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Business News/ Opinion / Online-views/  Lafarge, Holcim may expand their profits
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Lafarge, Holcim may expand their profits

Lafarge, Holcim may expand their profits

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London: Lafarge SA, the world’s largest cement maker, and Swiss competitor Holcim Ltd may say first-quarter profit advanced, driven by acquisitions and expansion in India.

Net income at Paris-based Lafarge may climb to €258 million (approx Rs1,444.8 crore) from €58 million, the median of five analyst estimates in a Bloomberg survey showed. Profit at Jona, Switzerland-based Holcim jumped 30% to 221 million francs, the survey said. Both report tomorrow at 6:00am local time.

Lafarge and Holcim have spent more than $6 billion (approx Rs24,600 crore) on takeovers since the start of 2006. Holcim on 28 February forecast “significant" growth in emerging markets after $1.2 billion in Indian purchases. Lafarge, which expanded in China and bought out its North American unit, said it will beat growth targets.

“Emerging markets still seem to be going well and we’re seeing good results from Europe, especially the further east you go," JPMorgan Chase & Co. analyst Mike Betts said. He has a “neutral" rating on Lafarge and an “overweight" on Holcim.

Shares of Lafarge, which took the No. 1 spot in 2001 when it bought Blue Circle Industries Plc of the UK, have advanced 17% in six months, compared with a 9.7% gain in the Dow Jones Stoxx 600 Index.

That gives the company a market value of €21.3 billion. Holcim, the world’s second-biggest cement maker, has added 24%, for a value of 34 billion francs.

Cement makers including Cemex SA of Mexico are racing to expand globally, using acquisitions to grow in countries where spending on building as well as transport systems is accelerating. Both Lafarge and Holcim now get more than 40% of sales from emerging markets.

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Published: 03 May 2007, 12:32 AM IST
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