Displaying items by tag: Lafarge
Lafarge to axe a further 97 jobs at home
27 June 2012France: On 22 June 2012 Lafarge announced that it expected to cut a further 97 jobs in France as part of a plan to merge its three French divisions, based around its different product lines, into one national unit to be headquartered in the Paris region.
The move came just a week after the cement maker unveiled plans to cut costs by Euro1.3bn and boost profits over the next four years as it seeks to cut its debt and regain an investment-grade rating. At the start of 2012 the group, which employs a total of 68,000 people around the globe, said that it would cut 460 jobs worldwide, including 90 in France, as part of corporate reshuffling.
MP opens new bagging plant at Lafarge site
27 June 2012UK: MP for Rushcliffe and UK Government Cabinet member Ken Clarke has visited Lafarge Cement UK's Barnstone cement blending plant in Nottinghamshire to officially open a new state-of-the-art cement packer at the site. As well as significantly increasing the plant's output, the packer will also secure the future of some 60 local jobs and provide a boost to the local economy.
Supplying the local market with a range of 26 ready-to-use cements, Barnstone also exports specialist cements to 27 countries. Over recent years Lafarge has invested Euro8.5m at Barnstone, expanding production facilities, refurbishing offices and improving safety.
Clarke said, "I was very impressed by the professionalism of all (those that) I met at the plant. Lafarge should be congratulated for its most recent investment in the area and I'm proud the company has this site in my constituency."
The Barnstone plant manager Chris Stephens said, "While the (UK) construction industry currently faces real challenges, our new sophisticated packer will support new secured business and provide capacity and flexibility for future business."
Lafarge details expansion plan at Exshaw
27 June 2012Canada: Lafarge Canada is planning to develop a community outreach plan as part of the plant expansion and modernisation project set to begin at its Exshaw plant in Alberta in the autumn of 2012. The Canadian unit of French cement giant Lafarge is looking to build a new kiln line on the western side of the current facility and intends to increase production by 60%. It will do this by replacing outdated technology at the 107-year-old cement facility.
The company submitted its development permit application at the start of June 2012 in order to begin constructing the necessary foundations to support the new equipment, including a five-stage preheater, precalciner tower and a new rotary kiln. The Alberta government has already given Lafarge permission to proceed with the project.
On 19 June 2012 Exshaw plant manager Heinze Knopfel said that the community outreach plan would address how Lafarge intends to keep residents informed and address the negative effects of constructing a large industrial plant could have on Bow Valley communities, specifically Exshaw.
"Over the next three years during the construction phase we anticipate that there is going to be additional traffic and extra contractors on site. We will be sharing regular updates with the community and will continue to respond as quickly as possible to complaints," said Knopfel. "Our neighbours are really important to us. We recognise it is a partnership. We meet regularly with the surrounding communities. We want to understand how they feel about their operations and what we can do to improve their life or lifestyle."
Lafarge expects that the construction will take approximately three years with the foundation work beginning in the autumn of 2012. Knopfel said that he expects that this first phase would not have a significant effect on traffic or noise as the number of contractors working on site would be low with only cement trucks and the drilling contractor coming to the site. Two cranes will also be working to move equipment stored on the project site.
Construction on the kiln line itself will likely begin in 2013 with the peak of activity seen in 2014. At that point, Knopfel said he expects there could be 200-350 contractors at the site. He added that the plant's expansion and modernisation project would also provide a good opportunity to improve traffic flows at the plant. Instead of having resource and product trucks enter the plant at the same point, which is what currently occurs, trucks will leave the plant through the current main entrance and enter through a new gate to the west of the plant.
"Instead of the entrance, which is a real bottleneck, we're going to streamline the flow of traffic, which we know will mitigate a lot of the concerns of the community," he said. The upgrade will also increase the amount of cement leaving the plant by rail.
Overall, Knopfel said that he expects the project to have a positive effect in the Bow Valley, environmentally, socially and economically. "I expect the plant expansion will provide tremendous benefits for the community."
Environmentally the standards will be raised beyond the new Alberta requirements. "We're consciously aware of where we are relocating equipment and we're trying to relocate the equipment as far away as possible from the community," Knopfel said. "(The new kiln) is going to be state of the art as far as technology is concerned. It is going to be the newest and the best technology on the market," he said.
The Municipal Planning Commission for the MD of Bighorn is scheduled to review Lafarge's municipal development permit application on 18 July 2012.
India fines cement firms US$1.1bn over cartel
22 June 2012India: In one of the largest fines of its kind, India's antitrust body has imposed a penalty of a combined US$1.1bn on 11 cement companies for price fixing. The companies penalised by the Competition Commission of India (CCI) include ACC and Ambuja Cements (both units of Swiss cement-maker Holcim), UltraTech Cement, Jaiprakash Associates, India Cements, Madras Cements and the local unit of France's Lafarge.
"The commission has found that the cement companies have not utilised the available capacity, so as to reduce supplies and raise prices in times of higher demand," said the CCI in its judgement. It said that the penalty on each company amounted to 50% of their profit for the financial years 2009-10 and 2010-11.
ACC has been fined US$201m and Ambuja has to pay US$204m. India's largest producer of the building material, Ultratech Cement, has to pay US$206m, while Lafarge's Indian unit will have to shell out US$84m. Jaiprakash Associates has been fined US$232m.
On 21 June 2012 the CCI said that the cement companies' action of limiting supplies to the market through an 'anti-competitive agreement' was not only detrimental to consumers but also to the economy, as the building material is a critical input for infrastructure projects. The regulator asked the companies to pay the fine within 90 days. The companies can challenge the regulator's orders in the Competition Appellate Tribunal, a quasi-judicial body and can then appeal to India's Supreme Court.
In response UltraTech said that it hasn't indulged in any cartelisation and that it would appeal against the order in the appellate tribunal. In Zurich Holcim said it would, "contest the allegations and findings against (ACC and Ambuja) in the order and will pursue all available legal steps to defend their respective positions." In Paris Lafarge said, "We will see the detailed report and decide the suitable actions to take. Lafarge has a strict policy to comply with competition laws."
The CCI started accepting cases in 2009, replacing a relatively toothless antitrust body that had been in place since 1970, and has been becoming increasingly assertive. The biggest penalty it had imposed so far was in 2011, when it ordered DLF Ltd., India's biggest property developer by sales, to pay US$120m for abusing its dominant market position by changing agreements signed with some property buyers.
The judgement comes at a bad time for cement companies, as demand for construction materials is weak due to sluggish economic growth and a fall in spending on infrastructure projects. The cost of raw materials such as coal is on the rise as well, pressuring margins.
Jaypee under the hammer
18 June 2012India: India's biggest cement producer, Jaiprakash Associates, says that it is planning to sell its cement units in Gujarat and Andhra Pradesh as a part of its divestment plan. In a move that is very similar to those of debt-ridden European and North American cement producers, local media has reported that Jaiprakash has been in talks with at least two different investors, including domestic group Aditya Birla and Lafarge from France. It is looking to sell its 'Jaypee Cement' unit plants, which are already run as a separate company.
Birla and Lafarge have finished their first round of talks with Jaypee. Final bids will be completed in two months. Jaypee wants to exit the cement production business in order to focus on its core activities.
Earlier, it was also reported that Switzerland's multinational Holcim Ltd. was prepared to spend up to US$1.6bn on the three plants, which have a joint capacity of 9.8Mt/yr.
Lafarge - next steps
13 June 2012Lafarge announced swingeing cuts this week in a new bid to squash its debt. The headline figures were that it intends to generate at least Euro1.75bn earnings before interest, taxes, depreciation and amortisation (EBITDA) in the four years from 2012 to the end of 2015 and that it aims to reduce net debt below Euro10bn in 2013.
Given that Lafarge's EBITDA has dropped from Euro4.62bn in 2008 to Euro Euro3.22bn in 2011 this seems like a tough job. In addition to finding the savings, Lafarge may also have to battle the decline of the Euro a clear and present danger for a multinational with deep Eurozone foundations. The group has detailed planned cost savings of at least Euro400m in 2012 and of at least Euro300m in 2013. Both of these figures are below the yearly average of Euro435m required to meet the EBITDA target of Euro1750m by 2015.
First came the regional restructuring from January 2012 with the job losses but how Lafarge will really save cash still remains unclear. Higher energy savings through alternative fuels, increased savings from new programmes to manage electricity and productivity improvements were all mentioned in the press release. No specific information was provided for how these changes will affect the bottom line. Practically, analysts expect that Lafarge will raise its cement prices in response to rising energy input costs, making profits along the way with raised margins.
Lafarge chief executive Bruno Lafont stated that the group will raise Euro1bn in asset sales in 2012. On the cement side, progress on the Lafarge-Tarmac UK joint venture will start by the end of June 2012. The combined assets are valued at around Euro500m. News on an Indian acquisition in Lafarge South Africa has gone quiet since Aditya Birla Group and Shree Cement were reported as showing interest in January 2012. The holding was valued at around Euro650m.
Crudely assuming that half of the proceeds of the sale of the Lafarge-Tarmac assets will go to Lafarge, selling Lafarge South Africa would probably allow Lafarge to hit Lafont's target for 2012. That just leaves similar savings for 2013, 2014 and 2015 to be found! What does Lafarge intend sell next?
Lafarge to start Tarmac asset sales by end of June
13 June 2012UK: Lafarge's chief executive Bruno Lafont has said that the joint venture between miner Anglo American and cement maker Lafarge in the UK is likely to begin selling a series of assets as required by regulators by the end of June 2012.
The UK Competition Commission said in May 2012 that the companies had to sell 'an extensive package of operations' including one of the UK's largest cement plants, the Hope plant in Derbyshire, for the planned joint venture to win approval.
"It's a process that should start at the end of the month of June when we have completed the process of authorisation and consultation with the antitrust authorities," Bruno Lafont announced.
Both companies said in May 2012 that they were confident the conditions for the joint venture would be met, prompting speculation that they might have buyers for the assets lined up, despite government austerity plans that are likely to limit infrastructure spending.
Lafarge to cut Euro1.3bn by 2015
12 June 2012France: Lafarge intends to cut its costs by Euro1.3bn from 2012 to 2015. The French-company announced that it is speeding up cost-cutting measures, boosting sales revenue and cutting net debt over the next four years in a bid to improve its profitability.
At least Euro400m of cost savings are scheduled for 2012 and at least Euro350m are planned for 2013. The plan seeks to raise Euro450m from innovation and efficiency gains and boost earnings before interest, taxes, depreciation and amortization (EBITA) by Euro1.75bn. As a result of the higher EBITDA, Lafarge will cut its net debt below Euro10bn 'as soon as possible' in 2013.
The company seeks to boost return on capital employed to above 8% by 2015.
"All our actions will contribute to higher cash generation, improved returns, and cash flow from operations to net debt of 28% to 30% no later than 2015," Lafarge said in a statement.
Lafarge has struggled over the past few years from its heavy debt load and the global economic downturn. Its debt peaked at Euro17bn in 2008, following a series of acquisitions culminating in the Euro8.8bn takeover of Egyptian rival Orascom Cement. The company had already managed to reduce its debt to Euro12.36bn at the end of the first quarter of 2012.
Lafarge Chief Executive Bruno Lafont reiterated the company will raise Euro1bn in asset sales in 2012 and doesn't plan any major acquisition over the coming years. He added that the company's ultimate goal is to raise dividends and resume investing once its financial structure is stabilised.
Lafarge Zimbabwe raises revenue target
01 June 2012Zimbabwe: Increased cement demand in the local market has lead to Lafarge Cement Zimbabwe upgrading its revenue forecast for the year to 31 December 2012 to US$62m from an initial forecast of US$60m. At the company's annual general meeting managing director Jonathan Shoniwa said that increased capacity utilisation and cement demand had resulted in the revenue forecast adjustment.
In 2011 the company recorded a revenue of US$50m following a refurbishment exercise that increased capacity utilisation from 75% to 90% against a 19% decline in exports culminating from an increased focus on local demand. Shoniwa said that turnover in the four months to 30 April 2012 had risen by 35.2% to US$21.9m, with the operating margin having improved to 14% from 10% year-on-year.
Since Zimbabwe's economy 'dollarised' in January 2009, when US dollars were permitted to be used in parallel to the existing currency, cement demand for individual home projects increased as people focused on improving and building residential houses. According to Shoniwa, cement demand in the country is currently up by 28% predominantly due to retail construction. With the construction industry currently operating at below 40% capacity, the focus by the company will continue to be on the domestic market and increasing market share.
Lafarge Cement Zimbabwe has a capacity of 0.45Mt/yr. US$4.5m is expected to be spent on upgrades by the company in 2012.
India: Martin Kriegner has been appointed CEO of Lafarge India as part of the current group-wide reorganisation drive. He will hold responsibility for all of Lafarge's cement, aggregates and concrete activities in the country.
"I am happy to return to India as Country CEO, at a time when the construction sector is evolving quickly in the country. By combining all of our activities together we will be able to support this evolution by offering integrated and innovative solutions at an earlier stage of construction in close proximity with our customers, allowing the full benefits of our innovative products and services to be realised," said Kriegner.
Martin Kriegner, an Austrian citizen, joined Lafarge in 1990 and became the CEO of Lafarge Perlmooser AG, Austria in 1998 before he moved to India as head of the cement activity in 2002. Prior to this assignment he served as regional president, based in Kuala Lumpur, Malaysia. Lafarge has four cement plants in India: two plants in the state of Chattisgarh and a grinding plant each in Jharkhand and West Bengal.