Zurich: Holcim Ltd, the world’s second biggest cement maker, said business in Asia and Latin America is satisfactory, helping slow the decline in earnings caused by construction slumps elsewhere.
“There are some markets that are difficult, the US, the UK and Spain,” chief executive officer Markus Akermann said on Wednesday after a shareholders meeting in Zurich. “We are quite positive about the emerging markets. We had an excellent half year volume-wise in India. Also, Latin America as a region is quite resilient.”
Concrete path: Workers at a Holcim distribution centre in Indonesia. The firm says it had an excellent half year volume-wise in India. Kemal Jufri / Bloomberg
Akermann reiterated his prediction for a difficult 2009. He won shareholders’ support on Wednesday for the $1.6 billion (Rs7,824 crore) takeover of Cemex Australia. The purchase will drive expansion into concrete and crushed-rock markets at a time when rivals Lafarge SA and HeidelbergCement AG are selling assets to pay down acquisition-driven debts.
China’s overall cement consumption grew 14% through April, and India’s increased 8% to 10% in the year’s first five months, Akermann said.
Eastern Europe, meanwhile, is quite difficult, he said.
Investors on Wednesday approved a sale of 50.3 million shares that will raise 2.1 billion Swiss francs (Rs9,291 crore). The 42 franc price tag is a 28% discount to Tuesday’s close.
The purchase will add 1 billion tonnes of aggregate reserves, 249 ready-mix concrete plants and 16 pipe factories located across the faster growing regions of eastern and southeastern Australia. Akermann predicted a full consolidation of the purchase this year.
Akermann said he doesn’t see any similarly sized transaction in the immediate future in the cement market.
There is nothing big on the horizon. There are a few assets which are being sold here and there, but these are not big divestments, he said.
Holcim shares fell 3.8% to 56.25 francs as of 1.08pm in Zurich.
Akermann has closed two factories in the US and one in Spain and will cut investment by 29% to 2.5 billion francs this year to counter the slowdown. The US economy contracted at a 5.5% annual rate in the first quarter, revised from a preliminary report of a 6.1% drop.