Cemex targets TCL acquisition

Cemex targets TCL acquisition
09 December 2016

This week Cemex launched a bid to acquire Trinidad Cement Co Ltd (TCL) via its subsidiary Sierra Trading, which would consolidate the strength of Cemex in the region, while providing investment for the Caribbean cement sector.

The interest in TCL by Cemex is long held and the Mexican multinational already has 39.5 per cent of the shareholding in TCL group via Sierra Trading. Cemex now aims to acquire up to 132,616.942 ordinary shares in TCL for TTD4.50 per share, which if successful, together with its existing 39.5 per cent holding, would take its ownership to 74.9 per cent of the equity share capital in TCL. Last year TCL shares were trading at TTD4.75 per share.

TCL is a producer of cement and ready-mix products in the Caribbean, with eight operating companies in Trinidad, Barbados, Guyana, Jamaica and Anguilla. TCL’s net debt stood at approximately US$113m as of 30 September 2016.

TCL had reported 3Q16 revenues of TTD449.9m (US$66.7m), a fall of 18 per cent on the same period of 2015, while net income fell to TTD11.6m in 3Q16 from TTD84m in 3Q15. The company cited weak cement demand in Trinidad and Tobago. Clinker exports to Venezuela were discontinued in 3Q16.

Maintenance work resulted in scheduled production shutdowns of eight weeks in Jamaica and seven weeks in Trinidad in 3Q16.

Revenue for TCL by 9M16 had slipped further, declining by 12.2 per cent.

Caribbean Cement Co
At the TCL subsidiary Caribbean Cement Co Ltd (CCL), demolition of the slurry tanks near Cement Mill No 5 began in January and was set for completion in June 2016. The plant also added a slurry recirculation system at the start of 2016 to improve its environmental performance.

At the start of 2016 CCL announced that it planned to spend US$30m up to March 2017 at its East Kingston plant by adding a new coal mill and carrying out a kiln overhaul at its Rockford facility,  boosting cement capacity from 1.2Mta to 1.8Mta. Cement Mill No 4 at the works was also overhauled in 3Q16, while 45 days of shutdown were needed for the kiln overhaul, impacting income by US$7.5m.

CCL reported consolidated profits before tax of JMD1.26bn (US$9.7m) in 9M16 compared to JMD1.7bn in 9M15. Although CCL's cement and clinker export volumes during the period were down by 16 and 84 per cent, respectively.

Published under Cement News