May 18, 2016, HeidelbergCement Caucasus ('HC Caucasus'), Georgian Co-Investment Fund ('GCF') and Hunnewell Partners, LLP ('Hunnewell') held an official presentation of their joint investment project of USD 120 million to upgrade HeidelbergCement’s existing cement and concrete facilities in Georgia. Final closing of the agreement is scheduled in June, 2016. Apart from financial contribution, the partnership will enable HC Caucasus to capitalize on GCF’s portfolio of cement-intensive projects and Hunnewell’s expertise in primary construction materials.
USD 100 million will be spent on a new cement production line in Kaspi using the dry process that will push down production costs substantially. Preparation works in Kaspi have already started at the end of 2015. The main works will begin in July 2016.
In order to reach a strong vertically integrated business setup, additional USD 20 million will be invested in upgrading and developing the supporting network of ready-mixed concrete and aggregates plants. The involved parties are also looking into opportunities of expanding the production base in West Georgia after completing the proposed project.
Apart from introducing new technologies, the project will contribute to Georgia’s economy through 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 business in Georgia in 2006. After ten years of continuous development of the business the Georgian subsidiary HC Caucasus currently operates three integrated cement plants (Kaspi and Rustavi), a cement grinding facility in Poti and a cement terminal at the Black Sea coast. The cement production capacity exceeds 2 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 aggregates for the concrete is partly supplied by two own aggregate pits in Batumi and Tbilisi.
About GCF
Established in 2013, Georgian Co-Investment Fund, is a USD 6 billion private investment fund with the mandate to provide investors with unique access to opportunities in Georgia’s fastest growing industries and sectors through a private equity structure. The current size of GCF’s projects portfolio exceeds USD 2.115 B and covers projects in Energy and Infrastructure, Manufacturing, Hospitality and Real Estate, Agriculture and Logistics sectors.
About Hunnewell Partners
Hunnewell Partners LP is a private equity, asset management and recovery firm with offices in London, Tbilisi, Kiev and Miami, with a strong focus on Eastern Europe and the former Soviet Union. In Georgia, Hunnewell is involved in the management of some of the largest companies in the country such as IDS-Borjomi, Imedi TV, and Rustavi Metallurgical Plant among other assets.
About HeidelbergCement Caucasus
HeidelbergCement Caucasus is the Georgian subsidiary of HeidelbergCement Group and the market leader for cement in Georgia. HeidelbergCement Group is one of the world’s largest integrated manufacturers of building materials with leading market positions in aggregates, cement, and ready-mixed concrete as well as other downstream activities. The company employs some 45,000 people at 2,400 locations in more than 40 countries.
