Lafarge S.A.
LAFARGE INVESTS TO KEEP PACE WITH MARKET GROWTH AND STRENGTHEN ITS POSITION…
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The issuer is solely responsible for the content of this announcement.
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Euronext: LG, NYSE: LR Paris, 15 December 2005
LAFARGE INVESTS TO KEEP PACE WITH MARKET GROWTH AND STRENGTHEN ITS POSITION IN
CEMENT
The Lafarge Group’s Cement business is pursuing its strategy of strong, value-
creating growth by significantly expanding production capacity and modernizing
industrial facilities.
In 2005, the Group began the construction of nearly 5 million tonnes of
additional production capacity in China, Bangladesh, Mexico, Morocco and
Vietnam. These will be fully operational in 2006.
To strengthen its position, keep pace with market growth and better serve its
customers, new investments have been decided for the Group’s cement plants and
grinding stations, for an amount of around EUR400m. These development
investments will increase cement production capacity by 5 million tonnes by
2008.
KEEPING PACE WITH MARKET GROWTH BY INCREASING THE PRODUCTION CAPACITY OF
CEMENT PLANTS
– In Russia, in addition to its ongoing modernization programme, Lafarge will
invest EUR125m to increase production capacity at its Voskressensk plant near
Moscow in order to boost it to 3 million tonnes by 2009. This involves the
construction of a dry production line, which will significantly enhance the
technical performance of the plant and product quality to meet new market
demand. In the Moscow region, the growth of cement demand has averaged 10% per
annum over the past five years.
– In South Africa, Lafarge will increase production capacity at the
Lichtenburg plant by 1 million tonnes. An investment of nearly EUR120m will
strengthen Lafarge’s position in the northwest part of the country by
increasing the plant’s production capacity by 40% to 3.5 million tonnes.
Alongside current efforts to modernize the plant, this investment will enable
the Group to maintain a strong position and satisfy increasing demand in this
fast-growing market.
– In Zambia, Lafarge will build a new plant in compliance with the latest
technological standards. With a 750,000 tonne capacity, the plant will be
located near the capital city of Lusaka, and is set to be operational in 2008.
This investment will bring Lafarge Zambia’s total production capacity to 1.2
million tonnes. Lafarge will then be in a position to meet the country’s
growing infrastructure needs, notably for new copper mines and the
construction of electrical power plants. Greater production capacity will also
be used to supply neighboring countries. Lafarge’s investment will amount to
about EUR85m.
– In the United States, small investments will significantly increase the
capacity of the Roberta plant, Alabama, to reach production capacity of 1.4
million tonnes by mid 2006.
– Other projects currently being studied are : the doubling of plant
production capacity at the Tetouan plant in Morocco, and the plant near Quito,
Ecuador, as well as new lines in the United States.
NEW GRINDING STATIONS TO BETTER SERVE LOCAL MARKETS
In addition to cement plants, Lafarge is investing in several grinding
stations, including slag grinding stations, to better serve local markets. As
part of the Group’s commitment to promoting sustainable development, slag, a
byproduct of the steel industry, is used as a substitution material in cement
production. The use of this type of material with hydraulic binder qualities
helps combat the climate change.
– In Spain, Lafarge has just invested EUR30m in the acquisition of Cemento
Esfera, a cement grinding station in Tarragona with a 500,000 tonne capacity.
– In South Korea, Lafarge has announced the acquisition of the Soosung
grinding station for EUR20m. With a 1 million tonne capacity, this new
production site in Gyeonbuk province will serve Taegu, the country’s third
largest city, and will enable Lafarge to develop its slag cement business.
– In France, Lafarge is investing EUR25m in a new slag grinding plant using
the latest technologies. With an annual capacity of 300,000 tonnes, the
grinding plant will be located at the Port of Bordeaux in Bassens, and is
scheduled to be operational in early 2007. It will strengthen Lafarge’s
industrial facilities in southwestern France. Lafarge has also filed an
application for a project to build a new grinding station in Sete to optimize
synergies with the Port La Nouvelle cement plant.
– In Chile, Lafarge is investing EUR20m in a new grinding station in Puerto
Montt in the southern part of the country. With a 300,000 tonnes production
capacity for cement with pozzolana additives, the plant is set to enter
service in 2007.
– In Morocco, Lafarge is also assessing the possibility of doubling the
capacity of its grinding station in Tangier, to 1 million tonnes.
Lafarge, the world leader in building materials, holds top-ranking positions
in all four of its divisions: Cement, Aggregates & Concrete, Roofing and
Gypsum. Lafarge employs 77,000 people in 75 countries and posted sales of
EUR14.4 billion in 2004. Additional information is available on the web site
at http://www.lafarge.com .
COMMUNICATIONS INVESTOR RELATIONS
Stéphanie Tessier: 33-1 44-34-92-32 Yvon Brind’Amour: 33-1 44-34-92-93
stephanie.tessier@lafarge.com yvon.brindamour@lafarge.com
Louisa Pearce-Smith: 33-1-44-34-18-18 Danièle Daouphars: 33-1 44-34-92-93
louisa.pearce-smith@lafarge.com daniele.daouphars@lafarge.com
Statements made in this press release that are not historical facts, including
the planned capital expenditures and expansion of production capacity in the
Cement business, are forward-looking statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
These statements are not guarantees of future performance and involve risks,
uncertainties and assumptions (“Factors”), which are difficult to predict.
Some of the Factors that could cause actual results to differ materially from
those expressed in the forward-looking statements include, but are not limited
to: the cyclical nature of the Company’s business; national and regional
economic conditions in the countries in which the Group does business;
currency fluctuations; seasonal nature of the Company’s operations; levels of
construction spending in major markets; supply/demand structure of the
industry; competition from new or existing competitors; unfavorable weather
conditions during peak construction periods; changes in and implementation of
environmental and other governmental regulations; our ability to successfully
identify, complete and efficiently integrate acquisitions; our ability to
successfully penetrate new markets; and other Factors disclosed in the
Company’s public filings with the French Autorité des Marchés Financiers and
the US Securities and Exchange Commission including its Reference Document and
annual report on Form 20-F. In general, the Company is subject to the risks
and uncertainties of the construction industry and of doing business
throughout the world. The forward-looking statements are made as of this date
and the Company undertakes no obligation to update them, whether as a result
of new information, future events or otherwise.
End of announcement (c)DGAP 15.12.2005
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WKN: 850646; ISIN: FR0000120537; Index:
Listed: Open Market in Frankfurt, Freiverkehr in Berlin-Bremen, Düsseldorf,
Hamburg, München und Stuttgart
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