Irish green cement group Ecocem has signed a €27 million joint venture with ArcelorMittal, the world's biggest steel producer, to establish a large cement-making factory in the south of France, writes Ciarán Hancock, Business Affairs Correspondent.
The Dublin-based company, headed by Donal O'Riain, will have a 70 per cent stake in Ecocem France and invest €6 million cash in the new business.
ArcelorMittal will own 30 per cent and is investing €3 million in equity in the venture. The steel producer will also provide raw materials for the venture. The balance of the funds will be raised through non-recourse borrowings. Ecocem said it will pay for its stake from its own resources.
The firms plan to build a facility to manufacture 700,000 tonnes of cement a year at a site owned by ArcelorMittal in Fos-Sur-Mer, about 30km west of Marseille.
The plant, which will employ about 30 staff, has yet to receive planning permission and Mr O'Riain said it could be the end of 2009 before it opens. The deal took three years to negotiate.
Ecocem plans to use the manufacturing facility as a launchpad into the markets of the south of France and northern Spain.
This will be Ecocem's biggest manufacturing plant. It already has facilities in Dublin Port and the Netherlands, producing a total of about 930,000 tonnes of cement annually. Founded in 2001 by Mr O'Riain (60), Ecocem imports granulated blast furnace slag, a steel byproduct it dries and grinds into a powder for use in its eco-friendly cement.
Ecocem's cement is being used in the construction of the National Conference Centre and the redevelopment of Lansdowne Road. It is regarded as being more energy-efficient and more durable. It is also cheaper to produce that conventional cement.
ArcelorMittal has more than 300,000 employees in 60 countries. In the first nine months of this year, it had net income of $7.9 billion on sales of $77.2 million.
Ecocem has had a busy year. In July, France's Saint-Gobain, one of the world's biggest building materials groups, paid €17.8 million for a 30 per cent stake in the company.
Mr O'Riain and his wife, Vivienne, own 39 per cent of the business, while Durkan Construction has an 11.4 per cent stake and builder Ged Pierse owns 2.7 per cent. Ecocem last week appointed accountant and former Bank of Ireland governor Laurence Crowley as its chairman.
Mr O'Riain said the new plant would allow it, coupled with its existing operations, to reduce the CO2 emissions of the European cement industry by more than one million tonnes a year.
Ecocem posted its first profit in 2006. It produced after-tax profits of €1.7 million on turnover of €35.4 million.
