Strategy
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Sector overview

The building materials market is undergoing profound changes. Emerging markets are becoming urbanized and experiencing unprecedented growth. People are also becoming increasingly aware of environmental issues and new building methods.

 

An overview of the challenges faced by the sector around the world.

Understanding the industry

The cement industry provides materials used in the construction of homes, other buildings and infrastructure. The most widely used of these materials is concrete (made from cement and aggregates) which is used in situations ranging from foundations for roads through to structural elements in very large and complex buildings.

 

Demand for cement worldwide is strongly linked with population growth, urbanization, and economic growth. The generally accepted projection of global growth in demand for cement through to 2025 is that it will continue to grow by an average 5% a year to around 4.7 billion tonnes. The demand for more elaborate and complex buildings and the desire for more sustainable construction have stimulated the industry to produce many different types of cement suitable for different purposes.

2020 cement consumption

2020 cement consumption (estimate in %)

Domestic cement, aggregates and concrete market

In 2013, the domestic cement market continued its recessive course, but at a slower pace, compared to previous years. Cement sales in Greece reached exceptionally low levels during the year. This is mainly attributed to the public expenditure for infrastructure being kept at poor levels, while the low disposable income, the high taxation and the large number of unsold properties led the private construction activity to a dead-end.

 

However, from the third quarter of 2013, signs of stabilization in domestic demand have been shown. The main drivers of this slight recovery, from low level reached in the first semester, remain the infrastructure projects through small-scale public rehabilitation and maintenance works.

 

The aggregates and concrete market in 2013 also followed the recessive trend. However, since the second half of 2013 the concrete volumes have been increased, reflecting the realization of the big infrastructure projects, while aggregates volumes are similarly higher.

Clinker being carried on a conveyor belt

Clinker being carried on a conveyor belt

Moving towards new industrial practices

Cost structure

In general, the cost of manufacturing our different products can be broken down as follows:

  • Energy accounts for 33% of the cost of producing cement,
  • Raw materials (more than 50% of which are cement) represent 75% of the cost of ready-mix concrete. Delivery expenses account for approximately 20% of the cost,
  • Energy, raw materials and labor represent 50% of the cost of producing aggregates.

 

Reducing the environmental footprint of our activities

The cement making process necessarily entails the release of carbon dioxide: 60% of emissions are due to the transformation of raw materials at high temperatures (decarbonation of limestone), and 40% result from the combustion needed to heat the cement kilns to 1500°C. Since the 1970s, the Lafarge Group has been working to reduce its ecological footprint in order to respond to needs for infrastructure, housing, hospitals and schools while conserving natural resources.

 

This approach focuses on:

  • The modernization of plants and the improvement of industrial processes,
  • Product research and innovation,
  • The use of alternative fuels and materials, with the aim of reducing the consumption of non-renewable natural resources and limiting CO2 emissions.

 

Towards sustainable construction

The building consumes vast amounts of energy and is the source of 40% of the CO2 emissions of developed countries.

 

Lafarge is working to invent the building methods of tomorrow. The entire life cycle of the building needs to be reconsidered, from the use of recyclable materials to the integration of renewable energies and the reduction of pollution.

Sustainable construction

Sustainable construction aims to limit the impact of buildings on the environment while enhancing their quality in terms of aesthetics, sustainability, durability and strength. Sustainable construction techniques apply across the entire life cycle of a building, from the selection of initial materials to demolition and recycling.

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Commitment to sustainability

Our products meet basic human need to construct homes and provide the basic infrastructure: the roads, the hospitals, the schools, the factories and offices that underpin our common life. Yet, business as usual is not a sustainable option for us or for the world as a whole. Together we must find a way of delivering the benefits of economic growth, while leaving a lighter trace on the earth. 

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LafargeHolcim. Cement, aggregates, Concrete.