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News Suez Cement Group

Displaying items by tag: Suez Cement Group

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Mohamed Hegazy appointed as head of Suez Cement

30 March 2022

Egypt: Suez Cement has appointed Mohamed Hegazy as its chief executive officer (CEO). He succeeds Jose Maria Magrina, who has held the post for six years. Magrina will start a new position as the CEO of HeidelbergCement Trading.

Hegazy is currently the commercial director of Suez Cement. He started his career with HeidelbergCement Group in 2007 as a sales representative for Suez Cement. He took over managerial roles in the sales and marketing departments, before being nominated as commercial director in 2017.

Published in People
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Suez Cement inoculates staff against Covid-19

28 May 2021

Egypt: Suez Cement, part of Germany-based HeidelbergCement, has begun its first round of staff inoculations against Covid-19 at its plants and offices. Government medical staff supervised the sessions, which the company said were well attended.

Human resources director Sherry Bishara said, "I am pleased to take this opportunity to thank the Ministry of Health and Suez governorate Preventive Medicine Directorate for their collaboration in providing the vaccine and medical staff needed for administering the vaccine for staff and also to thank the group's medical service for facilitating the campaign.”

Published in Global Cement News
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HeidelbergCement's divestment strategy

24 February 2021

News has been dripping out slowly over the last few months about which assets HeidelbergCement is planning to divest. This week reporting from Bloomberg suggested that the German-based building materials producer might be seriously considering selling one or more integrated plants in Spain. The idea is reportedly part of a wider review of its portfolio in the country with the possible inclusion of cement plants at San Sebastian and Bilbao at a future date also. A proposed price of Euro300m for the national business was put forward by the sources to the reporters but it is unclear how many cement plants that figure includes.

HeidelbergCement announced in July 2020 that it had reduced the value of its total assets by Euro3.4bn following a review. It blamed this on reduced demand for building materials due to the coronavirus pandemic and the devaluation of its Hanson subsidiary in the UK, in part related to the UK’s exit from the European Union. A divestment plan followed at its Capital Markets Day event in September 2020 when it said it was simplifying its country portfolio and prioritising the strongest market positions. To this end it said it was setting up a watch list of underperforming assets to keep an eye on.

Over the next few months a number of corporate reorganisations and actual confirmed divestments occurred as well as plenty of speculation. HeidelbergCement-controlled Suez Cement started to acquire a 100% stake in its own subsidiary, Tourah Portland Cement, in September 2020. Suez Cement then sold its majority stake in Kuwait-based Hilal Cement in late January 2021. This week HeidelbergCement Bangladesh informed the local stock exchange that it is planning to amalgamate its subsidiary Emirates Cement.

Signs that European reviews had taken place could be seen later in the autumn of 2020. In November 2020 the Italian press picked up on rumours that HeidelbergCement was planning to move subsidiary Italcementi’s research centre from Bergamo, Lombardy, to Heidelberg in Baden Württemberg. Whether this was ever a serious proposition or not, this appeared to have been avoided in early February 2021 when an Italian union said it had agreed with Italcementi to keep the research centre in Italy as well as a preserving jobs generally. Meanwhile, also in November 2020, France-based subsidiary Ciments Calcia announced a major upgrade at its integrated Airvault cement plant but along with the conversion of two other integrated plants into a grinding unit and a terminal respectively, and changes at the French headquarters at Guervill.

Just before Christmas the bigger speculations started to appear in the press, with a story suggesting that HeidelbergCement was considering selling assets in California, US, with a target price of US$1.5bn for three integrated plants and associated concrete and aggregate units. That story is particularly beguiling given Cemex’s decision this month to reopen a kiln in Mexico to supply cement to the southwest US to meet shortages (See GCW 493)! Incidentally, readers should also note the story this week about a shortage of natural gas exports from Texas, US, that has caused cement plants in northern Mexico to shut down. This week, as mentioned at the start, has seen Spain added to the list of places that HeidelbergCement might be considering selling up in. The Spanish market like Italy has been rationalising heavily over the last decade particularly as export markets have dwindled. Oficemen, the Spanish cement association, reported that domestic cement consumption fell by 10% year-on-year to 13.3Mt in 2020 from 14.7Mt in 2019. On top of this Oficemen has repeatedly warned of the threat that CO2 emissions prices pose for its members’ exports.

Group chairman Dominik von Achten told Reuters this month that the company plans to sell the first of the five assets in early-to-mid 2021. Of course he wouldn’t say where, except for adding that the company would stay in ‘rock solid’ markets like Northern Europe. Indonesia has been seen as a candidate for disposal by analysts, likely due to local production overcapacity levels and LafargeHolcim’s own departure in Indonesia 2018. All Von Achten would say on the matter was that Indonesia was an ‘important’ market for the group. Whether it’s seen as important for reducing company debt or building value remains to be seen. HeidelbergCement hasn’t exactly been shy about saying what they are doing over the last half year or so but they are only going so far and they won’t comment on speculation. So in the meantime we must wait to find out more.

Published in Analysis
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HeidelbergCement discusses Hilal Cement sale

28 January 2021

Kuwait/Germany: HeidelbergCement has detailed the reasons behind the sale of its 51% stake in Hilal Cement, which has been led by HeidelbergCement subsidiary Suez Cement since 2016. The group said that the divestment represents the first step in a ‘comprehensive portfolio optimisation’ in line with its Beyond 2020 strategy.

Chief executive officer Dominik von Achten said, “We are pleased with the closing of the transaction in Kuwait.” He continued, “The focus of our portfolio management is the simplification of country portfolios and a prioritisation of the strongest market positions.”

Hilal Cement operates two cement terminals and four ready-mix plants.

Published in Global Cement News
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Suez Cement sells majority stake in Hilal Cement

26 January 2021

Kuwait: HeidelbergCement subsidiary Suez Cement has sold its 51% majority stake in Hilal Cement. Decypha News has reported the new owner of the stake as Silver Share Real Estate. Boodai Group retains 44% of the remainder of shares.

Published in Global Cement News
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Metallurgical Industries Holding sells stake in Egyptian Tourah Portland Cement

01 December 2020

Egypt: Metallurgical Industries Holding has sold its 18% stake in Egyptian Tourah Portland Cement for just under US$3m. Mubasher has reported that Arab African International Securities (AAIS) acted as broker for the transaction.

In October 2019, the Financial Regulatory Authority (FRA) approved HeidelbergCement subsidiary Suez Cement’s mandatory tender offer (MTO) for 100% acquisition of Egyptian Tourah Portland Cement for around US$33m.

Published in Global Cement News
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Egyptian Financial Regulatory Authority approves Suez Cement’s Tourah Portland Cement acquisition

19 October 2020

Egypt: The Financial Regulatory Authority (FRA) has approved HeidelbergCement and Simon France subsidiary Suez Cement’s mandatory tender offer (MTO) for acquisition of a 100% stake in Egyptian Tourah Portland Cement for US$32.7m. Daily News Egypt has reported that the FRA also approved a change to Suez Cement’s ownership, with HeidelbergCement France acquiring a 33% stake in the company.

Published in Global Cement News
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Suez Cement appoints Grant Thornton Financial Consulting as financial advisor ahead of share evaluation

07 October 2020

Egypt: Suez Cement has approved the appointment of Grant Thornton Financial Consulting as a financial advisor as it prepares for a fair value study of its shares. This follows a desire expressed by Heidelberg Cement France, the parent company of Simon France. which directly and indirectly owns 55% of Suez Cement shares, for the submission of a bid to fully buy the company’s shares, according to the Daily News Egypt newspaper. In late September 2020 Suez Cement approved the launch of a tender offer to acquire a 100% stake in its subsidiary, Egyptian Tourah Portland Cement.

Published in Global Cement News
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Update on Egypt: September 2020

30 September 2020

The one thing that the Egyptian cement industry really didn’t need this year was any more jolts. Since the gargantuan 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened in 2018, the sector has been stuck in production overcapacity and struggling to catch up. Yet, like the rest of us, they got one nasty surprise in the shape of the coronavirus pandemic. This has added stress to the whole situation and we can see some of this in various news stories that Global Cement has covered recently.

HeidelbergCement’s local subsidiary Suez Cement has been busy in recent days making changes to its corporate structure in the form of a tender offer to buy a 100% stake in Egyptian Tourah Portland Cement. Production stopped at Tourah Cement in June 2019 due to market conditions. This follows yet more lacklustre financial results earlier in September 2020 that show the pain that it and other cement producers have been enduring. Suez Cement’s loss nearly doubled year-on-year to Euro38m for the first half of 2020 and its sales fell by 18% to Euro145m. This was blamed on production overcapacity and a coronavirus-related lockdown. Other producers, both multinational and local, have experienced a similar situation.

Suez Cement also announced in mid-September 2020 that its Ready Mix Beton subsidiary had secured a contract for the supply of concrete for the construction of two new monorail lines connecting the country’s new city projects. Unfortunately, as Suez Cement’s chief executive officer (CEO) Jose Maria Magrina explained in an interview to Daily Egypt News in July 2020, “the New Administrative Capital (NAC) is a very big project, but in the end it has not offset the decrease in informal buildings that have been stopped.” Despite Suez Cement being a major supplier and the proximity of its plants to the site, overall sales have gone down.

Graph 1: Cement consumption in Egypt. Source: Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries.

Graph 1: Cement consumption in Egypt. Source: Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries.

Magrina’s gloom is shared by other industry figures with a general assumption that perhaps up to a quarter of the country’s 20-something cement plants may have to close in the next year or so. Coronavirus has only deepened this view as the government’s response was to cease issuing construction licences for private buildings in Greater Cairo, governorate capitals and major cities from late May 2020 for six months. Solomon Baumgartner Aviles, the CEO of Lafarge Egypt, said in July 2020 that local cement demand fell by 6.5% year-on-year in the first half of 2020. He added that coronavirus had ‘strongly’ impacted the building materials sector with a big effect on the individual market, and with the licence halting exacerbating the situation further. As data from the Cement Division of the Building Materials Chamber of the Federation of Egyptian Industries shows above in Graph 1 demand peaked at 56.5Mt in 2016 and has since declined to a low of 48Mt in 2019. By month the sector recovered in January and February 2020 respectively with growing cement sales on a year-on-year basis but this has since declined with losses in most months subsequently. This is set against a production capacity of 81.2Mt/yr in 2018, giving an excess of 30Mt/yr and a utilisation rate of 59%.

One story that was mentioned in the local press this week is that Arabian Cement Company (ACC) had started negotiations with the European Bank for Reconstruction and Development and the Commercial International Bank – Egypt to secure new loans worth over US$20m. The ACC has denied this publicly in a statement to the Egyptian Exchange but it’s a sign of the trouble that is expected in the sector given the current circumstances.

All of this leaves cement producers scrabbling to hold on until the market picks up again, takes action in other ways or the government intervenes. Some analysts expect the market to stabilise in the medium to longer term as work on large infrastructure projects like the NAC mounts. Suez Cement’s Jose Maria Magrina has said that, “the government must, within the law, dictate norms that will rationalise the market, while making sure that companies survive since current prices do not cover the costs of production.” Local press has since reported that the Ministry of Trade and Industry has started trying to help cement companies, including measures such as limiting production to balance supply and demand, and decrease the surplus in the market. Another option is a coordinated export subsidy programme in coordination with the government but nothing appears to have happened yet after several years of discussion. Unhelpfully for any export aspirations, Egypt finds itself in a very cement export-heavy part of the world, wedged as it is between North Africa, Turkey and Southern Europe.

Hope springs eternal though as, almost unbelievably, Egyptian Cement Group’s CEO Ahmed Abou Hashima surfaced last week to remind everyone that his company still plans to inaugurate its new integrated cement plant in 2021. The project to build a new 2Mt/yr unit in Sohag has been brewing since 2017 when it was announced with China-based Sinoma on board as the engineering partner. It was originally scheduled to open in the first half of 2020 but it was delayed by coronavirus. Let’s hope the picture looks better when it finally opens.

Published in Analysis
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Suez Cement company to make bid for Egyptian Tourah Portland Cement

29 September 2020

Egypt: The board of HeidelbergCement subsidiary Suez Cement has approved the launch of a tender offer for the company to acquire a 100% stake in Egyptian Tourah Portland Cement. Reuters News has reported the value of the deal as US$32.6m.

Published in Global Cement News
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