Lafarge in Nigeria

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Lafarge in Nigeria

• Guillaume Roux
• Executive Vice President, Lafarge Group

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Lafarge in Brief

• Lafarge was created in 1833
• It is the world leader in building materials and
  holds top-ranking positions in all of its
  businesses
•           Cement World Leader
•           Aggregates Concrete No. 2 worldwide
•     Gypsum No. 3 worldwide
• Operates in 79 countries with 2,200 industrial
  sites worldwide
• Employs 84,000 people
• 19,033 million Euros in Sales as at December 31,
  2008
•  Listed on Euronext Paris stock exchange

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A well balanced geographical portfolio,a
worldwide presence in 79 countries on every
continent
Central Eastern Europe Workforce 8,600 Sales
1,761 M
Western EuropeWorkforce 17,900 Sales 6,021 M
? 19 billion in sales ? 84,000 people in 79
countries ? 2,200 industrial sites
North America Workforce 14,200 Sales 4,270 M
Asia Workforce 20,900 Sales 2,029 M
Latin America Workforce 4,400 Sales 968 M
Developed countries ? 54 Sales 40
COI Emerging countries ? 46 Sales - 60 COI
AfricaWorkforce 11,200 Sales 2,373 M
Middle East Workforce 6,400 Sales 1,611 M
Lafarge 2008 key figures
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Lafarge in Brief

• Our business we extract mineral resources from
  the earth and transform them into major
  construction materials.
• Our activities meet the basic needs of mankind
  by
• Providing housing and infrastructures all over
  the world.
• Shaping the everyday surroundings of millions of
  men and women
• Lafarge is more than ever at the heart of the way
  our societies are being transformed.
• Lafarge has for many years pursued a sustainable
  development strategy.
• In 2009 and for the fifth year in a row, Lafarge
  was listed in the Global 100 Most Sustainable
  Corporations in the World.

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Lafarge Presence in Nigeria

• Turnover c450 M
• Employees c2 000
• 5 integrated plants, 1 grinding station, 2 Import
  terminals
• Total installed capacity 5.5 MT in 2009 and c10
  MT by 2012 horizon

Ashaka 0.8
Lafarge plant
Grinding station
Abuja
Imports terminal
Projects
UNICEM (JV of Lafarge, Holcim, Dangote, Flour
Mills) 2.5 Mta
Wapco / Sagamu 0.8
Wapco / Ewekoro 1.3
Ewekoro / New Line2 MT by 2011
Calabar
Sagamu / New Line2 MT by 2012
1 Grinding Station 0.5Mta Unicem
Port Harcourt
Lafarge / Atlas 0.5 Mta
Source company
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Our objective

• Maintain a leadership position in the country
• ? From 3.5 million tones in 2008 to 10 million
  tones by 2012
• Contribute to the economic and social growth of
  the country
• Reduce the dependence upon imports

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BACK UP
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Our main  people  challenges in Nigeria

• HEALTH and SAFETY FIRST Our ambition is to rank
  among the top world-class industrial groups for
  safety performance by ensuring the safety of our
  employees and contractors
• HEALTH we are developing communication campaigns
  within our workforce about the fatal dangers of
  Malaria and AIDS and the ways to be better
  protected against these diseases
• SAFETY we have defined a common and compulsory
  policy, rules and standards in order to achieve
  significant improvement.
• No lost time incident (LTI) in Ashaka for 970
  days, but 3 fatalities and 6 LTIs in Wapco
  operations last year a lot remains to be done to
  put safety in the heart of our culture

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Our main  people  challenges in Nigeria

• SUPPORT TO THE COMMUNITIES communities living
  around our production sites expect that we
  support their development. On the other hand, we
  believe that there is no lasting leadership
  without both respect for the environment and
  social responsibility
• We entertain close relationships with the
  communities to understand their needs and the
  ways to help their long lasting development
• We support communities in many ways, going beyond
  our role as an economic player, with
  construction, housing, education, health care,
  heritage conservation, youth empowerment etc.

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Our main  people  challenges in Nigeria

• PEOPLE DEVELOPMENT
• It is our goal to promote first Nigerians into
  positions at all levels of the company
• Specialized skills and professional experience
  are scarce, especially in the technical areas and
  away from large cities
• We organize a continuous development of our local
  talents through learning tracks and Individual
  Development Plans
• We expatriate Nigerians to other Group Units to
  long term training (management positions, new
  plant start up)
• It is difficult to attract excellent
  expatriates for the very few positions that
  cannot temporarily- be occupied by Nigerians
• An overly negative image of the reality country
• Significant salary premiums are the normal
  practice in these cases to overcome reluctance

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Other main challenges in Nigeria

• ENERGY SUPPLY Power and gas are strategic inputs
  for the production of cement. Shortages are
  creating important damages to our capacity to
  deliver enough volumes from our production
  capacities
• Wapco 130 hours lost due to gas shortages and
  180 hours lost due to power failures in the 1st
  Quarter 2009
• We are now investing in own power plants or
  looking for Independent Power Providers to supply
  our needs in all our cement plants
• We are investing in dual firing capacities to
  allow our kilns to use alternative energy
  sources gas, fuel oil or even coal
• Development of our own coal mine in Ashaka

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Other main challenges in Nigeria

• LOGISTIC CONSTRAINTS
• The lack of rail transport and professional
  trucking companies restrict our abilities to
  deliver our markets
• We have to accept to sell a large part of our
  production ex-works, limiting our customer
  service and our control of the destination of our
  products
• We collaborate with the more professional
  transporters to upgrade the safety and quality of
  their deliveries
• The congestion of ports creates important
  difficulties and delays in the import of
  equipments / raw materials
• We have increased our level of strategic spare
  parts to avoid lengthy production disruptions
• We have to accept delays and higher costs for our
  investment projects

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Other main challenges in Nigeria

• ADMINISTRATIVE CONSTRAINTS
• Corporate Governance
• We have defined and communicated a rigorous code
  of business conduct to be respected by all our
  employees
• We have put in place a whistle blower system
  with an independent auditor to identify abnormal
  activities
• Continuous activities of internal control are
  required in all areas of the business (sales,
  purchasing, stock management)
• Unstable legal environment
• Restrictions on work permits for foreign workers
• Import bans/restrictions for raw materials
• In some areas, efforts and time are required to
  convince the relevant authorities that
  regulations with apparent short term benefits can
  create a mid term disadvantage for the country

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