GCC, a leading producer of cement and concrete in the United States and Mexico, announced that it will execute a capacity expansion at the plant located in Odessa, Texas. The project will increase annual cement production capacity by over one million metric tons and lower the plant’s greenhouse gas intensity by 13%.
GCC will execute the project at the Odessa plant since the market is developing faster in the U.S. and represents large freight savings, compared to the plant located in Chihuahua, Mexico. This expansion will optimize the cost structure and GCC’s cement network by relocating cement shipped today to this region from Samalayuca, Chihuahua and Pueblo plants to other markets the Company serves with optimized freight cost. In addition, the capacity expansion will allow GCC to prepare and participate in the upcoming growth associated with the Infrastructure Investment and Jobs Act.
For the past year, GCC has been assessing the West Texas cement market to define the optimized scope of equipment and technology, as well as working with original equipment manufacturers and construction suppliers. Furthermore, the Company has been negotiating with vendors and progressing on the project. Due to the current market conditions, supply chain constrains, inflation and the project scope, GCC will invest US$750 million, and the capacity will come online by mid-2025.
Enrique Escalante, GCC’s Chief Executive Officer, mentioned “We remain strongly committed to delivering strong stakeholder value, while investing in the future growth of our business.
“With the expansion of the Odessa plant we will ensure GCC is prepared for a new phase of the industry cycle.”
The project will be funded with internal cash flow and has a double-digit investment return, representing strong value creation compared to the much lower weighted average cost of capital (WACC).
