Lafarge Africa’s alternative fuel strategy paying off – CEO

24 October 2017

CEO of Lafarge Africa, Michel Puchercos, has said that the energy strategy of the company has delivered against the objectives set and enables the development of local businesses.

Speaking after the recently released financial results for the third quarter and 9-month period ended September 2017 which indicated that its energy strategy helped deliver a four-fold increase in operating margins to N41.7 billion with margins stable at 30%, Puchercos noted that although the gas shortages in the South-West persisted, for the 9-month period, Ewekoro II utilised 65% of coal and petcoke combined, as gas supply was low at about 36%. Ewekoro I plant utilised 44% of alternative fuels, with gas supply in the region of 50% while Sagamu achieved about 25% alternative fuel substitution over the same period.

“Mfamosing plant in the South East region, utilised 99% gas in spite of a gas explosion in August. AshakaCem operations utilised 82% of coal over the same period.

“Operating EBITDA for our Nigeria operations was up 4.0x at N41.7 billion and EBITDA margin stood at 30% thanks to stable pricing environment, steady industrial operations, fuel flexibility, execution of our commercial and logistics performance improvement plan. We shipped the first batch of cement to the Ghana market, which was well accepted,” he said.

Lafarge CEO further explained that the decision to attain fuel flexibility was part of the company’s turnaround plan that began in September 2016 as cement demand in Nigeria was significantly lower than the previous year and it was expected to stay low on account of the economic slowdown in the first half of 2017.

Nevertheless, Puchercos maintained that “our company continues to recover. Our EBITDA margin expectations in Nigeria for 2017 remains strong at the mid-30s, as we strengthen the performance on the basis of a robust route to market, efficient logistics operation, and cost optimization programme through fuel flexibility, reduction of FX exposure and administrative cost optimisation of our South Africa operations would benefit from the aggregate & concrete business, as our cement operations stabilizes

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