Holcim and Lafarge Merger in Indonesia to Conclude by Year-End i

Holcim Indonesia, the local unit of the Swiss cement maker, booked a 73.46 percent decline in profit last year on the back of low cement demand and rising costs, the company said in a statement on Wednesday (16/03). (JG Photo/ Lidya Caroline)

By : Vanesha Manuturi & Nuriy Azizah | on 12:25 PM August 19, 2015
Category : Business, Corporate News

Jakarta. Holcim Indonesia and Lafarge Cement Indonesia, the local affiliates of multinational cement giant LafargeHolcim, are speeding up their merger in a bid to finalize the process by the end of this year.

The merger is an extension of the union between French-based Lafarge Cement and Swiss-based Holcim International to create LafargeHolcim, which was settled last month.

"We hope to finish the merger process by the end of 2015. As Holcim is listed on the bourse, we are still waiting for the permit from [Capital Market Supervisory Agency] and [Business Competition Supervisory Commission]," Holcim Indonesia vice president of sales Juhans Suryantan, said as quoted by cement industry publication Global Cement on Monday.

However, Juhans noted that the companies would likely keep their brands separate, even after the merger. "We have not decided on the brands. We might still use our own brands for the next one or two years," he said.

The merger would increase both companies' market share in Indonesia to about 18 percent against the backdrop of declining cement sales, mostly due to waning consumer demand, bloating costs and tighter competition.

Holcim, which currently holds a 15 percent market share, has a stronger presence in Java and southern Sumatra, while Lafarge has a better grip on northern Sumatra with 3 percent of national market share, according to the report.

State-controlled Semen Indonesia currently leads the market at 43.7 percent, followed by privately owned Indocement Tunggal Prakarsa at 30 percent, according to the report.

Net profit at Holcim Indonesia fell 90 percent to Rp 32.7 billion in the January to March period from Rp 323.6 billion ($23.3 million) in the same period last year, as sales declined by 4.5 percent to Rp 2.25 trillion.

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