Displaying items by tag: Votorantim Cimentos

US: The Charlevoix Township Board of Trustees has approved a request from St Marys Cement to extend a certificate allowing St Marys Cement more time to complete expansion work at its Charlevoix plant in Michigan. Votorantim Cimentos North America asked the local government body to extend its industrial facilities exemption certificate abatement by one year, as construction at the site is not expected to be completed until the end of 2018, according to the Charlevoix Courier newspaper. The cement producer plans to have the new systems at the plant running by mid-May 2018.

Upgrade work at the plant will increase its production capacity from 1.3Mt/yr to nearly 2Mt/yr. The cost has been budgeted at US$130m.

Brazil: The state government of Mato Grosso has reached an agreement with Votorantim to recover US$79m in tax from Votorantim. The payment refers to an under-payment of tax made in error by the company's cement plants in Corumbá and Nobres in 2015, according to Midia News. The state’s tax recovery unit absolved the cement producer of any blame, instead attributing the error to an interpretive issue.

Tunisia: Fire fighters have controlled a fire that broke out at the Djebel El Ouest cement plant. The fire started on the ground floor of the plant, according to Tunis Afrique Presse. It then damaged electrical cabling and equipment. It is suspected to have been caused by a short circuit in an electrical machine caused by rising temperatures. No casualties have been reported.

Turkey: Brazil’s Votorantim is set to inaugurate a Euro140m upgrade project at its Sivas cement plant. The project has been part of the cement producer’s strategy to increase its revenue outside of Brazil, according to the Valor Economico newspaper. The upgrade has seen the plant’s cement production capacity rise to 1.8Mt/yr from 0.6Mt/yr. Prior to the investment the plant accounted for around 19% of Votorantim’s 3Mt/yr production in Turkey and once fully operational it will account for 42%. The plant will supply the market with CEM I and CEM II products.

Company president Walter Dissinger said that international sales account for 40% of group revenue. However it is hoped that this will recede to 30% once the Brazilian market starts to recover. The company is also building an upgrade at its Charlevoix plant in the US.

Bolivia: Itacamba’s Yacuses cement plant in Germán Busch province has installed several electric motors from Brazil’s WEG. The scope of supply included W22 IP66 low voltage motors and medium voltage slip ring motors with a brush lifting system for continuous operation. Although WEG did not specify the exact application of the motors these products are usually used in drive mills, crushers and fans at cement plants.

Itacamba is a joint venture between Brazil’s Votorantim and Spain’s Molins. WEG has previously supplied its motors with the brush lifting system to several cement plants operated by Votorantim.

Brazil: Votorantim’s net revenue from its cement business fell by 14% year-on-year to US$731m in first quarter of 2017 from US$848m in the same period in 2016. The cement and steel producer blamed the continuing decline on an 8% drop in cement consumption which triggered lower sales volumes and prices. Negative currency exchange effects also contributed to the situation as the country continued to suffer from the on going political crisis and the resulting negative effects on the local economy. The company’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) for its cement division decreased by 49% to US$60.9m from US$119m.

Outside of Brazil the group started up a 1.2Mt/yr expansion project in Turkey in April 2017. In North America its good performance driven by strong demand and cost optimisation helped to offset the group’s overall performance. In China the group sold ‘non-core’ assets worth Euro30m in May 2017.

Spain: Cementos Cosmos has stopped exports from its Niebla cement plant due to an increase in the price of petcoke. The subsidiary of Brazil’s Votorantim has also implemented a Temporary Regulation of Employment from June 2017 to May 2018 that will enable it to suspend workers or reduce working hours, according to the Huelva Información newspaper. The cement producer says it is waiting for planning permission to install a dosing system for waste fuels that will cut it fuel bill. However, the local community has opposed attempts to use alternative waste fuels previously.

Unsurprisingly the European Commission blocked Duna-Dráva Cement’s (DDC) attempted purchase of Cemex Croatia this week. Merging the country’s biggest cement producer with its largest importer was going to be a challenge for the commission. Whereas in previous transactions the various parties offered business disposals to ease the commission’s concerns, here all they were got was access to a cement terminal in Metković in southern Croatia. And this facility on the Neretva river is currently being leased by Cemex! Clearly this didn’t give the impression of being a long term solution.

Compare this with the merger between Lafarge and Holcim in 2015 where multiple sales were proposed to make sure the deal went through. Or look at the acquisition of Italcementi by HeidelbergCement in 2016 where the parties sold Italcementi’s Belgian subsidiary Compagnie des Ciments Belges to Cementir to make the deal happen. In comparison to these deals the attempt by HeidelbergCement and Schwenk, through their subsidiary DDC, comes across as a calculated gamble designed to test the resolve of the commission. If the commission had somehow passed the proposed acquisition then the companies would have cornered the market. If it turned it down, as it has, then nothing would be lost other than putting together the bid. HeidelbergCement had its mind on bigger things as it bought and then integrated Italcementi.

Commissioner Margrethe Vestager summed up the mood of the commission: “For mergers between direct competitors, we generally have a preference for a clean, structural solution, such as selling a production plant. HeidelbergCement and Schwenk decided not to offer that. Instead they proposed to give a competitor access to a cement terminal in southern Croatia. Essentially, this amounted to giving a competitor access to a storage facility – without existing customers or established access to cement, without brands and without sales or managerial staff.”

Elsewhere, the other big story in the industry news this week was Votorantim’s decision to focus on the lime business in Brazil by adding lime units to some of its existing cement plants. Given the dire state of the local cement and construction industry, initiatives to break the deadlock have been expected. The alternative is plant closures and divestures, such as the ongoing talks by Camargo Corrêa to sell the other big local producer, InterCement. Votorantim plans to build lime units attached to the cement plants at Nobres in Mato Grosso, Xambioa in Tocantins, Primavera in Pará and Idealiza in Goiás. Unfortunately the agricultural areas of the country and ones with cement plants don’t overlay neatly. Cement production is mainly focused in the south-eastern states and Votorantim are targeting the Cerrado, in the centre of the country, for the lime business.

The scale of the project, at US$50m, the scale of the lime business generally and the addition of lime units at cement plants suggest that the pivot to lime can only be a sideline to cement and construction. Given the similarity of the cement and lime production processes the announcement would be much more significant were Votorantim set to convert clinker kilns into lime ones. A notable example of this was at Cement Australia’s Gladstone plant in Queensland, Australia. Here a mothballed FCB-Ciment clinker kiln was converted into a lime kiln in the early 2000s. At the time the cost of the conversion project was valued at just under US$20m. If Votorantim was seriously thinking of doing this at a few of their underperforming cement plants then one would expect the bill to be higher than US$50m. However, it’s early days yet.

Brazil: Votorantim plans to spend US$50m towards building new plants and adapting its existing cement plants to produce agricultural lime in addition to cement. The cement producer intends to double its market share to 16% by 2021, according to the Valor Econômico newspaper. The focus on the lime business follows a contraction in the construction industry and the growth of agribusiness.

"With the expansion of the agricultural frontier, demand will grow, especially in the Cerrado savannah, where soil need more correction. Experience shows that agricultural lime also helps in the crop productivity," said Laercio Solla, general manager for agriculture at Votorantim.

The company plans to open new quarries and build additional lime units at its existing cement plants. The focus at first will be on the region of Matopiba, which includes Tocantins and parts of Maranhão, Piauí and Bahia. Votorantim will build lime units attached to the cement plants at Nobres in Mato Grosso, Xambioa in Tocantins, Primavera in Pará and Idealiza in Goiás. The lime part of Votorantim’s business will receive most of its minerals from the cement division but also some from Votorantim Metals, the group’s mining division. It will also build two new 0.5Mt/yr lime quarries in Pará and in the Matopiba region.

Lime represents a small part of the company’s business. In 2015 it produced less than 2Mt of agricultural lime compared to 65.8Mt of cement, mortar and aggregates. Agricultural lime production is also expected to be less susceptible to foreign currency exchange rates as its market its mostly domestic.

Bolivia: President Evo Morales has inaugurated the Itacamba Cement plant in Yacuses in the department of Santa Cruz. The plant had an investment of US$220m and has a production capacity of 0.95Mt/yr, according to Via Empressa. Itacamba Cement is a joint venture between Spain’s Cementos Molins, Brazil’s Votorantim Cement and Camba Cement. The cement producer also operates a grinding plant in Puerto Quijarro and its hopes to produce up to 1.2Mt/yr of cement from both sites. The plant is also expected to create up to 540 direct and indirect jobs.