Ecuador: new state-owned cement consortium to concession cement plants

Ecuador: new state-owned cement consortium to concession cement plants
28 October 2009

Ecuador’s state-controlled cement consortium Consorcio Cementero Nacional will launch concession projects to increase the number of cement plants in the country.

Consorcio Cementero Nacional, to be formed by local cement firms Chimborazo y Guapán, will increase cement supply in Ecuador to cover the country’s public works needs, the government reported in a release.

The consortium will sign a number of BOT (build, operate and transfer) concession contracts with international firms to increase the number of plants in Ecuador, local press quoted President Rafael Correa as saying.

A Chinese consortium has already expressed interest in building new cement plants under the BOT model, said Correa, adding that the facilities will continue to be state-owned with 49% of their shares owned by local citizens.

On October 24, Correa announced the purchase of Chimborazo by the industries and productivity ministry (MIPRO), with 49% of the firm’s shares to be sold to indigenous communities.

The ministry will also purchase Cementos Guapán, owned by the social security institute (IESS). A maximum of 49% of the firm will also be sold to local and indigenous communities.

At the same time, the government turned down an offer submitted by Portuguese cement firm Cimpor to purchase Chimborazo, the national gazette El Ciudadano reported.

Cimpor offered to pay US$20.7mn for the cement firm which is 95% controlled by the national development bank (BNF). However, the Chimborazo plant is worth an estimated US$70-80mn, according to Correa.

The firm reportedly also offered to invest US$25mn to increase cement production and build a new plant in which the state would be given a 20% share.

The offer was rejected after being reviewed by the country’s production, employment and competitiveness coordination ministry, which found it inacceptable.

Correa has not announced how much his government will pay to purchase the two cement plants.
Published under Cement News