CEMEX negotiates acquisition of minority interest in two plants in the Philippines
September 29, 1997
CEMEX, S.A. de C.V. (OTC: CMXBY) announced today that it is currently negotiating to acquire a minority 30% interest in Rizal Cement Inc. a Philippine Corporation which owns several cement plants. The firm is also negotiating an agreement whereby CEMEX would give technical assistance to two Rizal´s plants.
These two plants have five wet-process and one dry-process production lines.
The Philippines is the third largest cement market in Southeast Asia and accounts for 12% of the regional market. During the last ten years this market has experienced a compound annual growth rate greater than 10%.
This move, consistent with CEMEX´ geographic diversification strategy, seeks to take advantage of the company´s operational expertise, which has been proven throughout its international operations.
CEMEX is currently in the process of establishing an investment fund for its geographic diversification projects in Southeast Asia, which will allow the company to participate in this high-growth region without a substantial capital investment.
The fund, to be managed by CEMEX, will be comprised of a small group of institutional investors and CEMEX. The purpose of the fund is to invest in cement projects (greenfield plants or acquisitions) and in certain cases, joint-ventures may be entered with local partners in each country.
CEMEX´ share in this fund will be in the range of USD$100 million. The total fund will be USD$300 million including the participation of the other institutional investors. The amount of the acquisition in the Philippines will be less than USD$100 million.
Founded in 1906, CEMEX is the largest cement producer in the Americas and one of the three most important producers of cement in the world, with a production capacity of approximately 50 million metric tons per year. CEMEX is the market leader in its operations in Mexico, Spain, Venezuela, Panama, and the Dominican Republic; and has a significant presence in the markets of Colombia, the Caribbean, and the southern region of the United States of America.