Egypt's Arabian Cement has entered into a €23 million joint venture agreement with Cementos Relampago, part of Brazil's Cementos La Union. According to a statement released by the company, Arabian Cement's Board of Directors has approved the plans to set up a new 230 000 tpa cement grinding facility in Northwest Brazil.
50% of the €23 million investment would be financed through debt and equity, while Arabian Cement's contribution would be €7 million, representing 60% of the total paid-in capital (according to the statement).
Arabian Cement has a production capacity of 5 million tpa and a market share of around 8% in Egypt, while Cementos La Union is one of Brazil’s leading cement manufacturers.
Arabian Cement Company earned net profit of US$16.3 million in the first quarter, as reported in its first earnings announcement since being listed on the stock exchange.
Brazil’s cement industry is expecting a massive boom as the country’s predicted infrastructure spend for the 2014 World Cup and the 2016 Olympics will be at least US$ 55 billion, on top of which the government’s plans to invest US$ 85 billion in housing. What will be the impact on the country’s cement industry?