Holcim and HeidelbergCement to split Belgian concrete business

Holcim and HeidelbergCement to split Belgian concrete business
Published: 20 February 2004

As first highlighted by ICR in October last year, HeidelbergCement and Holcim have now decided to split up the jointly owned ready-mixed concrete producer Inter-Beton and are currently negotiating how to divide up the 44 batching plants.  It is the intention that both groups should end up with operations fairly evenly spread across Belgium.   Inter-Beton is currently the largest ready-mixed concrete producer, but its market share has roughly halved from some 70 per cent thirty years ago to around 35 per cent now.  The company has a production capacity of around 4m cu.m per annum and generated a turnover of approximately €170m in 2003.  However, Inter-Beton has been losing money for a number of years and by eliminating the jointly owned ready-mixed concrete business both CBR, part of HeidelbergCement, and Holcim Belgique would be free to conclude deals with independent concrete producers in order to secure outlets for their cement.  The Belgian ready-mixed concrete industry has been showing poor financial returns for some time and the problem for the domestic cement producers has been getting worse in 2003 as independent imports of low priced German cement made the operations owned by the cement producers even less profitable.  Italcementi, the third cement producer in Belgium has lost money on its ready-mixed concrete operations last year and just over a year ago, RMC sold its Belgian business, which was the second largest in the industry behind Inter-Beton, to Flemish interests.   The splitting up of Inter-Beton is almost certain to be accompanied by a similar development at Gralex, the aggregates producer also owned jointly by CBR and Holcim Belgique.