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LafargeHolcim, ArcelorMittal, Evonik and Solvay form partnership to reduce carbon emissions across industries 17 November 2016
Morocco: LafargeHolcim, ArcelorMittal, Evonik and Solvay have formed a Low Carbon Technology Partnerships Initiative across the steel, cement and chemicals industries. This new partnership will look at the potential synergies that exist between the manufacturing processes of these three energy intensive sectors, and how these synergies could be harnessed to reduce CO2 emissions.
As a first step, and following preliminary research, the innovative partnership will produce a study with the technical support of Arthur D Little to identify potential ways to valorise industrial off-gases and other by-products from their manufacturing processes to produce goods with a lower carbon footprint than through the fossil path. The preliminary research has already allowed identification of significant potential in selected trans-sector pathways.
The study is aimed at bringing a fact-based overview of carbon and energy sources from industrial off-gases (first at a European level), and evaluating the technical, environmental and economic feasibility of different Carbon Capture and Usage (CCU) pathways and their potential.
Initial findings from the first step already underway suggest that deploying cross-sector carbon capture and reuse opportunities on an industrial scale could reduce up to 3 GT/yr or 7% of global anthropogenic CO2 emissions. Existing conversion technologies that could be deployed across the three sectors could utilise by-products in the off-gases to create building materials, organic chemicals and fuel. Increased availability and greater access to renewable energy sources would significantly boost net carbon reduction efforts by those three sectors, within a supportive legislative framework. Cross sector carbon capture and reuse should also result in job creation, to be further investigated.
The study, carried out at European level, is building the ground for similar investigation extended at global level and paves the way for identifying and assessing industrial scale projects on CCU at the interface between the sectors.
“Concrete offers the highest level of life-cycle sustainability performance and we are continuously developing new products and solutions for a low carbon society. This new ambitious partnership will support our mission to cut our net emissions per ton of cement by 40% towards 2030 (versus 1990) and to develop and further deploy low carbon solutions for the construction sector. But to make this a reality, we will need an enabling regulatory framework and support for innovation,” said Bernard Mathieu, Head Group Sustainable Development of LafargeHolcim.
CRH releases trading update for first nine months of 2016 17 November 2016
Ireland: CRH’s Europe Heavyside division’s sales have risen by 5% year-on-year in the first nine months of 2016. However, no exact figures were released by the group in a trading statement. Improved volumes and prices of cement were noted in the UK and a ‘limited’ impact so far by the British decision to leave the European Union (Brexit) was noted. In North America CRH’s Americas Materials division reported that proforma sales volumes of cement fell by 2% in the third quarter principally due to Canada. Its sales volumes have risen slightly by 1% so far in 2016. Overall, CRH’s sales rose by 6% to Euro20.4bn in the reporting period.
Before and after the merger
Written by David Perilli, Global Cement
16 November 2016
The other shock news from the US last week was LafargeHolcim’s poor cement sales volumes in North America so far in 2016. HeidelbergCement’s third quarter financial results followed and they give us an opportunity to compare the fortunes of the world’s two largest cement producers either side of a high profile merger.
Graph 1 - Changes in cement sales volumes for LafargeHolcim, HeidelbergCement and selected European multinational producers in the first three quarters of 2016 compared to the same period in 2015 (%). Data labels are the volumes reported in 2016. Source: Company reports.
Graph 1 shows the effect of HeidelbergCement’s completion of its acquisition of Italcementi in mid-October 2016. Now that the purchase is complete its sales volumes have taken a whopping 20% boost to 73Mt. LafargeHolcim by comparison is struggling to hold sales. Although do note the difference in sales volumes between the two largest cement producers in the world. LafargeHolcim has sold nearly 2.5 times the amount of cement as HeidelbergCement so far in 2016.
Graph 2 - Changes in sales revenue for LafargeHolcim, HeidelbergCement and selected European multinational producers in the first three quarters of 2016 compared to the same period in 2015 (%). Data labels are the sales reported in 2016. Source: Company reports.
The point to take away from Graph 2 is the huge difference turbulent currency exchange rates are having on the financial returns of these companies. Like-for-like reporting of sales revenue hasn’t helped LafargeHolcim to grow but it is making a big difference to the sales of Cemex and Vicat.
Focusing on LafargeHolcim, the group has had a tough time of it so far in 2016 with falling cement sales volumes and falling sales revenue year-on-year on both a straight comparison basis and like-for-like one. Like many European cement producers negative currency effects have plagued its financial reporting. However, unlike many of its European-based competitors its like-for-like sales figures have also declined.
Particular problems have been noted in Nigeria as well as Brazil, Indonesia and Malaysia. It has managed to keep its profit indicators such as earnings before interest, taxation, depreciation and amortisation (EBITDA) mostly rising through the first three quarters of 2016 on a like-for-like basis. Yet, to give an idea of the effect fuel supply problems had in Nigeria in the third quarter of 2016 on the group’s entire bottom line, excluding Nigeria from its results would have seen its adjusted operating EBITDA rise significantly. With regard to the rest of the world, cement sales volumes have fallen in every one of the group’s territories so far in 2016 including, worryingly, its North America region. Here, falling cement sales volumes have been blamed on delays to infrastructure projects and bad weather.
By contrast, HeidelbergCement has reported rising sales revenue and profit indicators such as earnings before interest and taxation (EBIT) although its profit has fallen. Most of the good financial cheer has been derived from the new Italcementi assets although most of its territorial cement sales revenues have grown even when the effects of the new purchase have been excluded. The exception has been Africa where the group mentioned problems in Ghana due to local competition and imports.
The comparison between the world’s largest European-based cement producers is stark. LafargeHolcim made a big show of announcing the merger between Lafarge and Holcim in mid-2015. Today it is battening down the hatches as its tries to claw profit from asset sales and synergy savings. HeidelbergCement almost casually announced that it had finalised its acquisition of Italcementi in October 2016 and it has proceeded to rack up the profits at its first subsequent financial report. However, HeidelbergCement may be waiting for the regulators to finish approving parts of the deal before it makes a final announcement. For example, the Federal Trade Commission only approved the sale of various US assets on 15 November 2016. Meanwhile, the credits ratings agencies passed their own judgement when Standard & Poor upgraded its rating of HeidelbergCement earlier this week.
LafargeHolcim remains a much larger company than HeidelbergCement despite the problems it is facing so provided it can keep the investors happy it should be fine as its whittles itself down to a more sustainable shape. To this end the Swiss press has been speculating whether chief executive officer Eric Olsen will announce job cuts and plant closures at an investors meeting on 18 November 2016.
SEA-Invest orders Samson Eco Hopper for project in Ivory Coast 16 November 2016
UK: SEA-Invest has placed an order for an Eco Hopper from Samson Materials Handling, part of Aumund Group, destined for operation in the Ivory Coast. This product is designed to receive dry bulk materials such as cement clinker, limestone, gypsum and slag from a mobile harbour crane. The Eco Hopper will discharge onto a high-level quayside conveyor at a rate of 1200t/hour or via a dedicated outlet direct to trucks at 700t/hour.
“In a competitive market we need to ensure our service offering is reliable and value for money. Environmental responsibility is something that we take seriously at SEA-Invest. We endeavour to provide efficient, cost effective and environmentally appropriate service and we look forward to developing our port facilities with Samson,” said Sébastien Ghesquiere, Director of SEA-Tech, an engineering subsidiary of SEA-Invest.
Siam Cement orders vertical roller mill from Loesche 16 November 2016
Thailand: Siam Cement has ordered a LM 56.3+3 CS vertical roller mill from Loesche for its cement plant in Kaeng Khoi. The mill will produce medium-fine cement qualities and is designed for grinding clinker, gypsum and limestone. The cement producer previously ordered a LM 56.3+3 CS mill from Loesche for its Ta Luang cement plant in 2014.