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Lafarge document
Number 7 May 2009 Ethics: a rising stock Cottonseed oil, the flower of biofuels Construction sites: tailor-made services © Jacques Grison BRUNO LAFONT Chairman and CEO of Lafarge EXPLORING A WORLD ON THE MOVE 06 Ethics: a rising stock 10 Shigeru Ban, all the materials in the world 12 Marc Mimram, city between two riverbanks MOVING FORWARD IN OUR BUSINESSES 16 Tailor-made services that make the difference 22 The second life of materials 26 A responsible employment policy 32 Algeria: a huge leap forward CONTRIBUTING TO A SUSTAINABLE WORLD 38 East Africa: road safety makes headway with transporters 40 Brazil: cottonseed oil, the flower of biofuels 42 A global commitment to sustainable construction 44 Spain: on the threshold of the congress hall t he huge challenge facing companies today is one of profitability and embracing change. In light of today’s unprecedented economic and financial situation, Lafarge must demonstrate its ability to react and adapt. The Group has set new targets to cut its level of debt, including new actions to reduce costs and limit investments. We remain focused on the dynamics that enabled us to exceed the objectives of the “Excellence 2008” program and confirm our strategy, which is based on growth in emerging countries and innovation leveraged by our R&D strength. This strategy has already borne fruit and, thanks to the geographic spread of our portfolio, will help us to take worldwide advantage of the renewed confidence and growth stimulated by governments’ plans to re-launch the global economy, which all include major infrastructure projects. It also enables us to support architectural creativity with innovative products, to anticipate new requirements and to think about other uses for our materials. It is thanks to this capacity for innovation and operational performance that we shall be able to support infrastructure requirements, of which there are very many in the years ahead, with sustainable solutions that respect our planet. It is in periods of uncertainty, such as the one we are experiencing today, that Lafarge must restate the values of respect and responsibility that shape its character. The fact that a company’s performance can now be measured not only in terms of financial results, but also based on social, ethical and environmental criteria, reinforces the convictions that we have always maintained. In the period of uncertainty we are experiencing today, the Group must restate its values. STRIVING TO ATTAIN OUR FULL POTENTIAL 48 Highlights 50 Very strong operational results in 2008 BRUNO LAFONT CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 03 expl oring © Marc Mimram Architecte a world on the move “The Accommodating Structure” designed by Marc Mimram, in New York (United States). © Image Source - Leonard Pine EXPLORING A WORLD ON THE MOVE Nowadays, performance is not only measured in terms of financial results, but also in terms of social, ethical and environmental criteria. It is a change that has an impact on the strategic choices of financial markets, encouraging socially responsible investment funds to appear. Ethics: a rising stock i s a company that is committed to a policy of sustainable development, concerned about reducing its ecological footprint, enhancing the skills of its workforce and adopting ethical management policies, more profitable and competitive than another in the long term? This is currently the opinion of many investors (pension funds, banks and insurance companies, etc.). Socially Responsible Investment (SRI) is not, however, a new idea. The first ethical funds appeared in the 1920s. Their principles were based on excluding companies whose activities were considered to be immoral (weapons sales, businesses connected with gambling, tests on animals, etc.). Today, ethical criteria embody the strategic choices and the way that companies develop. Thus performance is no longer assessed by a company’s financial position alone: it also has to do with its ability to adopt coherent policies in terms of environment, to demonstrate transparency in its management and to provide appropriate solutions for social issues. In 2007, more than 200 investment funds had therefore adopted Principles for Responsible Investment (PRI), as set out by the United Nations a year earlier. A fruitful dialog In a rapidly evolving financial market, ethical investment funds provide evidence of sustainable development models. PAGE 06 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Following an in-depth analysis of financial and management models conducted by specialist credit rating agencies, companies that do not meet the criteria laid down are sometimes contacted by investors, who instigate a dialog in order to persuade them to improve their processes. “We encourage management to follow such a course of action when it may have a positive effect on their results. For example, when a group is acquiring several other companies, we recommend that it requests an upfront analysis of their environmental approach. In this way, the ••• CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 07 © Romuald Meigneux / Sipa EXPLORING A WORLD ON THE MOVE Questions for Nicole Notat, founder and president of the European credit rating agency, Vigeo How does one go about rating a company’s social and environmental responsibility? RESPONSIBLE STOCK INDEXES A stock index shows market trends, up or down, and serves as a reference point for measuring the performance of funds. Today, International Labor Organization (ILO) in Geneva, Switzerland. there are about a dozen responsible market indexes, most often focused on investment areas (Europe, Asia, etc.) or by type of business (high or low market capitalization). However, some are based on more specific criteria (such as the way the company is managed, the battle against climate change, etc.). • The DJSI (Dow Jones Sustainability Index) was launched in 1999 based on ratings from the Swiss company SAM. In 2001, SAM extended the scope of its analysis to Europe, by creating a European index, the DJ EURO STOXX Sustainability Index, which identifies stocks in the Dow Jones STOXX 600 Index. • The FTSE4Good Index was established in 2001 by the UK ethical research agency EIRIS. • The ESI (Ethibel Sustainability Index) has, since 2002, been based on analyses by the Belgian ethical consultancy firm Eth bel. purchase price can include adjustments necessary for bringing it into line,” explains Karina Litvack, manager of governance and sustainable investment at F&C Management. Being part of and maintaining a position in a responsible fund requires companies to be constantly vigilant. On the other hand, belonging to such a fund provides reassuring security for financing projects, as well as a significant benefit in terms of image. “To be regarded as a responsible company is a significant marketing asset, all the more so because consumers are listening to pressure groups more and more,” underlines Karina Litvack. ••• • The ASPI (Eurozone and Global Indices) was established in June 2001 by the French company Vigeo. It brings together Forward planning to make the difference 120 companies selected from some 300 stocks of the Dow Jones Quite apart from ethical considerations, the majority of investors consider that anticipation of evolving standards enabled by these funds is very much in companies’ interests. “In terms of environment, as with social welfare, regulations are multiplying. However, a well-programmed investment turns out less costly than a restricted one and a forward-looking group reaps the fruits of its efforts more quickly,” explains Dominique Blanc, SRI research manager at Novethic1. In fact, enlightened management enables problems to be uncovered more quickly and a voluntary environmental policy delivers substantial energy savings. When it is not a source of innovation, “a company committed to producing goods more compatible with the environment creates new processes and new products, which are growth and leadership factors,” says Nicole Notat, president of the rating agency Vigeo. In times of crisis, responsible conduct often ends up paying for itself: EURO STOXX. • The Calvert Social Index has been based since 2000 on analyses by the American firm Calvert. It is made up of more than 600 companies selected from the largest companies by market capitalization on the NYSE and on Nasdaq-Amex. • The KLD Domini Social Index 400 (DSI) was set up in 1990 by the credit rating agency KLD, with 400 major company stocks. • The Kempen SNS Smaller Europe SRO, created by Kempen Capital Management and analyzed by SNS Asset Management, has been the leading index representing the performance of companies with low market capitalization since 2003. I PAGE 08 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO “as opposed to a “short-termist” company that neglects its basic principles, the company that values the skills of its workforce, for example, can count on being able to mobilize them in order to secure its long-term survival.” Promising growth Although the SRI fund sector is still modest compared with the scale of the Stock Exchange, since such funds currently represent around 1.5% of total market capitalization, the volume of ethical investment is increasing rapidly, by approximately 30% per annum. “Ten years ago, few people knew that SRI existed. Now we can expect the financial crisis to have a major impact as a catalyst for the development of this approach to investment, since SRI meets the contemporary demands of ‘back to basics’. In time, a discredited company will have major problems in attracting capital,” predicts Dominique Blanc. And what about the real performance of socially responsible investment? “Although SRI funds provide little return in the short term, at least they are not yielding a negative return,” confirms Dominique Blanc. “Focused on human resources, the AXA fund, WF Human Capital, is recording better performance than those of the benchmark index2,” points out Nicole Notat. I 1. A subsidiary of the Caisse des Dépôts, Novethic is a research center for corporate social and environmental responsibility and for socially responsible investment. 2. This is an index that includes small and medium-sized European companies (in terms of stock market capitalization), with 50% of it made up by DJ STOXX EURO Mid 200 and 50% by DJ STOXX EURO Small 200. Nicole Notat : We have created benchmarks in six particular areas: human resources, market performance, environment, human rights, governance and community involvement. Our evaluation criteria are based on international standards coming out of recommendations from the most legitimate international institutions, such as the United Nations, the International Labor Organization (ILO) and the Organization for Economic Co-Operation and Development (OECD). These are evolving in line with new challenges, such as that of obesity, for example, which was unknown about five or six years ago. How is SRI evolving? N. N. : Practices and criteria are still to be standardized. However, a new balance is progressively being established between a rightful interest in capital remuneration and responsibility for the cost of controlling external factors. The financial crisis could allow better integration of non-financial factors. Moreover, responsible investors are establishing themselves and becoming better known. In terms of the make-up of the funds themselves, a high demand for greater transparency is also becoming apparent. I CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 09 EXPLORING A WORLD ON THE MOVE In July 2007, Shigeru Ban opened a “paper bridge” half a mile from the Pont du Gard aqueduct (France). © S. Ban Architects Europe & J. de Gastines A trailblazer firmly set on an inclusive approach, the Japanese architect Shigeru Ban is now to be seen everywhere. With offices in Tokyo, Paris and New York, he is in demand for projects worldwide. He is already recognized as one of the most important architects of the 21st century. Shigeru Ban All the materials in the world PAGE 10 | L A FA R G E | M AY 2 0 0 9 | don’t set myself any rules in terms of materials or structure. I like to develop new systems and adapt my approach to what is available on site.” Shigeru Ban draws his inspiration from his everyday surroundings and it is by using materials that are out of the ordinary, such as paper and recycled cardboard, that he has built his reputation on. “The idea of using paper came to me from rolls of fax paper and stiff cardboard,” he explains. “You can do almost anything with it and it’s very simple to make it waterproof.” After carrying out several tests with the help of engineers, a first version using structures made out of compressed rolls of paper (now known as PTS – Paper Tube Structure) was built in 1989 for the World Design Expo in Nagoya. Other “cardboard architecture” projects would follow, becoming benchmarks of contemporary architecture, in which PTS has become both a structural and movable component. A virtuoso, minimalist and essential style is being established. Can one detect an ecological bias through using a recycled material? “When I began to use this material, nobody was talking about the environment or sustainable development. These are sensitive subjects today but I hadn’t anticipated this trend.” CRESCENDO SHIGERU BAN Known for his creations of a humanistic nature, Shigeru Ban is one of the great architects of our time. Born in Tokyo in 1957, he was educated in the United States, at the Southern California Institute of Architecture in Los Angeles, then at Cooper Union School of Architecture in New York. Returning to Tokyo in 1985, he set up his own firm of architects. Between 1995 and 1999, he taught architecture at the University of Yokohama, and then in 2000 he became a visiting professor at Columbia University in America. From 1995 to 2000, he was also a consultant to the United Nations High Commission for Refugees. Since 2001, he has been a professor at Keio University (Japan). He has won several awards for his work (World Architecture Awards in 2001). He is now working on building the Pompidou Center in Metz, France. However, as founder of VAN (Voluntary Architects’ Network) and consultant to the United Nations High Commission for Refugees from 1995 to 2000, the architect now claims to be very concerned with the social dimension of his work. So he has used cardboard tubes for several emergency aid projects: shelters for refugees from the genocide in Rwanda in 1994; construction of a church in Kobe, Japan, after the 1995 earthquake and, more recently, an elementary school in China in the devastated region of Sichuan. Light, easy-to-assemble and economical, this material is perfectly suited to these emergency situations. In the Chinese city of Chengdu, an amazing, 500m² school was built in just one month. “The material here reveals an approach that puts architecture firmly in the present,” notes architect Arata Isozaki, for whom Shigeru Ban once worked as an assistant. Importance of context However, paper is just the first word of Shigeru Ban’s vocabulary. His architecture cannot be restricted to the use of just one material, whatever it is. Today, for a project in progress in Abu Dhabi, the architect needs Ductal®, ultra-high performance, fiber reinforced concrete. In his constant quest for harmonizing the building with its context, he is studying the possibility of adapting the composition of this innovative concrete to the characteristics of the sand that surrounds the city. I © AFP “I POMPIDOU CENTER, METZ (FRANCE) Due to open in early 2010. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 11 © Marc Mimram Architecte EXPLORING A WORLD ON THE MOVE Civil engineer and architect Marc Mimram presents “Living Bridges”, a study produced in partnership with Lafarge. He proposes to reinvest urban infrastructure with meaning and to “re-lay” the city . Marc Mimram © DR City between two riverbanks ONE PROJECT, FOUR EXAMPLES MARC MIMRAM A graduate of France’s National School of Civil Engineering, with a master’s degree in mathematics and a diploma of advanced studies in philosophy, Marc Mimram leads a twofold career as consultant and architect/civil engineer. He is the man behind several architectural works across the globe: the Léopold Sédar Senghor footbridge in Paris (France), the Beng Bu and Feng Hua bridges in Tianjin (China) and the Moulay Al Hassan bridge in Rabat (Morocco). He teaches at the University of Marne-la-Vallée (France) as well as at Princeton, in the United States. The originality and boldness of his project, “Living Bridges”, is generating lively interest within the architectural community. Why are you now interested in inhabited bridges? Marc Mimram : The need for mobility has become very evident, everywhere in the world. We also see the difficulties of creating a densely populated city with positive connotations, which thereby lends itself to promoting the idea of ‘living together’. Moreover, the infrastructure that shapes a city prior to its development is often experienced as a necessary evil, a source of environmental pollution. However, it can also create a link, express meaning and, from that point, be the subject of a wealth of reinterpretation. Has the structure of bridges been reinterpreted here? M. M. : In Journey to the End of the Night, “The Accommodating Structure” over the East River, New York (United States). PAGE 12 | L A FA R G E | M AY 2 0 0 9 Lengthy research led to the selection of four locations, each of which embodies a new way of designing a bridge as an infrastructure with multiple functions. In Shanghai, China, the underside of the “Roof Bridge” provides a public space above the road intersection. In New York, (United States), the bridge conceived as a residential megastructure juxtaposes several functions of public representation and accommodation, and acts as a dialogue with the city. In Moscow (Russia), the “Inhabited Bridge” over the river boldly draws comparison with the legendary image of the Ponte Vecchio in Florence (Italy), offering numerous routes and walkways. Lastly, in France, La Courneuve’s “Landscape Bridge” is a natural device for broadening the horizons of its inhabitants. | CRESCENDO Louis-Ferdinand Céline1 describes Manhattan as an ‘upright, absolutely straight and scarily stiff’ city. Our approach, our vision, has been to look at the typical infrastructure of bridges as we look at towers, as inhabitable structures that replace a vertical world with a horizontal one, taking advantage of its strength as a crossing. This urban device for crossing, which has been monofunctional for centuries, can be used to adjust or add to the ‘crafting’ of the city, encouraging a meeting of the riverbanks. Formerly used purely for traffic, it can be inhabited, imbued with a healing capacity, to seal a rift dividing the urban space. Does such a project mean redefining technical boundaries? M. M. : Concrete is now a high-tech material, which enables us to explore less restrictive and more ambitious structural styles than those of conventional crossings. Ductal®, the twin aspects of which – very high strength and elegance – we use to the full, is the masterpiece that underpins our building strategy. For example, Ductal® will make it possible to build the vast concrete sails of La Courneuve’s ‘Landscape Bridge’, which weaves together two strands of landscape, one urban and the other rural, inspired by the two areas that it unites beneath the motorway. I 1. French writer, 1894-1961. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 13 © Médiathèque Lafarge - Ignus Gerber Breakwaters installed to protect the Hassan II Mosque, Casablanca (Morocco). moving forward in our businesses In every country where the Group is established, Lafarge teams adapt their services to the specific requirements of each site. It is an approach that enables them to address the challenges presented by the most daring construction projects, as well as to satisfy the day-to-day needs of building professionals. Tailor-made services that make the difference t he Queen Sofia Museum in Madrid, the Millau Viaduct, the Washington Convention Center, the Tacoma Glass Museum and the Maritime Terminal at Tanger Med: for each of these projects, the Group develops innovative solutions to satisfy the requirements of architects, consultancy firms and civil engineering companies, whether by supplying products with specific properties, to maintain the balance dictated by the pace of construction, or by providing services enabling the various phases of the construction process to be optimized. This approach, aimed at satisfying the most specific demands of its contractors, has become a major factor of differentiation for the Group. “We are able to provide our customers with tailor-made solutions,” confirms François Redron, Senior Vice-President Marketing and Sales of the Group’s Aggregates & Concrete Business line. With concrete in particular we can provide an infinite variety of properties in our products to meet the technical specifications of our customers. To do that, we rely on the exceptional R&D resources available within the Group.” Innovation in action Rudy Ricciotti’s Villa Navarra is a perfect example of this ability to face up to challenges. Its ultra-thin concrete roof – a 40-meter-long cover with an overhang surface of 7.8 meters – would never have seen the light of day without Lafarge’s ultra-high-performance Ductal® fiber concrete. In another area, the Group’s Canadian subsidiary had to adapt the composition of its UltraGreen® and Agilia® concrete in order to comply with the very demanding LEED (Leadership in Energy ••• PAGE 16 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Millau Viaduct, France, designed by architect Norman Foster. © Médiathèque Lafarge - Claude Cieutat MOVING FORWARD IN OUR BUSINESSES MOVING FORWARD IN OUR BUSINESSES Construction of an apartment block in Agilia®, Chronolia® and concrete in Atlanta, United States. product with thermal insulation features and exceptional acoustics. Finally, PLAtec® provides tailor-made prefabricated solutions for nonstandard interior design fittings. © DR © Médiathèque Lafarge - Ignus Gerber Tailor-made solutions and Environmental Design) standard for building Millennium Water for the 2010 Winter Olympics in Vancouver. For the Conference and Exhibition center in Oviedo (Spain), designed by architect Santiago Calatrava, Lafarge also had to demonstrate a great capacity for flexibility. This enormous building, opened at the end of 2008, comprises a moving roof 120 meters in length, for which ten high-density concrete formulae were prepared. “These major projects are opportunities for the Group to demonstrate its inspiration and know-how,” continues François Redron. “Our aim is also to bring an added value to all our clients, whether it concerns major companies building a work of art or private individuals who want concrete paving slabs for their home. Between these two extremes, our product range can be used for hundreds of different applications.” Innovation is driven by prestigious projects and carried by more modest sites. For 15 years, Lafarge has transformed its haute-couture solutions into a “ready-to-wear” range that is constantly expanding. Extensia®, a concrete with limited shrinkage for large industrial surfaces, and Chronolia®, an ultra-quick-setting concrete, are products designed for the volume construction market. They are currently used for “conventional” projects in North America and Europe. Similarly, more and more private houses are being built with self-leveling concrete such as Agilia®, which elimi••• PAGE 18 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO nates the vibration stage on jobsite. There are just as many properties that create gains in productivity for service companies. In the cement sector, Lafarge brought out its new Sensium® generation of 100% dustfree products two years ago. The Japanese teams that developed this technology were guided by the results of a study carried out with users to define their expectations. The result was an improvement in working conditions and productivity on construction sites as well as in the quality of the constructions. Chape Liquide®, for its part, is a ready-to-use mortar, self-smoothing and self-leveling, which enables perfectly leveled floors to be produced. Additionally, it is an ecological product, the manufacturing processes of which consume very little energy. Generally, the Group’s efforts in terms of R&D have been focused over recent years in looking for solutions that are more respectful of the environment. The Gypsum Business line is not left out. “We have just launched WAB, the first plasterboard that is not afraid of water,” confirms Bernard Fauconnier, SVP Sales, Marketing and Innovation for the Group’s Gypsum business. Perfectly suited for use in a damp atmosphere, it can be stored for six months in the rain and cold weather without degrading or losing its properties and it can be cut with a simple cutter. Staying with the Gypsum range, Lafarge markets Synia®, the first plasterboard with four thin edges that enables a perfect finish to be obtained more rapidly. Pregymax® is a A PERFECT FINISH Thirty-three storeys, 147 meters high, 1,217 supporting columns and 65,000m3 of concrete: these few figures give an idea of the size of the project conceived by architect Zaha Hadid for the new headquarters of the maritime transport company CMA-CGM in Marseilles (France). The building, in concrete, glass and steel, comprises two buildings joined together by a double wall made out of glass. The project, which began in 2006, was given to GTM. This company, taking into consideration the technical constraints and deadlines imposed, decided to call on the know-how of Lafarge Concrete France. In addition to the complex geometry of the 1,217 supporting columns in the tower, as well as all the angular and variable sections, it had to have a finish that was very clear and perfectly smooth in appearance. They achieved this using a selfcompacting C60 concrete, which enabled the filling to be uniform and provided a perfect quality finish, without vibration. To keep up the pace dictated by the project, Lafarge installed an on-site plant to produce 100m3 every week, backed up where necessary by the nearby facility in Le Canet. The work was completed in October 2008. Handover of the building is scheduled to take place by the end of the year. I Restricting Lafarge’s added value to just one of its product ranges would be simplistic. The Group’s strength enables it to offer, for reference projects, on-site production tools, dedicated teams and delivery systems and even to take overall responsibility for project logistics. For example, the Group’s Australian subsidiary has developed the SkyCrane system, with a platform truck fitted with an articulated arm that allows largesized plasterboard to be delivered and set down in the place where it is to be installed. One of the Group’s main strengths lies in its ability to listen to its customers and anticipate their needs, and those of its customers’ customers. For example, staying with Gypsum, Lafarge has cemented its presence on the French market in the construction of hospitals by setting up a proactive initiative with hospital engineers. “They have particular constraints in terms of aesthetics, phonic and thermal insulation, etc.,” explains Bernard Fauconnier. “We have studied these in detail in order to get involved from the outset and offer them turnkey services genuinely adapted to the requirements, including the supply of products and approved installers.” This approach has been replicated in other countries and in other sectors: in France for schools, in the United Kingdom for hospitals and in China for hotels (“Total Care” concept). The Group’s Concrete business has adopted an identical initiative for its decorative Artevia® range and its Agilia® self-leveling concrete. In order to do that, it has used its networks of approved application contractors trained in the techniques of laying these products. “This type of service, which simplifies our customers’ work, whilst guaranteeing the quality of the end result, is enjoying growing success,” confirms François Redron. “We are also in the process of extending it to Extensia®.” Another initiative that has been successfully replicated in other countries is the customer support center hotline set up in France, in Avignon, to provide technical support and order tracking. This is a genuine advantage that complements the support and monitoring provided by the technical/commercial teams. “All this helps us to be the number-one choice for our customers,” concludes Bernard Fauconnier. “This strategy of differentiation, which means that we are always listening to our customers, is the driving force behind all that we do.” I CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 19 MOVING FORWARD IN OUR BUSINESSES M. AZZAOUI, Quality & environment manager, Lafarge Morocco > Exemplary coordination © DR Médiathèque Lafarge “In order to produce the seahardening cement, the Meknes factory began by preparing a special type of meal to create a lower grade clinker in tricalcium aluminate. Grinding tests were conclusive and the cement produced met the specifications demanded by our customer perfectly. The coordination between our two sites – Meknes, where the clinker was made, and Tangier, which produced the cement – was exemplary. Such painstaking work, as well as adherence to commitments in terms of quality, quantity and timescales, enabled us to land other landmark contracts.” Tanger Med Harbor, Morocco. Tanger Med, the Moroccan challenge Lafarge played a major role in the construction of the Tanger Med maritime terminal, on the northern coast of Morocco. A technical, economic, logistical and human challenge. Between 2003 and 2009, more than 600,000 tons of cement were supplied by Lafarge for the construction of Tanger Med and its associated infrastructure. This figure alone indicates the scale of the challenge faced by the Group’s Moroccan teams on this monumental project. It should also be noted that there were additional requirements to be met in terms of quality of use, storage and logistics. For the terminal alone, the Bouygues Group wanted to use various types of cement: a sea-hardening version, capable of withstanding deterioration caused by the marine environment, and a version based on fly ash, with greater flexibility and durability than traditional products. “It was a real challenge,” recalls Abdeslam Bikdir, Vice-President Sales of Lafarge Morocco. “We had never previously produced sea-hardening PAGE 20 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO cement in Morocco. Our factory in Tangier was unable to supply clinker of this type, the Tetouan factory was not finished and we had to turn to our other facility in Meknes, 320 kilometers to the south. As well as the transportation constraints this caused, we had to modify the meal in order to produce this clinker for sea-hardening cement, before transporting it to Tangier to make the cement.” The specifications also dictated that there should be a storage system close to the site, together with strict control procedures on the quality and temperature of the cement supplied. Just as strict quality control was applied to the fly ash cement, produced in Tangier from raw materials transported from Casablanca. “The Besix-Somagec Group, our customer, imposed many conditions, particularly in terms of the temperature of the cement used and the concrete delivered,” recalls Othman Ouçama, who was General Manager of Lafarge Concrete Morocco at the time. “We asked our colleagues in the Cement division to supply us with metallic silos for storage (2 x 800 tons); we invested in a specific type of water cooler and we covered the areas where the aggregates were stored, including the quarry. Despite that, we had to double up on the teams to work at night during the hottest periods of the year. It was the only way to comply with the specifications: drums to be delivered at 25°C, with a tolerance of just 1°C!” Although the technical properties of the concrete required were not out of the ordinary, Lafarge still had to use new admixtures and previously unreleased materials in order to obtain the desired quality. This was an additional difficulty that increased considerably between the beginning and the end of the contract. “It was all the more complex because we had to work at such a furious pace,” continues Othman Ouçama. “At the height of the project, production was up to 1,200m3 per day and we delivered in total more than 320,000m3.” This made it the biggest contract ever signed in Morocco. The quality of the services provided by Lafarge, and an exemplary coordination in the Group’s Cement and Concrete businesses, reinforced its image and paved the way for other landmark contracts. I M. LAMTOUEQ, Regional sales director, Lafarge Cement > Meticulous work “Twelve months of trials, tests and quality controls were needed before the contract with the Société de Réalisation du Port de Tanger Méditerranée (SRPTM) was signed. During the pilot phase, 25 samples were sent to the Bouygues laboratory, in Paris. Special logistics were required to ensure the transportation of the clinker from Meknes to Tangier within the given time. The tanks M. GHORFI, were prepared and emptied; Somagec representative tests were then conducted at each > Genuine added value phase of production. The Western “Our experience of the coEuropean Technical Center was operation with Lafarge has been also involved in the cement very positive. The investment they quality controls. This meticulous committed in terms of materials, work enabled us to meet all the the quality of their support client’s technical specifications through to project completion and and to win this contract.” also their adherence to the demands of the prime contractor M. ARNOUA, should be particularly emphasized. Director of SRPTM (Bouygues Group) at the time of the building site The close co-operation that was established between our technical > Effective customer service department and Rachid Chadly, “Lafarge Morocco made a huge profit head at Lafarge’s mobile contribution to the success of this concrete center, enabled them to project. This was due to the special meet our expectations perfectly. quality control of contractual We were able to offload any parameters that they carried out in problems related to the production the factory, their compliance with of concrete 24 hours a day, as well the delivery schedule and their as issues related to logistics, adherence to the temperature of safety, personnel management, the cement that they delivered to equipment maintenance, etc. us. Besides the technical aspects, To be able to depend on one of their main strengths during a subcontractor such as Lafarge is this project was undoubtedly their a genuine added value.” customer service performance.” CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 21 © Jean-Baptiste Vetter MOVING FORWARD IN OUR BUSINESSES Manufacture, construction, demolition... the life cycle of materials is variable. Mindful of conserving natural resources and to develop economically viable business streams, Lafarge is endeavoring to make concrete and gypsum recycling a more common process. It is a way of giving these materials a second life and also of increasing profitability. The second life of materials r ecycling waste materials represents one of the most effective ways of reducing the use of natural resources. Moreover, increasing energy costs and industrial waste landfill make recycling an economic necessity. By reducing production costs, recycling also enables a company’s profitability to grow. Committed to limiting its ecological footprint and secure its long-term performance, Lafarge, a pioneer in industrial ecology since the 1970s, is endeavoring to make the best possible use of gypsum and concrete waste. “Plasterboard is recyclable, almost infinitely. Indeed, gypsum crystal can be hydrated and dehydrated in several successive cycles, which makes it an outstanding material for recycling,” explains Pierre Bourgoin, project leader for building waste recycling and demolition in the research and development department of the Group’s Gypsum Business. “As far as concrete is concerned, it is an inert and nonpolluting material,” confirms Pierre de Prémare, Vice-President Environment and Public Affairs in the Group’s Aggregates & Concrete Business. By reusing it, we’re reducing the extraction of aggregates in natural sites.” Optimizing the manufacturing chain On deconstruction sites, materials are sorted and separated with a view to recycling. PAGE 22 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Recycling starts at the manufacturing stage. Starting and stopping the production line for plasterboard already generates 4% to 5% of the scrap. For a long time, Lafarge has been reusing this waste material by equipping most of its plants with recycling points where the components are dehydrated and ground down in order to be used for ••• CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 23 © Jean-Baptiste Vetter MOVING FORWARD IN OUR BUSINESSES MULTIPLE WAYS TO RECYCLE In the United States, nearly 700,000 tons of concrete aggregates have been reused in the construction of the Anaheim freeways in California. A mobile crusher installed on site to reprocess bitumen and concrete has enabled $5 million to be saved on the purchase and transportation of aggregates. In Chesapeake Bay, on the east coast of the country, the crushed concrete coming from road construction has been converted into artificial basins for oyster farming. The pores and irregularities of the material in fact create a suitable habitat for mollusks to develop, the cavities enabling them to escape from their predators. ••• making new plasterboard. So, thanks to the storage and reprocessing area installed in the plant, 5% of the gypsum used by the Delfzijl factory in the Netherlands comes from its own recycled offcuts. The recycling site in Bristol, in the United Kingdom, thus handles 300,000 tons of production waste each year, which represents the amount of natural resources preserved. With regard to ready-mix concrete, on the other hand, production losses are minimal. “Less than 1%,” estimates Pierre de Prémare, “is the proportion of concrete remaining at the bottom of the drum after delivery or unused on the construction site.” The concrete is then emptied into a separator, which breaks up the aggregates of the slurry, a sand and cement mixture. These reusable components are used for making new concrete. “The particular nature of this material is that its composition is sometimes very specific. There are more than hundred types of concrete, each with its own composition. It is not always possible to recover the components,” notes Pierre de Prémare. On the other hand, waste extracted from drums on trucks can easily be emptied into molds, in order to make useful items for construction sites, such as blocks for signposts. Waste water, extracted in 75% of production sites, is re-utilized for making concrete or for washing drums, depending on their fine material content. In France, the Carpentras plasterboard plant, in the Vaucluse, was fitted out with a recycling plant at the end of 2001. Gypsum waste A dual recycling opportunity goes through several successive grinding processes in order to reduce Made up of gypsum and paper, plasterboard is easy to recycle. On construction sites, it must be cut to size and the unused pieces represent on average 5% to 10% of the total. To recover the components requires fixed or mobile facilities fitted with grinders and sieves to be available, in order to separate the paper from the gypsum. “Unlike demolition, deconstruction consists in dismantling the building selectively, by separating materials from each other,” points out Pierre de Prémare. “This system is starting to be put into practice, notably in Great Britain where Lafarge handles recycling chain logistics.” The gypsum recovered is used as a raw material for the production of plasterboard or cement, notably in northern Europe, Brazil and South Korea. It can also be used for fertilizing agricultural soil or for stabilizing the waters of a lake, in view of its high calcium content. For its part, paper is converted into mulch for animals, then into fertilizer after being used for livestock. Mixed with the size of particles to less than five millimeters. The components extracted go into the composition of the gypsum produced. The production site therefore manages to recycle all of its waste. The Guerville site, near Paris, is a former chalk quarry that has been used since 2002 for recycling road-leveling materials, notably coming from the A86 highway. In 2008, this activity enabled thousands of tons of crushed concrete to be resold. In Great Britain, the average cost of landfill waste is now up to €72 per ton, compared with €46 in 2003. Lafarge has set up a recovery facility for plasterboard on construction sites: bags or skips are provided by the customer, who undertakes to separate the gypsum from other types of waste. Lafarge then recovers the material and processes it. I PAGE 24 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Recycled concrete blocks are crushed to obtain a gravel-cement mix, used as hardcore for roads. other waste material such as recycled oil, it also represents an excellent combustion material for ovens in cement works. “It is an up-and-coming solution for creating synergy within the Group,” underlines Pierre Bourgoin. At the end of its life, concrete is a precious resource. The blocks recovered from deconstruction sites, separated from doorframes and other types of framework, are broken up with a pneumatic drill. Stripped of the metal (which is resold to scrap metal merchants) and then crushed, the recycled concrete is used particularly as hardcore for roads. “It is a much sought-after product that compacts well and is less expensive than natural aggregates,” remarks Pierre de Prémare. In Japan, almost all waste material is recycled, compared to about a third in Europe. Recycling is beneficial in more than one way, since by encouraging the use of recycled materials or substitute combustible materials, the Group can also optimize its profitability. Different situations according to country The worldwide map for recycling is currently still highly contrasted. Depending on the region, waste material recycling practices have devel- oped to a greater or lesser degree. “To install a profitable recycling facility, notably for end-of-life products, it is necessary, on the one hand, to have significant volumes of material available and, on the other, outlets for disposing of the recycled products. Higher volumes create the need for outlets – and vice versa – but the circumstances for the development of these facilities are not favorable everywhere. In Romania and India, for example, very little is demolished. They get rid of very little waste. In Europe, on the other hand, deconstruction is widespread and highway construction and renovation creates a high demand for recycled materials. Facilities can therefore be developed easily,” explains Pierre de Prémare. In order to encourage the development of recycling practices, Lafarge endeavors to take advantage of local situations and studies best practices implemented on each site in order to deploy them in other regions where conditions are similar. Experience is now being shared widely across the whole sector, since the Group has been tasked with piloting the cement initiative being conducted under the auspices of the World Business Council for Sustainable Development (WBCSD), an umbrella group for more than 190 international companies. I CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 25 © Jacques Grison/Rapho/Médiathèque Lafarge MOVING FORWARD IN OUR BUSINESSES Loyal to its values and its desire to make the most of its employees’ skills, the Group is working on a strategy to track the development of its employees throughout their careers. This includes occasions when it has to cut back or cease activities at one of its industrial sites. Extensive personal support plans have therefore been implemented to secure its employees’ future. A responsible employment policy i Consultation and dialogue are at the heart of the Group's employment policy. n the past decade, Lafarge has more than doubled the number of its staff, going up from 40,000 employees in 1997 to nearly 85,000 people in 2009. “However, we have retained strong company values, together with a great sense of belonging to the Group,” explains JeanPaul Berquand, general manager at Lafarge SA headquarters in Paris, France. “In times of economic difficulty, the company has a social responsibility. If we forget that, we’re scoring an own goal. A company is not there just to remunerate its shareholders. It also has a duty to inspire its employees, to support them if there is a problem.” Since the 1980s, although French industry has been going through a period of major restructuring, which has not spared the cement sector, Lafarge has implemented an employment policy that puts the individual at the forefront of its concerns. The Group has always anticipated developments: it has been the central thread of its strategy since it was established. Although the crisis that we are currently experiencing is significant, it must be remembered that between 1974 and 1984 demand for cement fell by 30%. ••• CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 27 MOVING FORWARD IN OUR BUSINESSES “ In times of economic crisis, we owe it to ourselves to remain steadfast in our values.” © Nicolas Tavernier / RÉA PHILIPPE JACQUESSON Instructor training a young female apprentice bricklayer. Restructuring in the cement industry has also resulted in significant staff reductions. “The fact that this socially responsible policy was implemented during a period of crisis is not insignificant,” adds Philippe Jacquesson, Vice-President, Social Policies for the Group. “In times of economic crisis, we owe it to ourselves to remain steadfast in our values.” An architect of many innovative initiatives in terms of restructuring and vocational retraining, Jean-Paul Berquand sums up Lafarge’s beliefs in this simple formula: “Let nobody face his or her employment problems alone.” Lafarge today is very much an international company. Nevertheless, from Europe to North Africa, from the United States to Africa or the Middle East, the same philosophy applies to all restructuring plans, with methods of application varying according to the local situation and the legislation in force. ••• PAGE 28 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO WORKPLACE INTEGRATION IN BRITTANY Apart from internal retraining plans, Lafarge has also given priority to integrating the long-term unemployed into local companies. In the Morbihan region of Brittany, 750 jobless people were trained in building trades, thanks to a scheme called PRIÉ (Rural Plan for Integration through the Economy), which was conducted between 1995 and 2002. Supervised by professionals, in consultation with local craftsmen and the Chamber of Trade, unqualified people had the chance to be trained in building trades, obtain qualifications and find work. This innovative initiative also enabled architectural heritage in the city center to be restored and unoccupied houses to be renovated and converted into social accommodation. This was a fine example of integration, with benefits on both sides. I A relationship based on trust Many factors can lead to staff reductions: modernization of a production site, exhaustion of natural resources in a quarry or even the vagaries of supply and demand. However, familiarity with the local economic situation and the study of redeployment possibilities within the Group, as well as various support and training initiatives for redundant employees, enable the impact of a reorganization on individuals and their communities to be reduced. An activity of such magnitude is clearly not done on the spur of the moment: it requires significant resources and, above all, wide-ranging consultation in advance. “The key factor is consultation with the social partners on the causes of the restructuring and on measures to take to limit its social impact,” explains Anne Larrat, manager of international social relations for the Group. “The social partners understand better than we might think the reasons behind a restructuring, since we are working with trust and transparency. We are also in a long-term industry where we can anticipate economic changes; this enables better organization and therefore greater clarity in decision-making.” In-depth preparation together with local players, management involvement and dialogue with social partners is all vital for building a coherent vocational retraining program. “Lafarge favors a consultation phase between management and staff representatives,” explains Philippe Jacquesson. “Committed dialog enables measures to be defined that will be integrated into the social plan: identification of positions to be filled and redeployment possibilities, advertised notably by our in-house employment agency, assistance with training and mobility. All these measures can soften the impact of reorganization considerably. Lastly, the third phase consists in implementing the social plan with general ongoing support for each of the employees.” Personalized monitoring and support In many of the emerging countries, Lafarge’s production sites are often located in rural areas. The biggest retraining opportunities are therefore provided by the agricultural and craft industries. In this particular context, support consists mainly in help with setting up small companies, which revitalize the local economic fabric. Drawing on experiences from France and Morocco, Lafarge’s subsidiary in Jordan, Jordan Cement, following the reorganization of its business in 2007, has implemented a plan of voluntary redundancies accompanied by support with the setting up of small and medium-sized companies. Since its launch in July 2007, this initiative has enabled 194 projects to see the light of day, in sectors as diverse as agriculture, trade, services and transport. The initiative, which ended up with 584 jobs being created, contributed to the economic development of a region badly affected by unemployment. ••• CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 29 MOVING FORWARD IN OUR BUSINESSES MOHAMED OULAD AISSA AND SAÏD BEN AMEUR, former employees at the Tetouan plant, set up a transport company that now employs five people. In 2003 and 2004, a huge retraining plan in Morocco, which was put in place following the closure of the Tetouan factory and the clinker plant in Tangier, helped to secure the future of those people laid off. In 2003, Lafarge closed the old Tetouan cement works, which was obsolete and had insufficient production capacity, “ One of the key reasons for its success is that our employees saw the opportunity to create jobs for those close to them.” JEAN-MARIE SCHMITZ to build a new factory that required half the number of people. “In order to provide vocational retraining for employees, we went beyond our legal obligations, because we were determined to ensure the long-term future of each one of our employees,” points out Jean-Marie Schmitz, CEO of Lafarge Morocco. This same desire to support our employees prevailed the following year, when the exhaustion of limestone reserves in the Tangier quarry forced Lafarge Morocco to convert the city’s cement works into a crushing plant. PAGE 30 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Some 235 people in Tetouan and Tangier, two cities on the northern tip of the country separated by 60 km, lost their jobs. To help them find a stable position, a support and retraining plan was implemented at each of the two sites. A team of three people in Lafarge Morocco was therefore given responsibility for ensuring personal support for the employees laid off and for helping them to identify the market sector in which they could find employment. Two training agreements, made with the OFPPT (Office for Vocational Training and Promotion of Labor) and the Ministry of Agriculture, enabled them to acquire the necessary additional skills to succeed with their project. Lafarge Morocco also provides them with financial assistance, increasing in line with the number of jobs created, with a ceiling of 150,000 Moroccan dirhams and support for a period of two years. Mr Ja’afar Aranki and his son Haytham Aranki in their building materials store in Al Fuhais, Jordan. A virtuous circle for local employment “One of the key reasons for its success is that our employees saw the opportunity to create employment for those close to them,” notes Jean-Marie Schmitz. Encouraged by this dynamism, the operation, conducted in close consultation with the UMT (Moroccan Labor Union), a union with factory representation, far exceeded expectations. Out of the 235 people laid off, 9 found a new job and 226 started their own business. These small businesses created 544 jobs in the region, which is an average of more than two jobs for every person laid off; more than four years later, only 14 of these small businesses have failed. I In Europe and North America, legislation, social welfare and the employment market are often more favorable. For all that, retraining plans are put together in those countries with the same concern for dialog and effectiveness. In France, where the Employment Code is particularly demanding in terms of social welfare, Lafarge goes beyond its legal obligations. “Our credibility depends on it,” acknowledges Philippe Jacquesson. “We can’t talk about our socially responsible corporate values and just do the bare minimum in practice.” In Europe as well, projects to set up companies are encouraged within the scope of vocational retraining plans. “The classic example is the local provincial cafe,” notes Jean-Paul Berquand. “However, consultancy or small/medium-sized companies/industries are also very common. Furthermore, when they appear to be solidly based, they are strongly encouraged and supported.” When reorganization is conducted through consultation and with sufficient resources, it can represent an opportunity for former employees to be retrained, to find a new career direction, to take on new challenges or to consolidate and apply their experience. I ••• © DR Lafarge Jordan Cement © DR Tetouan and Tangier: notching up successes CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 31 The country is modernizing and the market for accommodation and infrastructure is exploding. Lafarge intends to play a front-line role in this process and is getting itself ready. © Pascal Parrot / AFP MOVING FORWARD IN OUR BUSINESSES Algeria: a huge leap forward l PAGE 32 | L A FA R G E | M AY 2 0 0 9 | afarge and Algeria share a common history that goes all the way back to 1864 with the major Suez Canal project, when the Group decided to set up in Algeria to produce the 110,000 tons of lime required for this ambitious project. This history of cooperation was interrupted in 1962, at the time of the country’s independence. For some years the two partners had wanted to renew their links. A first step was taken in 2002 with the setting up of a joint venture for the Gypsum business. The purchase of Orascom Cement in 2008 confirmed the Group’s return to the country. “Algeria is a very attractive country economically,” notes Didier Riou, manager of Southern Europe, the Mediterranean and Africa for the Aggregates & Concrete business. In the construction sector, needs are increasing at a very fast pace. The Algerian government thus intends to build more than a million homes as part of the 2005-2009 Growth Support Plan. In 2008, given that the Algerian government is committed to a policy of privatization, Lafarge acquired 35% of the cement works at Meftah, 20 kilometers from Algiers, and a ten-year management contract. As Laurent Bourgoing, its CEO, explains, “our investment programme will enable us to modernize this factory, which dates from 1975, to achieve a production capacity of 1.1 million tons by 2010, and to improve its environmental performance.” By implementing its standards with regard to safety, processes, training and the environment, Lafarge commits to ••• CRESCENDO Entrance to a subway station under construction in the city of Algiers. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 33 MOVING FORWARD IN OUR BUSINESSES Construction of the new town of Ali Mendjeli, near Constantine (Algeria), by a Chinese consortium. implementing its policy of excellence on this site, as it does on all the sites that it operates. The Algerian cement market now represents over 17 million tons per year (by way of comparison, France uses 20 million tons) with an annual growth of 6% to 10%. “In Algeria,” explains Guillaume Roux, Executive Vice-President and Co-President of the Group’s Cement Business, “we are the leading cement manufacturer and the only non-Algerian company, even though all the public sector companies carry more weight than we do. It is our desire to take part in the modernization and development of the cement industry.” A long-term commitment SOLUTIONS TAILORED TO REQUIREMENTS Cherif Dinari, general manager for Lafarge Concrete in Algeria, joined the Group quite recently from the public building and civil engineering works sector. He acknowledged that the French Group’s arrival had “multiple benefits for the country’s development owing to its mastery of the trade, its cutting-edge innovations and the quality of its services”. Lafarge will thus make a decisive contribution to far-reaching, lasting changes to the country’s culture. Building and civil engineering works professionals and private-sector builders will realize the advantages of using readymix concrete. Lastly, there will be major opportunities in the aggregates sector, There is also a proliferation of projects in the highways sector. A quarter of the present network is in a poor condition and half of the infrastructure is in need of repair. Work is in progress on the east-west freeway, which will link the main cities in the north of the country. Work on the second ring road for Algiers – a 65-kilometer freeway – is also underway. More than 600 kilometers of expressways are planned, as is the construction of 3,700 kilometers of new highways and the repair of 14,000 kilometers of existing highways. A subway and a new tramway are now being built in Algiers, the contract for building Line 1 having been given in 2006 to a consortium led by the French company Alstom, one of the global leaders in energy infrastructures and rail transport. To finance these projects, the Algerian government has significant financial resources as a result of oil and gas production. It has established a revenue regulation fund, drawn from budget surpluses, calculated since the financial law of 2008 on a base price of $37.50 per barrel. The country is therefore totally debt free. It is not a speculative approach: it has the needs and now the means to satisfy them. Here as elsewhere, Lafarge is committed for the long term. “notably in the area of crushed sand, which is used for making concretes, given that the government plans to stop the use Exceptional growth of alluvial sand, and dune sand on occasion, in its concern for Lafarge thus operates a gypsum plant with a capacity of 150,000 tons at Bouira in Kabylie, as a joint venture with the Algerian group Cosider. Furthermore, in the concrete sector, the rising demand for readymix preserving the environment.” I PAGE 34 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO © Édouard Caupeil / MYOP ••• is opening up promising new perspectives. “Demand basically comes from construction site plants for major infrastructure projects,” explains Emmanuel Beeker, director for the North Africa and West Africa region. “We have also developed our activities in a fixed-plant network.” By June 2009, the Group will have a total of twelve plants across nine sites. “Our growth is exceptional. In 2007, we only had four,” clarifies Emmanuel Beeker. Lafarge also operates one aggregates quarry – with an objective of 1 million tons per year from 2009 – and is gearing up to put two others into operation. In fact, the Algerian cement and concrete market is consolidating. For Ayman Anis, general manager Lafarge Algeria, “the Group’s dynamic contributes and will continue to contribute substantially to bringing about this development, notably by passing on their know-how and creating activity wherever they set up their plants.” Other overseas companies will certainly appear in the future. However, Lafarge will have already gained a solid foothold in the country. I CUSTOMIZED SERVICES Lafarge now offers Algeria quality products and services, which complement the products that until now were only sold by public sector companies. With its wealth of experience and expertise in the cement sector, the Group has gained a firm foothold on this buoyant market and enhanced the complementary nature of its product offering. Ahmed Abdelaziz, Lafarge Cement sales director, is quick to underline that Lafarge is currently the only company in the Algerian cement industry to supply white cement of such an exceptional quality, in addition to a full range of services. This notably enables them to offer personalized services to each of its customers: delivery to site, after-sales service, technical back-up to deal with quality issues… as many services as it takes to ensure that Lafarge can strengthen its market competitiveness in the future. I CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 35 contri buting Training truckers and haulage contractors to drive more responsibly improves road safety. © Kenneth Gerhardt - Getty Images to a sustainable world © Médiathèque Lafarge - Réa - Hamilton De Oliveira CONTRIBUTING TO A SUSTAINABLE WORLD EAST AFRICA With training programs and higher standards, Lafarge strives to establish safer driving practices, in partnership with East African haulage contractors. An initiative that is inspiring government policy and other companies in the area. Road safety makes headway with transporters trainers pair in random “road patrols” to witness and reward good practices, but also to observe and stigmatize violations. A truck driving through Haller Park, Kenya, a rehabilitated quarry, now a nature reserve. After a disappointing first campaign in 2005, Lafarge East Africa named Magdalene Mwende Group Safety Coordinator, in 2006. “One in every seven trucks carries a Lafarge product! We were determined to use our influence to work with suppliers to save lives and improve road safety,” she explains. In August 2006, Magdalene and her team launched their award-winning Driving for Excellence program across Kenya, Tanzania and Uganda, with the active support of every transport company, supplier and customer driver who works with Lafarge. Now a basic requirement for any driver carrying a Lafarge product, the Defensive Driving Training & Certification and the Drivers’ Safety Promise combat the prevailing Ajali haina kinga mind-set (a Swahili expression meaning “Accidents just happen”), and some very risky habits. Drivers must score above 70% to earn the Road Safety Pass required for entry to all four plants. Once a month, transport managers and Training and spot checks FIRST RESULTS But prudence behind the wheel is not enough. Reducing the risk of accidents also means good vehicle maintenance. A mandatory checklist excludes unsafe, ill-equipped trucks from entry to plant sites. Spot checks carried out at loading and unloading yards further ensure safety compliance. The two-year campaign has been a great success. In the words of George Alusa, Safety Manager with transporter Paddy Distributors, “We have had no fatal incidents involving our trucks since 2006.” “Other firms come to study our methods or ask for advice,” says Magdalene, “and Lafargetrained drivers are being snapped up by other companies! That’s good news. Even the Kenyan government has shown an interest in the program, for training drivers has clearly improved road safety in the region.” The first campaign may have reached its term, but Lafarge and partners will maintain standards, while initiating new safety measures such as on-board GPS, to help transporters to keep even closer tabs on their drivers. I November 26, 2008, celebrated the end of Lafarge’s two-year Driving for Excellence campaign, commenced in 2006. Positive results were reviewed in the presence of Lafarge’s 50 transport suppliers. Kenya’s Minister of Transport and Traffic Commandant were also on hand to commend this initiative that has significantly improved road safety. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 39 © Getty Images - Walter Bibikow BRAZIL CONTRIBUTING TO A SUSTAINABLE WORLD To reduce the carbon footprint of its plasterboard production processes, Lafarge is exploring alternative fuel solutions. In Brazil, using cottonseed oil improves plant performance while reducing CO2 emissions. Cottonseed oil, the flower of biofuels If the Araripina plant (Brazil) is powered exclusively by biofuels today, it is thanks to the combined determination of Lafarge and a local entrepreneur. “With heavy oil our biggest cost and a primary CO2 culprit, we began exploring alternative fuel options in 2004, explains plant manager, Luciana Campos. “We tried five different solutions in all, from glycerine to rapeseed oil.” A cost-efficient, low impact by-product of the cotton flower, cottonseed oil won the trials in 2005. Extracting oil from the cottonseed has no ill effects on water resources, and cotton does not compete with other vital crops, as it is already grown in the region. The initial supplier made a satisfactory first delivery, but then encountered a number of manufacturing hiccups. The quality of the next batch did not meet plant standards. What’s more, the 3,000 km distance proved impractical, and far from ecological. A better solution therefore had to be found… “A man from the company came to follow up and noted the plentiful cotton fields in our area. He saw the potential for a local factory and asked if we could help him set up, in exchange for oil at first,” recalls Luciana Campos. Fourteen PAGE 40 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO AN ADVANCED BIOFUEL CULTURE months later, after a series of careful trials to get oil, pressure and temperature ratios just right, production was launched. The plant was exclusively powered by cottonseed oil by September 2007, and has been ever since. The advantages of green energy As a result of using green fuel, the factory’s CO2 emissions have decreased considerably, without counting the carbon benefits of local delivery. Up until the end of 2008, when petrol prices were still soaring, the new cotton-derived biodiesel shaved 30% from the plant’s energy bill. “And now that gas has dropped, we are still saving a significant 10-15%. Best of all, the switch has improved plant performance and competitiveness, our enterprising supplier has created ten local jobs, and residual materials from the process are sold to Siemens!” shares Luciana Campos. Recycling is another golden key to sustainable development. I Brazil began experimenting with bioethanol even before the 1970s oil crisis. Such a strong alternative fuel culture is helping Lafarge to meet its sustainability ambitions. In 2007, our Brazilian kilns achieved 26% replacement of fossil origin energy by the use of vegetable biomass, thus reducing CO2 emissions by 156,000 tons. Plentiful cotton crops in the area around Araripina guarantee the factory’s fuel supply. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 41 © Jesper Mattias CONTRIBUTING TO A SUSTAINABLE WORLD WO R L D With a long-standing commitment to a policy of sustainable development, Lafarge is intent on supporting the development of the construction sector towards more sustainable practices, by creating new, more environment-friendly materials and taking part in the debate on the construction systems of tomorrow’s world. A global commitment to sustainable construction INTERNATIONAL IMPACT Arousing strong interest, the WBCSD EEB project has attended more than 75 international conferences since its launch and is generating growing enthusiasm among construction industry players worldwide. 1. The World Business Council for Sustainable Development (WBCSD) unites some 200 international companies in a common commitment to sustainable development. Its members come from more than 30 countries and 20 major industrial sectors. 2. Lafarge, United Technologies, Actelios, ArcelorMittal, Bosch, Cemex, DuPont, EDF, GDF Suez, Kansai, Philips, Skanska, Sonae Sierra, TEPCO. WAB plasterboard, 100% sustainable house, designed by architect Richard Hawkes, Staplehurst, Kent (UK). PAGE 42 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO Contributing to sustainable construction In the field of sustainable construction, the verdict is unanimous: we must move quickly... and there is still a long way to go! For global economies, particularly in emerging countries, will have increasing needs for buildings and infrastructure to support their economic and social development. Fully aware of the importance of this universal challenge, Lafarge attaches great importance to reducing the environmental footprint of both its activities and its materials, which play a vital role in supporting worldwide development. Improving its industrial installations, protecting natural resources and biodiversity, and reducing waste and greenhouse gas emissions in its processes... these are just some of the goals which Lafarge has set out to achieve. In 2009, for example, the Group reduced its absolute CO₂ emissions per ton of cement produced in industrialized countries by 10%, compared with 1990, and is approaching a 20% reduction in terms of its net worldwide emissions. “In 2008, Lafarge enhanced its understanding of sustainable construction after adopting a scientific method known as Life Cycle Analysis (LCA), which we applied to buildings. This methodology is now used by our research center,” explains Constant Van Aerschot, director construction trends – Group. “We are working on reducing the environmental footprint left by our material, while developing new construction solutions made possible by the materials we produce. This approach is a central part of our innovation process,” as evidenced by our research and development budget, more than half of which is devoted to the manifold challenges arising from sustainable construction. Towards self-sufficient energy buildings Although Lafarge is master of its own products, a building’s energy performance is the result of an architectural design and the selection and intelligent integration of a great many materials and equipment. To make its voice heard in the building energy efficiency debate, in 2008 Lafarge took on the joint chair of the Energy Efficiency in Buildings (EEB) project, under the aegis of the WBCSD.1 This project sets out to develop a vision of a world in which buildings consume zero net energy. “The LCA of a building over 50 years demonstrates that 80% of overall energy is consumed during its period of usage,” explains Constant Van Aerschot. Each of the 14 project members2 contributes with its products and services to achieving the project’s vision. In 2009, EEB published a report that is a genuine call to action for all construction industry players to change the way buildings are designed, built and used. “Action is vital,” stresses Christian Kornevall, head of the EEB project, “because buildings represent more than one-third of global energy demand and 60% of today’s buildings will still be around in 2050.” The road to more sustainable construction methods is clear. Lafarge is on the move. I CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 43 © Fiaga S.A. / Architecte Santiago Calatrava CONTRIBUTING TO A SUSTAINABLE WORLD S PA I N A wander round Oviedo’s conference and exhibition center is like a journey. It gives the impression of embarking on a ship of the future, feeling the sea breeze at the heart of Asturias, being at the center of a monument that unites all the elements with power and elegance. Scheduled to open in 2009, the building designed by Santiago Calatrava, sculptor/architect made famous by the curved and original structures of his creations, harnesses the individuality and boldness of Spanish architecture. An oval playing tricks with the light Oviedo’s conference and exhibition center in Spain is an exceptional work, as much for its architectural form as for the technology required to build it. Guided tour of a 21st-century work of art, designed by architect Santiago Calatrava. On the threshold of the congress hall… PAGE 44 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO The main, egg-shaped building has two floors. Arranged under structures of white steel, it houses a huge concourse, an exhibition center and a main hall with over 2,500 seats: a national record. Other halls more modest in size are set aside for staging conferences. Along its façade there is an array of moving panels that open and close according to the time of day and the season. This vast tilting sun blind is a clever way of providing natural light, while changing the external appearance of the building. Quite apart from its architectural elegance, it is a feat of technical achievement: the 31 moving panels measuring 45m x 120m, perched at a height of 70 meters, required more than 800m3 of ultra high performance concrete. NEW MATERIALS LEAD THE WAY Mix of styles Framing the conference center, a U-shaped structure stands 30 meters above the ground. These additional buildings will be adjacent to the Asturias regional administrative facilities, a 5-star hotel and an 80,000m² shopping mall. A large public square gives locals the opportunity to enjoy the surroundings of the conference center. Tranquility, modernism and power are the three faces of this modern center. The structure’s spirit and design are reflected on the inside in the finest details of the fittings – in the elevator buttons and the marble staircases, etc. The visitor is scarcely over the threshold of the conference center before entering a world given over to the imagination. Engraved in the floor, the verse of Octavio Paz guides the visitor through this stationary vessel, moored between spirit and substance: “The wind dies down, hear the cry of the elements, water and sand talking in hushed voices, the moaning of the jetty assaulted by the salt, the daring secrets of fire, the soliloquy of the ashes, the endless conversation of the universe.” I To extract Oviedo’s conference center from the visionary imagination of Santiago Calatrava and position it squarely in the reality of people's lives required all Lafarge’s innovation and knowhow. The construction of the building demonstrated the Group’s ability to mobilize its teams and technologies: products of high added value (high strength, selfleveling concrete, etc.) are an integral part of this remarkable work of art. CRESCENDO | L A FA R G E | M AY 2 0 0 9 | PAGE 45 striving to attain our full potential © Médiathèque Lafarge - Ignus Gerber View of the Beskoura cement plant, Morocco. STRIVING TO ATTAIN OUR FULL POTENTIAL Aix-en-Provence (France), were laid on 18 January. The aim of this €13.8 million project is not only to make these buildings a place of remembrance but also to educate people about internment and deportation during the World War II. Lafarge, which owns the site, is a founder member of the Remembrance and Education “Camp des Milles” Foundation. I At all levels of the company, personal safety is a cornerstone of Lafarge’s management approach. It is its main priority. The Group, which is using all the resources at its disposal to be the safest company in its sector, has since 2002 recorded a significant decrease in the number of workplace accidents and a lessening in their severity, thanks in the main to the Health and Safety management system implemented on all its sites. Having reduced the lost time incident frequency rate from 1.66 to 1.57 between 2007 and 2008, Lafarge is trying to drop under the 1.35 level this year. To achieve this, Lafarge has implemented a series of measures since 2006 and a new Energy Insulation Standard (EIS) will be deployed in June. Using strict and defined procedures, its aim is to neutralize the threats associated with hazardous energy sources. I PAGE 48 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO PATRONAGE A memorial for the “Camp des Milles” The first stones of the memorial for the “Camp des Milles”, near Creation of the Shareholders’ Club ENVIRONMENT CO2 : Lafarge stays on course Because its shareholders are at the heart of its strategy and their satisfaction is a priority, Lafarge set up a Club especially for them at the end of 2008. Notably by means of information bulletins, site visits and cultural events, the Group also intends to help shareholders find out about its business, values and commitments, as well as building closer links with them. I In the context of its partnership with WWF, Lafarge had set itself the objective in 2001 to reduce by 10% its absolute gross* emissions of C02 in industrialized countries, and its net* emissions by 10% per ton of cement produced in the world, for the period 1990-2010. This is far above the recommendations of the Kyoto Protocol. The world leader in construction materials seems to be well on course to achieve its commitment ahead of time, since net C02 emissions per ton of cement dropped by 16% between 1990 and the end of 2007. The 10% objective was reached at the end of the year. I A new factory in Zambia Last December, Lafarge opened a new cement works at Chilanga in Zambia. With a production capacity of 830,000 tons, this plant will enable the Group to double its production in a market which is experiencing double-digit growth. In Zambia, production will be set at 1.3 million tons from 2009. The cement works, fitted with ultramodern equipment, meets the highest standards in terms of environment and quality. Its installation represents a total investment of €90 million. I COMMITMENT Renewal of the partnership with WWF Working alongside environmental protection organizations, Lafarge is firmly committed to sustainable development. In 2000, Lafarge was thus one of the WWF International’s first Conservation Partners. Renewed in 2005, this partnership has led the Group to become involved in ambitious ecological projects, which aim to reduce its carbon footprint and greenhouse gas emissions. In 2009, © DR Médiathèque Lafarge Going the extra mile in safety © DR Médiathèque Lafarge The Palatka plasterboard factory in Florida, in the United States, uses the LOTOTO safety procedure. INSTALLATION © DR Médiathèque Lafarge © DR Médiathèque Lafarge On 12 May 2008, a violent earthquake struck the Chinese province of Sichuan. Lafarge, which lost two of its team members and whose cement works at Dujiangyan and Jiangyou were severely affected, reacted immediately. Nearly 4,000 people were taken under its wing and housed in its factory at Jiangyou, with more than 300 people in Dujiangyan. The Group also made a donation of €1.5 million to the two cities and a major collection amongst its 16,000 employees in China helped to raise 1.1 million yuans. The Lafarge Shui On Cement teams quickly mobilized for action, thus enabling production to be relaunched a few months later. I the partnership between the two protagonists will again be renewed for four years. I On top in digital accessibility Lafarge’s Internet site was designed with the intention of being accessible to all. Team efforts have paid off since the portal has received “Silver Level” certification from Accessiweb in France and European Eurocert “Level A”. This is a first for a CAC 40 company. In order to facilitate access for the partially sighted, the hard of hearing and senior citizens, the Lafarge site offers, for example, the opportunity to listen to its contents, through voice synthesis, and even browse without using a screen or mouse. I CRESCENDO * Net emissions are equivalent to gross emissions reduced by emissions linked to the combustion of waste materials. © DR Médiathèque Lafarge Solidarity in action © DR Médiathèque Lafarge MOBILIZATION | L A FA R G E | M AY 2 0 0 9 | PAGE 49 STRIVING TO ATTAIN OUR FULL POTENTIAL Presentation of the Executive Committee Lafarge recorded a strong operational performance in 2008, despite the strong market pressures at the end of the year. Moreover, it was the best in its sector. CONTACTS BRUNO LAFONT JEAN-CARLOS ANGULO Chairman and Chief Executive Officer. Executive Vice-President, Co-President of the Cement Business. Senior Vice-President, Group Communications Sara Ravella [email protected] Phone: + 33 1 44 34 58 36 Editorial director Yolaine Galhié Editor-in-chief Valérie Gautier Assistant editor Anne Larroquette © DR Médiathèque Lafarge Concept-Production Lafarge, Textuel ISIDORO MIRANDA GUILLAUME ROUX THOMAS FARRELL Executive Vice-President, Co-President of the Cement Business. Executive Vice-President, Co-President of the Cement Business. Executive Vice-President, Co-President of Aggregates & Concrete. Copy Lafarge, Textuel Printed by E-Graphics Front cover Cement and concrete breakwaters, harbor of Safi, Morocco. © Médiathèque Lafarge - Ignus Gerber Construction site of the new Route des Tamarins, Ile de La Réunion, France. Page 2 : Harbor of Tanger Med, Morocco. © Médiathèque Lafarge - Ignus Gerber “Despite deterioration in our markets in the fourth quarter, we recorded a strong operational performance in 2008. Moreover, it was the best in the sector,” Group CEO Bruno Lafont points out. In fact, the world leader in construction materials posted record operational results for 2008. The Group thus made a current operating income that was up by 9% to €3.5 billion (+ 14% at constant exchange rate). Sales for the period increased by 8% to €19 billion and operating margin increased by 20 base points to 18.6%. Despite PAGE 50 | L A FA R G E | M AY 2 0 0 9 | CRESCENDO a fourth quarter affected by the economic slowdown, the Group managed to exceed the objectives of the “Excellence 2008” plan. Against a difficult economic and financial background, Lafarge announced a €4.5 billion stock plan that “is aimed at strengthening its financial structure and market leadership in 2009, as well as putting the Group in an ideal position in anticipation of the recovery.” This notably includes new operational actions and the raising of €1.5 billion in capital with preferential rights issue. I © DR Médiathèque Lafarge GÉRARD KUPERFARB CHRISTIAN HERRAULT Executive Vice-President, Co-President of Aggregates & Concrete. Executive Vice-President, President of the Gypsum Business. ERIC OLSEN Executive Vice-President, Organization and Human Resources. JEAN DESAZARS DE MONTGAILHARD Executive Vice-President, Strategy, Business Development and Public Affairs. JEAN-JACQUES GAUTHIER Executive Vice-President, Finance. SARA RAVELLA Senior Vice-President, Group Communications. © Médiathèque Lafarge – Gérard Uféras, Jacques Grison / Rapho Very strong operational results in 2008 Back cover: Puerto Montt project, construction of a grinding station, Puerto Montt, Chile. EFC 10 1 10 7 PROMOUVO R LA GEST ON DURABLE DE LA FORÊT Printed on paper made from wood from sustainably grown trees. 7 | C R E S C E N D O | L A FA R G E B I A N N U A L M A G A Z I N E | M AY 2 0 0 9 | Number 7 “Providing made-to-measure solutions to meet the technical specifications of each customer” Lafarge 61, rue des Belles-Feuilles, BP 40, 75782 Paris Cedex 16, France Phone : + 33 1 44 34 11 11 Fax : + 33 1 44 34 12 00 www.lafarge.com May 2009 Ethics: a rising stock Cottonseed oil, the flower of biofuels Construction sites: tailor-made services