Displaying items by tag: New Zealand

New Zealand: Holcim New Zealand has reported a loss of US$8.9m in 2016 as it changed its business from production to importation and distribution. The subsidiary of LafargeHolcim made a profit of US$58m in 2015, according to the Business Desk news agency. Its distribution costs also rose to US$54m from US$45m. A company spokesperson attributed the rising distribution costs to a transition away from manufacturing.

The company’s results in 2016 benefited from its sale of its lime business to Canada’s Graymont. It also closed its Westport cement plant and invested in import terminals. It operates terminals in Auckland and Timaru and depots in Dunedin, Lyttelton, Nelson, Wellington and Napier.

New Zealand: HR Cement has launched Eco-Cem, a brand of pozzolanic cement. The cement producers says it will source its pozzolan from the Central Plateau on the North Island, according to the Scoop news website. The cement producer operates a cement grinding plant at Mt Maunganui near Tauranga. It also produces a Ordinary Portland Cement branded as HR Cement General Purpose (GP) Cement.

New Zealand: Holcim is conducting negotiations with prospective buyers for its Westport cement plant and associated assets. The cement producer closed the site in June 2016 with the loss of 100 jobs, according to the Daily Post newspaper. The assets on sale include the cement plant site, a quarry, a packing plant site, wharf silos, a water treatment plant and 11 houses. The assets comprise about 500 hectares of land, including 200 hectares of farmland. Expressions of interest closed in July 2016.

Australia: Adelaide Brighton says it has prepared for an acquisition of the operations of LafargeHolcim in Australia and New Zealand. Chief executive Martin Brydon confirmed the plans to The Australian newspaper. He added that the plan includes measures to cope with competition issues that could arise from the takeover. However, Brydon admitted that LafargeHolcim has not declared if it is actually selling its assets in the region.

New Zealand: Holcim Zealand has officially opened its 30,000t cement terminal at Timaru port. Economic Development Minister Steven Joyce and Rangitata MP Jo Goodhew attended the opening. The US$34m project is intended to serve South Island and lower North Island, according to local press.

The terminal has unloaded two ships since December 2015. The cement producer aim’s for 18 inbound ships a year to Timaru, with the Holcim-owned Milburn Carrier II shipping outbound orders from its berth at the reconstructed No 2 wharf. Another cement terminal is being built in Auckland and is planned for opening in mid-2016.

New Zealand: Plans for the future use of Holcim's Westport cement plant after it closes are still unknown. Holcim plans to close its Westport plant in 2016 in favour of importing cement from Japan, resulting in 105 staff and contractors losing their jobs.

The company announced in September 2015 that the Westport plant might close at the end of May 2016 and plans were under way for the plant to be demolished and the quarry site rehabilitated. Holcim owned more than 500 hectares of land around Westport, including the Cape Foulwind cement plant and quarry, 11 houses at Cape Foulwind and a rail siding near Westport.

General Manager Ross Pickworth said that no decisions had been made on the future of the company's land and assets in Westport. "The focus is on looking after our people and the work that needs to be done before plant closure. Preparatory and planning work is being carried out with a focus mainly on the plant site, quarry and houses," said Pickworth.

The company was investigating what work was needed on the 11 houses occupied by staff near Westport so that they could be sold after the plant closed. The Buller District Council was looking for new businesses to occupy the plant site and make use of the town's port. The council owned the port and transporting Holcim's cement was its main source of income. Council Business Development Facilitator, John Hill, had been investigating turning the plant into an eco-park, which could include making energy from rubbish incineration or turning waste timber into diesel.

Pickworth said that demolition work was unlikely to commence until late 2016, so any potential users had, "Quite some time to register interest in the site and any equipment that may be of use."

The council had been trying to attract new industries to Buller to increase employment opportunities in the region. "Holcim is supporting this process by promoting its Cape Foulwind site to see if there is interest from other potential users of the site," said Pickworth. "An advisor has been appointed to assist Holcim with demolition planning and project management. The cost of demolition will depend on what buildings and assets may be left on site and tenders will be called for such work closer to the time."

This week we got our first real sense of how things are going at the new global cement leader LafargeHolcim. The group released its first 'combined' results, which cover the third quarter of the year and the nine month period to 30 September 2015.

First impressions are that LafargeHolcim is having a tough time of it, struggling, as many cement industry players are, with an increasingly tricky and uneven global market. It reported a fall in net sales and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first nine months of 2015, compared to the same period of 2014. Cement sales were also down by 1.3%. The group said that lower than expected demand was the reason behind lower sales, particularly in China and Brazil, which continue to struggle economically. It also picked out India as a country where momentum was lacking.

Of course, it's not all bad. While net sales were down, they were only down very slightly, by 0.6% year-on-year in the first nine months. Many a cement producer would love to pull in Euro20.4bn in sales and ship 189Mt of cement in just nine months! And, after a sticky start to the year, the picture is improving in some regions, with third quarter performance buoyed by improving fortunes in Asia, excluding China and India. LafargeHolcim was able to continue banking on the strong recovery in North America and parts of Europe, where some markets, such as the UK, continue to buck the otherwise depressing trend.

While these results will be a concern they are by no means horrific. However, they have already given rise to (or at least sped up) LafargeHolcim's future divestment plans. According to Dow Jones, LafargeHolcim plans to raise Euro3.23bn in 2016 from selling off assets, around half as much as Lafarge and Holcim had to sell to allow the merger to go through. The company has reportedly started discussions with interested parties, including private-equity firms and industry rivals about some of the assets. The proceeds will be returned to shareholders through dividends or share buybacks, according to CEO Eric Olsen.

Which assets will be divested remains to be seen. However, it reportedly won't involve LafargeHolcim's assets in Australia and New Zealand, at least in the short term. In the past week or so local media has reported that LafargeHolcim's assets in the two countries were to be sold off. However, since then Holcim Australia's Chief Executive Mark Campbell said the company was 'not currently being sold.' Campbell also added that he couldn't rule out a possible sale in the future.

So, while being clear that LafargeHolcim has no plans to sell its Australian and New Zealand assets at the moment, what could happen if it did? The starting point is complex, especially in Australia. According to the Global Cement Directory 2016, there are six operational integrated cement plants and 12 grinding plants in the country, which share a combined 13.9Mt/yr of cement capacity. LafargeHolcim has a 50% interest in Cement Australia's 4.0Mt of cement capacity, giving it 2Mt/yr of capacity and around 14% of national capacity. The other 50% of Cement Australia is owned by HeidelbergCement. Other major players include Adelaide Brighton, which has 2.3Mt/yr in its own name and a 50% stake in Independent Cement, and Boral Cement, which owns 2.3Mt/yr of capacity outright and 50% of SunState Cement's 1.5Mt/yr of capacity. In New Zealand there are two integrated plants, one operated by Golden Bay Cement and one by LafargeHolcim. The latter, however, is due to be closed in 2016.

If LafargeHolcim was to leave the mix in Australia, it is possible that neither Adelaide Brighton nor Boral would be able to take over its share, due to their already-large market presences. This may leave the door open for other regional players, perhaps a Chinese player looking to exit that country's rapidly-declining domestic market? Cemex is contracting and still heavily indebted, leaving it out of the running. While it is also possible that assets could be sold to private equity firms, another interested player could be Ireland's CRH, with 'cash to burn' and recent disappointment from its failure to buy Lafarge and Holcim's former assets in India.

Of course, if the assets aren't for sale, it won't be possible to buy them, meaning that for now the above is just speculation. However, the quick analysis above does highlight the relative lack of viable cement industry suitors in this region. If LafargeHolcim does ever decide to sell in this region, it might find the assets hard to shift.

Australasia: LafargeHolcim has said that, despite what has been reported recently in the media, its Australian and New Zealand operations are not for sale.

LafargeHolcim recently announced a plan to divest almost US$5bn of assets in 2016 after posting unexpectedly weak third-quarter results. Speculation had emerged that it might exit from the Australasia region.

However, according to local media, an internal email sent to staff on 30 November 2015, Holcim Australia Chief Executive Mark Campbell said the company was 'not currently being sold,' but could not rule out an exit in the long term.

"I have checked whether the LafargeHolcim group had made a decision to sell the businesses in Australia and New Zealand and started a sale process without my knowledge and the answer I have received is 'no,'" said Campbell. "That said, organisations change focus over time and it is impossible to say that we will always be part of the LafargeHolcim group."

Australian-listed rivals, including Boral, Fletcher Building and Adelaide Brighton, are seen as potential acquirers, should the multinational giant choose to sell off its local arm. Ireland's CRH may also be interested. However, Morgan Stanley said that many of LafargeHolcim's local competitors might run into competition issues, given that the market is concentrated among several large players. "Should Adelaide Brighton fully participate, we cannot rule out that the 50% share in Cement Australia would be divested due to Australian regulations, given Adelaide Brighton's already strong share in cement," said Morgan Stanley Analyst James Rutledge. "While we think Fletcher Building is unlikely to be in a position to participate in industry consolidation, a change in owner that was less integrated into the region may be a positive for Fletcher Building at the margin," said Rutledge. "Given Boral's strong share in aggregates and the concrete market, we believe it will be difficult to participate in industry consolidation."

While Lafarge has a limited local presence in Australia and New Zealand, Holcim bought a string of Australian assets from Mexico's Cemex in 2009 for US$2bn and now boasts more than 350 sites nationwide.

New Zealand: Two cement ship unloaders, a ship unloader and two conveyor belt systems purchased by Holcim are being shipped to New Zealand from the Netherlands on a heavy lift ship called the Happy Dragon.

One of the cement ship unloaders along with a ship unloader, which have a combined weight of 240t, will arrive in Timaru in early November 2015 and will be used by Holcim at its new dome at the Timaru Port. The other unloader and conveyor belts are bound for Holcim's Auckland dome.

Holcim's Capital Projects Manager Ken Cowie said that Holcim was excited to have the cargo in transit in the North Atlantic. "This signals the arrival on site of all the major equipment for the terminal and brings us closer to commissioning the operations later this year."

The cement ship unloaders were built by Van Aalst Bulk Handling in Hazerswoude. The largest of them is 33m long, 15.5m wide and 18m high. A logistics company brought the unloaders 20km east of Rotterdam, where they were placed on a pontoon by a floating crane and floated down to be loaded onto a ship.

New Zealand: Holcim, part of LafargeHolcim, is making faster than expected progress on an operational restructure that will lead to 120 job losses on the west coast.

The New Zealand operation has revealed plans to close its manufacturing plant at Cape Foulwind, Westport, with cement instead to be imported from the Mitsubishi Kanda plant in Fukuoka, Japan, via the Timaru and Auckland ports. Holcim will now close its Westport cement plant in the middle of 2016, with 120 job losses expected. The company said that some employees have switched to other roles.

Holcim is building a 30,000t cement silo at Timaru Port and is spending a similar amount at the Port of Auckland. The company had previously said that the silo and importing facilities would be finished in the second half of 2016. However, Holcim New Zealand country manager Glenda Harvey said that the Timaru facility could be operational in January or February 2016 and that the Auckland facility should be completed in May 2016 rather than June 2016. The Westport cement plant will remain operational until the Auckland import site is fully commissioned, then it will be closed.

When the Timaru and Auckland terminals are completed, there will be about 30 staff employed in sales, operations and technical laboratory roles. Westport cement plant staff have been able to apply for positions at Holcim's Timaru and Auckland operations and also overseas, with a small number having taken up roles in other parts of the business. Workers have redundancy provisions in their contracts. The company has about 40 staff within its Christchurch head office operation and 360 in the country across the cement and aggregates businesses.

Some Westport residents have said that the Westport cement plant site and buildings could be used as an industrial park, for electricity generation or as an eco park. Harvey said there has been no update on the site, or if alternative uses could be found. The cement plant has been operating for 57 years.