Mexico's cement giant eyes RI

Mexico's cement giant eyes RI

MONTERREY, Mexico (Reuter): Mexico-based Cemex SA, one of the world's largest cement markers, is taking aim at booming Asia, most probably Indonesia after previous assaults on the Spanish and Latin American markets.

According to the company, its first foray could be announced this quarter. It will not say where, but analysts predict the initial port of call may be Indonesia, where PT Bakrie & Brothers has said it is considering forming a joint-venture cement company with the Mexican firm.

"The capital that we would invest in the first three or four years to go into Asia will be a small amount ... less than two percent of the company's ($3.4 billion) equity," Rodrigo Trevino, CFO at Cemex, told Reuters in a recent interview.

Cemex says it is the world's third largest cement producer.

Wherever the company goes, analysts said it was not clear whether Cemex would take a minority stake in already existing plants, build a new plant, or administer the business for a third party.

"We can capitalize (on our name) for the benefit of all Cemex shareholders by entering new markets and obtaining administrative or operating contracts that increase returns on capital," Trevino said.

Analysts had worried that Cemex's Asia plans would be a major investment, along the lines of its purchases in Spain, Colombia and Venezuela that have left it highly leveraged.

Cemex last year went through a major restructuring of some $2.35 billion in debts, but the company's total debt remains high at $5.4 billion.

Its Spanish unit Valenciana de Cementos, raised $850 million in December to refinance debt.