Votorantim to invest in its NE Brazil plants

Brazil’s Votorantim group will invest US$200m to double production capacity at its Cimentos Sergipe cement plant in Sergipe state, Gazeta Mercantil reported.  The expansion works are in the bidding phase and should be completed in 7-11 months, the paper quoted Votorantim Cimentos’ north/northeast commercial manager Francisco Carlos Silveira as saying. Silveira also said that due to a slowdown in the local market, exports will be the best alternative to maintain production levels.

Votorantim’s three plants in the northeast - Cimento Poty da Paraiba, Cia Cearense de Cimento Portland and Cimentos Sergipe - are currently operating at only 50 per cent capacity due to the market demand situation. The plants have a combined capacity to produce 5.3Mta of cement, equivalent to 51 per cent of the northeast’s annual demand.

According to the report, Votorantim’s cement export sales reached US$1bn in 2003, which should reach US$1.2bn this year.
While products are currently shipped to Canada and the US, where Votorantim has two and one plants, respectively, Silveira said there is the possibility of exporting to Europe and Africa, and that they are also interested in expanding into Europe (via acquisitions).

Regarding the local market, Silveira said this should pick up this year due to announcements by the federal government that it has freed funds to carry out needed infrastructure works, such as the 12.1bn reais the cities ministry plans to free for housing and waterworks.