Displaying items by tag: Mexico
Cement market to grow between 3% and 5% in 2015
13 March 2015Mexico: Mexico's cement market could grow by 3 - 5% in 2015, driven by dynamism in the housing sector, an increase in the amount of cash remittances migrants send home and the government's national infrastructure programme, according to Holcim. Growth could, however, be limited by low crude oil revenues, federal government budget cuts and the US Dollar exchange rate volatility. Nevertheless, 2015 is likely to be much better than 2014 as far as cement sales are concerned.
The local construction industry continued to recover in the first two months of 2015 as it did after the second half of 2014. Cement sales for infrastructure projects might be driven by growth in three sectors, namely road, airport and port construction, energy construction and water pipeline and dam construction. Infrastructure projects account for 30 - 40% of cement consumption in Mexico. Housing construction accounts for 40% of all sales. An increase in the arrival of cash remittances is expected to trigger more sales of cement for housing projects. Commercial and industrial construction projects consume 20% of all sales and this segment has performed very well in recent months.
Cemex to develop gas power plants in Mexico
03 March 2015Mexico: Cemex plans to build new power plants in Mexico using natural gas, according to Cemex Energia chief executive Luis Farias. "We are looking to develop a 300MW gas project in the north of the country, near the border with the US," said Farias. Cemex is also looking at a portfolio of three to five 70MW plants, complementing existing installations at its cement plants where it already has access to gas.
Grupo Cementos de Chihuahua sees 1025% swell in 2014 net income
27 February 2015Mexico: Grupo Cementos de Chihuahua (GCC) saw its consolidated net income surge by 1025% in 2014 to US$43.1m. Its consolidated net sales grew by 14.8% year-on-year to US$755m. Net sales grew by 11.7% to US$185m in the fourth quarter of 2014. Cement sales volumes rose by 10% in the fourth quarter and by 9% in the full year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) in 2014 increased by 35% year-on-year to US$154m. EBITDA in the fourth quarter of 2014 grew by 27.5% year-on-year to US$37.2m.
Ventika wind park in northeast Mexico to open in quarter two of 2016
24 February 2015Mexico: Cemex expects its Ventika wind power project in the northeastern state of Nuevo Leon to start operations between April and June 2016, according to Luis Farias Martinez, vice president of Energy and Sustainability. The construction of the project, which was initiated in the middle of 2014, is about half complete.
The Ventika project, comprised of two 126MW wind farms, is located some 128km from Nuevo Leon's capital city of Monterrey and approximately 56km from the US border. The project requires investments of a total US$650m, which will come from US investment company Fisterra Energy, majority owned by funds managed by Blackstone Group, Cemex and other private investors. The investments are structured as 75% debt and 25% capital investment, of which Cemex has provided 5%.
Martinez, who is also head of the newly-established Cemex Energia, added that the Ventika project, as well as all previous Cemex projects, are fully independent and are not included in Cemex Energia's plans to develop 1000MW renewable power projects in Mexico by 2020 in cooperation with Pattern Energy Group.
Cemex creates Cemex Energia to tap into energy reform
20 February 2015Mexico: Cemex has created an energy division, Cemex Energia, to take advantage of Mexico's landmark energy reform and launch power projects that could provide up to 5% of Mexico's electricity requirements within five years.
Cemex has struggled with a large debt load and cost-cutting since an ill-timed US$16bn takeover of Australian rival Rinker in 2007, when the US housing market nosedived. In recent years, Cemex has been slashing costs and has looked to sell assets to regain a coveted investment grade rating. Cemex executives are hopeful that Mexico's energy reform will be a lucrative new path.
"We are very enthusiastic about Mexico's energy sector future and we will leverage on our experience in developing projects that benefit the country," said Cemex CEO Fernando Gonzalez.
Cemex will invest US$30m in Cemex Energia in the next five years. Cemex has also signed a joint venture agreement with Pattern Energy Group Inc, which owns wind power projects, to create 1GW of renewable power in Mexico in the next five years. Pattern said that new legislation in Mexico, which mandates that 35% of Mexico's power must come from renewable sources by 2024, prompted it to expand.
Cofece approves LafargeHolcim merger
16 February 2015Mexico: The National Competition Commission (Cofece) in Mexico has approved the merger between Holcim and Lafarge, as it does not see any risk to free competition in the country. Lafarge operates in Mexico via ELC Tenedora de Cementos, which it sold to Elementia on 16 December 2014.
Cemex’s net loss narrows on higher operating gains
06 February 2015Mexico: Cemex's net loss narrowed in the fourth quarter of 2014 compared to the prior year as higher operating profits offset the effect on sales of weaker currencies against the US Dollar, according to Reuters.
Cemex reported a net loss of US$178m for the October - December 2014 period, compared with a loss of US$255m in the fourth quarter of 2013. Lower financial costs and higher operating profits helped to narrow the loss. Sales slipped by 1% in the quarter to US$3.8bn as weaker currencies against the US Dollar offset greater sales volume in most markets. Adjusting for exchange rates, sales were up by 5% from the fourth quarter of 2013. Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 9% to US$701m in the quarter, bringing the total for the full year to US$2.7bn. Adjusting for currencies, EBIDTA was up by 16% in the quarter.
A construction recovery in Mexico led to a 5% rise in sales to US$827m, while in the US sales rose by 13% to US$923m. Sales fell in Europe and South and Central America, but rose in Asia. Globally, Cemex sold 17.2Mt of cement in the fourth quarter of 2014, up by 5% from the year-ago period.
Chief executive Fernando González said that Cemex narrowed its net loss in 2014 for a third consecutive year. Despite an earnings recovery, Cemex maintains high levels of debt that were taken on during past acquisitions. Cemex lowered its total debt in 2014 to US$16.3bn from US$17.5bn at the end of 2013. "We continue to improve our debt maturity profile and interest expense through our debt reduction of almost US$1.2bn and our refinancing activities of approximately US$5bn during the year," said González.
Cemex expects to sell up to US$1.5bn in assets over the next 12 - 18 months and that investments will reach US$800m in 2015. It expects cement sales volumes to grow by mid-single digits in 2015 and to generate US$300m in cost and spending reductions during the year. Cemex also expects to pay US$500m in debt payments in 2015.
Cemex to grow at home with Tepeaca expansion
09 December 2014Mexico: Multinational cement giant Cemex has announced that it will invest US$200m in an expansion project at its Tepeaca plant in Puebla. The expansion will allow the company to increase its Mexican capacity by 16.7% up to 30Mt/yr. Cemex is confident national cement demand will go up thanks to projects seen in the Plan Nacional de Infraestructura (PIN), energy reform and civil construction.
Cemex to resume Tepeaca cement plant expansion
03 December 2014Mexico: Cemex has announced that it is restarting its expansion of the Tepeaca cement plant in Puebla State. By 2017 its total production capacity will reach 7.6Mt/yr. Total investment is estimated to be approximately US$650m. The additional investment, in order to add 4.4Mt/yr to the current capacity, will be approximately US$200m, since the company had already invested close to US$450m by 2008.
"We are encouraged by our industry's positive outlook in Mexico. With this investment, Cemex reaffirms its confidence in the country's future" said Rogelio Zambrano, chairman of the board of Cemex. The expansion is expected to generate approximately 1500 jobs during the construction phase and about 100 direct and 240 indirect jobs once operation begins.
The announcement was made during a ceremony at the plant with the attendance of Ildefonso Guajardo, Secretary of Economy of Mexico, Rafael Moreno, Governor of Puebla, Amelio Flores, Mayor of Cuautinchan, Rogelio Zambrano, Chairman of the Board of Cemex, Fernando A Gonzalez, CEO of Cemex and Juan Romero, President of Cemex Mexico.
Mexico: Cemex plans to create an energy division to participate in power generation using natural gas and wind power for self-supply and sale to Mexico's state utility company CFE. Cemex wants a stake in up to seven power generation projects similar to the two it currently relies on, according to CEO Fernando González.
The Monterrey-based company announced in September 2014 that it would seek to increase its power generation capacity, without mentioning specific projects. In April 2014, Cemex completed financing of the US$650m 252MW Ventika wind farm in Nuevo León State, in which it holds a 5% stake. The facility is slated for completion in the second quarter of 2016.
Ventika is expected to supply power to beverage bottler Femsa, steel products firm Deacero, Tecnológico de Monterrey University and Cemex, with more off-takers likely to come onboard in the future. AWS Truepower, a New York-based renewables consulting and engineering services firm, will act as independent engineer to support the construction of Ventika, which will comprise two 126MW parks.
González said that Cemex was exploring project possibilities and searching for partners with the requisite plant management knowledge. "We have already developed energy generation projects in Mexico and in other countries under the self-supply model, because cement production demands a lot of power and there is not enough electricity available," he said.