Displaying items by tag: Sales

India: HeidelbergCement India sold a grinding plant in Raigad, Maharashtra to JSW Ispat Steel for an undisclosed sum. The announcement was made at the Indian cement producer's annual general meeting on 16 May 2013.

HeidelbergCement India also announced that its shareholders have given it approval for raising funds of up to US$340m through borrowings.

India: HeidelbergCement India will sell its 0.6Mt/yr cement grinding unit in Raigad, Maharashtra, to JSW Ispat Steel, part of the JSW Group.

"The disposal is in line with HeidelbergCement's philosophy of divesting less strategic assets with lower margins to focus on more strategic and key operations in central India where the company had recently expanded its cement capacity from 2Mt/yr to 5Mt/yr," said Ashish Guha, chief executive and managing director of HeidelbergCement India, in a statement.

The parties are negotiating and finalising the terms of the business transfer agreement, HeidelbergCement India said in a regulatory filing. The transaction will be finalised only after obtaining all relevant approvals, including that of shareholders.

Indonesia: Indocement Tunggal Prakarsa, a leading Indonesian cement producer, saw its market share fall from 32.5% to 30.6% in the first three months of 2013. A report by the Jakarta Globe attributed the decline due to other cement producers raising their production levels to match growing infrastructure development programs in the country. However, Indocement said that it actually believed in protecting margins rather than increasing its sales.

The HeidelbergCement subsidiary saw its domestic sales increase year-on-year by 2.1% to 4.2Mt for the first three months of 2013. However, the Indonesian cement industry as a whole saw sales volumes of cement rise by 8.6% to 13.6Mt for the quarter.

"Our competitors have managed to add to their cement production capacity, thus resulting in our sales volume being not quite as high as expected," said Indocement's Finance Director Tju Lie Sukanto.

India: Lafarge has signed an agreement to sell a 14% minority stake in its Indian subsidiary, Lafarge India, for Euro200m to Baring Private Equity Asia. The transaction, which is subject to the approval of local regulatory authorities, is intended to accelerate Lafarge's growth plans in India in all its product lines, inlcuding cement, aggregates and concrete.

France: The Vicat Group has reported that its sales for the three months ending 31 March 2013 amounted to Euro491m, a rise of 1.2% year-on-year and a rise of 2.7% at constant scope and exchange rates.

In the cement sector Vicat had sales of Euro256m, a marginal 0.2% increase (3.1% at current scope and exchange rates) on the Euro255m seen in the first quarter of 2012. Vicat sold 4.1Mt of cement during the quarter a year-on-year reported rise of 8%.

In France, Vicat's sales were down by 7.2% year-on-year for the quarter to Euro183m from Euro198m. Cement sales here were down by 14.2%. In Europe (excluding France) sales were stable year-on-year at Euro73m, a slight drop from Euro74m in the same period of 2012. Vicat noted a 14% sales increase in Switzerland but a 12.5% drop in sales in Italy.

In the United States, Vicat's cement sales increased by 13.7% year-on-year, with California seeing the most significant growth at 22%. In Turkey, India and Kazakhstan sales were up by nearly a third to Euro101m. In Turkey they were up by 84% to Euro45m, 10.6% to Euro44m in India and 23.2% to Euro12.4m in Kazakhstan. In Egypt sales fell by 10.6% to Euro22.8m and in west Africa sales were down by 5.1%.

Vicat said it would be able to advance its strong market positions in the rest of 2013. It expects conditions in France to remain difficult, those in Switzerland to remain positive and Italy to recover along with the US. It sees Turkey as continuing its positive cement market development and remains confident about the pospects of the Egyptian industry in the medium to long term. It expects to benefit from the recent launch of its Bharathi Cement plant in India and views its 'ideal' location within Kazakhstan as a great advantage in that growing economy.

Philippines: Cement sales in the first quarter of 2013 have risen by 3% to 4.80Mt from 4.63Mt in the same period in 2012, due to increased demand driven by the peak construction season. Compared to the fourth quarter of 2012, sales rose by 8.5% from 4.41Mt.

Cement producers are preparing for capacity expansion due to existing strong domestic demand and an expected boost from the full implementation of huge infrastructure projects under the government's Public-Private Partnership (PPP) programme.

Capacity expansion projects include a Holcim Philippines plant of up to 2.5Mt/yr costing up to US$500m. The project, which is awaiting approval, is expected to be operational by 2017. Cemex is to raise capacity at its plant in APO by 1.5Mt/yr with an investment of US$65m. The project is expected to be operational by 2014. Lafarge Republic plans raise capacity by 1Mt/yr with an upgrade of its Danao grinding plant in Cebu and debottlenecking its Norzagaray plant's mill in Bulacan. By the first quarter of 2013, Lafarge hopes to supply an additional 0.2Mt/yr to Luzon, 0.65Mt/yr to Visayas and another 0.1Mt/yr to Mindanao.

The Cement Manufacturers Association of the Philippines (CeMAP) has petitioned the Board of Investments for the inclusion of the industry in the 2013 Investment Priorities Plan (IPP) to be eligible for government incentives, including an income tax holiday.

According to Eduardo Sahagun, CEO of Holcim Philippines, the Philippines cement industry has a total capacity of 21Mt/yr and in 2012 it sold 18.5Mt, a capacity utilisation rate of 85%. In 2012 the industry grew by an 'extraordinary' 18%, fuelled by private and public construction projects.

Vietnam: Companies in Vietnam sold 7.55Mt of cement in the first quarter of 2013, a 15% rise year-on-year compared to 2013 according to the Ministry of Construction. This occurred despite a year-on-year fall of 30% to 2Mt in March 2013. The country's cement production increased by 15% year-on-year to 8.14Mt, according to local media.

Due to the increase in cement sales between January and March 2013, the country's cement inventory dropped by 45% year-on-year to 40,000t. Local cement makers currently have huge inventories and domestic demand remains low due to a frozen real estate market. High production costs, high lending interest rates and rising input costs have also put a burden on local cement producers, the ministry noted.

The ministry predicts that the country's cement sales will rise by 5 - 8% year-on-year to 48 – 49Mt in 2013, equal to total sales of 2011. In 2012, Vietnam's cement sales stood at 53.6Mt, of which 45.5Mt was sold in the domestic market, down 7.1% on-year, while 8.1Mt of cement and clinker was exported, up 30%.

India: Private sector ship builder ABG Group is in talks with private equity and financial firms to sell a minority stake in its cement business for about US$150m. According to Dhananjay L Datar, director of ABG Group, a potential deal is at a preliminary stage with several parties showing interest in the cement unit.

The group's cement business, ABG Cement, has a 6.5Mt/yr plant in Kutch, Gujarat, which is expected to be commissioned by the end of January 2013. India media has linked equity firms Blackstone and KKR to the deal. ABG Group originally announced its plans to enter the cement sector in 2008 with an initial investment of US$328m.

China: TCC International Holdings has reported that it has signed an agreement with Southwestern Cement, a subsidiary of China National Building Material Group Corp (CNBM), to 'increase cooperation on several businesses'.

According to agreement, TCC will buy cement assets in Sichuan Province from Southwestern Cement for US$8.52m to expand its share of the local market, while TCC will sell its cement assets in Guizhou Province to Southwestern Cement for US$17.8m. TCC will earn US$137m in profit from the deal and will use the profit to replenish working capital and fund future acquisition projects.

Just before the end of 2012 Holcim sold shares in companies it owned in Thailand and Guatemala. It reduced its stake in Siam City Cement Company (SCCC) in Thailand from 36.8% to 27.5% and it sold its entire 20% minority stake in Cementos Progreso in Guatemala. For the sale of these two share packages Holcim received approximately Euro310m.

This is interesting given that Asia-Pacific was the Switzerland-based multinational's biggest sales area in 2011 and because sales of cement rose by 6% in Latin America in 2011. Similarly in 2012 from January to September the two regions propped up the group's profits. Why would Holcim sell stakes into two of its most profitable regions?

In its third quarter report in 2012 Holcim repeatedly described Thailand as 'encouraging' following floods in 2011. It added that it had focused increasingly on the cement market in the country and strengthened its position in neighbouring countries that resulted in lower clinker exports.

According to the Global Cement Directory 2013 SCCC has a capacity of 31Mt/yr, 65% of Thailand's total capacity of 48Mt/yr. SCCC predicted in December 2012 that domestic cement demand would increase by 5-10% in 2013. The company is currently planning to build new plants in Indonesia and Cambodia and is considering investing in Myanmar. In Indoniesia Holcim is the third biggest producer after Semen Gresik and HeidelbergCement subsidiary Indocement.

Meanwhile in Central America, Cementos Progreso was the sole producer in Guatemala with 2.5Mt/yr from two plants. This was set to double with the commissioning of a third plant towards the end of 2012. However, Holcim retains seven plants in southern Mexico (12Mt/yr), both of El Salvador's plants (2Mt/yr) and a plant in Costa Rica (1Mt/yr).

With Holcim's strong presence in Central America and the North American market reviving leaving Guatemala makes sense with the group's debt reduction programme in mind. The situation in Thailand is more complex, so unsurprisingly Holcim has reduced its stake rather than leaving completely. SCCC's expansion plans outside of Thailand suggest, that although growing, the market is maturing. In one such potential expansion target, Indonesia, Holcim is already a major producer.

In its press release announcing the sales in Thailand and Guatemala, Holcim attributed the decision to its ongoing debt reduction programme. As part of its 'Leadership Journey' the group intends to save Euro1.25bn by the end of 2014. Other savings in 2012 included reducing management in Europe, layoffs and closures in Australia, a plant closure in Hungary, further delays on the decision to build a new plant in New Zealand and layoffs in Spain. The management changes in Europe alone contributed a Euro99m chunk of Holcim's target saving of Euro124m for 2012.

Yet it's worth considering that a week after the sales of its shares Holcim's subsidiary in India, Ambuja Cements, announced investments of Euro277m in India. Perhaps the best way to save money is to make more money.