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Lafarge HQ could leave Leicestershire

May, 03 2012

(UK) -- Bosses at quarry firm Lafarge could move the company's head office out of Leicestershire as part of its £1.8 billion merger with a rival.

Lafarge's UK operation, which employs 450 people in Syston and 100 at its quarry in Mountsorrel, was yesterday given the go-ahead for the joint venture with Tarmac, of Wolverhampton.

The coming together of the two operations will mean the creation of a new business.

Richard Halderthay, head of communications at Lafarge, said no decisions had been made about what would happen to the office at Watermead Business Park, Syston, once the merger was complete, but he did not rule out a move.

He said: "We have our head office in Leicestershire and Tarmac has a head office in Wolverhampton and when we create a new company it could be at either one of those locations or another altogether."

The Competition Commission yesterday approved the tie-up on the condition the two companies sold parts of their businesses, to stop them controlling a huge swathe of the construction materials market.

Lafarge confirmed the package of operations it has been told to sell did not include its Mountsorrel site, Europe's largest granite quarry.

It does, however, include a cement plant in Hope, Derbyshire, as well as the nearby Dowlow quarry and three linked rail depots.

Following the commission's report, quarry firm Breedon Aggregates, of Breedon-on-the-Hill, said it was interested in buying some of these assets.

Aggregate Industries, of Bardon, is also believed to be looking to make acquisitions as a result of the forced sell-off.

The commission has ordered that sales must be completed before the joint venture can go ahead.

Roger Witcomb, who chaired the Competition Commission's inquiry group, said: "A large-scale disposal like this is the only way to get a new entrant of sufficient scale to break into the UK cement market and thereby ensure that this joint venture does not damage competition.

"In bulk cement, there are currently only four UK producers and there is evidence that competition is not as effective as it could be.

"We believe these extensive sales will help protect all customers' interests in these key markets, which is particularly important when one considers how much construction work is funded by the public purse."

Lafarge's aggregates and concrete operations employ 1,650 staff in the UK.

The French-owned group has almost 200 UK locations, including 38 quarries and 100 ready-mixed concrete plants.

Tarmac is owned by Anglo-American group, of South Africa.

Mr Halderthay said combining the two businesses was expected to make them more efficient.

"The joint venture will be a market-leading UK construction materials company in cement, concrete, aggregates, asphalt and contracting services," he said.

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