Displaying items by tag: Votorantim Cimentos

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.

Brazil: The Brazilian cement industry is on hold over a US$1.32bn fine likely to be confirmed by the Brazilian Competition Authority (Cade) for cartel practices. A legal battle is likely to follow the final ruling of Cade in a process that would include the mandatory sale of 24% of the cement assets of the companies involved.

Votorantim Cimentos received a US$662m fine and will be compelled to divest 35% of its assets that represent 11Mt/yr of cement capacity, equivalent to 15% of the cement demand in Brazil. Holcim is to be fined US$216m and is required to sell 22% of its assets. Itabira will be fined US$175m and will be required to sell 22% of its assets. Cimpor faces a US$126m fine and the sale of 25% of its assets. InterCement is to be fined US$103m and will be required to sell 25% of its assets. Itambé will be fined US$37.5m and will not have to sell any assets, as the company operates just one cement plant.

Peru: Sources close to the Peruvian cement sector have reported that the shareholders of Cementos Portland (Cempor), a joint venture between Peru's Portland Investment World Cement Group, Brazil's Votorantim Cimentos and Chile's Cementos Bío Bío that was due to construct a cement plant close to the Peruvian capital Lima, did not reach an agreement on its agenda items. They are now to resolve their differences in an international commercial arbitration, which will probably take place in France. Issues came to a head at a meeting on 27 January 2014 due to a disagreement over financing.

Brazil: Brazil's antitrust regulator is likely to impose US$1.3bn of fines on six cement producers that were allegedly part of a cartel in the Latin American country.

On 22 January 2014, four of the five members of the board of Brazil's Administrative Council for Economic Defense (Cade) voted for the penalties, while the remaining member requested a review of the process. Under the regulator's rules, during the review period Cade members can change their votes. Cade didn't offer a timetable for a final decision.

According to the current proposal, Brazil's Votorantim Cimentos would be fined US$657m and Switzerland's Holcim would receive a penalty of US$214m. Itabira Agro Industrial would be fined US$173m, Cimpor Cimentos would receive a penalty of US$126m and InterCement, a subsidiary of Camargo Correêa group, would be fined US$102m. In addition, Itambe would receive a fine of US$37.1m. Representatives for companies involved in the investigation couldn't be immediately reached for comment.

Cade said that the cement cartel, which allegedly existed from 1986 - 2007 according to the regulator's investigation, led to increased prices that were passed on to consumers.

Brazil: América Latina Logística (ALL) plans to increase the volume of clinker and cement it transports for Votorantim Cimentos in the south of Brazil by over 30% before the end of 2013. The Brazilian logistics firm intends to increase its shipments for Votorantim to 1Mt/yr from 0.75Mt/yr, according to Brazilian news service Agência Estado.

ALL recently invested US$3.4m in trains and improving unloading bays in the southern state of Paraná and has borrowed a total of US$771m from the Brazilian Development Bank so far in 2013. The construction market represents 15% of its client portfolio in the industrial products sector.

Brazil: Votorantim Cimentos has cancelled a US$4.8bn initial public offering (IPO) due to poor market conditions. According to Dow Jones, the leading Brazilian cement producer had initially delayed its IPO in July 2013 to September 2013.

"The IPO continues to be the company's plan and we will continue to monitor the evolution of the capital market conditions to be able to resume the offer," said chief financial officer Lorival Luz.