Egypt's ASEC Cement is on track to triple production in the Middle East and North Africa by 2013 while finalising talks with banks to boost production in Syria, its chief executive has said.
ASEC, a subsidiary of Cairo-based Citadel Capital, controls plants in Egypt, Algeria, Sudan, Syria, Iraq's semi-autonomous Kurdistan and Ethiopia, with an annual combined cement production of nearly four million tons, Giorgio Bodo said.
"The Middle East is still a young part of the world. You have lots of new families and everybody wants new houses, new ports, hospitals, and schools," Bodo said in interview. "By 2013, if all goes well, we will be close to 12.6 million tons."
ASEC is also considering expansion elsewhere in sub-Saharan Africa, but will focus on its main markets first, Bodo said.
The company has finished the first phase of its Syrian plant, 85 kilometres north-east of Damascus, which it expects to bring in revenue of $93 million in 2013. It is now finalising talks with Syrian banks to expand further.
"Syria is an interesting country because it is opening up from an economic point of view and the banking sector is growing," Bodo said, adding that demand for cement was enormous.
The firm, which has stakes in Egypt's Misr Cement in Qena and Zahana Cement in Algeria, plans to consider investment alternatives in Africa, where cement demand is growing, once its ongoing projects are further along.
"What we would like to do is target especially sub-Saharan Africa," Bodo said. "We think this is the continent that will have the most important growth."
Still, ASEC may slash production at its $253 million Takamol plant in Sudan, which has a nominal capacity of 1.3 million tons, to one million tons due to political uncertainty ahead of a referendum on southern independence, he said.
The referendum is scheduled for 9 January.
"It is not clear what we are up against if the south decides to secede," Bodo said. "We are not able to operate at full production because demand is not particularly dynamic given the political situation."
In Egypt, ASEC has secured funding for a 1.6 million ton-per-year grey cement greenfield plant in the southern province of Minya, owned by its subsidiary, Al-Arabiya Al-Wataniya (ANCC), with production starting in early 2013, Bodo said.
ASEC plans to boost its sales of ready-mix cement, which it is producing in a joint venture with Misr Cement Qena, to complement its cement business, Bodo said.
"Our aim is to develop the ready-mix sector in a part of the country that we feel is growing and where there are no other major players."