Lafarge (company)
| Company type | Subsidiary |
|---|---|
| Industry | Cement, construction aggregates, concrete |
| Founded | 1833 |
| Founder | Joseph-Auguste Pavin de Lafarge |
| Fate | Merged with Holcim in 2015; rebranded as Holcim Group in 2021 |
| Headquarters | Le Teil , France |
Area served | Worldwide |
Key people | Bruno Lafont (former CEO), Eric Olsen (former CEO) |
| Products | Cement, construction aggregates, concrete |
| Parent | Holcim Group |
Lafarge is a French industrial enterprise focused on the production of cement, construction aggregates, and concrete. It holds the position as the world's leading cement manufacturer. Established in 1833 by Joseph-Auguste Pavin de Lafarge, the company is currently integrated into the Holcim Group.
In 2015, Lafarge combined with Holcim to create LafargeHolcim, which was rebranded as Holcim Group in 2021.
The company faced controversy when the US Department of Justice convicted it for financing terrorism and being complicit in crimes against humanity due to payments totaling $5.92 million made to ISIS and al-Nusra Front between 2013 and 2014 to maintain operations at its Syrian facility.
Origins and Expansion
Lafarge was founded in 1833 by Joseph-Auguste Pavin de Lafarge in Le Teil, France, initially focusing on extracting limestone for hydraulic lime production. Its first international contract came in 1864, supplying lime for the construction of the Suez Canal.
During the Second World War, Lafarge provided concrete used in building the Nazi Atlantic Wall, a contribution that facilitated its rapid growth during post-war reconstruction.
In 1980, Lafarge merged with Belgian firm Coppée, forming SA Lafarge Coppée. Subsequent acquisitions included a plant from National Gypsum in 1987 and British quarry operator Redland plc in 1997.
Entering new markets in 1999, Lafarge fully acquired Hima Cement Limited in Uganda (with an 850,000 tonnes capacity) and entered India by purchasing Tata Steel’s cement division, followed by Raymond Cement in 2001. That same year, acquiring British cement producer Blue Circle Industries made Lafarge the largest cement manufacturer worldwide.
In 2006, Lafarge took full ownership of Lafarge North America through a $3 billion tender offer, resulting in its delisting from the NYSE. The following year, it divested its roofing division but maintained a 35% share.
December 2007 marked the acquisition of Orascom Cement Group, broadening Lafarge’s footprint across Africa and the Middle East. In May 2008, it acquired Larsen & Toubro’s Ready Mix Concrete operations in India for $349 million.
The sale of Canadian precast concrete firm Pre-Con occurred in 2009. By 2010, Lafarge enhanced its Brazilian presence through a partnership with STRABAG concerning Central European cement activities.
In 2011, the company announced plans to invest $585 million to establish a cement plant in North Sumatra, Indonesia. It also exited its stake in Asian Gypsum joint venture LBGA by selling to Boral and inaugurated plants in Hungary, Syria, and Nigeria while forming a joint venture with Anglo American in the UK.
Between 2011 and 2015, Lafarge divested most of its gypsum operations across Europe, South America, Asia, and Australia.
In September 2013, it sold its majority share (53.3%) in Honduras-based subsidiary Lafarge Cementos SA de CV to Cementos Argos for €232 million.
By 2018, the Lafarge cement facility near Kobanî, Syria had been utilized as a base by French and US military forces.
In 2022, Lafarge Egypt introduced "Shatbna," an environmentally friendly masonry cement boasting a carbon footprint reduced by 40%.
Since 1991, Lafarge has wholly owned Heracles General Cement in Greece.
As of September 2024, plans are underway for constructing a new cement plant near Obrenovac in Serbia that will incorporate power plant ash as part of its process.
Merger with Holcim
On 7 April 2014, Lafarge and Holcim consented to a "merger of equals," with an exchange ratio of 9 Holcim shares for every 10 shares of Lafarge. The newly formed Swiss-headquartered entity would boast an annual production capacity of 427 million tons, nearly twice that of Anhui Conch. Bruno Lafont, then CEO of Lafarge, and Wolfgang Reitzle, Chairman of Holcim, assumed co-chairmanship roles, while Eric Olsen from Lafarge was appointed as CEO. Leadership anticipated annual cost synergies amounting to €1.4 billion (US$1.9 billion), establishing what they described as "the most advanced group in the building materials sector."
The agreement encountered regulatory hurdles in 15 different jurisdictions due to the concentrated nature of the European cement market and rigorous antitrust evaluations. To mitigate these concerns, both firms intended to divest or spin off assets generating approximately €5 billion (US$6.9 billion) in revenues during 2013 from overlapping regions. Lafont highlighted that the merger’s primary goal was to rebalance operational footprints rather than implement cost-cutting measures, aiming to reduce layoffs by opting for asset sales over plant closures.
Industry experts observed that the merger merged Holcim's marketing expertise with Lafarge's innovation capabilities, delivering notable cost reductions but cautioned that regulatory approval would be a complex process. Some analysts saw this transaction as a trigger for further consolidation within the industry, potentially enabling competitors to acquire assets under favorable terms. The majority anticipated eventual clearance from regulators.
This merger established the combined company as the third-largest global supplier of building materials, broadening its footprint in markets such as Eastern Europe, Brazil, and the Philippines—advantages largely reflected in market valuations. Lafarge and Holcim finalized their merger on 10 July 2015, officially launching worldwide as LafargeHolcim on 15 July 2015. The company was subsequently rebranded as the Holcim Group on 8 July 2021.
Terrorist financing and complicity in crimes against humanity charges
In June 2016, French authorities initiated an investigation into Lafarge’s Syrian operations following disclosures that the company had made payments to armed factions, including the Islamic State (ISIL), to sustain its cement facility in Syria. ISIL took control of this plant on 19 September 2014. From 2017 onward, executives at LafargeHolcim became subject to both civil and criminal probes.
The corporation maintained that these payments were solely intended to preserve business continuity and denied any support for ISIS or responsibility for the actions of its Syrian subsidiary. Initially, the Paris Court of Appeals ruled in favor of Lafarge.
Nonetheless, on 7 September 2021, France’s Supreme Court upheld accusations related to financing terrorism and endangering employee safety, determining there was sufficient proof that Lafarge possessed "specific knowledge" regarding ISIS’s criminal conduct. The ruling clarified that complicity in crimes against humanity does not require direct involvement but rather awareness and facilitation; payments made to a terrorist organization suffice to establish complicity. The case was remanded back to the Court of Appeals.
On 18 May 2022, the Paris Court of Appeals dismissed Lafarge’s motion to dismiss charges concerning complicity and endangering lives, concluding that despite being aware of ISIS’s atrocities, Lafarge opted to continue operations and made substantial payments to armed groups. Lafarge vehemently contested this judgement and intended to pursue an appeal.
On 17 October 2022, the U.S. Department of Justice announced a criminal plea deal with Lafarge valued at $777.8 million. Company executives admitted to disbursing $5.92 million to leaders of ISIS and al-Nusra Front in order to maintain operational facilities—signifying a major development in resolving the case.
Mercury Emissions in New York
According to a July 2008 report by the Albany Times Union, Lafarge's facility in Ravena, New York was identified as the state's leading source of mercury emissions between 2004 and 2006, discharging roughly 400 pounds (181 kg) annually. Subsequent plans were initiated to upgrade the plant to curtail these emissions. By 2009, data from the EPA indicated a decrease to 145 pounds of mercury emissions, with the plant operating within regulatory limits.
Although Lafarge challenged new EPA mandates in November 2010 aimed at reducing mercury emissions from cement plants, a joint public health evaluation conducted by the New York State Department of Health and the federal Agency for Toxic Substances and Disease Registry in July 2013 concluded that emissions from the Ravena site posed no anticipated health risks to nearby residents. The study verified that concentrations of metals, sulfur dioxide, nitrogen dioxide, and other pollutants in the air remained within acceptable thresholds, with community health statistics aligning with regional norms.
On 23 July 2013, Lafarge North America entered into an agreement with the U.S. EPA, Department of Justice, and New York State to allocate $1.5 million toward projects aimed at reducing air pollution in the vicinity of the Ravena plant. This arrangement modified a 2010 consent decree that set emission limits across Lafarge’s thirteen U.S. facilities and extended the deadline for completing a modernized plant until July 2016, after which the existing operation would be retired.
The $300 million modernization entailed installing a German-engineered dry-process cement kiln to replace two outdated wet-process kilns. This advancement significantly cuts coal consumption and mercury emissions by approximately 66%, enhances production output, and reduces water usage from the Hudson River by primarily sourcing water from an adjacent limestone quarry.
Under this agreement, Lafarge North America pledged to:
- Commit $1.5 million toward local environmental initiatives;
- Upgrade environmental systems at the Ravena site;
- Implement more stringent sulfur dioxide and mercury emission standards;
- Adhere to a definitive timeline for completing plant modernization.
Canadian Watersheds
In July 2019, Lafarge submitted a permit application to Ontario’s Ministry of the Environment seeking approval to increase water withdrawals from its gravel extraction sites near Guelph in Wellington County. If authorized, the company would be permitted to draw up to 27.7 million litres daily—exceeding half of Guelph’s average daily water consumption of 47 million litres. This proposal would expand its current permit allowance by an additional 21,718 m³/day beyond the existing limit of just over six million litres per day. Lafarge clarified that this plan involves transferring water from the quarry area to nearby wetlands or directly into the Speed River rather than escalating local groundwater extraction.
The advocacy group Wellington Water Watchers expressed concerns about potential adverse effects on downstream aquatic habitats and called for a comprehensive environmental impact assessment prior to any permit approval. Their chairperson underscored uncertainties related to climate change that challenge long-term water availability, stressing prudent management of water resources is essential.
Board of directors
The board of Lafarge is composed of 15 individuals who are selected by the annual shareholders' assembly to serve four-year terms:
- Chairman and Chief Executive Officer: Bruno Lafont
- Vice-Chairman: Oscar Fanjul
- Board Members: Philippe Charrier, Juan Gallardo, Ian Gallienne, Mina Gerowin, Jérôme Guiraud, Luc Jeanneney, Gérard Lamarche, Hélène Ploix, Baudouin Prot, Christine Ramon, Michel Rollier, Ewald Simandl, Véronique Weill
- Honorary Chairpersons: Bertrand P. Collomb and Bruno Lafont
Among former directors are Alain Joly, Michel Pébereau, Gérald Frère, Michel Bon, Philippe Dauman, Nassef Sawiris, and Hillary Clinton.
Financial data
Overview of principal financial indicators (expressed in millions of euros):
| Year | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 13,698 | 14,610 | 13,658 | 14,436 | 15,969 | 16,909 | 17,614 | 19,033 | 15,884 | 14,834 | 15,284 | 15,816 | 15,198 | 12,843 |
| EBITDA | 2,862 | 3,101 | 2,820 | 3,028 | 2,920 | 3,610 | 4,183 | 4,618 | 3,600 | 3,614 | 3,217 | 3,450 | 3,102 | 2,721 |
| Net income | 750 | 446 | 728 | 868 | 1,096 | 1,372 | 1,909 | 1,598 | 736 | 827 | 593 | 432 | 601 | 143 |
| Net debt | 9,332 | 8,544 | 6,734 | 7,017 | 7,221 | 9,845 | 8,685 | 16,884 | 13,795 | 13,993 | 11,974 | 11,317 | 10,330 | 9,310 |
| Employees (number) | 82,892 | 77,547 | 75,733 | 77,075 | 80,146 | 82,734 | 77,720 | 83,440 | 77,994 | 75,680 | 68,000 | 65,000 | 64,000 | 63,000 |
By February 29th of the year 2016 Lafarge's market value stood at €17.292 billion with roughly 288 million shares outstanding.
Nature reserves
Lafarge manages multiple nature reserves frequently situated on or near sites previously used for quarrying. Prominent examples include Brandon Marsh in the United Kingdom adjacent to an operational quarry and the LaCouronne facility in France where the company transformed an area of sixteen and a half hectares into a protected natural habitat. Additional reserves under Lafarge's care include Eardington Nature Reserve in Shropshire; Medway Nature Reserve in Kent; and the NWT Besthorpe Nature Reserve located in Trent Vale (UK).