Europe / Middle East / Africa
Lafarge Jordan Cement 2011 losses
Apr, 11 2012
Lafarge Jordan Cement reported JOD20m worth of losses in 2011 and revenues dropped 21 per cent YoY to JOD134m, according to reports in The National.
The company, which once had a monopoly in the country, has been struggling from increased competition ever since a fourth cement factory opened in March last year, while rising costs have impacted revenues.
Lafarge Jordan Cement has two plants, in Al Fuheis and Al Rashadiyah, with a combined production capacity of 4.8Mta. Production in 2011 was the lowest in 11 years last year.
The company stopped exporting to neighbouring Syria, Iraq and Sudan last year as it struggled with high fuel, electricity and transport costs. It has since been in negotiations with the government to allow the use of coal as a cheaper power alternative.
"There are talks with the government to allow us to use coal," the company's chief executive Salem Sousou told Bloomberg News in August. "If there is no progress we have no future and we cannot compete, especially as rivals are allowed to use it. This means shutting us down."
The company has "responded to problems by closing down production lines and offering retirement packages in order to decrease employees", analysts at Al Arabi Investment Group, a member of Arab Bank group, said in a note to clients.
The company's "provision expense against lawsuits increased 97 per cent to JOD4.2m, in addition the company reported JOD13m in losses due to lower value of equipment and spare parts," the note added.
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