Displaying items by tag: Loan

Vietnam: The Vietnamese government will no longer provide guarantees to foreign loans for cement projects, as domestic supply has surpassed real demand, according to Prime Minister Nguyen Tan Dung.

Local cement producers have been facing huge difficulties, including huge losses and high inventory due to the low domestic demand. While domestic demand has remained modest, the annual cement output continues to increase, reaching 70Mt in 2013. Cement sales remained low at 61Mt. Domestic cement production capacity is forecast to rise to 77Mt/yr due to the commissioning of five new cement plants with a combined production capacity of 7Mt/yr.

The Vietnamese government earlier guaranteed foreign loans worth US$1.36bn for 16 state-owned cement companies, including Dong Banh, Thai Nguyen, Tam Diep and Hoang Mai companies. According to an audit report in 2012 from the Ministry of Finance on cement projects using loans with the government acting as underwriter, 10 cement projects resulted in losses and some of them could not repay their loans.

Turkey: The International Finance Corporation (IFC) is providing Çimko a financing package that includes a US$40m loan for its own account and a US$25m syndicated loan from BNP Paribas Fotris mobilised by the IFC. The long-term financing will support Çimko's investment in energy-efficiency and in the ready mix concrete market, the IFC said in a statement.

The Turkish cement producer's investments will strengthen its overall competitiveness, increase employment in southeastern Turkey, enable the company to reduce greenhouse gas emissions, continue to supply more cement to the domestic market and export more cement to Middle East and North Africa (MENA) region. Çimko is a joint venture between local Sanko Group and Italy's Cementerie Aldo Barbetti.

Turkey: Batisoke Soke Cimento Sanayii has secured a Euro10m loan from local lender Akbank. The 7.5-year loan will be provided from Akbank under the EURO Turkey Mid-size Sustainable Energy Financing Facility of the European Bank for Reconstruction and Development (EBRD), Batisoke said in a filing with Borsa Istanbul.

With the facility, the EBRD aims to support Turkish private-sector borrowers to implement mid-size renewable energy, waste-to-energy and industrial energy efficiency investments via providing loans to seven Turkish banks for on-lending to private sector borrowers.

Saudi Arabia: Al Jouf Cement has announced in a bourse filing it had signed an agreement with Saudi Arabia's largest Islamic bank, Al Rajhi Bank, for a US$107m loan to partially finance the construction of a second production line. The loan is to be repaid by June 2019.

Al Jouf Cement has a cement production capacity of 1.75Mt/yr or 5000t/day. The company's products include Ordinary Portland Cement and sulphate resisting cement.

Iran: Cement producers in Iran owe about Euro750m to the country's banking system, according to Abdolreza Sheykhan, the secretary of Iran's Cement Producers Association.

Sheykhan added that cement producers were also incurring losses due to changes in foreign currency rates, in a report by Iran's Donya-e-eqtesad newspaper. Cement producers received bank credits based on an old official rate of 9000 rials to the US$. However they have to pay back the credit at a new rate of 25,000 rials to the US$.

Russia: The State Corporation Bank for Development and Foreign Economic Affairs (Vnesheconombank) has agreed with HSBC Bank to extend additional credit facilities worth up to Euro25.2m for the construction of a cement plant in the Kaluga region by the Kaluga Cement Plant company. Credit facilities are to be extended for a total period of up to eight and a half years against insurance coverage of Denmark's Export Insurance Agency, EksportKreditFonden. This project will help to develop production facilities and create new jobs.

South Africa: Chinese cement producer Jidong Cement has secured US$86.6m loan towards building a new cement plant at Koedoeskop in the northern state of Limpopo, South Africa. The 1Mt/yr greenfield project, Mamba Cement, comprises Jidong Cement and the China-African Development Fund, Wiphold.

"A master finance agreement was entered into between Nedbank Capital, Bank of China and a special-purpose vehicle known as Mamba Cement Company," said Nedbank head of infrastructure Brett Botha. South African bank Nedbank signed an agreement with Bank of China for the project on 27 March 2013.

Ethiopia: The Development Bank of Ethiopia has withdrawn from a US$82.8m loan agreement made with Habesha Cement. In September 2011 the bank approved the loan which was expected to cover over 70% of the financing of the proposed cement factory.

The bank withdrew from the arrangement on the basis of its inability to disburse money at this time. In addition, it also pulled out of the loan commitments to five other companies citing similar reasons. According to sources, the bank has pledged to help the companies in their search for foreign financing.

In July 2012 PPC (Pretoria Portland Cement) and South Africa's Industrial Development Corporation (SAIDC) paid US$21m for nearly half of Habesha Cement. PPC acquired 27% of the Ethiopian cement factory by paying US$12m in cash and the state owned SAIDC paid US$9m for an additional 20%.

Denmark: Danish cement plant manufacturer FLSmidth has signed a Euro125m loan agreement with the European Investment Bank (EIB). The five-year-bullet loan will finance FLSmidth's global research and development (R&D) programme within the cement industry during the period 2013-2016. The R&D programme will focus on development of innovative products, optimisation of energy efficiency and use of materials and fuel in the production process as well as reduction of harmful emissions.

"Through its focused R&D efforts FLSmidth aims at fulfilling its customers' future needs for innovative technical solutions, high reliability and availability, minimum environmental impact and the lowest possible lifecycle costs. This loan from the European Investment Bank supports these efforts," said Group Executive Vice President and CFO Ben Guren.

In its press release about the loan, FLSmidth noted that it places emphasis on the use of alternative fuels, reduced emissions and waste, improved heat recovery, lower power consumption, minimised water consumption, increased plant capacity, availability and operating efficiency and minimum safety risk.

Iraq: International Finance Coporation (IFC), a member of the World Bank Group, is providing a US$70m loan to help renovate a cement factory in Iraq.

The financing will allow Kerbala Cement Manufacturing (KCML), a subsidiary of Lafarge, to rehabilitate a state-owned plant near the city of Kerbala. KCML will undertake the work under a concession agreement with the government of Iraq. The financing is expected to aid Iraq's construction sector.

"This financing will help address the cement shortage that Iraq is facing and help the country meet supply gaps in its infrastructure," said Guy Ellena, IFC Director for Manufacturing, Agribusiness and Services in Eastern and Southern Europe, Central Asia, the Middle East and North Africa.

KCML is a joint venture between Lafarge and MerchantBridge, a London-based private equity group. The financing is being supplemented by a US$20m loan from Proparco, a development financial institution funded by the French Development Agency and private shareholders.