Lafarge, a world leader in building materials including ready-mix concrete, sees cement growth of between 2 to 5 per cent in its markets in 2014 versus 2013. It expects markets to increasingly benefit from the recovery in the United States and the continuing growth in emerging markets as Europe overall stabilises.
“Looking at 2014, we are determined and confident, and we expect an overall growth in our markets of between 2 to 5 per cent. In this improving environment, the group will take full advantage of its three organic growth drivers — emerging markets, where construction trends continue to be very favourable, accelerated growth through innovation, and the progressive recovery of developed economies, starting with North America,” Bruno Lafont, Chairman and CEO, Lafarge, said, in the wake of Q4 results.
Volumes increased again in the fourth quarter, as the more positive market trends exp in Q3 continued to prevail. The group’s volumes benefited from the continuing recovery in the residential market in USA and by sustained growth in Middle East and Africa and in Asia. At the same time, Europe showed stabilising volumes for the second consecutive quarter, the company noted.
Consolidated sales decreased 2 per cent in the fourth quarter, still affected by adverse foreign exchange, notably in Brazil, India, South Africa and Canada.
Lafarge’s investments totalled €306 million for Q4, sustaining capital expenditures at €172 million and development investments at €134 million. It included investment in the plants of Exshaw (Western Canada) and Ravena (New York, USA), and in the new cement plant projects in Kaluga (Russia) and Rajasthan (India). The company’s 2.6-million tonne plant in Rajasthan started its operations in October 2013.
In India, the company’s regions were resilient despite a slowdown in the economy ahead of the 2014 elections, impacting the construction sector. Cement sales volumes increased 2 per cent year-to-date (contracted by 2 per cent in Q4) while prices improved to mitigate the impact of cost inflation, the company observed in its financial report (Q4, December 2013). Lafarge’s ready-mix sales volumes were down 11 per cent versus 2012, but it was able to raise prices in response to cost inflation. Its new 2.6-million tonne cement plant located in Rajasthan successfully started in the fourth quarter 2013 and should help Lafarge to continue to benefit from market growth in the coming years.
Reaping the benefits of its debottlenecking investments, Lafarge also started additional capacities in the Philippines, Brazil and Algeria (totalling of 1.8 million tonnes) which are progressively ramping up and enabling the company to seize market growth in these countries.
The company has been focusing on building its products based on technology and value. The new 265 cc quadricycle petrol engine is developed on an all-new platform and could be adapted to run on compressed natural gas, if there is need. This technology is going to be relevant for the future.
Greaves Cotton Ltd, a Rs.1,900 crore multi-product and multi-locational company, is a leading engineering company with core competencies in diesel and petrol engines, gensets and construction equipment. The company’s 10 manufacturing units produce these products.