Displaying items by tag: South Korea
Bid made for Lafarge Halla Cement
12 February 2016South Korea: The South Korean private equity fund Glenwood Private Equity will join with Hong Kong-based private equity fund Baring Private Equity Asia to buy Lafarge Halla Cement from LafargeHolcim for US$455m, according to investment bank sources.
According to investment bank industry sources on 11 February 2016, Glenwood PE, a preferred bidder of Lafarge Halla Cement, has notified LafargeHolcim that it selected Baring Private Equity Asia as a joint takeover partner. The group will decide whether to give a final nod to the acquisition proposal ahead of its shareholders’ meeting scheduled in March 2016.
Glenwood PE will likely establish a strategic partnership with a local cement company after it buys Lafarge Halla Cement. The possible cement companies include Sungshin Cement Co. with a 12.9% market share as of 2014 or Hanil Cement, which had a 13.6% market share in 2014. The combined market share of Lafarge Halla Cement (12.1%) with either of the cement companies would top the 19.8% share held by the current South Korean market leader Ssangyong.
Lafarge Halla Cement up for sale
21 January 2016South Korea: Glenwood Private Equity, a South Korean investment company, is in talks to buy Lafarge Halla Cement for US$497m. The private equity fund is in talks to buy the cement company in cooperation with Eugene Group, the country's largest ready-mixed concrete manufacturer, and Sungshin Cement, another Korean cement maker, according to sources cited by the Maeil Business Newspaper.
If the sale completes it will make Sungshin Cement the country's largest cement producer. At present Lafarge Halla Cement is the fourth largest producer with 12.1% of the market. The current market leader, Ssangyong Cement Industry, holds 19.8% of the market. Sungshin Cement could also benefit from buying Lafarge Halla Cement due to the company's diverse locations.
Lafarge Halla Cement was acquired by Lafarge in 2000 and is wholly owned by LafargeHolcim. Lafarge Halla Cement recorded US$367m in sales and US$30m in operating income in 2014.
Six cement makers fined for price rigging in South Korea
05 January 2016South Korea: South Korea's antitrust watchdog has fined six local cement makers a combined US$168m for fixing the prices of cement products and divvying up the market, according to Dow Jones.
According to the Fair Trade Commission (FTC), cement companies have allegedly colluded to rig the prices of cement products by controlling output and market share in 2011. The suspected companies are Ssangyong Cement Industry Co., Tongyang Cement & Energy Corp., Hanil Cement Co., Sungshin Cement Co., Hyundai Cement Co. and Asia Cement Co. Ssangyong was set to take 22.9% of the total market share, while Tongyang and Hanil were in charge of 15.1% and 14.9%, respectively.
"Managers of the six companies had regular monthly meetings to oversee whether or not the members had complied with the arranged shipments," said the FTC. The prices of cements surged by 43% year-on-year in April 2012.
Industry leader Ssangyong was slapped with US$73.6m of fines, followed by Hanil with US$34.5m and Sungshin with US$36.7m. Tongyang was exempted from the penalty, as the cement maker has been under court receivership since October 2013.
The FTC said that it will strictly crack down on price-rigging practices in backbone industries to build sound market order and fair competition.
South Korea: A new solid recovered fuel (SRF) production facility is now fully operational in Wonju City, South Korea, thanks to global shredding company UNTHA and local partner PERITUS.
Korean waste management specialist Zion has built the SRF manufacturing plant to make smarter use of its residual materials. Now, with the new system in place, pre-sorted construction and demolition waste and commercial and industrial waste, is being shredded to produce a homogenous 50mm fuel for the cement industry.
The UNTHA XR3000C shredder with cutting concept was chosen following a series of trials at UNTHA's Austrian headquarters. Demonstrations showed that the technology could comfortably achieve throughputs of 60-70t/day, with scope to almost double that moving forward. The XR3000C's flexibility also means Zion can achieve a 40-50mm particle size from the single step shredding of plastic bales, which has further boosted the company's SRF production capabilities.
"South Korea may only be in the infancy of its waste-to-energy journey, yet the nation has formed a very sophisticated and disciplined approach to its waste roadmap relatively quickly. Legislation is in place to drive the production of <50mm SRF and the necessary infrastructure is fast evolving to accommodate this," said UNTHA's Head of Business Unit Waste Peter Streinik. "What we see here with Zion, however, is not just a company striving for compliance. They're prioritising energy efficiency, profitability and innovation too, to realise the wider benefits that come with smarter waste management."
Committed to principles akin to Europe's waste hierarchy, Zion extracts as many materials as possible, including bricks, metal, sands, glass and batteries, for re-use or recycling, prior to them entering the SRF manufacturing stream.
"Our family-run business is incredibly passionate about renewable energy, from solar power to alternative fuel production," said Zion's President Geumju Kim. "Now that our new SRF plant is up and running, with state-of-the-art configurable technology in place, the next step is to investigate relationships with different customers. We can satisfy varied specifications, and look forward to improving South Korea's resource agenda."
Sun Cement orders another vertical roller mill from Loesche
27 October 2015South Korea: Sun Cement Co Ltd has placed another order for a Loesche vertical roller grinding mill to grind granulated blast furnace slag.
At the Mokpo cement plant in South Korea, in order to ensure more cost-effective production, plans have been made to replace the current outdated ball mill with a new grinding plant. For this reason, Loesche has been commissioned to deliver a LM 35.2+2 CS mill. The vertical roller grinding mill will produce slag cement with a fineness of 4600 Blaine, at a capacity of 45t/hr. The capacity of the gearbox will be 1600kW.
The delivery of the key parts to Sun Cement Co Ltd is planned for the end of 2015.
Ireland: CRH CEO Albert Manifold has said that the company will now take a pause from large-scale acquisitions following the completion of its US$7.3bn acquisition of various Lafarge and Holcim assets and its recent US$1.3bn acquisition of glazing products producer C R Laurence. Manifold was quoted by the Wall Street Journal as saying that significant acquisitions going forward are 'unlikely,' and that the company will focus on integrating its two big acquisitions over the next 12 - 18 months.
CRH had previously been linked with two other large-scale cement industry acquisitions. In India, it was in the running to acquire 5Mt/yr of Lafarge assets that have since been sold to Birla Group. Meanwhile, in South Korea CRH had been linked with the wholesale acquisition of Tongyang Cement & Energy. Due to Manifold's announcement, it appears that the South Korean deal is no longer on the table.
Cement producers in South Korea face cartel probe
24 July 2015South Korea: The Korea Fair Trade Commission (FTC) has continued its investigation into whether cement producers colluded to raise cement prices. The antitrust watchdog conducted an on-site probe into cement producers including Tongyang Cement & Energy and Hanil Cement in mid July according to industry sources cited by the Maeil Business Newspaper and the FTC. If a fine is levied a legal battle may follow regarding whether the Sampyo consortium, chosen as the preferred bidder to acquire Tongyang Cement & Energy, should pay the fine imposed by the FTC on Tongyang.
Upon the request from the ready-mixed concrete industry, the regulator started an investigation into alleged price-fixing in the South Korean cement industry in April 2013, but it has yet to reach a conclusion. The latest site visit is believed to have been organised to obtain further evidence on suspicions of price-fixing.
The combined sales of the seven cement makers that account for about 88% of South Korea's cement market are estimated at be up to US$855m/yr. Suspicions of cartel-like activity date back to 2011 and this may be reflected in potential fines if any price-fixing is proved.
Ireland/South Korea: CRH's investment spend for 2015 looks set to surpass Euro7bn, with the company heavily linked with a Euro800m move for the number two player in South Korea's cement market, Tongyang Cement & Energy. Tongyang Cement & Energy has a market value of nearly Euro600m. Its owner is reportedly putting a 74% stake on the market, with a Euro800m price tag being touted.
CRH's Euro6.5bn purchase of assets being offloaded as part of the merger between Holcim and Lafarge is due to conclude in August 2015. CRH is set to become the third-largest building materials business in the world on the back of that deal, but management has already suggested that it won't be the limit of its 2015 spending. CRH chief executive Albert Manifold said that the group had a 'very strong' acquisition pipeline.
CRH spent Euro45m in the first four months of 2015. Manifold said that CRH currently has a separate Euro1bn US deal under consideration and a Euro700m deal, but noted that CRH typically concludes around 10% of the deals that come onto its radar. However, if all of those deals came to pass, CRH's 2015 investments would exceed Euro8bn.
While the Euro700m deal is thought to be a European target, if the Korean deal goes ahead, it would further boost CRH's Asian presence, which is already being improved via new assets in the Philippines coming on stream via the LafargeHolcim deal. CRH said that it would repackage its Asian operations into a separate grouped entity in 2015 to cater for its growing size. The South Korean market consumes about 45Mt/yr of cement from a total production capacity of around 65Mt/yr.
Coal-zilla slain?
28 October 2014The 'revelation' this week that South Korean cement producers have been paid US$127m to use/dispose of Japanese coal that is thought to be radioactive certainly sounds scary. If it is true that cement made with contaminated coal has led to the construction of radioactive buildings and roads, this may have prised open a 'can of worms' for coal producers, exporters and cement players alike. According to local media, four South Korean firms - Ssangyong Cement, Tongyang Cement, Lafarge Halla Cement and Hanil Cement - received the money to use the coal between March 2011, when the Fukashima nuclear power plant started to leak radiation, until 2013. A total of 3.7Mt of cement is 'under suspicion.'
Caesium-137 is formed by fission reactions that start with uranium-235 in nuclear reactors. The Fukushima reactor that started leaking in 2011 used this type of fuel. Once it leaked, caesium-137 was deposited into the sea and onto the land, presumably also making its way into nearby coal deposits.
As it is a metal with a melting point of just 28.5°C and a boiling point of 671°C, the caesium-137 would vaporise if it were to enter a cement production line operating at 1450°C as a metal. However, caesium will not enter the cement-making process as a metal due to its rapid and explosive reaction with water. An interesting slow-motion of this reaction can be seen here.
Instead, caesium will enter the cement-making process either as its oxide or a simple salt (e.g.: caesium chloride) in the coal. The salt will be ionized in the heat of the flame, sending caesium ions into the kiln and thus direct contact with the clinker as it is being formed. Here it will become part of the matrix of the clinker and hence the final cement product. All the time the caesium-137 is radioactive.
And it stays radioactive once it is in the finished product, for example in a building or road surface. Its half-life, the time that it takes for half of the caesium-137 to decay to meta-stable barium-137 (emitting radiation as it decays), is unfortunately very well matched to the life-span of concrete buildings at 30.7 years. This means that after about 100 years of building life the building would still be around 10% as radioactive as it was when it was built.
This would certainly be a problem if the coal was highly contaminated. However, a few questions come to mind. Firstly, if the coal contains 20-73 becquerels per kilogramme (Bq/kg) of caesium-137, as has been claimed by Lee In-young, an opposition spokesman for the New Politics Alliance for Democracy party and member of the National Assembly's Environment Labour Committee, why is this a problem when the Japanese legal limit for eating caesium-137 in contaminated vegetables is all the way up at 500Bq/kg? When the most dangerous mechanisms of caesium-137 poisoning relate to accumulation in soft tissue, how can driving along a caesium-137-containing highway constitute a health risk?
Also, the coal may well start the cement making process with 25-73Bq/kg of caesium-137 but the clinker will have a lower level. This is because for every 1t of clinker the plant will typically consume just 100-200kg of coal. The caseium-137 and hence the radiation will therefore be spread out over a larger mass. A level of 50Bq/kg in the coal would translate to a clinker level of 5-10Bq/kg. This is around 100 times lower than the Japanese vegetable limit. After this, the clinker is extended with additives to make cement. This is then added to aggregates and / or sand when concrete or mortars are made, further diluting the caesium-137, perhaps to as low as 1-5Bq/kg. It is arguable that South Korea has received a higher caesium-137 dose from Japan via air and sea than via coal imports.
In light of all this, it appears that those calling for investigations on scientific grounds, like Lee, may be misguided. However, there may be political gain. The histories of Japan and South Korea are long, violent and distrustful. Indeed, according to a BBC World Service poll conducted earlier in 2014, South Korea and China jointly have the most negative perceptions of Japan of all world nations. In this environment stories about radioactive coal become much easier to believe in.
In reality the Japanese vegetable limit is well above the likely levels that might be found in any cement products resulting from the use of this coal. It is consistent with EU limits set more than 20 years earlier (600Bq/kg). A search on the US Environmental Protection Agency's website fails to bring up any formal limit. Instead it states that everyone is exposed to caesium-137 from atmospheric fallout to a low level and that the most dangerous cases are where waste metal processors unwittingly come across sources.
So on the surface then, the South Korean reaction seems like a storm in a teacup. One question remains though. If the caesium-137 levels in the coal are so much lower than the Japanese vegetable limit, why are Korean firms being paid to take it out of Japan?
Asia Cement considers buying Ssangyong Cement
28 October 2014South Korea: Asia Cement is considering the acquisition of South Korea's Ssangyong Cement. According to investment banking sources, Asia Cement is currently discussing the feasibility of purchasing a 46.8% stake in Ssangyong Cement for US$762m.
In terms of shipments, Asia Cement is the seventh-largest cement producer in South Korea with a market share of 6.9% in 2013. During 2013 it posted sales revenue of US$418m. During the same period, Ssangyong Cement recorded US$1.96bn in sales revenue and a market share of 22.0%.