Egypt’s Orascom builds $450 million cement factory in Algeria
The Algerian Cement Company (ACC), a subsidiary of Egypt’s Orascom Construction Industries (OCI), has commenced construction of its new $450 million cement factory, which will produce up to four million tons per annum (mta). The project’s first phase, a two-mta capacity unit, is set for completion by 2004, while the second phase is expected to be completed in 2007.
AAC has already signed a $176 million Engineering, Procurement and Construction (EPC) contract for the installment of the first unit with a consortium made up of Denmark’s F.L. Smidth and OCI Algeria, another wholly-owned subsidiary of OCI which pursues construction opportunities in Algeria.
This first contract provides for the construction of ACC‘s two-mta green field cement plant in Hammam Dalaa, in the southeastern M’sila Province located in central Algeria. The plant is expected begin early cement production in mid 2003 by grinding imported clinker and plans to fire up its kiln in mid 2004.
The total investment cost of the project’s first phase is estimated at $250 million, to be financed through a 60:40 debt to equity structure. Debt financing for ACC is being provided by a syndication of local Algerian and international banks arranged by Citibank N.A.
“ACC is committed to an aggressive construction schedule in order to speed up the commencement of production. We expect ACC to generate substantial returns to shareholders, to become a valuable contributor to our consolidated results in 2003 onwards and to solidify our strategy of expanding the Building Materials Group’s operations into selected markets in the region,” OCI Chief Executive Officer Nassef Sawiris commented.
OCI focuses on three business activities: construction, building materials manufacturing and infrastructure development. The Construction Group provides engineering, procurement and construction services on industrial, commercial, infrastructure and railway projects. The Building Materials Group invests in manufacturers of basic and specialized products for contractors and industrial users, such as cement and paints. The Infrastructure Group invests in long-term development projects including industrial parks, natural gas distribution systems, and port operations. — (menareport.com)
© 2002 Mena Report (www.menareport.com)