CAIRO: Aresco, a subsidiary of Citadel Capital's platform company ASEC Holding, won a $130 million contract to construct a cement plant for Building Materials Industry Company (BMIC) in Upper Egypt. The plant, situated in the governate of Assiut, will produce 1.5 million tons of cement per year, and it is slated to be completed within 22 months, the company said in a statement. “The project includes 15,000 tons of steel fabrication and erection — of which 7,000 tons will be equipment manufacturing,” Tarek Salah, managing director at private equity firm Citadel Capital, told Daily News Egypt. The plant will be built by ASEC for Manufacturing and Industrial Projects (Aresco), a subsidiary of Asec Holding, which is Citadel Capital's platform company in the industrial services and contracting sectors. “The contract to build this plant strengthens Aresco's position as the market leader in industrial projects in general and cement plants in particular,” Salah said. Aresco is currently present through projects in Egypt, Iraq, Jordan, Qatar, Sudan, Algeria and Libya, with over 4,000 employees. The plant's output will help meet Egypt's growing cement needs. “[Aresco's] involvement is in line with the government's policy to maximize domestic inputs in the fabrication of cement plants,” Salah explained. The country's total production is set to increase to 60 million tons per year by 2011, HC Brokerage a private equity firm in the Middle East and Africa, said in a statement. Moreover, HC Brokerage noted that Egypt is already one of the top cement producing countries, with current production reaching 50 million tons per year, which is in contrast to the 31 million tons produced in 2004. Last year cement demand jumped by 25 percent, which was for the most part spurred by strong growth in the housing sector. To help meet demand Egypt is planning to issue eight new cement licenses this year, according to a recent Reuters report. Seeking to capitalize on the growth of the housing sector, ASEC's chief executive told the news agency back in January that the company is aiming to double the cement production it controls by 2013; thus placing this decision firmly in line with these plans. Salah indicated that 600 local jobs would be created through the construction of the plant. “Members of the local community will win a large share of these jobs as well as many of the indirect jobs that are always created by such large-scale construction projects,” he continued. In addition to construction of the cement plant, Aresco will also be involved in testing and commissioning as well as steel fabrication on behalf of BMIC on a lump sum basis, the company said. Salah concluded that the project is precisely represents what Citadel Capital seeks to engage in, as other companies will “be willing to pay premium when we exit our investments.” Citadel is a regional private equity firm with investments of over $8.3 billion.
