Cement crack: State Trading Corp to step in and buy 51% of Holcim Mauritius?
However, as a minority shareholder of Holcim Mauritius, Mauritius-based conglomerate Gamma-Civic – which owns 49% of the company – actually enjoys first rights over the purchase of its partner`s shares. (Image: African Business Review)
Following merger plans of the two largest cement operator both on the island and on the global stage besides – Lafarge and Holcim – the State Trading Corporation (STC) of Mauritius might be poised to re-enter the island’s cement market.
According to reports circulating in the local market, the STC might be willing to acquire majority (51%) stake of Holcim Mauritius which has been put on sale, further to the merger announcement of Holcim and Lafarge.
However, as a minority shareholder of Holcim Mauritius, Mauritius-based conglomerate Gamma-Civic – which owns 49% of the company – actually enjoys first rights over the purchase of its partner`s shares.
And, if this happens, Gamma-Civic would become the sole cement distributer on the island.
Instead, by acquiring 51% of share of Holcim Mauritius, the STC will automatically control the whole supply chain going from import to distribution, and passing on to cement storage and packing.
Therefore, for the STC, re-entering the cement market would also allow fair competition to rule and, at the same time, enjoy greater control over prices.
Lafarge and Holcim are the largest cement and construction product makers in Canada, and the merger – plans for which were unveiled on April 7 – is likely to be finalized by early 2015 and is expected to result in the world’s largest cement maker.
Besides Mauritius, others countries where these conglomerates are actively operating, are also likely to feel significant repercussions.
The State Trading Corporation (STC) was set up by an Act of Parliament of October 1982 (amended in 1988), to be the trading arm of the government of Mauritius.
Until July 2011, the month of liberalization of the cement market, the STC performed the role of cement import, which it thereafter yielded to both Holcim Mauritius and Lafarge Mauritius, as there were at least 2 players in the market, avoiding a situation of monopoly.
The STC operates under the aegis of the Minister of Industry, Commerce and Consumer Protection.