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China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
Photo by:guardian.ng
The shareholders of Lafarge Africa Plc on Monday, approved the merger with United Cement Company of Nigeria Limited (Unicem), and Atlas Cement Company Limited (Atlas). The Board of Directors of Lafarge Africa received shareholders endorsement at a court ordered meeting in Lagos.
According to the Chairman, Lafarge Africa, Bolaji Balogun, who addressed shareholders, the merger will help to streamline the operations of Unicem and Atlas as well as reduce the operating costs by consolidating the cement manufacturing and marketing businesses for better management and efficiency.
The chairman noted that the realisation of these synergies is expected to result in improved returns to shareholders and be beneficial to other stakeholders, including employees and customers of Lafarge Africa, Unicem and Atlas.
He added that it will also "eliminate cost inefficiencies arising from duplication of resources such human resources, financial reporting, operating and administrative expenses amongst others are expected to be significantly reduced post-merger."
Lafarge Africa is the sole shareholders of Unicem and Atlas with Lafarge Africa holding an indirect 100 per cent equity shareholding in Unicem and Atlas.
Atlas was commissioned for operation in 2001, in Rivers State, within the Federal Ocean Terminal, Onne, and the plant was operated on a floating vessel, which had a nominal capacity to pack 500,000 metric tonnes (MT) of cement annually.
Unicem on the other hand, is headquartered in Calabar, Cross River state, with all its cement manufacturing operations consolidated at the Mfamsoing plant. The Mfamosing plant, a modern production facility with an annual production capacity of 5MMT was inaugurated in 2009.
The Chief Executive Officer, Lafarge Africa, Michel Pucherchos, said: "The merger is part of the asset consolidation we began in June 2014. It will solidify our market position in Nigeria particularly our presence in the South-South and South-East regions.
We have seen our installed cement production capacity grow from 4.5 to over 10 million metric tonnes per year with a diversified product range."
According to him, total industry installed cement production capacity in Nigeria has grown rapidly from 4.3MMT in 2004 to 37MMT in 2014, due to government policies which banned importation of bulk cement in favour of local production in 2012.
However, he noted that cement consumption in the largest economy in Africa still lags behind its peers. "Investors in the sector remain very optimistic based on favourable demographics, a rising middle class, rapid urbanisation and a significant housing and infrastructural deficit, which should all combine to support increased demand.
"The board of Lafarge Africa assured that there will be no significant impact on the employees of UniCem and Atlas, and on their terms and conditions of employment. Both companies will transfer their assets, liabilities and undertakings including real and intellectual property rights to Lafarge Africa."
Atlas Cement, based in Port-Harcourt, has moved from supplying Ordinary Portland Cement to providing cement solutions to the oil and gas sector. It serves as the hub for Lafarge Africa's ready-mix operations in the South-South and South-East markets.
Production capacity at Calabar-based UniCem doubled in 2016 to 5MMT consolidating the cement maker's leading position in the region, he added.
