2023, the total profit of China's cement industry is roughly estimated to be about 32 billion yuan, down more than 50% from the same period last year. Also in 2023, Holcim Group's annual recurring profit before interest and tax reached 4.760 billion Swiss francs (equivalent to about 39 billion yuan) and 4.58 billion Swiss francs (equivalent to about 36 billion yuan) after deducting financial expenses, setting a record for its performance.
That is to say, more than 2900 cement enterprises in China have not "done" a Holcim Group! Why is Holcim able to achieve such excellent results? Can the future development of China's cement industry learn from Holcim?
Scientific market layout and M & a strategy
Holcim actively shifts from traditional quantity-driven to value-driven, achieves rapid growth in the most attractive markets, and enhances its competitiveness through rigorous M & a activities. In
2023, Holcim expanded its footprint in North America and Europe. Holcim made 3 reinforcement acquisitions in aggregates and ready-mix concrete in North America and 12 reinforcement acquisitions in aggregates, ready-mix concrete and building demolition materials in Europe. In addition, Holcim has signed divestment agreements in South Africa, Uganda and Tanzania. After the
reinforcement acquisition, Holcim achieved steady growth
in sales and profits in North America and Europe, and after partial withdrawal, Holcim's sales in the Middle East and Africa declined sharply, but its profit margin increased
significantly. Strengthening the main business of traditional cement, aggregate and ready-mixed concrete is still the key reinforcement direction of Holcim. Not only that, while expanding its core market scale in North America and Europe, Holcim has also resolutely cleared non-performing assets in areas with poor efficiency to achieve the effect of increasing income and reducing losses.
Since 2018, Holcim has achieved 97 value-added transactions through a rigorous M & a approach, including six major acquisitions of solutions and products and 72 bolt-on transactions, while completing 19 divestments.
It can be seen that cement enterprises need to comprehensively examine their own development model, ensure that the market layout, enterprise strategy, demand space and resource conditions are in line with the long-term planning of enterprises, timely adjust the industrial structure and business layout in line with the changes of the market, and "cut the Gordian knot" in the face of non-performing assets, in order to achieve good development of enterprises.
Diversified development, creating new growth points
and achieving the goal of double carbon is a major event for all mankind in the world. The building materials industry has an unshirkable responsibility for decarbonization, which is particularly valued in Europe and North America, where developed countries are concentrated. Europe and North America are the core business markets of Holcim. Holcim is deeply in line with the needs of the market and is committed to promoting decarbonization as a driving force for profit growth.
From the performance report disclosed by Holcim, we can see that "solutions and products" have surpassed ready-mixed concrete to become Holcim's third largest source of profit. Moreover, Holcim plans to continue to expand the project.
"Solutions and products" mainly refers to providing more comprehensive and innovative building materials solutions and related products. Including but not limited to: low carbon and environmental protection solutions (such as low carbon cement, low carbon concrete, CCUS, etc.), recycling product technology (such as renewable aggregate, etc.), value-added products and services (such as customized concrete formula, engineering consulting services, etc.).
Holcim's "Solutions and Products" business segment not only meets the sustainable development needs of its core market, but also forms diversified products and services to meet different market segments on the basis of its traditional main business, which undoubtedly consolidates Holcim's strong profitability.
Decarbonization and sustainable development are also unavoidable obstacles for domestic cement enterprises. As the cement industry is about to be incorporated into the carbon market, whether it can achieve the combination of sustainable development and commercial benefits, create a new business growth pole, and achieve diversified development may become the key to the successful transformation of cement enterprises and the industry trough.
To sum up, Holcim Group has been able to achieve outstanding performance for the following two important reasons:
1. In-depth market research, in-depth integration of the requirements of the times, corporate responsibility and customer needs, consolidation and development of the main business while expanding products and services, to create new business growth points;
2. Integrate resources through mergers and acquisitions, accurately locate and expand the most valuable market, timely dispose of non-performing assets, and optimize the asset structure, so as to achieve sustained and healthy growth in the face of challenges.
At present, China's cement industry has serious overcapacity, the impact of peak staggering production on the supply side has declined significantly, the "competition and cooperation relationship" formed over the years has broken down, and the pressure of industry operation has doubled. How should China's cement industry get out of the predicament and face the new cycle? On March 28-29, China Cement Network will hold the "13th China Cement Industry Summit and TOP100 Award Ceremony" in Hangzhou, during which awards will be given to top 100 cement and supplier enterprises, and experts and scholars will be invited. China Railway and other construction units jointly discuss the new development trend of the cement industry in the future, and work together to create the future!
