Polpaico to invest US$15m this year

Chile’s Cemento Polpaico will invest US$15m this year, company general manager Eduardo Kretschmer said during the company’s annual shareholders’ meeting.  The investment will go towards the construction of a coprocessing plant fired by alternative fuels, the purchase of cement mixer trucks and projects aimed at rationalising costs.

However, Kretschmer said that this year’s forecast 2-3 per cent cement sales increase will prevent companies from investing larger sums.

The funds to be invested by cement companies Melón, Polpaico and Bío Bío during 2004 will be aimed at improving efficiency and reducing costs rather than to increase production levels because the production capacity in the country is still double that domestic consumption. 2003 was a very good year for the cement industry with sales of 3.6 million tons in addition to 221,000t imported from foreign markets, so the figure was close to the peak of 3.8Mt observed in 1998. The figures give the impression that the sector has started a definitive recovery after several seasons of adjustments due to the economic crisis that affected the country.

However, the extraordinary situation of 2003 - with 7.9 per cent sales growth compared to 2002 and 10.1 per cent profitability - was due to large infrastructure works, especially the construction of the Ralco hydroelectric dam and the Costanera Norte highway in Santiago. For 2004, cement sales are expected to grow just one per cent, said the Chilean Construction Chamber, while companies projected an increase of between 1.8 per cent and two per cent.