MEXICO CITY (Reuters) - A Mexican industrial conglomerate part-owned by billionaire Carlos Slim plans to list shares on the local exchange and is launching a cement company that it says will be the first new entrant to the Mexican market in 70 years.
Elementia plans an initial public offering in the medium term, and it is opening a cement company that aims to supply 3 percent of the Mexican market by next year, Chief Executive Eduardo Musalem said on Tuesday.
Elementia is 46 percent-owned by Slim’s Grupo Carso (GCARSOA1.MX) conglomerate, with the remaining 54 percent held by businessman Antonio del Valle, a majority shareholder of plastics pipe maker Mexichem (MEXCHEM.MX), Musalem said.
Elementia, with annual sales of $1.2 billion, is backing the new cement maker that aims to begin operating a plant in December with a capacity of 1 million tonnes per year, Musalem said.
Slim, who Forbes ranks as the world’s richest man, controls a financial network built on telecommunications companies that has expanded into retail, banking, construction, real estate and mining.
The new cement maker, Cementos Fortaleza, is building a $300 million plant in Hidalgo state and will distribute cement in about one-third of Mexico’s states, mostly in the central part of the country, Musalem said.
“It’s been 70 years since the last time a cement maker launched in the (Mexican) market,” Musalem said during a press conference.
About 85 percent of Fortaleza’s initial sales will be made in 50-kilogram bags, with the remaining 15 percent sold by the bulk.
By 2014, the company plans to start selling ready mix and aggregates. Elementia has quarries good for a “100-year supply,” according to Antonio Taracena, chief executive of Fortaleza.
The firm is set to compete against market leader Cemex (CMXCPO.MX) (CX.N), which supplies more than 60 percent of Mexican demand. Cemex’s local plants have the capacity to produce 29.3 million metric tons a year, according to the company’s website.
Other competitors in the Mexican cement market include Holcim Apasco, Grupo Cementos Chihuahua, Corporacion Moctezuma, Cemento Cruz Azul and Lafarge.
Elementia has other units that produce polyethylene, copper and aluminum, key materials in the construction field.
Writing by Michael O'Boyle; Editing by Simon Gardner, Tim Dobbyn and Leslie Adler