Global Cement News

Mining and materials company Afrimat said it was buying Lafarge South Africa this week. The assets it is acquiring include aggregate quarries, ready mix concrete (RMX) batching plants, one integrated cement plant, two cement grinding plants, cement terminals and fly-ash sources. The means of purchase is somewhat unusual, as Afrimat is paying around US$6m but it also appears to be taking responsibility for around US$50m of outstanding debt that Lafarge South Africa owes its parent company, Holcim. In a statement Afrimat’s chief executive officer (CEO) Andries van Heerden talked up the benefits for his company in terms of the boost to its aggregates and concrete businesses.

This is quite the change from 2012 when India-based Aditya Birla Group was reportedly looking into buying Lafarge South Africa. At this time the value for the business for a similar mix of assets, including 55 RMX plants and 20 quarries, was said to be to US$900m. Prior to this, Lafarge South Africa spent around US$170m in the late 2000s on increasing the production capacity at its integrated Lichtenburg plant and building its Randfontein grinding plant. Then in 2014, when the merger between Lafarge and Holcim was announced, Lafarge consolidated its Nigeria-based and South Africa-based operations as Lafarge Africa. It later decided to move the South African business to another Holcim subsidiary, Caricement, in 2019 to keep the business in Nigeria more profitable by reducing its debts. This transaction was valued at US$317m. At the time chair Mobolaji Balogun said that Lafarge South Africa’s operations had faced a challenging market in South Africa, with shrinking demand in an aggressively competitive sector. Afrimat is now buying Lafarge South Africa and its subsidiaries from Caricement.

Holcim isn’t alone in making an effort to sell up in South Africa. In April 2023 the Valor Econômico newspaper reported that Brazil-based InterCement was receiving offers for its remaining African-based assets in Mozambique and South Africa with a potential deal valued at around US$300m. InterCement runs Natal Portland Cement in South Africa, which operates one integrated plant and two grinding units. This follows the sale of its Egypt-based assets in January 2023 to an unnamed buyer.

PPC, the country’s largest cement producer, is staying put. However, it issued a mixed trading update this week ahead of the formal release of its annual results to 31 March 2023. Trading conditions in the interior of South Africa and Botswana were described as being ‘difficult,’ with cement sales volumes down by nearly 6% year-on-year and earnings before interest, taxation, depreciation and amortisation (EBITDA) down by 26%. Yet the group says it was able to grow its revenue. PPC’s CEO Roland van Wijnen added, “We therefore remain hopeful that the South African government will roll out its infrastructure development plans and protect the local cement market through the introduction of import tariffs to create a level playing field for domestic producers.” Dangote Cement subsidiary Sephaku Cement was more circumspect in its recent trading update but it too warned that, “deteriorating economic conditions and persistent challenges in the cement industry impacted Sephaku Cement’s financial performance to break-even levels.”

Much of the above makes for gloomy reading. As the local trade association Cement and Concrete South Africa (CCSA) has laid out to local media, the market faces the problem of having 20Mt/yr of production capacity, 12Mt/yr of demand and over 1Mt/yr of imports compounding the problem. Lobbying by local producers against imports has been a feature of the market since the early 2010s and this work continues through the efforts of the CCSA and others. However, the plea by PPC for government infrastructure spending suggests that the market faces more systemic problems. As a consequence some cement producers are trying to leave the market, while others are attempting to tough it out.

Belgium: Cembureau, the European Cement Association, has elected Ken McKnight as its president and Jon Morrish as vice-president. McKnight, a member of the CRH executive committee, succeeds Isidoro Miranda in the role. Morrish is the chief executive officer for Western & Southern Europe of Heidelberg Materials.

Germany: Schenck Process has appointed Jörg Ulrich as the chief executive officer (CEO) of its Schenck Process EMEA and Asia subsidiary. He succeeds Christoph Haar, who is leaving the company. Ulrich previously held the position of CEO at Linde Hydraulics for more than 10 years. He has also worked in the private equity sector most recently as the Chief Transformation Officer at TK Elevator.

The company’s EMEA and Asia division employs more than 1100 people on four continents and focuses on chemical and high-performance materials as well as infrastructure and energy market segments.

UK: British Rema has appointed Tony Goodwin as its Group Managing Director. He holds 30 years of experience in industrial powder processing and handling. He was previously the managing director of Oliver Valves. Prior to this he spent much of his career working for Kemutec and related companies, firstly in engineering roles and then in operations.

British Rema Group comprises three divisions: British Rema Process Equipment; British Rema Processing; and British Rema Rotary Engineering. The three companies provide powder processing equipment, contract processing and rotary engineering services to the mineral, chemical and recycling industries.

Ukraine: Buzzi has agreed to sell its business in Ukraine to Ireland-based CRH for US$109m. The assets additionally include Buzzi’s Slovakian ready-mix concrete business. The Ukrainian business is comprised of the 2Mt/yr Volyn cement plant and 1Mt/yr Nikolajev cement plants, as well as ready-mix concrete operations in Kiev, Nikolajev and Odessa.

Italy-based Buzzi retains its operations in Russia, including the 3.6Mt/yr Suchoi Log cement plant in Irkutsk Oblast and the 700,000t/yr Korkino cement plant in Chelyabinsk Oblast.