This week, Cimsa (Sabanci Group) has made an agreement to acquire Mannok in Ireland in a EUR330m deal. With this acquisition, the Turkiye-based cement producer will increase its European operations in the cement sector and follows on from its expansion in Spain and the USA.
The decision to enter the UK and Irish markets is part of Cimsa's broader strategy to transition from a cement producer to a 'building materials company', as well as to make the jump from 'local to global producer' and reshape its products from 'grey to green'. A further goal of Cimsa is to generate 70 per cent of its revenue in foreign currencies.
Commenting on the agreement, Burak Orhun, president of Sabançi Holding's Material Technologies Group, stated: "The acquisition of Mannok, once finalised, will be perfectly aligned with our transformation strategy. It allows us to expand our footprint in the UK and Irish markets, which are critical for our growth. By incorporating Mannok's advanced product lines, we can offer more diversified and value-added solutions to our customers. This acquisition also supports our goal of transitioning our portfolio from grey to green, in line with our commitment to sustainability."
Mannok aligned with Çimsa’s growth strategy
Mannok operates in two main business segments: building materials and packaging products. With manufacturing facilities in the Republic of Ireland and Northern Ireland, and a comprehensive sales and distribution network across the Republic of Ireland, Northern Ireland and Great Britain, Mannok is well-positioned as one of the regional leaders in the industry. The company offers a wide range of products, including cement, cement-based products (such as roof tiles, precast, and concrete), insulation materials, and sustainable plastic packaging, employing over 800 people.
Mannok has made significant strides in energy efficiency, saving 59mkWh of energy at its grey cement plant by early 2024, thanks to efficiency investments initiated in 2017. Its two cement plants include the 0.45Mta Derrylin works in Northern Ireland and the 1.4Mta Ballyconnell plant in Ireland.
Çimsa widens its options
The emergence of Çimsa in the UK, Ireland and Spain's building materials sectors gives the the company a foothold in regions where Carbon Border Adjustment Mechanisms (CBAMs) are being prepared. Both the UK and European CBAM will protect local producers from cheaper imports and producers from outside of the EU and UK who manufacture cement with higher carbon emissions. By buying up cement capacity in Ireland, Spain and the UK, Çimsa becomes a domestic player operating within the carbon regimes, limiting dependence on imported sources of cement and clinker.
Nevertheless, Çimsa's operations in Türkiye are making good progress with regards to decarbonisation. In July the company obtained an Environmental Product Declaration (EPD) certification for its low-carbon grey cement products, such as IzoPower 42.5, manufactured at the Afyon, Eskisehir and Mersin cement plants in Türkiye. This expands on the EPD certificates the exporter already has for Super White and calcium aluminate cements.
In addition, the Eskisehir cement plant in Turkey will lower its CO2 emissions further after receiving a EUR25m loan from the European Bank for Reconstruction and Development (EBRD) to finance a 14.2MW solar power plant and a waste heat recovery system. The Afyon Cement works in Türkiye and Buñol plant in Spain already have solar power plants installed. Çimsa has set a target to increase its electrical energy generated from renewable energy sources from 58.2 per cent in 2022 to 80 per cent by 2030.
Çimsa is not the only Turkish company to venture into the UK market. Fellow competitor Medcem has approached the UK market slightly differently by acquiring Brett Concrete and opening up terminals in the UK to handle various cementitious products.