CEMEX consolidates position in Philippine Cement Market
January 11, 1999
CEMEX, S.A. de C.V. (CMXBY:OTC) announced today that has reached an agreement in principle with JG Summit Holdings, Inc., a Philippine public company, to invest in APO Cement Corporation.
This transaction would allow CEMEX to increase its presence in the Philippine cement market, consolidating the company´s position as the country´s second largest cement producer.
CEMEX plans to acquire a 99.9% interest in APO in conjunction with Philippine investors through a Philippine company. As part of the agreement, and subject to nationality requirements, CEMEX will have the right to designate the members of the board of directors of APO. With a planned investment of US$400 million, CEMEX will obtain the economic rights of 99.9% of APO´s paid in capital.
Including an expansion that will be operational in less than 3 months, the company has 3.0 million metric tons of cement production capacity. APO has US$100 million in debt.
The investment will be financed by applying a portion of the US$280 million proceeds received from the sale of a plant and related assets in Spain, free cash flow and taking advantage of the debt capacity of CEMEX´s international operations.
Hector Medina, Executive Vice President of Planning and Finance stated: "This investment will strengthen our position in the Philippine market and Southeast Asian region. We expect to achieve significant synergies by combining the complementary capabilities of Rizal and APO, thereby increasing the profitability of our investment in the Philippines. Coupled with the completion of our recent investment in Indonesia, CEMEX has firmly established itself in two of Southeast Asia´s most strategic markets for cement."
Founded in 1906, CEMEX is one of the three largest cement companies in the world, and after the closing of the above-mentioned transaction, with more than 57 million metric tons of production capacity. Through operating subsidiaries well positioned in three different continents, CEMEX is engaged in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates and clinker. In addition, the Company is the world´s leading producer of white cement and the world´s largest trader of cement and clinker.