Saint-Gobain’s Construction Products Sector Bolsters Its Presence In Emerging Countries

Saint-Gobain’s Construction Products sector is strengthening its positions in emerging countries, thanks to six acquisitions completed over the last few weeks in South Africa, Algeria, Turkey and Argentina.

The acquisitions concern companies involved in the industrial mortars, insulation and gypsum businesses, and represent total sales of more than €230 million.

In South Africa, Saint-Gobain has acquired TAC and Tylon, the country’s leading manufacturer of industrial mortars for tile adhesives, and has also entered into an agreement with a view to acquiring Owens-Corning South Africa, South Africa’s top-ranking insulation business. This acquisition is subject to the approval of the South African competition authorities.

Tylon is South Africa’s no.1 manufacturer of cement-based tile adhesives and grouts. It has sales of around €20 million and employs close to 70 people. Tylon has two plants, in Johannesburg and Cape Town. Renowned for the quality of its products and services, Tylon boasts an extensive network of distributors across the country.

TAC offers an ideal complement to Tylon’s geographical market and has an adhesives plant 200 km to the east of Johannesburg (Middleburg). TAC was created in 2005, fields a workforce of nearly 30 employees, and generates around €5 million in sales.

Saint-Gobain has entered into an agreement to purchase Owens Corning South Africa (OCSA). With sales of approximately €25 million, OCSA is the only manufacturer of glass wool and stone wool in South Africa and also manufactures insulating foam. A former Isover licensee (glass wool and stone wool), the company has already used Saint-Gobain’s TEL process (1957 to 1997).

These three companies will be able to enhance their service offering to their distributor and applicator customers thanks to BPB Gypsum Ltd and its logistics network.

In Algeria, Saint-Gobain has acquired 66% of the share capital of CM Gypso, based in Bouira. CM Gypso has two quarries, which are thought to hold more than 40 million tons of gypsum. CM Gypso is ideally situated to serve customers in two major cities – Algiers and Constantine, which represent 75% of the domestic plaster market. On the manufacturing front, Saint-Gobain is planning to build a 220,000-ton facility for production of its plaster product range.

In Turkey, Saint-Gobain and its partner Alghanim have taken joint control of Izocam, after having acquired a majority stake (61.2%) in its capital. An IPO on the remaining shares will be launched on the Istanbul stock market.

Izocam has been an Isover licensee for over 40 years. The front-ranking supplier of insulation in Turkey and the Middle East, Izocam expects to deliver sales of around €125 million in 2006, up sharply from 2005.

In Argentina, Saint-Gobain has acquired Iggam, a company specializing in industrial mortars and plaster. IGGAM reported sales of €18 million in 2005 and has two plants, one in Tortuguitas near Buenos Aires, and one in the state of Entre Rios, 500 km to the north of the capital.

Tortuguitas is an ideal complement to Saint-Gobain Weber Argentina’s plant in Bosques, 40 km to the south of Buenos Aires. The two sites are perfectly situated to serve the Buenos Aires region, where most of the Argentine business is generated.

In a market enjoying sustained growth, this acquisition drives Saint-Gobain Weber into the top spot on all industrial mortars segments (tile adhesives, wall-facing products, additives, white cement, etc.) and broadens its business portfolio. This acquisition also represents an opportunity for Saint-Gobain’s Gypsum business, which is regaining its foothold on the Argentine market with its Tuyango plaster brand, the recognized market leader.

These acquisitions in attractive and dynamic construction markets have confirmed Saint-Gobain Construction Products as a major player in South Africa, Argentina, Algeria and Turkey. The acquisitions have also helped to further the sector’s development in emerging countries.

600450 Saint-Gobain’s Construction Products Sector Bolsters Its Presence In Emerging Countries
Date: 31 January 2007
Source: Saint Gobain

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