LafargeHolcim CEO Says Working on Plan to Extend Merger SavingsJan-Henrik Förster
LafargeHolcim Ltd., created by the merger of the biggest cementmakers in France and Switzerland, said achieving its target of 1.4 billion euros ($1.5 billion) in savings will be a challenge, yet the enlarged group is working on plans for additional synergies.
“Of course we are not going to stop once we delivered on the target,” Chief Executive Officer Eric Olsen said after a press conference in Zurich.
The main rationale for combining the cementmakers is to reward shareholders and generate cash flow and the company will give an update on its plans at a capital markets day at the end of the year, Olsen said. With logistics such as transportation accounting for 25 percent of LafargeHolcim’s cost base, that’s a key area to look at, he said.
Global cement demand hasn’t significantly deteriorated over the past months, according to the CEO. China is currently challenging, though the company’s “balanced portfolio” will help counter that trend, according to the executive.
Olsen said there is currently no need for new “significant investment” and it’s premature to talk about possible further divestitures. The year-end update to investors may include any additional moves.
“Of course when you bring two portfolios together it is an opportunity to see where portfolio tomorrow should be but at this point we have no specific plans for further divestments,” he said.
LafargeHolcim will be fully established within 300 days, with the full raft of synergies in place within 1,000 days.
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