While Cemex has divested its Caribbean assets in the Dominican Republic, one company has jumped on the opportunity to expand its presence in the region. Guatemala-based Cementos Progreso (Cempro) is rapidly extending its reach in the Caribbean and Central America as it adds further cement capacity to its growing portfolio.
The San Pedro de Macoris plant in the Dominican Republic will add 2.4Mta to Cempro's cement capacity by the 4Q24, when the transaction is expected to close. The acquisition will also give the company entry into Haiti's export market. The group now has operations in eight countries across Latin America.
Progreso's expansion programme
The Guatemalan cement producer has started to expand aggressively in recent years. In addition to its 5.5Mta domestic cement capacity, which includes the new 2.5Mta San Gabriel plant, the company acted quickly in 2021-22 to grab Cemex's operations in Costa Rica and El Salvador for approximately US$329m. The Cemex assets included a 0.55Mta cement plant, a 0.25Mta grinding mill, seven pre-mixed concrete plants, an aggregates quarry and a distribution centre in both countries.
“We were lucky: the combination of being prepared and the opportunity presenting itself. We were ready, it was a combination of strategy changes we managed to seal the deal in December 2021. It took us a bit more time to comply with all the regulatory requirements, so the last quarter of 2022 we took control of the operations in both countries”, said José Raúl González, CEO of Cempro.
This latest step in the company's expansion strategy came after opening a 0.09Mta grinding plant in Belize in 2020 to enable cement and clinker exports to Panama, as well as the purchase of Cemento Interoceánico in Panama in 2019. This gave Cempro a 0.25Mta grinding plant and a construction materials distributor in Panama with the plant located in La Chorrera municipality, just an hour from Panama City.
Dominican Republic opportunity
Now the Dominican Republic and Haiti offer similar opportunities to Cempro. The US$950m transaction fee gives the Guatemalan producer the second-largest integrated cement plant in the Dominican Republic behind the 3.8Mta Domicem SA plant (Colacem group). The deal also includes the addition of 12 ready-mix plants (three of which are active), an aggregates quarry, two distribution centres and two leased marine terminals.
The company maintains that, “the operation in the Dominican Republic is the most important in the Caribbean…This significantly expands Cementos Progreso’s current capabilities, but, above all, allows it to enter a thriving construction market in one of the fastest-growing economies in the region.”
José Raúl González said, “We are excited to continue implementing our expansion strategy, which makes us even more committed to the development of the countries where we operate. With this acquisition, we now have operations in eight countries, now entering the Caribbean market and, mainly, adding highly professional and trained teams to the Progreso family to continue generating ‘Progress in everything we do’.”
Following this latest acquisition, Cempro now operates in Guatemala, Belize, Honduras, Coast Rica, Panama, Colombia, the Dominican Republic and Haiti.
Cemex to reinvest in the USA
The view from Cemex is similarly positive as it looks to rearrange the weight of focus on its portfolio. “The transaction advances us significantly in our portfolio rebalancing strategy which focussed on reducing our exposure in emerging markets and redeploying capital in growth investments in priority markets, primarily the US,” said Fernando Gonzalez, Cemex CEO. Proceeds from the divestment are expected to fund the multinational’s bolt-on investment growth strategy.
