Global Cement News

Germany: Bernd Scheubel retired from Refratechnik at the start of May 2018.

He started his career at the technical centre of Krupp Polysius (TKIS) in New Beckum. After five years working there as a mineralogist he joined Refratechnik in 1987, starting as a sales manager for South America. In 1998 he was appointed a member of executive management of Refratechnik Cement in Goettingen. In 2003 Scheubel joined the management board of Refratechnik Holding at Ismaning near Munich, the position he held until he retired.

The main focus of his work was the expansion of the international refractory business of Refratechnik in the Americas and East Asia, mainly in China. In addition he held positions at the executive boards of the World Refractory Association and the European Refractory Association.

Germany: Thomas Spitzenpfeil has been appointed as the chief financial officer of Schenck Process Group with effect from 1 October 2018. He will also join the management board of the company. Spitzenpfeil will be responsible for the company’s global finance and IT organisation and will work alongside Andreas Evertz, president and chief executive officer (CEO). He will replace Eric Jaschke as CFO, who has decided to leave the company at the end of 2018 for personal reasons.

Spitzenpfeil has 14 years’ experience as the CFO of large international businesses in the manufacturing sector. For the past eight years, he was the CFO of Carl Zeiss, the global technology group in optics and optic-electronics with 27,000 employees.

He started his career at Robert Bosch in 1990 and thereafter held various commercial roles at VIAG, Kodak and Hydro Aluminium/VAW-Aluminium. Prior to joining Carl Zeiss AG, he served for six years as the CFO of Zumtobel in Austria. At Carl Zeiss, his role comprised responsibility for finance and controlling, audit and risk management, consolidation and accounting, IT, digital innovation, financial services, facility management, logistics, central production and US shared services.

Jaschke joined the company in 1999 and held various roles with focus on local and international accounting and controlling responsibilities in Germany and Australia. He was appointed as CFO of Schenck Process in September 2015.

Germany: Schmersal Group has appointed Andreas Balack as the new manager of its South Germany sales region. The 44-year old holds over 20 years of sales experience with knowledge of the plastics processing sector. He previously worked as the deputy sales manager at a company selling safe automation technology. At Schmersal he manages a team of 25 people, comprising customer service employees, product managers and engineers.

Holcim Indonesia was forced to refuse to comment on rumours this week that it might be selling up. Local business press in the country was running stories that parent company LafargeHolcim was in the early stages of a possible divestment. Although the stories seemed pretty spurious, Holcim Indonesia’s share price rose on the news.

The situation is reminiscent of an anecdote attributed to the former US president Lyndon Johnson by Hunter S Thompson about making a political opponent deny a ridiculous rumour. If they don’t respond then it looks like they have something to hide and if they do engage with a denial then they look silly anyway. In Holcim Indonesia’s case, as soon as the cement producer actually refused to comment the story gained more credence.

Part of the reason why the Holcim Indonesia story has legs is because LafargeHolcim has said it plans to make divestments of Euro1.7bn in 2019. There is rampant production overcapacity in Indonesia. The territory is exactly the kind of place you might expect LafargeHolcim to consider leaving. As recently as early in 2017 Semen Indonesia, the main producer, was showing the gaping production capacity – consumption gap in its investor presentations with no catch-up until at least 2020. Romauli Panggabean, an analyst for Bank Mandiri, was even more blunt in a forecast for the Jakarta Post in mid-2016. She ran a model predicting that if production capacity doubled to 150Mt/yr by 2017 then it would take the market until 2032 to catch up with an assumed 7% construction growth rate. Panggabean’s simulation seems to massively overstate capacity growth in the country as Global Cement Directory 2018 data places integrated (clinker) plant capacity at 79.3Mt/yr. By comparison the Indonesia Cement Association (ASI) placed cement production capacity at 108Mt/yr in 2017. Both of these figures are far below 150Mt/yr.

Graph 1: Domestic and export sales in Indonesia, 2013 – 2017. Source: Indonesia Cement Association.

The graph above sets the scene for the capacity wobble worries in 2016 and 2017 as sales growth faltered. It picked up in 2017 with domestic sales rising by 7.6% year-on-year to 66.4Mt. Sales so far in 2018 support this trend, with domestic sales growing by 6.4% to 21.06Mt for January to April 2018. The other trend to note here has been the explosion in exports in recent years with a near doubling to 2.93Mt in 2017 and an accelerated continuation of this trend so far in 2018.

Holcim Indonesia operates four integrated cement plants at Narogong in West Java, Cilacap in Central Java, Tuban in East Java and Lhoknga in Aceh with a production capacity of 15Mt/yr. In addition it runs two cement grinding plants at Ciwandan in West Java and Kuala Indah in North Sumatra respectively, although this last unit is currently mothballed. It also owns cement terminals in Lampung and a new one in Palembang in Sumatra.

LafargeHolcim owns an 80% share of Holcim Indonesia, its main subsidiary in the country. In 2017 Holcim Indonesia described the local situation as one of ‘hyper competition’ due to market overcapacity. Production capacity was over 100Mt/yr but consumption was only 70Mt/yr. Its overall cement sales volumes including exports rose by 7.8% year-on-year to 11.1Mt in 2017 from 9.6Mt in 2016. But despite this its net sales fell slightly to US$953m due to falling prices as new competitors entered the market. Its earnings before interest, tax, depreciation and amortisation (EBITDA) also fell. The positioning of its production units is relevant in Indonesia given the concentration of sales in Java but the faster growth in sales rates and higher competition in other regions.

Both of the other market leaders, Semen Indonesia and Indocement, reported similar problems in 2017 but they don’t appear to be looking to make cuts. Put it all together in LafargeHolcim’s case and you have a group-level desire to sell off parts of the business, overcapacity locally with no end in sight in the short to medium term, falling earnings and profits and some hope that consumption is heading back to its normal brisk rate. All of this seems to suggest that now would be the perfect time for it to exit Indonesia if it decided to. So, if LafargeHolcim isn’t already soliciting offers then maybe it should be. The tough call would be deciding whether to leave the country altogether or to just sell a share of the business. Leaving totally would significantly reduce the group’s presence in South-East Asia and reduce its profile as a truly global player. However pride and money-making are not the same thing. In the meantime though, the only people making a fortune will be the speculators.

UK: The Global Cement and Concrete Association (GCCA) has appointed Benjamin Sporton as its chief executive. He will take up the role in early October 2018.

Sporton joins the GCCA from the World Coal Association where he has served as chief executive for almost four years. As chief executive of the newly-formed GCCA, Sporton will lead the association’s efforts to drive advances in sustainable construction, working to enhance the cement and concrete industry’s contribution to a variety of global social and developmental challenges.

A dual Australian-British national, Sporton joined the World Coal Association as its Policy Director in 2010 and became deputy chief executive two years later. Before his appointment as chief executive in 2014, Sporton led the World Coal Association’s strategic and business planning and was responsible for its policy and advocacy work with a particular focus on sustainable development and climate change issues. He holds an honours degree in politics from the University of Adelaide and has also studied at the University of Buenos Aires and the Australian Institute of Management.