Europe / Middle East / Africa
Lafarge restructures, cuts debt
May, 02 2012
(South Africa) -- New appointment in SA appears to have overturned a report that Lafarge was seeking a buyer for its South African operations.
French based cement maker the Lafarge Group is implementing a new global structure, having appointed a country CEO for all its South African operations.
The group, one of the four biggest cement makers in the country, says the former GM of Lafarge in SA, Thierry Legrand, took up the new post last month. "Implementing this new structure will allow us to focus more efficiently on our customers and get closer to our markets," Mr Legrand said last week. "We will use the strengths of our different product lines to design solutions in line with our customers’ needs ."
The appointment appears to have overturned a Bloomberg news report in December that Lafarge was seeking a buyer for its South African operations. Bloomberg said such a transaction might fetch up to $800m, identifying potential bidders as including India’s Aditya Birla industrial group.
Lafarge has more than 3-million tons of cement capacity in SA.
The group has already sold assets elsewhere in the world to help meet a goal of cutting back debt. Ratings agencies Standard & Poor’s and Moody’s Investors Service last year cut its credit rating to below investment grade because of global market turmoil. Earlier this year, Lafarge spokeswoman Christel des Royeries declined to comment on the possibility of Aditya Birla buying its South African operations.
Mr Legrand has managed several senior portfolios within the Lafarge group, both in SA and Europe.
The restructuring announcement comes at a time when cement companies in SA are struggling to shake off the effects of the global recession, and the severe downturn in domestic construction markets.
This week, SA’s Cement and Concrete Institute said it would abide by an instruction from the Competition Commission to publish only a single, aggregated quarterly cement statistic, delayed by three months. The commission said this was to prevent collusion in the industry.
This means national cement statistics for the first quarter of this year will be published only in July.
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