After a first quarter beset by heavy winter snowfall in the northern hemisphere, the overall economic picture improved slightly
After a first quarter beset by heavy winter snowfall in the northern hemisphere, the overall economic picture improved slightly. In some Western European markets and in North America, demand for building materials increased, and Asia remained on a growth trajectory. Latin America and in particular the Africa Middle East region held up well. However, one cannot speak of a global economic recovery. Elements of uncertainty still exist and make forecasting difficult. These include high levels of government debt, which are limiting further stimulus programs, particularly in Europe. Even though the U.S. economy has improved, the upturn is not yet broadly based.
Holcimís measures to cut costs and boost efficiency continued. Despite the commissioning of approximately 5 million tons of new cement capacity, fixed costs on a like-for-like basis were reduced compared with the same period a year ago.
In the first half of the year, consolidated cement sales grew by 4.1% to 67.8 million tons. Sales of aggregates increased by a more substantial 17.1% to 73.2 million tons, while sales of ready-mix concrete grew by 13.5% to 21.9 million cubic meters. In comparison with the first quarter of 2010, sales increased in all segments. The main contribution to volume growth came from the newly consolidated Holcim Australia. Holcimís companies in the United Kingdom, Canada, Brazil and Morocco sold significantly more aggregates. The companies in Canada, India and Vietnam achieved marked increases in sales of ready-mix concrete.
In the course of the succession process of the executive committee, Thomas Aebischer, currently CFO of Holcim U.S., has been appointed a member of the executive committee as of Jan. 1, 2011. Effective April 1, 2011, he will take over Group CFO responsibility from Theophil H. Schlatter, who will be retiring at end of March 2011. Andreas Leu, currently area manager and member of the senior management of Holcim Ltd., has been appointed a member of the executive committee of Holcim Ltd as of Jan. 1, 2011. He will take over responsibility for Latin America from Thomas Knˆpfel, who will be retiring at year-end 2010.
The economic trend in Holcim regions Europe and North America remains considerably uncertain despite some positive market signals. Holcim expects demand in most countries of Latin America to be stable. Consumption in the regions Africa, Middle East and, in particular, Asia Pacific will grow further.
In the second half of the year, Holcim will continue to concentrate its efforts on factors it can directly influence, such as cost efficiency along the whole value chain and efficient commissioning of new state-of-the-art production facilities in the fast-growing emerging markets.
Certain countries are witnessing signs of economic slowdown and increasing pressure on prices. Holcim is confident of coping well with these challenges thanks to the operational measures initiated at an early stage.