Displaying items by tag: Disensa

What’s in a name? Well maybe quite a lot when the company in question originally formed as a ‘merger of equals.’ So the news this week that the shareholders of LafargeHolcim have agreed to change its group name to Holcim suggests quite a lot. The name will only apply to the group company name and all market brands will remain as they are. Yet something fundamental appears to have changed.

As readers may remember, the original merger arrangements between Lafarge and Holcim ran into difficulties in early 2015 when Holcim’s shareholders expressed discontent at the perceived difference in value between the two companies in 2014. The deal was saved with a move away from a proposed 1-1 share exchange ratio towards one more in the favour of the Holcim shareholders and the removal of Lafarge’s chief executive Bruno Lafont as the designated chief executive of the new entity. However, from this point onwards the nagging suspicious was that the merger was really a glacial takeover of Lafarge by Holcim. Lafont and LafargeHolcim’s first chief executive officer (CEO) Eric Olsen became embroiled in legal proceedings surrounding Lafarge’s historic conduct in Syria. Then in mid-2018 LafargeHolcim decided to close its Paris headquarters, Lafarge’s old hub. During an extraordinary general meeting in May 2015 held by Holcim it was agreed to rename Holcim Ltd as LafargeHolcim Ltd as part of the merger process. The latest decision by shareholders in 2021 has reversed this.

For consumers of building products the bit about market brands staying as they are, as LafargeHolcim changes its name, is probably more important than the corporate wrangling over whatever the faraway parent company may or may not be called. So, Holcim Argentina’s plans this week to open 1000 new branches of its Disensa retail chain by 2024 may be far more important for existing and potential customers in that country. This is an enormous number of hardware stores for just one country by most reckonings and its gives one an idea of LafargeHolcim’s ambitions in the sector. It also carries echoes of the trend of business chains taking over the previously independent convenience store sector in the food sector in other parts of the world in recent decades. The Disensa franchise already operates over 2500 stories in eight countries - Argentina, Brazil, Colombia, Costa Rica, Ecuador, Mexico, Nicaragua and El Salvador – and it holds claim to being the largest building materials network in Latin America. And they aren’t stopping with just selling building materials. One innovation announced in April 2021 was the introduction of financial services to small businesses wanting to buy building products at its stores.

LafargeHolcim isn’t saying how much its retail chains contribute to the bottom line but no doubt it’s helping in a variety of ways. During an earnings call for its fourth quarter results in 2020, for example, its chief financial officer Geraldine Picaud noted that growth in Latin America in the second half of 2020 was driven by branded product in all distribution channels, including the Disensa chain. She also added that the region had the highest margin in the group at the time. Another thing to consider is, if the rumours about LafargeHolcim preparing to sell its operations in Brazil are true, what will it do with the local Disensa chain? Divesting carbon-intensive heavy industries, such as cement production, but migrating outwards and upwards in the building materials supply chain would certainly suggest that the company is preparing for its place in a low-carbon future.

Yet with all this talk of what LafargeHolcim or Holcim wants to call itself it is interesting to note that it was under Holcim in 2005 that Disensa was turned into a franchise network in its original home of Ecuador. A similar version of this model called Binastore was expanded and launched by LafargeHolcim in 2018 for Africa and the Middle East. ‘Joe Public’ or rather ‘José Public’ may not care what LafargeHolcim is called when they are buying cement from their local Disensa store. Other hardware stories are of course available.

Argentina: Holcim Argentina, part of Switzerland-based LafargeHolcim, has announced plans to open 1000 new branches of its Disensa retail chain by 2024. The Diario Financiero newspaper has reported that the chain opened 40 new locations during 2020.

General manager Natalia Soler said, "Being considered an essential sector, builders merchants continued to operate during quarantine. This scenario benefited us, coupled with the number of customers who took advantage of the context and their savings to make repairs to their homes."

Americas: Switzerland-based LafargeHolcim has begun its roll-out of ECOPact low-carbon concretes in its Latin America region, launching the product range in Ecuador, Colombia and Mexico to “meet growing demand for green products.” The company says that the launch in other markets will follow in early 2021. It said “this roll-out of ECOPact builds on its successful market adoption across Europe, the UK, the US and Canada.” The producer additionally plans to introduce its ECOLabel “to transparently communicate the environmental benefits of its green cement range” across the Disensa retail network from December 2020, enabling customers to “easily identify products that comply with the company’s green criteria, including lower carbon dioxide (CO₂) footprint and recycled content.” Every country in the region will have at least one ECOlabel product, according to the company.

Latin America regional head Oliver Osswald said, “With the roll-out of the widest range of green building materials in Latin America, we are committed to leading the way in sustainable construction. Building on our region’s excellent third quarter 2020 results, demonstrating strong resilience despite an unparalleled health crisis, Latin America is well positioned to tackle the challenges ahead. We have a clear and unified strategy supported by two strong pillars: a rapidly expanding Disensa retail franchise network, and a fully orchestrated regional push toward green building solutions.”

LafargeHolcim’s Latin America retail network Disensa will reach 2500 stores in 2020, almost double the number in 2018. The company said, “Disensa will become the central network to reach millions of consumers with a diverse product portfolio, based on quality and environmental benefits by offering ECOLabel products on a wide scale. Disensa will also introduce new digital experiences to the buying process and eventually become a full line of stores from Disensa Express to Disensa MAX!”

LafargeHolcim will host the First Latam Virtual Convention for current and potential Disensa franchisees from 25 – 27 November 2020, with participants from eight Latin American countries.

Costa Rica/Latin America: LafargeHolcim has opened the 1000th store in its Disensa retail network in Latin America. The milestone store opened in Costa Rica in late December 2017. Since expanding its Disensa network beyond Ecuador in April 2017, the company has added around 500 Disensa-branded stores in Argentina, Colombia, Costa Rica, El Salvador, Mexico and Nicaragua. LafargeHolcim plans to continue its network expansion in Latin America by opening its first store in Brazil in early 2018.

“The roll-out of the group’s retail strategy in emerging markets such as Latin America is enabling us to get even closer to consumers,” said Oliver Osswald, Head Region Latin America at LafargeHolcim.

The Disensa network is intended to offer self-builders and smaller contractors access to LafargeHolcim’s own building solutions as well as other construction materials and services, including microcredit and technical help. The concept was developed in Ecuador as a franchise scheme. The group also launched its Binastore brand of retail stores in the Middle East and Africa in mid-2017, opening stores in Algeria, Lebanon, Morocco, Ivory Coast, South Africa and Zambia.

Middle East/Africa: LafargeHolcim is expanding its specialised Binastore retail network for construction materials in Middle East and Africa. The construction materials producer already operates 500 stores in the region that serves end-consumers, self-builders, masons and smaller contractors. The newly-branded network will sell a broad range of LafargeHolcim’s own products and solutions as well as a variety of other construction materials from partner suppliers.

The first stores operating under the Binastore brand have begun to serve customers in Algeria, Cameroon, Iraq and Lebanon. The format of the stores will vary with sizes from 50m² to 2000m² and it will also include mobile stores in some rural locations. Existing stores in the region will gradually be rebranded as Binastore, while new stores will also open under this brand.

“Our vision is to build the largest retail network for construction materials in the Middle East Africa region so the Binastore brand becomes a household name for small and medium-size builders. Building on our success in Algeria, our goal is to deliver a range of building products, including our own, through multiple channels to meet the needs and lifestyle of our customers who are becoming more and more sophisticated,” said Saâd Sebbar, Region Head Middle East Africa.

The Binastore network is part of LafargeHolcim’s long-term strategy of expanding its retail business in emerging markets. In April 2017, the group announced the rollout of Disensa, a similar concept, in Latin America, where the goal is to have a network of around 1000 stores operating by the end of 2017.