Cement maker Intercement in talks to sell assets

Brazilian cement maker Intercement is in talks with Votorantim, Brazil's largest cement maker, along with other potential buyers, to sell some of its assets to help pay down debt.

Votorantim, which boasts a cement production capacity of 31.8mn t/yr, confirmed on 22 February that it has submitted an offer to acquire a portion of Intercement's assets. Such a deal would have to be approved by Brazilian antitrust authority CADE.

The next day, Intercement said that over the last few months it has received "a series of inquiries and expressions of interest in its assets." Intercement is evaluating "strategic alternatives, such as private placement, merger, or partnership with a strategic player or even a potential divestment."

Company officials said those talks are in an "embryonic stage."

In June 2023, Intercement reached an agreement with China's Huaxin to purchase the company's assets in Mozambique and South Africa. Intercement sold its business in Egypt to an undisclosed buyer in January 2023.

Intercement owns 23 cement plants, 15 concrete plants and two aggregates plants in Brazil and Argentina.

Lower cement demand, stronger competition and higher costs of raw materials have pressured the company's earnings in recent quarters. In its third-quarter earnings report, the company cited increases in petroleum coke prices in 2022 as a particular drain on its operational margins and cash flow.

The company had $1.5bn in debt as of 30 September 2023, according to a company financial statement.

By Alexander Makhlay