Announcement of Argentine Cement Company in Second Major Expansion on May 12, 1981

I ntenzational Finance C01poration 1818 H Street. N,W • IFC Press Release No. 81/38 Washington, DC 20433. U,S,A 202-4 77 -1234 Tuesday, May 12, 1981 Argentine Cement Company In Second Major Expansio~ J. Minetti S. A., a leading Argentine cement producer, is undertaking its second major expansion in three years by constructing a new, $154 million plant in the northern part of the country. Financing is being provided by local and foreign investors, and by the International Finance Corporation (IFC) and an international group of banks which, together, are providing $62.5 million in senior and subordinated loans. The new cement plant will have a capacity of 720,000 metric tons a year and will be built at Puesto Viejo, Province of Jujuy. The expansion, together with an earlier project in 1978, will increase the Company's • capacity to approximately 1.6 million tons annually, making it the third largest cement manufacturer in Argentina. The Company's main markets are in the interior of the country. Of the $60 million senior loan, $10 million is for IFC's own account and $50 million is being taken up by Manufacturers Hanover Trust Company, New York; Union Bank of Switzerland, Zurich; Bank of Montreal; Banque Europeenne de Credit, Brussels; Kredietbank S. A. Luxembourgeoise; Libra Bank Limited, London; The Riggs National Bank of Washington, D. C.; The Royal Bank of Canada, Montreal; Deutsch-Suedamerikanische Bank AG. (Dresdner Bank Group), Hamburg; and Euro-Latinamerican Bank Limited, London. A $2.5 million subordinated loan is also to be provided by IFC. Banco Exterior de Espana, Spain, is lending $26.9 million equivalent; Kreditanstalt fur Wiederaufbau, Federal Republic of Germany, $9. 5 million equivalent; and other banks, $10. 0 million. 'Equity in.vestments of $2.5 million by existing main shareholders, a public stock offering of $5 million and $3 7. 9 million in internally generated funds comple.te the financial plan . •  2 The plant will use the drv process and will produce both bulk and bagged cement. It is designed to use either natural gas or fuel oil but expects to rely on the Duran Norte gas fields, some 95 • miles distant. A new seven-mile pipeline is to connect the plant with the existing gas line. Demand for cement in Argentina has been rising steadily for the past four or five years, creating shortages -- particularly in the northern provinces -- and necessitating imports. The plant 1 s output will be mainly for domestic consumption and will help alleviate the shortfall in domestic production, resulting in estimated net foreign exchange savings of $28 million a year. Part of the production is expected to be used for World Bank and Inter-American Development Bank assisted international infrastructure projects. The venture will also benefit the Argentine economy by reducing the need for expensive internal cement shipments. It is in line with the Government's interest in expanding and modernizing the cement sector and in decentralizing industry into the lesser developed, interior regions of Argentina. IFC helped to finance the Company's earlier 540,000 metric tons-a-year cement plant in Malagueno, Province of Cordoba, in north- • central Argentina. The Malagueno facility began commercial operations last autumn, four months ahead of schedule. (Any inquiries strictly relating to IFCts participation in this project should be directed to the IFC Information Office, 1818 H Street, N.W., Washington, D.C. 20433, Telephone (202) 676-0394). •