Items filtered by date: Thursday 02 March 2017
LafargeHolcim admits to deals with armed groups in Syria 02 March 2017
Syria: LafargeHolcim has accepted that its conduct at a cement plant in Syria in 2013 and 2014 was ‘unacceptable.’ An internal investigation by the group into Lafarge’s behaviour has reported that staff committed ‘significant errors in judgment.’ The probe, supervised of the Finance and Audit Committee of the Board, was started in response to media allegations in 2016 that legacy Lafarge operations had engaged in dealings with armed groups and with sanctioned parties during 2013 until the plant was ultimately evacuated in September 2014.
The investigation has found that the Lafarge subsidiary appears to have provided funds to third parties to work out arrangements with a number of armed groups, including sanctioned parties, in order to maintain operations and ensure safe passage of employees and supplies to and from the plant. The investigation could not establish with certainty the ultimate recipients of funds beyond those third parties engaged. However, LafargeHolcim says that it believes its staff acted in a manner they believed was in the best interests of the company and its employees.
Following the review, the board has approved the creation of a new Ethics, Integrity & Risk committee, supervised by a member of the Executive Committee. The group will also adopt a more rigorous risk assessment process focusing in particular on high risk third parties and joint venture partners, a restricted party screening program, a new sanctions and export control program and further efforts resulting from a benchmarking exercise it has undertaken.
Finally, LafargeHolcim does not believe that its culpability poses any financial impact to its business. It says that its operations in Syria operated at a loss during the time period in question and represented less than 1% of the group’s sales at the time.
LafargeHolcim sales crumble as earnings grow in 2016 02 March 2017
Switzerland: LafargeHolcim’s net sales took a tumble of 8.7% to Euro26.9bn in 2016 from Euro29.5bn in 2015. Although on a like-for-like basis it says they declined by just 1.7%. However, its adjusted operating earning before interest, taxation, depreciation and amortisation (EBITDA) rose by 1.3% to Euro5.83bn from Euro5.75bn, with a higher improvement rate on a like-for-like basis. The building materials company didn’t explain why its sales had fallen in 2016. Instead it focused on its efforts on cutting costs, building benefits from synergies, working on pricing and growing its earnings.
“Our strong execution was visible across our five regions, which all grew earnings for the quarter and for the year. This performance underlines the strength of our diversified portfolio, which has a good balance of mature and developing markets. I am also pleased with the positive trajectory of markets such as the US, Nigeria, India and key countries in Europe, which we have singled out as important drivers for growth in 2017 and beyond,” said chief executive officer Eric Olsen.
The group’s sales volumes of cement fell by 8.8% to 233Mt from 256Mt with decreases in all regions. It reported that production overcapacity hit cement volumes and prices in Indonesia, Brazil continued to face challenging operating conditions with its ongoing recession and both Nigeria and Egypt faced difficult markets in the period. Of particular note its sales volumes fell in North America due to an economic downturn in Western Canada and a strong fourth quarter in 2015 to measure against. Operating EBITDA rose on a constant basis in Europe and North America only.
China: China National Building Material Company (CNBM) has entered into an agreement with the Bank of Communications for finance of around US$1.43bn in the form of direct loans, debt-to-equity conversion and/or capital injection into members of the group. The finance will be used to improve the group’s asset-debt structure, improve production operations and pay for upgrades.
UK: The Mineral Products Association (MPA) has outlined key points that the UK government should consider ahead of its anticipated triggering of Article 50 of the Treaty of Lisbon later in March 2017 as it moves towards leaving the European Union (EU). Following consultation with its members the association wants the government to focus on six areas including: investment; growth; access to markets; access to labour and skills; maintaining equivalent regulations and standards; and rebalancing regulation after Brexit.
"More needs to be done, both politically and economically, to give the clarity needed by businesses to sustain investment confidence beyond the triggering of Article 50. The economy has remained resilient in the short term, but the issue always was, and remains, what will happen post-Brexit in the medium and longer term? Given that the public political conversation in the UK has not yet involved the other 27 EU member states, we are currently no wiser as to the likely outcome of negotiations. We must therefore contemplate the possibility that no deal may mean a clean break in 2019 and trading arrangements under WTO rules,” said MPA chief executive officer Nigel Jackson.
The MPA has urged the government to build confidence in the short and long term performance of the UK economy and maintain stability. It also wants it to seek the fullest access to European and non-European markets using comprehensive free trade agreements in preference to adopting World Trade Organisation (WTO) rules.
The association also highlighted that, on average, 3% of the Mineral Products industry's workforce comes from the EU, increasing to 9% for activities directly related to freight transport by road. It noted that at present there is no guarantee that EU citizens now resident in the UK will have a continuing right to reside in and work in the UK following Brexit.
Other issues include a desire for the government to confirm its commitment to existing regulatory initiatives and to hold and improve on the international competitiveness of energy intensive industries such as cement and lime. However, it also asked the government to mind the impacts of regulation of taxation on these industries in order to protect investment. Lastly, the MPA wants the government to retain influence in European product technical standards development via the British Standards Institution (BSI), the European Committee for Standardisation (CEN) and design codes.
Holcim Vietnam renamed as Siam City Cement Vietnam 02 March 2017
Vietnam: Holcim Vietnam has been officially renamed as Siam City Cement Vietnam following its acquisition by Thailand’s Siam City Cement. Holcim products will now be sold locally under the Insee brand, according to the Saigon Times. An agreement for Siam City Cement to buy LafargeHolcim’s 65% stake in Holcim Vietnam was announced in August 2016.