Displaying items by tag: Lafarge Syria

France/Syria: The Court of Appeal in Paris will decide on 24 October 2019 whether charges of financing terrorism and crimes against humanity will be upheld. Lafarge and its former executives Bruno Lafont, former chief executive officer (CEO) of Lafarge, former safety director Jean-Claude Veillard, and one of the former directors of its Syrian subsidiary, Frédéric Jolibois have challenged the indictments, according to the Agence France-Presse. The legal case is investigating Lafarge’s conduct in Syria between 2011 and 2014. It has been accused of financing terrorism through indirect payments to extremist groups to keep its Jalabiya cement plant operational after the outbreak of war in Syria.

France/Syria: Lafarge SA and three of its former executives are appealing against accusations of crimes against humanity. The Court of Appeal is expected to address the indictment in late June 2019, according to the Agence France Press. The former executives involved include Bruno Lafont, former chief executive offcier (CEO) of Lafarge, former safety director Jean-Claude Veillard, and one of the former directors of its Syrian subsidiary, Frédéric Jolibois. The Presecutor General has supported some arguments of the defence team.

If the appeal is succesful the legal case will focus instead on the financial aspects of Lafarge’s conduct in Syria between 2011 and 2014. It has been accussed of financing terrorism through indirect payments to extremist groups to keep its Jalabiya cement plant operational after the outbreak of war in Syria.

France: Eric Olsen, the former human resources chief of Lafarge says that charges of financing a terrorist organisation by have been dropped against him. French prosecutors have been investigating Lafarge’s conduct in Syria, according to the Agence France Presse. In late 2017 Olsen and two other former executives were charged with ‘financing a terrorist organisation’ and ‘endangering the lives of others’. The second charge still stands against Olsen although he is reportedly challenging it.

The investigation is attempting to determine whether LafargeHolcim’s predecessor company Lafarge Syria paid terrorist groups in Syria during its civil war and how much managers knew about the situation.

Fascinating information came out of LafargeHolcim last week as part of its Capital Markets Day 2018. The building materials company said it is expecting sales growth to slow in 2019 but earnings to grow. Jan Jenisch, the chief executive officer (CEO), said that the group was ‘aggressively’ moving forward in aggregates and ready-mix concrete. Alongside this, its recent divestment of its Indonesian operations was declared a ‘major’ milestone in focusing its portfolio and cutting down on debt.

Graph 1: LafargeHolcim’s major product lines by sales (%), 2015 – 2017. Source: Company reports.

Graph 1, above, gives a good idea of how LafargeHolcim has been changing its business. Cement sales as a percentage of total sales have been cut to 60% in 2017 from 67% in 2015. Ready-mix concrete and other sales (including asphalt) have risen to 26% from 19%. Aggregate sales have stayed at around 14%. If the world is making too much cement then LafargeHolcim is switching to concrete and balancing out its supply chain. Naturally, this was backed up in one of its investor presentations showing a more even split in the world building materials market between cement, concrete and aggregates. This fits with Jenisch’s background as the former head of Sika. That company manufactures a wide range of specialty chemicals for the construction and automotive industries.

That shift in focus could also be seen at the inaugural Global Cement and Concrete Association (GCCA) event in late November 2018 where concrete was very much the centre of attention from a sustainability angle. The main companies involved with the GCCA are vertically integrated ones and, by switching its product balance, LafargeHolcim seems to be moving in the same direction. In a sense this is a continuation of the synergy-seeking that was promised when Lafarge and Holcim merged in 2015.

Graph 2: Forecast cement demand growth in LafargeHolcim markets. Source: LafargeHolcim investor presentation 2018.

The other interesting question for LafargeHolcim is where next for growth? The graphic above shows a number of promising areas, including India and east Sub-Saharan Africa. Also, note the slowdown forecast for China. That renewed faith in India is timely this week given the expectation by the Indian Cement Manufacturers Association that cement demand growth in the country will rise by at least 10% in the current financial year to March 2019. If the momentum holds up after a strong first half then it will mark the fastest increase for the region since the market slowed down in 2011. LafargeHolcim doesn’t appear to be on course to grow significantly in India anytime soon but it has major ‘skin in the game’ in a promising market.

Another indication of the vibrancy of the Indian market also came this week from the Cement Sustainability Initiative (CSI) with the results of a status review from its low carbon technology roadmap (LCTR). The results were fairly good for such a large industry, with falling CO₂ emissions intensity, growing co-processing rates and a decreasing clinker factor. This report carried a sad note given that the work that the CSI does will be taken over by the GCCA in January 2019. However, if this is the last we’re going to hear from the CSI, then they’ve left on a high note.

Lastly, leafing through old financial reports may not be everybody’s idea of a good time but it does let one see how LafargeHolcim’s product mix has changed. It also gives one time to catch up with old faces. Like Bruno Lafont and Eric Olsen. Once again those two former executives popped up in the latest twist of the on going Lafarge Syria legal case as a group of Yazidi women have applied to become ‘civil parties’ in the case. Whether the war crimes inflicted upon the Yazidis can be pinned on Lafarge Syria remains to be seen. Yet, for all of the LafargeHolcim’s business reorganisation, its predecessor’s conduct in Syria continues to make headlines. However much progress the company makes in turning around its fortunes, if it can be, this will continue to overshadow everything. Once a line is drawn under the affair then LafargeHolcim can move on properly.

France/Syria: A group of Yazidi women have applied to become ‘civil parties’ in a criminal case brought in France against Lafarge and several of its executives for complicity in crimes against humanity and financing a terrorist organisation. The women survived rape and slavery at the hands of the Islamic State (IS) group in Iraq and Syria, according to the Agence France Presse. Lafarge allegedly made multi-million dollar payments to IS in order to continue operations at one of its cement plants in northern Syria in 2013. Lawyers on behalf of the Yazidi said that the case would allow the women, "to have their voices heard in a court of law."

Lafarge Syria is suspected of paying nearly Euro13m to IS and other militant groups to keep the Jalabiya plant running. Payments by the cement company were considered a ‘tax’ in exchange for which militants allowed free movement of the company's staff and goods inside the warzone, according to investigators.

Syria: Declassified notes from the French secret service reported upon by the Libération newspaper have revealed that the Islamic State of Iraq and Syria (ISIS) terrorist group made at least US$11.5m in 2014 from cement it plundered from Lafarge Syria’s Jalabiya cement plant.

In December 2014 the Directorate of Military Intelligence (DRM) reported that ISIS had taken control of an estimated US$25m worth of cement at the site. Subsequently in late December 2014 the DRM monitored a meeting between Turkish businessmen and IS representatives from the cement plant that took place at the Turkish-Syrian border. 65,000t of cement from the plant had already been sold for US$6.5m and another 50,000t was contracted to be sold for US$5m.

France/Syria: Lafarge SA, a subsidiary of LafargeHolcim, has been placed under judicial investigation over its actions in Syria between 2011 and 2014. It has been accused of complicity in crimes against humanity and financing terrorism, according to the Agence France Presse.

LafargeHolcim said that would appeal against the charges. It admitted that the system of supervision of its Syrian subsidiary did not allow the company to identify wrongdoing. However, it blamed this on “…an unprecedented violation of internal regulations and compliance rules by a small group of individuals who have left the group.”

“We truly regret what has happened in the Syria subsidiary and after learning about it took immediate and firm actions. None of the individuals put under investigation is today with the company,” said the chairman of the board of LafargeHolcim, Beat Hess.

Non-government organisation (NGO) Sherpa, one of the plaintiffs in the case, said it was the first time that a parent company anywhere in the world had been charged with complicity in crimes against humanity. A panel of three judges in Paris has ordered Lafarge to pay over Euro30m as a security deposit ahead of the trial. Eight former executives, including ex-chief executive officer (CEO) Bruno Lafont, have already been charged in connection to the investigation.

France: Sherpa and the European Center for Constitutional and Human Rights (ECCHR) have argued that Lafarge should be indicted for complicity in crimes against humanity. The non-government organisations (NGO) have made the argument for the accusation in a memorandum to investigative judges examining Lafarge Syria’s conduct. Despite the indictment of several Lafarge executives the NGOs want to the charges to apply to Lafarge itself as a company. The cement producer allegedly paid extremist groups to keep a cement plant operational after the outbreak of war in the country.

“Companies have the means to fuel armed conflicts by doing business with regimes or armed groups who commit war crimes and crimes against humanity. The fight against multinationals’ impunity will necessarily imply holding them to account, in particular in countries where parent companies operate and control their subsidiaries’ activities worldwide. Access to justice for thousands of victims of armed conflicts depends on it,” said Sandra Cossart, director of Sherpa.

France: Jacob Waerness, the former security chief at Lafarge Syria, has been arrested in Paris. He was taken into custody in early May 2018 while transferring between planes at the Charles de Gaulle airport, according to Le Monde newspaper. He was arrested on charges of financing terrorism. Waerness worked as the head of security for Lafarge in Syria from 2011 to 2013. He published a book about his experiences in 2016.

France: The French government reportedly asked the US not to target Lafarge Syria’s Jalabiya cement plant during military operations in 2014. Emails seen and reported upon by Reuters suggest that France's Syria envoy, Franck Gellet, asked the French Foreign Ministry to protect the cement plant while it was in Islamic State controlled territory. The request to ‘not to do anything about this site without checking with us first’ was then passed to US officials. Neither the French Foreign Ministry nor LafargeHolcim commented on the emails when asked by Reuters.

LafargeHolcim is being investigated in France over claims that Lafarge Syria had paid extremist groups to keep a cement plant operational after the outbreak of war in Syria. Six former Lafarge executives have been charged so far with financing a terrorist organisation.