Displaying items by tag: Joint Venture

France: CRH has sold its stake in a French joint venture company called Doras to its partner, Samse, for just under Euro37m. Doras operates specialist and general builders merchants and is particularly prominent in the Burgundy and Franche Comté regions in eastern France. CRH has now sold its 45% stake in the company to the Samse Group, which already holds a 55% share in the firm, for Euro36.6m. The move was recently given the green light by the Competition Authority.

India: Jaypee Group is reportedly in talks with HeidelbergCement and JSW Cement to form a joint venture that will control the majority of its cement plants. The plan envisages a separate joint venture entity that will house around 20 – 22Mt/yr of Jaypee's operational plants in Uttar Pradesh, Himachal, Uttarakhand, Andhra Pradesh and Chattisgarh. The venture may exclude Jaypee's first cement plant in Rewa, Madhya Pradesh, which has approximately 3Mt/yr of cement production capacity.

Mexico: Cemex has created an energy division, Cemex Energia, to take advantage of Mexico's landmark energy reform and launch power projects that could provide up to 5% of Mexico's electricity requirements within five years.

Cemex has struggled with a large debt load and cost-cutting since an ill-timed US$16bn takeover of Australian rival Rinker in 2007, when the US housing market nosedived. In recent years, Cemex has been slashing costs and has looked to sell assets to regain a coveted investment grade rating. Cemex executives are hopeful that Mexico's energy reform will be a lucrative new path.

"We are very enthusiastic about Mexico's energy sector future and we will leverage on our experience in developing projects that benefit the country," said Cemex CEO Fernando Gonzalez.

Cemex will invest US$30m in Cemex Energia in the next five years. Cemex has also signed a joint venture agreement with Pattern Energy Group Inc, which owns wind power projects, to create 1GW of renewable power in Mexico in the next five years. Pattern said that new legislation in Mexico, which mandates that 35% of Mexico's power must come from renewable sources by 2024, prompted it to expand.

China: Gezhouba Group Cement, a subsidiary of China Gezhouba Group, has signed an agreement with Hubei Zhongxia Cement to set up a joint venture to restructure the assets and businesses of Zhongxia Cement.

The joint venture, with a registered capital of US$190m, will be engaged in production and sales of cement, clinker and fine slag powder and opencast mining of limestone for cement uses. Gezhouba Cement will hold 51% of the venture and Zhongxia Cement will hold the remaining 49%. The venture will acquire the entire current assets of inventories for cement production and operation of Zhongxia Cement after establishment.

Australia: Terra Cement, a sustainable cement technology company, has signed a joint venture agreement with Ore Mines International (OMI) in South Australia to form a new company, called Terra Cement Australia (TCA). TCA will engage in the marketing of Terra's proprietary process (patent pending) for producing sustainable cement using ash in Australia, New Zealand and Papua New Guinea.

"As collaborators with a global reach and local market knowledge, industry leaders such as OMI play a significant role driving innovation to market," said Henry Val, CEO at Terra. "OMI's expertise enables rapid commercialisation by freeing us to focus on the development of our core technology. Likewise, our technology gives OMI access to a large, new market that would not exist without Terra."

TCA will convert existing cement plants and mixing facilities to produce hydrogel made from fly ash in Australia. When organic proprietary liquids are added, sustainable cement is produced, which is stronger, more durable and cures faster than Ordinary Portland Cement. No thermal energy is used and no carbon dioxide emissions are produced during the manufacturing process.

OMI has conducted preliminary testing of the ash available in Australia and has determined it to be suitable for the production of its cement. OMI has ordered the design for the conversion process for its existing facilities and will complete the process in the near future. TCA, as a joint venture, will begin its operations by the end of 2014.

Egypt/Brazil: Egypt's Arabian Cement has entered a joint venture for a cement grinding plant with Brazil's Cementos La Union. The project is worth US$28.8m.

Arabian Cement's board of directors approved the venture with Cementos Relampago, an affiliate of Cementos La Union, 'to establish a cement grinding plant in Northwest Brazil with a total capacity of 230,000t/yr.' The US$28.8m investment cost will be financed 50% through debt and equity. Arabian Cement's contribution would be US$8.76m, representing 60% of the total paid-in capital.

Mexico: Lafarge has announced plans to sell its 47% stake in its Mexican cement business to Mexico's Elementia SA de CV for US$225m in cash. Lafarge and Elementia operate three cement plants in Mexico, with the former owning 53% of their joint venture. The transaction is pending regulatory clearance and has to fulfil a number of customary closing conditions. Lafarge said that the proceeds from the sale would be used to reduce the company's net debt.

Japan/China: Japan’s Taiheiyo Cement has dissolved a joint venture agreement with Xinjiang Tianye in Xinjiang, Chinese in response to Chinese government efforts to reduce excess capacity in the sector.

Taiheiyo Cement Investment, the company’s Chinese arm, signed the agreement with Xinjiang Tianye in December 2012. After receiving government approval, they set up a joint venture in April 2013, planning to produce 1.2Mt/yr of cement. However, in 2013 Beijing increased measures to curb investment in the cement industry to counter overcapacity. This cast doubt on whether the venture could build production facilities as planned. With the business environment for the region's cement industry worsening, Taiheiyo and Xinjiang Tianye opted to end the agreement.

India: Sagar Cements has completed the sale of its 47% stake in its joint venture company, Vicat Sagar Cement. Sagar had earlier obtained approval from the shareholders through postal ballot for the sale. Sagar and Vicat entered into the joint venture in June 2008 with the objective of setting up a 5.5Mt/yr cement plant in Gulbarga, Karnataka. The first phase of the plant, which was to reach a production capacity of 2.75Mt/yr, was completed in December 2012. Production commenced in January 2013.

Mexico: Mexico's cement producer Elementia is in talks to buy out its joint venture partner Lafarge, according to local media. Elementia has the right to buy Lafarge's 47% stake under an option described in the original terms of the partnership. Lafarge is said to be keen to avoid competing with itself in Mexico after agreeing to the US$40bn merger with Holcim, which already operates in the country.

The stake has been valued as high as US$500m. However, it is unlikely to attain that high a price because Lafarge has limited bargaining power and Elementia already has majority and management control of the joint venture. Lafarge may be forced to offer its stake at a discount to convince Elementia to buy. Lafarge and Holcim's recent proposed asset divestment list did not include the Mexican joint venture, which has a cement production capacity of 2Mt/yr.

Elementia sells cement in Mexico under the brand Cementos Fortaleza. Buying out Lafarge would bolster Elementia's position in Mexico, where cement demand is predicted to grow on the back of economic overhauls that were approved in 2013.