SERBIA: CRH buying Serbian cement factories

The Swiss giant in the field of production of building materials Holcim connects its activity with the French Lafarge, jointly selling plants to the Irish group CRH specialized in building materials. At issue is the production of cement and other materials in Serbia, Hungary, Slovakia, Romania, Germany, UK, and France. More in our regular feature ECONOMIC REVIEW prepared by Ranka Pavlovic.

The plants, being sold to the Irish include several Holcim’s factories in Serbia, the cement plant in Popovac, and two concrete plants in Belgrade. Holcim bought a 70% stake in the company in Popovac in 2002 for slightly over 52 million dollars, and since then it has invested about 135 million euros in it. Concrete factories in Belgrade, located in the settlements Krnjaca and Dobanovci, were built in 2007 and 2013, and "Holcim" invested 2 million euros in them. The Swiss also own the Holcim Aggregates company for exploitation and sale of sand, gravel and crushed stone. These plants employ a total of 380 people, who, based on the collective agreement, cannot lose their jobs prior to 2016.

As published on the Holcim’s official website, the Irish company will buy 24 plants owned by the Swiss and the French which annually produce 23 million tons of cement while having a capacity of 36 million tons. They will employ more than 15,000 workers. As announced, Holcim will sell all its assets except its Altkirch cement factory and the plant for production of cement and ready-mix in the French department of Haut-Rhin, and Lafarge’s plant in the French town of Saint-Nazaire. As for Lafarge, the sale of the facility in Romania has been announced in order to reduce the market share of 33%, before merging with Holcim.

Total sales of Lafarge and Holcim includes primarily the business activities of these companies in Europe, Canada, Brazil and the Philippines, and their assets enabled the turnover estimated at 5.2 billion euros in 2014, with a profit of around 744 million euros. Lafarge and Holcim plan to complete the merger in the first half of this year.

CRH has confirmed that it accepted to pay 6.5 billion euros for the property of Holcim and Lafarge, whereby they will finance the transaction with 2 billion euros of its own funds and need a loan to cover the remainder. After this purchase, the Irish company will become the third cement producer in the world. CRH produces building materials in 35 countries, at 3,400 locations, and has 76,000 employees.