In line with its strategy to develop its Aggregates & Concrete business in emerging markets, Lafarge today announced the acquisition of L&T Concrete for an enterprise value of 226 million euros. Lafarge will be acquiring 66 highly efficient concrete plants located across India, in key markets such as Delhi, Kolkata, Mumbai and Bangalore, with total estimated volumes of 4.1Mm3 in 2008 and a market share of approximately 25%. The acquisition will be accretive to Lafarge earnings per share from 2009. With this acquisition, Lafarge establishes itself as the leader in the Indian readymix concrete market.
The readymix concrete market is still in an early stage of its development in India, but offers strong growth and value creation potential. The Indian construction market is developing to meet significant demand for new housing, urbanization and infrastructure.
This acquisition marks an important step in Lafarge's strategy to develop its Aggregates & Concrete business in emerging markets. It will provide the Group with an excellent platform to develop further its Aggregates & Concrete business in the fast-growing Indian market, along with a very experienced team.
India offers strong potential for introducing innovative products. Lafarge boasts the world's leading research facility in building materials and has developed innovative, value-added concrete products over the last ten years which contribute to improving construction methods and working conditions on building sites. One of Lafarge's key strategic focuses today is innovation in concrete, which translates into an accelerated roll-out of value-added concrete products in both developed and emerging markets. Lafarge will be aiming to offer the Indian market its most advanced and value creative solutions for construction.
Lafarge Chairman and CEO, Bruno Lafont, declared:
"Lafarge was the first in its industry to move into Aggregates and Concrete in a significant way, over 10 years ago, and to develop a unique expertise in creating value in the Concrete business. With this acquisition, we are taking a pioneering step in the emerging Indian market."
This acquisition follows the recent start-up of operations at Lafarge's first Greenfield readymix concrete plant in Raipur, in the state of Chhattisgarh and marks a decisive step in Lafarge's strategy to grow its presence in the Indian readymix market.
Lafarge is already present in India in its other businesses and is investing to develop its Indian operations, in order to accompany market growth. In cement, Lafarge has emerged as a major player in the eastern region of India, with a cement production capacity of 5.5 million tons and a strategic plan to more than double its presence in the next five years through greenfield projects in several regions. In Gypsum, Lafarge is already supplying the Indian market and is currently building a plasterboard plant near New Delhi, Rajasthan, with an annual capacity of around 10 million m².
Notes to editors
Lafarge in India
Lafarge entered the Indian market in 1999, through its cement business, with the acquisition of Tata Steel's cement activity. This acquisition was followed by the purchase of the Raymond Cement facility in 2001. Lafarge currently has three cement plants in India: two plants in the state of Chhattisgarh and a grinding plant in Jharkhand. Lafarge's total cement production capacity in the Indian market currently stands at around 5.5 million tons and the Group has launched an ambitious program to more than double its capacity in the next five years. Operations started at Lafarge's first Greenfield readymix concrete plant in April 2008 and the Group is also building a plasterboard plant near New Delhi, Rajasthan, with an annual capacity of around 10 million m².
Lafarge is the world leader in building materials, with top-ranking positions in all of its businesses: Cement, Aggregates & Concrete and Gypsum. With 90,000 employees in 76 countries, Lafarge posted sales of Euros 17.6 billion and net income of Euros 1.9 billion in 2007.
Lafarge is the only company in the construction materials sector to be listed in the 2008 ‘100 Global Most Sustainable Corporations in the World'. Lafarge has been committed to sustainable development for many years, pursuing a strategy that combines industrial know-how with performance, value creation, respect for employees and local cultures, environmental protection and the conservation of natural resources and energy. To make advances in building materials, Lafarge places the customer at the heart of its concerns. It offers the construction industry and the general public innovative solutions bringing greater safety, comfort and quality to their everyday surroundings.