Rock Products

FEB 2018

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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68 • ROCK products • February 2018 www.rockproducts.com said Guillermo Martinez-Sans, Cemex USA's executive vice president, human resources and communications. "It encour- ages all our employees to be more proactive and keep an active safety dialogue so we can make sure workers at our facilities go home safe." Thousands of Cemex USA employees were also given spe- cial Take 5 Hazard Assessment booklets to get them to stop, think and act, when approaching job sites. The booklets provide a list of possible hazards including fall risks, traffic concerns and environmental threats, as a reminder to pay extra attention to safety. "Employees need to analyze every location to make sure they stay safe," explained Alan MacVicar, Cemex USA's vice president of health & safety. "By doing these hazard assess- ments, potential safety risks can be quickly identified and fixed," he concluded. HeidelbergCement Addresses U.S. Tax Reform HeidelbergCement released a statement in response to the United States' recent tax overhaul that reduced the federal corporate tax rate from 35 percent to 21 percent as well as changed the regulations regarding the utilization of loss carryforwards. "As a consequence, especially deferred tax assets on losses and interest carried-forwards must be re-measured in the consolidated financial statement for 2017," the company said. "Based on initial calculations and taking into account respective restructuring measures, we expect a negative bal- ance sheet effect of in total about 200 million euros ($240 million) that leads to a corresponding impact on Group net profit in 2017. The exact amount can only be computed during preparation of the 2017 group financial statements. This re-measurement of the deferred tax assets is a one-time effect that is not cash-effective and has no impact on earnings before tax or cash flow in 2017." The outlook for 2017 group share of profit before one-time effects remains unchanged. The write-down also has no impact on the company's com- municated, progressive dividend policy. Starting in 2019, HeidelbergCement said that it assumes the significant reduction of the effective tax rate in the United States will have a positive effect on net profit and cashflow. "Again, the overall effect cannot be quantified with rea- sonable certainty at this point in time as, among others, implementation rules from the U.S. tax authorities regard- ing the new legislative bill are still pending," the company concluded. Cement Equipment Market to Reach $9B by 2022 According to CW Research's recently published "World Cement Equipment Market and Forecast Report," the market for cement manufacturing related equipment and services is projected to reach $9 billion by 2022. As greenfield cement plant projects remain scarce, upgrades to existing cement plants will become relatively more important; equipment relating to upgrades (i.e., excluding service-related spend) will move from representing a quarter of the total cement manufacturing equipment capital spent in 2017 to more than 40 percent by 2022. The study also stated that "functional" equipment (i.e., con- veying, automation, filtering, environmental control, etc.) will be a central growth driver of cement plant-related equipment sales over the next five years. "Decision making for cement manufacturers is becoming more and more complex as players aim at achieving higher efficiency and reducing operating costs," said Robert Madeira, CW Group managing director and head of research. "As a result, more technology-intensive functions such as auto- mation, control and testing are becoming more prominent, and representing an ever-growing share of the cement plant equipment spend mix." With a global shortage of cement production capacity expan- sion projects, equipment suppliers have been facing a tough down-cyclical market. New equipment orders are relatively scarce, and competition to win orders is very high. The cost per ton of cement production capacity has continued to fall; the average price per ton of cement production capacity for a turnkey cement plant has fallen about 15 percent since 2008, according to CW Research. Given the cement plant expansion and upgrade market dynam- ics, CW Research expects prices to fall an additional 5 percent. Cement plant equipment types that do not require as complex engineering or proprietary technology are expected to further commoditize and continue to face even harsher price erosion. The expansion of the upgrade and spares segments will be underpinned by cement manufacturers' shifting capital expenditure and strategic priorities. CW Research projects the market for upgrades and spares to amount to $3.3 billion, with China accounting for 44 percent of the market. Globally, by 2022, the upgrades and spares segments are projected to expand the fastest, reaching close to $5 billion.

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