The Pro Forma Financial Information for the year ended December 31, 2015 reflects the merger of Holcim and Lafarge as if the Merger had occurred on January 1, 2015.
It reflects a hypothetical situation and is presented exclusively for illustrative purposes, as such it does not provide an indication of the results of operating activities that would have been obtained for the period ended on December 31, 2015.
The net capital expenditure to maintain productive capacity and to secure competitiveness amounted to CHF 1,148 million, while investments in expansion and diversification projects reached CHF 1,453 million. Investments in property, plant and equipment for expansion mainly reflected key projects, the objective of which was to increase cement capacity in developing countries.
Key investment projects
Indonesia – capacity expansion at Tuban and new Cement Terminal at Lampung in South Sumatra
In order to meet growing demand, the Group has built a new integrated cement plant in Tuban, East Java, including two production lines with the capacity of 1.6 million tonnes each. The cement mill of the first line was put into commercial operation in December 2013 and the kiln followed in September 2014. The second line became fully operational in August 2015.
The Group is also building a cement terminal and packing plant near Lampung, South Sumatra. This terminal is expected to be in operation in the first quarter of 2016. The Group already has a strong position in the regional market of Southern Sumatra which is growing faster than the Indonesian average, and this strengthening of the footprint will allow for an improvement in customer service and a reduction in logistics costs.
Brazil – capacity expansion at Barroso
In Brazil, a second kiln line is being installed at the Barroso plant and will be commissioned in the second quarter of 2016. The additional cement capacity of 2.3 million tonnes will bring the total installed cement capacity of LafargeHolcim Brazil to 11.0 million tonnes. With this investment, Brazil will be able to improve its cost structure while the assets footprint is being constantly reassessed following the merger to adjust to the demand for building materials in the south-east of the nation.
Ecuador – clinker capacity expansion at Guayaquil
The second phase of the cement plant modernization in Guayaquil started in December 2012 with the construction of a new clinker line. The commissioning of the new line was celebrated in March 2015, almost a year ahead of schedule. The total clinker capacity has been increased by 1.4 million tonnes thus balancing local clinker production capacity with local cement capacity in order to eliminate costly clinker imports, reduce logistics-related risks, strengthen local value creation and reduce the CO2 footprint. With this investment, the operation in Ecuador is significantly better positioned to further leverage its strong brand presence, meet customer’s needs and substitute imports.
India – expansion of market position
The new cement plant at Jamul in India is expected to go on stream in the first half of 2016. The production unit with a clinker capacity of 2.8 million tonnes is planned to start operation in April 2016. The grinding units with a capacity of 2.5 million tonnes at Jamul and Sindri are expected to start production by mid-2016.
Australia – expansion of aggregates capacity
In 2011, the Group began work on a new quarry in the southwest of Sydney, one of the largest aggregates investments of the Group. Known as Lynwood Quarry, the site supplies aggregates to one of Australia’s largest markets. With the capability to transport raw-material by rail, the quarry together with the distribution center in West Sydney offer a long term cost effective supply to the profitable and growing Sydney market. The plant was commissioned in December 2015, and it strengthens the Group’s integrated market position.
Russia – modernization at Volsk plant
Russia’s modernization strategy continues with the upgrading of its existing wet process at Volsk plant in the Volga region. The project is progressing on schedule and the new clinker line (semi wet) should be commissioned in the second half of 2016.
A number of important technical improvements will take place in the mining of limestone, in the preparation of the raw material mix, and in the kiln line that will be upgraded from a wet to a semi-wet technology. This will allow the revamped plant to be competitively positioned in its primary market in the Volga region.
Algeria – Djemorah project
The Group continued the construction started in November 2013 of a new integrated cement plant in the region of Biskra. The plant capacity is 2.7 million tonnes. Cement production is scheduled to start by March 2016 with clinker supplied by other internal sources and the clinker production by July 2016.
Canada – capacity expansion at Exshaw
The expansion project at the Exshaw plant, near Calgary, consists of upgrade an existing kiln to a new five stage kiln, increasing the plant’s cement capacity. First clinker will be produced in March 2016 and cement production is scheduled to begin June 2016.
USA – new line at Ravena
The brownfield project for a clinker and cement production line in Ravena located in the northeast of the United States will supply 1.9 million tonnes of cement capacity. The new line will replace the two existing kilns in order to serve in a more efficient manner, also from an environmental and logistic aspects. Clinker production is scheduled to start by the fourth quarter of 2016.
Nigeria – second line for capacity expansion at Unicem
A second clinker line, with a capacity of 6,250 tonnes per day and a new cement production line with a capacity of 2.5 million tonnes per year are being built at the Unicem Mfamosing plant in order to meet the strong market growth in the south and southeast of the country.
This second line is scheduled to be operational by the end of 2016.