Aalborg Portland A/S has signed a new 10 year joint venture agreement that will maintain and increase the Danish cement producer's sales of white cement to the growing American market.
The agreement which comprises production, sales and distribution has just been signed in the USA following nearly one year's negotiations between Aalborg Portland, the American cement producer Lehigh, owned by the German group Heidelberger Zement, and the Mexican cement group Cemex. The three partners jointly control Lehigh White Cement Company. Founded in 1988, the American cement business owns two white cement facilities in York, Pennsylvania, and Waco, Texas, respectively.
The deal will give Aalborg Portland annual sales in excess of 200,000 tonnes white cement - up about 35,000 tonnes on the former agreement. The total contract value amounts to some DKK 140m (EUR 18.8m) per annum.
Following the renewal of the joint venture agreement, Aalborg Portland has acquired 4.5 per cent of Cemex's shares in Lehigh White Cement Company, making the two equal partners with each holding 24.5 per cent of the shares in the company. The two agreements will have no impact on Aalborg Portland's projected financial result for 2000. Aalborg Portland is part of the APH Group which is turn is part of FLS Industries.
''We expect Lehigh White Cement Company to give Aalborg Portland an over 20 per cent share of the market based on cement delivered from Denmark. Together with the two other partners, we will hold in excess of 50 per cent of the American market which is seeing vigorous growth. In 1999 alone, it grew by 20 per cent and the latter years have experienced average annual growth rates of 10 per cent,'' says Søren Vinther, President & CEO, Aalborg Portland.
The agreements are in line with Aalborg Portland's ''white'' strategy to defend and expand it leadership position worldwide. Combined with its sister company Aalborg Portland White's investment in Malaysia, the current construction of a new w
hite cement plant in Egypt and the present production in Aalborg, they will rank the company as the world's largest producer of white cement with a total production capacity of about 1.5m tonnes per year.
FLS Industries A/S
Corporate Public Relations