CEO Bradley Mulroney said the Malaysian operations was not affected by the the merger between parent company Lafarge SA and Swiss cement producer Holcim Ltd, at least not immediately.
“It is the parent company that is merging so there is no comment from our local perspective. At this stage, there is no bearing on Lafarge Malaysia’s business,” he said at the CCI France Malaysia’s 25th anniversary celebration.
“Our major shareholder is merging with Holcim at their own level and at this stage, that is it. It really does not impact us and decisions about (any impact) will be taken at a much later date,” he added.
Lafarge Malaysia is 51 per cent owned by Lafarge SA.
However, should the impact of the merger trickle down to both Lafarge and Holcim’s existing operations in Malaysia, there would be a positive impact, a research house said.
Malaysian bank-backed research house Hong Leong Investment Bank Research said that the merger between the giant cement companies Lafarge SA and Holcim Ltd will further cement Lafarge Malaysia’s leading position in the domestic market, assuming it eventually acquires Holcim’s estimated 4 per cent market share in west Malaysia.
The research house said it was positive news that the $44 billion merger, first announced in April 2014, was back on track after it was stalled when Holcim sought better financial terms as well as questioned whether Lafarge’s management should be in charge.
Of Lafarge Malaysia’s expansion in Malaysia and Singapore, Mulroney said there were no plans for acquisitions. “We have an extremely good network here and our job is to leverage off that network. Organic growth is by far the most efficient and cost-effective way of growing,” Mulroney said.
Lafarge SA and Holcim Ltd announced in mid-March that their respective boards had agreed to make Lafarge SA chief executive officer Bruno Lafont non-executive co-chairman of the merged company, together with Holcim’s chairman Wolfgang Reitzle.
Post merger, the group will be known as LafargeHolcim.
In a press statement on its website, Lafarge noted that the group and Holcim have received clearance from the Competition Commission of India (CCI) for their proposed merger. “A package of asset divestments has been agreed with the CCI which includes 1 cement plant and 1 grinding station from Lafarge (with a total of approximately 5 million tonnes annual cement capacity) in Eastern India,” the statement said.
India is an important market for the future LafargeHolcim Group with a balanced portfolio in cement, aggregates, and ready-mix concrete. The combined group will have a cement capacity of around 68 million tonnes in India.