On the face of it this week's 'news' that CRH expects to receive the regulatory decisions it needs on its Euro6.5bn purchase of Lafarge and Holcim's joint divestments without significant delay is not particularly ground-breaking. However, the press release helpfully suggests that the deal will proceed according to CRH's desired outcome and only needs to be rubber-stamped. This is not strictly the case, with approval required in the EU, Philippines, Brazil, Canada and Serbia.

So... this story could just be incidental 'puffery' and the timing irrelevant. However, if read in the context of the letter concerning the acquisition from CRH Chairman Nicholas Hartery to company shareholders, it makes for a far more interesting read. Issued on 20 February 2015, the letter notifies shareholders of CRH's planned Extraordinary General Meeting (EGM) on 19 March 2015 and it starts fairly innocuously. The Chairman recommends that shareholders approve CRH's resolution to proceed with the acquisition of the LafargeHolcim assets. He describes the strong overlap between the divestments and CRH's existing portfolio, as well as the financial reasons behind the move. So far, as expected.

However, later in the document, the language gets fairly heated, bordering on bizarre in places. Hartery says that CRH has given 'hell or high-water' commitments to Lafarge and Holcim regarding the purchase This language indicates the importance of the deal to the board and possibly the level of personal involvement in the process to this point.

'What has CRH done?' we are supposed to ask. Are we led to believe that CRH has, in poker parlance, gone 'all in?' Any shareholders that are in doubt as to the board's position need look no further than the section concerning 'break fees.' If CRH backs away from the deal for any reason, for example by failing to approve the resolution at the EGM, the company will have to give a combined Euro158m to Lafarge and Holcim. This would be a sizeable headache and CRH can take no chances.

Returning to CRH's press release, its timing is even more intriguing when we consider reports out of Switzerland this week. Swiss newspaper Sonntagszeitung reports that Holcim has considered offering its shareholders a 'sweetener' to win their approval for the merger. It says that this could involve 'creative methods' to sway its shareholders into backing the deal, including a generous special dividend or a share buyback. The paper reports that Holcim is wary of not securing investor approval for a capital increase for financing, which is required for it to satisfy its side of the deal.

Holcim's actions may in turn be motivated by Reuters reports from 23 February 2015, which state that analysts have seen a potential divergence in earnings outlooks between Lafarge and Holcim as a potential 'spanner in the works' of the deal. This is in response to Lafarge's apparent poor performance relative to Holcim in the fourth quarter of 2014. Reuters even refers to analysts' rumblings that the terms of the whole mega-merger may be up for renegotiation in light of this.

CRH has said that it is prepared to move hell and high water to buy the LafargeHolcim divestments, but will it be able to if there is no LafargeHolcim from which to divest?

The full letter to CRH shareholders and associated information about the proposed CRH acquisition of Lafarge and Holcim's proposed divestments can be seen here. 

Czech Republic/Slovakia: The sale of Holcim's operations in the Czech Republic and Slovakia has prompted a series of management changes to Cemex's operations in those countries.

Hermann Dietrich has been appointed as Cemex's vice president for strategic planning in the Czech Republic and Slovakia. Henning Weber has become the vice president for operation and technology at the cement division, Mariusz Kostowski has been named as the trade and logistics director with the cement division and Justus Geiseler has been appointed as the BSO director. Lubos Merunka and Hana Fidrova, who have been named as the head of the stone aggregate division and the company lawyer respectively, both came to Cemex from Holcim after the asset handover.

Cemex's general director in the Czech Republic and Slovakia, Peter Dajko, has stated that the company is not planning any additional personnel changes in the foreseeable future.

One of the compelling issues to emerge from the Global CemFuels conference last week in Dubai was how alternative fuel (AF) use by cement producers might change while oil prices are low. Dirk Lechtenberg, of MVW Lechtenberg hinged his overview talk on both low energy prices and the on-going Lafarge-Holcim merger. The unspoken implication was that Holcim and Lafarge are offloading cement plants that use increasingly unprofitable AF. Cement plants are increasingly being out-bid for AF by energy-from-waste plants and 'gate fees' are dwindling accordingly.

Here's how it works. CRH is buying nine plants from Lafarge and Holcim in western Europe and five in eastern Europe. These are plants with high AF substitution rates. For example, Holcim's plants in France and Belgium have a substitution rate of 50% using around 250,000t/yr of waste fuels. Similarly, the Lafarge Zement Wössingen cement plant has permits for a 60% AF rate.

Globally, Lafarge and Holcim had substitution rates of 17.2% and 12.8% in 2013. CRH had a substitution rate of 21.2% in the same year. Post merger LafargeHolcim is estimated to have a substitution rate of below 10% in 2015. Meanwhile CRH is estimated to have a rate over 30%. After establishing this, Lechtenberg demonstrated how a thermal substitution model might be affected by fluctuating coal prices whilst using a refuse-derived fuels (RDF) rate of 35%. Put the price of coal below US$55/t and the savings of using RDF vanish.

Other delegates at the conference pointed out various limitations in Lechtenberg's methodology and figures. External legislation such as a carbon tax can disrupt this model for example. However, once coal becomes cheap and abundant enough it will displace most AF on economic grounds due to its high calorific value. Very few waste fuels can beat it.

At the time of writing the Brent crude oil price is just below US$60/barrel following a steep decline since mid-2014. The Australian coal price, the world's biggest export hub, has seen a steady fall since 2011 hitting just over US$60/t in January 2015. However, how interconnected are the oil and coal price?

This is difficult to link because bulk energy consumers switch supply according to price and other variables such as which fuels they can actually use. That last point is important in this discussion because preparing a cement plant to use AF requires an investment cost. Meanwhile, energy producers vary production depending on how much profit they want to make. Throw in new energy sources such as waste fuels and fracking and the overall picture becomes messy as all of these factors and others (OPEC policy, legislation etc) interact. Low oil prices do not necessarily mean low coal prices. For example, one analyst looking at BP's Statistical Review of World Energy in 2014 concluded that oil and coal consumption hold an inverse relationship to each other. When the proportion used of one rises, the proportion used of the other falls, and vice versa.

With all of this in mind there is ambiguity over whether CRH has been handed a time bomb in terms of its new cement plants' energy policies. Given that widely assumed production costs for the major oil producing nations are mostly above the current cost of crude oil, if the producers are controlling the price, then it seems likely that the price can't stay this low on a sustained basis. However, the cost of coal is on a five year low also. Is this the new normal or a market blip?

Cement plants using AF have a capital expenditure cushion against changing their fuels mix in the short to medium term but it can only last so long. The longer fossil fuel energy prices remain low the longer CRH will make less money from the fuel strategy it will inherit at its new plants.

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Germany: Aumund Fördertechnik has announced that Robert Gruss has been appointed as its new Managing Director. He is responsible for sales, service and technology as well as for research and development. He has been in post since 1 November 2014. Gruss will also join Volker Brandenburg on the managing board.

Gruss, aged 49 years, joined Aumund from SMS Siemag AG. He started his professional career with SMS in 1995. For several years he worked in Italy, China and Belgium in managing positions.

During 2015 Aumund's president, Franz-W Aumund, will gradually retire from operational business. He will continue as managing director of Aumund Holding and as member of the advisory boards of the product and daughter companies. Primarily he will dedicate himself to steering and controlling the Aumund Group. Gruss will take over additional responsibilities from the managing Franz-W Aumund.

Ukraine: Mykolaiv Cement has appointed its commercial director Andrii Zvyrynskyi as a board member. He replaces Ruslan Koliada who occupied the post since September 2013 and has now been dismissed. Zvyrynskyi will hold the position until the recall of his candidacy by the supervisory board or a general stockholders' meeting. Previously he had been the commercial director of Mondy Packaging Behs Ukraine.

India: Shree Digvijay Cement Company has reported that Persio Morassutti has been appointed as a director. He will replaces Osvaldo Ayres Filho following his resignation.

India: Mangalam Cement has reported that Shri K K Mudgil, a non-executive independent director of the Company died on 20 February 2015 in New Delhi.

Valentines Day 2015 (14 February 2015) saw the kick-off of India's first round of coal mine auctions - who said that the commercialisation of Valentines Day is a bad thing? For those not following the story, here's a brief summary of the key events that have led to the auctions:

Coal, the main fuel used for cement and power production in India, has been in short supply in recent years due to the shortcomings of state-owned Coal India Ltd (CIL), which produces around 80% of India's coal and owns 90% of its coal mines. In 2013-2014, CIL produced 462Mt of coal, missing a target of 482Mt. Demand is expected to reach 950Mt/yr by 2016 - 2017. Numerous cement plants have had to temporarily cease production due to inadequate coal supplies. This is in spite of India's estimated 302Bnt of coal reserves, more than enough to supply both the power and cement industries. Coalgate indeed!

On 24 September 2014, India's Supreme Court cancelled 214 of the 218 coal blocks that had been allocated since 1993. The blocks were for captive use by the cement, steel and power industries, but the allocation process had been accused of lacking transparency. Of the cancelled blocks, 12 belonged to cement companies. The re-allocation of the cancelled blocks commenced in December 2014, when 36 of the 98 viable coal blocks were allocated. A transparent auction process for 21 of the cancelled blocks for end-usage in power, cement and iron production started on 14 February 2015. In March 2015, a further 23 blocks will be auctioned. CIL was requested to steer clear of the bidding by the Indian government.

Reliance Cement and Jaiprakash Associates, as well as Aditya Birla Group's Hindalco Industries, have all won coal mines during the first three days of bidding. Prices ranged from US$22.5/t to US$45.9/t. UltraTech Cement and JSW Cement both placed bids, but have so far been beaten by rivals. There are still many opportunities for cement producers to win coal mines, although whether the locations are suitable is another matter.

With captive coal mines in hand for India's luckiest cement producers, fuel shortages should become a problem of the past. As India's coal-fired power companies are also bidding fiercely in the auctions, power supplies throughout the country should become more reliable. However, one only needs to look at Afghanistan's Ghori I cement plant to see that having a captive coal mine is not always the answer to fuel shortages; due to internal disputes and poor mining equipment, its coal mine production is poor and the plant operates only intermittently. Hopefully, any cement companies new to coal mining will invest in equipment wisely and ensure an efficient supply chain. As with any large purchase, or indeed Valentines Day, India's coal mine auctions are very much a case of caveat emptor...

Canada: Alexandre Rail has been appointed as plant manager of McInnis Cement's Port-Daniel-Gascons plant in Gaspé. Rail brings with him 15 years of experience in heavy industry. He joins the company from ArcelorMittal, where he served as a Steel plant manager for seven years.

"We are pleased with our recruitment of an experienced manager in the heavy industry who shares our values in the areas of health and safety, environment and quality. Rail has proven abilities to mobilise employees," said Christian Gagnon, CEO of McInnis Cement. "Rail's family comes from Gaspé, so he is undoubtedly happy to relocate to that region and eager to contribute its local economic development."

McInnis Cement has also named Mark T Newhart as vice president of Logistics and Distribution and as a member of the company's management team. He will develop an efficient distribution network, with responsibility for transport management and marine terminals. Newhart will report to Jim Braselton, senior vice president of Commerical and Logistics.

"With his 30 years of experience in logistics, which includes 20 years in the cement industry, the addition of Mark to our management team is a major milestone," said Gagnon. "Since our business model is based on marine transportation of our products, Newhart's expertise in transportation and marine terminal management will be beneficial for our organisation."

With Newhart's appointment, McInnis Cement's management team is now complete. It comprises: Christian Gagnon as CEO; André Racine as senior vice president of Corporate Development and Legal Affairs; Jim Braselton as senior vice president of Commercial and Logistics; Gaétan Vézina as senior vice president of Operations; Claude Ferland as CFO; Mark T Newhart as vice president of Logistics and Distribution; Marc Lachapelle as senior director of Human Resources; Maryse Tremblay as director of Communications and Corporate Social Responsibility. McInnis Cement has also announced the relocation of its corporate office in downtown Montreal.

Bangladesh: Sumanta Pandit has been appointed as CEO of Holcim Cement (Bangladesh) Ltd. Pandit joins Holcim Bangladesh from Emirates Cement, a subsidiary of UltraTech India, where he was heading the business in Bangladesh as country manager.

Prior to this, Pandit worked for various multinational cement companies in different management positions. During his long career in the cement industry, Pandit has worked in Switzerland, Oman, Kuwait, Sri Lanka and Sudan. With 22 years of exposure in the industry, he brings with him considerable regional and international experience. He holds an honours degree in Civil Engineering from the University of Mumbai.