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Published On: Thu, Jul 23rd, 2015

How merger has made Lafarge a clear leader in building materials industry

A couple of days ago,  Lafarge Holcim officially launched a record merger around the world and announced key elements of its ambitions for the future.

The merger places the group as the clear leader in the building materials industry in the world, with a market worth of $40 billion and plan to deliver annual savings of €1.4 billion ($1.54 billion) within the next three years.The merged companies have a combined global capacity of 386 million tonnes per annum.

At a world press conference held in Zurich, Eric Olsen, now chief executive officer of the merged firms, said LafargeHolcim would concentrate on integrating the two companies, reducing capital spending and creating new solutions.

But how will this merger impact on LafargeHolcim operations in Nigeria? Speaking at a press conference in Lagos last Thursday, Guillaume Roux, outgoing country CEO for Nigeria, said the merger would have a positive impact on the on-going consolidation of the Nigerian operations under Lafarge Africa plc.

According to Roux, the United Cement Company of Nigeria (UniCem), a joint venture between Lafarge and Holcim in Cross River State, would now join the other operations, which include Ashaka Cement in Gombe, Atlas terminal in Rivers, WAPCO Operations in Ogun , as well as its aggregates and ready mix sites across the country as a member of  LafargeHolcim in Nigeria.

Peter Hoddinott, area manager, Nigeria  and West Africa, who takes over leadership of Lafarge Africa plc, said the union of the world’s two biggest building materials companies marked a milestone in the company’s commitment to providing the best cement, concrete and aggregates products to Nigerians.

Hoddinott said the company, which was still known in Nigeria as Lafarge Africa plc, would continue to play a key role in the economic development of the country by leveraging on the group’s combined technical excellence and years of operation for the continuous production of building solutions that were best in quality as well as innovative, available and affordable.

“We will create a stronger company that is able to make more solid investment in Nigeria and be better able to assist in delivering more affordable housing as well as supporting socio-economic progress through corporate social responsibility (CSR) activities,” he said.

Data show that expected sales from Nigeria in the LafargeHolcim Group Africa and the Middle East represent about 18 percent of the total group. Nigeria is approximately one-sixth of that, representing between three and three and a half of the total group turnover in 2014.

 

Hoddinott said the company would now pay closer attention to cost cuts.

“Today, we transport cement from Ewekoro down to Calabar. That was because we were competing with Unicem. But now with the merger, it makes sense for the Calabar plant to supply to those customers closer to it and for us in the South-West to withdraw. This will save money on logistics cost, “he observed.

 

On renewable energy opportunities in the country, he said Nigeria had “a huge amount of biomass, a huge amount of useful waste, a huge amount of other opportunities to convert what is currently not used by the economy into useful energy.”

 

He reiterated that the company’s determination to use the very best practices around the world to efficiently reduce the cost of energy that would go into production.

 

“I like to count my challenges on the fingers of one hand, but unfortunately as I come to Nigeria I may need to use both hands and both feet as well. There are rather a lot of challenges,” he said, while answering questions on challenges he would likely face in the country.

 

“Today, I think we are the only operations in the North-East. It is very challenging; very complicated for people working in Ashaka. But we see this as a tremendous opportunity for investment and we are delighted to see that the president has made the North-East his focus and priority for himself, starting with the improvement of the security situation.

That is something you will agree with me is key as an absolute precursor to investment,” he stated, adding that he was targeting improving the health, safety and security of individuals working in the firm’s operations, while also developing the people as well as reducing logistics and energy costs.

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