Joint venture between
St. Marys Cement (Canada) and McInnis Cement to focus on expanding
operations to supply cement across the Great Lakes region, Eastern
Canada and the Northeastern Coast of the United States
Toronto
and Quebec (Canada), São Paulo (Brazil) December 10, 2020
– St. Marys Cement Inc. (Canada), a wholly owned subsidiary of
Votorantim Cimentos, and McInnis Cement Inc. today announced that
they will combine their assets to create a combined entity to
manufacture, distribute and sell cement in Canada and the United
States. The joint venture will be owned by Votorantim Cimentos
International (VCI), the international investments platform and
wholly owned subsidiary of Votorantim Cimentos S.A., the sixth
largest cement producer in the world, and Caisse de dépôt et
placement du Québec (CDPQ), a long-term institutional investor,
through its investment in McInnis Holding Limited Partnership
(McInnis Holding).
The
business combination is expected to significantly strengthen the
strategic positioning of the combined operations through increased
cement production capacity, operational efficiencies and an enhanced
distribution network.
Votorantim
Cimentos International will hold 83% and CDPQ will hold 17% of the
shares in the joint venture. Both parties will transfer North
American assets to the combined entity. The Votorantim Cimentos
assets are primarily cement plants located in Bowmanville and St.
Marys, in Canada, and in Detroit and Charlevoix, Michigan, and Dixon,
Illinois, in the United States, along with its extensive distribution
network concentrated in the Great Lakes region. The McInnis Cement
assets include the Port-Daniel-Gascons plant with all of its
terminals located in Quebec, Ontario, New Brunswick, Nova Scotia and
the Northeastern region of the United States, as well as its maritime
operations.
“The
creation of this combined entity allows us to partner with a
world-class player with an established presence – and strong track
record of profitability – in North America to operate the McInnis
Cement plant in Port-Daniel-Gascons, one of the most modern and
efficient facilities in the region. This partnership will enable the
Port-Daniel-Gascons plant to benefit from Votorantim Cimentos’
production, distribution and operational expertise to develop
important markets, particularly in Eastern Canada, the Great Lakes
region and the Northeastern Coast of the United States to meet the
growing demand for cement”, said Kim Thomassin, CDPQ’s Executive
Vice-President and Head of Investments in Quebec and Stewardship
Investing.
“This
transaction is aligned with Votorantim Cimentos’ portfolio
management strategy, prioritizing investments in markets in which we
already operate and enabling geographic expansion in locations with
attractive growth prospects. McInnis Cement’s state-of-the-art
plant and distribution network enable an efficient cost position in
an attractive region, with access to new markets and lots of
opportunities”, said Marcelo Castelli, Global CEO of Votorantim
Cimentos.
“We
are excited about the prospects for Votorantim Cimentos in North
America through this joint venture, and very much welcome the
partnership with CDPQ, a leading institutional investor that shares
our long-term approach to investing and our commitment to sustainable
and best-in-class business practices”, said João Schmidt, CEO of
Votorantim S.A., the controlling shareholder of Votorantim Cimentos.
With
a growing demand for the development of critical infrastructure
throughout North America – and an emphasis on new large-scale
projects to drive the economic recovery– the market outlook for
cement remains positive. McInnis Cement’s 2.2-million-tonne annual
capacity plant in Port-Daniel-Gascons, Canada is the first new plant
built to serve Eastern Canada, the Northeastern U.S. and the Great
Lakes region in more than 50 years – complementing St. Marys
Cement’s longstanding presence in the region. McInnis Cement has
constructed a deep-water marine terminal, adjacent to the plant, and
operates three marine vessels and a distribution network consisting
of 10 terminals (marine, rail and truck) strategically located in the
U.S. and Canada.
Commitment
to Sustainability and the Port-Daniel-Gascons region
Votorantim
Cimentos and McInnis Cement both bring a deep commitment to employing
the latest technology to drive sustainable business practices and
support the local communities where they have operations. As part of
the agreement on this joint venture, the parties have committed to
maintaining jobs and facilities at the Port-Daniel-Gascons plant
until at least 2029. Additionally, the combined entity will deploy
initiatives at the Port-Daniel-Gascons plant to support carbon
footprint reduction in the cement industry and will work closely with
leading experts and local stakeholders to ensure that these
activities benefit the region.
Votorantim
Cimentos manages the impacts of its operations and works to make them
increasingly sustainable. From 1990 to 2019, Votorantim Cimentos
reduced its CO2
emissions per tonne of cement by 23%. Recently, the company approved
its Sustainability Commitments for 2030 with clear targets in seven
areas: to reduce its environmental footprint, promote a more circular
economy, co-create sustainable solutions, operate with integrity and
transparency, promote a diverse and inclusive environment, share
value with its communities, and promote safety, health and
well-being. Votorantim Cimentos’ vision is to achieve carbon
neutrality in concrete by 2050.
Established
Presence in North America with Market Leading Position
Founded
in 1933, Votorantim Cimentos is a global company operating in
building materials, mining, agricultural lime, co-processing and
waste management. With 256 industrial sites worldwide, the company
has an installed cement capacity of 52.8 million tonnes. Votorantim
Cimentos’ presence in North America began in 2001 with the
acquisition of St. Marys Cement, a Canadian company founded in 1912
in the Town of St. Marys, Ontario. Through its integrated cement
plants in St. Marys and Bowmanville, Ontario, and Detroit and
Charlevoix, Michigan, St. Marys Cement currently serves Canadian and
U.S. customers in the Great Lakes region. With a production capacity
of 5.2 million tonnes, St. Marys Cement participated in such landmark
projects as the CN Tower, Roy Thompson Hall, Maple Leaf Gardens and
the Darlington Nuclear Station, as well as countless other
engineering, civic and residential projects that significantly
contributed to the growth and prosperity of Canada.
The
transaction remains subject to customary closing conditions,
including approval by regulatory authorities in Brazil, Canada and
the United States. The two companies will continue to operate as
separate businesses pending the closing of the transaction.
Moelis
& Company LLC acted as exclusive financial advisor for Votorantim
Cimentos. HSBC served as lead financial advisor to CDPQ on the
transaction, in collaboration with National Bank Financial and BMO
Capital Markets.