Sales volumes

Cement sales volumes exceeded the previous year’s level, backed by a stronger economy in North America and economic growth experienced in some countries in Asia Pacific such as India and the Philippines. This progress could offset adverse situations in Latin America where some economies remained in a low gear, as well as in Europe, which still faces economic headwinds as the legacy of the global crisis. Consolidated cement sales were up 1.0 percent to 140.3 million tonnes, a like-for-like increase of 1.4 percent or 1.9 million tonnes.

Some economies in the Asia Pacific Group region remained on course to record growth. As a consequence, cement sales volumes rose by 1.4 percent or 1.0 million tonnes. At constant scope of consolidation, cement sales volumes increased by 2.0 percent or 1.4 million tonnes. In the Philippines, the reconstruction and rehabilitation efforts of the government in areas affected by natural disasters supported the demand for infrastructure projects and residential buildings. In addition, both the government and the private sector invested in infrastructure projects while some companies were venturing in mining and power plants. As a result, Holcim sales volumes increased significantly versus last year. The situation in India proved to be more promising following the elections, and construction activities started to pick up gradually as the government kicked off new projects in order to stimulate growth. Both Group companies in India have benefited from this rebound. Growth of cement sales in Indonesia is estimated to have slowed down in 2014 amid uncertainties brought about by the “political year”, which led to the postponement of various infrastructure projects. However, Holcim sales volumes improved over the last year, supported by additional volumes from the newly commissioned Tuban cement plant.

In Latin America, the economic situation remained uneven in 2014 as solid development in some smaller economies was coupled with slower growth in larger countries such as Brazil and Argentina – with the latter being affected by the debt crisis. Cement sales volumes decreased by 1.5 percent or 0.4 million tonnes and were not impacted by changes in the Group structure. While Holcim Ecuador achieved an all-time record in 2013, lower consumption of bagged cement and delays in large public projects caused by government liquidity constraints led to cement volumes decrease for the local Group company in 2014. Holcim Argentina suffered from a volume drop in cement, as the debt crisis strongly affected construction markets, leading to a significant fall in demand for building materials. Drops in some countries were partly mitigated by the volumes improvement experienced in Brazil, where Holcim benefited from its position in the livelier construction markets of the south-east, as well as in Mexico. The Mexican construction sector benefited from the National Infrastructure Plan, which boosted public sector investment and provided financial support for construction activity.

Europe witnessed a slow and fragile recovery. GDP growth began to slow in spring 2014 and remained very modest, below the expected levels. Construction markets were affected by the level of uncertainty felt, which caused demand to slow down following a strong first quarter with lively building activity. Cement sales volumes fell by 1.0 percent or 0.3 million tonnes. A change in Group structure did not impact cement sales volumes. The largest volume drop was experienced in Azerbaijan; the local Group company faced with market pressure from new entrants and increasing imports could not maintain the high levels of volume growth recorded in the last years. In Italy, Holcim sales volumes were down as a result of the sluggish demand for building materials being exacerbated by a further contraction of economic output in 2014. These drawbacks could however be partly compensated by significant volume growth in Russia – despite political tensions – and in Spain, where the Group company was able to increase cement sales on the strength of export deliveries. It is also worth mentioning the cement volume growth in Holcim Romania, which came about thanks to larger projects in the Bucharest area.

North America recorded growth in cement sales volumes of 11.4 percent or 1.3 million tonnes, mostly stemming from the United States, where economic activity gathered momentum as the headwinds from fiscal policy waned and household consumption gained speed. Holcim benefited from particularly strong demand in the Northern Central region and a new monthly sales record was reported by the Group company over the last 7 years.

Cement shipment in Africa Middle East picked up by 5.4 percent or 0.4 million tonnes. A change in Group structure impacted volumes by -0.8 percent or -0.1 million tonnes. In Morocco, the national cement consumption fell by 5.4 percent over the last twelve months however, the Group company achieved volume growth thanks to clinker exports to the Ivory Coast. Sales volumes contraction in Guinea, Mauritius and Lebanon partly offset the regional growth.

Aggregates sales volumes decreased by 0.9 percent to 153.1 million tonnes. On a like-for-like basis, the decrease amounted to 0.4 percent or 0.7 million tonnes, a development partly explained by the closure of unprofitable business units notably in Latin America. The region posted a drop of 26.4 percent or 2.7 million tonnes. Shipments of aggregates fell by 1.0 percent or 0.7 million tonnes in Europe. Significant setbacks were experienced in France, where the lack of governmental stimuli severely hampered demand for construction and infrastructure projects. Volumes in Asia Pacific retracted by 1.5 percent or 0.4 million tonnes, hindered by fewer projects in the resource sector at Holcim Australia. Africa Middle East recorded a contraction of 0.2 million tonnes or 8.7 percent in aggregates volumes. North America was the only region to record substantial growth with 7.7 percent or 3.3 million tonnes.

Sales of ready-mix concrete declined by 6.3 percent to 37.0 million cubic meters. Adjusted for changes in Group structure, the drop amounted to 4.9 percent or 1.9 million cubic meters. With the exception of North America which posted a moderate growth of 2.2 percent or 0.2 million cubic meters on a like-for-like basis, all Group regions witnessed a negative development. Lower volumes primarily resulted from restructuring initiatives implemented in Latin America to refocus the ready-mix concrete business. The region reported for the financial year a decrease in ready-mix concrete sales of 20.0 percent or 1.6 million cubic meters with the largest volume drops being recorded mainly in Mexico, Chile, Brazil and Ecuador. In Europe, the solid growth in the United Kingdom could only mitigate volume losses in Belgium, France and Italy which suffered from the sluggish demand; at a constant scope, ready-mix concrete volumes fell by 2.5 percent or 0.3 million cubic meter. Singapore and Vietnam contributed most to the volume decrease of 0.6 percent or 0.1 million cubic meters in Asia Pacific. The volume contraction of 15.0 percent or 0.1 million cubic meters recorded in Africa Middle East was mostly stemming from Lebanon and resulted from the disposal of a plant and a general slowdown of the business, especially in the Beirut area.