Displaying items by tag: Heracles Cement
George Michos appointed CEO of Heracles
30 September 2015Greece: George Michos has been appointed CEO of Heracles, member of LafargeHolcim Group, assuming his duties as of 1 October 2015. He succeeds Pierre Deleplanque, who after seven years in Heracles, moves to become Area Manager Emerging Europe of LafargeHolcim Group, while remaining on the board of Heracles as a non-executive member.
George Michos had previously been Senior Vice President RMX Concrete for Lafarge since January 2013 and in parallel, since July 2014, leader of the Operating Model & Organisation workstream for the LafargeHolcim merger. He joined Heracles General Cement in Greece in 2004 and held various executive positions before moving to India in early 2008 and becoming the COO of Lafarge India. In mid-2011 he became Senior Vice President Cement Strategy and M&A for the Lafarge Group in Paris.
He began his career in the construction industry in Greece in 1994 and from 1998 until 2003 he worked in consulting companies in London, Paris and Athens. Michos is 45 years old and married with one daughter, is a graduate of the National Technical University of Athens in Electrical & Computer Engineering (Dipl. Eng) and holds an MBA from Harvard Business School.
The Greek debt crisis directly hit the local cement industry on Tuesday 30 June 2015 when Titan Cement reported that it was unable to pay a dividend to its shareholders. The leading local cement producer blamed the capital controls introduced by the government.
It is worth looking at the effects on the domestic cement industry as the Eurozone bureaucracy and the Greek government play 'chicken' with each other while Greece starts the default process, having failed to pay the latest International Monetary Fund (IMF) payment on 30 June 2015. Greece will now join a group, possibly even more select than the European Union, of countries that have failed to pay back the IMF, including current defaulters like Sudan and Zimbabwe.
A better comparison might be made with Argentina which defaulted upon its foreign debts in 2001. Its construction industry fell by 12% year-on-year in 2001 and by a further 30% in 2002. Cement consumption and cement production utilisation rates hit 23% in 2002. One key difference with Greece is that the country has had major financial difficulties for far longer than Argentina. Argentina ran into financial depression in 1998 and defaulted in 2001. Greece ran into financial trouble following the 2008 financial crisis and then received its first bailout in 2010.
As the capital controls show, even initial responses to the financial situations are impacting upon the standard transactions a limited company conducts. The Financial Times ran an article in May 2015 examining the potential effects on businesses of a debt default and Greek exit from the Eurozone (Grexit). In short, business and commerce will continue where possible reacting to whatever comes their way. For example, an olive oil producer reported switching to exports to make profits. Crucially though, another company interviewed, a construction contractor, worried about potential cuts to government or EU-led infrastructure projects.
As Titan reported in its first quarter results for 2015, its Greek market has been dependent on road building. In February 2014 Titan Cement reported its first improved operating results in seven years followed by profit in 2014 as a whole. The other major cement producers, Lafarge subsidiary Heracles General Cement and Italcementi subsidiary Halyps Cement, reported an improved construction market in 2014 with rising cement volumes. However, it was noted by Lafarge that it was developing exports to 'optimise kiln utilisation.' Titan also noted the benefits of exports in its first quarter report for 2015, focusing on a strengthening US Dollar versus the Euro. Given on-going events, one suspects there is going to be a lot more 'development' of this kind.
To set some sense of scale of the crisis Jim O'Neill, former head of economics at Goldman Sachs, famously calculated that, at the height of its growth, China created an economy the size of Greece's every three months. What happens next is down to the crystal balls of economists, although the path of least resistance now seems to be pointing at further default, departure from the Eurozone and Euro and further significant financial pain for Greece.
It looks likely that the local construction market will stay subdued and exports will offer a lifeline. How much the EU is prepared to let Greece default on its bills and then try and undercut its own over-capacity cement industries remains to be seen. However, since the main cement producers in Greece are all multinational outfits, it will afford them some flexibility in their strategy in coping with the fallout. Meanwhile a cement production capacity of around 14Mt/yr for a population of 11m suggests over capacity by European standards. If exports can't help then the situation looks grim.
UPDATE: Here is Global Cement's previous take on Greece from June 2012
Greek Supreme Court orders Heracles General Cement to pay village Euro78,000 for pollution
07 January 2015Greece: The Supreme Court of Greece has ordered the Heracles' General Cement Company, a subsidiary of Lafarge, to pay the residents of Agia Marina, Halkida Euro78,000 as compensation for pollution from its cement plant.
The court upheld the settlement's arguments that the cement plant had failed
to adhere to the environmental terms in its operating licence in order to avoid the relevant costs and refused to take measures for the proper maintenance and modernisation of its facilities. They said this resulted in all outdoor areas in the village being covered in a layer of cement dust up to 1.2cm thick, including the nearby coastline.
The village residents had originally sued for a total of Euro1.14m but the court awarded the residents a much lower sum, even though it found that the company's omissions fully justified their claim to moral damages resulting from their deprivation of environmental benefits and the threat to their health from exposure to environmental pollution.
Heracles fined Euro7500 for breaking lay-off law
28 June 2013Greece: The Labour Inspectors' Corps has fined AGET Heracles cement industry, a subsidiary of Lafarge Group, Euro7500 for violating mass lay-offs legislation after ruling in favour of former employees recently laid off from its cement plant in Halkida and essentially shutting down the plant.
By closing the unit and laying-off 236 employees, the industry was found in violation of article 4 of Presidential Decree 240/2006 according to which, employees have to be notified and consulted in advance. The cement industry had said that it proceeded with the shutdown of its unit in Halkida due to financial reasons and as a result of the plunge in domestic construction activity and after failing to distribute its surplus production to international markets.
Greece blocks Heracles layoff at Halkida
01 May 2013Greece: Greek authorities have blocked a request made by Heracles Cement to lay-off 229 workers from its plant in Halkis. The move would have shut down the plant. The Supreme Labour Council of the Employment, Social Insurance and Welfare ministry, voted to reject the plan made by the Lafarge subsidiary and recommended to Labour Minister Yiannis Vroutsis not to approve the demand.
Heracles Cement announced in late March 2013 that it had stopped operations at its plant in Halkida, as part of a restructuring program of its production structure. The restructuring programme was aimed at helping the Lafarge subsidiary cope with Greece's recession in its construction sector.
Heracles Cement shuts production at Halkida
27 March 2013Greece: Heracles Cement has terminated operations at its plant in Halkida, as part of a restructuring program of its production structure. The production unit at Halkida has been idle since July 2011.
The plant at Halkida was hit by a plunge in construction activity in Attica, with sales falling by 80% between 2008 and 2013. The company said it would seek every possible solution to minimise the effect of its decision to close down the unit on its 236 workers. Heracles Cement said the decision will burden its 2013 results by Euro57m but it expects a positive impact of Euro18m/yr in subsequent years.
The restructuring programme is aimed to help the Lafarge subsidiary cope with Greece's recession in its construction sector. Under the new structure, Heracles Cement will continue cement production from its two units in Volos and Evia, exploiting their comparative advantages, mainly their port facilities, to support the group's activities in Greece and in the wider Mediterranean region.