LafargeHolcim ‘eyes withdrawal from several markets’
Cement giant’s chairman says sale of operations in several countries is an option following last year’s merger
LafargeHolcim, the world’s largest cement group, is considering its withdrawal from a number of markets as part of its efforts to make last year’s merger a success, chairman Beat Hess has said.
Speaking to the Swiss weekly paper Sonntagszeitung, Hess said that the sale of operations in several countries was an option for the cement group.
“We will be present in less countries for sure,” he said, adding that the group generates 80% of its operational earnings before taxes, depreciation and amortisation in 25 countries.
The report quoted Hess as saying that there was “much potential for improvement” in another 25 countries.
“Either we succeed in strengthening these operations through targeted investments, or we have to see whether other owners could do better.”
He added that for the remaining 40 countries that the Switzerland-based firm operates in, the question was about how to reach the target to earn its capital costs in the foreseeable future and “whether it would not be better to invest elsewhere the proceeds coming from a sale”.
LafargeHolcim was created in 2015, following a merger between France’s Lafarge and Switzerland’s Holcim. The company has already exceeded its 2016 goal of making divestments worth $3.57 billion. It said in August 2016 that it had extended the programme to $5.10 billion by the end of 2017.
In addition, 250 jobs were shed as part of the reorganisation of global functions. Hess said that the group was likely to cut more jobs in its country organisations, with the closure of more plants also likely.
“In big markets, where both Lafarge and Holcim were present, we still have to adjust structures,” the chairman was quoted as saying by the paper.
