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ASEC Holding

ASEC Holding (ASEC) is a leading regional cement, engineering and construction group with operations in the Middle East and Africa. With 32 years of experience, ASEC’s portfolio of services includes plant engineering, technical management, automation and construction. Portfolio Company ASEC Cement is emerging as a leading regional cement production group that will control 14 million tons of cement per annum by 2014 in five countries spanning from Algeria to Iraq-Kurdistan.

ASEC Holding’s construction, engineering and management groups provide full-spectrum turnkey solutions and installation management services to industry, with a particular focus on the cement sector. ASEC Holding’s integrated services offer a one-stop shop to regional cement, industrial and energy producers, providing construction, contracting and operational management services through portfolio companies ARESCO, ASEC Engineering and Management, ASEC Automation and ESACO, as well as environmental protection technologies through ASENPRO.

Operational Developments
ASEC Cement owns two assets in Egypt, including a stake in Misr Qena Cement Co. and a license to build a 1.5 million tons per annum plant in Minya. The company has entered four other markets, namely Algeria, Sudan, Iraq-Kurdistan and Syria, and is well on its way to becoming a substantial regional player producing 14 million tons of cement by 2014.

In Algeria, where demand for cement outstrips the country’s production capacity, ASEC Cement has established a strong presence by acquiring a 35% stake and management control of Algeria’s government-owned Zahana Cement Company and continues building a US$ 579 million, 3.2 MTPA greenfield cement plant in the central Algerian region of Djelfa. Construction at Djelfa is now underway, with the first phase set for completion in 2011. Prominent partners in the Djelfa project include the Hayel Saeed Group and the Danish International Investments Funds, while the Banque Exterior d’Algerie has provided a US$ 180 million bank loan to finance the plant. The Djelfa plant will create 600 direct and 800 indirect jobs.

ASEC Cement’s 1.6 MTPA Al-Takamol plant in Sudan entered the final stages of operational testing in the final quarter of 2009 and should begin operations in 2010. Al-Takamol will serve Sudan’s sizable local market. In Kurdistan, Northern Iraq, ASEC Cement acquired an 85% stake in GRD Cement Company in a deal that will allow ASEC Cement to construct a US$ 333 million greenfield cement plant. In Syria, ASEC Cement has obtained a greenfield license to build a 1.6 MTPA plant that is anticipated to come online in 2013. The company is also exploring the Ethiopian market.

ASEC Cement also established a Ready Mix Concrete Company in 4Q09.

To continue its expansions and exploring new markets, ASEC Cement is evaluating new opportunities in Sub-Saharan Africa. In 2009, ASEC Engineering managed eight plants in Egypt with a total production capacity of 15 MPTA, more than 30% of total cement capacity in Egypt. In addition, it completed five large consultancy projects during the year and continues expanding its operation into Algeria, Sudan and other countries.

ESACO, a civil contractor and steel fabrication firm, won five large-scale civil and mechanical development contracts throughout Egypt and Algeria in 2009. ARESCO, the group’s turnkey contractor, announced in September 2009 that it had completed construction of a second production line at Sinai Grey Cement’s facility in Al-Arish, Sinai.

Industry: Engineering, Construction and Cement
Investment date: December 2004
Investment type: Distressed and Greenfield
Citadel Capital ownership: 49.8%