In a further effort to reduce its high gearing, which stood at 180.1 per cent at the end of March, Cemex has agreed to sell assets worth US$400m to a US subsidiary of the Mexican Grupo Cementos de Chihuahua.
The deal includes two cement plants – a 0.76Mta integrated plant in Odessa, Texas and a 0.57Mta integrated plant in Lyons, Colorado – as well as three cement terminals and building materials businesses in Texas and New Mexico. Plans are in hand, however, to increase the capacity of the Odessa works to 0.9Mta and a contract has been awarded to FLSmidth, but all the permits are not yet in place.
The Wall Street Journal reports that after the deal, Cemex will still have 10 US plants with a combined capacity in excess of 10Mta. At present, GCC has a capacity of 4.6Mta, which will increase to around 6Mta with Cemex’s assets. The company’s first US cement works, a 0.5Mta plant in New Mexico, was acquired in 1994 and was followed by a distribution terminal later that year. A further cement works was acquired in South Dakota in 2001 and a new cement works was built at Pueblo, Colorado, in 2008 with a 1Mta.
Last year, the US operations accounted for a turnover of US$535.4m, or 71.1 per cent of the group total, with cement volumes increasing by two per cent, but ready-mixed concrete deliveries were five per cent lower. During the 1Q16, the US turnover improved by 5.5 per cent to US$87.7m, with volumes being two per cent lower in cement but 25 per cent higher in ready-mixed concrete.
Cemex is currently working towards reaching an investment grade rating. To this end it has been selling off assets and reducing debt. Since 2009, the company’s stock of debt and perpetual securities has fallen by US$6.9bn. In the past two years, Cemex has sold assets in Germany, Spain, Austria, Hungary Bangladesh and Thailand and will also look to dispose of its Croatian operations in 2016.
