Michel Puchercos, is the Managing Director, Lafarge Africa Plc, one of the largest cement groups in Africa, a member of the French global cement giant, LafargeHolcim Group, with a huge presence in Nigeria. With decades of experience in cement industry across the world through South Korea, Kenya and Uganda, Tanzania, and France, Puchercos’ career span extensive operational and strategic experience both at Junior and Senior levels with small and medium organizations, cooperatives and multinationals organisations.
Joining Lafarge as Head, Strategy and Purchasing in Orsan, Lafarge Biochemistry, in 1998 became Director of Cement Strategy and Information Systems, Lafarge Gypsum and in 2003, the Director of Cement strategy, Lafarge Group in France. He moved into cement operations in 2005 as the CEO for Lafarge operations in Kenya and Uganda while doubling as the Chairman of Tanzania operations. After four years in Sub-Saharan Africa, he moved to Asia as the President and CEO of Lafarge South Korea, before coming over Nigeria as Country CEO for Lafarge Africa Plc in April, 2016. In this interview he shared his experience so far in Nigeria’s cement industry while also talking about the Lafarge Africa finances and sundry issues.
In the short while that you have stayed, what can you say about Nigeria’s cement market?
Nigeria cement market is dynamic and has great potential for continued growth, despite the current economic challenges. The huge market size, level of infrastructural development and massive desire for housing are positive indicators. Focus on infrastructure development by current government is quite encouraging. The people are warm and committed. Hence, there is great focus and high expectations from the LafargeHolcim Group.
Please elaborate a bit more on LafargeHolcim’s commitment to continue to do business in Nigeria despite the challenges.
It is a known fact that we have been in business in Nigeria for over five decades now. Following the backward integration policy of the government, our operations grew from 3million metric tons (mt) in 2008 to 8.5mt in 2012, with INVESTMENT of over 1.0 billion Euros. Further investment of over $565 million is currently being made in the additional 2.5mt capacity cement plant in Mfamosing, Calabar, Cross River State.
The plant will be officially commissioned soon. With this, we have a combined capacity of 10.5 million metric tons of cement from our operations in Ashaka Cement (Gombe State), UniCem in Cross River State, WAPCO operations in Ogun state and Atlas Cement in Rivers State. We have announced plans and performed a ground breaking ceremony for a 2.5mt ton expansion in plant capacity at Ashaka. In addition, we are constructing an N11 billion captive power plant also at Ashaka, Gombe State.
We are the leading readymix concrete producer through our Lafarge Readymix Nigeria operations in Lagos, Ewekoro, Abuja, and Port-Harcourt, with plan to spread to other states of Nigeria in the near future to contribute innovative solutions to the building and construction industries. Outside the oil and gas and telecommunications industries, LafargeHolcim, is the largest foreign INVESTOR in Nigeria.
How would you assess Lafarge Africa in 2016?
No doubt, 2016 has been a challenging year not just for Lafarge Africa, but for all businesses in Nigeria, for obvious reasons. For us, the reasons are mostly external – gas supply, logistics challenges due to the NATURE of our of roads, lack of spare parts, increase in fuel costs, no or low access to explosives as well as foreign exchange, inflation and devaluation. Despite the external challenges in 2016 we have had a very positive, very promising and better cost performance improvement compared to previous year. We look forward to improvements in these areas in the new year.
What projections do you have for Lafarge in 2017?
We are quite optimistic that all the indices will get better in 2017, and there will be overall improved performance.
A big input cost for cement manufacturers is energy and power. How has your company been coping with these issues in Nigeria?
Supply availability and cost of energy (fuel and electric power) have been major issues for cement manufacturers in Nigeria over time. Over the years, we have INVESTED on projects that guarantee fuel flexibility in all our operations. Apart from the consideration of economics, the use of natural gas as our main energy source has turned out to be effective in the goal to reduce the carbon footprint of our industrial process compared to other fossil fuel. We have a 310MW Power Project, of which 90MW is already completed, in Ewekoro, as our contribution to the current power GENERATION in Nigeria.
A good number of companies in Nigeria including Lafarge Africa, have been reporting negative results in recent time due to the economic downturn. Now that you are here, what do you intend to do to improve the company’s books and meet shareholders’ objectives?
For me, it is simply by motivating the team for improved performance. By being anticipatory, and making the right INVESTMENTS within available budget. We also need to be mindful of our costs and avoid ‘business as usual’. Our Nigerian Naira loan has been refinanced at a cheaper rate, while we are currently restructuring the USDollar loan.
The delisting of Ashakacem, (one of the cement companies you recently acquired) from the Nigerian Stock Exchange is currently being pursued. Could this be as a result of the economic recession? The delisting of AshakaCem is a transaction initiated by its Board of Directors. It is not due to current economic recession, which we believe is a passing phase. Recent evolution of the shareholding of AshakaCem has meant that today, the free float (tradable shares) of the Company on the NSE is below the minimum threshold permissible. Minimum Free Float permissible by the NSE Listing rule is 20%, Ashaka currently has 15.03%. The Directors of the Company decided to be proactive to launch a Voluntary Delisting rather than wait for a regulatory delisting.
The media was recently awash with news of your recent SERAs Awards and the National Literacy Competition. What is the motivation behind your organization’s corporate social responsibility?
Our corporate social responsibility is neither philanthropic nor ad-hoc, but intrinsic to our business strategy with focus on the 2030 Plan, stakeholder management, community development, National CSR Projects, Volunteering, Donations, and Sponsorships. Lafarge Africa’s Social INVESTMENT for its host communities is needs-based, strategic, and highly sustainable.
Our CSR approach recognizes the host communities as strategic partners to whom we accord mutual respect, believing that our footprints should, in its overall assessment, be a blessing to our neighbours. Lafarge Africa continually makes INVESTMENTS woven around health and safety, economic empowerment, education, shelter and community support as a good corporate citizen. Our track records speak volume with several notable awards to show for them.
– Original article can be found here.