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Kaspar E A Wenger appointed chairman of the board of Holcim (Schweiz) AG
Written by Global Cement staff
20 May 2015
Switzerland: Kaspar E A Wenger has been appointed as the chairman of the board of Holcim (Schweiz) AG. The role follows more than 20 years at Holcim, including more than ten years of operating responsibility for Holcim (Schweiz) AG and the responsibility for Central Europe.
In the framework of the progressing merger between Holcim and Lafarge, Wenger will become designated chairman of the board of Holcim (Schweiz) AG, effective from 30 June 2015. He will relinquish his responsibilities as area manager for Central Europe (Switzerland, South Germany, Italy). Wenger will play a key role in supporting the activities of LafargeHolcim in Switzerland specifically.
Gerd Aufdenblatten, currently CFO of Holcim Central Europe, will replace Wenger and become cluster-CEO. Gerd Aufdenblatten joined Holcim in 2007 and became CFO of Holcim Central Europe in 2013. A successor for the position of CFO will be communicated in due course.
CRH faces competition probe on home turf
Written by David Perilli, Global Cement
20 May 2015
CRH's ambitions took a setback this week when the Irish Competition and Consumer Protection Commission (CCPC) raided the offices of its subsidiary Irish Cement as part of an investigation into the bagged-cement industry in Ireland. Details are vague but the media reports state that the inquiry is examining whether or not the Irish market leader has abused its dominant position in the market, valued at Euro50m/yr.
Undoubtedly CRH and Irish Cement hold a leading place in the local cement industry. Irish Cement runs two integrated cement plants in the Republic with a combined production capacity of 2.7Mt/yr. This constitutes 79% of the country's 3.4t/yr total capacity.
Previous acquisition activity such as CRH's purchase of Dudman Group's UK import terminals in July 2013 has led to concerns regarding market competition. At that time Irish cement importer Eircem complained to the UK Competition Commission (CC), claiming that 'there is no free competition' in the market and also to initiate proceedings against CRH for damages relating to alleged anti-competitive behaviour in that market.
Roll the clock forward nearly two years and CRH is making the headlines once more for a much larger acquisition portfolio: the purchase of the largest chunk of assets sold from the merger of Lafarge and Hocim. With regards to Ireland and the UK, CRH will take on three (Dunbar, Tunstead and Aberthaw) of Lafarge Tarmac's five cement plants. Lafarge Tarmac's other two plants (Cookstown and Cauldon) will become part of the Aggregate Industries division of Lafarge Holcim. And once again, following acquisition activity competition, questions are looming as the CCPC raid suggests. This time though the potential impact of any market abuse, if it is actually happening, is far larger given the influx of UK and European assets that CRH are taking on.
We don't know what the CCPC will find but we can look at how CRH was viewed in the UK CC report on 'Aggregates, cement and ready-mix concrete market investigation' published in January 2014. At that time the CC concluded that, "We have seen nothing to suggest... that the recent acquisitions by CRH will result in importers collectively or individually offering a significantly greater constraint on cement producers than in the past." Amusingly though CRH also told the CC that it had no major expansion plants for the UK.
We also know how one of CRH's competitors felt about them. One of the more telling quotations from the CC report was from a Commercial Manager, at Lafarge Cement Ireland who viewed expansion in Ireland by Lafarge as a 'mechanism' to control CRH's ambitions by attacking it in its home market by showing CRH that Lafarge was a global player. Ironically the comments of that anonymous manager look very different now that CRH is on track to becoming a global player itself.
PPC hit by low domestic cement demand 19 May 2015
South Africa: PPC has reported that in the six months that ended on 31 March 2015, its profit fell by 38% year-on-year, hurt by slack demand at its mainstay home market. However, its revenue rose by 9% to US$379m during the period.
South African building firms are struggling with weak demand as the government delays rolling out its US$84bn infrastructure investment package. In response, PPC has set its sights on the rest of Africa. It is building plants in African countries like Ethiopia and the Democratic Republic of Congo as part of a wider plan to generate 40% of its sales outside its home market by 2017.
India: JK Lakshmi Cement has reported an 88.6% fall in its net profit to US$0.95m for the quarter that ended on 31 March 2015. Total income fell by 11.4% year-on-year to US$93.8m for quarter.
For the year that ended on 31 March 2015, JK Lakshmi Cement posted a 2.8% rise in its net profit to US$15m. Its total income surged by 11.2% to US$367m for the year and its net profit after tax grew by 9.65% year-on-year to US$16.2m.
Cimpor reports 5.3% fall in cement sales 19 May 2015
Portugal: In the first quarter of 2015, Cimpor's cement and clinker sales fell by 5.3% year-on-year to 6.8Mt. Growth in Argentina, Paraguay, Portugal and South Africa was not enough to offset a downturn in Brazil and Egypt. Sales rose by 7.4% year-on-year to Euro637m, bolstered by an overall rise in average prices. However, Cimpor's earnings before interest, taxes, depreciation and amortisation (EBITDA) of Euro123m reflected the lower activity in the first quarter.
In the Brazilian market, Cimpor's cement sales were affected by the economic contraction. Local constraints on the water supply affected the construction market, which in turn hit cement demand and put pressure on energy costs. In Argentina, Cimpor outperformed growth in local consumption, which was robust. Cement consumption in Paraguay remained dynamic and Cimpor, which is now making use of all of its local production capacity, showed a marked improvement in its EBITDA margin.
In Portugal, after a long period of downturn in consumption, the market returned to growth in the first quarter of 2015. Cimpor said that its Portuguese business managed to capture the growth in domestic market demand while also maintaining its export capacity.
In South Africa, despite strong competition from a new operator in Cimpor's operating region, as well as from imported cement, its commercial policy and the launch of co-processing made it possible to take advantage of growth in local demand. Demand for cement in Egypt was expected to have fallen and was more pronounced in Cimpor's volumes because of an adjustment to its natural market share after posting an unusual level of sales in 2014. This was based on competitors' operations being negatively affected by fuel scarcity.
Cimpor said that a new commercial dynamic introduced into its activities in Mozambique had come to fruition in the first quarter of 2015. Despite a negative market trend over the previous year due to adverse weather and problems with local power supply and increased pressure from importers, cement sales fell only by 1.5% year-on-year.