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ASEC Cement has stakes in cement plants in Egypt, Algeria and Sudan as well as cement licenses in Syria and Iraq (Kurdistan). As a growing regional production platform, ASEC Cement continues to attract leading international management talent and secure top global partners such as IFC.
IFC's investment in ASEC Algeria includes an equity investment of up to $24m. ASEC Algeria's project, with a total project cost of $550m, is in Djelfa, one of the least developed regions in Algeria. It will support local small and medium enterprises in sectors such as transportation, maintenance, and general services.
Giorgio Bodo, ASEC Cement's Chairman and Chief Executive Officer, said:
"This is an important day for us as it marks ASEC Cement's first agreement with the IFC. We look forward to deepening our partnership in the future on other projects. At the same time, our investment in Djelfa confirms our commitment to Algeria, a country we consider crucial in our strategy."
The 3.1 million tons per annum plant will supply Algeria's expanding construction and infrastructure needs. The North African nation continues to ramp up oil and gas production capabilities and increasingly intersects trade routes from Africa to Europe.
In July 2009, Algeria is expected to close a $10bn trans-Sahara pipeline that will link the country to Nigeria, Africa's most prolific oil and gas producer. The government also began construction in 2005 on the multi-billion dollar East-West Highway, one of the world's largest public works projects, as part of its infrastructure development plan.
The Djelfa plant will cater to future cement demand as Algeria continues directing rising oil revenues into large-scale development projects. Moreover, a plentiful supply of natural gas and easy access to European markets provide Algeria with significant advantages over countries looking to cater to global demand.
Michael Essex, IFC Director for the Middle East and North Africa said, "This investment fits with our strategy to increase cross-border investment in the region and assist Algeria diversify its economy. This investment will also help develop the cement sector in the country, and we hope it will have an important demonstrative effect that will encourage other investments in Algeria."
Among other investments it has made with Citadel Capital, IFC has previously invested $17m in the Sphinx Turnaround Fund, a $100m Fund sponsored by Citadel Capital to invest in distressed small and medium-sized enterprises in Egypt's industrial sector.
Pharos Investment Banking acted as financial advisor to ASEC Cement on this transaction.
Posted by Rana Mesbah
