IFC considering equity injection in Myanmar cement plant expansion project

The International Finance Corp (IFC) is considering an equity injection into the brownfield expansion of Shwe Taung Cement Co's cement plant at Pyi Nyaung village, Myanmar. Shwe Taung Cement is part of a local conglomerate, Shwe Taung Group (STG)

The total project cost is estimated at US$110m. The proposed IFC investment in STC comprises an investment in common equity for up to US$15m and providing an A Loan of up to US$20m. The IFC is also looking to mobilise up to US$20m through the syndication of parallel loans and up to a US$20m investment in common equity from IFC AMC Emerging Asia Fund (EAF).

The balance of the project cost will be financed through internal accruals, fresh equity infusion from sponsors and other loans.

STG entered the cement industry in 2010 with a clinker and cement capacity of 1500tpd and 2800tpd, respectively. Its cement is distributed under the Apache Portland Cement brand name. Through its wholly-owned subsidiary, Shwe Taung Mining (STM), STC has mining concessions providing captive sources for limestone and coal.

The financing from IFC will help the expansion cement plant’s clinker capacity to 5500tpd and cement grinding capacity to 7200tpd. The project also involves construction of a waste heat recovery system and improvements in emission control.