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Sweden: Denmark’s FLSmidth has completed its acquisition of Sandvik Mining Systems’ projects business except for the transfer of assets in South Africa, which is awaiting merger control clearance. The acquisition includes continuous surface mining and minerals handling technologies and competences that strengthen the group's core minerals business. The purchase is intended to increases FLSmidth’s coverage of the full mining value chain.
"With this acquisition we will be able to increase the productivity of the complete ‘Pit to Plant’ operation by better integrating upstream mining with downstream processing. The acquisition also allows us to digitalise the full value chain and enables a better utilisation of existing leading technologies by obtaining direct access to all key processes and equipment," said Manfred Schaffer, Group Executive Vice President, Minerals Division of FLSmidth.
The acquisition includes the part of Sandvik Mining Systems that is closest to the mine, which excludes Sandvik's conveyor component and its Finland based businesses. It includes all products for continuous surface mining, inpit crushing and minerals handling technologies and related intellectual property, including reference lists, drawings and data for installed base. The deal includes the transfer of over 200 employees from Sandvik. FLSmidth will also provide project management services to Sandvik on the majority of ongoing projects to be delivered during 2017 - 2019 period and parts and services for the installed equipment.
The closing of the acquisition in South Africa is expected to occur in early 2018.
Africa: FLSmidth says that a contract for a cement plant valued at more than Euro100m in an unspecified location in North Africa is now effective. The change in the project’s status follows the completion of carious conditions, including the receipt of a down payment for the work.
The order is in part a result of the partnership between FLSmidth and Beijing Triumph International Engineering Company, a company under the China National Building Material Group Corporation (CNBM Group), which will be responsible for the construction of the cement plant. The plant will mainly supply cement to the North African market. Once completed, the cement plant will have a capacity of 12,000t/day. The includes engineering, equipment supply, construction supervision, commissioning and training.
Jenisch hits the reboot button at LafargeHolcim
Written by David Perilli, Global Cement
01 November 2017
Lots to mull over in LafargeHolcim’s third quarter results this week. Not least that the new guy is now in charge. Former Sika boss Jan Jenisch took over officially in September 2017. In his first financial statement, he said that the results did not represent the company’s ‘full potential.’ He then said that he had hit the reboot button to reset the group’s expectations to reflect the current market.
The group’s forecast for cement demand globally remains at an increase by 1 – 3% on average for 2017. This is no change from LafargeHolcim’s forecast in mid-2017. What has changed though is the anticipated growth in operating earnings in 2017 revised down to 5 – 7% year-on-year from 10% or higher. Expected measures of earnings per share and leverage have also been reduced. Underpinning this is a change to some of the volume and pricing assumptions for 2018. The group also said it was conducting a business review, including country strategies and a focus on simplification, cost discipline and performance management.
As any IT manager will tell you, when you have a problem with a computer you reboot the machine in the first instance as an easy fix. Jenisch’s version of this strategy will hopefully buy him some time to try and take charge of the company.
Previous chief executive officer (CEO) Eric Olsen was doing similar things since the formation of LafargeHolcim in 2015 to downsize the company into profitability whilst coping with too much cement production capacity worldwide. However, the on going Syria legal investigation forced the company to publicly accept some level of wrongdoing and it cost Olsen his job despite him having zero involvement or even knowledge of the affair. Meanwhile, rumours of continued boardroom clashes between major shareholders that have existed since even before the formation of the company resurfaced with the announcement in mid-October 2017 that chief financial officer (CFO) Ron Wirahadiraksa was leaving after less than two years in the role. As this column noted in May 2017 Jenisch might be exactly the right man for this particular job given his battles at Sika with that company’s controlling family’s wish to sell its stake and majority voting rights to Saint-Gobain.
Moving on, the group’s cement market outlook makes for sobering reading with growth above 2% only expected for Latin America and Asia Pacific regions in 2017. Even North America, the great white hope of cement industry growth in recent years, only has a forecast of 0 - 2%. Actual cement sales volumes in this region fell by 1.6% to 5.9Mt on a like-for-like basis so far in 2017 due to hurricanes and other bad weather events, with ‘cautious’ private and public investment giving an effect too. Incidentally, the Portland Cement Association (PCA) downgraded its assessment of US growth this week too in its latest forecast. Worse still the Middle East Africa region is expected to drop by 2 – 4% due to poor economies in various local markets, notably in Algeria and Egypt. All of this pretty much fits the like-for-like growth of cement sales of 1.8% to 156Mt in the first nine months of 2017 that LafargeHolcim has reported. The surprise though is that Latin America is growing despite on-going problems in Brazil.
This then leaves the surprise message on the same day as the third quarter results release that LafargeHolcim is in talks with the board of South Africa’s PPC. Buying a major African cement producer like PPC doesn’t quite sit with the image of a company whittling itself down into profitability. Instead, it gives the impression that LafargeHolcim wants to dominate the African market ahead of the anticipated demographic cement consumption wave. PPC for its part, after flirtations with other bidders such as Dangote Cement, may simply be trying to raise its price in a bidding war.
Boardroom battles, sluggish global cement consumption, the Syrian legal probe, potential expansion plans in Sub-Saharan Africa and efficiency drives. And these are just the issues we know about! Jan Jenisch has a lot on his plate whatever happens next. Let’s just hope that when the reboot process finishes he doesn’t find himself looking at the construction company version of the ‘blue screen of death.’
Anhui Conch Cement appoints Yu Shui and Wu Tiejun as assistants to general manager
Written by Global Cement staff
01 November 2017
China: Anhui Conch Cement has appointed Yu Shui and Wu Tiejun as assistants to the general manager of the company. The postings have been made to strengthen training of junior management. They will replace Chen Yongbo in the role.
Yu graduated from Anhui University with a bachelor degree in economics. He joined the company in 1997 and has held various positions such as deputy director of the control room of the company’s sales department, assistant to director, deputy director and executive deputy director of the sales department, and in some of the company’s subsidiaries, such as executive deputy general manager of Bengbu Conch Cement, Huainan Conch Cement and Anhui Changfeng Conch Cement, general manager of Conch South Kalimantan Cement and deputy director of Wanbei Regional Management Committee. Yu is currently a director of the company’s sales department.
Wu graduated from Wuhan University of Technology with a bachelor degree in inorganic non-metallic materials. He joined the company in 2001 and has held various positions such as director of the production branch of the subsidiary, Anhui Chizhou Conch Cement, assistant to general manager, deputy general manager, executive deputy general manager and general manager of Chizhou Conch, general manager of Yingde Conch Cement and executive deputy director of the Guangdong Regional Management Committee. Wu is currently a director of the Guangdong Regional Management Committee and officer of the production control and craft management centre of the Company.
Hanson appoints Paul Lacey as packed products general manager
Written by Global Cement staff
01 November 2017
UK: Hanson has appointed Paul Lacey as the general manager of its packed products business. Lacey, who was previously head of sustainability and marketing for Hanson, has also worked for Ronseal and Crown Paints and has extensive experience in commercial and business development. He will be responsible for sites across the country producing packed cementitious products such as Postfix, as well as decorative and construction aggregates.