HeidelbergCement Caucasus (HC Caucasus), Georgian Co-Investment Fund (GCF) and Hunnewell Partners (Hunnewell) have agreed a USD120 million joint investment project to upgrade HeidelbergCement’s existing cement and concrete facilities in Georgia.
The final closing of the agreement is scheduled for June 2016. Aside from the financial contribution, the partnership will enable HC Caucasus to capitalise on GCF’s portfolio of cement-intensive projects and Hunnewell’s expertise in primary construction materials.
USD100 million will be spent on a new cement production line in Kaspi using the dry process that will push down production costs substantially. The main work will begin in July 2016 although preparatory work has been underway in Kaspi since late 2015.
In order to reach a strong vertically integrated business setup, an additional USD20 million will be invested in upgrading and developing the supporting network of ready-mixed concrete and aggregates plants. The parties involved are also looking into opportunities for expanding the production base in West Georgia once the proposed project is completed.
Apart from introducing new technologies, the project will contribute to Georgia’s economy through an improved trade balance and the creation of additional jobs within the sector. The upgrade and development of the Georgian business of HC Caucasus will take place between 2016 and 2018.
HeidelbergCement started doing business in Georgia in 2006. After ten years of continuous business development, its Georgian subsidiary, HC Caucasus, currently operates three integrated cement plants (in Kaspi and Rustavi), a cement grinding facility in Poti and a cement terminal at the Black Sea coast. The cement production capacity exceeds two million tons of high quality cement.
The cement business is supported by a strong network of 12 ready-mixed concrete plants that produce more than 670,000m³ concrete per year. Sand and concrete aggregates are partly supplied by two of HC Caucacus’ aggregate pits in Batumi and Tbilisi.
