Displaying items by tag: Votorantim Cimentos

Brazil: Votorantim Cimentos’ net revenue grew by 22% year-on-year to US$954m in the first quarter of 2022 from US$781m in the same period in 2021. Its cement sales volumes rose by 5% to 8Mt from 7.6Mt. However, its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 57% to US$81.4m from US$189m. The group attributed its increased sales to ‘favourable price dynamics’ in Brazil, North America, Europe, Asia and Africa. However, its earnings suffered from inflation, mounting commodity and energy prices and a strong comparison base in the same period in 2021.

"The war in Europe, sanctions imposed on Russia, new lockdowns in China and bottlenecks in logistics chains continue to impact the global economy. In addition, rising interest rates and cost inflation have affected companies and markets as a whole. Faced with this challenging environment, we remained aligned with our strategy and attentive to costs, our operational excellence and our business plan in all regions," said Marcelo Castelli, Global chief executive officer of Votorantim Cimentos.

Brazil: Votorantim Cimentos recorded a 37% year-on-year rise in its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) to US$1.10bn in 2021. Its sales rose by 33% to US$4.71bn, while its profit more than tripled to US$2.1bn. The group’s sales grew in all of its regions. Its cement volumes totalled 37.2Mt, up by 15% from 2020 levels. Its capital expenditure (CAPEX) investments grew by 30% year-on-year to US$317m. It commissioned a new production line at its Pecém grinding plant in Brazil and continued to work on an upgrade to Cementos Artigas’ Sayago grinding plant in Uruguay, scheduled for completion in 2022. It also completed its acquisition of Spain-based Cementos Balboa.

Cement operations, logistics and adjacent businesses director Osvaldo Ayres Filho, who was serving as group CFO during 2021, said “We had a record financial performance in 2021, despite the challenging environment due to the ongoing effects of the pandemic and global inflationary pressure.” He added that the producer also made ‘significant strategic moves.’

Brazil: Votorantim Cimentos has appointed Bianca Nasser as its chief financial officer (CFO) and investor relations director. She succeeds Osvaldo Ayres Filho, who will remain in the company as the Director of Cement, Logistics and Adjacent Business Operations.

Nasser worked for Petrobras from 2002 to 2019, eventually becoming the Executive Manager of Corporate Finance and Treasury. She subsequently became the CFO and investor relations officer at BNDES. She is a graduate in economics from the Universidade Federal do Rio de Janeiro and holds a master’s degree in administration and finance from the Pontifical Catholic University of Rio de Janeiro.

Canada: Concrete Economics managing director and long-time figure in the North American cement industry Colin Sutherland has died. Colleagues from throughout his 30 year-career spanning Canada, France and the US have been posting memories of Sutherland. Olsen Management Consulting president and Sutherland’s former Lafarge and Votorantim Cimentos colleague Richard Olsen said “We've lost a dear friend and long-time colleague. Colin was highly respected and valued in the cement industry and had developed a depth of knowledge and insight that was unique.” He continued “Colin's infectious laughter, ever-positive attitude and charm endeared him to many. He'll be sorely missed.”

Before joining Concrete Economics in May 2021, Sutherland was president and co-founder of SC Market Analytics and a board member of US Concrete. Previous positions also included vice president, commercial strategy, for Votorantim Cimentos North America; vice president, business development, integration and strategy for Holcim US and vice president, cementitious materials for Lafarge Cement. Between 1995 and 2001, Sutherland served as director of corporate development for Blue Circle North America, where he subsequently became group integration director following its merger with Lafarge Cement.

The data on cement consumption for 2021 in Spain is out this week and it looks promising. As the national cement association Oficemen explained, last year was the sector’s best for over a decade, nearly reaching 15Mt consumption and exceeding the figure in 2019 before the Covid-19 pandemic started. Oficemen also singled out particular strong performance in December 2021. It now expects this growth trend to continue into 2022 with a forecast of 5% to 15.6Mt predicted based on both domestic and infrastructure segments.

Graph 1: Cement consumption in Spain, 2012 – 2021. Source: Oficemen.

The Spanish cement industry reached a peak consumption of over 50Mt in the late 2000s before hitting a near-50 year low in the 2010s in the wake of the 2008 financial crisis. The market then started to recover in the second half of the 2010s until Covid-19 came along. A report on the Spanish cement market to the start of 2021 that lays out the situation can be found in the February 2021 issue of Global Cement Magazine. The larger news stories since then have been Votorantim Cimentos’ growth in the market through its acquisitions of FYM and Cementos Balboa, and Çimsa Çimento’s final completion of its deal to buy the Buñol white cement plant from Cemex. Each of these stories involve an integrated cement plant changing ownership.

Looking back at Oficemen’s summary describing 2012 depicts a much different dwindling market. However, one commonality it shares with the association’s roundup for 2021 is that it complains about the country’s disadvantage in electricity costs compared to its neighbours. Back in 2012 this was framed as holding back exports. As Oficemen noted at the time it exported 5.9Mt of cement in 2012, less than half the 13Mt it exported in 1983. Jump forward to 2021 and exports are now 6.8Mt. Energy is still a key issue though. Now Oficemen’s president, José Manuel Cascajero Rodríguez, says that the sector’s production costs have increased by 25% since the latest round of electricity price rises began. He then compares the cost of energy intensive industry in Spain unfavourably against France and Germany and calls for a structural change in the Spanish electricity market to make prices more predictable. Cement producers elsewhere in Europe and beyond may share Oficemen’s concerns regard unpredictable energy prices over the last six months but electricity has been a particular issue for Spain for a long time. To take one recent local example, in November 2021 Cementos Cosmos said it was planning to scale down the production of clinker at its Córdoba cement plant as a result of the high cost of electricity.

The other issue that gets raised in Oficemen’s 2021 summary is competition from cement importers outside the European Union (EU) and the necessity of a border carbon adjustment mechanism (CBAM) to take in account carbon taxation for producers within Europe. To jump back a bit, back in May 2021 the EU Emissions trading Scheme (ETS) reached Euro50/t. Then in December 2021 Cembureau, the European cement association, published a calculation predicting that if the EU ETS CO₂ cost made it to Euro90/t then this could represent 12 - 15% of the production costs of cement producers. Well, as readers will have guessed, the EU ETS beat Euro90/t on 2 February 2022 and then rose to Euro96.7/t on 7 February 2022. Answers in an email for when readers think the EU ETS price will top Euro100/t.

All of the above feeds neatly into the week’s other big Spanish news story: Cemex and Synhelion have successfully produced clinker from concentrated solar radiation at a pilot unit at the Very High Concentration Solar Tower of IMDEA Energy near Madrid. It’s early days yet as the process needs to be scaled up but, make no mistake, this is a big story. An interview with the team behind Cemex and Synhelion’s solar concentration project can be found in the December 2020 issue of Global Cement Magazine for more information. The SOLPART (Solar-Heated Reactors for Industrials Production of Reactive Particulates) project in France did similar research a few years ago but it didn’t reach the 1500°C target required to reach the sintering phase where clumps of clinker form. US-based Heliogen has been trying to industrialise concentrated solar energy but not much has been heard about its cement-industry ambitions since it said it reached temperatures of about 1000°C in 2019.

The relevance of an eventual full-scale concentrated solar unit for the entire production line or just the preheater and/or calciner at a cement plant in Spain makes considerable sense. At a stroke energy costs are reduced, diverted to a renewable source and any desired CO₂ capture becomes, in theory, easier and cheaper. Cemex said in the interview with Global Cement Magazine that the tentative next step would be a pilot unit at a cement plant, although, candidate plants could be in the US or Mexico, as well as Spain. Another side of the drive to cut energy and carbon costs can also be seen in a couple of photovoltaic solar projects supplying cement plants that were announced in 2021 for Spanish plants run by Cemex and Cementos Cosmos.

We leave the Spanish cement sector in a growth phase but with plenty of challenges ahead, not least from electricity costs and the mounting cost of carbon. Yet in common with other countries in Europe the industry faces a high-wire balancing act between staying economically viable and inching towards net zero. It’s conceivable that an industrial scale concentrated solar unit at a cement plant in Spain by 2030 might steady the wobbles along the way.

Spain: Bulk cement exports have resumed from the Port of Malaga for the first time since September 2021. The Panamanian-flagged Grit Cement II docked at the port in mid-January 2022 to collect a consignment of 8000t, according to Málaga Hoy. Trade in cement from the port stopped in the autumn of 2021 when HeildebergCement sold the Southern Spain business of its FYM subsidiary to Brazil-based Votorantim Cimentos. Prior to the reopening, ships from the port exported cement to the Port of Banjul in Gambia.

Spain: Cementos Cosmos plans to scale down the production of clinker at its Córdoba cement plant as a result as the high cost of electricity. The Cordoba Day newspaper has reported that parent company Votorantim Cimentos said that clinker grinding operations at the site will continue to ensure a sufficient cement supply in the region.

The Córdoba cement plant employs 48 people. The company is currently negotiating the situation and the scope of its impacts with the workforce.

Canada: St Mary’s Cement plans to apply for a licence to substitute alternative fuel (AF) for a part of its coal, gas and petcoke fuel mix. The plant previously held a two-week AF substitution trial in May 2011. CBC News has reported that the subsidiary of Votorantim Cimentos will present its plan at an evening meeting for the general public on 18 November 2021. The company says that it plans to implement similar AF arrangements to those at its Bowmanville plant, where it uses 90,000t/yr of biomass, wood from construction and demolition and non-recyclable paper and plastics.

Environmental manager Ruben Plaza said "Lower CO₂ emissions is the first consideration and, equally as important, the material has to be approved and available in sufficient quantities with a reliable and sustainable long-term supply."

Brazil: Members of the Brazilian National Cement Industry Association (SNIC) have committed to a 34% reduction in the CO₂ emissions of their cement production to 375kg/t by 2050 from 564kg/t in 2019. Ten cement producers including Cimento Tupi, CSN Cimentos, InterCement and Votorantim signed the commitment. With the industry's forecast rate of growth in cement production capacity, this will result in possible total CO₂ emissions of 45Bnt in 2050 compared to 36.7Bnt in 2020.

Planned CO₂ emissions reduction investments before 2032 are US$637m across the industry.

Brazil: Votorantim Cimentos’ revenue grew by 37% year-on-year to US$2.95bn in the first nine months of 2021 from US$2.15bn in the same period in 2020. Its adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 67% to US$758m from US$455m. Cement sales volumes rose by 18% to 27.8Mt from 23.5Mt. The cement producer benefitted from strong growth in the first half of 2021, particularly in Brazil, although this has slowed somewhat. Notable acquisitions by the company so far in 2021 include an agreement to buy both Cementos Balboa and FYM’s Southern business in Spain and the completion of a deal to take control of McInnis Cement in Canada.

Overall the group’s net revenue rose by 32% to US$8.81bn from US$6.67bn. Its adjusted EBITDA grew by 70% to US$2.14bn from US$1.26bn. Cement-based revenue represented 44% of the total. The group attributed its result in the third quarter of 2021 to higher commodity prices and sales volumes.