GCC, S.A.B. de C.V. Announces Odessa, TX Cement Plant Expansion
August 03, 2022 at 09:21 am EDT
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GCC, S.A.B. de C.V. announced that it will execute a capacity expansion at the plant located in Odessa, Texas. The project will increase annual cement production capacity by over one million metric tons and lower the plant's greenhouse gas intensity by 13%. GCC will execute the project at the Odessa plant since the market is developing faster in the U.S. and represents large freight savings, compared to the plant located in Chihuahua, Mexico.
This expansion will optimize the cost structure and GCC's cement network by relocating cement shipped to this region from Samalayuca, Chihuahua and Pueblo plants to other markets the Company serves with optimized freight cost. In addition, the capacity expansion will allow GCC to prepare and participate in the upcoming growth associated with the Infrastructure Investment and Jobs Act. For the past year, GCC has been assessing the West Texas cement market to define the optimized scope of equipment and technology, as well as working with original equipment manufacturers and construction suppliers.
Furthermore, the Company has been negotiating with vendors and progressing on the project. Due to the current market conditions, supply chain constrains, inflation and the project scope, GCC will invest USD 750 million, and the capacity will come online by mid-2025. The project will be funded with internal cash flow and has a double-digit investment return, representing strong value creation compared to the much lower weighted average cost of capital (WACC).
GCC SAB de CV, formerly known as Grupo Cementos de Chihuahua SAB de CV, is a Mexico-based company primarily engaged in the construction materials sector. The Company foocuses on the production and marketing of cement and other related building materials. The Companyâs product portfolio includes Portland grey cements, ready-mixed concrete, gypsum, additives and limestone aggregates, as well as such prefabricated products as walls, architectural concrete blocks and paving stones, among others. The Company also offers technical support and assistance for the installation of its prefabricated structures. The Company operates in Mexico and the United States, through such subsidiaries as GCC Comercial SA de CV, GCC Concreto SA de CV, GCC Rio Grande Inc, GCC Dacotah Inc, GCC Alliance Concrete Inc, Mid Continent Concrete Inc and Consolidated Ready Mix Inc.