IRELAND: Used tyres to reduce costs at Irish Cement 's Limerick plant

Irish Cement will burn used tyres at temperatures higher than those in a volcano in a bid to cut costs and secure jobs at its Limerick plant.

The company plans to switch to dry waste material such as rubber from used tyres and plastic to heat the kiln at the Castlemungret plant which employs 80 on the outskirts of the city.

The switch will cut costs, make the plant cleaner and more competitive, according to the company.

A spokesman for Irish Cement said they will shortly be lodging a planning application with Limerick City and County Council for the replacement of fossil fuel with alternative fuels and raw materials to improve the sustainability of their operations.

The company will also be seeking a revision of its licence from the Environmental Protection Agency.

“Limerick is Ireland’s oldest cement plant, having commenced operations 77 years ago.

"Its continuous operation has been sustained by continuous investment in new technologies and processes.

"After the recent period of reduced demand, production is once again on the increase at home and abroad for cement.

"This fuel replacement programme will be key to sustaining this growth,” said Castlemungret plant manager, Pat Robinson.

“Based on exerience in other cement plants in Ireland and throughout Europe, the opportunity to reduce our dependence on imported fossil fuels will prove critical to our ability to operate competitively and sustain jobs at Irish Cement Limerick into the future.”

Councillors from the Limerick City West metropolitan district were briefed on the plan earlier this week when they met senior executives from the company.

In making cement, the kiln has to be heated to over 1,400 degrees, higher than the 1,100 degrees a volcano reaches.

Thousands of tons of used tyres will be ferried to the plant along with shredded plastics which waste disposal companies cannot process.

Used tyres now piling up around the country pose a major problem with regards to their proper disposal.

The making of cement involves the mixing of materials including limestone, slate, ore, ash and heating them to nearly 1,500 degrees.

The ash used at the Limerick cement plant is brought from the ESB Money Point Power station in west Clare.

IRELAND: Irish Cement raided in competition investigation

A competition investigation launched last week with a raid on the offices of CRH subsidiary Irish Cement is looking for evidence it is abusing a dominant position in the market.

Gardaí and officials from the Competition and Consumer Protection Commission (CCPC) raided Irish Cement’s offices last week in an investigation into the €50 million bagged-cement industry.

It is understood the inquiry is focused on charges of abuse of a dominant position, which is an offence under both Irish and European law.

The offence involves a business using a powerful position in a particular market to force out rivals or put them out of business. It often involves predatory pricing, that is cutting charges for products or services to a point where others cannot compete.

Irish Cement is one of the largest players in the market. It is part of Ireland’s biggest company, the €20 billion international building materials group, CRH, which has operations in Europe, the US and Asia.

In a statement, CCPC chairwoman Isolde Goggin said last week’s searches were part of an ongoing investigation that was expected to take some time, and therefore the commission was not in a position to provide any further details.

Irish Cement confirmed the raid in a statement. “Irish Cement fully facilitated the inspection and is continuing to co-operate with CCPC. Inspections regarding competition policies, procedures and practices are an accepted part of the business environment around the world,” it said.

The company added that it operated to the highest standard and was confident that it had no issues in relation to competition.

Conor O Riain, chief executive of another producer, Ecocem, said his business would co-operate with any CCPC inquiry, although he added the commission had not approached it or contacted it.

TURKEY: CRH, Eren Said to Hire JPMorgan to Sell Turkey Cement Unit

CRH Plc (CRH), Ireland’s biggest cement company, and its Turkish partner Eren Holding AS have hired JPMorgan Chase & Co. (JPM) to help sell their cement joint venture in Turkey, people with knowledge of the matter said.

Companies including Haci Omer Sabanci Holding AS (SAHOL), Limak Holding AS and Oyak Cement Group are interested in the unit, in which CRH holds a 50 percent stake with Istanbul-based Eren owning the rest, said the people, who asked not to be named because the talks are confidential.

The three potential bidders are among those shortlisted and the sale process for the unit, known as Denizli Cimento Sanayii TAS, could be finalized by October, one of the people said.

About 20 domestic and international cement producers, including Italcementi SpA (IT), operate in Turkey, where cement makers have a total annual capacity of about 107 million tons, according to the local Cement Producers’ Association. The country, which has a gross domestic product of about $820 billion, is seeking to become one of the largest 10 economies in the world by 2023, and has planned $100 billion of infrastructure projects in the next four years, including a new bridge across the Bosphorus strait.

Representatives of Sabanci Holding and Eren Holding didn’t respond to e-mailed questions and calls seeking comment. Representatives of CRH, JPMorgan, Oyak, Denizli and Limak Holding declined to comment.

Denizli Output

Denizli, in which CRH bought a 50 percent stake from Eren Holding in 2007, produces about 3 percent of Turkey’s and 31 percent of western Turkey’s total clinker output, according to its website. The company is aiming to increase its sales to 250 million liras ($116 million) this year from 220 million liras in 2013, according to an e-mailed statement.

Oyak Group’s cement units include Mardin Cimento Sanayii & Ticaret AS, Unye Cimento Sanayii & Ticaret AS, Bolu Cimento Sanayii AS and Aslan Cimento AS.

Sabanci’s Cimsa Cimento agreed to buy Sancim Bilecik Cimento, a cement producer in western Turkey, from Sonmez Group for $220.7 million, it said in a public filing last month.

IRELAND: Ecocem wins €150k contract with ITER in France

Irish environmentally friendly concrete company Ecocem has announced it has won a €150,000 contract with International Thermonuclear Energy Reactor (ITER), the world’s biggest energy research project.

The ITER is a large-scale scientific experiment to demonstrate the generation of commercial electrical energy from nuclear fusion financed with contributions from Russia, the US, the EU, Japan, China, South Korea and India. 

Ecocem’s French subsidiary Ecocem France will supply the second phase of the development of the $20bn ITER experimental nuclear fusion reactor in Cadarache in the south of France. 

This will mean that the Ecocem Cement will be used in both the seismic isolation pit and the foundations of the project. 

“ITER is the most important energy project in the world, an international cooperation of countries, including Ireland, aiming to revolutionise nuclear energy with clean, pollution free energy,” said Conor O’Riain, head of new markets and products at Ecocem. 

“The nuclear industry doesn’t take chances for obvious reasons, so the fact that they have decided to use Ecocem cement speaks volumes. 

“Ecocem as increasingly being seen as the supplier of choice to large infrastructural projects in Europe that require high performance with minimal environmental impact.”

A joint venture between Irish company Ecocem Materials (70pc) and ArcelorMittal (30pc), the biggest steel producer in the world, Ecocem France will provide around 1,500 tonnes of Ecocem cement to ITER under the new deal.

IRELAND: CRH faces up to its sins of the past

Albert Manifold was unequivocal yesterday in diagnosing the group’s boomtime errors that led to the decision to sell off a tenth of its poorest-performing assets, with the future of a further 20 per cent up in the air.

“We invested in unsustainable trends. We forgot the core principle of CRH, which is that we used to make businesses better. We invested in bubbles.”

Manifold highlighted that 70 per cent of the business units heading for the door were bought between 2000 and 2006, the binge before the bang. As he spoke alongside his finance director Maeve Carton in London, it did not escape the notice of some that the period the new chief executive had chosen to highlight fell entirely under the rein of former boss Liam O’Mahony.

Myles Lee, Manifold’s immediate predecessor, was O’Mahony’s finance chief for much of that time.

Manifold continued: “Those businesses were cruelly exposed as the crisis hit. We will never again go down the road of buying market trends and growth, instead of understanding how to make those businesses better. At least now we have started to understand what went wrong. ”

So what did go wrong?

CRH, perhaps Ireland’s most conservative listed company, was swept along in the euphoria of unsustainable European housing booms, not least the one that decimated its home country. It lost its focus on returns.

Its portfolio review has directly resulted in the decision to sell 45 business units worth €1.5 billion.The future of others worth more than €3 billion is unclear, although Manifold expects most of those to be retained after “fixing”.

It has taken a €755 million write down on the businesses already tagged for sale. Manifold would not be drawn on the identity of the damned, but an analysis of where the impairments fell gives some clues.

Half of the writedowns are in its European products division, which manufactures accessories and solutions such as wall boards and tiles. The division, according to CRH’s website, is 60 per cent exposed to housebuilding, with extensive operations in the Benelux countries, France, Spain, the UK and Ireland.

Another quarter of the writedown goes to its European materials division, which produces materials such as cement. Half the writedown of its products division, and half of its exposure to housebuilding: just 30 per cent.

The rest of the writedown is accounted for by some “trimming” of its US operations.

CRH’s roll of press releases and announcements for 2000-2006 reveals some of the activity that it may now be looking to redress.

The December 2006 decision to invest €200 million in a cement plant in Drogheda looks, in hindsight, like poor timing. As do O’Mahony’s contemporaneous comments about “an expanding Irish economy and construction sector”.

CRH also acquired DIY chains in countries such as Belgium, another market that is now performing poorly.

Ireland accounts for 1 per cent of the group’s sales, but its proportion of the disposals are likely to be higher. Britain is also heavily represented in the products division that will see the biggest slice of the sell-off.

Drill further into the distribution of the €755 million writedown, however, and you can see that they have their problems too. Just €380 million of the writedown of its subsidiaries is accounted for by goodwill, which exists only on paper. The rest is a writedown on the value of the actual assets themselves.

It could have been a lot worse for CRH given the state of some of its peers. Manifold denied that there was anything strategically “wrong” with the company in the run up to 2006. “We made mistakes. We are only human,” he said.

Confirmation, if it was needed, that the errors were made by people.

IRELAND: Cement subsidiary makes €14m loss

ACCOUNTS FOR a Dublin-based subsidiary of Australian building materials company James Hardie made a loss of $17.8 million (€13.7 million) for the year ended March 31st, 2011. This compares to a $25.5 million (€19.7 million) profit for its 2010 financial period.

James Hardie International Finance Limited provides finance and treasury services, including the advancing and lending of money, to various subsidiaries of its parent company, James Hardie.

It incurred a foreign exchange loss of $43.5 million (€33.6 million) on the retranslation of monetary assets and liabilities during the year, the accounts state.

Since year end, the company has received a capital contribution of $329 million from its parent company, as well as $453 million from a subsidiary, James Hardie Technology NTL Limited. The company has continued to advance loans and enter into new facility agreements with other group undertakings since year end, the accounts state.

James Hardie International Finance, which has a registered address on Harcourt Street in Dublin, employed an average of nine people during the year. It paid $760,000 in salaries, with social welfare and pension costs pushing its payroll bill up to $834,000.

James Hardie International Finance Limited is part of the James Hardie Industries group, which moved its headquarters from the Netherlands to Ireland last year for tax purposes. The company, which has operations in Australia, New Zealand, the US and Europe, is one of the world’s biggest cement companies.

James Osborne, who was recently appointed as chairman of Independent News and Media and is also a director of Ryanair, is a non-executive director at James Hardie.

Former Greencore chief executive David Dilger is also a non-executive director of James Hardie, as well as a director of James Hardie International Finance.

Ireland: CRH ramps up acquisitions

CRH has busy with its expansion program lately, participating in 21 acquisition and investment initiatives over the six months, spending almost €200 million in the process, the Irish Times reported.

Next stop for CRH is the acquisition of Belgian business VVM Group. If approved, the VVM Group acquisition will put CRH’s total spending to almost €300 million.

The European materials division will gain in the process two cement grinding mills with a combined capacity of 1.5 million tonnes in Belgium and two readymixed concrete plants in Belgium and France.

"The first six months of 2011 saw development activity continue across all six operating segments, strengthening our existing market positions and adding valuable and well-located aggregates reserves," said CRH chief executive Myles Lee.