Italian cement producer Italcementi SpA announced it is to sell one of its domestic cement plants and close two other factories to reorganise its local production base on the back of lower demand.
Italy's leading cement producer said it would sell its Pontassieve factory to local cement company Colacem and will shut down two mid-sized cement-making plants by the third quarter of 2012 in order to reorganise its domestic production capacity. The two plants could be turned into clinker grinding plants.
Italcementi also said it could announce by the end of the year another move to render the production structure more efficient to meet the changed market conditions.
The plan is aimed at rationalising the industrial structure, allowing Italcementi to face more efficiently the current economic situation and at the same time to launch production and distribution systems capable of absorbing the future demand once the Italian market recovers, Banca Akros analysts commented, keeping a "hold" rating and EUR 5.90 price target on the stock, according to reports by SeeNews Italy.
Italcementi may also introduce measures aimed at raising its production efficiency to adapt it to the new market conditions, the brokerage said.
The Italian cement sector registered its fifth year of declining cement consumption with volumes falling 3.4 per cent to 31.27Mt. Production in 2011, meanwhile, was down 4.3 per cent to 32.79Mt. In terms of construction activity, the residential sector fell 2.9 per cent while civil engineering decreased 10.5 per cent and non-residential construction was down six per cent. For this year, cement consumption is expected to see further decreases.