Top cement producers eye ASEAN stakes<\/p>\n
HANOI (Reuters): Swiss cement maker Holderbank Financiere
\nGlaruse Ltd said on Thursday big foreign cement makers are
\nbattling for position in key Southeast Asian markets and will
\nplay a significant role in the industry.<\/p>\n
But Urs Bieri, member of the executive committee of
\nHolderbank, said the firm would steer clear of Indonesia for the
\nmoment because of political uncertainties there.<\/p>\n
Analysts have said Asia's combination of cheap labor and high
\ninfrastructure demand has persuaded international cement
\ncompanies to chase bargains in the region even though many
\ncountries are under severe economic stress.<\/p>\n
"Global cement producers are locked in competition on the main
\nASEAN markets," Bieri said in written remarks handed out at a
\nnews conference in Hanoi to mark a trip by Holderbank executives
\nto Vietnam.<\/p>\n
The Association of Southeast Asian Nations (ASEAN) comprises
\nBrunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines,
\nSingapore, Thailand and Vietnam.<\/p>\n
Apart from Holderbank, the world's largest cement maker, Bieri
\nwas referring to recent deals or negotiations in ASEAN involving
\nBritain's Blue Circle, France's Lafarge S.A. and Mexico's Cemex
\nS.A. de CV.<\/p>\n
"The outcome of this wave of investments spearheaded by
\nHolderbank, Blue Circle, Cemex and Lafarge is not yet fully
\nvisible, but it is likely that in the future the big foreign
\ncement producers will play a significant role in these
\nmarkets...," he said.<\/p>\n
Bieri said Blue Circle had achieved the dominant position in
\nMalaysia, Holderbank was beginning to play a major role in
\nThailand and the Philippines while Cemex appeared to be gaining
\nthe upper hand in Indonesia.<\/p>\n
Holderbank's capital expenditure in Southeast Asia recently,
\nexcluding Vietnam, had been $500-600 million, Bieri said.<\/p>\n
Holderbank also has a 65 percent stake in a $350 million
\nVietnam joint venture called Morning Star Cement Ltd.<\/p>\n
Bieri said Holderbank was cautious on Indonesia, which has
\nheaved under political tumult this year with the downfall of
\nPresident Soeharto in May and a major economic crisis.<\/p>\n
"We will look at Indonesia as an important market but whether
\nwe move depends on the political situation. Our next move (in
\nASEAN) would be there but there are still many questions," he
\ntold the news conference.<\/p>\n
Bieri said demand for cement in ASEAN had dropped dramatically
\nand would take years to recover. Asia, and ASEAN in particular,
\nhad seen demand fall 15 to 50 percent, he said.<\/p>\n
In Thailand, Holderbank estimated production capacity at 50
\nmillion tonnes this year but demand at 20-25 million tonnes.<\/p>\n
Asked if he expected a nationalistic backlash in ASEAN against
\nforeign firms buying up such a strategic industry, Bieri said top
\nproducers would get involved mainly in joint ventures.<\/p>\n
"Most Western companies will try to move into these countries
\nin a careful and low-key way," he said.<\/p>\n
Indonesia cut an offer to sell a 35 percent stake in giant
\ncement maker PT Semen Gresik to 14 percent earlier this year in
\nthe face of protests from workers who did not want the company
\nfalling into foreign hands. Mexico's Cemex won the second round
\nof bidding on September 29 for the stake.<\/p>",
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