The recent drop in energy prices will have a positive impact on Lafarge in 2009 if the trend continues, the company’s chief executive, Bruno Lafont, told a shareholders’ meeting Saturday.
"It’s clear that the current trend will have a positive impact if it continues and if the (lower) price of oil has a quick and direct impact on coal and fuel costs," Lafont said.
In 2008, the high costs of energy has led to a strong rise in cement prices, he said. The cost of energy for Lafarge has risen by 20% on average, sometimes even by 25% and the group has responded by increasing cement prices and by reorganizing its energy mix.
Lafont said that Lafarge’s board of directors "works very well" and he sees "no sign of difficulties with the group’s main shareholders" - Belgian financier Albert Frere’s investment vehicle Groupe Bruxelles Lambert and Nassef Sawiris and his family, the founding members of Egypt’s Orascom Construction Industries. Lafarge finalised the acquisition of Orascom’s cement division in January.
"It’s quite the opposite, I’d say they strongly support us," Lafont added.
Asked whether it would have been better to buy Orascom cement at the end of 2008 instead, Lafont answered that he wasn’t sure there would have been a seller in the current market conditions.
Lafont also declined to comment on Lafarge’s 2008 dividend. It is for Lafarge’s board of directors to set it, Lafont said, in February when it meets ahead of the group’s full-year 2008 earnings publication.