
Displaying items by tag: GCW202
How many staff will LafargeHolcim need?
27 May 2015There was a lot of news out of Lafarge and Holcim this week regarding preparations towards their merger. Just this morning we heard that the partners have entered into a binding agreement with Ireland's CRH regarding the sale of the assets that must be divested. Meanwhile, Lafarge and Holcim have also completed the appointments for the future LafargeHolcim executive committee. Its nine members will be responsible for such tasks as finance, integration, performance and costs, growth and innovation, as well as regional activities in Europe, Asia Pacific, the Middle East and Africa, North America and Latin America.
However, it was other types of personnel that featured in Lafarge and Holcim's earlier press releases. On 19 May 2015 Lafarge came out and announced the first (pre-merger) job losses that will result from the merger. It will cut 380 positions in central and regional corporate roles, with 166 going in its native France. For its part Holcim will make 120 pre-merger job losses, all in Switzerland. Ignoring the clear discrepancy in scale between the different sides, Lafarge and Holcim will have lost at least 500 jobs out of their combined ~130,000. This is just a scratch on the surface, but it does raise an interesting question: How many more jobs will go at LafargeHolcim?
First up are the staff that will go to work for CRH. This probably represents the largest number of staff that will come of LafargeHolcim's books relative to Lafarge and Holcim's current staff levels. According to their 2014 Annual Reports, Lafarge and Holcim employ a combined 81,000 staff in cement roles. Given that they have a combined 425Mt/yr of cement capacity (give or take) this equates to around 190 staff for each 1Mt/yr of capacity.
As the new LafargeHolcim will have control over around 340Mt/yr of cement capacity, we can crudely scale the 190 staff up to 64,600 cement sector staff. This indicates that around 16,400 staff that are currently employed by Lafarge and Holcim will be 'off' to CRH (and others). This leaves 48,100 staff in non-cement roles at LafargeHolcim.
Will more jobs be lost post-merger? Lafarge and Holcim have stated that the new entity will have 115,000 staff. However, with around 42% of future employees employed in non-cement roles - compared to 41% and 34% for Lafarge and Holcim respectively in 2014 - it certainly seems that there could be scope for at least some reduction in overall numbers from LafargeHolcim's non-cement functions. Future job losses could therefore be a possibility, but the exact scale of future consolidations and 'synergies' (if any) will only become apparent post-merger. Maybe LafargeHolcim could end up with around 105,000 to 110,000 staff.
A key time may well be early 2016, when LafargeHolcim will launch a new 'corporate structure.' This term was also used by Lafarge and Holcim in their most recent releases, so further job losses could be on the cards.
One member of LafargeHolcim staff with nothing to worry about now will be Bruno Lafont, current CEO of Lafarge. He received a Euro2.5m bonus this week for his 'key role' in conducting the merger. How LafargeHolcim staff who could be nervous about their jobs will take this remains to be seen.
The Lafarge-Holcim Report from Global Cement is available to order now
Europe: Lafarge and Holcim have completed the appointments for the future executive committee of LafargeHolcim following a recommendation by Eric Olsen, future CEO of the combined group. The future executive committee, under the leadership of Eric Olsen, is composed of:
- Finance - Thomas Aebischer, currently in charge of finance at Holcim;
- Integration, organisation and human resources - Jean-Jacques Gauthier, currently in charge of finance at Lafarge;
- Europe - Roland Köhler, currently in charge of Europe at Holcim;
- Asia Pacific - Ian Thackwray, currently in charge of East Asia Pacific and trading at Holcim;
- Middle-East Africa - Saâd Sebbar, currently in charge of Morocco at Lafarge;
- North America - Alain Bourguignon, previously in charge of North America and the UK at Holcim;
- Latin America - Pascal Casanova, currently in charge of France at Lafarge;
- Performance and cost - Urs Bleisch, currently in charge of corporate functions at Holcim;
- Growth and innovation - Gérard Kuperfarb, currently in charge of innovation at Lafarge.
Following appropriate information-consultation processes with relevant works councils and employee representatives, Lafarge and Holcim have now entered a binding agreement with CRH regarding the sale of several assets. The assets include operations mainly in Europe, Canada, Brazil and the Philippines with an enterprise value of Euro6.5bn. The divestments remain subject to the completion of the merger including the acceptance of Holcim's public exchange offer by the shareholders of Lafarge. The merger is expected to close in July 2015.
Steppe Cement chairman Malcolm Brown to retire
27 May 2015Kazakhstan: Steppe Cement's Malcolm Brown will retire as the non-executive chairman on 28 May 2015 due to health reasons. He does not intend to stand for re-election in the forthcoming AGM. He has served on the board for more than six years, since December 2008 and is a member of the audit and remuneration committees. Brown remains as a shareholder of Steppe Cement. The company is currently searching for an appropriate candidate to replace Brown.
India: Malabar Cements' Pallipuram plant in Kerala, which has 600t/day of production capacity, plans to restart production after a layoff of six years. The trial run was started on 20 March 2015.
The plant was shut in 2009 following a clinker shortage and labour issues. After funds were received from the state government in 2014, renovation of the plant costing around US$780,939 and 200 workers went on for a year.
Kyrgyzstan: Gansu Qilianshan Cement and 8th Metallurgical Corporation have signed a memo on the joint construction of a cement production line project in Osh, Kyrgyzstan with contractor JBK. The three parties plan to spend US$130m building the cement line. The Chinese and Kyrgyzstan sides hold 80% and 20% of the project respectively.
Turkey: Turkish officials have said that an explosion at a cement plant in Kazan near Ankara has killed three employees. Chief of production Haluk Bilge, the plant's deputy manager Orhan Özer and an operations staff member Bayram Altın died in a resulting fire. Mayor Lokman Erturk said that two other workers were injured in the explosion and fire on 24 May 2015 at the plant. According to Erturk, the blast occurred while the workers were trying to fix a faulty boiler. The exact cause is under investigation.
Vietnam: FLSmidth has received a US$109m order from the Vietnamese cement producer Xuan Than Group for the supply of a complete 12,000t/day capacity cement plant. The plant will be located approximately 100km south of Hanoi. Once completed, the plant will be the largest cement plant in Southeast Asia with the most energy-efficient equipment, state-of-the-art emissions control systems.
"The Vietnamese cement market is expected to grow over the coming years and it is a well-known market to FLSmidth as we have been present in the country for many years. The construction of the largest cement plant in Southeast Asia proves our strong position in the area," said president of the cement division, Per Mejnert Kristensen. The order will be booked by the cement division and contribute beneficially to FLSmidth's earnings until mid 2017.
Arabian Cement’s first quarter profit down
26 May 2015Egypt: Arabian Cement has reported that in the first three months of 2015, which ended on 31 March 2015, its net profit fell to US$7.52m versus a net profit of US$15.3m a year earlier.
Egypt: Suez Cement plans to increase its energy intake and its production capacity by 15%, according to Bruno Carrè, the company's managing director in Egypt. He added that the company would not file a request to obtain a new cement licence. Suez Cement will convert two new facilities in 2015, adding to two facilities converted in 2014. "We are investing US$52.4m/yr for four years," said Carrè.
Carlo Pesenti, the CEO of Suez Cement's mother company Italcementi, said that the company is currently focusing on energy source diversification at its Egyptian facilities. Pesenti said that the company "Has capacity to increase the volume of investments in Egypt." It is currently investing US$15.7m to build a wind farm that will be deployed in the next two years.
India: JK Cement's net profit fell by 8.5% year-on-year to US$10.9m in the fourth quarter of 2015, which ended on 31 Mar 2015. The net profit for the whole 2015 financial year rose by 61.7% year-on-year to US$24.6m.