Lafarge Building $120 Million Cement Factory as Education and Infrastructure Power Mexico's Construction Growth

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Lafarge Cementos, (PEC 65000442) the Mexican arm of the Lafarge Group, is investing more than $120 million to expand and convert its existing plant in Hidalgo state. The newly developed plant will produce 600,000 tons of cement and will replace the current plant that produces 350,000 tons per annum.

Bernard Kasriel, General Director of the Lafarge group said that the new plant is part of the company's strategy to increase growth, reduce costs, and increase profitability. He said that Mexico was the second largest cement market in Latin America with an annual consumption of cement in excess of 30 million tons with positive growth potential.

Hidalgo, which is situated in the center of the country, close to Mexico City produces around eleven million tons or about 38% of national cement production. Lafarge Cementos uses raw materials found locally for production. Limestone, clay and kaolin are sourced from deposits in a number of Hidalgo municipalities including Atotonilco de Tula where the Lafarge plant is situated producing gray and white cement.

Growth in the Mexican construction industry is expected to run at between 3.5% and 4.5% in 2004. The government has redirected funds to the construction of educational facilities which makes it a lead segment. Infrastructure development will drive engineering construction where electrical generation facilities and road construction will feature. Non-residential sectors will be the strongest sectors in the country's construction market. In past years housing has represented more than 50% of the construction market. Construction growth for 2003 is expected to be between 1.5% and 2.5% this is well below the 5% growth that had been forecast for the year.

Industrialinfo.com's 2004 Industrial Outlook says that in the third quarter of 2003 plant closings in both Canada and Mexico outweighed new plant openings. In total, nineteen new plants started up while 31 closed resulting in a net loss of twelve plants. For Mexico the statistics were: start-ups five - closures sixteen. This means Mexico contributed a negative variance off twelve to the totals.

Plant survey results are based on actual phone verified information derived from Industrialinfo.com's industrial plant database.