Displaying items by tag: grinding plant
Cementos Progreso grows in Central America
05 January 2022We start 2022 with the news that Cemex is selling up to Cementos Progreso in Costa Rica and El Salvador. On 20 December 2021 Cemex announced that it was selling one integrated cement plant, one grinding plant, seven ready-mix concrete plants, one aggregate quarry and one terminal in Costa Rica and one terminal in El Salvador. The sale is valued at around US$335m with an expected completion date in the first half of 2022 subject to regulatory approval.
This sale is noteworthy because it concerns Mexico-based Cemex selling off assets in its ‘back yard’ of Central America. Once the sale completes it will retain operations in Panama, Nicaragua, Guatemala and Colombia under its Cemex LatAm subsidiary. It will also continue to operate in the Caribbean in the Dominican Republic, Jamaica and Puerto Rico. Previous divestments by Cemex over the last five years or so have tended to focus on piecemeal (or bolt-off) divestments in the US and Europe. This latest sale could be viewed in a similar way if Central America and the Caribbean are seen as a region rather than individual countries. For its part Cemex describes the divestment as part of its ‘Operation Resilience’ plan to optimise its global portfolio.
Why it chose to sell up in Costa Rica is curious given that Cemex LatAm’s cement sales volumes for the region were reported as ‘flat’ in 2019 with the exception of Colombia and El Salvador. 2020 was then a shock, like almost everywhere else, as coronavirus caused disruption reducing sales volumes. 2021 saw recovery in all of Cemex LatAm’s national markets over the first nine months. Notably, both Cemex’s revenue and operational earnings in Costa Rica grew when comparing the first nine months of 2019, before the pandemic, to the same period in 2021, unlike Colombia and Panama. For the third quarter of 2021 Cemex said that growing cement sales volumes in Costa Rica had been driven by infrastructure and housing sectors. It also added that “Our cement footprint in the country is also a very relevant component of our regional trading network. We continued exporting during the quarter, mainly to our operations in Nicaragua.” In may be coincidence but it was interesting timing to add a comment like that.
From Cementos Progreso’s perspective the new assets in Costa Rica and El Salvador are part of an ongoing expansion phase outside of its home base. At home in Guatemala the company operates three integrated plants. The third, the San Gabriel plant, started up in 2019. In the same year the company purchased Cemento Interoceanico and its grinding plant in Panama. Then in July 2021 the group commissioned its new Belmopan grinding plant in Belize as part of its Cementos Rocafuerte subsidiary. The new proposed acquisitions in Costa Rica and El Salvador start to fill in the gaps in Cementos Progreso’s network between Guatemala and Panama. The price seems on the high side for a 0.9Mt/yr integrated plant and a 0.9Mt/yr grinding unit. Yet the associated quarry, concrete plants, terminals and, crucially, the location may have made it one well worth paying. For comparison Peru-based Unacem agreed to purchase a grinding plant from CBB in Chile this week for around US$30m. Back in 2013 Lafarge sold assets in Honduras, including an integrated plant and a grinding unit, to Cementos Argos for Euro232m.
Both parties may do well out of this transaction. Cemex continues to show that it is fully prepared to sell assets anywhere as it sharpens up its operations. Cementos Progreso meanwhile is turning itself into a regional player to watch.
Insee Cement to upgrade Galle grinding plant in Sri Lanka
05 January 2022Sri Lanka: Insee Cement plans to spend US$56m on an upgrade to its Galle grinding plant in Southern Province. The project will add an additional 1Mt/yr of production capacity to the 1.4Mt/yr unit, according to the Daily News newspaper. Commissioning is scheduled by the end of 2023. The company’s integrated plant at Puttalam and its grinding plant at Galle have reportedly been running at full utilisation since mid-2020 to meet high local demand.
Unacem buys Cemento San Antonio grinding plant from CBB
04 January 2022Chile: Peru-based Unacem has bought CBB’s Cemento San Antonio grinding plant in Valparaíso region for US$30.8m. The deal also covers the nearby Popeta pozzolano deposit.
Germany: Holcim Germany has published environmental reports for 2020 focused on each of its cement plants. The subsidiary of Switzerland-based Holcim has decided to target its reports on local issues by issuing separate reports for each of its four integrated plants in the country, at Beckum, Höver, Lägerdorf and Dotternhausen respectively. Each report covers national developments for the sector and the company. Local data is then included as well as data on connected cement grinding and concrete plants. The reports can be downloaded from Holcim Germany’s website.
Malawi/Zambia: Huaxin Cement says it has completed its acquisition of Lafarge Zambia and Lafarge Cement Malawi. In late December 2021 the Chinese cement producer completed the equity delivery conditions for Lafarge Cement Malawi. This follows a similar process for Lafarge Zambia in late November 2021.
In June 2021 Huaxin Cement said it had agreed to spend US$150m on purchasing a 75% stake in Lafarge Zambia and US$10m on acquiring Pan African Cement from Lafarge Cement Malawi. The former operates two integrated cement plants in Zambia with a combined production capacity of 1.5Mt/yr. The latter operates a 0.25Mt/yr grinding plant at Blantyre in Malawi. Following the completion of the takeover Huaxin Cement now intends to increase its cement grinding capacity in Malawi by 0.25Mt/yr.
Keralan state government to double cement capacity by 2024
21 December 2021India: The government of Kerala says that it will double the total cement production capacity in the state to 14.4Mt from 7.2Mt before 2024. The Times of India newspaper has reported that Industries Minister Pinarayi Rajeev told Keralans that the state government would build a grinding plant at Kinfra in Kannur’s Mattanur district and a blending plant at Kochi Port Trust. Commissioning of both projects is planned by the end of 2023. A second phase of the plan will see additional grinding plants established.
Opterra signs renewable power deal with Statkraft
15 December 2021Germany: Opterra has signed a power purchase agreement (PPA) with Statkraft for the supply of electricity from onshore wind farms. The renewable energy producer will supply around 30GWh to the subsidiary of CRH’s integrated cement plants at Karsdorf in Saxony-Anhalt, Wössingen in Baden-Württemberg and a grinding plant at Sötenich in North Rhine-Westphalia between 2022 and 2025. The wind power will be generated at four wind farms.
Tokyo Cement tackles Sri Lankan cement shortage
10 December 2021Sri Lanka: Tokyo Cement says it took delivery of a shipment of 12,000t of bagged cement in addition to its regular 30,000t/month at its Colombo cement terminal in early December 2021. The Daily FT newspaper has reported that the company took the measure to help ease a shortage in the Sri Lankan cement market. Its Trincomalee grinding plant continues to operate at full capacity.
The company said “Through these concerted efforts that focus on enhancing local value creation, Tokyo Cement continues to fulfil its national duty by ensuring an uninterrupted supply of cement to meet the requirements of customers across the island, and to firmly establish the company's position as the leading partner in nation-building.”
In November 2021 Tokyo Cement laid the foundations for its upcoming 1Mt/yr Trincomalee cement plant in Eastern Province. The producer now plans to commission the plant in early 2023.
Argos USA to go public
08 December 2021Cementos Argos announced this week that it is starting the process for an initial public offering (IPO) for its US business. It said that this had followed several months of consideration by its board of directors. Getting listed on the New York Stock Exchange is expected to help the company ‘optimise’ its capital structure and promote growth, due in part to the recent approval of the US$1Tn Infrastructure Bill in the US and a general positive cycle expected for the local construction materials sector over the next decade.
Argos’ decision to go public in the US comes hot on the heels of several recent attempts in Colombia to buy stakes in two of the major shareholders of Grupo Argos, the parent company of Cementos Argos and Argos USA. First, Grupo Gilinski tried to buy a majority stake in Grupo Nutresa in early November 2021. Then, at the end of November 2021, Grupo Gilinski put in an offer for a large minority share, up to 32%, of Grupo SURA.
Argos, Nutresa and SURA are all part of a highly interconnected group of companies known as the Grupo Empresarial Antioqueño (GEA), which each own stakes in each other. In part this structure helps to prevent hostile takeover attempts. However, Grupo Gilinski appears to be trying to challenge this, in the eyes of some market observers. Grupo Argos is the next obvious target for such an attempt after Nutresa and SURA. In response Grupo Argos has said that it won’t take part in Grupo Gilinski’s public acquisition offer to buy shares in Nutresa (it owns around 10% itself). Instead it has accelerated its plans for Argos USA and also wants to consolidate its interests in road and airport concessions, energy and real estate into a single entity, also to be listed in New York. All of this can be seen as action intended to make any further moves by Grupo Gilinski on GEA harder. Corporate tussles between Grupo Gilinski and GEA also hark back to a long-running legal dispute from the late 1990s over the formation of Bancolombia.
It is reasonable for the US subsidiary of Cementos Argos to want to raise funds from an IPO. The business has gradually been expanding over the last 15 years or so. First it acquired ready-mix concrete operations in the southern US from 2005. Then it purchased two integrated cement plants from Lafarge in 2011, at Roberta in Alabama and Harleyville in South Carolina respectively. This was followed by the integrated Newberry plant in Florida from Vulcan Materials in 2014, along with two grinding units in Florida. Finally, it picked up the integrated Martinsburg plant in West Virginia from HeidelbergCement in 2016. More recently it has been divesting some of its concrete plants in the US. At present Argos USA is the ninth largest cement producer in the country by cement production capacity.
Its cement sales volumes have grown by 4.5% year-on-year to 4.6Mt in the first nine months of 2021 and earnings before interest, taxation, depreciation and amortisation (EBIDA) rose by 25% to US$239m although sales revenue dipped very slightly to US$1.09bn. Ready-mixed concrete sales volumes have also fallen, by 12% to 3.98Mm3. The growth has been attributed to both residential and commercial markets and the Infrastructure Bill is expected to keep demand brisk for the next few years. Looking at the wider picture, cement generated about 64% of Grupo Argos’ revenue in 2020, its biggest share after energy generation and a concessions business. A third of Cementos Argos’ revenue so far in 2021 came from the US.
It’s fascinating to glimpse what may be some of the inner corporate workings of Grupo Argos and the various things it has to consider for its US cement business. The US subsidiary is clearly a major earner for it with a buoyant future. The Portland Cement Association (PCA) was forecasting cement consumption growth of nearly 8% in 2021 and 2% in 2022 in its summer summary and that was before the infrastructure bill made it into law. Further expansion in the US by Argos is to be expected and the planned IPO underlines this. Meanwhile whether this and other actions are enough to stymie Grupo Gilinski remain to be seen.
Christian Pfeiffer supplying mill and separator for Cementos Inka
08 December 2021Peru: Germany-based Christian Pfeiffer is supplying grinding and separation equipment for Cementos Inka’s grinding plant project near Pisco. A 4.2m diameter 3500KW mill and a QDK 143-Z type separator with gas recirculation, to help dry the raw material without hot gases, are being provided. Cementos Inka’s 0.7Mt/yr plant was previously reported to have a budget of US$20m.