Taiwan Cement Corporation Expands Investment in Europe's Low-Carbon Cement Sector

Taiwan Cement Corporation (1101) announced on the 7th of March that it has successfully completed the expansion of its investment in European low-carbon cement.

Taiwan Cement Corporation Expands Investment in Europe's Low-Carbon Cement Sector
Picture/provided by TCC

The total amount involved in the transaction is 621 million euros (approximately 21.3 billion New Taiwan Dollars). Following an increase of 20% in Turkey and 60% in Portugal, Taiwan Cement now holds a 60% stake in a joint venture company in Turkey and 100% ownership of Cimpor, a cement company in Portugal, solidifying its position as a key supplier of low-carbon cement in Europe.

The revenue generated from the Turkish and Portuguese operations will be officially included in Taiwan Cement's consolidated financial reports starting from March this year, with the first-quarter consolidated financial figures set to be released in early May.

Taiwan Cement's partnership with OYAK in Turkey, established in 2018, has seen significant growth with a six-fold increase in net profit after tax over five years. This collaboration has been instrumental in boosting Taiwan Cement's revenue, with the joint venture accumulating 2.37 million tons of carbon credits in Europe to date.

To support its expansion into the European low-carbon market, Taiwan Cement secured an 800 million euro unsecured perpetual subordinated loan syndicate. The banking consortium includes major institutions such as BNP Paribas, China Trust Commercial Bank, Fubon Bank Taipei, and Oversea-Chinese Banking Corporation (OCBC), demonstrating strong support with subscriptions exceeding 1.5 times the loan amount.

Research Nester's assessment forecasts an annual compound growth rate of 8.5% for the European low-carbon cement market from 2022 to 2030. Taiwan Cement anticipates that with the European Union's implementation of the Carbon Border Adjustment Mechanism (CBAM), low-carbon products will become a significant competitive advantage for entering the European market.

With high carbon prices in the EU and stringent energy efficiency directives like EPBD requiring zero carbon emissions for new public buildings by 2026 and extending to private buildings by 2028, the demand for low-carbon cement is expected to rise steadily. Taiwan Cement's acquisition of Cimpor in Portugal positions it strategically to enhance low-carbon research and development efforts, aiming to become one of the global leaders capable of producing ultra-low carbon cement by 2025.

Source: Chinatimes.com