Cementos Andino and Concrecem, Colombia, have decides to sell their complete cement and concrete business to the Argus Group, Colombia. Both companies have reached an agreement on a sale value of just US$192m which includes all financial liabilities and production assets linked to cement and concrete production throughout Colombia.
The closing of this deal will be announced following 30 days of due diligence and approval by the Colombian industry and trade regulator Superintendencia de Industria y Comercio. Argus says it will keep some 600 employees of Andino and Concrecem in employment and honour existing social commitments.
Argus will make an initial payment of US$100m within the next 12 months, the remaining balance payable over a period of 10 years from generated cash flow, according to the negotiations established between the parties and the 40 shareholders of Andino and Concrecem.
Andino and Concrecem operate three cement plants, located in San Gil (Santander), Cajicá (Cundinamarca) and Sabanagrande (Atlantic). In addition the companies also produce and sell concrete and readymix from their plants in Bogota, Cajicá, Sabanagrande, Santa Marta and Pereira. The deal will increase the annual capacity of Argos and its subsidiaries to over 9Mt of cement and 1.5 million cu m of concrete within Colombia.
Andino and Concrecem have performed relatively well in their seven years of existence, recently building up a new plant on a greenfield site close to Barranquilla, and initiating some useful cement exports in cement and clinker to different markets within the Caribbean from their Sabanagrande plant. However, the company has been very much hampered by a severe price war of late, said to have been initiated by the established production base in Colombia, which has seen domestic cement prices drop to a level on a par, or even below, actual production costs.
Apparently Andino had been looking for a strategic partner for some time (an ideal opportunity for Colacem, Uniland or Orascom one would have assumed) but without success. The full story of Cementos Andino was presented at the recent Cemtech Barcelona conference with video and powerpoint now available at: http://www.cemnet.com/members/video/info.asp