Peru’s Cemento Andino to get US$162m loan for expansion

Peru’s Cemento Andino to get US$162m loan for expansion
Published: 26 November 2009

Peru’s Cemento Andino  will receive a US$162m loan to increase cement-production capacity, the Andean Development Corporation, or CAF, said Wednesday.

Cemento Andino is based in the central province of Junin..

The operation will be co-financed by Peru’s largest bank, Banco de Credito de Peru, the CAF said in a statement.

The terms of the deal, described as a long-term lease, state Banco de Credito will be the sole lender to Cemento Andino, while the CAF will share the credit risk with a guarantee of $50 million.

The loan will mean Cemento Andino can increase cement production by at least 800,000 metric tons. Its production of clinker, a cement derivative also used in cement making, will increase by 700,000 metric tons, the CAF said.

Although the Cemento Andino wouldn’t say how much it produces, Peru’s total cement output in the first 10 months of this year was 5,157,223 metric tons.

Analysts said the loan showed significant confidence in Peru’s construction sector.

"We are forecasting a 9% growth for the construction sector next year," said the director of Lima-based Intercapital, Luis Zapata.

In September, Peru’s construction sector grew 3.29%, according to government statistics agency INEI, and cement consumption grew 2.45%. In the first nine months of 2009, Peru’s construction sector grew 3.01%.