lafarge – raw materials and shipping -...
TRANSCRIPT
Lafarge profile 2013
� A World leader in building materials
� Major player in the cement , aggregatesand concrete businesses
� We contribute to the construction of cities throughout the world with innovative solutions, providing cities with more housing, and ensuring that they are more compact, more durable, more beautiful and better connected
� Operating in 62 countries
� 64,000 employees
� €15.198 billion of annual sales
� 1,636 production sites
� Listed on the Paris Stock Exchange
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A well-balanced geographical portfolio
North America
€3,137m 7,752
Latin America
€869m 2,669
Middle East and Africa
€4,067m 19,055
Western Europe
€3,256m 14,431
Central and Eastern Europe
€1,145m 6,086
Annual sales Employees
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Asia
€2,724m 14,094
Cement: key figuresCement | A world leader
Sales
€9,657m
Employees
38,000
Production sites
155
Operatingin
56 countries
14 %
34 %
7 %
9 %
12 %
24 %
Sales by region
Western Europe Middle East and Africa
Latin America Central and Eastern Europe
North America Asia
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Cement , a hydraulic binder and a key ingredient in concretes and mortars, is mainly used by the building and public construction industries
Aggregates and Concrete: key figuresAggregates and Concrete | World no.2 and World no.4
Sales
€5,451m
Employees
25,000
Production sites
1,481
Operatingin
37 countries
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41.1%
2.8%
1.0%9.9 %
45.7%
1.8 %Aggregates sales by region
34.6%
16.5%3.8%3.4%
32.1%
9.6%Concrete sales by region
Western EuropeLatin AmericaNorth America
Middle East and AfricaCentral and Eastern EuropeAsia
Solid foundations for growth (1/2)
� A geographical portfolio with well-balanced positio ns and a strong presence in emerging countries. � Share of sales in emerging markets: from 32 % in 2005 to 58 % in 2013
� None of these countries account for more than 5% of our sales
� Focusing on our core businesses� Cement , aggregates and concrete
� High potential for development and significant prospects of synergies
� A country-based organization� To be close to our markets and customers
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Solid foundations for growth (2/2)
71%Of sales outside Europe
A geographical portfolio with well-balanced positionsBreakdown of sales by region
Focusing on our core businessesBreakdown of sales by business
A strong presence in emerging markets
21.4 %
26.9%
5.7 %7,5 %
20.6 %
17.9%
Western Europe Middle East and AfricaLatin America Central and Eastern EuropeNorth America Asia
63.5%
35.9 %
0.6 %
Cement Aggregates & concrete Others
68 %
42%32 %
58 %
2005 2013Sales in developed marketsSales in emerging markets
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What do we need to produce cement and concrete?
� Four Elements to arrive at clinker:
� + additives to have cement:� Gypsum� Flyash� Puzzolane� Slag…� ….
� +Water, Sand, Gravel to arrive at concrete
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+ Energy (Coal, Petcoke, Alternative Fuels (Waste), Gas, Oil)
Logisitcs is a Key Factor for the Raw Materials
� Raw Material Consumption of Lafarge� 470 Mmt of Raw Materials� 10 Mmt of Coal and Petcoke
� Production of Lafarge� 136.8 Mmt of Cement
� Means of transportation:� Pneumatic vessels (Cement, Cementicious Materials)� Dry bulk vessels (Iron Ore, Bauxite, Slag, Gypsum, Coal, Petcoke, Limestone….)
from small coasters up to small capesize vessels� Barging (River and Ocean)
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Lafarge Shipping
� Cementia owns and operates a fleet of pneumatic vess els (11 in 2014/ 14 in 2015)
� Cementia charters all shipping activities for seabor ne trades and run operations on behalf of Cementia Trading or the orde ring entity � Shipments per year of different vessel sizes
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All of Lafarge Shipping is handled by Cementia
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Numbers of shipments per vessel sizeMajor FOB and CFR regions
Lafarge Solid Fuels
� In 2013 Lafarge founded Lafarge Energy Solutions to look after all seaborne trades.
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Ocean freight based Solid Fuel Activity
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2013 2014 2015
1.4 Mmt
3.8 Mmt4.5 Mmt
2016
35%
22%
15%
9%
19%Europe/Med
Africa
Americas
Indian Basin
Asia
Ocean freight based Solid Fuel Activity
World Wide Petcoke Market 124 m Mt
� Market Segmentation for Petcoke
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• Petcoke is a refining byproduct that has to move• No transparent market index, no futures, no direct hedging• Price is at discount to more noble fuels depending on the
utilization of the product.
~ 36 m Mt
0-4% Sulphur
~ 14 m Mt
4-5,5% Sulphur
~ 74 m Mt
5,5-8% Sulphur
Leading Commodity is Coal
� Prices on Index basis (FOB Petcoke, NEWC, API4, CFR for API2)
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Petcoke traces coal, but with poor correlation
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Importance of Freight
World Wide Petcoke Market Trade Flows
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Major Producing, Exporting and Consuming Markets
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“Spezialized”Market
“Conventional”Market
“Swinging Market”Market
Petcoke Benchmark vs NEWC Coal (thermal)
� Calculated Graphs based on average Pace +Fixed frei ght portions
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Average Pace+Freight NEWC CFR China
Fuel Grade – Supply and Demand 2014
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Global Balance between Markets in Mmt: slight overhang in supply
Conclusion
� The times where we were only looking at shipping as a simple part of a supply chain are over.
� Deciding Strategies for Trading or Raw Material Sup plies goes hand in hand with proper planning and a proper shipping str ategy, including hedging strategies
� Shipping decides where Petcoke can go and where not, and whether trades can happen or not. Fluctuation in FOB pricin g is lacking behind freight evolution.
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