Votorantim Cimentos, the Brazilian market leader, has consolidated its position as the sixth-largest multinational cement player, ahead of Buzzi Unicem, following the integration of much of Cimpor’s international portfolio. Now with more than 57Mta of capacity under its control, and a busy expansion programme, ICR talks to its CEO, Walter Schalka, about the evolution of this dynamic company into an emerging global major.
ICR: The Votorantim Group is a diversified conglomerate with interests ranging from banking to mining and metals. Where does Votorantim Cimentos sit within the group?
Walter Schalka (WS): If you take a picture right now, and given the volatility in the commodity business, the cement business is roughly 50 per cent of the group, but we used to be around 30 per cent.
ICR: Votorantim Cimentos is decisively transforming itself into a globally- diversified cement producer, but the bulk of your capacity is located in Brazil. What is the current state of your domestic capacity?
WS: Right now we have a total capacity of around 29-30Mta in Brazil. We are commissioning new plants every year now: six new plants last year, two new plants this year adding a capacity of around 3.2Mta, and two more grinding plants next year, each with 1.5Mta. Then, in 2014, we’ll have two new plants again with 3.2Mta of integrated capacity. Our total capacity at the end of the process is going to be around 38-39Mta.
ICR: Where is this new capacity located?
WS: We are moving to a more dispersed geographic distribution of operations. We believe that Brazil will shift its consumption towards the interior. Usually, in the past, the consumption was concentrated just 200km from the coast – I think 85 per cent of the total consumption. Now we believe that development will shift more to the west, and for this reason we are creating new capacity in other areas of Brazil.
ICR: What is the Votorantim approach to building new plants?