Industry Archives: Construction Materials


Development of a Stone Crushing Plant in Addis Ababa

The Project is the development of a stone crushing plant of 200t/hr capacity in Addis Ababa. The demand for gravel in Addis Ababa is very high owing to the construction boom of the city. The supply lags far behind the demand. The Developer has a quarry site with 3 million cubic meter deposit and 30 million cubic meter expansion area. The license and all legal documents have been updated and ready. Once an agreement is made production can start within four months.

The Project requires 1.2 million USD. The potential profit/sales ratio of the project is 49.7%; with IRR of 67% at 10% discount rate, providing 4.3 million USD per annum in two shift operation. The investment payback period is 8 months. The Developer proposes and equity stake of 50% to an investor.

Deal Contact:
[email protected]

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Azrieli in deal to sell Tambour to Singapore group for $144 mln

TEL AVIV, May 27 (Reuters) – May 27 (Reuters) – Real estate developer Azrieli Group agreed to sell Israeli paint company Tambour Ltd to Singapore-based holding company Kusto Group for 500 million shekels ($144 million). The buyer made a payment of 70 million shekels upon the signing of the deal, Azrieli, which focuses on operating shopping malls, said in a statement.

The company, which is controlled by Canadian businessman David Azrieli, said it expects to post an after-tax gain of 50 million shekels from the sale. Azrieli said the sale of Tambour is in line with the company’s strategy of focusing on its core activities of income-producing real estate and selling non-related businesses.

Israeli media reported in March that private equity firm Apax Partners was in talks to buy Tambour, which Azrieli controls through its subsidiary Granite HaCarmel, for 300 million shekels. Apax last week struck a deal to sell its 56 percent stake in Tnuva, Israel’s largest food company, to China’s Bright Food Group.

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Saudi firm CPC buys Egypt’s Sphinx Glass for $190 million

DUBAI, May 26 (Reuters) – Construction Products Holding Co (CPC), a unit of private Saudi Arabian construction giant Saudi Binladin Group, said on Monday it had bought Egyptian glass manufacturer Sphinx Glass for $190 million. The deal underlines growing interest among Gulf companies in Egyptian assets as Egypt’s economy begins to recover after three years of turmoil following the toppling of Hosni Mubarak in 2011.

The Saudi Arabian, United Arab Emirates and Kuwaiti governments are pouring billions of dollars of aid into Egypt and encouraging firms to consider investing there.

Under CPC’s ownership, Sphinx will meet growing demand for float glass in local and export markets, setting up a second production line to increase capacity, CPC’s director of business development Faysal Alaquil said in an emailed statement.

Sphinx, which expects a construction boom in Egypt as the government seeks to ease social tensions by stepping up construction of lower and middle-income housing, aims to increase its revenues to $63.2 million this year from $55 million in 2013.

CPC bought most of the company from Egyptian investment firm Citadel Capital, which said earlier this month that it had received an offer of $112 million for its 73.3 percent stake in Sphinx. The rest of Sphinx was owned by other investors, who were also bought out by the Saudi firm.

The deal is part of a programme by Citadel, which has $9.5 billion of assets under management, to exit non-core assets and focus on energy, transport, agrifoods, mining and cement over the next five years.

Among other Gulf investment projects announced this year in Egypt, Saudi Arabia’s Aujan Coca-Cola Beverages Co plans to spend $100 million building a fruit juice factory, while Dubai retailer Majid Al Futtaim says it aims to invest about $2.3 billion over the next few years.

Egyptian officials have said they expect more than $4 billion of direct foreign investment in the country in the current fiscal year to end-June, up by more than a third from the previous fiscal year.

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Cement Plant in Northern Iraq

A prominent Iraqi Group and a prestigious Turkish Group commenced the cement plant investment in Northern Iraq in 2012. The plant is intended to produce cement products such as Ordinary Portland Cement (OPC) and Sulfate Resistance Cement (SRC). The plant will have 2 x 5,000t/d clinker production capacity. The second 5,000t/d line will be built after the first line depending on the market dynamics. Expected to annual cement production capacity is 1,730,000 tons with a single line. The total site covers 375,000 m2 and is rectangular in shape. Civil works involve 105,000 m3 of concrete works and 10,500 tons of steel structure.
Total investment amount including working capital is $249mm. The capital expenditures is planned to be financed %25 by equity and %75 by long term loan.

High Quality and Low Cost raw materials, low cost energy input, host country incentives, insufficient domestic production and rising demand are among the key factors that drives the Turkish Group into cement investment in the region.
• Domestic Price of Ordinary Portland Cement (OPC) is $100/t ($60-$80/ton in Turkey and the region).
• Annual Domestic Production Capacity is around 10 million tons and unable to meet the demand and operating with only %50 production the initial capacity of 20 million tons (technical strains), the demand is expected to rise to 35 million ton per year by 2015
• Per capita consumption of cement is 600 kg and expected to be 1,000 kg by 2015
• New 4 million housing unit requirement of 30 million Iraq Population within 5 years duration
• $500 billion fixed investment in the country (in the next 10 years) tempted by the rising oil revenues and the potential of Iraq
• The cost of 5,000t/d line investment is $249mm
• 2 x 5,000t/d clinker producing plant have total investment value of $450mm and Market cap value of $900mm
• First year expected revenue is $170mm. After commissioning second phase the annual revenues will reach $350mm
• 66% average EBITDA Margin
• Turkish Group’s partnership and commitment
• Levered IRR of 62%

The investment shall be protected against political risks including expropriation, war and civil disturbances and transfer restriction. Other risks regarding construction, erection, machinery breakdown, employers’ liability and health staff policies will also be secured.

Investment license pertaining to the subject project includes;
• Exemption from %15 income taxes for 10 years (can be extended for 5 more years)
• Free use of land for 50 years
• No customs duty on the machinery imported for the investment
• Other incentives are available for creating employment (not included in projections)
• Purchasing guarantee received from Regional Government of Iraq
• Electricity and other infrastructure
• Fuel Oil $145/t ($450/t in Turkey)
• 200,000,000 tons of raw material reserve located in 1,000,000 m2 area allocated with the land at no cost.
• 375,000 m2 allocated land area for the plant site without rent and right to register the title under the investor company

The project has roughly 4 years of payback period for the equity. Net Income is projected as $43mm for the first, $61mm for the second; and $88mm for the following years of operations.
• Share pledge of a specific company of Turkish Group, $278mm valuation by PWC report dated Dec 5, 2012
• Signature of guarantee can be provided by the shareholders, both individuals and companies
• Cash flows to be generated from cement project.
• 375,000 m2 land as a real estate collateral with an estimated value of $30-40mm
• Machinery & Equipment being acquired for the project valued approximately $120mm shall be insured and can be provided as a “first loss payee”.

Avg Projected 5-yr Turnover = $130mn, EBITDA=$85mn.

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CRH sees off rival Vicat to snare Indian manufacturer in deal worth €175m

Irish Times 12 Aug 2013
CRH and its Indian joint venture have seen off competition from French rival Vicat to clinch a €175 million deal to buy a cement manufacturing business from conglomerate Shiriam. Continue Reading →

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Huaxin subsidiary to buy 20% of Shide Golden Eagle Cement, China
Huaxin Cement announced that its wholly-owned subsidiary Huaxin (Hong Kong) International Holdings, has signed an agreement with Starry Cosmos Group Ltd to acquire a 20 per cent equity in the latter’s Shide Golden Eagle Cement Continue Reading →

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Japanese Bath Fixture Maker Lixil Buys American Standard

The Wall Street Journal
Though Japan’s economic might has faded, the country continues to enhance its status as a powerhouse in one realm: toilets. Continue Reading →

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Lafarge Sells North American Gypsum Business to Lone Star Funds

Bloomberg 24 June 2013
Lafarge SA (LG), the world’s biggest cement maker, agreed to sell its North American Gypsum business with an enterprise value of $700 million to an affiliate of Lone Star Funds. Continue Reading →

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Votorantim suspends $4.9bn Brazil IPO

Financial Times 19 June 2013
Votorantim Cimentos, Brazil’s largest cement producer, suspended plans to raise R$10.3bn ($4.9bn) from an initial public offering that would have been the second-largest globally this year Continue Reading →

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Corning Backs View to Develop Energy-Saving Glass for Buildings

Bloomberg 18 June 2013
Corning Inc., the maker of glass for flat-panel televisions, phones and tablets, led a $60 million investment in View Inc. and will help the company develop tintable, energy-saving windows for buildings. Continue Reading →

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