We begin 2022 with the announcement of the sale of Cemex to Cementos Progreso in Costa Rica and El Salvador. On December 20, 2021, Cemex announced the sale of an integrated cement plant, a grinding plant, seven ready-mixed concrete plants, an aggregates quarry and a terminal in Costa Rica and ‘a terminal in El Salvador. The sale is valued at approximately US $ 335 million with an expected completion date in the first half of 2022 subject to regulatory approval.
This sale is remarkable because it concerns the Mexican company Cemex which sells assets in its “backyard” in Central America. Once the sale is concluded, it will keep its activities in Panama, Nicaragua, Guatemala and Colombia within the framework of its subsidiary Cemex LatAm. It will also continue to operate in the Caribbean in the Dominican Republic, Jamaica and Puerto Rico. Past divestments of Cemex over the past five years or so have tended to focus on piecemeal (or bulk) divestments in the United States and Europe. This latest sale could be viewed in a similar fashion if Central America and the Caribbean are viewed as a region rather than individual countries. For its part, Cemex describes the sale as part of its “Operation Resilience” plan to optimize its global portfolio.
It is curious why he chose to sell in Costa Rica, given that Cemex LatAm’s cement sales volumes for the region were reported as ‘flat’ in 2019, with the exception of Colombia and El Salvador. . 2020 was a shock then, like almost everywhere else, as the coronavirus caused disruptions reducing sales volumes. 2021 saw a recovery in all of Cemex LatAm’s national markets in the first nine months. Notably, Cemex’s revenue and operating profits in Costa Rica increased by comparing the first nine months of 2019, before the pandemic, to the same period in 2021, unlike Colombia and Panama. For the third quarter of 2021, Cemex said the growth in cement sales volumes in Costa Rica was driven by the infrastructure and housing sectors. He also added that “Our cement footprint in the country is also a very relevant component of our regional sales network. We continued to export during the quarter, primarily to our operations in Nicaragua. It might be a coincidence, but it was an interesting time to add a comment like this.
From Cementos Progreso’s perspective, the new assets in Costa Rica and El Salvador are part of an ongoing expansion phase outside of its original base. At home in Guatemala, the company operates three integrated factories. The third, the San Gabriel plant, started up in 2019. In the same year, the company purchased Cemento Interoceanico and its grinding plant in Panama. Then in July 2021, the group commissioned its new Belmopan grinding plant in Belize as part of its subsidiary Cementos Rocafuerte. The new acquisitions proposed in Costa Rica and El Salvador are starting to fill the gaps in the Cementos Progreso network between Guatemala and Panama. The price seems high for an integrated plant of 0.9 Mt / yr and a grinding unit of 0.9 Mt / yr. Still, the associated quarry, concrete batching plants, terminals and, most importantly, the location may be worth it. For comparison, Peru-based Unacem agreed this week to buy a grinding plant from CBB in Chile for around $ 30 million. In 2013, Lafarge sold assets in Honduras, including an integrated plant and a grinding unit, to Cementos Argos for 232 million euros.
Both parties can benefit from this transaction. Cemex continues to show that it is fully prepared to sell assets anywhere while strengthening its operations. Cementos Progreso, meanwhile, is becoming a regional player to watch. (https://www.globalcement.com/news/item/13485-cementos-progreso-grows-in-central-america)
(Visited 22 times, 9 visits today)
Last modification: January 11, 2022