Lafarge is withdrawing from its direct joint venture with Yibitas after 12 years. The interest, which comprises of three integrated works and three grinding centres with a present combined capacity of 3.5Mta, is being sold to Cimpor for €260m, which places an enterprise value on Yibitas Lafarge of €535m. The deal is subject co approval by the Turkish competition authorities, which ought not to pose a problem, as Cimpor is not at present active in Turkey. It is an interesting move in as far as Yibitas has signalled its intention to withdraw form cement manufacture and Cimpor is buying the Yibitas stake as well, taking its interest in the Turkish cement group to 99.7%. Clearly, Lafarge is not prepared to increase its investment in Turkey at current prices and, in the short term, we are seeing a further fragmentation of the Turkish market.
This is a further example of Lafarge selling off parts of its cement interests to Cimpor, in which the company holds 12.64% of the equity. In addition to the five cement plants, Yibitas Lafarge owns downstream operations in the form of two quarries and twelve batching plants and this year the company is expected to sell 2.5m tonnes of cement, 1.2m m³ of ready-mixed concrete and 2.4Mta of aggregates. There investments in hand to increase are plans to increase Yibitas Lafarge’s clinker capacity from 1.6Mt at present to 2.4Mt and the grinding capacity from 3.5Mt to 4.8Mt. This investment programme is expected to be completed by the end of 2008.
Lafarge has signalled its intention to retain its wholly-owned operations in Turkey, Lafarge Aslan Çimento, all based in the Istanbul area, that comprise of one integrated cement works with an annual capacity of 1.4m tonnes ands a grinding plant capable of producing 0.25Mta. The Istanbul plants are all located on water and can thus be integrated in the group’s international operations.