Displaying items by tag: Sales

One surprise at the end of August 2024 was that Türkiye-based Çimsa has agreed to buy a majority stake in Ireland-based Mannok. The subsidiary of Sabancı Holding signed a deal to acquire just under a 95% stake in Mannok Holdings based on an enterprise value of Euro330m for 100% of the shares. The final purchase price will be determined later in the process, as will a potential completion date subject to the usual regulatory approvals.

Çimsa has described the deal as its “third major global initiative in the past three years” following expansions in the US and Spain. Çimsa started production at its 0.3Mt/yr white cement grinding plant in Houston, Texas in 2019. It is currently planning to set-up a 0.6Mt/yr grey cement grinding plant, also in Houston, with operation expected to start by the end of 2024. Its Spain-based business received a boost in mid-2021 when it purchased the Buñol white cement plant in Valencia from Cemex. Outside of Türkiye the company also operates a few terminals in Germany and Italy. Of interest to this article it established a subsidiary for sales in the UK in mid-2023.

Mannok was previously known as Quinn Group before it was rebranded in 2020. In addition to cement the company sells a range of construction products including PIR (polyisocyanurate) insulation, aircrete thermal blocks, roof tiles and precast concrete. The company is headquartered at Derrylin in Fermanagh, Northern Ireland in the UK but it operates in both Ireland and the UK. It runs a 1.4Mt/yr integrated plant at Ballyconnell, County Cavan in Ireland, just across the border from Derrylin. With the 17th Global CemFuels Conference scheduled to take place next week in Dublin, it is worth noting that this cement plant had a recent upgrade of interest to the alternative fuels sector. In 2023 the company said that it had installed the world’s first FLSmidth Fuelflex Pyrolyzer at a cement plant following an earlier pilot of the system back in 2018. It is used to replace coal with solid recovered fuels (SRF) in the pre-calcination stage of cement production. Later in 2023 Mannok said that the equipment was reducing its CO₂ emissions by 58,000t/yr.

As reported in the October 2023 issue of Global Cement Magazine, cement from the Ballyconnell plant is sold in both Ireland and the UK. In 2022, 35% of its sales were in Ireland, 30% in Northern Ireland and the remaining 35% in the rest of the UK. The company uses a storage unit at Warrenport in Northern Ireland to despatch cement to a 8400t cement storage and distribution at Rochester in Southern England.

Çimsa said that the acquisition is intended to help it to increase the share of its revenue in foreign currencies to over 70%. It is not a revelation that Çimsa might want to do this given the parlous state of the economy in Türkiye since 2018. Interest rates are high and the Turkish Lira has lost value. Çimsa raised the issues this has caused in its 2023 annual report. These include higher costs for imported goods and services such as energy, equipment and engineering services. In 2023 the company reported that 57% of its sales consisted of foreign currency-based revenue. The same year exports represented just under 40% of the company’s total revenue. Overall, Çimsa’s revenue fell slightly year-on-year in 2023, in part due to the divestment of a cement plant and other assets, but earnings rose significantly.

Buying Mannok gives Çimsa another route into the European Union (EU), via Ireland, and the UK. Crucially, this gives its first integrated grey cement production site outside of Türkiye. Both of these things are especially useful for an export-focused company facing increasing hurdles to sales in the guise of the EU Emissions Trading Scheme. It also helps the business to further hedge against negative currency exchange effects back home in Türkiye. So ‘Sláinte’ to Çimsa and Mannok, and good luck.

The 17th Global CemFuels Conference & Exhibition takes place in Dublin, Ireland on 18 - 19 September 2024

Brazil: Cement sales increased to 6.2Mt in August 2024, marking the highest monthly sales since October 2014, when sales reached 6.7Mt. This 10-year peak reflects a 5% month-on-month and 3% year-on-year increase, spurred by dry weather and a robust real estate sector, according to data released by the National Union of the Cement Industry (SNIC).

All regions in Brazil reported sales growth, with the highest sales in the north and northeast and a recovery in the south after the floods in Rio Grande do Sul. Year-to-date sales reached 43Mt, up by 3% from 2023.

However, concerns about prolonged dry spells potentially affecting electricity prices and logistics are emerging, with SNIC stating in a press release "The announcement of the increase in the red flag energy bill in Brazil due to the lack of rainfall is already causing concern for the cement sector, both in terms of production costs and logistics. Brazil is facing the worst drought in history in 2024 and this could have an impact on cement sales, especially in the north."

Russia: Belarusian Cement Company (BCC) increased its cement supplies to the Russian Federation by 3.5% year-on-year in the first half of 2024, and by 50% in June 2024, reports Belta News. Major sales markets for BCC in Russia include Moscow, Moscow Oblast, the Central Federal District and the North-Western Federal District.

Vyacheslav Golovatsky, deputy director general for foreign economic activities, credited the growth in foreign cement sales to logistics. He said “We did a lot of work in 2023. We created a commodity distribution network, BCC-Soyuz, which has its own cement transshipment facilities. When there were difficulties with cement delivery in late 2023 – early 2024, logistics came into play. We started routing deliveries, launching our own trains that consisted of our own cars. In March 2024, our first route train went to Russia, in May 2024 we had already 12 BCC route trains, and in June 2024 - 15. Our products have been delivered to transshipment facilities, unloaded and distributed to consumers more promptly.”

Pakistan: According to brokerage firm AKD Securities, Pakistan's cement industry recorded a 2% year-on-year growth in dispatches, reaching 45.3Mt in the financial year 2024, largely due to increased exports. Domestic sales, however, fell to a seven-year low of 33.2Mt, a 5% decline from 2023. This drop is attributed to a slowdown in construction activities, influenced by high construction costs, rising inflation, and peak interest rates.

Exports grew significantly by 56% year-on-year, amounting to 7.11Mt. This was mainly due to the decreased international coal prices, which improves the viability of exports. Despite the overall increase, June 2024 saw a decline in both local sales and exports. Local sales fell by 12% due to fewer working days during the Eid holidays, and exports declined by 18%, mainly due to reduced clinker sales from the south regions.

Pakistan: Domestic cement sales declined by 4.6% to 38.2Mt in FY2024 from 40Mt in FY2023, reflecting a slowdown in construction activities. Despite this, exports were up by 56% to 7.1Mt, contributing to a slight overall rise in cement dispatches of 1.6% to 45.3Mt in 2024, according to Dawn newspaper.

A spokesperson from The All Pakistan Cement Manufacturers Association said “Cement is not a luxury item but a basic necessity. The government must take measures to reduce construction costs to make it affordable for the masses.”

Zimbabwe: Khayah Cement has reported a significant increase in sales volumes across its operations for the year ending 31 December 2023. Dry mortar product sales volumes surged by 153%, bolstered by the demand for the Supagrow agricultural lime range within the government's Pfumvudza agriculture programme, absorbing 0.34Mt during the period. The firm's cement business also saw a 34% year-on-year increase in sales volumes following the installation of a vertical cement mill in the third quarter of 2022.

Despite challenges such as power quality issues and equipment breakdowns impacting production, bulk cement volumes grew from 1% to 4% during the period. However, clinker production volumes fell by 21%, mainly due to the mothballing of the kiln in the last half of 2023.

The company said “A total of 1000 hours were lost as a result of the unplanned breakdowns which in turn impacted negatively on both clinker, cement production and sales volumes and with it profits and cash generation.”

Pakistan: Cement dispatches rose by 7.8% reaching 4.275Mt in May 2024 from 3.97Mt in May 2023. According to data from the All Pakistan Cement Manufacturers Association (APCMA), local sales fell by 2.2% to 3.36Mt, while exports increased by 72% to 0.91Mt. Over the first 11 months of the financial year, total dispatches were up 3% year-on-year to 41.7Mt. Domestic sales dropped 4% to 35Mt, but exports grew by 66% to 0.66Mt.

An APCMA spokesman said “It is a matter of serious concern that the cement sector continues to post negative growth in local dispatches for the ninth straight month. We are hopeful that the government will give due attention to the concerns of the cement industry in the upcoming budget. We have an almost one-third idle capacity which, if utilised, can bring our operational costs down and provide relief to end-consumers

Brazil: Cement sales in April 2024 totalled 5.1Mt, up by 12% year-on-year. Compared to March 2024, sales rose by 4%, as reported by the National Cement Industry Union (SNIC). April 2024 sales have increased following a forecasted rise despite earlier climate-related impacts.

President of SNIC, Paulo Camillo Penna, said "After two consecutive years of falling sales and idle capacity of around 35%, the Brazilian cement industry hopes to reverse this performance, influenced by progress in housing and infrastructure projects. The sector is betting on the growing use of cement and concrete in road and urban paving, as municipalities and states such as Santa Catarina, Paraná, Goiás, Maranhão, Ceará, São Paulo and the Federal District are leading the way in the use of these inputs."

Saudi Arabia: Cement sales in Saudi Arabia recorded a 12.5% increase in April 2024 to 2.92Mt, up from 2.6Mt in 2023, despite the impact of Ramadan. This is according to a report by Aljazira Capital. However, cement exports saw a significant decrease, dropping by 30% year-on-year to 554,000t from 790,000t. Additionally, clinker inventories reached 43.4Mt in April 2024, marking an 18% year-on-year increase and a 3% rise from March 2024.

Vietnam: Amid weak domestic demand and rising costs of electricity and coal, the Vietnam Cement Association (VNCA) is focusing on boosting domestic consumption. The current domestic supply of cement is estimated at 60 – 62Mt, far exceeding demand. The excess 30Mt is planned to be exported, with cement and clinker exports already rising in April 2024 by 12% year-on-year to 2.85Mt. In the first quarter of 2024, exports grew by 4.6% to 10.9Mt compared to the same period in 2023.

The VNCA notes ‘challenging’ conditions in major markets, including China's oversupply and protectionist measures in the Philippines, Central America and South Africa. To counter these hurdles, the VNCA proposes several government-led initiatives to increase domestic consumption and help manufacturers, including tax relief on clinker exports and financial incentives such as reduced interest rates for local producers.