CEMEX acquires minority participation in Philippine cement producer rizal
October 17, 1997
CEMEX S.A. de C.V. (OTC:CMXBY) today announced the acquisition of a 30% minority stake in Philippine company Rizal Cement Inc., confirming the successful completion of the negotiations previously announced. CEMEX also signed an agreement to provide technical and consulting services to Rizal.
The transaction closed on October 16 and was executed through a CEMEX subsidiary owned by Valenciana de Cementos.
The two plants for which CEMEX will provide technical assistance have a total cement production capacity of 2.8 million tons per year.
The Philippines is the third largest cement market in Southeast Asia, after Thailand and Indonesia, and accounts for 12% of the region´s total market. During the last ten years the Philippine market has experienced a compound annual growth rate greater than 10%.
CEMEX has had a presence in the region for the last few years through its Singapore office, which manages its trading activities as well as performes analysis of the local industry.
This acquisition is consistent with CEMEX´ geographic diversification and financial strategy and seeks to take advantage of the company´s operational expertise, which has been proven throughout its international operations. This investment in South East Asia enhances the stability of the company´s cash flow and generates greater flexibility in the financial structure.
CEMEX Investment Holdings Asia Pte. Ltd., a Singapore based subsidiary of Valenciana will be the company through which this acquisition and others in the region will be made. Although Valenciana de Cementos will supply the initial capital, in coming months institutional investors will provide up to 75% of the subsidiary´s total capital.
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 southwest region of the United States of America.