UK: Aggregate Industries has appointed Pablo Libreros as its Growth and Innovation Director. He will be responsible for developing, recommending and delivering growth and innovation opportunities for the business. This will include facilitating greater cross promotion of products both in the UK business and in the wider group.

Libreros joins the UK subsidiary of LafargeHolcim after working for the parent company in Latin America since 2011. Most recently he was the chief executive officer (CEO) for Holcim Costa Rica. Prior to this he held various senior roles, including Logistics Director and Supply Chain Director within the business’ Brazil division. He has also worked in a number of ecological public sector positions in Paris, most notably as an advisor to the Minister for sustainable development in France.

US: Caterpillar has announced a number of personnel changes to its Material Handling & Underground (MH&U) and Surface Mining & Technology (SM&T) divisions. Karl Weiss, vice president of the Earthmoving Division, will become vice president of MH&U following the retirement of Doug Hoerr. Jean Savage, Chief Technology Officer and vice president of the Innovation & Technology Development Division, will become vice president of SM&T following the transfer of Tom Bluth to a new internal position. All of these changes will take effect on 1 August 2017.

Weiss joined Caterpillar in 1992 and has had various assignments within product development at Caterpillar’s Decatur, Joliet and Aurora, Illinois, facilities, primarily focused on large machine structural design. Later he worked in Beijing, China as the wheel loader product manager for the Asia Pacific Region. He then was named the worldwide product manager for medium wheel loaders in Aurora before being named Earthmoving vice president in 2013. Weiss graduated from Purdue University with a degree in agricultural engineering and an MBA from Northern Illinois University.

Savage was formerly senior vice president and Chief Operating Officer of the Locomotive and Railcar Services business unit for Caterpillar subsidiary Progress Rail Services (PRS). Savage joined PRS in 2002 as vice president for Quality and Continuous Improvement. She also served as vice president of PRS’ Freight Car Repair, Parts and Quality Divisions before her most recent position. Prior to joining PRS, she worked in a variety of manufacturing and engineering positions in her 14 years at Parker Hannifin Corporation. That was preceded by nine years in the Army Reserves as a military intelligence officer. Savage has an electrical and computer engineering degree from the University of Cincinnati and a master’s degree in engineering management from the University of Dayton.

US: The board of directors of HarbisonWalker International (HWI) has elected Carol Jackson as its chairman and chief executive officer (CEO) following the retirement of Stephen Delo. He will assume the new position on 1 July 2017. Jackson currently works as senior vice president and general manager at HWI.

Delo was the chairman and CEO at HWI for three and a half years. During his tenure the company combined three US refractories companies together and rebranded them as HWI. Previously, he held several roles at Honeywell International, including positions in chemicals, operating systems, and integrated supply chain.

Austria: Lindner has appointed four new members of its international sales team to cover the Americas and Asia. Christopher Howard has become the general manager for Lindner America covering the shredder manufacturer’s North American operations. Jeff Wolfe has become the sales manager for Lindner America’s Waste Division. Frederico Hartmann has responsibility for the company’s plastics division in Latin America. Gerhard Gamper becomes a sales manger in the Waste Division for Asia.

Further shifts in the South Korean cement industry this week as Ssangyong Cement purchased Daehan Cement. Private equity firm Hahn & Company owns both producers so this looked like a realignment exercise. Yet it follows a corporate version of pass-the-parcel within the local cement industry. Hyundai Cement was acquired by Hanil Cement in the first half of 2017, Halla Cement was bought by investment firms from LafargeHolcim in mid-2016 and Tongyang Cement was bought by Sampyo Group in 2015.

Ssangyong Cement’s purchase is seen in the local media as an attempt to reaffirm its market dominance. Before the Hyundai Cement auction, Ssangyong Cement was the market leader with a cement production capacity of 15Mt/yr and a market share of around 20%. Hanil Cement’s on-going purchase of Hyundai Cement will see it increase its production capacity from 7Mt/yr to over 15Mt/yr. Ssangyong Cement’s transaction for Daehan Cement puts it back in the lead again.

The local industry is notable for the high ratio of cement grinding plants to integrated plants. The Korean Cement Association (KCA) reported that the country had 12 integrated plants to 23 grinding plants in 2015. This compares to other developed countries in relatively remote places such as Australia and Chile that also have high numbers of grinding plants. South Korea doesn’t import that much clinker though. One difference is its prominent steel industry that has hovered around 70Mt/yr since 2014 and which puts it in the top ten of world producers. Subsequently, as POSCO’s Sunghee Han explained at the Global Slag Conference 2016, 13.9Mt of granulated blast furnace slag (GBFS) was produced in 2015 and the majority of this ended up being used as supplementary cementitious materials (SCM) either to grind cement or to make concrete. The size of this slag market underlines the value of the Daehan Cement sale, as it is a major slag cement producer.

Other notable point about the local cement industry includes the presence of a few extremely large multi-kiln plants with production capacities in excess of 7Mt/yr. The country also has a relative scarcity of limestone. South Korea is the fifth biggest importer of limestone in the world at US$34m. It brings limestone in principally from the UAE, Japan, India, Malaysia, and Vietnam. Notably it also has one of the world’s longest single conveyors, with a length of 12.8km, connecting a quarry to Ssangyong Cement’s Donghae plant.

Graph 1: Cement production and consumption in South Korea, 2010 – 2015. Source: Korean Cement Association.

Unlike the European cement-producing nations that this column has covered in recent weeks, fundamental market structural changes do not appear to be driving the merger and acquisition activity in South Korea. As Graph 1 shows, production and consumption fell from 2010 onwards but has started to pick up since 2013. Instead, a general slowing of the economy from 2010 and a relaxation of the rules triggered merger and acquisition activity. Unsurprisingly then, perhaps, given the potential opportunities for market manipulation, that the Fair Trade Commission fined six of the seven major producers a total of US$168m in early 2016 for alleged price fixing. With the private equity firms widely expected to exit the market after a relative short time, the cement industry looks set to remain volatile for the next few years. Doubtless the market regulators will be watching very carefully indeed to see how it all plays out.

France: LafargeHolcim has appointed Heike Faulhammer as Group Head of Research & Development with effect from 1 July 2017. She will be based at the group’s global research and development (R&D) centre near Lyon, France.

Faulhammer, aged 50 years, joins LafargeHolcim from Arkema, a French chemicals producer, where she has spent 20 years in research, production, product innovation-related functions and sustainable development. In particular, she acted as a Director at Arkema’s global R&D centre in Lacq. Faulhammer graduated from the University of Freiburg (Germany) and holds a PhD in Chemistry.

US: Martin Marietta Materials has appointed James AJ Nickolas as its new chief financial officer (CFO) with effect from mid-August 2017. He will also become a Senior Vice President and will report to C Howard Nye, chairman, president and chief executive officer (CEO). He replaces Anne H Lloyd who is set to retire in September 2017.

Nickolas, aged 46 years, joins Martin Marietta from Caterpillar where he currently serves as the head of Corporate Development. Previously, as Group Chief Financial Officer of Caterpillar’s Resources Industries segment, he was responsible for financial planning and reporting, internal controls, compliance and M&A activity. Before joining Caterpillar in 2008, Nickolas was Executive Director at JP Morgan Securities where he worked on originating and executing debt and equity capital raising and mergers and acquisitions. He began his professional career as a Certified Public Accountant at Coopers & Lybrand where he was a senior tax associate. He holds a BS degree in Accounting from the University of Illinois at Urbana-Champaign and both an MBA in Finance and a JD degree from the University of Chicago.

Lloyd, aged 56 years, joined Martin Marietta in 1998 as Vice President and Controller. She was named Chief Accounting Officer in 1999 and was promoted to CFO in 2005. She was named Executive Vice President in 2009. As CFO, she has led the financial areas of Martin Marietta, including financial reporting, accounting, internal audit, investor relations, tax and treasury.

Spain: Casimiro Molins Ribot, the chairman of producer Cementos Molins, has died at the age of 97 years. He had been a member of the board of directors of Cementos Molins for 71 years, where he occupied various executive positions, according to the Expansión newspaper. Casimiro Molins Ribot graduated in Law from the University of Barcelona. In 1945 he was named director and secretary at the board, in 1972 he took the post of chief executive officer (CEO) and since 1986 he has been the chairman of the company.

UK: Stephen Eastick has re-joined Vortex Global. In his new role he will be responsible for the oversight of sales and rep groups throughout Europe. Previously, Eastick was a member of the Vortex Global internal sales team from 2011 to 2015. In that time, he was tasked with managing Asian markets. Most recently, he was employed as an external salesperson for Eclipse Magnetics.

Buzzi Unicem strengthened its position in Italy this week with a deal to buy Cementizillo. The agreement included Zillo Group’s two integrated cement plants at Fanna and Este in the northeast with a combined production capacity of 1.4Mt/yr. The sale price appeared to be low at a maximum of Euro104m plus 450,000 shares in Buzzi. However, the interesting part of this transaction is a variable portion of zero to Euro21m based on the average price of cement achieved by Buzzi in Italy between 2017 and 2020.

Buzzi hammered home the point in its acquisition statement that the local cement sector suffers from, “…significant surplus of production capacity coupled with permanently reduced sales volumes.” No doubt this was a prominent part of the deal negotiations given that, with a rough calculation of Euro10m for the shares, Buzzi has picked up the new cement production capacity at about Euro80/t or US$91/t. In July 2016 this column commented that Cementir’s purchase of Compagnie des Ciments Belges’ assets for Euro125/t seemed fairly low globally. Yet even this seemed high when Cementir picked up Sacci’s cement business, including five cement plants, for Euro125m or Euro38/t. Although it should be noted that Sacci was bankrupt at the time and being run by its liquidators.

As ever all these transactions were complicated by assets other than clinker production lines but the problems facing the Italian cement industry are clear. Following on from last week’s column about changing patterns of cement consumption in southern Europe, the cement intensity of the construction sectors in Italy and Spain has dropped significantly since 2000 suggesting that the mode of construction has moved from new projects to patching up old ones. Throw in the financial crash in 2007 and, strikingly, cement production in Italy fell from 49Mt in 2006 to 21Mt in 2015. Anecdotally, looking through the Global Cement Directory 2017, 13 of the country’s 56 integrated cement plants were listed as idled, mothballed or closed at the start of the year. Cembureau, the European Cement Association, reckons that consumption fell year-on-year by 4.7% in 2016 with a further drop of 3% forecast for 2017. Surprisingly though estimates from the Associazione Italiana Tecnico Economica Cemento (AITEC) suggest that cement exports have not increased dramatically since 2007. Since hitting a low of 1.6Mt in 2011 they rose to 2.5Mt, a similar figure to that of before the crash.

This kind of environment suggests consolidation and that’s exactly what has happened with Buzzi buying Cementizillo this week, Germany’s HeidelbergCement’s purchase of Italcementi in 2016 and Cementir’s purchase of Sacci in the same year. Earlier in 2014 Austria's Wietersdorfer & Peggauer picked up a plant in Cadola from Buzzi.

Financially, the story is in line with what the declining production and consumption figures suggest. Buzzi reported that its net sales in Italy fell by 16% to Euro375m in 2016 and Cementir said that its sales would have fallen by 14% had it not benefitted from the new revenue from Sacci.

HeidelbergCement presented Italy as a territory ripe for ‘substantial’ recovery potential at a shareholders event in the autumn of 2016. It highlighted opportunities in further rationalisation of the industry, recovery in cement consumption from a low base and optimisation of the country’s distribution and depot network. It probably will not be publicly released but if Buzzi Unicem pays out the full amount of its variable payment to Cementizillo then the industry may be picking up again. Until then expect more acquisitions.