The Caisse de depot et placement du Quebec (CDPQ) announced Thursday the integration of Ciment McInnis into a joint venture with the Brazilian conglomerate Votorantim.
• Read also: Orgy of public funds in a cement factory
• Read also: The Caisse discreetly collects invoices from the cement factory
• Read also: The company that wants to buy McInnis associated with a cartel
In August, our Investigation Office revealed that talks were underway between the CDPQ and the company, headquartered in Sao Paolo.
The joint venture will consist of the North American assets of the two partners. Votorantim will own 83 percent of the new entity, compared to 17 percent for CDPQ, the partners said in a statement.
Votorantim’s Canadian subsidiary, St. Marys, already had six cement plants in Ontario, which produce more than five million tonnes of cement per year. It also has some forty concrete plants, including one in Gatineau.
In addition to its plant in Port-Daniel, the Gaspé cement plant has a major port terminal in New York, and other similar facilities in the Maritime provinces.
Marcelo Castelli, global CEO of Votorantim Cimentos, said the transaction is part of its strategy to invest in markets where the Brazilian company is already present.
“Ciment McInnis’ state-of-the-art distribution network and plant provide us with a cost-efficient position in an attractive region, with access to new markets and a multitude of opportunities” , he said in the statement.
Kim Thomassin, Senior Vice-President and Head of Quebec Placements and Sustainable Investment at CDPQ, said the transaction will allow Ciment McInnis to benefit from Votorantim’s expertise.
“The creation of this combined entity allows us to partner with a world-class player with an established presence – as well as a strong track record in profitability – in North America to ensure the operations of the McInnis Cement plant, ”she said.
Public funds
Announced by Pauline Marois a few weeks before the 2014 election, the project received public support, in particular $ 350 million from Investissement Québec, in addition to the participation of the CDPQ, which was initially $ 100 million. in share capital, before further reinjections of approximately $ 275 million.
IQ will register a loss for its investment while the Beaudier Group, which was also a partner in the project from the start, will sell its shares in the cement plant, said a source familiar with the matter who requested anonymity.
Construction experienced significant cost overruns, going from $ 1 billion to $ 1.6 billion.
Losses
In Quebec, Ciment McInnis is the largest cement production facility, with a potential capacity of 2.2 million tonnes per year, which has yet to be reached.
The facility, located in Port-Daniel, in the Gaspé, however, does not have the capacity to transform cement into concrete.
Cartel
In 2014, Votorantim was ordered to pay a fine of $ 700 million for its involvement in a cement cartel, which the company still disputes.
In September, Prime Minister François Legault had indicated that no offer had yet been submitted by Votorantim.
“We will wait to see if there is an offer that is submitted by this company, then after we will assess the situation, if it is acceptable as a buyer,” he said.
–
