Taiheiyo plans expansion in US

Taiheiyo plans expansion in US
Published: 11 April 2007

Taiheiyo Cement Corp. of Japan may buy plants in the US, the company’s most profitable market, and in faster-growing countries in Asia as demand at home falls and competition in global cement markets heat up.

US sales may rise 33 per cent to as much as 160bn yen ($1.3bn) in 2007 for a third consecutive record year, from about 120bn yen in 2006, Keiji Tokuue, head of Taiheiyo’s overseas operations, said in an interview on March 28.

The 59-year-old said he wants Taiheiyo to accelerate expansion in the western US, Vietnam and China to counter a home market that has shrunk 28 per cent since its 1996 peak. Taiheiyo has spent less than $500m on acquisitions in the past decade compared with more than $30bn by Lafarge, Holcim and Cemex.

“Unless we spend money for overseas expansion now, even if it’s financially tough, we will be left behind the foreign majors,” Tokuue said at Taiheiyo’s headquarters in Tokyo.

Taiheiyo expects operating profit to be 7.7 percent of sales in the year ended March 31. It is now looking to buy cement plants in the western U.S. or Mexico within in the next one or two years to add to the two it has in California and one in Arizona, Tokuue said. Arizona and Nevada are the fastest-growing US states by population. US cement generates about a third of Taiheiyo’s operating profit and 13 per cent of sales.