Displaying items by tag: Malaysia

Malaysia: Hong Leong Group has offered to buy out the minority shareholders in Tasek. The offer values the cement producer at around US$160m, according to the Star newspaper. Hong Leong Group is controlled by Quek Leng Chan who owns an 80% stake in Tasek through Hong Leong Asia. If the minority shareholders accept the offer the the cement producer could become a private company. Tasek operates a 2.3Mt/yr integrated plant in Perak state.

Malaysia: Yeoh Khoon Cheng has resigned as the chief executive officer (CEO) of Lafarge Malaysia. He will remain as the group’s executive director, according to the Edge Malaysia.

Several executives of YTL Corporation have been appointed to Lafarge Malaysia’s board. YTL’s executive chairman Francis Yeoh and managing director Yeoh Seok Kian have been made executive directors of Lafarge Malaysia. Other members of the Yeoh family appointed to Lafarge Malaysia’s board as executive directors are Yeoh Soo Keng and Yeoh Seok Hong. In addition, Lafarge Malaysia’s vice-chairman Martin Kriegner and non-independent and non-executive director John William Stull and Pei Ling have resigned.

Malaysia: LafargeHolcim has completed the divestment of its activities in Malaysia with the disposal of its entire 51% shareholding in Lafarge Malaysia to YTL Cement for around Euro872m. The group says that the transaction will reduce its net financial debt by close to Euro530m. Together with the divestment of its activities in Indonesia, Singapore and the Philippines, this transaction is expected to ‘significantly’ reduce the company’s net debt to recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) ratio.

Jan Jenisch and the team at LafargeHolcim only went and bloody did it! Apologies for readers not wanting yet more column inches on LafargeHolcim but when the world’s largest cement producer leaves an entire sub-continental market it deserves mention.

First Indonesia, then Malaysia and now the Philippines. LafargeHolcim will soon no longer produce clinker in Southeast Asia. That’s a region with 651 million inhabitants or around 8% of the world’s total population. All of those people need cement and other building products as their nations build houses, infrastructure and so on. And LafargeHolcim is no longer there.

The reason, of course, is local production overcapacity in many of these countries and rampageous importers pulling in cheaper product from elsewhere. The Association of Southeast Asian Nations (ASEAN) includes Thailand and Vietnam, two of the world’s largest cement exporters. The region also borders China, the place which could produce 40% of the world’s cement if it so wanted. So, understandably, LafargeHolcim pulled the plug. Note that the recent divestments in the region didn’t include its seabourne trading wing, LafargeHolcim Trading. Oh no! Clearly, if you can’t beat them, you join them instead.

So, what to say about the Philippines sale? Unlike the divestments in Indonesia, this sale has valued the production base more highly. LafargeHolcim’s integrated production capacity, including the upgrade at its Bulacan plant, is being sold for over US$175/t with the partial share factored in. And that’s not even including the grinding plant at Mabini. The sale in Indonesia was US$120/t or lower. The Duterte administration’s infrastructure drive (Build, Build, Build) and muscular government action on imports have doubtless played their part here. Yet still LafargeHolcim sold. In the words of chief executive officer (CEO) Jan Jenisch the area was ‘hyper competitive.’

Back home at the group’s headquarters in Switzerland, the potential revenue of over US$4bn from the three ASEAN divestment is poised to trickle onto the balance sheets for 2019. If it were all to go towards debt reduction then these proceeds could pile drive the group’s net financial debt to below Euro10bn. This would be good place to be if the on-going Chinese-US trade tiffs became a little hotter, say, or in the case of a fresh banking crisis. Alternatively the group could pick a new region for development and start all over again or focus on diversifying its business along the building materials chain. And let’s not forget the potential legal bill from the on-going investigation into Lafarge Syria’s conduct during the Syrian civil war.

Throughout this whole exercise, from the outside looking in at LafargeHolcim’s actions, the thought has persistently been: what do they know that everyone else doesn’t? The answer, it may turn out to be, nothing. Yet, rightly or wrongly, we’re marvelling at the bravado of it all.

Malaysia: Lafarge Malaysia has resumed supplying cement to the East Coast Rail Link project. The cement producer has been asked to continue supplying the project until the end of 2019, according to the Star newspaper. The US$65m contract was originally agreed in March 2018 but then suspended in July 2018 when the government reviewed the project.

Malaysia/Singapore: Switzerland’s LafargeHolcim has signed a deal to sell its 51% stake in Lafarge Malaysia to YTL Cement for US$396m. Lafarge Malaysia operates three integrated cement and two grinding plants. With the divestment, LafargeHolcim will fully exit the Malaysian market. LafargeHolcim has also signed an agreement with YTL Cement Singapore for the divestment of its entire 91% share in Holcim Singapore.

YTL Cement is part of YTL Corporation, a Malaysian infrastructure conglomerate, which is active in cement production, construction, property development and utilities. The deal is expected to be completed within the second quarter of 2019. It is subject to approval by regulatory bodies.

Malaysia: Lafarge Malaysia has appointed Yeoh Khoon Cheng as its chief executive officer (CEO). He has held the role of interim CEO since late 2018 and was also the company’s chief financial officer (CFO), according to the New Vision newspaper. Edward James Coultrup will succeed Yeoh as CFO.

Yeoh, aged 60 years, holds over 30 years of experience in the cement industry and 18 years of experience as a CFO. He has worked for LafargeHolcim’s subsidiaries and predecessor companies since 1999. He first held the CFO post in Malayan Cement Berhad, now Lafarge Malaysia, from 1999 until 2011. He has since been CFO at Lafarge Cement China and Huaxin Cement. He is a Certified Public Accountant and is a member of the Malaysian Institute of Certified Public Accountants (MICPA) and Malaysian Institute of Accountants (MIA).

Malaysia: Cahya Mata Sarawak’s (CMS) sales from its cement division rose by 7% year-on-year to US$137m in 2019 from US$128m in 2017. Its operating profit fell by 11% to US$22.2m from US$24.9m. CMS attributed the drop in profit on repair costs from maintenance to its integrated plant at Kuching. Rising international clinker prices were also blamed.

Italy: Cementir Holding’s sales revenue fell by 4.2% in 2018 on a like-for-like basis due to poor performance in Egypt and Norway. Military operations in the Sinai impacted production in Egypt between February and May 2018 and bad weather in Norway affected the first quarter. However, it noted good results in Malaysia, Belgium and China.

On an adjusted basis its revenue rose by 4.9% to Euro1.2bn from Euro1.14bn. Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 7.1% to Euro239m from Euro223m. Grey and white cement sales volumes fell by 4.4% to 9.8Mt from 10.3Mt. Ready-mixed concrete volumes fell slightly to 4.9Mm³.

Malaysia: YTL Cement has awarded a turnkey project for air pollution control to Italy’s CTP Team. The project at the Perak-Hanjoong Simen cement plant in Pedang Rengas includes the conversion of an existing PL1 raw mill electrostatic precipitator (ESP) to a fabric filter and the upgrade of an existing exhaust fan.

The work includes converting an existing 740,000m³/hr ESP unit downstream of the kiln and raw mills of Line 1 to a bag filter. The conversion will abide to the current footprint on foundations with the minimum impact on steel structures, ducting and dust transport system. The new filter will reduce the emission limits below 10mg/Nm³ by June 2019. The intention is to meet new government regulations quickly. The unit will also be equipped with CTP’s SWAP technology for the cleaning of bags with low-pressure compressed air. CTP Team will work with local partner Shinco Industrial Equipment on the project. No value for the deal has been disclosed.