Displaying items by tag: construction chemicals

Egypt: Construction chemicals producer Mapei has opened a new production plant in the 10th of Ramadan City, north-west of Cairo. The 30,000m2 facility will produce Mapei’s main products for the local market, including grinding aids for cement production and concrete admixtures. It will be the Italy-based group's second production plant in Egypt following Vinavil’s polymer plant in Suez, which began operating in 2002 and employs around 150 people.

"Egypt today represents a very promising market for the global construction industry," said Veronica Squinzi, CEO of Mapei. "With over 100m inhabitants and a constant demographic growth, the country is experiencing a growing demand for residential construction, supported by strong government investment plans in infrastructure, hospitality and large-scale transport. The presence of two production sites in the area, Mapei and Vinavil, will strengthen the group's competitiveness, while promoting local production capacities, creating job opportunities and facilitating technology transfer".

Mapei Group has 220 employees. It has been present in the country since 2002 through its subsidiary Vinavil.

US: Gabriel Carrero has taken on the role of Chief Commercial Officer (COO) at Carbon Limit, developer of the CO₂-sequestering concrete additive CaptureCrete. Carrero previously served as Senior Vice President, Sales & Marketing at fellow additive developer CarbonCure, and has held directorial roles in multiple companies in the cement and concrete chemicals innovation space, including working as COO of Sysdyne Technologies and NITROcrete and as Global Director, Specialty Construction Chemicals at GCP Applied Technologies. Carrero holds a Mechanical Engineering degree from the Centre Technological University (UNITEC) and an MBA from the University of Carabobo, both in Venezuela.

Dominican Republic: Sika has announced the acquisition of fellow construction chemicals producer Vinaldom. This acquisition marks Sika’s first production site in the Dominican Republic and its sixth in the region, according to a press release. The deal aims to improve customer supply and support local production.

Saint-Gobain looks set to increase its presence in the construction chemicals market this week when it announced a deal to buy Fosroc. A definitive agreement has been set for the acquisition valued at just over US$1bn. The purchase will be financed in cash and is expected to close in the first half of 2025.

The light construction materials company has been growing its construction chemicals capabilities for several years now. In 2021 it acquired Chryso for Euro1.02bn and then it bought GCP Applied Technologies for Euro2.3bn in 2022. Acquisitions of smaller companies in the sector, including Duraziv and IMPAC, also took place. With regards to the proposed Fosroc transaction, Saint-Gobain highlighted in its press release that the deal was “supported by solid macroeconomic factors including the transition towards low-carbon concrete.” It also noted that Fosroc’s geographic profile would strengthen its own presence in emerging markets such as India and the Middle East. Chryso’s market share is mainly in Europe, Turkey and Africa. GCP’s is in North America, Latin America and Asia-Pacific.

As Riccardo Stoppa, Saint-Gobain’s Business Director of Cement additives related to Global Cement Magazine in our May 2024 issue, the Construction Chemicals Business Unit of Saint-Gobain’s High Performance Solutions (SGHS) division broadly produces two groups of products for the cement and concrete sector: additives and admixtures; and a wider range of more recent products using newer chemistry approaches. Saint-Gobain’s total annual revenue is around €48bn/yr with SGCC’s contribution weighing in at around €1bn/yr. Most of that latter revenue derives from the former businesses of Chryso and GCP. Finally, Stoppa highlighted SGCC’s strength in North America, Europe and China but also highlighted the potential in the Middle East for its products. That last point makes interesting reading in light of the current Fosroc deal.

India was flagged as a benefit of the proposed Fosroc purchase. If any further reminder of the growth and market consolidation taking place there were needed, UltraTech Cement revealed this week that it is in the process of buying a 23% share of The India Cements. This story ties into the rivalry between the country’s two largest cement companies. Both UltraTech Cement and Adani Group are mounting up production capacity at pace through both acquisitions and by building new plants. All of this is rosy news for a company selling additives and admixtures to the cement and concrete market.

Saint-Gobain latest acquisition is subject to the usual regulatory conditions as one might expect. Yet, what Saint-Gobain didn’t mention in its statement, was that it reportedly had one of its sites in Türkiye visited in late 2023 as part of an international investigation into anti-competitive behaviour in the sector. Switzerland-based Sika was also linked to the case at the time. The UK-based Competition and Markets Authority (CMA) announced in October 2023 that it had launched an investigation into suspected anti-competitive conduct in relation to the supply of chemicals for use in the construction industry. It said it was working with the European Commission and that it had been in contact with other authorities, including the US Department of Justice, Antitrust Division. At this time Sika confirmed to Construction News that inspections had taken place into “suspected antitrust irregularities in the area of additives for concrete and cement.” However, it is important to note here that these were merely information gathering activities and no accusations of any breaches of competition law have been made so far. All of this suggests that Saint-Gobain does not seem too troubled by the interest of the various competition bodies with regards to its expansion plans.

In his interview, Stoppa told Global Cement Magazine that SGCC’s products allow cement and concrete producers to reduce the amount of cement used in their concrete. This is almost heretical thinking to a world that produces too much clinker. Yet Saint-Gobain is betting on exactly this outcome through the expansion of its construction chemicals division. Its purchase of Fosroc is the latest stage in this line of thought. It’s not the only company doing this. In May 2023 Sika completed its purchase of MBCC Group, another admixture manufacturer. Further sector consolidation looks likely.

Ecuador: Saint-Gobain has entered into an agreement to acquire a majority stake in IMPTEK Chova del Ecuador, a producer of waterproofing construction chemicals. When the deal completes it will be France-based company’s first manufacturing presence in the country. IMPTEK sells its products locally but also exports to several Latin and Central American countries. The completion of the transaction is subject to approval by competition authorities and expected in the first half of 2024. No value for the purchase has been disclosed.

China: Switzerland-based Sika has opened its new Suzhou Technology Centre in Jiangsu Province. The centre will help Sika to develop its sustainable and high-performance technologies in order to grow it market potential throughout the Asia/Pacific region. By strategically expanding its research and development activities across all core technologies, Sika aims to further strengthen its global innovation leadership.

Chief innovation and sustainability officer Patricia Heidtman said "With our new technology centre, we are strengthening our innovation capabilities in the Asia/Pacific region and are fostering synergies in sustainable construction and environmentally friendly mobility. We have created the ideal framework for close collaboration between our research teams. It will thus enable us to develop forward-looking technologies for our customers that combine sustainability with performance."

The larger cement producers in China have published their half-year financial results and the numbers are looking grim. Starting with data from the National Bureau of Statistics of China, cement output in the country fell by 14.5% year-on-year to 979Mt in the first half of 2022 from 1.14Bnt in the same period in 2021. This is the lowest first half output figure since 2012. The decline on a monthly basis started in May 2021 and has carried on consistently since then. Rolling cumulative annual output hit a low of 2.18Bnt in July 2022, the lowest figure since at least the start of 2019 and well before the coronavirus pandemic started.

Graph 1: Cement output in China, 2018 to 2022. Source: National Bureau of Statistics of China.

The financial figures from the cement producers have mostly followed this trend. Of the companies covered here, Anhui Conch’s drop in sales revenue was the most distinct at 30% year-on-year to US$8.14bn. However, Jidong Cement actually managed to increase its revenue and Huaxin Cement’s decrease was fairly small, possibly due to its growing stable of overseas projects. None of these companies could avoid falling cement and clinkers sales volumes though. Again, Anhui Conch is the outlier here with a larger fall in sales volumes proportionally at nearly 40% compared to around 20% for the rest. Chen Bolin, the deputy secretary-general of China Cement Association (CCA), told the 21st Century Business Herald newspaper that of the 20 or so listed cement companies that have published their half-year reports by the end of August 2022, more than half had reported falling sales revenue and net profit and only one company had managed to increase its net profit.

Graph 2: Sales revenue from selected Chinese cement producers. Source: Company financial reports. Note: Cement revenue shown only for CNBM & Taiwan Cement.

Graph 3: Sales volumes of cement and clinker from selected Chinese cement producers. Source: Company financial reports.

The financial reports from the Chinese cement companies detailed here have been fairly light on the reasons for the current state of the sector. Repeated coronavirus outbreaks, instability in the real estate market, a lack of funding for infrastructure projects, growing energy and raw materials costs, pressure on prices and a generally weak economy have all been blamed for the situation. Media channels outside of China have continued to scan the country’s real estate sector for signs of collapse following Evergrande’s problems in 2021. However Chen Bolin diplomatically held back by describing the real estate market as not yet stabilised and a drag on cement demand. Instead he hoped that large-scale infrastructure projects would offer some form of relief.

One last point to note, that both the CCA has made and could be seen in some of the company reports, is that some of the Chinese cement companies are already starting to diversify their businesses. This is in parallel to what some of the larger western-based multinational cement producers have also been doing in recent years with forays into concrete, light building materials and construction chemicals. CNBM already has large concrete, light building materials and engineering subsidiaries. However, Huaxin Cement and Anhui Conch have also started to branch out recently into aggregates, concrete and new energy generation, in the case of the latter company. Things may get worse before they get better, especially depending when or if the Chinese government decides to act on the real estate market. However, whatever kind of adjustment the cement sector may face, there are some signs present already of what some of the companies may do next.

US: France-based Saint-Gobain has entered into a deal to buy GCP Applied Technologies for around US$2.3bn. It said the move was a ‘decisive’ step in helping it to become a leader in construction chemicals with total sales of over Euro4bn. It is also expected to promote the group’s strategy as leader in light and sustainable construction. Saint-Gobain expects to conclude the deal by 2023 and will finance the acquisition through cash on its balance sheet.

Benoit Bazin, the chief executive officer of Saint-Gobain, said, “The acquisition of GCP is an excellent and significant step for Saint-Gobain to further reinforce its worldwide leadership in construction chemicals and strengthen its geographic presence in North America and emerging markets, both objectives being at the core of our ‘Grow & Impact’ strategic plan.” The proposed purchase follows Saint-Gobain’s acquisition of Chryso, another constructions chemicals company, for Euro1.02bn in October 2021.

GCP Applied Technologies is a global producer of specialty construction chemicals with approximate revenues of US$1.0bn/yr, 50 manufacturing plants in 38 countries and it employs around 1800 employees. It manufactures cement additives, concrete admixtures and products for infrastructure and commercial and residential waterproofing.

France: France-based Saint-Gobain has acquired Chryso from financier Cinven for Euro1.02bn. The Le Moniteur newspaper has reported that the group will operationally integrate Chryso into its high performance solutions division. It said that it intends to develop Chryso in markets already served by Saint-Gobain, and to accelerate cross-selling between Weber and Chryso.

CEO Benoit Bazin said "Chryso strengthens us significantly in the growing construction chemicals market, in which we have made 10 acquisitions and opened 16 plants in 18 countries over the past three years to now exceed more than Euro3bn in turnover in 66 countries.”

India: JSW Cement has launched a new set of products in the construction chemicals sector. These will include floor hardeners, waterproofing compounds and readymix plaster. The company’s 0.3Mt/yr chemical plant at Ballari in Karnataka is supporting the move.

Construction Chemicals business head Mubin Hussain said "With advances in green product technologies, this sector will see a dynamic shift from conventional construction mix ratios to extracted by-product engineered compositions. Construction chemicals and dry mix mortars are expected to grow fourfold by the 2025 financial year."