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LafargeHolcim poised to exit Vietnam JV

Released at: 13:38, 09/08/2016

LafargeHolcim poised to exit Vietnam JV

Photo: LafargeHolcim Vietnam

Group agrees to terms over sale of holding in LafargeHolcim Vietnam to Thai cement producer.

by Hong Nhung

Cement manufacturer the LafargeHolcim Group has confirmed the signing of an agreement with Siam City Cement Public Company Limited (SCCC) over the sale of its entire 65 per cent holding in LafargeHolcim Vietnam.

In a press release sent to VET on August 8, LafargeHolcim Vietnam said the sale was going ahead but provided no further information.

LafargeHolcim Vietnam has been valued at nearly $890 million, according to the group, which would put SCCC’s purchase at around $580 million.

The closing the sale is subject to customary regulatory and shareholder approvals as well as to a right of first refusal of LafargeHolcim’s joint venture partner, Holcim Vietnam, and is expected to take place in the fourth quarter of this year.

Market observers believe LafargeHolcim’s exit from Vietnam is part of its restructuring plan given the oversupply of cement in the domestic market.

Mr. Luong Quang Khai, Chairman of the Vietnam Cement Industry Corporation (Vicem), which holds 35 per cent of Holcim Vietnam, told local media in early July that Vicem had prepared for the sale.

From Switzerland, Holcim Limited last year merged with France’s Lafarge Group to form the LafargeHolcim Group, becoming the world’s largest multinational cement producer in terms of capacity.

After the merger LafargeHolcim had five cement plants and eight ready mixed concrete plants in Vietnam, with an annual capacity of 6 million tons of cement and 1 million cu m of concrete. It overtook the Nghi Son Cement Corporation and the Phuc Son Cement Company as the largest foreign-invested cement company in output terms.

Holcim Vietnam was founded in 1994 and now has total investment capital at $441 million. Last year it merged with Lafarge Vietnam to become LafargeHolcim Vietnam.

It operates one integrated plant and four grinding plants with an annual cement grinding capacity of 6.3 million tons. The company is also a leading ready-mixed concrete producer, with seven plants in the south of Vietnam.

With a presence in 90 countries and a focus on cement, aggregates and concrete, LafargeHolcim is one of the leading manufacturers in the building materials industry. The group has over 100,000 employees around the world and combined net sales of $30 billion in 2015.

It is the industry benchmark in R&D and has a customer base from individual homebuilders to the largest and most complex projects, with the broadest range of value-added products, innovative services, and comprehensive building solutions.

SCCC is the second-largest cement company in Thailand. Established in 1969 it has recently embarked on a strategy of building a regional asset footprint that brings synergy in the wider region, having already established operations in Indonesia, Cambodia and Bangladesh and Sri Lanka.

With turnover of $908 million in 2015, SCCC is listed and headquartered in Bangkok, Thailand. It has two core shareholders: the Thai Group and the Ratanarak and Jardine Group, who both focus on long-term value creation and actively invest to ensure growth.

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