Displaying items by tag: Titan
Titan Cement records US$1.2bn nine-month turnover in 2019
07 November 2019Greece: Titan Cement has increased its nine-month turnover by 9.7% year-on-year to US$1.21bn to 30 September 2019 from US$1.10m in the corresponding period of 2018. Net profit after tax fell by 9.9% year-on-year to US$45.3m from US$50.2m. The company noted progressive sales momentum growth throughout the period, with profitability in all regions except the Eastern Mediterranean, and projected further growth with the continued recovery of markets in Southeastern Europe.
Global Cement and Concrete Association launches research network
10 October 2019UK: The Global Cement and Concrete Association (GCCA) has launched ‘Innovandi,’ a research network between industry and scientific institutions. The network intends to research the areas of process technology, including the impact of co-processing, efficiency of clinker production and implementation of CCUS/ technologies, and products. This will include the impact of clinker substitutes and alternative binders in concrete, low carbon concrete technology and improve the understanding of CO2 reduction through re-carbonation.
“Our industry is fully committed to taking action to reduce CO2 emissions. As such, Innovandi is an industry led initiative and will bring together the best minds from all corners of the cement and concrete world, academia and business. Together we will truly collaborate on a global scale and use our expertise to find new ways of working and developing effective innovations,” said Benjamin Sporton, the chief executive officer (CEO) of the GCCA.
24 companies from the cement and concrete industry, including cement and concrete manufacturers, admixture specialists and equipment suppliers, have committed to the initiative, with scientific institutions and additional companies set to join as its work begins work. These include Buzzi Unicem, Cementir Holding, Cementos Argos, Cementos Molins, Cementos Pacasmayo, Cemento Progresso, Cemex, CNBM, Chryso, CRH, Dalmia Cement, FLSmidth, Grupo Cementos de Chihuahua (GCC), GCP Applied Technologies, Mapei, HeidelbergCement, LafargeHolcim, Nesher Israel Enterprises, SCG Cement, Titan Cement, Refratechnik Cement, Sika Technology, Subote New Materials and Votorantim.
As part of the new initiative, the GCCA also intends to establish an annual Innovandi global conference to promote collaboration on innovation and research in the sector.
With a good number of the financial results published by the non-Chinese multinational cement producers for the first half of 2019, it is now time for a roundup. Graphs 1 and 2 below lay some of the basics with the general sales revenue and cement production volume trends.
Graph 1: Sales revenues from large multinational cement producers in the first half of 2019 and 2018. Source: Company reports.
Graph 2: Cement sales volumes from large multinational cement producers in first half of 2019 and 2018. Source: Company reports.
This is only part of the picture as the larger companies had various complications. For example, LafargeHolcim’s apparent falling revenue and sales volumes is mainly due to its massive divestments in South-East Asia. On a like-for-like basis its sales and sales volumes of cement rose. Its recurring earnings before interest, taxation, depreciation and amortisation (EBITDA) better illustrated this with a rise of 7.2% year-on-year in real-terms to Euro2.41bn in the first half of 2019 from Euro2.25bn from 2018. The company didn’t have it all its own way though with falling cement sales volumes in Asia despite the divestment and poor growth in its Middle East Africa region.
By contrast HeidelbergCement reported growing sales but its earnings and profits were down. Its profit fell by 33% to Euro291m from Euro435m. This was blamed on the group’s sale of its Ukraine subsidiary in April 2019. The operations were sold to Overin Limited, part of Ukrainian investment company Concorde Capital Group, for Euro13m. HeidelbergCement said that the divestment resulted in a loss of Euro143m. Aside from this, as Bernd Scheifele, the chairman of the managing board of HeidelbergCement, explained, positives in markets in Asia, Western and Southern Europe compensated for weaker business in North America and the Africa-Eastern Mediterranean Basin Group area.
Cemex has a tougher time of it than its larger rivals due its greater reliance on American markets. Slow starts to infrastructure projects were blamed in Mexico, poor weather hit earnings in the US and problems occurred further south too. Luckily Europe was strong for the company with lots of good news areas. It wasn’t enough though as Cemex’s sales fell by 4% to US$6.72bn from US$7bn and its operating EBITDA dropped by 11% to US$1.21bn from US$1.36bn.
As for the other companies covered in the graphs, Buzzi Unicem and Titan Group prospered due to the US market. The former described its US activity as ‘lively.’ However, it admitted that its sales growth there was mainly caused by falling imports in the face of weak domestic demand and ‘considerable production and logistical difficulties’ in June 2019 caused by flooding of the Mississippi river. Titan, meanwhile, caught a well-deserved break after recent years with growth also in Greece and Southeastern Europe. Vicat managed to stave off a decline in sales due to poor markets in Turkey, Switzerland, Indian and West Africa through its acquisition of Brazil’s Ciplan in late 2018. Yet, its earnings and cement sales volumes fell anyway.
Dangote Cement once again suffered at home in Nigeria, while its Pan Africa business grew. Trouble at home was pinned on lower volumes, price discounting, higher input and distribution costs and higher fuel and power costs in the first half of 2019. Of more concern, earnings fell in Pan Africa too in the first half due to market conditions in South Africa and Zambia. As ever though Dangote Cement’s diversity in Sub-Saharan Africa should see it through. Finally, Semen Indonesia continued to ride high as its sales increased by 23% to US$1.17bn due to its absorption of LafargeHolcim’s assets. Unsurprisingly, its sales volumes grew at a similar rate, to just below 13Mt in the first five months of 2019. Yet trouble may be store ahead as its local sales fell by 7% in this period.
Other major producers omitted here include Ireland’s CRH and India’s UltraTech Cement. Both are set to release their results later in August 2019 and will make for essential reading as the market conditions so far in 2019 become clearer. The latter in particular will be worth watching if a report by Indian credit agency CARE Ratings out this week is correct. It has forecast production capacity growth of 120Mt by 2030 in India. UltraTech Cement is perfectly poised to benefit from this.
Improving markets in Greece and Southeastern Europe add to Titan Group’s revenue growth in first half of 2019
01 August 2019Greece: Titan Group’s turnover rose by 10% to Euro785m in the first half of 2019 from Euro713m in the same period in 2018. The building materials producer attributed this to improving markets in Greece and Southeastern Europe, as well as continued ‘strong’ performance in the US.
Its earnings before interest, taxation, depreciation and amortisation (EBITDA) remained stable at Euro122m but its net profit fell by 46% to Euro13.3m from Euro24.8m. In its Eastern Mediterranean region the group described market conditions as ‘challenging’ with falling demand in Egypt and Turkey. In Brazil it said that cement sales volumes were stable but that revenue had risen due to an improving market.
Titan Group completes share exchange tender offer
19 July 2019Greece: Titan Group has successfully completed a share exchange exercise between its subsidiaries. The voluntary share exchange tender offer was submitted by Τitan Cement International to the shareholders of Titan. Following the transaction Titan Group will be listed, through Titan Cement International, on Euronext Brussels, the Athens Exchange and Euronext Paris, on 23 July 2019. The company said the move would strengthen its international growth path and future outlook.
Update on Egypt
19 June 2019Tourah Cement in Egypt took the tough decision last week to temporarily stop production. It blamed this on an acute financial crisis rendering it unable to pay its running costs. The subsidiary of Germany’s HeidelbergCement was reported in the Global Cement Directory 2019 as already being partly closed. This latest news is regrettable but not surprising.
Graph 1: Cement consumption and production in Egypt. Sources: Industrial Development Agency, Global Cement Directory 2019, Cement division of the Building Materials Chamber of the Federation of Egyptian Industries.
As Graph 1 shows that the backdrop here is of a local cement sector rife with overcapacity. Capacity utilisation rates have hovered around 70% in recent years. The sector breaks down into about a quarter of production capacity under state control and the remainder owned by private companies. Overall, about half of the production capacity is run by multinational companies like Greece’s Titan, France’s Vicat and Germany’s HeidelbergCement.
The country hosts some of the largest cement plants in the world as well as several very big plants by European or North American standards anyway. The whopping 13Mt/yr government/army-run El-Arish Cement plant at Beni Suef opened fully in 2018. It seemed likely that there were going to be losers in the industry following that kind of disruption from a state-owned player. Indeed, Medhat Istvanos, head of the cement division of the Building Materials Chamber of the Federation of Egyptian Industries, explicitly blamed the El-Arish Cement plant for making the situation worse in September 2018. He said that the decision to build the plant was ‘not based on precise information’ and that it had harmed local production.
In the wider picture, the cement sector started to move away from subsidised natural gas and heavy fuel oil to coal instead in the mid-2010s. Tourah Cement mentioned this in its statement about halting production. The government has supported the cement industry through large-scale infrastructure projects and a state-sponsored compensation system under the Contractors Compensation Act that offset the loss prompted by the Egyptian pound’s floatation in 2017.
However, overcapacity has consistently been a problem and this was clear when the El-Arish Cement plant was approved. Exports of cement crept up to 1Mt/yr in 2017 from 0.1Mt/yr in 2015. Yet, as the Low-Carbon Roadmap for the Egyptian Cement Industry pointed out, Egyptian FOB exports of cement cost US$20/t higher than regional competitors such as Turkey. At this kind of disadvantage Egypt lacks the traditional escape route for an overproducing cement sector.
In these kinds of conditions, consolidation appears to be crucial while organic or government-backed demand plays catch-up with the production base. Certainly Egypt has the population and the development potential as its economy grows in the medium to long term. The government stabilising the economy after recent troubles is crucial for the construction industry. In the meantime all is not lost as the focus is on efficiency gains and cost cutting. The growth of alternative fuels as the sector’s fuel mix continues to adjust to the new normal following the abolition of subsidies on natural gas is one example of this.
Greece: Titan Group’s turnover has benefited from the US market and growth in southeastern Europe. Its turnover grew by 12.5% year-on-year to Euro363m in the first quarter of 2019 from Euro323m in the same period in 2018. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 1.9% to Euro44.3m from Euro43.5m. It blamed its limited earnings growth on ‘challenging’ conditions in Turkey and Egypt.
US: The Portland Cement Association (PCA) has announced the winners of the 2019 Energy and Environment (E&E) Awards. The awards recognised environmental and community relations projects that were completed in 2018 and were presented at the 3rd Annual Cement and Concrete Fly-In.
The CalPortland Mojave cement plant in California won the Energy Efficiency award for the installation of a new classifier system for its vertical roller mill that increased energy efficiency by reducing fan power requirements. The plant also installed a control system for the finish mill that will maximise performance and help reduce wear on equipment. The classifier installation reduced the finish mill energy intensity by 1.5 to 2.0kWh/t, and the control system reduced energy intensity by 13%. In 2018 22% of the electricity consumed by the plant came from on-site renewable wind energy generation. CalPortland has implemented significant energy efficiency measures and its energy management program has been recognised by the Environmental Protection Agency Energy Star program as the Energy Star Partner of the Year for 15 years in a row.
Roanoke Cement Company and Titan America’s Troutville plant in Virginia won the Environmental Performance award for being the first cement manufacturing plant in the US to receive ISO 50001 certification for energy management of all aspects of energy procurement, design and use. The plant reduced its total electrical consumption by 10% and fossil fuels use by more than 12%. The plant has also implemented an alternative fuels program as part of its certification for the True Zero Waste Program, administered by Green Business Certification and has received silver status achieving a 96% rate of waste divergence from landfills.
Lehigh Hanson’s Permanente cement plant at Cupertino in California won the Innovation award for the installation of a water treatment system reducing concentrations of metals, including selenium, to meet permit limits. Lehigh Hanson developed a treatment system that combined ultrafiltration and reverse osmosis (UF/RO) technology in conjunction with biological treatment technology to remove metals, including selenium and dissolved solids. This ensured applicable effluent limits were met while optimising treatment capacity and efficiency. This treatment system is the first of its kind in the cement industry ensuring that effluent limits are met while, at the same time, limiting the quantity of waste needed to be managed.
Buzzi Unicem USA’s Greencastle cement plant in Indiana won the Land Stewardship award for opening a 4km smooth packed stone trail in conjunction with the not-for-profit People Pathways organisation as Phase 2 of the Putnam Nature Trail. Buzzi Unicem USA staff and People Pathways used heavy equipment for rough clearing and grading of the overgrown former railroad bed and improved and expanded the physical trail. These areas were then landscaped with trees, native prairie vegetation plugs, interpretive signage, benches, birdhouses and other features. Additional nature trail enhancements include placement of wildlife monitoring cameras along the trail, installation of nesting boxes and interpretive signage, and maintenance of the recently completed restoration of native flora installed in 2017 and 2018.
Cemex’s Lyons cement plant in Colorado won the Outreach award for volunteering work by its staff at the Rocky Mountain National Park in Boulder, Colorado, performing campground improvement activities at Glacier Basin Campground by moving rocks and fallen timber and clearing existing fire pits of ash deposits. The plant then introduced a new community outreach initiative by hosting a Manufacturing Day event, providing local students tours of the quarry and plant to increase youth interest in pursuing a vocation in skilled trades. Additionally, the plant teamed up with the Celestial Seasonings B Strong Ride for cancer care and research for an event aimed at increasing safety awareness while fundraising for two local organizations and their efforts to fight cancer.
The European Union’s (EU) verified CO2 emissions figures were released earlier this week on 1 April 2019. The good news is that no cement plant is within the top 100 largest emitters. All the top spots are held by power plants, iron and steel producers and the odd airline. Indeed, out of all of the verified emissions, cement clinker or lime production only represents 7% of the total emissions. Of course this is too much if the region wants to meet its climate change commitments but it is worth remembering that other industries have a long way to go as well and they don’t necessarily face the intrinsic process challenges that clinker production has. If the general public or governments are serious about cutting CO2 emissions then they might consider, for example, taking fewer flights with airlines before picking on the cement industry.
The EU emitted 117Mt of CO2 from its clinker and lime producers in 2018, a 2.7% year-on-year decrease compared to 120Mt in 2017. This compares to 158Mt in 2008, giving a 26% drop in emissions over the decade to 2018. However, there are two warnings attached to this data. First, there are plants on this list that have closed between 2008 and 2018. Second, there are plants that provided no data in 2018, for example, all the plants in Bulgaria. Climate change think tank Sandbag helpfully pointed out in its analysis of the EU emissions data that industrial emissions have barely decreased since 2012. The implication here being that the drop from 2008 to 2012 was mainly due to the economic recession. Sandbag also made the assertion that 96% of the cement industry’s emissions were covered by free allocations in the EU Emissions Trading Scheme (ETS) thereby de-incentivising sector willingness to decarbonise.
By country the emissions in 2018 from cement and lime roughly correspond with production capacity, although this comes with the caveat that emissions link to actual production not potential capacity. So, Germany leads followed by Spain, Italy, Poland and France. Of these Poland is a slight outlier, as will be seen below.
Plant | Company | Country | CO2 Emissions (Mt) |
Górazdze Plant | Górazdze Cement (Heidelberg Cement) | Poland | 2.73 |
Rørdal Plant | Aalborg Portland Cement | Denmark | 2.19 |
Ozarów Plant | Grupa Ozarow (CRH) | Poland | 2.01 |
Slite Plant | Cementa (HeidelbergCement) | Sweden | 1.74 |
Kamari Plant | Titan Cement | Greece | 1.7 |
Warta Plant | Cementownia Warta | Poland | 1.55 |
Volos Plant | Heracles General Cement (LafargeHolcim) | Greece | 1.27 |
Vassiliko Cement Plant | Vassiliko Cement | Cyprus | 1.21 |
Małogoszcz Plant | Lafarge Cement Polska (LafargeHolcim) | Poland | 1.18 |
Kujawy w Blelawach Plant | Lafarge Cement Polska (LafargeHolcim) | Poland | 1.15 |
Table 1: Top 10 CO2 emitting plants in the European Union in 2018. Source: European Commission.
Poland leads the count in the top 10 EU CO2 emitting cement plants in 2018 with five plants. Greece follows with two plants. This list is deceptive as all of these plants are large ones with production capacities of 2Mt/yr and above. As it contains many of the largest plants in the EU no wonder the emissions are the highest. It is also worth considering that there are far larger plants outside of the EU.
In summary, as most readers will already know, the cement industry is a significant minority CO2 emitter in the EU. Countries with larger cement sectors emit more CO2 as do larger plants. So far, so obvious. Emissions are down since 2008 but this mostly seems to have stalled since 2012, bar a blip in 2017. The change though has been the rising carbon price in the EU ETS in 2018. Coincidentally the carbon price has been fairly low and stable since 2012. If the mechanism is working properly then changes should start to appear in 2019. Already in 2018 a few European cement producers announced plant closures and blamed the carbon price. Watch this space.
Titan profit growth driven by grew US in 2018
21 March 2019Greece: Titan Group’s profit growth in 2018 due to by its US operations. However, negative currency exchange rate effects have dragged on its financial results. Overall, its turnover fell by 1% year-on-year to Euro1.49bn in 2018 from Euro1.51bn. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) decreased by 5% to Euro260m from Euro273m. However, its net profit rose by 26% to Euro53.8m from Euro42.7m.
By region, the US region reported rising turnover and stable EBITDA in US Dollar terms. An improvement in results was recorded in Florida, counterbalanced the lower profitability of the mid-Atlantic region, which was affected by protracted inclement weather and an increase in competition in the broader New York area. The market remained poor in Greece with falling turnover and earnings. Markets in south-eastern Europe recorded increases, although rising energy costs wee a concern. Continued problems were reported in Egypt and Turkey due to additional input costs and market conditions respectively.