Lafarge-Incehsa increases investments?, Honduras

Lafarge-Incehsa increases investments?, Honduras
Published: 03 January 2012

Lafarge-Incehsa is modernising and expanding its plant in Comayagua, Honduras, over a period of three years with plans including debottlenecking measures and a new kiln line. The move comes on the back of public infrastructure investment requirements which are driving local demand.

Commenting on the investment, director general, Juan Martinez, said: “In the short-term, we are eliminating the different bottlenecks of the plant to obtain a 10% increase in production capacity that allows us to accompany market growth over the next three years. In the medium-term, we will double the plant capacity.…We will build a new kiln line complete with crushing, raw material grinding, kiln, cement grinding and packing sections, with a total investment close to US$200m”.

Currently, the cement plant, located 80km from the capital, Tegucigalpa, is capable of producing 1Mta. 
Lafarge also has a grinding and packing plant, located in southern
 Honduras, able to produce 0.3Mta with clinker imported through the port of San Lorenzo. This facility is currently mothballed due to the downturn experienced in the market over the 2009-10 period, but the company says it will be reactivated during construction of the second production line at Comayagua if market demand continues to grow.

At the end of the third quarter of 2011, the Honduran construction industry showed a slight reduction of 0.4%, 16.1% lower than in the same period of 2010.

The smallest decline in private construction was mainly driven by rising commercial  construction, a sector that showed a growth of 73.3%, which demonstrates the progress in commercial infrastructure projects in the centre of the country.

Martinez said that the construction of new shopping centres in major cities of
Honduras (Tegucigalpa and San Pedro Sula), in addition to investing in housing, show a slight recovery for the sector.

However, the biggest consumption driver will be the country’s infrastructure development. Recent heavy rains have left Honduras with a deteriorating road network nationally and the Government approved a loan of US$31.5m for construction.

“’The Government’s announcement is somewhat unexpected, it is important to be able to have the capacity and not turn to imports to meet demand, "says Martinez.

Although state investment has not yet materialised, Martinez estimated that it is to grow 15% this year around 900,000t of cement sold and projected 5% to 6% more in 2012 (20% increase).

“The group is in a difficult situation due to the construction slowdown/halt in the most developed countries, but in Honduras, as in other emerging countries, markets are growing and we with them, " he said.