Camargo Corrêa creates InterCement holding
Valor Econômico
The cement business of the Camargo Corrêa group, started in 1967 with a small plant in Apiaí, interior of São Paulo, gains a new corporate identity today. In line with the international expansion plan, it was created the holding company InterCement Participações, which will be its new brand and set the whole investment strategy of the conglomerate in the area. In the new configuration, all assets of the group in the area of cement will be under InterCement Participações. The 33% interest in the Portuguese Cimpor migrates in May from the umbrella of Camargo Corrêa S.A., holding of all businesses of the group, to the new holding company, as well as the operations in Angola, Bolivia and Paraguay. The last one to be transferred will be Argentine Loma Negra, acquired in 2005. The new name is under study.
According to José Edison Barros Franco, President of InterCement Participações, the plan of the Camargo Corrêa group is to have a cement company with a strong presence in some regions of the world, with emphasis on Latin America and Africa, where are the new frontiers of expansion of the economy, and of cement, and opportunities for investments in the increase of the offer. In those two regions, said the Executive, the growth of the demand is above the world average of the cement industry. Already thinking about it, the InterCement brand name was registered in 43 countries. Besides the regions mentioned, also in some European countries.
The group, which in 2010 invested R$ 3.5 billion (US$ 2 billion) on the acquisition of 33% of the share capital of Cimpor - ninth largest in the world -, intends to be among the 20 largest international producers of cement until the end of 2012. That means starting producing and selling at least 20 million tons a year. The Executive admits it will not be obtained only with organic growth - setting up of new plants and expansion of the current ones. "It will certainly go through a major acquisition of assets", said Franco, recalling they currently rank 35th.
The creation of the new holding company, he admits, can be a step to the listing of its shares on the stock exchange. "As we have a fairly expressive investment plan ahead that is an option to seek capital". The company is prepared for that, but there is nothing set at the time on such issue, he says. The company, which is already an S.A. (joint stock company) has governance committees and publishes its financial statements, has 99.9% of its capital held by the holding company of the group.
From 2011 to 2015, without considering acquisitions, InterCement plans to invest R$ 6.2 billion (US$ 3.9 billion) in new plants and in the increase of the capacity of the current facilities. Brazil and Argentina will receive the largest part of the package. In the neighbor country it is foresee a new plant in the Northwest or North of the country, new expansions and more logistics. In Brazil, with strong operation in the Southeast, it wants to enter the North with the setting up of two plants: one in Amazonas and another in Pará. One of the investments should be announced still this quarter. As regards the Northeast, there is nothing planned due to participation in Cimpor. The subsidiary Cimpor Brasil has strong presence in the region, besides in the Midwest and South. One of the important projects in progress, with a minimum investment of US$ 300 million, is that of the plant in Angola.
In 2010, the company sold 11.6 million tons of cement - 6 millions in Brazil, 5.5 million in Argentina and 100 thousand in Paraguay. That yielded a net income of R$ 2.47 billion (US$ 1.5 billion) and profit of R$ 226 million (US$ 128.4 million). The operating result was impacted by the appreciation of the value of the Real against the Argentine Peso and because of the rising costs. This year, InterCement - leader in Argentina with 54% of the market and third in Brazil, with 10.2% -projects sales of 12.8 million tons. Cement is among the leading businesses chosen by the group to grow, along with construction and engineering, concessions of energy and road concessions.