The building materials market is undergoing profound changes. Emerging markets are becoming urbanized and experiencing unprecedented growth. People are also becoming increasingly aware of environmental issues and new building methods.
An overview of the challenges faced by the sector around the world.
Expansion of emerging markets |
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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. |
Growing marketsLafarge in India The Indian economy is extremely dynamic and enjoys a growth rate of 8%. The construction sector is growing at a rate of 15% due to the development of infrastructure and residential housing.Present in India since 1999, Lafarge currently has 3 production sites: 2 cement plants and 1 grinding plant. Total production capacity is almost 5.5 million tons, a figure that will double by 2012 thanks to internal growth. The Gypsum Business is also present and controls approximately 15% of the market. The Group employs 3,000 people in India!
Acquisition of Orascom Cement
Accelerate the strategy
On January 2008, Lafarge acquired Orascom Cement, the cement leader in Middle-East and Mediterranean Basin: i.e. a fast-growing and very profitable market, with high potential. With this acquisition and the current construction program of 45 million tons, the Group will add a total of 90 million tons of production capacity. |
Moving towards new industrial practices |
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Sustainable constructionBalancing construction and sustainable development Sustainable construction aims to limit the impact of buildings on the environment while enhancing their quality in terms of aesthetics, sustainability, durability and strength. Sustainable construction techniques apply across the entire lifecycle of a building, from the selection of initial materials to demolition and recycling.The building materials sector4 very different markets China accounts for 50% of global demand for cement, the aggregates market is very local and very fragmented while the gypsum market is relatively consolidated... Discover the characteristics of different markets, the competition and Lafarge's Businesses.
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Cost structure
In general, the cost of manufacturing our different products can be broken down as follows:
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:
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. |
Last update on 11/06/2008
