Bombardier, Quebec to invest $1B in Gasp cement plant

Bombardier's founding family is partnering withQuebec's government and two provincial agencies to invest $1 billion
in a new cement plant in the Gasp region.

The project is expected to support about 2,300 jobs during theconstruction phase. Once it's built, it will support about 200 jobs and another 200 indirect jobs.

The project is being led by McInnis Cement, a company formed bymembers of the family that founded Bombardier Inc. and its spinoff, BRP Inc.

The Quebec government will provide a guaranteed loan worth about$250 million. The province's investment arm will invest $100 millionand the Caisse de dpt, Quebec's pension manager,will invest anadditional $100 million.

Project boon to depressed region

The location in the community of Port-Daniel-Gascons was selectedbecause of its rich limestone formations and proximity to maritimeshipping that will carry 95 per cent of annual production.

The plant is welcome news for an area of Quebec that suffers fromhigh unemployment.

However, rivals in the cement industry say government funding willthreaten other jobs in the province.

The Canadian Cement Association criticized the government,however, for supporting the project that will add unneeded supply.

Association president Michael McSweeney said the new plant wouldcompete directly with Quebec producers at a time when 60 per cent oftheir capacity sits idled.

"The government's financial participation in the projectjeopardizes jobs and existing plants," he said before the
announcement after reports surfaced late last week.

Rival Lafarge could cut jobs

French-based Lafarge, which is partially owned by Montreal-basedPower Corp., has said it would be forced to cut jobs at its plant in St-Constant, Que., if it can't maintain its activitiesbecause of a further surplus of production capacity.

The idea of a cement plant in the region dates back more than 20years. Planning for the project began in 1998 but was postponed fora few years due to the lack of financial support.

It got back on track with a more than doubling of output after the Beaudoin family's investment arm, which also partially ownsSki-Doo maker BRP.

The cement plant promises to be among the industry's mostfuel-efficient and lowest emitters of greenhouse gases on thecontinent.

It will initially burn petroleum coke, a refinery product and mayadd biomass from logging and sawmills.

"Ultimately, the production of the project's cement plant willreplace that of older plants," said a November report byengineering firm Genivar, now WSP.

Beaudoin vs. Desmarais?

That puts it in direct conflict with Quebec's Desmarais family,whose Power Corp. owns a 21 per cent stake in Lafarge.

Quebec media have labelled the competition a battle between twoof Quebec's wealthiest families.

But Power spokesman denies any friction.

"There is no disagreement between the Desmarais and the Beaudoinfamilies. They are in fact very good friends," Stephane Lemay saidin an email.

Bombardier CEO Pierre Beaudoin sits on Power's board ofdirectors.