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Spain: FYM-HeidelbergCement has launched a sustainability commission to support its Malaga cement plant and the surrounding community. The initiative is part of the company’s 2030 sustainability plan. It includes representatives from local neighbourhood associations, local government and environmental bodies. The commission will meet several times a year to foster an open relationship between the cement producer and its neighbours. It also intends to promote behavior based on the circular economy and the reduction of the unit’s carbon footprint. It will build on the company’s work with the Provincial Forum of Socially Responsible Companies of Malaga since its inception in 2013.
France: Hoffmann Green Cement Technologies has inaugurated its pilot plant at Bournezeau, Vendée. The 50,000t/yr unit will manufacture cement products using metakaolin and blast-furnace slag, according to the L'Usine Nouvelle magazine. It says it will produce cement with reduced CO2 emissions up to 250kg/t using a flash-calcined process down from 900kg/t in the normal clinker production process. The project had investment of Euro10m.
UltraTech Cement declares Binani Cement is its subsidiary 22 November 2018
India: UltraTech Cement says that Binani Cement has become a wholly-owned subsidiary. The announcement to its shareholders follows a protracted legal battle with Dalmia Bharat group over the outcome of an auction for the insolvent producer. The acquisition includes production capacity in Rajasthan as well as subsidiaries in China and the UAE.
PCA forecasts slower growth in the US
Written by David Perilli, Global Cement
21 November 2018
A couple of long-running news stories popped up this week, led by the Portland Cement Association’s (PCA) latest forecast for the US market. Chief economist Ed Sullivan and the Market Intelligence Group predict slowing cement consumption growth to 2020 as the recovery period ends following the financial crash in 2008. The background to this is an expected rise in interest rates dragging on the construction market, a limited boost from the Trump administration’s tax cuts and rising debt levels hitting federal infrastructure spending.
This marks an abrupt turnaround from the PCA’s April 2018 forecast in which potential federal infrastructure spending was anticipated to kick in towards the end of 2019 creating 4% growth in 2020. To give the PCA credit, it did say at the time that this was contingent on a couple of key steps, including passage of an infrastructure bill, federal and state paperwork, bid letting and review and finally, contract awards leading to construction. Following the US mid-term elections in early November 2018 the prospect of an infrastructure bills seems remoter than before given the political differences between the US House of Representatives and the Senate. This may have been the final straw for the PCA and it adapted its forecast accordingly.
Graph 1: Cement shipments in the US, January – August 2013 - January – August 2018. Source: Portland Cement Association (PCA).
It is also worth reflecting on the third quarter financial results of the multinational cement producers over the last few weeks. CRH may have been crowing this week about how its US performance was driving its business in the wake of its acquisition of Ash Grove Cement and other assets, but many of the other multinational cement producers weren’t. HeidelbergCement, Buzzi Unicem and Titan all blamed the weather in the US for dragging on their results. LafargeHolcim said it suffered less with a ‘soft’ first quarter in 2018 followed by recovery.
The other story this week with relevance to the US was the continued speculation in the Canadian press about the future of the McInnis Cement plant in Quebec. The latest update is that the plant’s shareholders have asked the provincial government if they can swap the debt the province holds in the venture for equity. This has been seen as a potential bid to keep the company operational while it continues to hunt for a buyer. Rumours of a sale have swirled around since the start of 2018, with the Global and Mail newspaper naming HeidelbergCement as being potentially interested. Three bids have been reportedly made by unnamed parties but they were rejected for being too low. A slowing US cement market is particularly bad news for McInnis Cement. The plant is situated on the Atlantic Coast of Canada and exports to the US have been seen as a major part of its business. To this end it officially opened its marine terminal in the Bronx, New York in October 2018.
The main US market needs to find an alternative to the ‘fabled’ infrastructure bill if it wants better growth. Yet, reduced US cement consumption growth won’t help McInnis’ shareholders recoup the money they have sunk in the project. Somebody seems certain to lose in this situation and, with a protectionist incumbent in the White House, it seems likely to be somebody north of the border.
Yeoh Khoon Cheng appointed interim chief executive officer of Lafarge Malaysia
Written by Global Cement staff
21 November 2018
Malaysia: Lafarge Malaysia has appointed Yeoh Khoon Cheng as its interim chief executive officer (CEO).
Yeoh started his career with Deloitte Kassim Chan in 1979. He joined Lafarge Malaysia in 1987 as finance manager and has held various positions involving business development, mergers and acquisitions and corporate finance activities and acted as company secretary from 1990 to 1998. He was appointed as executive director and chief financial officer (CFO) in 1999. From mid-2011 to the end of 2015, he was the CFO for Lafarge Cement China. Latterly, Yeoh was the CFO of Huaxin Cement in China from 2016 to mid-2017. He is a member of the Malaysian of Institute of Accountants and the Malaysian Institute of Certified Public Accountants.