Euronext: LG, NYSE: LR
Lafarge, which first moved into the Ho Chi Minh City region in 2001 with ready mix concrete operations, has just inaugurated its first cement grinding plant on the Long Tau river, 25km south-east of Ho Chi Minh City, in the Dong Nai province.
The construction and commissioning of this 500,000 ton grinding facility with a private port was achieved in less than eighteen months, for a total investment cost of US$30 million. It is the first project of Lafarge Xi Mang, the Joint Venture in which Lafarge owns a 70% interest alongside a Vietnamese building materials company.
The project is rapidly expected to create value for shareholders thanks to the construction market's strong pace of expansion, particularly in the Ho Chi Minh City region.
The Vietnamese cement market is expected to reach 30 million tons in 2006 with annual growth averaging close to 15% over the past decade. Vietnam currently has to import over 4 million tons of clinker per year.
This project, in a region undergoing rapid economic and urban development, is in line with the Group's strategy of focusing on fast growing markets. Lafarge is also expanding its gypsum activities in Vietnam, with the recent construction of a wallboard factory.
Notes to Editors:
1. Lafarge's ready-mix concrete activities in the Ho Chi Minh City region have a capacity of 400,000 m³ and consist of four concrete plants with 100 employees.
2. Lafarge's plasterboard activities include a newly built factory with a capacity of 10 million m2 in Ho Chi Minh City and 80 employees.
3. The southern Vietnamese cement market, which currently accounts for a volume of 12 million tons and has posted growth averaging close to 15% per year over the past ten years, is experiencing a cement production shortage of 1 million tons. Our project is an integral part of the Vietnamese Construction Ministry's Development Plan that aims to satisfy domestically the cement demand.
4. Ho Chi Minh City already has a population of close to 7 million, a figure that may double over the next ten years. Since 1995, GDP has increased at an annual average rate of 12%. Dong Nai province is also enjoying very rapid expansion, with some of the country's highest growth rates, including 20% for the industrial sector.
5. The Lafarge Group's cement business generated 48% of its sales and 47% of its operating income in emerging markets in 2005.
6. Lafarge is the world leader in building materials with top-ranking positions in all four of its businesses: Cement, Aggregates & Concrete, Roofing and Gypsum. With 80,000 employees in 76 countries, Lafarge posted sales of Euros 16 billion in 2005.
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. Lafarge is the only company in the construction materials sector to be listed in the 2006 “100 Global Most Sustainable Corporations in the World”.
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.
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