By Mauro Nogarin
In general, the cement industry in Latin America is recovering positively, as is the case in Bolivia, Brazil, Colombia and Mexico.
*Credit: Cementos Moctezuma (Mexico)
The situation is different in Argentina, however, where the government halted many public works to cut fiscal spending, thus reducing cement consumption. While in Peru, the construction industry, after closing 2023 with a 7.8% decline, is currently in a phase of slow economic recovery in both the public and private sectors.
Argentina
The new statistical report from the Portland Cement Manufacturers Association (AFCP) confirmed that cement shipments for the year through August were 6,050,000 tons, registering a drop of 28% compared to the same period in 2023.
The report also stated that in August shipments totaled 888,000 tons, with a reduction of 26% compared to the same month of the previous year.
As for exports, 34,600 tons were recorded in the month of August, with a slight increase of 1.4%.
Bolivia
In the first half of 2024, cement production in Bolivia reached 1.95 million tons, registering an increase of 6.3% compared to the same period in 2023, when it reached 1.83 million tons.
The construction sector report published by the National Institute of Statistics (INE) also confirmed that shipments registered a volume of 1.9 million tons, registering an increase of 4.3% compared to the same period of the previous year.
According to the National Construction Chamber, although through June 2024 142,000 sq. meters were authorized for residential construction (-28%), public works offset cement consumption.
Brazil
According to the National Cement Industry Union (SNIC), cement industry sales recovered in July, after closing the semester with good growth, where in nominal terms, 5.9 million tons were sold (+6.6%) compared to the same month last year.
Meanwhile, sales of the product in the first seven months of the year closed with an increase of 2%.
However, confidence in the construction sector remains optimistic, thanks to the general recovery of the Brazilian industrial sector. The social housing program Minha Casa, Minha Vida (MCMV) was the main driver of cement consumption.
Votorantim Cimentos ended the second quarter of 2024 with a higher net revenue from greater volumes and supported by geographic and product diversification. The Brazilian company recorded global net revenue of R$7 billion in the second quarter, a 1% increase compared to the same period last year.
In the second quarter, the company’s global cement sales totaled 9.6 million tonnes, a 2% increase compared to Q2 2023. Additionally, net profit reached R$515 million, 10% higher compared to the same period of last year.
“At the end of the first half of the year, our results demonstrate the resilience and effectiveness of our diversification and capital allocation strategy. We remain focused on strengthening our structural competitiveness, advancing decarbonization projects and new businesses, while maintaining our solid financial discipline. We stay on course with our investment plan, aligned with our global strategy and strategic mandate,” said Osvaldo Ayres, global CEO of Votorantim Cimentos.
In North America, net revenue reached R$2.2 billion in the second quarter, a decrease of 13% compared to Q2 2023, excluding the exchange variation, mainly impacted by the slowdown in demand, which was partially mitigated by the increase in prices at the beginning of the year. The adjusted EBITDA result in the region was R$613 million, compared to R$647 million in the same period of the previous year. The drop in operating results is due to lower volumes and higher variable costs from raw materials, mitigated, for the most part, by the increase in prices and better operational efficiency.
In Latin America, revenue grew 2% in the second quarter compared to the same period in 2023 in local currency, due to better volumes in Bolivia. The region ended the second quarter with R$29 million in adjusted EBITDA, 25% lower than Q2 2023, excluding the exchange rate variation effect, mainly due to the challenging market dynamics in Uruguay and maintenance timing.
In Brazil, Votorantim Cimentos’ net revenue in the second quarter of 2024 was $R3.2 billion, flat compared to the same period in 2023. Adjusted EBITDA reached R$566 million in the second quarter, stable compared to the same period of the prior year, due to a positive trend in new businesses and an improvement in variable costs
Colombia
The Colombian Institute of Statistics (DANE) stated that in July, cement production nationwide was 1,156,000 tons, which represented a negative variation of -5.4% compared to the same month in 2023. In the same month, 1,050,000 tons were shipped to the national market, which meant a decrease of 0.1% compared to July 2023.
In the period January – July 2024, cement production reached 7,677,000 tons, showing a decrease of 5.3% compared to the same period of the previous year. Shipments to the domestic market totaled 6,940,000 tons, resulting in a negative variation of 5.6% compared to the period January – July 2023.
In July 2024 compared to the same month in 2023, the total result of gray cement shipments was mainly explained by the decrease in the Concreteras channel (-3.4%), which subtracted 0.9 percentage points from the total variation of -0.1%.
Mexico
The Chamber of Construction (CMIC) confirmed through the new report that during the first four months of 2024, the industry observed an increase of 12% compared to the same period in 2023, when comparing April against April 2023 it registered an increase of 16.1%, also, in its monthly comparison with 8.8%.
The construction sector showed progress during the first four months of 2024, mainly thanks to large public works.
According to data from the Institute of Statistics (INEGI), the accumulated production of cement from January to June went from 20,122,000 in 2023 to 20,850,000 tons in 2024, registering a drop of 3.62%.
According to the new technical report of the Mexican Chamber of the Construction Industry, the main causes that generated this limited growth in cement production were the 12% increase in prices, in addition to the inflation of the construction industry, which was 3.7%.
In June 2024, the index that measures the price variations of materials in the construction sector registered a percentage variation of 1.05%.
Peru
The Association of Cement Producers (ASOCEM) confirmed that in July national production reached 913,000 tons of cement, which represents a decrease of 7% compared to the same month of the previous year.
Clinker production reached 884,000 tons during the month, an increase of 42% compared to the same month of the previous year.
In July 2024, national cement shipments were 1,022,000 tons, which represents a drop of 0.4% compared to July 2023.
In July 2024, the associated companies exported 10,400 tons of cement, which represents a drop of 6% compared to July 2023, while imports reached 21,000 tons, which represents a drop of 45% compared to July 2023.
Mauro Nogarin is Cement Products’ Latin American correspondent.
