Colombia’s Inversiones Argos, operator of the country’s largest cement maker, said on Wednesday it would invest $350m through 2009 to expand a local production plant and consolidate operations in the United States.
Inversiones Argos operates Cementos Argos , Latin America’s fifth cement producer and the No. 6 concrete producer in the United States, and is an affiliate of leading Colombian conglomerate Grupo Empresarial Antioqueno or GEA.
Argos president Jose Alberto Velez said after a shareholder meeting that this year’s investment would focus on a production plant in Cartagena to increase output to 1.8Mt a year there and on consolidating investments in the U.S. market.
He told reporters investments for 2006 included more than $500 million in machinery, equipment and storage facilities and operations in Colombia and the United States.
Argos has been active in expanding in the international market, following foreign investment of Colombian companies as it seeks to diversify its revenues, lessen dependency on the local market and prepare for the approval of a free trade agreement with the United States.
Velez said regional opportunities to buy cement producers were limited, but he believed there could be more space for overseas deals in the concrete business.
"Obviously as opportunities arise, we are looking at them and evaluating them. In terms of Latin America, I would say that there are not many opportunities (in cement) because it is very consolidated among the larger groups," he said.
Argos cement operations have a capacity of 13Mta year and control 51 per cent of the local market.
As well as strategic investments in concrete plants in the eastern and southern United States, Argos has cement operations in Panama, Haiti, the Dominican Republic and Venezuela, some of which are in association with Holcim.
Velez described 2006 as a "good" year for operations in Panama, Haiti and the Dominican Republic, but in Venezuela he said business was complicated after a 2006 court ruling called for the nationalization of an associated cement plant with an annual capacity of 800,000tpa.
The plant, which was purchased from the Venezuelan state in 1998, is currently being run by the government of President Hugo Chavez until the supreme court makes a ruling on how it should be operated. But Velez said he was confident of a positive outcome.