Egypt’s Orascom Construction Industries said its wholly owned subsidiary Algerian Cement Company signed a US$112m loan to build a second production line in Algeria. Orascom Construction (OCI) said in a statement sent late on Tuesday that the new facility would have an annual capacity of 2.2Mt and would increase the firm’s total production to 4.4Mta, making it the biggest cement producer in Algeria.
OCI said in January that ACC had signed a US$153m deal with Danish company FLSmidth to construct the second production line, which should be completed by mid-2005. The loan was syndicated by a group of international banks, which had participated in financing the first production line. Citibank International London (C.N) was the lead arranger.
"The continued involvement of the European Investment Bank... and other lenders in financing the second production line at interest rates more favourable than those applicable to the first production line demonstrates their confidence in the track record of the OCI," Chief Executive Officer Nassef Sawiris said in the statement.
Algeria faces a housing shortage, exacerbated by an earthquake in May 2003 that killed 2,300 people and caused $5 billion in damage. The country’s annual cement output capacity figure exceeds 10Mt, but actual production is much lower due to production bottlenecks and rather elderly equipment.