Strategy

The aggregates market remains very fragmented, with many independent operators and local producers. The Lafarge Group possesses a number of strong competitive advantages that secure its global leadership position, including:

• expertise throughout the value chain, from obtaining licenses to extraction,
• experience with and knowledge of local markets,
• cost reduction programs,
• a capacity to anticipate changes in the supply of resources,
• proven quarry rehabilitation practices that respect the environment and biodiversity,
• a global presence, which enables the systematic sharing of best practices in strategy, sales, marketing, manufacturing and site management.

Lafarge is moving quickly to establish a presence in fast-growing emerging markets. The challenge is significant, as it is not simply a question of gaining market share but of doing so in a way that respects regulations and the Group's quality standards, both of which can require expensive upgrades to infrastructure.

Managing mineral reserves is a key concern for Lafarge. To maintain its operational reserve levels, the Group undertakes acquisitions and actively seeks new growth opportunities, particularly in emerging economies.

Lafarge enjoys a relatively favorable position:

• the Group's authorized reserves represent about 40 years of operation,
• since 2006, increases in reserves exceeded annual consumption, as a result of targeted acquisitions in the United States (in Arizona and the Chicago area) and in Poland.

Lafarge manages its aggregates reserves according to 2 main principles:

• reduce the impact of operations on the environment,
• minimize inconvenience for local communities.

Lafarge is committed to serving the environment, particularly through a pro-active policy of quarry rehabilitation. The Group also undertakes information and communication campaigns to inform local residents about its capacity to preserve the environment.

Lafarge is the only building materials company to conduct research into aggregates. Aggregates are a limited natural resource, so R&D teams are working to improve:

• industrial processes,
• the use of quarry materials, with the goal of using all aggregates extracted regardless of their source.