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GROUP PRESENTATION
1.3Overview of operations
A WORLD
LEADER
(December31, 2014)
CEMENT
8,545
revenue
million euros
37,000
employees
(27,000 without
jointventures)
Blasting
1
Quarry
Crusher
Grinder
55
countries
4
Preheating
Kiln
Cooler
149
production sites
Clinker storage
7
Boat
Additives
6 Grinder
Storage Silos
34
Rail
Truck
GROUP PRESENTATION
1.3Overview of operations
1.3.1 CEMENT
Cement production historically represents the Lafarge core business.
Cement is the principal hydraulic binder. It is the principal strengthgiving and property-controlling component of concrete. It is a high
quality, cost-effective building material that is a key component of
construction projects throughout the world.
On the basis of both internal and external research, taking into account
Revenue, production capacity, geographical positions, technological
development and quality of service, Lafarge is a global leader in cement
production.
a) Profile
b) Production process
The raw materials needed to make cement are calcium carbonate,
silica, alumina and iron ore. These are usually present in limestone,
chalk, marl, shale and clay.
These raw materials are crushed, then ground up and mixed in the
appropriate proportions. The resulting mixture is then put into a rotary
kiln and heated to approximately 1,500C to produce clinker. The
clinker is nely ground with gypsum to make cement.
It is also possible to substitute other ingredientssuch as limestone,
ground slag (by-product of steel manufacturing), y ash (created when
coal is burned in thermal power plants), or pozzolan (volcanic slag)
for certain raw materials or to add these ingredients at the end of
the manufacturing process. This technique makes it possible to cut
energy bills and CO2 emissions and to broaden the range of products.
See Section1.2.3.b) (Becoming increasingly competitive through
performance) for further information on lowering energy costs and
improving the cement/clinker ratio.
d) Markets
Emerging markets (Central and Eastern Europe, Asia, Middle East &
Africa, Latin America) currently represent 90% of the worldmarket,
while North America and Western Europe make up the remaining
10%. Lafarge has a large presence in each of these markets, in erce
competition with other international cement companies and local
producers.
Over the past twenty years, worldwide cement consumption has
signicantly increased with an average rate of growth above 5% per
year. Despite the economic and nancial situation, global cement
demand grew by approximately 3% in 2014, supported by the
dynamism of many emerging markets, particularly China and SubSaharan Africa and the progressive recovery in the United States.
Mid and long-term prospects for cement demand remain favorable,
especially in these markets, where demography, urbanization and
economic growth drive the needs for housing and infrastructure.
Million tonnes
4,060
3,710
3,540
ar
5% / ye
3,290
2,980
2,740 2,800
2,500
2,300
2,100
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
1,900
2003
1,800
2002
2001
2000
1999
1,620
1,495 1,570
1998
1997
1,420 1,470
1996
1995
1994
1,300 1,350
1,700
Analyse Lafarge
35
GROUP PRESENTATION
1.3Overview of operations
g) Breakdown by regions
Lafarge produces and sells cement in the regions and countries listed
in the tables below.
The following presentation shows, for each region, the percentage
contribution to 2014 cement Revenue ineuros, as well as the number
of plants operated, cement production capacity, and approximate
market share in each country over the year ending December31, 2014.
6 1
REVENUE 2014
3
36
1. Western Europe
2. North America
3. Central and Eastern Europe
4. Middle East and Africa
5. Latin America
6. Asia
13%
14%
9%
36%
6%
22%
The approximate market share has been calculated per country based
on information contained in the Industrial Building Materials Sector
report published by Jefferies in June2014 (the Jefferies Report)
and internal estimates.
GROUP PRESENTATION
1.3Overview of operations
NUMBER OF
Country
Cement plants
Grinding plants
Cement production
capacity
(million tonnes)
France(1)
10.6
34
Greece
6.8
50
Spain
6.0
10
United Kingdom(1)
4.6
40
Germany(1)
3.7
10
0.7
100
21
10
32.4
Approximate
market share
(%)
(1) See Section1.2.7 for more information on disposals proposed in the framework of the merger project.
Country
United States
Canada
TOTAL NORTH AMERICA
Cement plants
Grinding plants
Cement production
capacity
(million tonnes)
10.7
21(1)
5.8
33
12
16.5
Grinding plants
Cement production
capacity
(million tonnes)
Approximate
market share
(%)
CENTRAL AND EASTERN EUROPE (9% OF THE CEMENT ACTIVITY 2014 REVENUE)
NUMBER OF
Country
Cement plants
Approximate
market share
(%)
Poland
5.7
20
Romania(1)
4.9
31
Russia
3.7
Austria
2.0
32
Serbia
2.0
45
Moldova
1.4
62
Czech Republic
1.2
Hungary
1.0
20
Slovenia
0.6
38
14
22.5
TOTAL CENTRAL
AND EASTERN EUROPE
(1) See Section1.2.7 for more information on disposals proposed in the framework of the merger project.
In Russia, Lafarge inaugurated in the Moscow area a brand new integrated dry process plant (2million tonnes capacity) in the second quarter
of 2014 and in the fourth quarter of 2014, disposed of one wet process plant in the Urals region.
37
GROUP PRESENTATION
1.3Overview of operations
MIDDLE EAST AND AFRICA (36% OF THE CEMENT ACTIVITY 2014 REVENUE)
NUMBER OF
Cement plants
Grinding plants
Cement production
capacity
(million tonnes)
Egypt
10.0
15
Algeria
9.4
36
Morocco
6.8
43
Iraq
5.8
24
Nigeria
5.7
32
Jordan
4.8
33
South Africa
3.6
17
3.0
Syria
2.6
23
Kenya
2.0
48
Cameroon
1.7
92
Zambia
1.3
75
Uganda
0.8
62
Benin
0.7
37
Zimbabwe
0.5
38
Tanzania
0.3
22
Malawi
0.2
76
25
59.2
Country
Approximate
market share
(%)
Lafarge develops its Cement Business through joint ventures in Morocco (50%), the United Arab Emirates (50%) and Benin (50%).
Lafarge also has two interests consolidated by the equity method:
Cement plants
Grinding plants
Cement production
capacity
(million tonnes)
Brazil(1)
7.1
7.1
Country
Approximate market
share
(%)
11-12(2)
(1) See Section1.2.7 for more information on disposals proposed in the framework of the merger project.
(2) For our relevant markets.
38
In 2014, Lafarge disposed of its entire stake (47%) in its joint venture
with Elementia in Mexico (three plants serving the Mexico City area).
GROUP PRESENTATION
1.3Overview of operations
NUMBER OF
Cement plants
Grinding plants
Cement production
capacity
(million tonnes)
20
31.6
6-22(1)
Malaysia
12.5
37
South Korea
9.6
13
India
11.0
20(2)
Philippines(3)
6.5
33
Pakistan
2.1
Indonesia
1.6
Bangladesh
1.6
Vietnam
0.5
35
12
77.0
Country
China
Total Asia
Approximate market
share
(%)
39