Buzzi Unicem has not had the need to raise additional finance, having traditionally had the strongest balance sheet of any of the top ten global cement producers, with a gearing level of less than 50%. At the end of September net debt amounted to 45.3% of shareholders' funds. Two modest disposals have raised €4.6m in the first nine months, while there have been no acquisitions.
The US$367m investment in the integrated cement works at Selma, Missouri, on the banks of the Mississippi, led to the commissioning of the new kiln in August, raising the annual capacity to 2.3Mt, a net increase of 1.0Mt, but other plants have been closed on a permanent or temporary basis. The other new capacity being added this year was the installation of additional milling capacity at the Esch-sur-Alzette works in Luxembourg, raising the grinding capacity there from 0.9Mt to 1.5Mt in October.
The completion of two investments in Russia and the Ukraine next spring will substantially reduce the group's cost base in those countries. The addition of 1.2Mt of dry capacity at Suchoi Log works will permit the temporary closure of some wet capacity until demand improves for what will be a 3.6Mt plant, while the coal mills in the Ukraine will enable the shift away from expensive gas imports from Russia to domestically produced coal. The weaker demand has put the construction of additional white cement capacity in Wiesbaden and additional grey cement plants in Russia and the Ukraine on hold until further notice. The Mexican joint venture is building a new 1.3Mt per annum works in the state of Veracruz for completion towards the end of next year.
Group cement volumes are expected to decline by around 16% in Italy and by close to 15% in Germany, Luxembourg and the Czech Republic. Poland is showing the best performance in Europe, with a reduction in the order of 7%. German and Dutch ready-mixed concrete deliveries fell by around one-fifth. Cement volumes are down by around 45% in the Ukraine and by a bit over 35% in Russia. Russian cement prices have seen the strongest deterioration at some 30%, while modest price reductions (low single figures) were seen in the Ukraine and in Italy. The Italian price pressures could drag on into next year, only partially offset by a reduction in the cost base, and there are, as yet, no signs of improvement in either Russia or in the Ukraine. Elsewhere in Europe, prices improved, led by Germany. US volumes are expected to be down by 20% or more, with prices being slightly down on average, but quite volatile in some areas. Mexico has seen improvements in both local currency prices and volumes, though the volume improvement may turn out to be no more than marginal.
Cement shipments in the first nine months of 2009 fell by 20.6% to 19.7Mt, while ready-mixed concrete deliveries were slightly less badly affected with a 18.9% reduction to 10.5m m³.