Displaying items by tag: McInnis Cement

A couple of long-running news stories popped up this week, led by the Portland Cement Association’s (PCA) latest forecast for the US market. Chief economist Ed Sullivan and the Market Intelligence Group predict slowing cement consumption growth to 2020 as the recovery period ends following the financial crash in 2008. The background to this is an expected rise in interest rates dragging on the construction market, a limited boost from the Trump administration’s tax cuts and rising debt levels hitting federal infrastructure spending.

This marks an abrupt turnaround from the PCA’s April 2018 forecast in which potential federal infrastructure spending was anticipated to kick in towards the end of 2019 creating 4% growth in 2020. To give the PCA credit, it did say at the time that this was contingent on a couple of key steps, including passage of an infrastructure bill, federal and state paperwork, bid letting and review and finally, contract awards leading to construction. Following the US mid-term elections in early November 2018 the prospect of an infrastructure bills seems remoter than before given the political differences between the US House of Representatives and the Senate. This may have been the final straw for the PCA and it adapted its forecast accordingly.

Graph 1: Cement shipments in the US, January – August 2013 - January – August 2018. Source: Portland Cement Association (PCA).

It is also worth reflecting on the third quarter financial results of the multinational cement producers over the last few weeks. CRH may have been crowing this week about how its US performance was driving its business in the wake of its acquisition of Ash Grove Cement and other assets, but many of the other multinational cement producers weren’t. HeidelbergCement, Buzzi Unicem and Titan all blamed the weather in the US for dragging on their results. LafargeHolcim said it suffered less with a ‘soft’ first quarter in 2018 followed by recovery.

The other story this week with relevance to the US was the continued speculation in the Canadian press about the future of the McInnis Cement plant in Quebec. The latest update is that the plant’s shareholders have asked the provincial government if they can swap the debt the province holds in the venture for equity. This has been seen as a potential bid to keep the company operational while it continues to hunt for a buyer. Rumours of a sale have swirled around since the start of 2018, with the Global and Mail newspaper naming HeidelbergCement as being potentially interested. Three bids have been reportedly made by unnamed parties but they were rejected for being too low. A slowing US cement market is particularly bad news for McInnis Cement. The plant is situated on the Atlantic Coast of Canada and exports to the US have been seen as a major part of its business. To this end it officially opened its marine terminal in the Bronx, New York in October 2018.

The main US market needs to find an alternative to the ‘fabled’ infrastructure bill if it wants better growth. Yet, reduced US cement consumption growth won’t help McInnis’ shareholders recoup the money they have sunk in the project. Somebody seems certain to lose in this situation and, with a protectionist incumbent in the White House, it seems likely to be somebody north of the border.

Canada: Quebec's Ministry of Economy and Innovation has confirmed that it has received a request from the shareholders of McInnis Cement to swap the debt the province holds in the venture for equity. A request has been made to the ministry and to Investissement Québec, the provincial government's investment arm, to convert almost US$200m of debt into shares in the cement producer, according to the Globe and Mail newspaper. The newspaper speculates that an arrangement of this kind could be part of a potential deal with creditors to reduce the company’s liabilities and enable it to continue to operate.

McInnis Cement’s plant at Port-Daniel–Gascons was inaugurated in mid-2017. Construction at the site started in mid-2014. However, cost overruns saw the government-backed project delayed and then taken over by an investor, the Caisse de dépôt et placement du Québec (CDPQ), a pension and insurance fund manager. The CDPQ was reportedly considering options including selling the plant or securing more investment in early 2018. Three bids were made for the cement producer but were rejected as being too low, according to reporting by the Globe and Mail. Interested parties in the company included Germany’s HeidelbergCement.

US: Canada’s McInnis Cement has officially opened its terminal in the Bronx, New York. The terminal can store up to 44,000t of cement and most of this will be delivered by ship. City Council Member and Land Use Committee Chair Rafael Salamanca, Bronx Community Board 2 Chair, Bobby Crespo and members of several Bronx organisations and the local business community joined McInnis Cement executives to celebrate the opening of the unit, the first new industrial maritime project built on the South Bronx waterfront in more than half a century.

Canada: Hervé Mallet, the president and chief executive officer (CEO) of McInnis Cement, is leaving the company. He has been in post since November 2016. He will be replaced, with immediate effect, by Jean Moreau, chief financial officer, who will assume the role of president and CEO on an interim basis

Moreau joined McInnis Cement in the spring of 2017. He holds experience in company, finance and operations management, and has held leadership positions within private and public entities in the finance and operations management sectors. McInnis Cement said that, “Moreau is familiar with McInnis and will ensure business continuity.”

US: The first ship from McInnis Cement’s plant in Canada has docked at the company’s terminal in the Bronx, New York. The NACC Alicudi docked at the terminal in mid-June 2018. The event follows the start of commercial production at McInnis Cements’ plant in Port-Daniel–Gascons, Quebec in June 2017.

Canada: Caisse de dépôt et placement du Québec (CDPQ), the owner of McInnis Cement, has hired advisors to consider options for the cement producer including a sale or bringing in a new investor. No final decision has been made and the pension investment management company may decide to keep McInnis Cement, according to sources quoted by Bloomberg. CDPQ took control of the McInnis Cement project in 2016 following cost overruns and delays. The plant eventually opened in mid-2017.

Canada: McInnis Cement has inaugurated its Port-Daniel–Gascons plant in Quebec. Provincial Prime Minister Philippe Couillard attended the ceremony. First cement at the 2.2Mt/yr plant was produced in June 2017 and the unit has started commercial production since then. Construction at the site started in mid-2014. However, cost overruns saw the government-backed project delayed and then taken over by an investor.

Canada: McInnis, formerly McInnis Cement, has released details about its distribution plan for the Atlantic provinces. The company has acquired two CRH Canada-owned terminals allowing it to access markets in New Brunswick, Nova Scotia and Prince Edward Island. McInnis says it will honour the orders of the clients supplied through those terminals and integrate their current employees. In addition, McInnis has entered into an agreement with CRH Canada and will supply cement for its terminals at Long Pond, Argentia and Corner Brook in Newfoundland directly from McInnis plant in Port-Daniel – Gascons. Deliveries to Newfoundland will begin in the autumn of 2017.

“With the addition of these terminals to our network, we are now able to secure a solid position in this market” said Hervé Mallet, president and chief executive officer (CEO) of McInnis Cement.

The McInnis distribution network includes several facilities: marine terminals in Providence, Rhode Island and Sainte-Catherine, Québec were the first to be built and commissioned. The Oshawa terminal in Ontario has started operation in September 2017. A railway transshipment station in New Richmond, Québec is also operational, and the Bronx marine terminal in New York will join the network in 2018.

Canada: McInnis Cement produced the first cement at its plant in Port-Daniel–Gascons, Quebec on 16 June 2017. Construction at the 2.2Mt/yr plant started in mid-2014. However, Caisse de dépôt et placement du Québec (CDPQ), a pension and insurance fund manager, took charge of the government-backed project in mid-2016 after cost overruns.

“This important milestone marks the work of hundreds of employees, workers and partners who have helped make our plant a performance model for the cement industry, both in terms of productivity and environment”, said Hervé Mallet, President and chief executive officer (CEO) of McInnis Cement.

Canada: Plans by the state government of Quebec to rebuild the Gaspésie railway between Matapédia and Gaspé will allow McInnis Cement to increase its distribution of cement by rail significantly. Once the line has been restored the cement producer says the number of wagons it uses could rise to 2000/yr from 300/yr.

”The flexibility of the railway combined with our maritime distribution mode allows us to improve our logistics chain and reach certain markets more efficiently, in all seasons,” said McInnis Cement chief executive officer Herve Mallet.

In December 2016 McInnis Cement confirmed its use of the rail for a volume of approximately 28,000t/yr over five years, through a transshipment facility in New Richmond, fed by truck from Port-Daniel–Gascons. Railway repairs are expected to result in the transport of at least 200,000t/yr of cement by rail.