Orascom Construction Industries announced that Group GLA - 50% owned by OCI - has signed an agreement for a total value of EUR 17.4m for a 100% stake of Minas Nieves in Corrales de Buelna and for the acquisition of Minas Cau, a quarry operation in Yecla. Combined, the two quarry operations are expected to produce close to 0.8 million tons after the take-over is complete.
Group GLA is the largest independent aggregates and ready-mix concrete producer in Spain. OCI acquired 50% of the Group in October 2006. The Group has activities in aggregates, ready-mix concrete, and clinker grinding throughout Spain with a focus on the Madrid and Valencia markets.
The individual investments reached EURO 12.6m for Minas Cau and Euro 4.8m for Minas Nieves. The two barite and calcium carbonate deposits rank amongst Spain’s major mining reserves. Minas Cau is South Europe’s largest reserve with 80Mtof carbonate, allowing for a strong market share in Spain as well as market opportunities in Europe and Africa. Minas Nieves contains 4 million tons of barite deposits. Group GLA now controls a total of approximately 268 million tons of various aggregates reserves.
Calcium Carbonate creates new avenues for growth as it is an essential component in a multitude of industries. It is primarily used in pharmaceutical products including cosmetics and sanitary products. It is also used in the manufacturing of ceramics, glass, paper, paint, plastics and concrete. Investing in Barite deposits allows the company to target new markets through the production of special types of concrete that are typically used to shield against laboratories from x-rays and radioactive materials, as well as the production of enamels, ceramic products, sanitary items and high-resistant paint.
OCI Chief Executive Officer, Nassef Sawiris commented," this acquisition affirms Group GLA’s strength in generating growth and identifying new opportunities in the industry at extremely attractive valuations. Furthermore, this investment asserts OCI’s strategy to expand its current position in ready-mix and concrete operations in markets suffering from structural deficits in cement. Securing these two reserves will allow the Group to capture the opportunities arising from the increased significance of aggregates in Europe and enhances diversification of our client base."