Group

Emerging markets drive global growth in the sector

Around the world, cement production is increasing by 5% per year for 20 years. This means 100 million additional tons of cement is being consumed every year.

This growth is predominantly driven by urban and demographic development in emerging markets that are facing strong demands in infrastructures and housings. 80% of the global demand for cement comes from these markets! In these countries, the cement market is growing at a significantly faster rate than the general economy.

Lafarge is positioning itself as a leading player in this context.

Lafarge strengthens its positions

In the 1990s, the Group established solid positions in emerging markets through a combination of acquisitions and organic growth.

Nearly 40,000 people - more than half of Lafarge's workforce - are employed in emerging countries (Asia, Africa, Central and Eastern Europe, the Mediterranean Basin and Latin America). In 2007, these countries accounted for 37% of Lafarge's turnover and 45% of its operating income.

In the Cement Business, emerging markets account for, in 2007, 52% of its results.

Lafarge invests in emerging markets to answer their growth

The Group invests where there is potential for growth and applies rigorous, ambitious criteria with regard to value creation. For example, a construction program is creating 45 million tons of additional capacity in cement while development in Aggregates and Concrete and internal growth in Gypsum are made.

Cost structure

In general, the cost of manufacturing our different products can be broken down as follows:

• energy accounts for 33% of the cost of producing cement,
• raw materials (more than 50% of which are cement) represent 75% of the cost of ready-mix concrete. Delivery expenses account for approximately 20% of the cost,
• raw materials (primarily gypsum and paper) represent 40% of the cost of plasterboard,
• energy, raw materials and labor represent 50% of the cost of producing aggregates.

Reducing the environmental footprint of our activities

The cement industry emits CO2. Since the 1970s, the Group has been working to reduce its ecological footprint in order to respond to needs for infrastructure, housing, hospitals and schools while conserving natural resources.

This approach focuses on:

• the modernization of plants and the improvement of industrial processes,
• product research and innovation,
• the use of alternative fuels and materials, with the aim of reducing the consumption of non-renewable natural resources and limiting CO2 emissions.
  
  

Towards sustainable construction

The building sector consumes vast amounts of energy and is the source of 40% of the CO2 emissions of developed countries.

Lafarge is working to invent the building methods of tomorrow. The entire life cycle of the building needs to be reconsidered, from the use of recyclable materials to the integration of renewable energies and the reduction of pollution.