The cement market is prepared to increase its capacity and keep pace with growth in construction in the country.
Cemex and Holcim, cement companies founded with foreign capital in the domestic market, say they are prepared to increase their capacity and thereby keep pace with growth in construction in Nicaragua.
These companies will continue to expand their investments in 2014.
A ruling states that the already concentrated Honduran cement market will not be altered by the sale of shares to the Colombian company Argos.
From a press release by the Commission for the Defense and Promotion of Competition (CDPC):
The Commission for the Defense and Promotion of Competition (CDPC) as part of its advocacy of free competition within the framework of its powers and in relation to economic concentrations, was notified about a project of economic concentration in the Cement Industry, involving the economic agents Cementos Argos, S. A de C.V. (buyer) and Lafarge Cementos S.A. Unipersonal (seller).
Mexico's Cemex will build a new plant for grinding and packing under an agreement with the Compañía Nacional Productora de Cemento.
From the statement released by Corporaciones Nacionales del Sector Público (CORNAP):
Memorandum of Understanding Signed Between Cementera and CEMEX Nicaragua
Thursday, November 21, 2013
The Chairperson of the Board of the Compañía Nacional Productora de Cemento (CNPC) Carmen Reyes García and the representative from CEMEX Nicaragua, Andrés Jiménez Uribe signed a Memorandum of Agreement where the Mexican government authorized the construction company to install and operate a plant for grinding and cement packing facilities outside the cement plant located in San Rafael del Sur.
The Salvadoran company Postes de Concreto S.A. has built a factory with a capacity to produce 125 concrete posts a day.
"Two years ago we began to operate in Tegucigalpa, Honduras, after having consolidated ourselves in El Salvador and in 2015 we thought about investing in Panama," said Mauricio Avalos, president of the company, explaining that the opening in Nicaragua is part of its strategy of expansion into Central America.
Keeping pace with growth in demand for modern workspaces, in the last three years construction of luxury office buildings has increased in Managua .
High rise luxury buildings for offices and roads built using reinforced concrete are saving up to 40% on electricity bills and saving up to 15% in fuel consumption.
According to Marco Amador, executive director of Discover Construcciones in Managua there are about 15 office buildings with an occupancy of 90%.
The construction of megaprojects has caused a high demand for cement and an increase in the prices of the main material for the construction industry.
The fact that only two companies (Argos, and Cemex) lead the Panamanian market has caused prices to skyrocket because they are setting the price of this item. Experts expect that when demand for this raw material decreases, so will prices.
The construction of the hydroelectric station Tumarín, and the eventual realization of the Grand Canal project, have created great expectations for business deals in the sector.
Holcim is waiting for clear signals about the canal project, a project that could represent a great opportunity for the company.
On the other side is the hydroelectric station Tumarín, over which they have had been making approaches for several years, even though it has not yet fully started. "While the company has had to reorganize, expand its staff and equipment, and increase its investments in order to keep pace with the growth of the sector, the construction of the canal (a Pharaonic project) will force the two cement companies to work flat out to meet the requirements for the work," noted an article in Confidencial.com.ni.
Cementos Progreso has announced an investment of $720 million in the construction of the San Gabriel plant with capacity of 2.3 million tons per year.
"Adding this to the capacity of the San Miguel plant, located in Sanarate, El Progreso, the company will be able to offer the market five million tons of product every year", reported Prensalibre.com.
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In Panama cement prices increased between 11 and 12% from the first of January, and other materials are also rising.
Capital.com.pa reports that "With the construction boom and the arrival of the dry season, the country’s hardware stores have begun to record price increases in many of its products."
In the case of gray cement, for example, "The companies Cemento Panamá and Cemex announced that as of January 1 their products will increase by 11% and 12%, respectively, and the market is already reflecting these adjustments", said Ricardo Castillo, the sales manager of the hardware store Super Materiales. Since October 2012, he added, "most building materials began to reflect significant increases."
The Municipality of San Jose, Costa Rica is looking at funding options to replace asphalt with concrete on all the avenues in the city center.
During the inauguration ceremony for the new works on Avenida 10 in the capital city, the mayor, Johnny Araya, said: "We will be analyzing the financial alternatives, to see if we can give continuity to the project in other parts of the city and, that in the heart of the city at least, all the streets will be done in concrete .
The Guatemalan PreCon Group has opened its production plant at km 17.5 on the road to Leon.
Investment in new plant was $2 million, and the production area is 1,400 square meters.
An article in Trincheraonline.com reports that "The products that will be marketed in Nicaragua are building materials such as blocks, ‘Blocón’ system, paving stones, curb stones and slabs or beam with with LK moldsh."
One of the main indicators of the construction industry reveals the intense dynamic being maintained in this sector in Panama.
According to the Controller General of the Republic, an increase of 20.9% was reported in the production of concrete in the first quarter, as a result of strong performance by the construction industry.
Pa-digital.com.pa reports, "This growth is due to the positive way in which he has the real estate sector in the isthmus has been performing in recent years, positioning itself as one of the largest in Latin America, because of the accelerated pace and the dynamics seen in the area of construction, with its contribution to the Panamanian economy "
In order to position better in a very competitive market, manufacturing companies are betting on strengthening their technical divisions, customer service and infrastructure.
Such is the case of Productos de Concreto (PC) which since its separation from the Holcim group, has been focussing its efforts on strengthening its technical division and developing a customer service area.
A legal reform will end tax exemptions on cement produced in the provinces of Alajuela, Limón, Heredia and Puntarenas.
A statement from the Legislative Assembly reads:
CEMENT PRODUCTION TAX PAID
The Standing Committee on Financial Affairs has approved the bill number 18164, by which is introduced an amendment to the 6849 Act that relates to the tax of five percent on the cement produced in Cartago, San Jose and Guanacaste.