Lafarge (company)

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Lafarge S.A.
Type Société Anonyme
Traded as EuronextLG
Industry Building materials
Founded 1833
Headquarters Paris, France
Key people Bruno Lafont (Chairman and CEO)
Products Cement, Construction aggregates, asphalt production and concrete
Revenue 15,198 million (2013)[1]
Operating income € 2,020 million (2013)[1]
Profit € 432 million (2012)[1]
Total assets €37,075 million (end 2013)[1]
Employees 64,000 (end 2013)[1]
Website www.lafarge.com
Bags of Lafarge cement

Lafarge is a French industrial company specialising in three major products: cement, construction aggregates, and concrete. The company has become a world leader in building materials.

History[edit]

Lafarge was founded in 1833[2] by Joseph-Auguste Pavin de Lafarge in Le Teil (Ardèche), to exploit the limestone quarry in Mont Saint-Victor between Le Teil and Viviers. The limestone is white and argillaceous, and yielded an eminently hydraulic lime.

Villeneuve-lès-Maguelone, Hérault 05.jpg

In 1864 Lafarge signed its first international contract for the delivery of 110,000 tonnes of lime to the Suez Canal construction project.[2] In 1980 Lafarge joined with the Belgian coal, coke and fertilizer company Coppée to become SA Lafarge Coppée.

Lafarge purchased a plant from the National Gypsum Company in early-1987.[3] Ten years later, it bought Redland plc, a leading British quarry operator.[4]

In 1999, Lafarge acquired 100% shareholding in Hima Cement Limited, the second-largest cement manufacturer in Uganda, with installed capacity of 850,000 metric tonnes annually, as of January 2011.[5] In 1999, Lafarge entered the Indian market through its cement business,with the acquisition of Tata Steel's cement activity.This acquisition was followed by the purchase of the Raymond Cement facility in 2001.[6] In 2001, Lafarge, then the world's second largest cement manufacturer, acquired Blue Circle Industries (BCI), which at the time was the world's sixth largest cement manufacturer, to become the world leader in cement manufacturing.[2]

In 2006, Lafarge North America shareholders accepted a $3 billion tender offer from Lafarge Group which gave the parent company full control over the North American business, removing LNA from the New York Stock Exchange. Previously the Group had owned 53% of LNA shares.[7]

In 2007, it divested its roofing division, selling it to a private equity group in a deal that resulted in Lafarge retaining a 35% equity stake.[2]

In December 2007, Lafarge announced the purchase of the Orascom Cement Group, an Egyptian based cement producer with operations across Africa and the Middle East, from Orascom Construction Industries (OCI).[8]

On May 15, 2008 Lafarge acquired Larsen & Toubro Ready Mix-Concrete (RMC) business in India for $349 million.[9]

In 2010, Lafarge strengthened its presence in Brazil (agreement with Lafarge and STRABAG to create a common company in Cement in Central Europe).

In 2011, Lafarge SA announced it would build a cement plant in Langkat, North Sumatra, Indonesia with investment up to Rp 5 trillion ($585 million).[10]

Lafarge launched three plants in Hungary, Syria and Nigeria and created a joint-venture with Anglo American in the United Kingdom.

The Group sold most of its European, South American, Asian and Australian gypsum operations.[11][12][13]

In April 2013, Lafarge adopted a new brand baseline "Building better cities".[14] It reflects the Group’s ambition to contribute to the improvement of cities by developing innovative construction products, solutions and systems. Lafarge’s contribution to better cities addresses some key challenges of urbanization:[15]

  • contribute to more housing in cities;
  • contribute to more compact cities;
  • contribute to more durable cities;
  • contribute to more connected cities;
  • contribute to more beautiful cities.

In September 2013, Lafarge agreed to the sale of its 53.3 per cent stake in its Honduras subsidiary Lafarge Cementos SA de CV to Cementos Argos for €232m.[16]

Proposed merger[edit]

Main article: LafargeHolcim

On April 7, 2014, Lafarge and Holcim announced they had agreed to terms on a "merger of equals".[17] The merger would entail Lafarge stock being converted into Holcim stock on a 1:1 basis. Former Holcim shareholders would own 53% of LafargeHolcim.[18] The new company would be based in Switzerland and have a manufacturing capacity of 427 million tons a year would vastly exceed the 227 million ton capacity Anhui Conch, the current industry leader in that category.[19] Lafarge Chief Executive Officer Bruno Lafont will lead the new company, while Holcim's Wolfgang Reitzle will be chairman.[20] Executives from both companies said the deal would save the new company 1.4 billion euros (US$1.9 billion) annually and create "the most advanced group in the building materials industry."[19]

The deal will face significant regulatory obstacles, as 15 different jurisdictions could potentially raise objections. The cement market in Europe is already tightly consolidated and antitrust scrutiny of deals has been commonplace since the 1970s.[19] To meet regulatory concerns, Holcim and Lafarge plan to sell or spinoff assets that generated about 5 billion euros (US$6.9 billion) of revenue in 2013 in areas of large overlap between the two companies.[20] Lafont said the merger was aimed at rebalancing operations, not cutting costs. He said overlapping businesses would be sold, not closed, so industry job losses would be minimal.[19]

Industry analysts said the deal would combine Holcim's marketing strength with Lafarge's edge in innovation, while providing significant cost savings, but cautioned "the road to merger clearance will be a long, complex and uncertain one."[18] Others said the deal could lead to further mergers within the industry and give competitors a chance to pick up assets at a bargain price.[20] Most analysts surveyed by Reuters felt the merger would be approved in the end.[18]

Environmental concerns[edit]

Cement plant in Frontignan, France.

On July 11, 2008, the Albany Times Union reported that Lafarge's Ravena, New York plant "was the greatest source of mercury emissions in New York from 2004 to 2006" [21] According to the story, plans have been made to upgrade the plant to reduce the mercury emissions. A second story, published the following day, stated that the factory had emitted 400 pounds (181 kg) of mercury annually from 2004 to 2006.[22] In November 2010 Lafarge, together along with other companies, opposes new EPA regulations that require mercury-emissions reductions at cement plants.[23] Preliminary data published by the EPA for the year 2009 showed 145 pounds of mercury were recorded for the Ravena plant (total on- and off-site disposals). The plant has continued to perform within permitted limits.[24]

In July 2013, the New York State Department of Health (NYS DOH), in partnership with the federal Agency for Toxic Substances and Disease Registry, completed a public health assessment for communities near the Lafarge Cement Plant in Ravena, New York.[25]

Major findings and results from the NYS DOH Lafarge Cement Plant Health Assessment:

  • Breathing the ground-level air concentrations of metals (e.g., mercury), polycyclic aromatic hydrocarbons, polychlorinated biphenyls, carbon monoxide, lead, particulate matter, dioxins, furans, hydrocarbons, volatile organic compounds and ammonia released in cement kiln stack emissions is not expected to harm people's health.
  • For the general public, breathing ground-level air concentrations of sulfur dioxide or nitrogen dioxide released in the kiln stack emissions is not expected to harm people's health.
  • Touching, breathing or accidentally eating dust that originated from the Ravena cement plant and other sources is not expected to harm the health of people who reside, work, or attend school in the community.
  • Current health status of the communities near the cement plant is similar to the health status of other areas in the region and state.

On July 23, 2013, under an agreement with the U.S. Environmental Protection Agency, the U.S. Department of Justice and the state of New York, Lafarge North America Inc. agreed to fund $1.5 million in projects to reduce air pollution in the community surrounding its Ravena, New York cement plant.[26] The agreement also amends a March 2010 consent decree that the federal Environmental Protection Agency, New York and 11 other states entered into with Lafarge requiring the company to limit pollutant emissions from its 13 plants nationwide.[27]

Under the agreement, Lafarge North America will adhere to an updated schedule that provides Lafarge an additional 18 months to finish construction of a new modernized facility by July 1, 2016. At that time, the existing Ravena plant - which remains in compliance with all current environmental requirements - will be taken offline.[28]

Details of the agreement include that Lafarge North America will:

  • Invest $1.5 million in projects benefiting the local environment;
  • Make additional improvements to the environmental infrastructure at the existing Ravena plant;
  • Adopt new, stricter emission limits for SO2 and Hg; and
  • Set a strict, new timetable complete the Ravena plant modernization project.

The group[edit]

The group conducts its operations through more than 1,000 subsidiaries, out of which 82% are consolidated. Further to the divestment of a majority of its gypsum assets and the fundamental changes to its management structure, the group has fully refocused on its core businesses of cement, aggregates and concrete. The strategic shift will accelerate growth and innovation.[citation needed]

It has an organizational structure based on its three divisions, with decentralized local operations and strong corporate expert departments, which are involved in strategic decisions.

  • Cement: Lafarge has 155 plants in 56 countries
  • Aggregates and Concrete: 1481 production sites and sales offices in 37 countries

The headquarters of the group are based in Paris (France).

Management team[edit]

In November Lafarge announced its new organization project focused on its markets and its clients, designed to accelerate the Group’s development and profitability. The product line-based organization is replaced with a country-based organization. This included the removal of a layer of management and the resulting reorganization of the executive committee. Since January 2012.[29]

  • Bruno Lafont, Chairman and Chief Executive Officer
  • Sonia Artinian, Executive Vice-President Organization and Human Resources
  • Jean Desazars de Montgailhard, Executive Vice-President Strategy and Development
  • Thomas Farrell, Executive Vice-President Operations
  • Jean-Jacques Gauthier, Executive Vice-President Finance
  • Christian Herrault, Executive Vice-President Operations
  • Peter Hoddinott, Executive Vice-President Performance
  • Gérard Kuperfarb, Executive Vice-President Innovation
  • Eric Olsen, Executive Vice-President Operations
  • Alexandra Rocca, Executive Vice-President Communications, Public Affairs and Sustainable Development
  • Guillaume Roux, Executive Vice-President Operations

Board of directors[edit]

The board of directors of Lafarge has 16 members appointed by the annual shareholders' meeting for a period of four years:[30]

Former members of the Board: Guilherme Frering, Raphaël de Lafarge, Michael Blakenham, Jean-Pierre Boisivon, Alain Joly, Bernard Kasriel, Jacques Lefèvre, Eric de Waubert de Genlis, Michel Pébereau, Pierre de Lafarge, Gérald Frère, Bertrand Collomb.

Financial data[edit]

The following is a summary of data:[31][32][33]

Financial data in millions of euro
Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sales 13,698 14,610 13,658 14,436 15,969 16,909 17,614 19,033 15,884 14,834 15,284 15,816 15,198
EBITDA 2,862 3,101 2,820 3,028 2,920 3,610 4,183 4,618 3,600 3,614 3,217 3,450 3,102
Net results 750 446 728 868 1,096 1,372 1,909 1,598 736 827 593 432 601
Net debt 9,332 8,544 6,734 7,017 7,221 9,845 8,685 16,884 13,795 13,993 11,974 11,317 10,330
Staff 82,892 77,547 75,733 77,075 80,146 82,734 77,720 83,440 77,994 75,680 68,000 65,000 64,000

See also[edit]

Main Lafarge competitors are:

External links[edit]

References[edit]

  1. ^ a b c d e "Annual Report 2013". Lafarge. 
  2. ^ a b c d Lafarge history
  3. ^ Wharton, George. "Great Lakes Fleet Page Vessel Feature - J. A. W. Iglehart," Boatnerd.com.
  4. ^ Redlands needs white knights
  5. ^ Hima Cement Expands Factory
  6. ^ http://www.lafarge.in
  7. ^ French parent targets huge but little-known Lafarge North America
  8. ^ Lafarge buys Orascom Cement for Euros 10bn
  9. ^ Lafarge Enters in Indian RMC Business with L&T Acquisition
  10. ^ http://www.thejakartapost.com/news/2011/07/04/lafarge-may-invest-rp-5t-n-sumatra.html-0
  11. ^ Lafarge closes sale of Gypsum assets to Etex Group
  12. ^ Lafarge agreed with Boral to sell them its stake in their common Asian Gypsum Joint-Venture for 429 M€
  13. ^ Lafarge sells its Australian Gypsum operations for 120 million euros
  14. ^ http://www.lafarge.com/wps/portal/6_2_2-TCDet?WCM_GLOBAL_CONTEXT=/wps/wcm/connect/Lafarge.com/AllPR/2013/PR20130411/MainEN Press release:"Building better cities" An ambition driving our innovation
  15. ^ http://www.lafarge.com/wps/portal/9-contribuer-a-des-villes-meilleures "Contribute to better cities" section on the corporate website
  16. ^ "Lafarge - September 2013". CemNet.com. International Cement Review. 3 October 2013. Retrieved 31 October 2013. 
  17. ^ "Holcim Agrees To Merge With Lafarge". Bloomberg TV India. April 7, 2014. 
  18. ^ a b c Natalie Huet; Caroline Copley (April 7, 2014). "Holcim, Lafarge agree to merger to create cement giant". Reuters. Retrieved April 9, 2014. 
  19. ^ a b c d David Jolly (April 7, 2014). "Antitrust Hurdles Loom Large for Giant Cement Merger". New York Times. Retrieved April 9, 2014. 
  20. ^ a b c Patrick Winters; Francois de Beaupuy (April 7, 2014). "Holcim to Merge With Lafarge to Form Biggest Cement Maker". Bloomberg. Retrieved April 9, 2014. 
  21. ^ "Update at Ravena Cement Plant to Clean Air". Albany Times Union. Retrieved 2008-07-29. 
  22. ^ "Update at Ravena Cement Plant to Clean Air". Albany Times Union. Retrieved 2008-07-29. 
  23. ^ http://www.publicnewsservice.org/index.php?/content/article/16878-1
  24. ^ "The EPA's Toxic Release Inventory (TRI) explorer". 
  25. ^ Department of Health, Information for a Healthy New York, Lafarge Cement Plant [1]
  26. ^ Lafarge North America Inc. Agrees to Environmental Projects as Part of Clean Air Act Agreement [2]
  27. ^ A.G. Schneiderman & DEC Commissioner Martens Announce Continuing Air Pollution Reductions in Updated Settlement with Ravena Cement Plant, Modification Provides Albany County Company More Time to Build New Kiln While Continuing Air Pollution Emission Reductions of Earlier Agreement, Company Required To Invest $1.5 Million In Additional Projects To Improve Air Quality In Local Communities [3] , Department of Environmental Conservation
  28. ^ Lafarge Finalizes Consent Decree Amendment for Ravena Plant
  29. ^ Lafarge announces its new organization project
  30. ^ "Board of Directors". Retrieved 13 February 2013. 
  31. ^ "Annual Report 2011". Lafarge. Retrieved 17 April 2011. 
  32. ^ "Annual Report 2009". Lafarge. Retrieved 2010-03-14. 
  33. ^ OpesC