ASEC Cement Reaffirms its Commitment to the Algerian Market

ASEC Cement calls Algeria 'North Africa's hottest up-and-coming cement market' as it prepares to launch projects in Djelfa and Wahran

ASEC Algeria, a subsidiary of ASEC Cement Holding (ACH), a platform company created by Citadel Capital, the leading Arab private equity firm and a group of leading co-investors, announced today that work is progressing smoothly on its two Algerian cement plants in Djelfa and Wahran.

ASEC Cement Managing Director Giorgio Bodo says Algeria is North Africa’s most promising cement market, explaining that the Company is firmly committed to seeing through the investments it has made there in the past eight months.

“With domestic demand spurred by 7-8% GDP growth per annum, a plentiful supply of natural gas and easy access to European markets, there are significant advantages to producing in Algeria compared with other North African markets,” says Bodo.

ASEC Cement’s investments in Algeria include a 35% stake and management control over Algeria’s government-owned Zahana Cement Company. ASEC made the strategic €32.6 million acquisition in late 2007 and has committed to increasing production capacity at the plant, located in western Algeria 40 kilometers away from the city of Wahran. ASEC Cement plans to hike capacity to 2 million tons of cement per year over the coming two years, up from 800,000 TPA today.

ASEC Cement’s major Algerian investment is in the central region of Djelfa. The company is committed to building a 3 MTA greenfield cement plant for a total investment cost of US$ 600 million.

A turnkey (take) contract has already been signed for Djelfa with Danish cement equipment, systems and services provider FLSmidth and sister companies ASEC Automation for electrical wiring and ASEC Engineering for project management. ASEC Cement expects a civil works and steel erection contract to be signed within the next few weeks.

The plant will make an important contribution to the industrial development of the booming Djelfa region when it begins operations in less than 3 years time. Approximately 2,500 new jobs will be created during the construction phase of the project and about 1,000 workers will be employed when operations commence.

“Djelfa is an ideal place for us to be investing right now. With a population of 1.2 million, it is approximately the size of four to five Gulf countries. Despite this, it has no cement production of its own and transports all of its consumption in from the capital and other industrial areas,” says Bodo.

According to Bodo, Djelfa’s production will primarily be sold in the local market.

Both Zahana and Djelfa will deploy the latest environmentally friendly technologies and will focus on upgrading the technical skills of the Algerian workforce.

In early 2008, Alaa El-Afifi, Head of Citadel Capital Algeria, announced that Citadel Capital has donated €150,000 to establish a technical training school for cement workers; graduates of the school will be employed at the Djelfa and Zahana plants as well as other Algerian companies.

When Djelfa and Zahana are complete, ASEC Cement, currently the only private company with a license to construct a greenfield cement plant in Algeria, will become one of the country’s most significant cement producers with a total capacity of 5 MTA.

Bodo, also adds that once the two projects are up and running, Algeria will become ASEC Cement’s number one market.

—Ends—

Citadel Capital is the leading private equity firm focusing on building regional platform investments throughout the Middle East and Africa in selected industries through acquisitions, turnarounds, and greenfields executed via Opportunity Specific Funds. Citadel Capital’s 19 OSFs now control Platform Companies with investments worth more than US$ 8.3 billion in 14 industries, including mining, cement, transportation, food and energy. Since 2004, the firm has returned more than US$ 2.2 billion in cash to investors, more than any other private equity firm in the region.

For more information, please contact:

Ms. Ghada Hammouda
Head of Corporate Communications,
Citadel Capital (S.A.E.)

Tel: +20 2 2791-4440 • Fax: +20 22 791-4448
Mobile: +20 16 662-0002