Wednesday, October 6, 2010

Overseas Cement Gambles

Foreign cement manufacturers are staking hundreds of millions of dollars on investment in new cement production capacity, betting that construction activity will pick up rapidly in their corners of the globe. MerchantBridge of London and LaFarge SA of Paris invested $220 million in expansion of a cement factory in Karbala, Iraq, and MerchantBridge has obtained a license to construct a new two million ton per year cement factory less than ten miles away from the expanded Karbala facility. Iraqi government spokesman Ali al-Dabbagh predicts Iraq will invest $200 billion in infrastructure construction over the next four year period – hence the need for a dramatic increase in cement production capacity.

Meanwhile, Brazil’s Votorantim Cementos SA is investing $1.47 billion in construction of eight new cement making facilities in Brazil, bring Votorantim’s Brazilian capacity to 35 plants producing 42 million tons of cement per year. Votorantim also owns cement making plants in Bolivia, Canada, the United States and Chile.
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