"Undisputed leader": what exactly does that mean?
"Our goal is to be the best player in our sector over the long term. As well as achieving the best possible performance with regard to employee safety, we must be the most innovative in our responses to the challenges of sustainable construction, the most responsible with regard to social and environmental issues, and the most profitable for our shareholders.
Being the best in all of these areas is an ongoing challenge because the world is constantly changing. We must never stop listening to our stakeholders, questioning our actions and adapting our methods."
What are Lafarge's strategic priorities?
" We have already seen very positive results from the 2008 Excellence plan. In terms of cost reduction, for example, we have already exceeded our ambitions, with 420 million euros achieved between 2006 and 2008, instead of the 340 million euros initially forecast.
We have 2 strategic priorities:
- Continue our growth in emerging markets. The need for building materials remains high in developing countries, due to growth in the urban population and the demand for housing and infrastructure.
- Accelerate innovation in order to:
- meet the need for more sustainable construction methods,
- increase our competitive advantage through our unparalleled strengths in R&D.
We also have 3 operational priorities:
- Employee safety: this is the number 1 priority for all Lafarge employees, as safety lies at the crossroads between our humanist values and our culture of performance,
- Cost reduction (400 million euros by 2011, and 120 million euros just in 2009),
- People development."
How does the acquisition of Orascom Cement (completed on January 28, 2008) fit into this strategy?
"The acquisition of Orascom Cement, the leading cement producer in the Middle East and the Mediterranean Basin, marks a real acceleration in our development strategy in emerging markets. It allows us to become the leader in these markets and the most performing player in our sector with regard to growth, margins and earnings. As a result, from 2010, 65% of the Group's profits will be generated in emerging markets. This is a major transformation!
In a more difficult economic context, this acquisition is an asset and gives the Group a better capacity for resistance."
What is the Group's growth outlook?
" In the mid and long term, the demand for building materials will remain extremely high in emerging markets: their needs following economic growth, population boom and major urbanization must be met. With our program to build new production capacities and the acquisition of Orascom Cement, the Group's cement capacity should grow by 78 M tons from 2006 to 2012. That's a considerable increase.
Our innovative products are also expected to generate strong growth and will enable us to move from a commodity business to one of value-added products. This will also help us reinforce our relationships with customers."
Why place so much emphasis on innovation?
"Innovation creates value for our customers and helps us to drive more sustainable construction methods and increase profitability. Innovating means staying ahead, inventing tomorrow! In 2008, Lafarge launched several new products with high added value, particularly in concrete and gypsum."
Tell us more about your Sustainability Ambitions for 2012?
"This is our roadmap for sustainable development. We want to be the best player in our industry with regard to employee health and safety, environmental respect, social responsibility and governance.
We have chosen to concentrate on the major challenges in our sector, the areas in which we can have a real influence and lead progress across the industry: climate change, biodiversity, the health of employees and the communities near our sites.
Our goals are expressed through ambitious objectives, with deadlines and quantified targets, and we measure our progress every year. They are aligned with our values and we believe that they give us a considerable competitive advantage."
