Displaying items by tag: Türkiye
European Commission approves Oyak acquisition of Cimpor Portugal
11 January 2019Belgium: The European Commission has approved the acquisition of sole control over Cimpor Portugal by Turkey’s Oyak. The commission ruled that there are no competition concerns between the cement producers given that they operate in different geographic markets. The deal was announced in late October 2018.
YD Madencilik orders two grinding plants from Christian Pfeiffer
10 January 2019Turkey: YD Madencilik, part of Üstyapi Insaat Group, has ordered two grinding plants from Germany’s Christian Pfeiffer for a new cement plant in the Düzce region. Christian Pfeiffer will supply two parallel grinding plants, consisting of a roller press (2x 1450kW) and a ball mill (Ø 4.0 x 13.0m, 3200kW), supplemented by a KS200 static separator and a TFS 325-Z twin feed separator.
Each of the two plants ensures a production of 210t/hr of ordinary Portland Cement. Alternatively, the two grinding plants can also be operated separately to allow production of different types of cement. It is also possible to operate the roller presses or the ball mills in single mode. Delivery of components for the plants started in late 2018 and they are scheduled to be completed by the end of may 2019. Christian Pfeiffer previously worked with YD Madencilik in 2015.
Turkey: Nihat Özdemir, the chair of Limak Holding and president of the Turkish Cement Manufacturers’ Association (TÇMB), has reassured the construction industry that the price of cement will not rise too sharply in 2019. He denied that the price would rise by up to 40%, according to the Hürriyet Daily News newspaper. However, he did confirm that prices would increase due to growing input costs and negative foreign currency exchange effects. Özdemir said that electricity costs had risen by 76%, coal by 182% and petroleum coke by 170%.
In late December 2018 the Construction Contractors Confederation (İMKON) complained about an expected 40% price rise in cement products and it called on the government to intervene. The Independent Industrialists’ and Businessmen’s Association (MÜSİAD) has also issued a similar warning.
Nesher Israel Cement lays off 20 workers at Haifa plant
28 November 2018Israel: Nesher Israel Cement has dismissed 20 workers at its Haifa plant. The redundancies took place in October 2018 due to a fall in production, according to the Globes newspaper. The company is also considering making staff change at its Ramla plant. Previously, Israeli cement producers have blamed Turkey and Greece for declining business and have lobbied for anti-dumping tariffs.
Taiwan Cement heads to Turkey
31 October 2018The long expected move by a Chinese cement producer outside of East Asia took a step closer this week with the news that Taiwan Cement is negotiating with OYAK Cement over a joint venture in Turkey. Taiwan Cement says it is prepared to invest up to US$1.1bn in the subsidiary that will operate OYAK Cement’s business in Turkey. In its press release Taiwan Cement said, bluntly, that government peak production limits and market saturation in China had forced it to expand internationally.
This isn’t Taiwan Cement’s first flirtation with a Turkish cement producer. Back in June 2018 local press reported that it had signed a memorandum of understanding and a confidentiality clause with Sanko Holding about potential investment. However, the timing is curious this time because almost simultaneously Brazil’s InterCement announced that it was selling its operations in Portugal and Cape Verde to OYAK Cement. This sale alone deserves more attention given that it is the third by a Brazilian producer since September 2018 but that’s a discussion for another week. Back on OYAK Cement, whilst nothing is certain at this stage, a pledge of US$1.1bn from a foreign investor would certainly come in handy helping to raise the money at the Turkish company.
Whoever, if anybody, Taiwan Cement ends up pairing up with, the level of the investment suggests a multi-plant move. Indeed, the suggested OYAK Cement deal involves a 40% share in 13 integrated cement plants in Turkey with a production capacity of around 12Mt/yr or a 16% local market share. This isn’t far off the regular international price of US$200/t for integrated production capacity.
For a Chinese company to choose Turkey is resonant historically because it is towards the western end of the Silk Road. Marco Polo, for example, travelled from Venice to China via the territory of modern-day Turkey. The modern day version, the Belt and Road Initiative, seeks to evoke this trade route as China attempts to expand internationally.
Pertinent to the cement industry, both China and Turkey are both major exporters. Turkey is the bigger exporter by proportion of production, at 10% in 2017. Both countries were in the top five exporters to the US in 2017 with 2Mt from China and 1.4Mt from Turkey. The commonly accepted wisdom is that the Chinese industry faces major hurdles to exporting its overcapacity. Yet its production base is so large, 15 times larger than Turkey’s, that the little clinker and cement it has the infrastructure to export is still significant. It’s interesting that a major Chinese producer seeking to overcome structural and market obstacles to its expansion at home is targeting a major exporting nation. Typically, when a foreign cement producer buys local companies, one strategy is to use the new assets to ‘naturalise’ its clinker imports as ‘local’ product. Given Turkey’s already large export market this seems unlikely in this case.
The highly public nature of Taiwan Cement’s latest attempt to strike it lucky in Turkey smacks of bolstering investor confidence as much as closing the deal. Normally, this kind of thing gets announced once everything has been agreed, possibly bar the regulatory approval. Putting some money up front may make Taiwan Cement seem serious but OYAK Cement also stands to benefit from its acquisition of the former-Cimpor assets in Portugal and Cape Verde, since it gives it a toehold within the European Union (EU). This one could go either way.
Taiwan/Turkey: Taiwan Cement plans to spend up to US$1.1bn on setting up a new joint venture with Turkey’s OYAK Cement. Through a new subsidiary, Dutch TCC Holdings, it intends to create a new business that will be 60% owned by OYAK Cement and 40% by Taiwan Cement. It will hold talks with OYAK Cement and if an agreement is reached the new company will operate OYAK Cement’s business in Turkey giving Taiwan Cement its first presence outside of Asia.
OYAK Cement is owned by Ordu Yardimlasma Kurumu (OYAK), the pension fund of the Turkish Armed Forces. It operates 13 integrated cement plants in Turkey with a production capacity of around 12Mt/yr. It holds a 16% market share. The plans with Taiwan Cement follow OYAK Cement’s purchase of InterCement’s operations in Portugal and Cape Verde.
Taiwan Cement hopes to gain access to the local market and the wider Mediterranean region. It said that, although it holds a production capacity of 75Mt/yr in the Greater China Region, government peak production limits and market saturation had forced it to expand internationally.
Oyak buys InterCement operations in Portugal and Cape Verde
29 October 2018Brazil/Portugal/Cape Verde/Turkey: Brazil’s InterCement has sold its operations in Portugal and Cape Verde to Turkey’s OYAK Cement for an undisclosed amount. The sale includes three integrated cement plants and two mills, with a total cement production capacity of 9.1Mt/yr, 46 concrete units, two dry mortar units, 17 quarries and a cement bagging plant. The completion of the agreement is dependent on regulatory approval.
InterCement, part of Camargo Corrêa group, purchased a majority stake in Portugal’s Cimpor in 2012, including assets in Portugal and Cape Verde. It says it will allocate a portion of the net proceeds from the sale to reduce its debts. Following completion of the transaction the Brazilian building materials company intends to focus its cement business in South America and Africa. In these regions it holds 39Mt/yr of installed production capacity at 35 cement plants.
Turkey: Sanko Holding is planning start a 7MW waste heat recovery (WHR) unit, supplied by Italy’s CTP Team, at its Cimko Narli Cement plant in early 2019. CTP Team signed a turnkey contract for the WHR unit in March 2018. It will be the first unit in Turkey to use Organic Rankine Cycle (ORC) technology. The unit will provide approximately 12% of the current plant’s electricity needs, with an annual uptime efficiency of 7920hr and energy of 36kWhr/yr.
“The project will be the first project based on ORC technology with a thermal oil loop in Turkey for heat recovery from the cement industry,” said CTP Team Assistant General Manager Acelya Arik and Sales Director Marco Ernesto Donghi when the contract was signed. They added that since the project is the first ORC-based heat recovery plant in a Turkish cement plant it will be a milestone that will push further WHR projects in this field.
Taiwan Cement deal with Sanko Group progresses
17 September 2018Taiwan/Turkey: Taiwan Cement and Turkey’s Sanko Holding have signed a memorandum of understanding and a confidentiality clause about the company’s plan to invest in Sanko’s cement business. Taiwan Cement said it would continue talks with the Turkish business group about a strategic partnership and would make details public once the parties sign a definitive contract, according to the Taipei Times newspaper. The cooperation agreement was first announced in June 2018.
Titan to buy further stake in Adocim
28 August 2018Turkey: Greece’s Titan Group has reached an agreement to increase its share in its joint venture, Adocim Çimento Beton Sanayi ve Ticaret. At present the cement producer is a 50-50 joint-venture operated with Cem Sak Group since 2008. The arrangement will see it buy an additional 25% share in Adocim and dispose of its 50% share of a grinding plant. The transaction is conditional upon approvals by regulatory authorities and is expected to be concluded by the end of November 2018.
Adocim owns an integrated cement plant with a production capacity of 1.5Mt/yr, a grinding unit with a production capacity of 0.6Mt/yr and three ready-mix concrete units.