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Holderbank cool as Lafarge cements top spot

Lafarge's purchase of Blue Circle Industries will knock Holderbank out of its top spot

(Keystone)

The Swiss company, Holderbank, is putting a brave face on the prospect of losing its position as the leading manufacturer of cement worldwide.

Holderbank's fall from the top spot appears to have been sealed on Monday when the French group Lafarge, announced it was to buy the British company, Blue Circle Industries for SFr7.45 billion ($4.6 billion).

If the merger goes through, the new company will dwarf Holderbank.

The deal has been a long time coming and finally condemns Holderbank to second place among the world's cement manufacturers.

The acquisition of Blue Circle lifts Lafarge's presence in Asia and fills a gap for the producer in North America too. The takeover of Blue Circle has been a long-held ambition for the French group, which launched an unsuccessful bid last year.

But Holderbank says it has a completely different strategy.

"I think it's an excellent deal for Lafarge and Blue Circle," says Holderbank spokesman, Roland Walker, "but it won't affect Holderbank because we are focussed on emerging markets."

The successful merger of Lafarge and Blue Circle will create a company with a production capacity of around 150 million tonnes of cement a year.
Holderbank produces just over 100 million tonnes.

"To be number one is nice," says Walker, "but it's not as important as the company's financial position, so to retrieve the top spot is not a priority. But we are in negotiations to acquire Cimpor in Portugal and we hope that that will be successful in February or March."

Acquiring Cimpor, though, would only boost Holderbank's production capacity by 10 to 15 million tonnes a year and that wouldn't be sufficient to regain its position as global leader.

Experts say other companies are bound to fall to larger predators such as Holderbank and Germany's Heidelberger Zement as the industry goes through this period of consolidation.

by Michael Hollingdale


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