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Doing deals with terrorists has a price: US$778m. The US Department of Justice (DOJ) revealed this week that it had fined Lafarge for its conduct in Syria between 2013 and 2014. In addition Lafarge and its subsidiary Lafarge Cement Syria (LCS) have pleaded guilty to one count of conspiring to provide material support to designated foreign terrorist organisations in Syria. It is uncertain how exactly the fine will be paid but it is worth noting that successor company Holcim reported net sales of nearly US$27bn in 2021. The fine represents nearly 2% of this.

A reasonable amount of new detail can be found on the DOJ website. LCS was essentially dealing with the Islamic State of Iraq and al-Sham (ISIS) and the al-Nusrah Front (ANF) as they would a local government in relation to the running of the Jalabiyeh cement plant. As a reminder, both of these groups were defined as terrorist organisations by the US government at the time. The relationship apparently started as monthly payments to local armed groups, including ISIS and ANF, to allow movement through checkpoints. This later progressed to a de-facto tax based on cement sales. However, it became worse when LCS started asking ISIS to block or tax imports of cement from Turkey-based competitors into northern Syria as part of a revenue-sharing agreement. Effectively LCS was fixing the price of cement in a war zone by collaborating with terrorists. In the end LCS, the intermediaries and the terrorist groups made around US$80m whilst they were working together.

Holcim’s interpretation of the ruling was keen to point out that the conduct in Syria was recognised by the DOJ as not involving Holcim in any way. The DOJ did agree that Lafarge’s executives didn't disclose their activities in Syria to its successor company Holcim either before or after the merger in 2015. However, it pointed out that Holcim had not carried out due diligence of LCS’s operations in Syria. It added that, “Lafarge, LCS and the successor company also did not self-report the conduct or fully cooperate in the investigation.”

Despite this, other information that Holcim also highlighted was that the US authorities were now happy that effective compliance and risk management controls were in place to prevent anything similar happening again. Crucially, it said that the DOJ didn’t think that an independent compliance monitor was required. It pointed out that none of the conduct involved Lafarge’s operations or employees in the US and that none of the Lafarge executives were working for Holcim or any associated company. Finally, the group wanted to report that the DOJ found that none of the former Lafarge executives involved shared any of the “methods, goals or ideologies” of the terrorist groups operating in area at the time.

The immediate reaction from all of this is what happens to the ongoing legal case in France, also about Lafarge’s conduct in Syria? In mid-May 2022 the Court of Appeals confirmed a charge of complicity in crimes against humanity against Lafarge. The company then reportedly started the appeal process at the Supreme Court. Other charges, including financing terrorism, endangering life and violating an embargo, were lodged earlier in the legal process. The US is generally seen as being the leading prosecutor of international corporate crime but if the French legal system also issued a fine to Lafarge on the same scale things could become difficult for Holcim. The other complication for the French legal case is that the national intelligence services allegedly used Lafarge’s links with the Syrian terror groups to acquire information but they did not warn the company that it was committing a crime.

Holcim is a different company from what it was when LafargeHolcim formed in 2015. It is being run by a new chief executive officer who came in from another company well after the merger and is diversifying away from the trio of cement, concrete and aggregates with the addition of a fourth business area of light building materials. Alongside this the group has been selling off businesses in the developing world and focusing on Europe and North America. Yet it is still being defined by the criminal actions of a company it absorbed seven years ago and the behaviour of staff long gone. Those actions have been investigated and punishment delivered. More may be coming.

India: Shree Cement has appointed Neeraj Akhoury as its designated managing director. Hari Mohan Bangur has also been appointed as chair and Prashant Bangur as Vice Chair. All these personnel changes are subject to approval by the members of the company. In addition, Gopal Bangur has resigned as chair and will become Chairman Emeritus.

Akhoury holds nearly 30 years of professional experience in the cement and steel sectors. He began his career in 1993 at Tata Steel, working for both the cement and steel divisions. He joined Lafarge India in 1999 and worked as member of the Executive Committee responsible for corporate affairs followed by sales. In 2011, he moved to Nigeria as the head of Lafarge AshakaCem. Later, he was appointed as Strategy & Business Development Director for the Middle East & Africa at Lafarge’s headquarters in Paris. He became the head of LafargeHolcim Bangladesh in 2015 and then was appointed as the head of ACC in 2017 and Ambuja Cement in 2020.

Akhoury is a graduate in economics from Allahabad University and holds a Master of Business Administration (MBA) from the University of Liverpool. He has also studied one-year General Management Program at XLRI Jamshedpur and is an alumunus of Harvard Business School.

Australia: AdBri says that Nick Miller will be leaving the role as its chief executive officer (CEO) and managing director. Mark Irwin has been appointed as interim CEO with immediate effect. Recruitment for a permanent CEO will start soon. In a trading update, the company said that its earnings were being negatively affected by rising costs, particularly energy and diesel costs, and poor weather.

Miller originally became the CEO of AdBri in 2019 and was later appointed its board of directors as managing director in late 2021.

Australia: Boral has appointed Belinda Shaw as its chief financial officer (CFO). She succeeds Jared Gashel, who has held the position of Acting CFO since April 2022.

Shaw holds over 25 years of professional experience, including more than 10 years of senior executive finance experience across multiple industries. She was appointed as Acting CFO of Sydney Airport, after three years at the company. Her previous roles included Deputy CFO, General Manager Finance, General Manager Investor Relations & Financial Control, and Head of Finance Transformation & Strategy. Prior to her time at Sydney Airport, Shaw worked at General Electric Company where she held roles including CFO ANZ & PNG, CFO Global Mining, and CFO Global Locomotive. She holds a Bachelor of Commerce from the University of South Australia and is a Fellow Certified Practicing Accountant (FCPA).

Syria/US: A US court has found Lafarge Cement Syria guilty of conspiring to provide material support to the terrorist organisations al-Nusrah Front (ANF) and ISIS in Northern Syria during 2013 and 2014. Lafarge Cement Syria and its parent company, France-based Lafarge, agreed in 2011 to pay the terrorists for Lafarge Cement Syria employees' 'protection' and the continuation of the Jalabiyeh cement plant's operations, as well as to gain an economic advantage over other Syrian competitors. During the duration of the agreement, Lafarge Cement Syria recorded US$70.3m in sales. Coalition forces fighting against ANF and ISIS damaged the plant in an airstrike 'to reduce the facility's military usefulness' on 16 October 2019.

The court ordered Lafarge Cement Syria to pay criminal fines and forfeiture totaling US$778m.

India: ACC recorded consolidated sales of US$1.56bn in the first nine months of 2022, up by 8.3% year-on-year from US$1.44bn in the first nine months of 2021. The producer's cement sales were US$1.44bn, up by 7.2% from US$1.35bn. A 24% cost increase, to US$1.49bn from US$1.2bn, caused ACC's profit for the period to fall to US$64.8m, down by 66% from US$191m in the first nine months of 2021.

ACC said that its power and fuel costs rose by 51% to US$443m, its freight costs rose by 8.5% to US$376m and its raw materials costs rose by 24% to US$243m.

Looking forward to the fourth quarter of 2022, chief executive offcier Sridhar Balakrishnan said “The post-monsoon quarter will see the traditional rebound for the sector. Recent cooling off in energy costs will impact us positively."

US: Bulk material handling equipment supplier MDG America says that it delivered four chain bucket elevators for Drake Cement's upgrade of its Paulden cement plant in Arizona. Drake Cement installed a new vertical mill grinding plant for cement, granulated blast furnace slag (GBFS) and raw materials grinding at the 0.7Mt/yr integrated plant. The supplier says that two of the elevators will work in a pair, conveying material from a feeder belt, while a third will convey it to the new mill. The fourth elevator will then collect the material for further grinding and metal discharge.

Drake cement secured approval to mine pozzolan for use in the Paulden's plants cement production at Bill Williams Mountain earlier in October 2022. As part of minimising the future mine's impacts, Drake Cement has offered to help the US Forestry Service to thin local woodland as part of local anti-fire management efforts.

India: Prism Cement, part of Prism Johnson, has signed supply agreements with three cement producers in Bihar and Uttar Pradesh. Mayflex Cement Industries, RLJ Infracement and Rockhill Hi-Tech Cement will supply the cement producer and distributor with cement from their respective grinding plants, which have a total capacity of 820,000t/yr. Prism Cement said that the agreements will help it to improve local availability in the strategic markets of Bihar and Uttar Pradesh. Bihar contributed 19% of Prism Johnson's cement sales by volume in the 2022 financial year, and Uttar Pradesh 55%.

Mayflex Cement Industries reportedly commissioned its new 300,000t/yr Faizabad grinding plant in Uttar Pradesh earlier in 2022.

South Korea: SK Ecoplant is at the centre of an initiative in partnership with the city administration of Seoul to co-process 52,000t/yr of incineration ash and 110,000t/yr of sewage sludge from the city in local cement production. AJU News has reported that the waste management company expects to supply the raw materials to make 150,000t/yr of cement production under the initiative.

Seoul generates 113,000t/yr of incineration ash and 200,000t/yr of sewage sludge. Currently, recycled incineration ash is used in concrete block and paving slab production, which have a limited strength when using the material.

Brazil: Haver & Boecker Niagara has upgraded its plant in Pedro Leopoldo. The expansion allows the company to increase its screen media and parts production capacity by 15%. It can now move its rubber production in-house, allowing for an increased production capacity of its Ty-Dura screen media and premium rubber liners by 60% and improved quality control. The upgrade has also enabled the company to expand its research and development laboratory and testing centre. The company produces products for screening and pelletising for the cement, aggregate and mining sectors.