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Cementos Portland Valderrivas adjusts its business plan

World Cement,

Revised business plan

Spain’s Cementos Portland Valderrivas’ Board of Directors has approved revisions to the Group’s 2012 – 2021 business plan. As turnover from its international business is not enough to mitigate low levels of demand in the Spanish market, the Plan NewVal has been ramped up. Cement demand in Spain decreased by 29% in 1Q13, after falling to 13.5 million t in full-year 2012 according to Oficemen.

The adjusted plan aims to lower costs and restore profitability whilst adapting the Group’s capacity and structure in line with the continued decline of the Spanish market. The measures include adapting cement plant activity in Spain, which will some include temporary stoppages. The concrete, aggregates and mortar businesses in the country will be downsized, with activity limited to profitable and strategic sites. In addition, the Group’s corporate structure will be streamlined with regards to personnel and offices. According to forecasts, the revised measures will help the Group to recover profitability once demand normalises in Spain.

Results for 1Q13

Cementos Portland Valderrivas cut its losses by 10.6% to €27.7 million following the introduction of the Plan NewVal. This figure excludes accounting gains from an asset swap in February with CRH, which saw the group exchange its stake in Cementos Lemona for CRH’s 26.34% share in Uniland. If this is included, the Group recorded a €61.6 million net attributable profit in 1Q13, up from a €31 million loss in 1Q12. The asset swap with CRH generated a profit before tax of €90 million. A further €15 million in capital gain was generated when Cementos Portland Valderrivas sold its Ipswich terminal, UK, to CRH for €22 million.

Turnover declined by 22% to come in at €121.8 million in1Q13. Domestic net sales dropped by 38.6%. However, net sales in the US were up by 18% and grew by 8% in Tunisia, mostly due to increased export levels to Libya and Algeria. Sales in Spain now make up 43.4% of the Group’s business, with 56.6% of turnover deriving from international business.

Adapted from press release by Louise Fordham.

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