Lafarge Local Content Drive Cuts Forex Use
Lafarge Africa Plc, a leading building solutions provider in Nigeria, has increased local sourcing of critical materials to lower foreign exchange component of its operational costs.
Michel Puchercos, Country CEO of Lafarge Africa disclosed this at the company’s Annual General Meeting (AGM) that held at Eko Hotel, Lagos earlier in June.
A turn-around plan, launched in the third quarter of 2016 amid country-wide gas shortages, was already counting in 2017, leading to record level fuel flexibility at its Ewekoro I and Sagamu plants; a feat the Federal Government commended recently.
Speaking at the AGM, Puchercos said the “our plan is to increase the use of alternative fuel (biomass) and locally mined coal to lessen production disruptions due to gas supply shortages. In 2017, we aim to consolidate energy optimization at Ashaka, Ewekoro 2 and Mfamosing.”
Also at the meeting, shareholders agreed to issue up to a record N140 billion in additional shares to existing shareholders, the Rights Issue that is planned to be launched in the third quarter of 2017.
Listing the benefits of the company’s recapitalisation in 2005, Balogun who doubles as the Chairman of the Board of Directors, said, “It reduces our foreign currency exposure by approximately half, improves our cash flow and positions the Company for our future capacity expansion plans.”
Lafarge Africa, with support from LafargeHolcim, is taking measures to hedge against currency risks.
The company is embarking on a Rights Issue to reduce its exposure to adverse foreign currency translation losses as experienced in 2016 following a 40% depreciation of the Naira against the US Dollar.
Beaming with optimism, Puchercos said that doubling of the production capacity of the Mfamosing plant in Calabar to 5 million metric tons per annum has “contributed significantly to Lafarge Africa’s capacity and footprint in Nigeria; provides an opportunity to increase our share of the cement market in the South-East and South-South regions, and has begun to impact positively on the financial results of the company.”
A member of LafargeHolcim, the global leader in construction innovation, Lafarge is supplying special anti-corrosion cement for the construction of Eko Atlantic, backed by the group’s Lyon-based R&D facility.
Listed on the Nigerian Stock Exchange with a presence in Africa’s two largest economies (Nigeria and South Africa), Lafarge Africa is actively participating in the urbanization and economic growth of Africa.
Combining its operations in Nigeria – Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and Ready-Mix Nigeria with its varied operations in South Africa, Lafarge Africa has a current installed cement capacity of 14.1Mtpa.
Lafarge Africa leverages on its innovative competence to provide valued added products and services solutions in the building and construction industry in Sub-Saharan Africa.