November 2016

Building News
Keep in touch with the Building Segment

This issue of our Building News is dedicated to masonry wall solutions

Walls are important and multifunctional components in buildings. External and internal
walls account for more than 50% of the totally built surfaces in residential buildings,
including slabs and roof; e.g. 1 m2 of floor leads to more than 1 m2 of wall, where
normally both sides are treated. Besides the structural function, walls are key to protect
from weather conditions and to give the building the desired design and appearance.
While concrete is a common building material for slabs, the construction of walls varies
greatly and cement based products compete with several other building materials. A key
functionality of load bearing and non-load bearing masonry walls is the thermal insulation.
The aspect of energy efficient buildings is progressing and countries impose more and
more demanding regulations – increasingly also for the existing building stock.
Masonry walls are important in many construction markets as rather low cost solution
compared to concrete and other construction systems. Innovation in masonry walls is a
great opportunity to differentiate and to increase the penetration of cement based
products. New and value added solutions in concrete products and dry mix are at the
core of Value Case 3c (“cement based products”) and support the differentiation towards
end users and customers
This newsletter covers three practical Country examples of masonry wall solution
offerings and gives an overview on how to initially screen and detect differentiation
potential in your market. We hope you get inspired and are ready to support you in
creating differentiated masonry wall solutions for our end users and customers.
LafargeHolcim, Growth & Innovation, Building Segment Team, Simon Wiedemann

Areas of differentiation for masonry wall solutions

In many markets more than 50% of our cement is used in the building segment with residential as the dominant sub-
segment. The share of cement used in masonry can reach 20% or more of overall cement consumption.
Distribution and retail often serve as main route to market for cement, e.g. general use and masonry cement used on the
job-site. In markets with concrete blocks as traditional masonry system, significant quantities of sand and coarse
aggregate are consumed in CPM. This industry is
often fragmented and smaller players purchase the
cement through retail. On the other hand, retail can
include concrete blocks in their offer which allows
them to market integrated wall solutions.
Quality of sand is key for for masonry applications, in
the production of concrete blocks with good cost to
performance ratios, and for the adhesion and
durability of mortars. Dry mix mortars can support the
masonry job-sites through simplified materials
handling and mixing and can also overcome
deficiencies in quality or availability of mason sand.
In more industrialized construction markets long-life
mortar is offered by RMX and/or dry mix mortar is
delivered in silos by DMX companies.
Relevant differentiation can come from alliances with CPM, dry mix and retail partners. By offering a range of services to
selected companies in these businesses we can support and increase their business and their loyalty to us.
Another differentiating factor are applicators of masonry products. Applicators can be supported by dedicated services
like technical information, H&S trainings, product application trainings and marketing support. Contractors, masons and
bricklayers are decision makers in many markets and influence the selection of brands and products. Their positive
awareness of the LH brand and products is critical for our business.

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Country examples on masonry wall solutions

New concrete block offer for better application and energy efficiency (Morocco)
Collaboration with CPM partners for the co-development of new light weight concrete blocks which ease the construction
of walls and improve the energy efficiency of buildings clearly drives commercial transformation and puts home owners
and masons in the focus of our attention.
Typical residential building with
concrete frame and mix of clay
brick and concrete blocks.
New block design for external
walls to substitute double wall in
clay bricks.
Market drivers and key needs
Clay bricks gained 30% in MS in the last 10 years
reaching 80% in 2015. The brick industry is concentrated
and their application oriented products are cost
competitive towards the concrete block. Active
communication towards developers, architects and
specifiers lead to a situation where clay bricks get widely
recommended by these stakeholders. On the other hand,
the concrete block industry is highly fragmented with a
large share of low quality output.
Traditional (standard) concrete
Key needs for external walls include thermal insulation block.
(new regulation in place) while partition walls should be
thin but capable to host installations (water, electricity).
Target segments and value proposition
The residential segment is targeted with a new concrete
block offer consisting of 3 distinct block types. This new
wall offer allows reducing mortar and labor costs in the
construction and provides good levels of thermal and
sound insulation. The positioning at premium price
compared to clay bricks generates additional margin for
the block manufacturers compared to the standard blocks Clay bricks penetrated the
they produced so far. standard concrete block market.
Business model and impact
Lafarge Morocco engaged into a strategic partnership
with selected (larger) manufacturers of concrete blocks.
The objective is to combine their precast knowhow with
Lafarge’s market research and R&D to develop
innovative concrete blocks and to jointly market and
position the branded solution.
The target segment consists of 200’000 housing units per
year with an estimate of 20% which can get addressed
through the partner network. Increased cement volumes
New block design for partition
towards block manufacturers is expected to contribute
with 2.2 m€ by 2018. Three CPM partners invested 40 k€ walls and simpler installation.
each and 2 new block types are getting sold since
October. The brand of the new blocks will be launched in
November and the 3rd block type early 2017.
Country contact: Lamia El Otmani

Mortar program (Algeria)

The aspect of commercial transformation is seen in the positioning of LH as provider of ready to use products which
address end user and applicator needs for more professional execution of masonry wall construction and finishing.
Market drivers and key needs
The residential segment was pushed by the presidential plan leading to an increase in
building projects and the need for faster project execution. Lack of qualified workforce
and difficulties to purchase sand in good quality resulted in stronger demand for dry mix
mortar. Growth in this business is significantly higher compared to cement, especially for
tile adhesives driven by the more frequent selection of ceramic tile flooring. While locally
produced dry mix mortars are usually of rather inferior or inconsistent quality, the
imported products (including international brands) are expensive and of limited
availability. Distributors and professional applicators seek for locally available solutions of
Key applications: 1) tile adhesive, regular quality.
2) monolayer (skim coat) and
3-4) plastering

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 Target segments and value proposition
The mid- to high-end housing segment is targeted as
high growth niche market for special mortars, especially
for tile adhesives. This segment is characterized by the
need for high quality wall and floor finishing. The
products for tiling and skim coating are white, which
allows to use pigments for a high degree of esthetic
individualization.
Another key value proposition of dry mortar is the job site
Dry mortar product portfolio. efficiency in mortar application due to fast mixing process
and consistent workability. Emerging technologies for
spray application of mortar is expected to favor dry mix
mortar even more and can accelerate the execution by
factor 5.
Business model and impact
Spray application of plastering
The products are company branded and produced in a dedicated facility which was mortar.
commissioned in 2016. The route to market uses the normal channels of building material
distributors and retailers as well as direct sales to end users (small entrepreneurs), but
additional channels to ceramic wholesalers and façade specialists will be developed.
Based on additional cement consumption and comparatively high margins on the dry mix mortars the EBITDA budget
impact 2017 is estimated at 1.1m€ for 80kT, 12kT are forecasted in Q4 2016.
Country contact: Tanguy Leriche, Nacer-Eddine Bahmed

“Mastereen” – the first masonry cement in the Lebanese market

Masonry cement addresses very specific application needs for the construction and finishing of masonry walls. It allows
more professional and efficient job execution. In spite of being a premium cement, it allows cost saving for applicators
and home owners.
Residential building with
concrete frame and concrete
block walls.
“Mastereen” – the first
masonry cement in Lebanon.
Market drivers and key needs
Masonry wall based on concrete blocks is the traditional
construction system in Lebanon. Together with the fact
that more than 80% of the cement consumption is in
residential buildings (concrete, concrete blocks), the
share of cement for masonry mortar is more than 20%.
Dry mortar and ready-mix mortar exist in the market, but
in very small quantities.
While 50% of the bagged cement is used for bricklaying,
plastering and tiling, there is only one cement type on the
market (CEM II/A 42.5). Compared to housing markets
with similar maturity in other countries, the opportunity
was identified to launch a special product for masonry
works as first of its kind in the Lebanese market and thus
positioning Holcim Liban as market leader in innovation.
External walls with plastered
End user surveys show that masons are conservative
surfaces and partially covered
people and that consequently the masonry product shall with stone.
be designed in a way not to change the working habits of
the masons regarding mix proportions and application.
Target segments and value proposition
The masonry cement type MC 12.5 is called Mastereen,
which resonates with the trowel (mastreen – ‫ مس طرين‬in
Arabic) as the main tool of masons as well is with master
in, in the meaning of capability to execute.
Proper application of this product eases the work of
masons in terms of mixing and application for bricklaying,
plastering and tiling. The superior workability for such
applications is based on the high limestone content and
Fresh mortar based on masonry
high fineness of the cement and the air entraining effect,
cement with superior mixing
it can increase the yield by up to 12% and save time up behavior and workability.
to 11%.

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Demo van to reach out to
applicators and end users.
The total cost of plastering 1 m2 with Mastereen can be reduced by 11% despite its
higher selling price compared to regular cement type. Due to the high adhesion of the
respective mortar and the low risk of cracking, it leads to better wall finish compared to
the traditional solution.
As for the design, Masterren bags respect working practices of the market, i.e. bags of
45 kg are desgined as opposed to 50 kg for the general use cement.
Business model and impact
No new business model was applied for this solution. However, it was critical to align
internal stakeholders in production, sales and logistics for the specificities of this new
product.
Other important elements of success consist in reaching out to the applicators and end
users with demo sessions, customer events, technical application support and broad
marketing. For the interface to the customers, a new role is incorporated as part of a
demonstration initiative to the clients.
Mastereen was launched in October 2015 with the objective to contribute 80 k$ additional
EBITDA in 2016 and another +700k$ in 2017. Issues with product quality, stability and
packing forced the team to withdraw the product from the market for 5 months in 2016, to
adjust production procedures and to optimize the product. YTD 20 k$ have been realized.
Country contact: Samer Mehtar, Eric Duflot

Initial screening of your market to detect opportunities to differentiate your masonry wall solution
offering

Through civilization, architects and builders have chosen masonry for its beauty, versatility and durability. Some of the
world's most significant architectural achievements like the Egyptian Pyramids, the Colosseum in Rome, India's Taj Mahal
or the Great Wall of China have been built with masonry.
Masonry wall solutions have been adapted and further
developed based on the local availability of raw
materials, more industrialized and standardized
masonry products and increased requirements of
living standards. Over time systems with higher
strength, better insulation and more precise
geometries have been developed which allowed to
build walls quicker, at lower cost and longer lasting. In
addition, the indoor climate and energy efficiency of
buildings have been improved very significantly by
additional functionality of masonry units.
In parallel with the evolution of masonry wall solutions,
the working practices for laying of bricks / blocks as
well as for plastering and finishing have been
adapted.
A range of special cements can address specific needs in block manufacturing and also in masonry applications. High
early strength and resistance against efflorescence are important attributes for CPM. Workability properties, water
retention and shrinkage behavior are key for masons. Masonry cements simplify the mortar mixing and lead to superior
application of mortar for brick/ block laying and especially for plastering. In markets with high labor cost the use of
plastering machines (pump/ spray machine) is gaining attraction.
Initial screening and market signals in wall construction to differentiate your offering:
Market signals ¹ Opportunity ²
• Clay bricks or stone blocks dominating wall solutions. • Develop new concrete blocks through partnership with
Concrete blocks with minority or dropping MS and with CPM (see example from Morocco). Consider new
rather low quality (fragmented industry). design, features and marketing of branded blocks.
• Masons use regular cement (with or without lime • Masonry cement. This cement is prized with a
addition) for brick/ block laying and for plastering. premium, it offers more efficient masonry work and up
to 10% higher yield (see example from Lebanon)
• Working with mortar is negatively affected by • Dry mix mortar or long-life RMX mortar to improve
availability and quality of sand. Space for stocking speed and quality of mortar jobs. Dry mix mortars: see
sand at job site is an issue. example from Algeria.
• Regulations for energy efficient buildings pushing • BlockFill: light-weight concrete hollow blocks with
thermal insulation of walls. Indication that authorities Airium inside, our mineral foam solution (Building
move away from fossil fuel based insulation materials. Segment on Connect)
Growth & Innovation Department – Building & Affordable Housing For Internal Use Only NOVEMBER 2016 | 4
 • AAC (autoclaved aerated concrete) blocks gaining MS
for non-loadbearing walls because of light-weight and/
or thermal insulation.
• Masons do not apply proper working practices
(materials selection, mixing procedure, curing) and
have little knowledge on construction materials.
• Low cost foam concrete blocks (see R&D article)
which can be produced locally or even on site using
“icecube” casting molds.
• Create a “masons club” for regular interactions with
masons and contractors.

¹ In market segments where masonry walls represent a relevant share of wall construction
² To be validated through in-depth customer discovery and stakeholder interviews

NEWS from R&D

Low cost foam concrete blocks: a new potential market and a challenge for R&D
For construction products, weight, strength and insulation are closely related. The lighter a concrete product, the better is
its thermal insulation. So, when using a light concrete block for ergonomics improvement, the insulation of the building is
improved as well. The concrete strength follows the opposite trend: light concrete products are usually less resistant
compared to standard concrete products.
The ergonomic question is more and more considered by the builders as well as the authorities. Indeed, in many
emerging countries where the thermal regulations are limited, the main competitive advantage of light blocks is the low
weight when placing the block. The growing priority for the builders in many cases is quite clear: light blocks are preferred
because they’re light! Insulation comes second.
In addition, in most of the related countries the load bearing system of buildings is based of concrete frame structures; the
blocks are used “to fill the wall”, with no major structural requirements.
With all these considerations, light products are definitely interesting.
In our R&D center in Lyon a new project has started recently, dealing with low cost foam concrete blocks. The idea is to
produce low cost foam concrete blocks with a simple mix design, a simple production process and a well defined
geometry. Such light blocks could be an alternative to AAC blocks or bricks when weight is the main feature.

Figure: simple process to produce the foam concrete blocks in "Icecube" mold.
The first results are encouraging. Several blocks have been produced with a limited thickness (600·250·70 mm, 6 kg dry).
These blocks do not show any significant cracks after several weeks when stored at 20°C 60% RH. The strength and
thermal properties were in line with the selected density (750 kg/m3 fresh, 600 kg/m3 dry): 3 MPa at 28d and 0.16 W/m·K.
The feasibility phase will finish by end of the year. So far the requirements for the blocks have been defined by the R&D
Building team. Real cases are now necessary to extend the project: if you are interested or if you think that such products
can meet your market, please contact Jerome Tierrie or Sebastien Georges. We need your input to design the concrete
and the blocks!

Building News is the Newsletter of the Building Segment Team.

For any idea or suggestion you can contact us - thank you !

simon.wiedemann@lafargeholcim.com

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