HeidelbergCement Caucasus will renovate and develop its cement plant in Kaspi, Georgia’s Shida Kartli region over the next two years, reports Agenda.GE.
HeidelbergCement Caucasus teamed up with the Georgian Co-Investment Fund and Hunnewell Partners, a private equity firm. The three sides met this week to discuss the project and agreed the final cooperation document should be closed by June 2016.
Apart from financial contribution, the partnership will enable HeidelbergCement Caucasus to capitalise on Georgian Co-Investment Fund portfolio of cement-intensive projects and Hunnewell’s expertise in primary construction materials.
Of the $120 million investment, $100 million will be spent on introducing a new cement production line in the Kaspi cement plant.
Those behind the project believed adding a new cement production line, which meant using a dry process, would substantially reduce the production costs.
Georgian Co-Investment Fund announced preparation works in Kaspi started at the end of 2015. The main works will begin in July 2016.
Meanwhile, the remaining $20 million will be spent upgrading and developing the supporting network of ready-mixed concrete and aggregates plants in order to reach a strong vertically integrated business setup.
The three involved parties said they were also looking into opportunities of expanding the production base in west Georgia after completing the Kaspi plant expansion project.
Heidelberg Cement started operating in Georgia in 2006. The company operates three integrated cement plants (one plant in Kaspi and two plants in Rustavi), a cement grinding facility in Poti and a cement terminal at the Black Sea coast. Collectively the cement factories can produce more than two million tonnes of high quality cement.