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‘Outlook is Stable’ for Cementos Pacasmayo according to latest Fitch Ratings

World Cement,

Fitch Ratings has affirmed the following ratings for Peru’s Cementos Pacasmayo:

  • Foreign currency Issuer Default Rating (IDR) at 'BBB-'.
  • Local currency IDR at 'BBB-'.
  • Senior unsecured US$300 million notes due 2023 at 'BBB-'.
  • The Rating Outlook is Stable.

According to Fitch ratings, this is a reflection of the cement producer’s ‘solid business position’ as the sole cement manufacturer in northern Peru. The likelihood of a multinational company entering the region is said to be low due to the small size of the market and logistical challenges. These factors have also limited the impact of imports in the region. The rating is also representative of the country’s economic and business environment, with a positive outlook for the cement sector in the medium-term.

In the 12 months to September 2014, Cementos Pacasmayo sold 2.3 million t of cement, retaining its national market share of around 22%. The company had a 27% EBITDA margin during the period, which Fitch expects to rise in 2016 as a result of the new Piura plant coming online. The new facility represents an investment of approximately US$386, with a CAPEX of US$150 still to be spent this year. The plant is expected to begin operating in 2H15.

In January – September 2014, Cementos Pacasmayo’s sales declined by 0.4% y/y. The fall was attributed to a decrease in concrete sales, although this was mitigated somewhat by a rise in quicklime sales.

The Peruvian cement association ASOCEM has not yet released the latest cement dispatch figures for December 2014. However, in November, companies associated with ASOCEM sold 929 000 t of cement on the domestic market and exported 27 000 t and 28 000 t of cement and clinker, respectively. In January – November 2014, dispatches increased very slightly by 0.57% y/y.

Adapted from press releases by

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