Turkey’s Afyon Cimento Doubles in Value on Capacity Expansion

Afyon Cimento TAS, the best-performing stock on the Borsa Istanbul 100 Index this quarter, has more than doubled in value on plans to triple the cement maker’s capacity.

Afyon has surged 131 percent since Nov. 21, the day it announced plans to invest in a factory upgrade. The stock rose 5.1 percent at 2:03 p.m. in Istanbul today, its third day of gains. The Borsa Istanbul 100 fell 0.3 percent.

Afyon allocated $165 million to rebuild and relocate its cement factory on land outside the city of Afyon and said it will use funds from its planned rights issue to finance the investment, according to public filings on Nov. 21. The investment will increase annual clinker capacity to 1.35 million tons from 450,000 tons, Cigdem Sahin, an investor relations official at the company’s parent, Cimsa Cimento Sanayi ve Ticaret AS, said by e-mail today.

While the capacity increase ’’was the main driver behind the price move,’’ it probably doesn’t justify Afyon’s current share price on its own, Umur Acikalin, an analyst at BGC Partners in Istanbul, said by e-mail today.

’’Some of the performance from Afyon Cimento comes from the potential of the land it is currently built on,’’ which investors assume they will sell once the new factory is completed, Acikalin said.

Cimsa Cimento owns 51 percent of Afyon Cimento, according to Borsa Istanbul data.

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