Displaying items by tag: Votorantim Cimentos

US: The Charlevoix County Board of Commissioners has approved the proposal by St Marys Cement to expand its cement plant in Michigan State. St Marys Cement, part of Votorantim Group, is planning a US$130m upgrade to the Charlevoix plant, which would increase its production capacity from 1.3Mt/yr to nearly 2Mt/yr.

According to local press reports, in a 5:1 vote that followed the hearing, the county board approved the upgrade plan. Commissioner George Lasater provided the lone vote in opposition. He said that he simply wanted to do more research on the proposal. Other commissioners described their votes in support as important to sustaining the economy in Charlevoix County.

The proposal now moves to the state Department of Environmental Quality for final approval. If the Charlevoix plans were rejected, St Marys officials have said they will seek to reopen the Illinois plant.

US: The mayor of Dixon, Illinois says that he is 'optimistic' that the mothballed St. Marys cement plant in the city will reopen. Mayor Jim Burke told local press that representatives from St. Marys Cement approached him in mid-2014 to discuss the possibility of restarting operations at the plant. The mayor says that the city government is working with the company to see if there are incentives 'to make it all work.'

The plant has been idle since December 2008. When it closed about 90 people lost their jobs. At the same time the Environment Protection Agency fined the company and a co-owner for violations of the Clean Air Act. St. Marys Cement is owned by Brazilian-based cement producer Votorantim.

India: The Aditya Birla Group has submitted bids to purchase global assets being divested from the LafargeHolcim merger. UltraTech and other companies that belong to Birla have put in bids for cement units of Lafarge and Holcim in Brazil and the Philippines at an enterprise value of US$1.4bn. The group had identified Brazil as a major place for expansion three years ago. The Philippines was among the overseas countries where the group started operations several years ago.

Birla is competing with rival cement companies and private equity funds for the units. Germany's HeidelbergCement has teamed up with Votorantim Cimentos of Brazil while Cemex has joined hands with CRH plc. Eurocement is also in the race. Birla's move is part of its overall plan to increase its cement capacity to 70Mt/yr by early 2016 from 63Mt/yr currently.

Over 50% of Birla's revenues come from its overseas operations. According to a consultant involved with the deal, Birla will be unable to bid for LafargeHolcim assets in some of the market, including India, as a purchase will lead to monopoly in those markets.

Brazil/UK: Lafarge Tarmac, the UK's largest cement firm, may be bought by the Latin American conglomerate Votorantim. The mooted deal comes as giant cement firms Lafarge of France and Holcim of Switzerland sell off assets as they pursue their merger, announced in April 2014.

Brazil: Antonio Ermírio de Moraes, a former chairman of Votorantim, died on 24 August 2014. De Moraes, who served as chairman and CEO of the company, died of heart failure at the age of 86. At the time of his death, De Moraes held a 25% in the group. His family hold the remaining 75% interest.

South America: Brazilian conglomerate Votorantim has teamed up with Spanish company Cementos Molins to expand their cement businesses in Latin America through newly formed cement company Yacuces.

Votorantim will have a 51% stake in the joint venture. The agreement involves the purchase of 66.7% of Bolivian cement company Itacamba for US$18.6m by Yacuces.

According to a statement filed with Spain's capital markets regulating commission CNVM, Itacamba has plans to invest around US$220m in the next two years to build a cement factory. Votorantim and Molins already have business partnerships in Argentina and Uruguay through cement companies Cementos Avellaneda and Cementos Artigas.

An update on the algae bioreactor project at Votorantim's St Marys cement plant in Canada this week provides a good opportunity to review this particular aspect of carbon sequestration. The project, run with Pond Biofuels, went live in 2009. It has now reached its third generation bioreactor at the site.

Little or no performance data has been released generally so we have no way at present of knowing how viable the process is commercially. Cement backers, Brazilian firm Votorantim, are certainly excited by the project even if only for the sustainability kudos it gives them. Director Edvaldo Araújo Rabello presented the project as one of the company's highlights at a keynote presentation at the 6°CBC Congresso do Cimento held in São Paulo, Brazil in May 2014.

One hurdle for the St Marys pilot is the relative lack of light, a required input for algae photosynthesis, even in Canada's most southerly state. Pond Biofuels have reportedly dodged this by using continuously flashing LEDs to simulate artificially short days that encourage growth. On paper or powerpoint a process that could potentially cut even a proportion of CO₂ emissions from a cement plant sounds enticing. Yet if it creates more CO₂ than it saves, through electricity requirements for example, than it isn't worth using.

This is probably what shelved Lafarge's Carbon Capture and Transformation project. It ran a pilot project at its Val d'Azergues plant in France in 2009 with Salata GmbH. The pilot worked but the researchers decided that new advances in processes and biotechnology were required to make the economic and environmental results better. Other companies have also had problems. Holcim started its Aurantia – GreenFuel project in late 2007 at its Jerez cement plant in Spain, backing it with an investment US$92m. This project stalled when GreenFuel shut in 2009 citing lack of funding as the recession hit.

ACC in India also reportedly started its own algae project in 2007, mentioning it in its sustainability report, but nothing more has been reported since. Since this burst of interest InterCement has invested US$2.5m towards algae research in 2013 working with the Federal University of São Carlos, the Federal University of Santa Maria and Algae Biotecnologia.

Algae-based carbon projects for cement plants may remain stuck in the research stage but the market for biofuels continues to grow. For example, this week we report that Ohorongo Cement in Namibia plans to increase its use of blackthorn as a biofuel to use as an alternative fuel in co-processing. The prospects of turning waste CO₂ into a valuable commodity remains uncertain, but the rewards are great. Let's wait and see what St Marys can do.

The Brazilian cement industry took a knock last week when the competition watchdog Cade (Administrative Council for Economic Defence) confirmed its intention to issue the sector with fines worth a combined US$1.4bn.

Under the terms of the ruling, Votorantim will have to pay US$672m, Cimpor will pay US$133m, InterCement Brasil will pay US$108m, Itabira will pay US$184m, Holcim will pay US$227m and Itambé will have to pay US$39.4m. The companies involved will be forced on average to sell 24% of their assets. Votorantim, for example, will be compelled to divest 35% of its cement assets or 11Mt/yr of production capacity. In addition a fine of nearly US$2m is to be imposed on the cement associations ABCP and SNIC.

To give these figures some context, Votorantim reported a net profit of US$105m in 2013 across all its business lines including cement, metals, mining and pulp. The fine Cade wants to impose is over six times greater than this! A fine of this size will be a serious setback for Votorantim if it goes through. Votorantim's net revenue for its cement business in 2013 was about US$5.5bn. This places the fine at just over 10% of company annual turnover, a common upper limit for fines imposed by anti-competition authorities around the world. 10% of turnover, for example, is the maximum percentage fine that European Union competition regulators can impose.

Although hard to compare with the other Brazilian cement producers due to differences in financial reporting, the proposed fines seem equally tough on the other companies. Before the acquisition of Cimpor inflated its financial figures, InterCement reported a net revenue of US$1.2bn in 2011. This places its fine at 9% of annual turnover. Holcim's net sales in its Latin American region as a whole, including operations in Brazil, totalled US$3.73bn in 2013.

Both Holcim and Cimpor have issued corporate rebuttals to Cade insisting that they followed and still follow all the necessary competition laws. Both companies intend to fight the decision. Votorantim went further in its response saying that it considering the fine 'unjust and unprecedented' and it warned that the ruling would cripple any investments in the Brazilian cement sector. The ruling also forbids the company from opening new factories within the next five years, places limits on the company taking out new loans and prevents it from consolidating its market share.

Internationally, the Cade fine surpasses the US$1.1bn Competition Commission of India penalty imposed against 11 producers in India in 2013. Other recent anti-trust fines against the cement industry include a Euro80m fine in Poland that was upheld on appeal in 2013 and the US$19.3m Lafarge was charged in South Africa in 2012.

The prosecutors pointed out that work on public roads had been inflated by nearly US$8m. Overall they reckon that the cartel cost the Brazilian economy US$6.3bn. Examples likes this are unlikely to gain sympathy for the accused cement producers from a Brazilian public already angry about the amount of public money spent on building excessive sports stadiums and the like for the Football World Cup later in June 2014 and the Olympic Games in 2016. In the meantime though – over to the lawyers.

Brazil: Brazil's antitrust watchdog Cade has fined six cement makers a combined US$1.4bn for fixing prices for two decades and ordered the companies to dispose of many assets.

Votorantim Cimentos SA, Camargo Correa SA's Intercement Brasil, Itabira Agro Industrial SA and Cia de Cimentos Itambé SA, as well as Switzerland's Holcim Ltd and Cimpor Cimentos de Portugal SGPS SA agreed to set prices to force rivals from the market, according to councillors at Cade. Cade ignored the companies' claims that there was no evidence of price-rigging and ordered them to cut installed capacity in concrete-services by 20% in large markets. The ruling also requires the companies to do away with any cross shareholdings.

The ruling, which followed an eight-year inquiry, came as allegations of cost overruns have dogged preparations for the 2014 FIFA Football World Cup. Local cement sales have more than doubled over the past decade and prices have jumped by about 66% in that period following a commodities-based boom and government efforts to expand roads and other infrastructure.

"This cartel was so strong that it had clear strategic goals," said councillor Márcio de Oliveira Junior. The six companies named in the ruling control about 75% of the domestic market for cement and concrete. The decision was slightly milder than councillor Alessandro Octaviani's January 2014 proposal, which called for bigger asset disposals. Cade also imposed sanctions on Abesc (an industry group representing concrete producers), ABCP (Brazil's Portland cement group) and SNIC, which represents local cement factories.

Lawyers said that litigation could go on for years should the companies appeal. Cade had previously blocked any attempt for early settlements. One of the lawyers involved, who asked not to be named, told Reuters that the severity of the fines and the asset disposals are unheard of in similar antitrust cases around the world. Industry leaders allege that Cade has no legal power to impose any asset sales.

Under terms of the ruling, Votorantim will have to pay US$672m in fines, Cimpor will pay US$133m, Intercement Brasil will pay US$108m, Itabira will pay US$184m, Holcim will pay US$227 and Itambé will have to pay US$39.4m. Votorantim will challenge the decision, "Because it is unjustified, lacks legal basis and ignores market facts," said Votorantim. SNIC has also said that it plans to appeal Cade's decision.

Brazil: Brazil's anti-trust regulator, Conselho Administrativo de Defesa Econômica (Cade) will force the sale of 24% of the total installed capacity of the country's four largest cement manufacturers and fine them a total of US$1.4bn as punishment for cartel activities. The decision to implement these measures comes after months of internal uncertainty at Cade.

The four companies are Votorantim, InterCement, Itabira and Holcim. Lafarge Brasil had previously settled with Cade by way of an agreement on divestments and a negotiated fine of US$19m.

Votorantim will be the most affected by the forced divestments. It will have to sell 35% of its production capacity, which Cade says is equivalent to 15% of the Brazilian cement market. InterCement will have to sell 25% of its capacity, equivalent to 4% of the market, Itabira will have to sell 22% of its assets, which is 3% of the market share and Holcim Brasil's 22% divestment equates to 2% of the market.

According to Cade, there has been a cement cartel active in Brazil for the last 10 years, which has seen companies collude to fix prices and sales volumes and create barriers to competition. Cade estimates that this has cost the economy US$6.3bn in inflated prices.