Euronext: LG, NYSE: LR
Lafarge, which first moved into the Ho Chi Minh City region in 2001, has announced the construction of a cement grinding plant on the Long Tau river, 20km south-east of Ho Chi Minh City in Dong Nai province.
Construction of this 500,000 tonne grinding facility is due to start in October 2004, and the new plant, which will be built to the highest environmental and safety standards, is set to enter service during late 2005.
The investment, which will cost a total of almost US$30 million, is being made by the DonaFrance joint venture, in which Lafarge owns a 70% interest alongside a Vietnamese building materials company. The project is rapidly expected to create value for shareholders thanks to the construction market's strong pace of expansion, particularly in the Ho Chi Minh City region.
The Vietnamese cement market is enjoying very brisk conditions with annual growth averaging close to 15% over the past decade. With demand for cement running at 23 million tonnes, Vietnam currently has to import over 4 million tonnes of cement.
“This project in a region undergoing rapid economic and urban development fits perfectly with our expansion strategy focusing on growth markets and will help to strengthen our manufacturing presence in South-East Asia” commented Bernard Kasriel, Lafarge's Chief Executive Officer.
Notes to Editors:
1. Lafarge's ready-mix concrete activities in the Ho Chi Minh City region have a capacity of 350,000 m³ and consist of three concrete plants with 80 employees.
2. The southern Vietnamese market, which currently accounts for a volume of 10 million tonnes and has posted growth averaging close to 15% over the past ten years, is already experiencing a cement production shortage of over 2 million tonnes. Our project is an integral part of the Vietnamese Construction Ministry's Development Plan that aims to cut the percentage of imports.
3. Ho Chi Minh City already has a population of close to 7 million, a figure that may double over the next ten years. Since 1995, GDP has increased at an average rate of 12%. Dong Nai province is also enjoying very rapid expansion, with some of the country's highest growth rates, including 20% for the industrial sector.
4. The Lafarge group's Cement Division generated 46% of its sales and 42% of its operating income in emerging markets in 2003.
Lafarge, the world leader in building materials, holds top-ranking positions in all four of its Divisions: Cement, Aggregates & Concrete, Roofing and Gypsum. Lafarge employs 75,000 people in 75 countries. In 2003, the Group posted sales of €13.6 billion and operating profit on ordinary activities of €1.9 billion.
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