Cementir CEO: Italy's cement market has finally reached the bottom
In an interview with Reuters, CEO and Chairman of Cementir Holding, Group Francesco Caltagirone jr, said "After nine year of contraction of cement output, I think the Italian market has reached the bottom," he said.
Domestic producers hit by the crisis could be a buying opportunity, Caltagirone said, adding the right target would have a price tag of no more than "tens in million of euros". A dozen other domestic groups are struggling to survive as output has halved since 2008 in Italy and today the market is expected to produce only about 19Mt, which is dramatically down on the 34Mt produced just six years ago.
As a result of a EUR400m round of recent deals, Cementir expects to boost its revenue by 30 per cent to EUR1.3bn this year on a proforma basis, which is an estimate assuming the businesses have been owned all year.
The group, which now operates in 17 countries and derives around 90 per cent of revenue abroad, agreed on 26 July to buy Compagnie des Cimentes Belges (CCB) from HeidelbergCement, entering the French and Benelux market. A few days later, it purchased smaller domestic rival Sacci, gaining clout in northern Italy.
The company forecasts the Belgian business will add EUR40m to its proforma core earnings of roughly EUR190m this year, while savings from Sacci will help it reach breakeven next year in Italy, where it is currently losing money.
"It will take some time to digest the latest acquisitions, but I still have some appetite," Caltagirone said.
New targets for the group, 70 per cent owned by the Caltagirone family, could be small domestic rivals or, in the medium term, a competitor based in South America, the CEO said.
"The group does not have a base in South America. In the next five years or so I would like to buy a company there," Caltagirone added.
In addition, Cementir Holding will launch its first-ever bond next year as the cement maker takes advantage of record-low interest rates to fund two recent acquisitions, its chief executive said, adding he was still interested in more deals.
