I. Colombia
1.1 Cement production enterprises in Colombia
Colombia is the third largest cement producer in Central and South America, after Brazil and Argentina. There are 14 integrated cement plants in operation and 4 cement grinding stations in Colombia, with a total cement production capacity of 17.1 million tons per year. Recently, the country also closed an integrated cement plant with a capacity of 300,000 tons per year, and two integrated cement plants with a capacity of 1 million tons per year are under construction. In addition, there is a capacity expansion project from 1.4 million tons/year to 2.4 million tons/year. When the above three projects are completed and put on line, Colombia's annual cement production capacity will rise to 20.1 million tons per year.
Figure 1: Distribution of Colombian Cement Plant
Data source: Globalcement, China Cement Research Institute
Cementos Argos is the largest cement producer in Colombia. It is one of the few cement companies in South America that does not come from Brazil but has a presence in North, Central and South America. It currently has cement production facilities in the United States, the French Guyana, Haiti, Honduras, Panama, the Dominican Republic and Suriname.
Argus operates 10 cement production plants in Colombia, most of which are integrated cement plants, with only one grinding station of 200,000 tons per year. The total cement production capacity of Argus in Colombia is 11.3 million tons per year, covering more than 65% of the Colombian cement market. At present, Argus is promoting the upgrading project of the company's Rioclara plant, which plans to expand the annual design capacity of the Rioclara plant from 1.4 million tons per year to 2.4 million tons per year.
Due to the weakness of the Colombian cement market in 2017, Argus's sales revenue and profit declined in the first nine months of 2017. Argus's sales revenue for the first nine months was $2.14 billion, down 1.3% from $2.17 billion in the same period in 2016. The company's EBITDA fell 16.85% to $352 million from $424 million in the same period in 2016. Despite the decline in revenue and profit, the sales volume of Argus Cement increased by 16.8% to 12.2 million tons compared with 10.5 million tons in the same period in 2016. Net profit fell 84.5% year-on-year, with net profit of only $19.3 million in the first nine months, down sharply from $124.4 million in the same period in 2016. In addition, Argus lost money in the first quarter of 2017, losing $15.6 million.
Cemex is the second largest cement producer in Colombia. The cement production capacity of Cemex in Colombia is 4.4 million tons/year. It has two integrated cement plants and two cement grinding stations in Colombia, with cement production capacity of 3 million tons/year and 1.4 million tons/year respectively. At present, Cemex is also promoting the construction of two new integrated cement plants with a capacity of 1 million tons per year. Therefore, in theory, Cemex's cement production capacity in Colombia will increase to 6.4 million tons per year in the future. However, Cemex's project in Maceo has been controversial, and the project has been delayed many times. In March 2017, the company announced that Marceo's plant would operate at a capacity of 250,000 tons per year because Cemex did not receive an environmental permit.
In addition, LafargeHolcim, a cement manufacturer operating in Mexico, has a 2.1 million tons/year integrated cement plant. In November 2016, the company announced the construction of a 500,000 tons/year grinding station, which is expected to be put into operation in the first quarter of 2018; Ultracem operates a 1 million ton/year grinding station in Colombia; Procemcol operates a 200,000 ton/year integrated cement plant. In addition, Cementos Molins plans to build a new 1.3 million ton integrated cement plant in Colombia, which is expected to come online in 2019.
Two, Venezuela
2.1 Venezuelan Cement Company
Currently, all cement companies in Venezuela are owned by the government, as a result of the nationalization policy of former Venezuelan President Hugo Rafael Chavez in 2008. Before Chavez's nationalization policy, Cemex and Holcim had more business in Venezuela and controlled most of the market.
Figure 2: Venezuelan Cement Plant Distribution
Data source: Globalcement, China Cement Research Institute
Currently, the Venezuelan government manages all cement enterprises through a company called Corporati Corporatión Socialista del Cemento. The company directly or indirectly controls these cement plants through its subsidiaries FNC Venezuela, Invecem and Ehdas Sanat. The Venezuelan government currently owns 10 cement plants, all of which are integrated cement plants with a cement production capacity of 14.5 million tons per year. Venezuela currently has only one non-governmental cement company, Cementos Cumumbo, which owns an integrated cement plant with a designed cement capacity of 800,000 tons per year.
In addition, there are three cement enterprises belonging to the government in different stages of construction. When all these cement enterprises are put into production and operation, they will add another 2.2 million tons/year of cement production capacity to Venezuela. By then, the total cement production capacity of Venezuela will rise to 17.5 million tons/year.
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