CRH stays silent on Portugal expansion

CRH was not willing to comment yesterday on a Sunday Business Post report naming it as one of a number of parties considering an offer for a 41 per cent stake in Secil, Portugal’s second largest cement producer.

Reports value the stake at €300-350m. Secil is reckoned to have an estimated 35pc market share, behind the market leader Cimpor, which has approximately 60pc. Secil is a subsidiary of Semapa, a Portuguese quoted company.

CRH has investment teams working right across its markets. However, it would be unusual for the group to acquire a stake of this size without having clear visibility to outright control down the line.

At least the group would want to know that it would eventually have access to cash flow. The fact that there are others reportedly in the market for this shareholding is not promising, given that CRH is known to operate on very strict financial criteria when considering new investments. Competition would normally push up the price.

The group does go for minority shareholding but usually only in new and untried markets where the risk has to be assessed. Portugal hardly fits this criterion, however.