HeidelbergCement upbeat on Italcementi integration, 2017 outlook

Sources: HeidelbergCement AG, Germany; CP staff

Completion of a $4 billion merger involving Essroc Cement Corp. and sister Italcementi S.p.A. businesses, improved financials and credit ratings, plus declining energy costs, support especially positive investor guidance for the parent company of Lehigh Hanson, Inc. “2016 was an exceptional year,” affirms HeidelbergCement Chairman Dr. Bernd Scheifele. “With the successful takeover of Italcementi, we have accelerated our growth and are now in an excellent strategic position.”

In 2017, the producer will institute the enterprise-wide “Competence Center Readymix” (CCR), optimizing logistics and concrete mix designs with an eye toward $130 million in savings through 2019. CCR follows 2015 and 2016 continuous improvement programs covering cement and aggregate, respectively, each executed with a goal comparable to or exceeding the CCR target over a three-year window.

“Operationally, we concentrate on five areas: an increase in customer satisfaction, high operating leverage, cost leadership, vertical integration, and optimized geographical positioning. As a result, we will increase our efficiency and the satisfaction of our customers, especially in the world’s rapidly growing metropolitan areas,” Dr. Scheifele observes.

“We remain cautiously optimistic about 2017,” he continues. “While the overall outlook for the global economy is positive, the major macroeconomic and particularly geopolitical risks have increased. HeidelbergCement will benefit from the good and stable economic development in the USA, Canada, United Kingdom, Germany, northern European countries, and Australia. With the acquisition of Italcementi and its rapid integration, we have impressively demonstrated our high business potential and strong momentum.”

             HeidelbergCement + Italcementi

Shipments                              2015                           2016

Cement (mt)                         121,929                      124,983

Aggregates (mt)                   278,452                      287,405        

Ready-mixed (m3)                47,433                        48,117           

Sales                                    $18.73 billion              $18.55 billion