Holcim and Heidelberg to operate Cement Australia as a joint venture

Holcim Ltd said Thursday it plans to sell a 25 per cent stake in Cement Australia to HeidelbergCement and operate the company as an equally-controlled joint venture between the two cement majors.

Holcim and HeidelbergCement should be equally represented on the board and the chairmanship should rotate, the Swiss firm noted, adding that the contract on the transaction is still to be signed. Holcim currently owns 75 per cent of Cement Australia and Hanson Cement the other 25 per cent.

“The planned increase of our stake in Cement Australia makes sense for us both from a strategic and an economic standpoint,” said Dr. Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.

“Due to the expected growth of the population and the continued expansion of the mining industry, Australia is a very attractive market. Cement Australia is a highly profitable company and the planned increase in our stake fulfils all our investment criteria. In addition, we would double our cement capacity in the country to 2Mt and strengthen the vertical integration of our building materials business there,” he added.

Cement Australia has a clinker and cement capacity of 2.8Mta and 4.2Mta, respectively, comprising two integrated plants and one grinding unit. The Gladstone works is the largest with a cement capacity of 1.6Mta and clinker capacity of 1.7Mta. In 2011 the company closed its 0.45Mta Kandos plant blaming government taxes and regulations.  It is now constructing a 1.1Mta grinding mill in Port Kembla, NSW, with Ecocem Pty, which is expected to be completed in 2013.