IFC to inject $15m equity into Myanmar’s Shwe Taung Cement project

Photo: Shwe Taung Group.

International Finance Corporation (IFC), the private lending arm of the World Bank Group, is considering an equity injection of $15 million into a brownfield project of Shwe Taung Cement Company Limited(STC), part of a local conglomerate, Shwe Taung Group (STG), according to its disclosure. Shwe Taung Group has presence in real estate, retail, construction and financial service sectors.

In addition to equity, IFC will also invest $20 million in the form of debt capital to part-fund the $100-million brownfield expansion project of  STC’s plat in Pyi Nyaung Village, Thazi in Mandalay Region.

The rest of the financing will be from a number of channels including internal accruals, equity from promoters and other loans.

STG was founded in 1990 by Aik Htun and STC is a closely held entity with majority stake held by family of Htun and his son Aung Zaw Naing.

STG started its cement business in 2010 with a clinker manufacturing capacity of 1500 tonnes per day and cement grinding capacity of 2800 tonne per day. The cement is distributed under the brand name, Apache Portland Cement.

STG also have a company named High Tech Concrete Co Ltd that provides ready mix concrete.

The financing from IFC will help the expansion cement plant’s clinker capacity to 5,500 tpd and cement grinding capacity to 7,200 tpd.

IFC is looking into long-term financing while supporting STC to be competitive with international cement producers and create a long term sustainable business model.

Myanmar has seen a spate of business approvals for cement manufacturing. In early 2016, Siam Cement Group from Thailand secured approval for its $5.8-million new concrete production business while Japan’s IHI Corp is investing in a $15 million concrete factory in partnership with the government.

Meanwhile, Credera Group, a PE firm from Singapore is considering greenfield investments in cement manufacturing in Myanmar.

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