Cimpor
Not withstanding a gearing level of 97.7%, Cimpor has still been looking for opportunities to expand its geographical spread, at least until the unsolicited bid from a Brazilian steel company arrived last week. Cimpor's approach to the Ecuadorian government to acquire Cemento Chimborazo and to invest in additional capacity in that country, was recently turned down. The expansion strategy tends to be co-ordinated with Lafarge, and Cimpor has made a number of acquisitions from the Paris-based group. When, a couple of years ago, Lafarge was disqualified from bidding for a particular cement works in Algeria, Cimpor made the bid instead, though that particular one did not succeed.
2009 saw the completion of a new 2,500 tonnes/day kiln at Hasanologan in Turkey. Additional grinding capacity has been this year at Asment de Tamara in Morocco taking its annual capacity to 1.6Mt. Future plans include new cement capacity for Tunisia and, possibly, a new works for Morocco, though that market is beginning to look too crowded if all current plans go ahead and that investment may take place elsewhere. Brazilian clinker capacity is being increased in 2009 at the Candiota and Cajati works and grinding capacity at Cezarina. In Mozambique new kiln and increased grinding capacity should come on stream in 2010, while in China, Cimpor is building one new integrated works and one grinding station.
In the first nine months of 2009, cement shipments increased by 2.1% to 20.53Mt, with higher tonnages in Egypt and China fully compensating for the reduction in several important markets. The aggregates volume declined by 12.6% to 10.7Mt and ready-mixed concrete deliveries fell by 16.7% to 5.5m m³. A number of minorities have been bought out in the Portuguese and Spanish subsidiaries and a new subsidiary has been set up in Tunisia to develop downstream operations there.
The unsolicited offer by Companhia Siderurgica National (CSN) was pitched at a surprisingly level, only 5% above the previous day's share price at €5.75. Within two days of the announcement, the shares were trading at €6.42, 12% above the bid price. CSN, with a background in steel, is a very recent entrant into the cement industry, having commissioned its first cement plant early in 2009. Teixeira Duarte is currently the largest shareholder with a 22.9% stake, followed by Lafarge with 17.3%. Quite a few of the remaining shares are concentrated in the hands of Portuguese institutional shareholders, many of which are there to protect the independence of Cimpor. Lafarge, through its present shareholding, board representation and technology agreements has a strong position and it unlikely to wish to see control of the company going to another party. On the other hand, Lafarge has plenty of other capital commitments and is unlikely to wish to counter bid at this stage, unless it has to. It could also face monopolies problems in Portugal, South Africa and Egypt, and would clearly wish to secure the support of like-minded parties in Portugal to prevent Cimpor falling into the hands of CSN without having to launch a full bid itself.
