22. Property, plant and equipment

Million CHF

Land and mineral reserves

Buildings and installations

Machinery and equipment

Construction in progress

Total

1

Restated due to changes in accounting policies, see note 2.

2015

 

 

 

 

 

At cost of acquisition

6,002

9,200

20,638

2,740

38,580

Accumulated depreciation/impairment

(1,450)

(4,126)

(11,838)

(79)

(17,493)

Net book value as at January 1

4,551

5,075

8,800

2,661

21,086

Merger with Lafarge (see note 4)

2,791

2,382

13,629

1,376

20,177

Other acquisitions

64

29

202

14

309

Divestments

(348)

(443)

(837)

(115)

(1,742)

Additions

48

150

185

1,814

2,196

Disposals

(30)

(22)

(52)

8

(95)

Reclassifications

68

503

1,178

(1,749)

0

Depreciation

(143)

(316)

(1,292)

0

(1,752)

Impairment loss (charged to statement of income)

(367)

(79)

(986)

(124)

(1,556)

Currency translation effects

(241)

(451)

(669)

(517)

(1,877)

Net book value as at December 31

6,394

6,828

20,158

3,367

36,747

 

 

 

 

 

 

At cost of acquisition

7,989

10,567

31,526

3,517

53,598

Accumulated depreciation/impairment

(1,594)

(3,739)

(11,368)

(150)

(16,850)

Net book value as at December 31

6,394

6,828

20,158

3,367

36,747

 

 

 

 

 

 

20141

 

 

 

 

 

At cost of acquisition

5,459

8,076

19,434

2,485

35,453

Accumulated depreciation/impairment

(1,170)

(3,460)

(11,022)

(92)

(15,745)

Net book value as at January 1

4,289

4,615

8,411

2,393

19,707

Change in structure

2

0

(4)

0

(2)

Reclassification from assets classified as held for sale

59

143

64

0

266

Additions

31

41

81

1,826

1,979

Disposals

(44)

(1)

(38)

(2)

(85)

Reclassifications

111

478

1,011

(1,600)

0

Depreciation

(109)

(283)

(926)

0

(1,317)

Impairment loss (charged to statement of income)

(3)

(4)

(6)

(5)

(19)

Currency translation effects

214

85

206

50

556

Net book value as at December 31

4,551

5,075

8,800

2,661

21,086

 

 

 

 

 

 

At cost of acquisition

6,002

9,200

20,638

2,740

38,580

Accumulated depreciation/impairment

(1,450)

(4,126)

(11,838)

(79)

(17,493)

Net book value as at December 31

4,551

5,075

8,800

2,661

21,086

The net book value of leased property, plant and equipment amounts to CHF 112 million (2014: CHF 117 million) and mainly relates to buildings, machinery and equipment.

CHF 559 million of the total net book value of property, plant and equipment are pledged or restricted (2014: CHF 3 million).

Net gains on sale of property, plant and equipment amounted to CHF 42 million (2014: CHF 123 million).

After the merger and as part of Group strategy, LafargeHolcim carried out an extensive portfolio review and assessed asset impairment indicators which resulted in an aggregate impairment charge relating to property, plant and equipment of CHF 1,556 million, of which CHF 464 million was impaired as insufficient goodwill was available to absorb the full impairment charge (see note 23).

The remaining impairment charge of CHF 1,092 million mainly consists of:

  • a third kiln line (construction in progress) relating to the Joppa cement plant in the United States which was fully written-off by CHF 105 million. The reportable segment for United States is North America;
  • CHF 280 million relating to cement plants, various ready-mix, asphalt and concrete product plants including aggregate quarries which were largely mothballed in Europe; and
  • CHF 460 million relating to the closure and mothballing of cement plants in China.

Apart from the third kiln line mentioned above, no asset impairment was deemed to be individually material.

The aggregate impairment charge of CHF 1,556 million resulted primarily from:

  • overlaps arising in certain countries resulting in overcapacity as a consequence of the merger which therefore impacted the recoverable amounts of the assets (including assets that were under construction or previously mothballed); and
  • the weaker than anticipated outlook for the macro-economic environment, especially in terms of expected growth rates and cement demand for countries such as China and Brazil (see note 23).

In 2014, the impairment loss related mainly to Group region Europe (CHF 7 million), Group region North America (CHF 5 million) and Group region Latin America (CHF 5 million).The impairment losses were a consequence of the decrease in demand for construction material in the respective regions and were largely included in production cost of goods sold in the statement of income.

The carrying amount of investment property held by the Group is not material.