Global Cement Newsletter

Issue: GCW672 / 14 August 2024

Headlines


Votorantim Cimentos released its half-year results this week giving us the opportunity to assess how well some of the larger cement producers are doing so far 2024. The general picture from the western multinational cement companies has been one of sluggish sales in the first half of the year but respectable earnings. So, for example, both Holcim and CRH were reporting static sales or revenue but earnings increases of over 10%. Heidelberg Materials and Cemex noted similar situations.

Graph 1: Sales revenue for selected multinational cement producers in the first half of 2024 and the first half of 2023. Source: Company financial reports. 

Graph 1: Sales revenue for selected multinational cement producers in the first half of 2024 and the first half of 2023. Source: Company financial reports.

Holcim was keen to play up that its net sales actually rose on a local currency basis. However, its recurring earnings before interest and taxation definitely rose, by 12% year-on-year to €2.33bn. Net sales were down in both North America and Europe, the group’s main two regions, but earnings were strong in both. Sales revenue for cement and aggregates may have been down across the group but earnings were up sharply. No such luck for ready-mixed concrete though, with both sales and earnings down overall. Another trend to watch is that sales and earnings were both up in the group’s Solutions & Products division. This part of the business has been growing due to merger and acquisition activity, and it is nearly the group’s second largest division after Europe.

CRH reported similar things overall. However, it has been busy selling off its Europe-based lime business, finishing the acquisition of its new assets in Texas and buying a majority stake in Australia-based AdBri. Its Americas Materials Solutions division reported both increasing revenues and earnings in the second quarter of 2024, at least, and the acquisitions in Texas helped too. Revenue in its Europe Materials Solutions division fell by 5% on an organic basis and this was blamed on subdued markets in Western Europe and poor weather.

Heidelberg Materials had a tougher time of it in the first half of 2024, with revenue down by 5% to around €10bn. It attributed the falling revenue to decreasing sales volumes across all business lines. It described its second quarter as follows, “The pressure on volumes is largely attributable to prolonged weak activity in the construction industry and adverse weather conditions in individual core markets. Active cost and price management largely offset the impact.” For clinker and cement this was noticed prominently in Europe despite volumes increasing in North America and Asia-Pacific. However, its result from current operations rose slightly. One reason for this appeared to be a ‘significant’ fall in material costs including energy.

Similarly, Cemex’s net sales were flat but its operating earnings were positive. Drilling down between its main geographical markets revealed a strong market in Mexico, a stable one in the US and declines in Europe, Middle East, and Africa (EMEA). In the US Cemex apportioned falls in cement and ready-mix concrete sales volumes to “...difficult weather conditions, a softening residential sector, portfolio rationalisation, competitive dynamics in certain micro markets and timing of several large projects.” Operating earnings were also hit by higher maintenance costs. In its EMEA region the trend was downwards but this was due to volume declines in Western Europe and geopolitical issues in the Middle East.

Votorantim Cimentos’ net revenue and adjusted earnings were down slightly in the first half of 2024 stemming from softer results in North America and Brazil in the first quarter. Revenue in Brazil was flat for the half year after a better second quarter. Revenue in North America though was hit by a slowdown in demand although price rises staved off some of this. Meanwhile, the group’s Europe, Africa and Asia region reported higher revenue due to higher volumes in most places.

Finally, UltraTech Cement is the odd company out in this group. The size of its annual revenue earns it a place in the list but it is more like some of the large China-based cement companies because it mostly sticks to one territory: India in this case. Yet, its revenue rose by nearly 6% to €4.2bn in the first half of 2024, making it the best performer in this article’s grouping. Domestic sales volumes increased at a similar rate in the April - June 2024 quarter. Similar to Heidelberg Materials, UltraTech Cement also reported that its energy costs fell by 17% year-on-year mainly due to reduced fuel prices. Its profit didn’t grow by much especially but the company is racing against Adani Cement to build capacity. It added 8.7Mt/yr alone in the April - June 2024 period compared to 13.3Mt/yr in its entire 2024 financial year that ended in March 2024.

The picture from the companies covered above suggests that the US market may have cooled for some since 2023. Despite this the earnings have mostly held up and cement companies enthusiasm for the market remains high led by Holcim’s impending market spin-off. Europe has been mixed, with declines in the west and stronger markets towards the east. Energy costs have finally fallen following the market shock when Russia invaded Ukraine in 2022 and this is helping earnings. That last point may be universal here given that it has affected both western multinationals and a large regional player such as UltraTech Cement. That’s it for now. In a future week Global Cement Weekly will take a look at how well the large China-based cement companies have done in so far in 2024.


India: Prism Johnson has appointed Raakesh Jain as Executive Director & CEO (Cement) with effect from 17 August 2024. His appointment will last for three years until mid-2027. He will succeed Vivek K Agnihotri, who has resigned.

Jain holds 30 years of experience in the building material industry working as the CEO of the cement division of Prism Johnson from late 2021. Before this he was the Chief Sales Officer for Nuvoco Vistas. Earlier in his career he spent nearly a decade with Lafarge India in sales roles. Before this he held sales positions for the white cement division of UltraTech Cement from the late 1990s onwards. He is a commerce graduate from Devi Ahilya University and holds a master of business administration in Marketing from Vikram University.


Pakistan: Bestway Cement has appointed Muhammad Danish Khan as its Chief Financial Officer. Khan has worked for Bestway Cement since 2019 first as Head of Budgeting, Treasury and Reporting and then Acting Chief Financial Officer. Before this he worked for Three, the AA, Deloitte and Ernst & Young in the UK. He is a graduate of the Government College University in Lahore and is a chartered accountant.


Finland: Tana has appointed Henri Kinnunen as VP, Product Management and Business. He previously worked as the CEO of WOIMA Corporation, a waste-to-energy engineering company , from 2018 to 2024. Prior to this he worked with Wärtsilä from 2007 to 2017 in both Finland and overseas.

Finland-based Tana operates in the waste management sector producing products such as shredders, compactors and separators.


Brazil: Votorantim Cimentos ended the second quarter of 2024 with global net revenue of US$1.3bn, up by 1% from 2023. The company recorded a net profit of US$2.8m, a 10% rise from the same period of 2023. In North America, revenue fell by 13% to US$403m, impacted by reduced demand, though this was partially offset by price increases and improved operational efficiency. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at US$112m, down from US$119m in 2023.

In Latin America, revenue grew by 2%, with Bolivia showing improved volumes. However, adjusted EBITDA dropped by 25% to US$5.3m, affected by tough market conditions in Uruguay and maintenance schedules. In Brazil, revenue was stable at US$586m, with adjusted EBITDA also stable at US$104m, supported by new business growth and cost improvements.

Osvaldo Ayres, global CEO of Votorantim Cimentos, said "At the end of the first half of the year, our results demonstrate the resilience and effectiveness of our diversification and capital allocation strategy. We remain focused on strengthening our structural competitiveness, advancing decarbonisation projects and new businesses, while maintaining our solid financial discipline. We stay on course with our investment plan, aligned with our global strategy and strategic mandate."


Egypt: Cementir Holding’s Aalborg Portland Holding has acquired an additional 25% stake in Sinai White Portland Cement (SWCC) from Sinai Cement Company for approximately €30m. This represents Sinai Cement Company’s entire stake. Following this transaction, Cementir will indirectly hold 96.5% of SWCC’s share capital.


New Zealand: Golden Bay Cement has resolved the breakdown of its Marine Vessel Aotearoa Chief (MVAC) earlier than anticipated, returning the vessel to service after necessary checks with marine authorities. The company made use of alternative transport options to distribute cement and sourced alternative cement supplies due to the disruption.

The earlier resolution has resulted in a reduced impact on earnings, estimated to be on the lower end of US$10m – 30m.


UAE: Sharjah Cement and Industrial Development raised its sales by 12% year-on-year to US$92m, Reuters has reported. The producer recorded a profit of US$2.61m, compared with a loss of US$1.58m in the first half of 2023.


UAE: RAK White Cement’s revenues declined by 3% year-on-year to US$34.1m in the first half of 2024. Nonetheless, the company more than tripled its net profit, to US$5.3m.


Austria: Alpacem will invest €50m to modernise its Wietersdorf plant, including a new cement grinding plant, reportedly capable of saving up to 21,000t/yr of CO₂ and reducing electricity consumption, according to the Kronen Zeitung. The plant is scheduled for completion and commissioning in 2027. In the future, a new cement silo plant will also be built in the Görtschitztal valley, directly connected to the railroad.

Florian Salzer, technical director at Alpacem Zement Austria said "With this new project, we are investing in a sustainable future and laying the foundations for energy-efficient and environmentally conscious cement grinding."

Managing director Lutz Weber added "Alpacem has a clear goal: CO₂-neutral production by 2035. To achieve this ambitious goal, we need a package of measures and a concrete path."


Peru: Switzerland-based Holcim has acquired ready-mix concrete producer Mixercon and industrial minerals producer Comacsa for US$100m. Comacsa owns a white cement plant in Lima. Noticias Financieras News has reported that the acquisitions mark Holcim’s entry into Peru, strengthening its hold in the South and Central American market.

Regional head Oliver Osswald said "The incorporation of Comacsa and Mixercon will allow us to generate synergies and develop export markets.”

 


Uzbekistan: Shriram EPC, a subsidiary of India-based conglomerate SEPC, has been awarded a US$325m contract from JV Ohongron Sement to build a 3Mt/yr greenfield cement plant in Urgaz Village, Akhangaran District, reports NDTV Profit. Shriram EPC will handle design, engineering, project management, civil works, supply, erection, testing and commissioning at the plant. The project will be completed over the next 30 months, according to an exchange filing.


Philippines: Holcim Philippines will invest US$6.5m to upgrade its La Union plant and increase the use of alternative fuels and raw materials to 40%. The project will be implemented by Sinoma CBMIPH Construction and will be completed by late 2025, reports the Manila Bulletin.

Nicolas George, Holcim Philippines president and CEO, said the investment aims to reduce CO₂ emissions, promote recycling, support local waste management and provide income for northern Luzon farmers, who will supply biomass residues as alternative fuels.

General manager Zeng Youbing of Sinoma CBMIPH Construction said “This marks the third collaboration between Sinoma CBMIPH and Holcim Philippines since 2021. We are honoured to contribute to Holcim Philippines' decarbonisation and sustainability goals.”


UK: UK-based startup Cocoon has raised €4.9m in pre-seed funding to develop technology that repurposes byproducts from electrified steel furnaces into a ‘near-identical replacement’ for blast furnace slag, according to the company. The modular technology integrates into existing steel-making processes without disrupting operations or requiring high capital expenditure, reports UK Tech News. Cocoon targets a 50% replacement of cement in concrete, aiming to reduce emissions for producers. Initial tests are underway at a steel plant in northern England, followed by another in the US.

Cocoon CEO Eliot Brooks said "We’re turning a byproduct with little use into a valuable product that the market badly needs and can be easily integrated into existing supply chains. By repairing a broken link in the circular economy, Cocoon provides steel makers with a new revenue stream while meeting the low-carbon material needs of the concrete industry. For every 1t of Cocoon’s slag-based cementitious material used, 1t of CO₂ can be avoided."

Brooks hopes Cocoon's climate technology will be integrated into a pilot plant by late 2025.


Uganda: West International Holding has commenced construction of a US$200m cement factory on 50 acres in Buikwe District, reports the Daily Monitor. The plant is located in Njeru municipality and construction is expected to complete by August 2025. It will employ 1800 workers and produce 4000t/day of cement.

Ambrose Byona, group director, said “This factory is going to support markets in the Central (Kampala areas), Mwanza in Tanzania and Mugingo in Kenya. We also want to use the railway to transport these products to avoid wearing out the road with loaded trucks.” The project will also provide a health centre and a school for the community.

Balaam Barugahara, state minister for gender, labour and social development, assured that local youth employment will be prioritised. However, Njeru municipality mayor Yassin Kyaze asked the company not to exploit employees like most plants in Njeru municipality are allegedly doing, saying such conduct has cast most plants negatively in the public domain.


Colombia: Cementos Argos recorded revenues of US$329m in the second quarter of 2024, down 1% from the same period in 2023. The company’s quarterly earnings before interest, taxation, depreciation and amortisation (EBITDA) was US$68.8m, while net profit reached US$31.2m. This net profit result includes the markets where it operates directly and the 31% stake it holds in Summit Materials in the US. According to the company, this result is explained "by the impact of seasonality in Summit's operations, which generate most of its net profit during the second and third quarters of the year."

Cementos Argos shipped 2.5Mt of cement across Colombia, Central America and the Caribbean in the second quarter of 2024, up 2%. However, in Colombia alone, volumes fell by 5% to 1.3Mt, despite rising exports. The company recorded a 14% rise in quarterly EBITDA to US$41.2m, with year-to-date EBITDA up by 11% to US$89.6m. In Central America and the Caribbean, Q2 2024 EBITDA was US$38m, a 13% year-on-year increase.

Cementos Argos expects improvements in Colombia's cement deliveries over the next 12 to 18 months due to stabilising new home sales, reduced mortgage rates, moderated inflation and improved housing subsidies.


South Korea: Ssangyong C&E has exported 30,000t of low-carbon limestone cement (Type IL) to the US, its first such shipment following three years of research and development, according to AJU News. The product reportedly has a reduced clinker content and maintains the same physical performance as general cement. The producer plans to export 200,000t to the US in 2024 and 600,000t in 2025.

A Ssangyong C&E official said "Currently, our country's national standards stipulate that mixed cement only uses slag, fly ash and pozzolan. In order to reduce carbon emissions in the future, conditions must be created where various types of eco-friendly cement, including limestone cement, can be used."


India: Thiruvananthapuram city Corporation has conducted a trial run of its refuse-derived fuel (RDF) plant at Sanmathi Park, Chala. The plant processes up to 1t/day of legacy waste, which is hard to segregate, to produce fuel for cement plants. The plant processes 40kg of materials per 15-minute cycle. Currently, non-recyclable materials are sent to Tamil Nadu cement plants. The government plans to establish at least one RDF plant per district as a permanent solution.


Uganda: Authorities in Tororo district intercepted a counterfeit cement operation on 7 August 2024, seizing over 4t of cement. The joint operation by police, Uganda Revenue Authority, and the Resident District Commissioner’s office targeted a group involved in producing and selling counterfeit cement, which was packaged in branded bags of Simba Cement, Tororo Cement, and Hima Cement. The bust took place 5km from Tororo along the Tororo-Jinja highway. A truck carrying the counterfeit cement was impounded, and the driver was arrested.

Albert Amula, deputy resident district commissioner, highlighted the dangers of using substandard materials, linking them to building collapses, and called on contractors to only buy from licensed hardware stores. Cement manufacturers have called for stricter regulations to combat this illicit trade.

 


Burkina Faso: The stone laying ceremony took place on Thursday 8 August 2024 at Ciments de l'Afrique’s (CIMAF) new calcined clay production unit and solar power plant at its plant in Ouagadougou, Burkina Faso. The calcined clay unit is valued at US$50m, while the solar power plant cost US$5.5m, reports Burkina 24. Completion is expected by August 2026.

Ibrahim Traore, president of Burkina Faso, said “The accompanying solar unit should make it possible to reduce production costs and we hope that in a few years, this technology will become popular and will make it possible to reduce cement costs.”

Anas Sefrioui, chair and CEO of CIMAF Group, said “The calcined clay that we will produce here in Burkina will serve as an alternative raw material to imported materials, particularly clinker.”


Nigeria: Dangote Cement has exported 14 shipments of clinker from Nigeria to Ghana and Cameroon as part of its strategy to boost foreign exchange inflows, reports Business Post Nigeria. The company reported that high demand for its products has ‘significantly’ increased its pan-African operations.

CEO Arvind Pathak said “This effort resulted in a 55% surge in our Nigerian exports, underscoring our commitment to fostering African self-sufficiency.”


Russia: Belarusian Cement Company (BCC) increased its cement supplies to the Russian Federation by 3.5% year-on-year in the first half of 2024, and by 50% in June 2024, reports Belta News. Major sales markets for BCC in Russia include Moscow, Moscow Oblast, the Central Federal District and the North-Western Federal District.

Vyacheslav Golovatsky, deputy director general for foreign economic activities, credited the growth in foreign cement sales to logistics. He said “We did a lot of work in 2023. We created a commodity distribution network, BCC-Soyuz, which has its own cement transshipment facilities. When there were difficulties with cement delivery in late 2023 – early 2024, logistics came into play. We started routing deliveries, launching our own trains that consisted of our own cars. In March 2024, our first route train went to Russia, in May 2024 we had already 12 BCC route trains, and in June 2024 - 15. Our products have been delivered to transshipment facilities, unloaded and distributed to consumers more promptly.”


India: Kaushalya Logistics (KLL) has launched a new cement depot in Ahmednagar, Maharashtra, enhancing its logistics services for Adani Cement. The depot will handle approximately 120,000t/yr of cement, supporting ACC and Ambuja Cement brands.

KLL has also introduced a new vertical in freight forwarding under full truck load services, commencing operations with VMS Equipment, a group company of construction equipment manufacturer ACE.

Managing director Uddhav Poddar said “We are thrilled to start this new association with Adani group with a new depot in Ahmednagar. Our collaboration with Adani Cement showcases our cement logistics capabilities, and our entry into the freight forwarding market marks a pivotal step in our growth strategy.”


Nigeria: An update has been released on the cement plant planned in Bauchi State, on which Global Cement previously reported on 11 June 2024. On 7 August 2024, the Bauchi State government signed a Memorandum of Understanding (MoU) worth US$1.5bn with Resident Cement Company to establish a cement plant in Gwana District, the Nigerian Tribune reports. The plant is expected to produce 10Mt/yr of cement. The project includes a 100MW power plant, a dam and other amenities for the community, which will reportedly help to attract foreign investment and boost the local economy.


US: CRH has announced its financial results for the second quarter of 2024. Revenue was US$9.7bn, down by 1% year-on-year, net income was US$1.3bn, up by 8% year-on-year, and adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$2.3bn, up by 12%. CRH raised its 2024 financial year guidance, projecting net income increase to US$3.85bn from the previous figure of US$3.7bn and an adjusted EBITDA increase from US$6.82bn to US$7.02bn.

Albert Manifold, chief executive of CRH, said "We are pleased to report another period of further profit growth and margin expansion for CRH. Reflecting the strength of our financial performance, the positive underlying momentum in our business as well as the positive contribution from recent portfolio activity, we are raising our guidance and remain well positioned to deliver another record year in 2024."


Argentina: Loma Negra has announced its financial results for the second quarter of 2024. Net sales were US$147m, down by 28% year-on-year. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) fell to US$51m, a 19% decrease from the second quarter of 2023. Net profit reached US$31.6m, up by 226% from US$9.7m in the same period in 2023, reportedly due to the ‘solid’ operational results and an improvement in the net total finance gain.

CEO Sergio Faifman said "We are glad to report another set of solid results. We are optimistic that this positive trend in the industry will consolidate, as July 2024’s dispatch figures already show significant improvement. Therefore, we have strong indications to expect further recovery in the second half of 2024."


UK: Following a successful trial in mid 2024, Aggregate Industries will deploy the ‘first electric cement truck in the UK’, according to the company, with more to follow. The trucks will be based at the Cauldon cement plant, alongside the company’s existing fleet of 60 trucks. The vehicles are equipped with a 600kW motor to deliver both bulk and bagged cement. Aggregate Industries has partnered with Lomas Distribution, its contracted haulier for the UK domestic market.

Gareth Durnall, general manager at Lomas Distribution, said "We are excited to work together with Aggregate Industries in adopting sustainable practices."

Steve Curley, Aggregate Industries’ managing director of cement division, said "Introducing electric trucks in our operations marks a pivotal shift towards efficiency and sustainability and is all part of our ongoing effort to decarbonise the business and contribute to our own net zero Strategy."


Ukraine: Companies belonging to the Ukrcement association increased cement production by 24% year-on-year to 3.8Mt between January and June 2024, according to a press release.

Clinker production also rose by 13% year-on-year to 3Mt.

The statement said "Despite the enormous challenges of the war, the enterprises of the Association of Cement Producers of Ukraine Ukrcement continue to adapt to new realities and produce strategically important products – cement.”