Displaying items by tag: LafargeHolcim

Indonesia: Semen Indonesia’s revenue grew by 23% year-on-year to US$1.17bn in the first half of 2019 from US$0.95bn in the same period in 2018. Its net profit halved to US$34.3m from US468.8m. Its domestic sales volumes of cement fell by 7.17% to 7.78Mt in the first five months of 2019 from 10.54Mt in the same period in 2018. Exports rose by 7.42% to 1.38Mt from 1.28Mt. Both local sales and exports fell at its Thang Long Cement subsidiary in Vietnam. However, its acquisition of Holcim Philippines in February 2019 has boosted its overall sales by 17% to 15.2Mt.

India: Ambuja Cement’s net sales increased by 5% year-on-year to US$834m in the first half of 2019 from US$824m in the same period in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 3% to US$168m from US$164m. However, its sales volumes of cement dropped by 3% to 12.2Mt from 12.6Mt. Bimlendra Jha, the managing Director and chief executive officer (CEO) of the subsidiary of LafargeHolcim, said that the company managed to optimise its logistics, raw material and fixed costs.

Greece: Heracles Cement has agreed an electricity energy deal with the Public Power Corporation. The three-year deal with the state-owned energy company will start at the end of 2020. It includes a 10% increase in the rate. The agreement is also part of the country’s Greenpass scheme. The subsidiary of LafargeHolcim operates two integrated plants in the country.

Canada: Lafarge Canada has launched the first phase of its CO₂MENT project. The objective is to build a full-cycle solution to capture and reuse CO₂ from a cement plant. The project is a partnership between Lafarge Canada, Inventys and Total.

“LafargeHolcim is committed to reducing CO₂ emissions and we are excited to join forces with Inventys and Total through Project CO₂MENT. We hope to discover ways to capture emissions from our production processes and reuse them in our products, advancing a circular economy even further than today. The recent launch of the new lower carbon fuel (LCF) system at our Richmond plant aims to make the facility the most carbon efficient cement plant in Canada,” said René Thibault, Region Head North America for LafargeHolcim.

Over the next four years, Project CO₂MENT will demonstrate and evaluate Inventys’ CO₂ Capture System and a selection of LafargeHolcim’s carbon utilization technologies at its Richmond cement plant in British Columbia. The project has three phases and is expected to be fully operational by the end of 2020. Subject to the pilot’s success, the vision is to scale up the project and explore how the facility can be replicated across other LafargeHolcim plants.

During the first phase the partners will work on purifying the cement flue gas in preparation for CO₂ capture. The second phase will focus on the separation of CO₂ from flue gas using a customised for cement version of Inventys’ carbon capture technology at pilot scale. As part of the final phase, the captured CO₂ will be prepared for reuse and support the economical assessment and demonstration of CO₂ conversion technologies onsite, such as CO₂ injected concrete and fly ash.

Two new stories from Algeria this week highlight a changing industry. Firstly, Groupe Industriel des Ciments d’Algérie (GICA) started marketing cement from its new Sigus integrated plant. The unit was commissioned earlier in the year. Secondly, clinker export figures for the sector show 10-fold growth year-on-year to a value of US$30m for the first five months of 2019.

Graph 1: Cement production and capacity in Algeria, 2012 - 2018. Source: Algerian National Office of Statistics, United States Geological Survey, Global Cement Directory 2013 - 2019. Estimates supplied for 2017 and 2018.

Graph 1 above depicts the moment that lots of new production capacity started to be ordered and then commissioned in 2017. The Global Cement Directory lists new plant projects as they are announced so the trend from 2016 to 2017 may not be as pronounced as it seems but the general destination remains the same. A Ministry of Industry and Mining report estimated that production capacity would reach 40Mt/yr in 2020. Consumption was reported at 26Mt in 2016.

To cope with this the cement industry in Algeria has been moving towards an export model over the last few years. Industry and government figures started to warn of an end to imports in 2016. This quickly flipped to prognostications of production overcapacity in 2017. This then became a stream of news stories about export operations from the local industries to places like West Africa. One consequence of this were problems for foreign exporters in Tunisia and Spain, for example, as the Algerian market was shut off. Indeed, it must have been satisfying for state-producer and market leader GICA to announce that it was exporting cement to Europe in 2018!

Notably the local market has no cement grinding plants, yet this too has started to change. In May 2019 Algematco Steel ordered a modular Ready2Grind MVR vertical roller mill from Germany’s Gebr. Pfeiffer. Target markets for the exports identified by the Ministry of Industry and Mining included neighbouring Mali, Libya, Mauritania and Niger. However, only two of these countries are accessible by sea. Unfortunately, Libya’s resurgence in violence since April 2019 is unlikely to help the export market. The other countries share land borders with Algeria but no rail links. An overland export operation to Niger from a plant near Adrar was reported in early 2019 but feasibility on a large scale seems unlikely given the distances involved.

LafargeHolcim said in its 2018 financial report that its net sales were down in its Middle East and African region due to price pressure and lower volumes in oversupplied markets, particularly in Algeria, Iraq and Jordan. Bloomberg reported in February 2019 that LafargeHolcim was considering divesting assets in the region. However, LafargeHolcim’s exit from Southeast Asia may have since bought it some financial breathing room.

With Algeria facing a production capacity gap of at least 10Mt/yr it seems likely that foreign-backed producers like LafargeHolcim will suffer despite potential in the local economy. Nationally, the race is on to see if the industry can bring its cement to the sea and find new export markets.

Romania: Holcim Romania plans to spend Euro10m on automation and digitisation upgrades to its plants. The project will focus on its integrated plants at Alesd and Compulung, according to the Ziarul Financiar newspaper. The subsidiary of LafargeHolcim operates three cement plants in the country.

Argentina: Holcim Argentina has signed a deal with YPF Luz for the supply of wind power to its cement plants. The supply agreement is planned for the start of 2020. It is intended to provide 35% of the company’s emergy requriements by the end of the first half. YPF Luz will provide eletectricity from its Los Teros Wind Farm at Azul in Buenos Aires province. The contracted supply is for 142GWh from a 30MW installed base.

Germany: Holcim Deutschland has opened a new 110,000Mm³ ready-mixed concrete plant at Weil am Rhein in Baden-Württemberg. The unit was biult in nine months. It had an investment of around Euro4m. Lars Essert willl manage the plant.

UK: The Institutional Investors Group on Climate Change (IIGCC) has called on European building materials companies to take steps to fight climate change or face commercial extinction. Recommended changes from its new ‘Investor Expectations of Companies in the Construction Materials Sector’ report have been sent to the heads of LafargeHolcim, HeidelbergCement, CRH and Saint-Gobain. The report informs investor engagement with other construction material firms on the initiative’s global list of 161 focus companies. Investment bodies in the group represent US$2Tn in assets, assets under management and under advice.

“The cement sector needs to dramatically reduce the contribution it makes to climate change. Delaying or avoiding this challenge is not an option. This is ultimately a business-critical issue for the sector,” said Stephanie Pfeifer, the chief executive officer (CEO) of the IIGCC. “Major economies such as the UK and France are increasingly adopting economy-wide net zero emission targets. The cement sector needs to get ahead of the profound transformation their sector faces by addressing barriers to decarbonisation in the short- to medium-term if companies are to secure their future.”

Key details set out in the ‘Investor Expectations’ report include becoming carbon neutral by 2050. Companies are expected to set short, medium and long-term science-based targets to reach this goal. Building material companies should be public policy transparent and advocate for the Paris Agreement, they should implement a ‘strong’ governance framework assigning specific responsibility for climate change to a board committee or board member and they should provide enhanced corporate disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

The IIGCC recognised the steps HeidelbergCement in particular has taken in already having committed to meeting key aspects of the investor expectations it has outlined. CRH, LafargeHolcim and Saint-Gobain have been encouraged to follow suit, given the ‘significant’ role they play as European-based multinationals. The group also praised the ambitious targets set by India’s Dalmia Cement to become carbon negative by 2040.

India: ACC’s net sales grew by 8% year-on-year to US$1.15bn in the first half of 2019 from US$1.06bn in the same period in 2018. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 18% to US$191m from US$162m. Its cement sales volumes rose by 2% to 14.7Mt from 14.4Mt and its ready-mixed concrete (RMX) sales volumes jumped by 15% to 1.79Mm3 from 1.56Mm3.

“I am pleased that EBITDA improved significantly on account of better realisations, operational efficiencies and supply chain efficiency improvement. Despite subdued cement demand, our strong customer relationships, loyal channel network and range of innovative products have helped us deliver a robust quarter,” said Neeraj Akhoury, the managing director and chief executive officer (CEO) of ACC. He added that the company’s concrete business grew ‘strongly’ due to eight new RMX plants it added in the second quarter. Altogether the company operates 82 operational.