Displaying items by tag: Soboce

Bolivia/Mexico/US: The US District Court of Colorado has confirmed compensation of US$36.1m awarded to Bolivian investment company Compania de Inversiones Mercantiles (CIMSA) from Mexico’s Grupo Cementos de Chihuahua (GCC). The arbitration follows a dispute that started in 2011 between CIMSA and GCC about the sales of shares in the Sociedad Boliviana de Cemento (SOBOCE) to Consorcio Cemento del Sur de Perú.

GCC said that it will continue to dispute the ruling and that it would continue to fight the legal case in Bolivia. In 2015 local courts in Bolivia overturned damages imposed by the Inter-American Commercial Arbitration Commission (CIAC) upon GCC.

Bolivia: Soboce (Sociedad Boliviana de Cemento) has inaugurated a new vertical grinding mill at its Viache integrated plant. Together with its other integrated plants at Oruro and Tarija and a grinding plant at Santa Cruz the company now has a cement production capacity of 2.9Mt/yr, according to the Diario Pagina Siete newspaper. The upgrade cost US$85m. Soboce ordered an OK 36-4 vertical roller mill from Denmark’s FLSmidth for the project. To coincide with the new mill the company will also launch ‘Viacha LP12 Insuperable,’ a new cement product.

FLSmidth revealed this week that Cooperativa Boliviana de Cemento, Industrias y Servicios (COBOCE) has ordered a cement mill for its Irpa Irpa plant near Cochabamba. The Danish engineering firm was pleased to note that with the sale it has now delivered mills to three of the country’s five producers. Other recent orders include supplying an OK 36-4 mill to Sociedad Boliviana de Cemento’s (SOBOCE) Viacha cement plant, announced in early 2016, and a sale of a complete integrated production line at Sucre to Fábrica Nacional de Cemento (FANCESA) in late 2016.

These order reveal slow but steady growth in the local industry in recent years. However, a slowdown so far in 2017 suggests that the market is changing. National Institute of Statistics of Bolivia (INE) data shows that sales in the local market broke down in 2016 into a 42% sales share for SOBOCE, 25% for FANCESA, 19% for COBOCE, 8% for Yura and 6% for Itacamba. This changed somewhat in the first quarter of 2017 with a reduction in the sales of SOBOCE and Yura. Sales in the country are concentrated in the departments of Chuquisca, La Paz and Cochabamba, which held 70% of cement sales in 2016.

Graph 1: Cement production and sales in Bolivia, 2012 – 2017. Source: National Institute of Statistics of Bolivia.

Annual cement sales in Bolivia have been growing consistently since 2001. Financial services company Pacific Credit Rating placed average annual sales growth at 7.72% from 1998 to 2016. In 2016 sales reached 3.7Mt. Graph 1 shows a continuation of this trend although the first half of 2017 has been weaker than 2016. COBOCE blamed the reverse in 2017 on reduced local government spending on infrastructure projects and poor weather. The producer was expecting sales to grow by 6 – 8% as a whole for 2017. However, on the basis of the figures for July and August 2017 this is not looking likely. Sales for the two months dropped by 2.5% year-on-year to 0.64Mt. A representative of FANCESA later blamed the market change on a reduction in sales supporting the construction of tall buildings in the country’s key markets as customers switched to buying ‘random’ volumes.

Sure enough local producers have started to complain about foreign exporters damaging their trade. A union head in Chuquisaca called for cement and clinker imports by Yura from Peru to be banned and concerns have been raised about concessions offered to Itacamba, a joint venture between Spain’s Cementos Molins, Brazil’s Votorantim Cement and Camba Cement. President Evo Morales inaugurated this company’s new plant in Yacuses, Santa Cruz in early 2017. The niggles about foreign exports to Bolivia seem counter-intuitive given that the country is landlocked and it has the world’s highest capital city above sea level. Usually, markets with nearby ports are most at risk from clinker and cement imports. Yet, Itacamba was planning exports to Argentina in November so the import and export markets via road and river links can’t be discounted.

Cement sales may be down so far in 2017 but overall the wider economy appears to be in rude health. After a strong decade of growth the national Gross Domestic Product (GDP) growth rate has fallen each year since 2014, but it was still 4.3% in 2016, one of the highest in South America. If that kind of growth persists it seems unlikely that the cement industry will have trouble for long.

Bolivia: Coboce, Itacamba Cemento, Soboce and Fancesa have all reported weakened demand for cement in the first half of 2017. Coboce’s sales growth has slowed year-on-year to 5% due to a reduced local government spending on infrastructure projects and poor weather, according to the El Deber newspaper. Despite this the cement producer expects sale to grow by 6 – 8% as a whole for 2017. Sales of the Camba cement brand produced by Itacamba Cemento have increased and this brand now holds 30% of all sales in Santa Cruz. Fancesa has seen a sharp contraction of its market share in Santa Cruz to 35% from 57%, although this now appears to have stabilised. The company is now targeting Cochabamba and Potosi.

Bolivia: SOBOCE has awarded a contract to FLSmidth for an OK 36-4 cement grinding system to be installed at its Viacha cement plant in Bolivia. The scope of supply includes cement grinding system equipment, engineering and site advisory services.

This will be the first vertical roller mill for cement grinding in Bolivia and will produce high strength cement with 5000 Blaine. Furthermore, at 4000m above sea level, it will have the highest installed elevation for any OK mill in the Americas. Additional scope of supply includes a longitudinal stacker, a sizer for gypsum and pozzolan, Airtech filter, Ventomatic silos and a packing plant.

Once installed, the new cement mill grinding system and packing plant will allow SOBOCE to increase its production capacity to meet cement demand in Bolivia. FLSmidth installed the existing line at Viacha in the late 1990s and in 2010 an expansion project that enabled the plant to double its capacity.

Bolivia: Sociedad Boliviana de Cemento (Soboce) has posted a profit of US$16.1m in the year that ended on 31 March 2015, down by 48.76% from US$31.5m in its 2014 financial year, according to Esmerk Latin American News. The fall was attributed to an increase in costs, rainy weather and a US$7.41m fine it had to pay in 2015, according to Esmerk Latin American News. The company is 98% owned by Consorcio Cementero del Sur, part of Gloria group.

Bolivia: Samuel Doria Medina, leader of the Unidad Nacional party, has sold his controlling shares of Soboce (Sociedad Boliviana de Cemento). Medina made the announcement after meeting with shareholders and officially listing the sale on the Bolivian stock exchange. Soboce was acquired by the Peru-based Holding Cementero, which has interests in the dairy, food distribution and service sectors. Prior to the full acquisition, Holding Cementero had an existing 49% stake in Soboce.

"I sold Soboce to completely devote myself to the people of Bolivia. In light of the October election results, which made my party the leading opposition force, I felt this was necessary," said Medina. He intends to donate some of the proceeds of the sale to charity.

Soboce was founded in 1925 in Viacha, La Paz. Medina took control of the firm in 1987, building the company from 200 employees to over 10,000.

Bolivia: Soboce's planned cement plant in Yacuses, Santa Cruz will require 10Mm³ of natural gas supplies, Soboce's main shareholder Samuel Doria Medina has said. According to the project's viability study, the plant will also need a pipeline to be built and a gas supply guarantee from state-run oil and gas firm Yacimientos Petroliferos Fiscales Bolivianos (YPFB).

Soboce estimates that the plant will cost US$160m to build. The project will be able to generate energy for its own consumption using natural gas. Soboce and YPFB have already built a 19.6km pipeline to supply gas to another plant in Viacha.

Bolivia: The Bolivian investment holding Cimsa, which is the majority shareholder of the country's largest cement firm, Soboce, has said that it will seek arbitration against Mexican cement firm Grupo Cementos Chihuahua for allegedly violating a partnership agreement.

GCC withdrew from Bolivia in a recent deal after completing the sale of its 47% share in Soboce, a private firm, to Peru's Consorcio Cementero del Sur, a subsidiary of Grupo Gloria.

Cimsa, owned by Bolivian opposition politician Samuel Doria, had a preferred interest in GCC's stake under Bolivian law, the company said in a statement.

"Cimsa will begin an arbitration process so that the failure to comply with the shareholder agreement and Cimsa's right of first refusal are adequately remediated, and the sale of the shares by GCC can be reversed," read a statement issued by Cimsa.

Earlier in 2011, GCC pulled out of a planned USD100m investment in a Bolivian housing project, citing a lack of legal security. In September 2010 Bolivia's government nationalized 33.4% of Soboce's shares in the state cement producer Fancesa. Soboce says it has yet to receive any compensation.

Bolivia/Peru: The Mexican cement maker Grupo Cementos de Chihuahua (GCC) has announced that it has finalised the sale of its 47% stake in Bolivian peer Sociedad Boliviana de Cementos (Soboce) to a unit of a major Peruvian conglomerate. GCC said that its stake in Bolivia's top cement maker would go to Consorcio Cementero del Sur, S.A., a subsidiary of the agroindustrial Grupo Gloria. It gave no details regarding the value of the deal.

"Proceeds from the transaction will be used primarily for debt reduction, in line with the company's goal of improving its financial profile and strengthening its core businesses in the US and Mexico," said GCC in a statement.

Previously, in April 2011, a judge in Bolivia ordered a freeze on assets held by Soboce, 53% of which is owned by a group controlled by Samuel Doria Medina, who is a political rival of the country's President Evo Morales.