Cement maker Holcim posts record result

Holcim announced on Tuesday that it had increased its stake in Ambuja Cements of India (Holcim)

Holcim of Switzerland, the world's second-biggest cement maker, posted a 39 per cent rise in net profit last year to SFr2.1 billion ($1.72 billion).

This content was published on February 28, 2007 - 07:53

The company said the result was boosted by a dynamic construction sector and favourable weather conditions.

Operating profit rose about 32 per cent to SFr4.4 billion, while sales were up 30 per cent at SFr24 billion.

The results beat analysts' expectations, which had forecast net growth to rise 25 per cent.

Holcim, which recently announced it had increased its stake in Ambuja Cements of India, said it benefited from its broad geographical spread as well as its position in emerging markets in eastern Europe, Asia and Latin America.

"We have 75 per cent of our cement capacity in emerging markets. These markets are growing very fast - between five and ten per cent in cement consumption [annually], so we are excellently positioned," company CEO Markus Akermann explained to swissinfo.

But he said there were other factors that had contributed to the result.

"It was also the excellent weather conditions in the northern hemisphere. We had an exceptionally strong fourth quarter and it was our programmes that we have been developing over many years to work on efficiency. These were all factors in our results."


Analysts also point out the growth in the global economy and strong results by the world's leader in cement production, Lafarge.

The company said it also boosted plant capacity by improving efficiency and introducing innovative products.

"The group has the necessary financial strength to avail itself of opportunities for attractive acquisitions in all segments," a statement said.

The company also said on Wednesday it expected to again notch up long-term growth of five per cent this year in its internal operating earnings despite the slowdown in some markets.

Holcim is a leading supplier of cement, gravel and sand, as well as aggregate products such as asphalt and ready-mixed concrete.

The group has a workforce of 90,000 in about 70 countries, including 1,200 employees in Switzerland.

swissinfo with agencies

Key facts

Net profit: SFr2.10 billion (+39.3%)
Operating profit: SFr4.39 billion (+32.2%)
Sales: SFr23.97 billilon (+29.8%)

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The company was founded in Holderbank, a village between Zurich and Basel, in 1912 and has become the world's second-largest cement producer.

It realised very early on that the domestic market could offer only limited opportunity for growth and by the early 1920s it was investing in businesses in other European countries.

Expansion followed overseas and particularly in the 1950s and 60s, it built up a network of holdings in North and Latin America.

Further ventures followed in the emerging markets of Asia-Pacific in the 1970s.

In the 1980s, Holcim continue to grow in new markets, including eastern Europe. This was followed in the 1990s by further expansion in Asia.

The company changed its name from Holderbank to Holcim in May 2001.

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