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The Exit of Cement Giant LafargeHolcim from the Country Joins That of Other Multinationals, Such as Sony, Ford, LG and Mercedes-Benz, That Also Announced Disinvestments in Brazil
After multinationals Sony, Ford, LG and Mercedes-Benz announced disinvestment in the country, the multinational cement giant LafargeHolcim informed its Brazilian subsidiary earlier this week that it will sell its operations in Brazil. If finalized, the deal will trigger a significant change in the sector, as LafargeHolcim is the third largest producer in the country, behind Votorantim and Intercement, in terms of installed capacity, according to data from 2017.
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BBA Itaú was hired to conduct the sale process. The transaction could reach US$ 1.5 billion (equivalent to R$ 8.35 billion), according to executives interviewed by the agency.
The Largest Cement Company, LafargeHolcim is present in nine states in the Southeast (São Paulo, Rio de Janeiro, Minas Gerais and Espírito Santo), Northeast (Bahia, Pernambuco, Paraíba and Rio Grande do Norte) and Midwest (Goiás). According to the company’s website, there are ten industrial plants, 1,400 employees in the country and 90,000 worldwide.
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‘Interlocking brick’ made of earth arrives in the construction industry with cost reductions of up to 40% on the project.
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Espírito Santo will receive the largest engineering project in its history with the duplication of BR 262, which will have 50 viaducts, 28 bridges, and 2-kilometer tunnels cutting through the most challenging mountainous region of the entire state.
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A project of nearly 9 million reais already has the first kilometer paved in Santa Catarina and promises to completely transform the access between Jaraguá do Sul and Rio dos Cedros in an area where tourism is growing at a rapid pace.
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A couple builds a system to bring water from the spring to their land, climbs a hill with materials on their backs, and creates a simple, cheap, and sustainable solution to ensure their own water supply.
The move is part of LafargeHolcim’s action to sell assets to reduce its debt. Since 2018, for example, the company has sold a series of its assets outside Europe, such as those located in Indonesia and Malaysia.
Other Multinationals Have Also Announced They Will Leave Brazil
If realized, the exit will join the movement of other multinationals from various sectors, such as Sony, Ford, LG and Mercedes-Benz, which have announced disinvestments in Brazil in recent months amid the economic crisis in the country.
The exit of the group along with Sony, Ford, LG and Mercedes-Benz will occur despite the construction market enjoying a positive moment in Brazil. According to the National Union of Cement Industry (SNIC), the production of the material rose by 19% from January to March 2021, to 15.3 million tons, compared to the same period the previous year. Before the pandemic, production had been affected by a period of heavy rains. In March, the increase was 34.6% compared to 2020, to 5.5 million tons.
Infrastructure Concessions May Help Accelerate Cement Consumption
The latest SNIC report states that, despite some good news on the horizon – such as infrastructure concessions that help accelerate cement consumption – there are also negative signs for the economy, such as the distribution of a more ‘skinny’ emergency aid and a high unemployment rate, above 14%. However, real estate sales remain strong, driven by single-digit interest rates.
“It’s not possible to bet on Brazil’s long-term growth. Companies can’t afford to waste time; they will prioritize locations with stronger growth. Brazil is lagging in the reform and infrastructure process. Concessions have happened with very little growth in construction, with ready airports, without a more significant boost for heavy construction. Brazil has become poorer and more expensive,” says Sergio Vale, chief economist at MB Associados.
In a Move Contrary to Those of Sony, Ford, LG and Mercedes-Benz, the Multinational Auto Parts Manufacturer Bosch Decided to Bring Its Production from the USA to Brazil
The German multinational auto parts manufacturer Bosch stood against the movement of Sony, Ford, LG and Mercedes-Benz, which decided to withdraw investments and production from Brazil, and brought to the country the production of injectors and injector nozzles for trucks, which were produced in its factories in the United States, thus expanding the diesel injection systems division in its factory in Curitiba.
Furthermore, the intention of the German multinational is to supply not only the domestic market but also to export a large quantity – which can reach up to half of the production.
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