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Building Materials Maker Holcim Banking On U.S. Reshoring Boom

Building materials maker Holcim banking on U.S. reshoring boom

Building materials maker Holcim banking on U.S. reshoring boom

The logo of Swiss cement maker Holcim is seen at its headquarters in Zug, Switzerland October 26, 2022. REUTERS/Arnd Wiegmann/File Photo ZURICH, July 27 (Reuters) – Holcim said on Thursday it expects to set another record for sales from North America this year as the world’s biggest cement maker goes after new business resulting from companies bringing production home and taking advantage of government subsidies. The forecast came as the company (HOLN.S) posted better-than-forecast quarterly results. Manufacturers are shifting production to the United States to avoid supply chain log jams while rising tensions between Washington and Beijing are making many firms wary of investing in China. Advertisement · Scroll to continue The Biden administration has also directed billions of dollars in federal funding to upgrade aging infrastructure and boost clean energy investment while a bill subsidising chip making has attracted huge projects. Holcim has set up an internal programme to win contracts for cement, roofing and other building materials needed for new factories and other buildings. “All the onshoring, all the new wind parks, all the new battery factories and all the new manufacturing for white goods and automotive, that all moves now strongly in the U.S,” Chairman and Chief Executive Jan Jenisch told reporters. Advertisement · Scroll to continue Holcim has already won more than 70 infrastructure projects for the 2023-2026 period, which it expects to add 5% extra in organic growth per year. The Swiss company said North America was on track to reach around 40% of group sales this year, increasing to roughly $12 billion, from $10 billion last year. “We already achieved record results in the North America last year and we are going to improve that further this year,” Jenisch said. Advertisement · Scroll to continue North America has also been the focus of Holcim’s acquisitions, with the company’s two biggest deals in the last two years coming in the United States. The region offered higher profit margins than other regions and less political risks than emerging markets, said Bank Vontobel analyst Bernd Pomrehn. “A higher U.S. exposure enables more attention by U.S. investors, who are used to higher multiples for this industry,” he added, saying the development could boost Holcim’s share price. Meanwhile long-term outlook for the U.S. cement and roofing market is positive, added Martin Huesler analyst at Zuercher Kantonalbank. “The fact that in the U.S. cement demand exceeds local supply also bodes well for pricing,” he said. Reporting by John Revill, Editing by Friederike Heine, Josephine Mason and David Evans Our Standards: The Thomson Reuters Trust Principles.

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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