Fast consumption forces Votorantim to expand plants
Valor Econômico - 07/01/2008
Under the pressure of the strong demand and of the federal government's, which fears new shortage in the supply of cement, the Votorantim group announced yesterday an additional allocation of R$ 1.45 billion (US$ 906.3 million) in its program of investments to increase the offer of the product. This value will be invested until 2011 in four new lines of production to be set up adjacent to the already existing plants, adding 6.7 million tons of capacity to the industrial park. Last August Votorantim had already launched a package of R$ 1.7 billion (US$ 880.8 million) in new plants, expansions and reactivation of ovens until 2010. With that, the group would be able to produce 33 million tons, with units spread from the State of Pará to the State of Rio Grande do Sul and setting ups of units in the interior of the country, achieving the States of Tocantins and Rondônia. The company planned an increase of 9% in consumption; however, the behavior of the demand so far signals an increase of 12% for this year. "Cement will not be a limiting factor of the economy growth", declares Walter Schalka, president of Votorantim Cimentos. In Schalka's opinion, Votorantim, as a leader of the national market with 40% of sales, has to be ahead of the programs for the expansion of the sector, but he informed that the decision in the group was taken with some concern. One of the "dark clouds" in the horizon is the increase of inflation that, on its turn, can lead to more increases in the interest rate and consequently to the retraction of credit. The second surge of expansion of VC includes additional lines in the plants of Nobres (MT), Sobradinho (DF), Salto de Pirapora (SP) and Rio Branco do Sul (PR). The investments will be ready between the first half of 2010 and the second half of 2011, generating 1.7 thousand indirect and direct jobs. The forecast of the company is that the market will grow at a pace of 7% to 8% a year from 2009 to 2011, after the two-digit index in 2007 and this year. Thus, the forecast is to reach 65 million tons within three years, and stabilize at such level. For 2008, the estimated volume is 50 million tons, reaching a new record of the sector. VC expects to produce 42% of such amount.