Cementos Progreso has taken the opportunity to extend their presence in the region, while Cemex has disinvested its assets in the Caribbean market in Dominican Republic. Cementos Progreso (Cempro) is a leading company in cement, materials and construction solutions based in Guatemala with business units in the Construction, Agro, Energy and Real Estate Development industries. The company will now have presence in 8 Latin American countries, as well as exports to other countries in Central America, the Caribbean, Mexico and part of South America. The company is rapidly extending its reach in the Caribbean and Central America as it continues to add more cement capacity to its growing portfolio.
The San Pedro de Macoris plant located in Dominican Republic will add 2.4Mta to Cempro’s cement capacity when the transaction is completed by the end of 2024. The acquisition will also give the company entry into Haiti’s export market.
The cement producer has started to expand aggressively in recent years. In addition to its 5.5Mta domestic cement capacity, which includes the new 2.5Mta San Gabriel plant. In 2021-22, the company bought Cemex’s operations in Costa Rica and El Salvador for approximately US$329m. These assets included a 0.55Mta cement plant, a 0.25Mta grinding mill, seven pre-mixed concrete plants, an aggregates quarry and a distribution center in both countries.
José Raúl González, CEO of Cempro, shared that they were lucky to be prepared and ready at the right moment when the opportunity presented itself. It was a combination of strategy changes how they managed to seal the deal in December 2021. It took them a little bit longer to meet all the regulatory requirements in order to take control of the operations in both countries at the end of 2022.
This last acquisition is part of the company’s expansion strategy and came after opening a 0.09Mta grinding plant in Belize in 2020 to allow cement and clinker exports to Panama, as well as the purchase of Cemento Interoceánico in Panama in 2019. All of this gave Cempro a 0.25Mta grinding plant and a construction materials distributor in Panama with the plant located in La Chorrera municipality.
Now the Dominican Republic and Haiti offer similar opportunities to Cempro. The US$950m transaction fee gives the Guatemalan producer the second-largest integrated cement plant in the Dominican Republic behind the 3.8Mta Domicem SA plant (Colacem group). The deal also includes the addition of 12 ready-mix plants (three of which are active), an aggregates quarry, two distribution centres and two leased marine terminals.
The company maintains that, “the operation in the Dominican Republic is the most important in the Caribbean…This significantly expands Cementos Progreso’s current capabilities, but, above all, allows it to enter a thriving construction market in one of the fastest-growing economies in the region.”
José Raúl González said, “We are excited to continue implementing our expansion strategy, which makes us even more committed to the development of the countries where we operate. With this acquisition, we now have operations in eight countries, now entering the Caribbean market and, mainly, adding highly professional and trained teams to the Progreso family to continue generating ‘Progress in everything we do’.”
Following this latest acquisition, Cempro now operates in Guatemala, Belize, Honduras, Coast Rica, Panama, Colombia, the Dominican Republic and Haiti.
The view from Cemex is similarly positive as it looks to rearrange the weight of focus on its portfolio. “The transaction advances us significantly in our portfolio rebalancing strategy which focussed on reducing our exposure in emerging markets and redeploying capital in growth investments in priority markets, primarily the US,” said Fernando Gonzalez, Cemex CEO. Proceeds from the divestment are expected to fund the multinational’s bolt-on investment growth strategy.
Source: https://www.cemnet.com/