor manufacturers to own the complete chain of design and manufacturing, from rotor, stator design and stamping to finished motor. There are over 40,000 CG-made motors operating in cement plants around the world. It has developed unique slip-ring, twin drive slip-ring and double squirrel cage motors, as well as low maintenance-energy efficient motors specially designed for the cement industry, which deliver high starting torque, low noise and vibration.

"We are extremely pleased to have entered into this agreement and have CG as a preferred partner for large motors. CG's ability to provide flexible designs, high quality and cost effective solutions were key factors that Lafarge considered while making this decision," said Michel Edmont, senior vice president of international sourcing at Lafarge Cement.

"Our sincere thanks to Lafarge for reposing their trust in CG's expertise in this sector, as one of the leading players in industrial motors. Our strategic investments such as the global design centre in Bhopal, India, exhibits our commitment towards developing energy-efficient and technologically-advanced products for the ever-evolving market needs of the industrial sector. This global supply agreement is a perfect fit for both the companies to leverage the growing demand in infrastructure the world over," said CG's CEO and managing director Laurent Demortier.

Kenya: According to Reuters, Kenyan cement producers have said that they are being left out of a US$3.8bn railway project that China Rail & Bridge Corporation (CRBC) is building, after the company gave an assurance it would source all of the raw materials domestically.

Companies including Lafarge South Africa's Kenyan unit and ARM Cement have asked Kenya Railways Corporation, the implementing agency, to provide clarity on CRBC's local procurement plans, five months after work on the project started, according to ARM Cement CEO Pradeep Paunrana. Kenya Ports Authority data show that CRBC has imported at least 7000t of cement so far in 2015.

"There was an assurance that all of the cement would be supplied by local producers," said Paunrana, who is also chairman of the Kenya Association of Manufacturers. "There has not been transparency on how much we will supply and we don't understand why they are importing cement when we can clearly supply cement to their specifications."

The 'Standard Gauge Railway Project' (SGR) is Kenya's biggest investment in infrastructure since it gained independence from Britain in 1963. The Export-Import Bank of China is funding 90% of the railroad, which will connect Nairobi to Mombasa, East Africa's biggest port. It is scheduled to be completed by 2017. Kenya's Treasury is pinning its 7% growth target for 2015 partly on activities generated during construction of the 609km link. In June 2015, treasury secretary Henry Rotich allocated US$1.46bn to the project for the 2015 - 2016 financial year.

The SGR project requires 1Mt of cement, all to be sourced in Kenya, according to a master list of supplies that the manufacturers' association was given by CRBC. Kenya is a higher cost producer of cement than China and imports for the project are duty-free, according to Paunrana. Kenya Railways spokeswoman Mary Oyuke has said that the company isn't importing cement because the material is available locally and ARM and Bamburi are already supplying the project.

ARM and other producers, including Lafarge's unit Bamburi Cement, have upgraded their plants to produce the 52.5 grade cement required by the contractors. The enhancements cost 'several million dollars' and were commissioned on the understanding that CRBC would buy the cement from domestic manufacturers. "We undertook significant investments in an endeavour to seamlessly supply cement to the project, including long-term agreements with transport companies to make deliveries," said Bamburi CEO Bruno Pescheux. "It is our hope that the project will continue to purchase cement locally rather than import, in light of the above investments." Bamburi supplied 20,000t of cement in April 2015.

The Greek debt crisis directly hit the local cement industry on Tuesday 30 June 2015 when Titan Cement reported that it was unable to pay a dividend to its shareholders. The leading local cement producer blamed the capital controls introduced by the government.

It is worth looking at the effects on the domestic cement industry as the Eurozone bureaucracy and the Greek government play 'chicken' with each other while Greece starts the default process, having failed to pay the latest International Monetary Fund (IMF) payment on 30 June 2015. Greece will now join a group, possibly even more select than the European Union, of countries that have failed to pay back the IMF, including current defaulters like Sudan and Zimbabwe.

A better comparison might be made with Argentina which defaulted upon its foreign debts in 2001. Its construction industry fell by 12% year-on-year in 2001 and by a further 30% in 2002. Cement consumption and cement production utilisation rates hit 23% in 2002. One key difference with Greece is that the country has had major financial difficulties for far longer than Argentina. Argentina ran into financial depression in 1998 and defaulted in 2001. Greece ran into financial trouble following the 2008 financial crisis and then received its first bailout in 2010.

As the capital controls show, even initial responses to the financial situations are impacting upon the standard transactions a limited company conducts. The Financial Times ran an article in May 2015 examining the potential effects on businesses of a debt default and Greek exit from the Eurozone (Grexit). In short, business and commerce will continue where possible reacting to whatever comes their way. For example, an olive oil producer reported switching to exports to make profits. Crucially though, another company interviewed, a construction contractor, worried about potential cuts to government or EU-led infrastructure projects.

As Titan reported in its first quarter results for 2015, its Greek market has been dependent on road building. In February 2014 Titan Cement reported its first improved operating results in seven years followed by profit in 2014 as a whole. The other major cement producers, Lafarge subsidiary Heracles General Cement and Italcementi subsidiary Halyps Cement, reported an improved construction market in 2014 with rising cement volumes. However, it was noted by Lafarge that it was developing exports to 'optimise kiln utilisation.' Titan also noted the benefits of exports in its first quarter report for 2015, focusing on a strengthening US Dollar versus the Euro. Given on-going events, one suspects there is going to be a lot more 'development' of this kind.

To set some sense of scale of the crisis Jim O'Neill, former head of economics at Goldman Sachs, famously calculated that, at the height of its growth, China created an economy the size of Greece's every three months. What happens next is down to the crystal balls of economists, although the path of least resistance now seems to be pointing at further default, departure from the Eurozone and Euro and further significant financial pain for Greece.

It looks likely that the local construction market will stay subdued and exports will offer a lifeline. How much the EU is prepared to let Greece default on its bills and then try and undercut its own over-capacity cement industries remains to be seen. However, since the main cement producers in Greece are all multinational outfits, it will afford them some flexibility in their strategy in coping with the fallout. Meanwhile a cement production capacity of around 14Mt/yr for a population of 11m suggests over capacity by European standards. If exports can't help then the situation looks grim.

UPDATE: Here is Global Cement's previous take on Greece from June 2012

India: Lafarge India has appointed Ujjwal Batria as CEO of the company effective from 22 June 2015. Batria will take over the responsibility from Martin Kriegner, who has been named as area manager for Central Europe of LafargeHolcim.

The development comes shortly before the expected completion of the LafargeHolcim merger. The Indian Competition Commission of India (CCI) has already approved the Indian leg of the proposed merger, with certain provisions, including divestment of two cement plants; Lafarge's plants at Jojobera, Jharkhand and Sonadih, Chhattisgarh. The two plants have a combined capacity of 5.15Mt/yr. Holcim's business in India is run through ACC and Ambuja Cements. It is not clear what Batria's role will be in the merged LafargeHolcim entity. Since ACC and Ambuja Cements are public listed firms, Lafarge's Indian unit may continue to operate separately, at least to begin with.

Prior to his appointment as CEO of Lafarge India, Batria was managing director of the company and was managing its cement business. He has been with Lafarge for 16 years. He had joined the company in 1999 and has served on different position across functions since then.

Slovenia: According to the Slovenian Press Agency, on 24 June 2015 the government adopted a proposal for changes to the environment protection act that remedies shortcomings in provisions governing environmental permits. The problems with the existing legislation had led to the European Commission (EC) taking Slovenia to the EU Court of Justice.

The government said that the key purpose of the amendments was meeting the demands of the EC and that all plants without environmental permits at the time when the changes enter into force will need to stop operations. The step is related to the Lafarge cement plant in Trbovlje, which was instructed to stop operations in March 2015 after lax legislative provisions allowed it to continue to operate for a protracted period even though it did not have an environmental permit.

The EC announced in February 2015 that it was taking Slovenia to the EU Court of Justice for its failure to implement environmental licensing in line with the integrated pollution prevention and control (IPPC) directive of 2007. The EC said that the legal action came because one of the country's major cement producers had continued to operate without the required permit, in reference to Lafarge. The EC was seeking a base fine of Euro1.6m for the country plus Euro9009 for each day that the violation persisted.

Russia: According to Esmerk Russian News, Lafarge has suspended the construction of a Euro710m cement plant in Rostov. The plant was scheduled to launch in 2016. The planned capacity of the first phase was 2Mt/yr of cement.

Maldives: Lafarge Maldives has opened a 4000t cement silo at its Thilafushi silo terminal. It is the largest single cement silo in the Maldives. The facility now has a total capacity of 9000t due to other silos at the same site.

The expansion was opened by the Minister of Economic Development Mohamed Saeed, Lafarge Cement Managing Director Breece Orden Reece and State Trading Organisation Managing Director Ahmed Shaheer.

France: Lafarge Group has appointed Benedicte de Bonnechose as CEO in charge of operations of its French unit. She will succeed Pascal Casanova, who was appointed as head of Latin American operations at the future combined group LafargeHolcim.

Bonnechose has been a member of Lafarge's board since 2012.
She has played a key role at the group's reorganisation in France and was in charge of its strategy, public affairs and environment businesses. Since 2013 Bonnechose has been CEO of Lafarge's aggregates unit.

US: According to Imperial Valley News, following a public comment period, the Federal Trade Commission (FTC) has approved a final order settling charges that the merger of Lafarge and Holcim would likely harm competition in 12 markets for Portland cement and two markets for slag cement.

Under the order, first announced in May 2015, the two companies are required to divest cement plants, quarries, terminals and other assets in the 12 states of Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, Montana, New Jersey, New York, Ohio, Tennessee, Wisconsin, as well as several locations in Canada. The commission vote that approved the final order was 4-1, with commissioner Joshua D Wright voting no.

Canada: The Vancouver Sun has reported that a pair of bald eagles that have nested in a tree on the Lafarge industrial site in Vancouver have been beset by tragedy after the mother eagle died, leaving two baby eagles as orphans.

Lafarge had built a new nesting platform up a 20m pole in 2009, but the eagles used it for perching only and continued to nest elsewhere. The eagles hatched two eaglets in April 2015, but on 13 June 2015 the female was electrocuted by power lines while being chased by crows. The loss has devastated conservationists who had long worked to protect the pair and has left them wondering if the male eagle can continue to successfully raise his young until they are fledged, in about four weeks.

"We are just heartsick over this tragedy," said Karen Bills, project coordinator for the Hancock Wildlife Foundation, which worked with Lafarge to install the artificial nest.