China's Huaxin Cement acquiring Brazilian mineral aggregates firm Embu

China's Huaxin Cement announced the acquisition of Brazilian mineral aggregates firm Embu in a deal worth US$187mn.

Embu owns four facilities in the São Paulo metropolitan area that produce crushed stone and sand, primarily used in civil construction.

"The acquisition of Embu by the Chinese company is a bet on Brazil's domestic construction market, specifically in the state of São Paulo. The materials produced at Embu’s sites in the state serve construction projects within a distance of up to 200km. Distances beyond that make price negotiations unfeasible due to the high cost of transportation," a person involved in the due diligence process of the deal told BNamericas, asking not to be named.

Embu has capacity of 8.8Mt/y of aggregates and produced 6.2Mt in 2023, according to a Huaxin statement.

"The four quarries have excellent locations relative to their target market in the São Paulo metropolitan area and have significant resources of mineable material," Huaxin said.

"Brazil has the largest economy in Latin America, with rich natural resources, a friendly environment for foreign direct investment, and significant potential for economic development. Brazil is the first Latin American country to establish a comprehensive strategic partnership with China," the company added.

The acquisition of Embu marks Huaxin's debut in Latin America. The firm currently owns and operates more than 20 large-scale cement and related factories in 12 countries across Central Asia, Southeast Asia, South Asia, the Middle East and Africa.

OTHERS CHINESE DEALS 

In November, China's Baiyin Nonferrous Group agreed to acquire Brazil’s Mineração Vale Verde from Appian Capital Advisory in a deal valued at US$420mn. This acquisition is pending approval from Brazil's antitrust regulator Cade and the Chinese government, with completion expected in early 2025. Mineração Vale Verde owns the Serrote copper and gold mine in Alagoas state.

Also in November, Peruvian polymetallic miner Minsur, through its subsidiary Minera Latinoamericana, reached an agreement to sell Brazilian firm Mineração Taboca to China’s CNMC Trade Company Limited for US$340mn. 

Taboca operates the Pitinga tin, niobium and tantalum mine in Amazonas state and has the Pirapora smelter in São Paulo, where its corporate headquarters are located.

These transactions highlight China's continued focus on Brazil and the strengthening of ties between the countries' leaders. 

Last month, during the G20 summit in Rio de Janeiro, Chinese President Xi Jinping met his Brazilian counterpart Luiz Inácio Lula da Silva to discuss bilateral relations and agreements.