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Vicat will reduce costs rather than close cement plants in France

World Cement,

French cement company Vicat SA is looking ahead to 2014/2015 when it is hoped demand in France will pick up. In an interview with Bloomberg BusinessWeek, Vicat COO Raoul de Parisot said that cement consumption in the country is likely to drop 5 – 7% this year because housing starts have dropped sharply.

“We don’t have any plan to close plants but we’re reducing costs and maintenance expenditure,” de Parisot said. “We need our production capacities to maintain market share when demand picks up, probably not in 2013 and maybe not in 2014, but hopefully in 2015.”

Demand/supply in France

Meanwhile the French federation of cement manufacturers is anticipating demand to fall 9% this year, having dropped 6.7% to 20 million t in 2012. Imports increased 5.2%, creating an overcapacity situation that has led Lafarge and Holcim to announce plant closures in the country. Production capacity in France currently stands at 27.5 million t.

In the interview, de Parisot put Vicat’s capacity utilisation in France from ‘a bit less than 60 percent to 70 percent’, and he urged French port operators to limit imports of cement and clinker from countries with less stringent social and environmental rules.

Vicat released its 2012 financial results last week, which showed sales up by 1.2% y/y to €2.29 billion (like-for-like, this represents a decline of 0.2%). Unfavourable weather conditions in Europe, and disrupted markets in Mali and Egypt put a dampener on growth, while markets in Turkey, India, Kazakhstan and the US showed positive results. Lafarge’s 2012 results will be released today and Holcim’s next week.

Edited from various sources by Katherine Guenioui.

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