St Marys Cement Inc (Canada), a wholly-owned subsidiary of Votorantim Cimentos, and McInnis Cement Inc announced that they will combine their assets to create a combined entity to manufacture, distribute and sell cement in Canada and the USA. The joint venture will be owned by Votorantim Cimentos International (VCI), the international investments platform and wholly-owned subsidiary of Votorantim Cimentos SA, the sixth-largest cement producer in the world, and Caisse de dépôt et placement du Québec (CDPQ), a long-term institutional investor, through its investment in McInnis Holding Ltd Partnership (McInnis Holding).
The business combination is expected to significantly strengthen the strategic positioning of the combined operations through increased cement production capacity, operational efficiencies and an enhanced distribution network. It will enable the cement producers to improve their position in the NorthAmerican market, which continues to have a positive outlook.
Votorantim Cimentos International will hold a 83 per cent stake and CDPQ will hold 17 per cent of the shares in the joint venture, with both parties transferring North American assets to the combined entity. The Votorantim Cimentos assets are primarily cement plants located in Bowmanville and St Marys, Canada, and in Detroit and Charlevoix, Michigan, and Dixon, Illinois, USA, along with its extensive distribution network concentrated in the Great Lakes region. The McInnis Cement assets include the Port-Daniel-Gascons plant with all of its terminals located in Quebec, Ontario, New Brunswick, Nova Scotia and the northeastern region of the USA, in addition to maritime operations.
"The creation of this combined entity allows us to partner with a world-class player with an established presence – and strong track record of profitability – in North America to operate the McInnis Cement plant in Port-Daniel-Gascons, one of the most modern and efficient facilities in the region. This partnership will enable the Port-Daniel-Gascons plant to benefit from Votorantim Cimentos' production, distribution and operational expertise to develop important markets, particularly in Eastern Canada, the Great Lakes region and the Northeastern Coast of the United States to meet the growing demand for cement", said Kim Thomassin, CDPQ's executive vice-president and head of Investments in Quebec and Stewardship Investing.
"This transaction is aligned with Votorantim Cimentos' portfolio management strategy, prioritising investments in markets in which we already operate and enabling geographic expansion in locations with attractive growth prospects. McInnis Cement's state-of-the-art plant and distribution network enable an efficient cost position in an attractive region, with access to new markets and lots of opportunities", said Marcelo Castelli, Global CEO of Votorantim Cimentos.
"We are excited about the prospects for Votorantim Cimentos in North America through this joint venture, and very much welcome the partnership with CDPQ, a leading institutional investor that shares our long-term approach to investing and our commitment to sustainable and best-in-class business practices", said João Schmidt, CEO of Votorantim S.A., the controlling shareholder of Votorantim Cimentos.
