After deal with CSN, Holcim leaves Brazil, but not other Latin American countries

RIO DE JANEIRO, BRAZIL – The world leader in the production of cement and other construction materials, the Swiss group Holcim announced on Friday (9) the sale of its business in Brazil for a value of US$1.025 billion to CSN (Companhia Siderúrgica Nacional). But it will strengthen its activities in other countries in Latin America.

The divestment in Brazil includes Holcim’s five integrated cement plants, four grinding stations, six aggregates sites, and 19 concrete mixing facilities.

Group CEO Jan Jenish said in a statement in Zurich that the sale of the activities in Brazil “strengthens the company’s balance sheet, significantly reducing its debt ratio.”

According to the executive, moving forward in optimizing its portfolio, Holcim will use the funds to invest in its Solutions & Products business, based on the acquisition of the American company Firestone.

According to the statement, although Holcim abandons its activities in Brazil, Latin America remains a core strategic growth region.

Building on strong positions in all of its markets, Holcim says it has recently invested in an additional clinker line in Malagueno, Argentina, a new grinding station in Yucatan, Mexico, and continued growth of its Disensa retail network.

Holcim also introduced its Firestone GacoFlex line in Mexico as the first step in developing its roofing systems business throughout Latin America.

In April, Jenish had already signaled his interest in leaving Brazil. For analysts, this was explained by the group’s transformation strategy to move from a company primarily focused on cement to greater exposure in construction materials and products. This implied, at the same time, asset sales and acquisitions.

Two analysts from UBS, Anastasia Solonitsyna and Gregor Kuglitsch, calculated at the time that the value of the deal in Brazil could reach US$ 1.4 billion. The deal now closed has a much lower value.