MONTREAL — The Caisse de depot et placement is ceding control of Quebec’s McInnis Cement plant to a Brazilian conglomerate after provincial taxpayers lost several hundred million dollars on the project.
The Gaspe plant will be part of joint venture comprising the North American assets of Votorantim Cimentos that will be headquartered in Toronto.
The sixth-largest cement producer in the world will control 83 per cent of the venture, with the Caisse retaining 17-per-cent ownership.
No financial details were disclosed and the sale announced Thursday didn’t mention Investissement Quebec, the financial arm of the Quebec government or Beaudier, the investment company of the Beaudoin family that controls Bombardier Inc., who helped get the project off the ground as shareholders.
This transaction includes a commitment to maintain the facilities and around 200 jobs at the Port-Daniel-Gascons plant until at least 2029.
In its fall economic update, the Quebec government estimated a loss of around $380 million for its investment in McInnis Cement.
“The creation of this entity allows us to establish a partnership with a world-class player with an established presence, as well as a solid track record in terms of profitability, in North America”, stated Kim Thomassin, head of investments in Quebec and sustainable investment for the Caisse.
The project was announced with great fanfare in 2014 by former premier Pauline Marios and was to be led by Beaudier. It ultimately cost $1.6 billion, at least $450 million more than expected, due to cost overruns that occurred while the Liberals were in power.
The Quebec pension fund manager has injected almost $500 million into the project since 2014. It took control in 2016 and the investment was valued at between $300 million and $500 million as of Dec. 31, 2019.
Present in 11 countries, Votorantim Cimentos has 12,000 employees and generates $4.4 billion in net revenues, according to a fact sheet provided to the media. The North American entity will operate five cement plants, 22 distribution terminals and two cement mills.
This report by The Canadian Press was first published Dec. 10, 2020.
The Canadian Press