‘Pricing, cost saving measures kept Lafarge’s sales up’
The Chief Executive Officer of the company, Michel Puchercos in a statement, attributed the strong margins in the Nigerian business to cost initiatives and more favorable pricing, saying the company’s industrial operations in 2017 were stable with plants operating at high reliability levels.
He also noted that the energy optimisation plan for the company has been successful with increased use of Alternative Fuel and Coal to offset gas shortages in operations in the West while plant operations in the eastern and northern part of the country relied mainly on gas and coal.
He said these logistic, commercial and operational initiatives helped to sustain market share in the year under review.
According to him, the South African business thrived in a challenging business environment, even as operations are set to stabilise in year 2018.
He explained that the Lichtenburg plant returned to normal operations in the course of the year, occasioned by a turnaround plan initiated in order to transform the company’s operations.
“South Africa the economy is expected to grow by 3per cent in 2018. The turnaround plan of the South African operations is focused on cost containment, commercial transformation and industrial stabilisation. The overall goal is to create value for shareholders through an attractive growth profile and good margins.
“A detailed review of key projects in Nigeria such as the Road in Calabar and of mothballed assets in South Africa led to an impairment of 19,1bnN.
The combination of these impairments and the net loss in South Africa of 18,7bnN led to a Group Net loss of 34,6bnN compared to a profit of 16,8bnN in 2016”, he added.
Furthermore, Puchercos explained its business turnaround actions will be consolidated further in 2018 through energy optimisation as well as commercial and logistic improvement.
He added that the firm would implement a continuous improvement programme that would enhance its profitability margins above the 35 per cent benchmark.