Lafarge opens new cement mill ahead of merger with rival
RIZAL, Philippines – Cement giant Lafarge Republic Incorporated (LRI) inaugurated a new cement mill in its Teresa, Rizal plant on Wednesday, April 15, and explained the local implications of its parent firm’s merger with Holcim Ltd.
The new grinding mill, built using horomill technology, can produce 850,000 metric tons (MT) of cement annually and raises the output of its Teresa plant to two million MT a year.
“We aim to keep the country abreast with the latest technology and support the country’s growth,” said Renato Sunico, president of Lafarge.
Aside from the 50% increase in output, the new horomill is also more environmentally friendly, decreasing energy consumption by 40%.
This is in line with Lafarge’s initiatives to be environmentally-friendly as the new mill can use carbon neutral additives and reduce carbon dioxide emissions by 94,000 tons annually.
Lafarge is the only cement producer in the country to utilize “fly ash,” a waste product of coal power generation, which it blends with cement to create a product called "Tibay Enhancers."
The result of the blend increases the durability of concrete and provides it with a smoother finish, said Lafarge.
The fly ash is obtained from 5 coal power plants operated by AES and GN Power, two major coal power plant operators in the country, Sunico said.
Lafarge country chief executive officer Don Lee also announced plans to install a new horomill at its plant in Norzagaray, Bulacan, which is expected to be finished by December and will produce identical figures.
The firm currently has a capacity of around 6.5 million MT of cement annually with another 850,000 expected to be added when the new mill in Norzagaray is operational.
Sunico also shared some details on the local implications of the merger of its parent firm, Lafarge SA, and rival Holcim Ltd.
Last year, the global heads of Lafarge SA and Holcim Ltd. announced a planned “merger of equals” that would create the largest construction materials company in the world.
“The first step is to wait for the global merger, nothing happens until it is concluded which we expect to be sometime in June or July,” Sunico pointed out.
Originally, the merger was supposed to entail an equal share trade between both companies, that is one share of Lafarge for one share of the new entity to be called LafargeHolcim.
The new share scheme, entails 1 share of Lafarge would be equal to .9 shares of LafargeHolcim, Sunico said.
Put another way, existing shareholders who trade 10 shares of Lafarge would get only 9 shares of the new entity, he said.
Sunico also confirmed reports that CRH Plc, an Irish construction materials multinational, was given buying rights to assets that will be sold off by LRI following the merger.
CRH will take a controlling stake in LRI after major shareholders were given the right to sell their shares which make up 88.85% of the firm.
Following the merger, CRH will take control of LRI’s 4 cement plants in Luzon and grinding plant in Cebu.
The sale of these assets to CRH was part of a global sale of businesses by both Lafarge SA and Holcim Ltd in order to gain regulatory approval for the merger.
Sunico said that CRH will first have to find a local partner to comply with existing laws limiting foreign ownership to 40%.
The arrangement with CRH excludes LRI’s remaining assets including Lafarge Mindanao, Lafarge Illigan, and Lafarge Republic Aggregates and Star Terminal at the Harbour Centre in Manila.
These assets will be offered to Holcim Philippines on a separate transaction as planned by the parent firms of both companies, he explained.
Sunico also said it was “premature” to discuss what arrangements will be made following the sale and how these changes will affect Lafarge’s existing workforce.
“We have encouraged our employees to remain focused on what they are doing as nothing yet has happened with the merger,” he said
He added that despite the impending merger, Holcim at this point is still a competitor. – Rappler.com