A joint venture between leading regional producer ASEC Cement and Egypt's Misr Qena Cement will cater to the under-served Upper Egyptian building and infrastructure markets.
Leading regional cement producer ASEC Cement announced today that it has launched operations at ASEC Ready Mix, which will have points of presence in the significantly under-served Upper Egyptian cities of Minya, Assiut and Qena.
ASEC Ready Mix is a joint-venture between ASEC Cement, a Portfolio Company of Citadel Capital’s ASEC Holding, and Misr Qena Cement. It has an annual production capacity of more than 200,000 cubic meters of concrete.
“This EGP 43 million project is an outstanding partnership with Misr Qena that will create some 100 new jobs in Upper Egypt while supplying high-quality ready mix concrete to a market in significant deficit, giving us an important first-mover advantage,” said ASEC Cement Chairman and Chief Executive Officer Giorgio Bodo.
While smaller construction operations typically mix concrete on-site from cement, sand, aggregates and water, ready mix concrete is created off-site and delivered in large quantities to construction venues. Mixed by specialists, ready mix product may be sold from a standard recipe or custom-tailored to the needs of an individual contractor, allowing for more aggregate or special curatives to be added, for example.
ASEC Cement owns 55% of the new venture, while Misr Qena Cement owns the balance.
“The market opportunity in Upper Egypt is substantial, not just because it has long been under-served, but also due to the rapid growth in both public and private spending on infrastructure, real-estate and other concrete-intensive projects,” Bodo added.
ASEC Ready Mix will also contribute to vertical integration at ASEC Cement’s under-construction 1.7 million tons per annum greenfield cement plant in Minya.
Production at the Minya plant begins this month, while Qena will follow in early June. Operations will begin at the Assiut plant soon afterward. Each station can produce up to 110 cubic meters of ready mix per hour of operations.
ASEC Cement owns a 27.55% stake in Misr Qena Cement.
ASEC Cement is Citadel Capital’s platform investment for cement production in the emerging cement markets of the Middle East and Africa. Created by Citadel Capital and a group of leading co-investors, ASEC Cement is growing into a leading regional cement production group that will have a combined production capacity of approximately 14 million tons per annum in 2014 spanning six countries from Algeria to Iraq-Kurdistan. ASEC Cement is a portfolio company of ASEC Holding. Citadel Capital owns a 30% stake in ASEC Cement.
Citadel Capital (CCAP.CA on the Egyptian Stock Exchange) is the leading private equity firm in the Middle East and Africa. Citadel Capital focuses on building regional platforms in select industries through acquisitions, turnarounds, and greenfields executed via Opportunity-Specific Funds. The firm’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 countries spanning 15 industries, including mining, cement, transportation, food and energy. Since 2004, Citadel Capital has generated more than US$ 2.5 billion in cash returns to its co-investors and shareholders (on investments of US$ 650 million), more than any other private equity firm in the region. Citadel Capital is the largest private equity firm in Africa by PE assets under management (2005-2010, as ranked by Private Equity International). For more information, please visit www.citadelcapital.com.
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