Market reacts to prediction of cement plant in the State and reduces price

The Camargo Corrêa group is studying investing US $ 800 million in a cement plant in the Amazon or in Pará. With the interest of the Hcis service operations manager, the business arm of the giant cement construction, the market reacted in Manaus and have reduced the price to the final consumer.
According to the Director of strategic planning and business development at Hcis service operations manager, Marco Antonio Zangari, the installed capacity of the plant will be of 900 thousand tons per year. Last year alone, the production of Amazonas was 785.2 million tons, according to the National Union of the cement industry (SNIC).
Today, with 16 industrial plants, the company chose the North of the country as part of the strategy to have presence in all regions of Brazil. "As the second largest producer, we believe that we should be present throughout the national territory. The northern region is one of the highest growth potential in the country, "he added Zangari.
And with this new plant, the Hcis service operations manager, intends to meet not only the market of Manaus or Santarém, but of all States in the northern region. Currently, Amazon already receives brand cement Cauê (acquired by Camargo Corrêa) imported from Portugal, while the para is served by the Northeast production.
"We are at the stage of refining the economic feasibility study, analyzing the particular aspects of each locality, so that we can make the final decision. Issues such as logistics, consumer profile, availability of raw materials and supplies are being taken into consideration. The study still requires a few months, but in parallel to it, have advanced in environmental licensing and on reservations in the two States, to gain time, "said the Executive.
The reservation which referred concerns the Zangari source of raw material in the manufacturing process of cement, limestone, which needs to be as close as possible to the place of manufacture, due to the cost of shipping. According to the company, regardless of the State where the venture will be installed, the licensing to operate in limestone mines in both regions is underway.
"The tax incentives are also criteria that are part of our analysis. Manaus has this characteristic to make more attractive the advent of companies. The establishment of the factory depends on the current phase of environmental licensing. This is a very rigorous process, depends on analysis of the competent organs. But with our experience, we estimate two to three years for factory deployment. Of course, that all depends on the implementation of the mining operation, the fluvial and road logistics operation and at the site of the plant, where we need to install heavy equipment, "he said.
Applying the concept of the law of supply and demand, with the possibility of another producer in acting in the State, the price drop seems inevitable. A monthly survey by the Brazilian Institute of geography and statistics (IBGE) points out that the behavior of the cement retail value has given signs of retraction.
In April this year, the 50-pound bag of portland cement compound cost $ 34,71, the average price recorded after five months amounted to r $ 33.53, a reduction of 3.39%. The percentage may seem small, but it makes a difference in the final cost of a building.
The President of the Union of the retail trade of Crockery, paint, hardware, Electrical and construction Material (Simacon), Kalagi, Fleet believes that only the announcement of the interest of the Hcis service operations manager in the northern region generated a single drive cement producer in the State, and the shops in General, which may explain the recent fall in the price of the product.
"In a process of competition between companies, even more when there are few, it is common that if lower prices, even if only at the beginning. Nobody will arrive in a new location by increasing values. But I believe that this announcement of the new plant is causing a stir in the industry, because the cement brands are investing a lot in advertising, what we couldn't see before, "said fleet.