Global Cement News

France: Lafarge has begun a consultation procedure regarding the proposed reorganisation of its corporate functions and shared resources in France. This follows from its 21 November 2011 announcement that it was planning a restructuring along geographical lines rather than its product types. Lafarge has now said that the proposed changes would result in 460 job losses, 90 of which would be in France. It said that voluntary redundancy plans would help it to avoid compulsory job losses.

Lafarge has said that the reorganisation will be structured around an Executive Committee consisting of a 'Performance' function, chiefly responsible for the technical centers and engineering, IT systems and the leadership of commercial and industrial performance; an 'Innovation' function, chiefly responsible for research and development, marketing and transformation; three Executive Vice Presidents, whose mission will be supervising 42 operating entities and support functions.

The group says that the shift in its centre of gravity towards countries would lead to a decentralisation ofcorporate functions. As a result, the outline of the new organisation that is being announced today entails a reduction in staff numbers. Lafarge says that the new group organisation will enable it to be more focused on the needs of its markets and its customers and will enable it to accelerate the development of the group through organic growth and innovation.

Mexico: Cemex has reported rises in its net sales for both the fourth quarter of 2011 and the full year. Geographically this increase for the fourth quarter was due to higher volume and prices in local-currency terms in the United States, northern Europe and Latin America regions. Sales were flat in Mexico, the Mediterranean region and Asia.

For the group as a whole consolidated net sales increased by 6% during the fourth quarter of 2011 to approximately US$3.7bn and increased by 8% for the full year to US$15.1bn versus the comparable periods in 2010. Operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 13% during the fourth quarter of 2011 to US$542m and increased by 1% for the full year to US$2.3bn versus 2010. The infrastructure and residential sectors were the main drivers of demand in most of its markets.

Fernando A Gonzalez, Executive Vice President of Finance and Administration, said, "This is the fifth consecutive quarter of top-line growth in our results. We are particularly pleased with the quarterly performance of our operations in northern Europe; the South, Central America and Caribbean region; and the United States. Regarding our full-year results, we saw net sales and operating EBITDA growing for the first time in four years."

Net sales in the company's operations in Mexico decreased 9% in the fourth quarter of 2011 to US$818m, compared with US$902m in the fourth quarter of 2010. Operating EBITDA increased by 7% to US$307m versus the same period of 2010.

Cemex's operations in the United States reported net sales of US$682m in the fourth quarter of 2011, up by 19% from the same period in 2010. In northern Europe, net sales increased by 16% to US$1.1bn, compared with US$950m in the fourth quarter of 2010. In the Mediterranean region sales were US$385m, 14% lower versus those in the comparable period of 2010. South, Central America and the Caribbean reported net sales were US$447m during the fourth quarter of 2011, representing an increase of 22% over the same period of 2010.

In Asia net sales were flat reaching US$124m.

Spare a thought for your fellow cement workers this week as reports emerge of plant employees being forced back to work at gunpoint in Kenya and Chinese workers being kidnapped in Egypt.

The news that workers have been coerced with bullets is just one horror story from the ongoing soap opera that is the East African Portland Cement Company. Since the Kenyan government dismissed the directors in December 2011, over allegations of alleged mismanagement, progressively more murky disclosures have emerged. Although the latest reports suggest that all the 1200 permanent employees have now returned to work, the situation remains volatile. Anyone who thought that a judge could simply order the plant back to work because he said so has underestimated the situation.

On one side sit the directors who have already been sacked and reinstated by the government following accusations of non-competitive tenders and rampant expenses claims in December 2011. Running scared of their own employees, they now have to face the Maasai elders who supporting the directors by ordering the closure of the gypsum, limestone and pozzolana mines. On the other side is the Kenyan government which was legally forced to return the directors they dismissed. In the middle remain the workers, at work for now but for who knows how much longer.

By contrast the 25 mostly Chinese cement factory workers who have been kidnapped in Egypt's Sinai Peninsula may have had the best management in the world. Yet working internationally can bring risks such as political instability that are hard to predict.

Elsewhere in this issue of Global Cement Weekly, you can read about new plant plans in Indonesia, rampant overcapacity in Vietnam, soaring profits in Saudi Arabia and the news that Italcementi is likely to have to sack 7.5% of its workforce.

Egypt: Bedouin in Egypt's Sinai Peninsulas kidnapped 25 mostly Chinese cement factory workers on 31 January 2012. They demanded that authorities free fellow tribesmen from prison, sources from the tribe said.

"We will not release the Chinese until our demand for the release of these sons of Sinai are met," said one of the Bedouin who wanted to remain anonymous.

The workers were kidnapped on their way to a Sinai Cement plant and were being held in a tent near a road that the Bedouin had blocked for the past three days to press their demand, the sources said. They said their jailed tribesmen were arrested between 2004 and 2006 as part of an investigation into bombings at the Taba resort on Sinai's Red Sea coast in which 31 people were killed.

Malaysia: Lafarge Malayan has appointed Bradley Peter Mulroney as its president and chief executive officer and Malaysian Chen Theng Aik as its executive director.

Mulroney, aged 49, is a British national. He holds a Bachelor of Arts from the University of London and he initially started his career with Redland plc, where he rose to the rank of a general manager. Redland was acquired by Lafarge SA in 1996.

Aik, aged 45 is a Malaysian who was previously the senior vice-president, finance and chief financial officer of Lafarge Malayan.