GCC invests US$750m to expand Odessa capacity

GCC plans to invest US$750m to expand its production capacity at its plant in Odessa, Texas, USA.

The project will increase cement production capacity by more than 1Mta and reduce the plant’s greenhouse gas intensity by 13 per cent, according to a statement sent to the Mexican Stock Exchange.

"GCC will carry out the project at the Odessa plant because the US market is developing faster and represents savings in freight compared to the plant located in Chihuahua, Mexico," it said. The expansion will optimised the company’s cost structure and cement network by relocating cement that is currently shipped to this region from the Samalayuca, Chihuahua and Pueblo plants to other markets, leading to optimised freight costs. Furthermore, it will enable GCC to prepare and participate in the upcoming growth associated with the US Jobs and Infrastructure Investment Act.

The project will be financed with internal cash flow and a double-digit return on investment is forecast. As a result, the project represents a strong value creation by being higher than the weighted average cost of capital.

It is expected the new capacity will come online by mid-2025.