Constructing New Pattern in Southwestern China---Visiting Mr. Cyrille Ragoucy, CEO of Lafarge Shui On Cement

Byzjx

Updated Fri, 19 May 2006 00:00:00 GMT

In the year of 2005, world’s largest cement producer—Lafarge announced a joint venture partnership with SOCAM to set up Lafarge Shui On Cement Ltd, and became the leader of cement in Southwestern China. Then, Lafarge purchased Sichuan Shuangma, mending its developing pace in Southwest. On the 18th April 2006, Lafarge Shui On Cement celebrated to set up Lafarge GuiZhou branch in Guiyang. Following a series of purchase and consolidation activities, we are wondering that whether Lafarge Shui On Cement could be the leader of Southwest market, what about Lafarge Shui On Cement’s next strategetic plan in China. These days, Shao Jun, CEO of China Cement Net was invited to visit Mr. Cyrille Ragoucy, new CEO of Lafarge Shui On Cement, and got one hand information.
 
 
(Following is the dialog, Mr. Shao asked, and Mr. Ragoucy answered.)
 
Mr. Shao: since you became the first CEO of Lafarge Shui On Cement, what’s the most different thing have you felt from the time that you were the president of Lafarge Canada? Though Lafarge Shui On Cement has formed for a time, the process must be very rough to unite two different companies with absolutely distinguishing cultures. Could you talk about the problems that you have faced?
 
Mr. Ragoucy: I think the differences are very obvious. Though two countries both have large areas, the market developing course and cement demand are different. To Chinese market, cement develops quite fast, and the demand of cement is increasing, but there is also fury competition in market, as there are so many cement companies. In Canada, the cement market has gone to steady, and has kept a slow-increase for a long time.
 
It is the challenges that is to combine two companies with different cultures into one and make it progress in the same way. Since my accession, I have faced many challenges. I list the main four.
 
First is security. It’s Lafarge Shui On Cement’s most important principle. Every staff should be responsible for his security and his accompaniers. There is no compromise before security.
 
Second is integration. It is needed not only in business, but also within enterprise, such as the advancement of productive devices, improvement of productive efficiency.
 
Third is customer. It’s our tenet to be customer-oriented. After the setting up of the joint venture, we need more communication with our customers and get common understanding to supply more high-quality products and services.
 
Forth is our staff and achievements. We should interact with our staff, and make them understand the situation and targets of our company. Then we grow together to get better benefits. Lafarge has paid much attention to Chinese market, and hope to grow with Chinese companies. At the end of last year, the productive capacity of Lafarge China had reached 1.74million tons, and the business of Lafarge China has stepped up in the whole Lafarge Group business for its fast expansion in China.
 
Mr. Shao: Lafarge Shui On Cement had set up its Guizhou branch in Guiyang, and there has one more world’s five-hundred-biggest company in Guizhou. Could you talk about Lafarge Shui On Cement’s next plan in China and Southwestern region?
 
Mr. Ragoucy: After Lafarge’s entrance into Guizhou, we will reconstruct its 3 companies that we recently have, in the technical criterion of Lafarge, to improve output and quality.
 
Now, we invest mainly in southwestern region for 4 reasons. First is that in this region, there is still no leader in cement. Second is that the cement demands will hike in a high speed, because there will be a lot of infrastructure projects after China brought out the plan of West Development. Third is that in southwestern region, low-side cement is much more than high-side cement, hence Lafarge could offer more high-quality cement utilizing its high technology. The last one is that favorable policies in China create a nice situation for us.
 
Mr. Shao: now, purchase and consolidation is one characteristic in cement industry and many other foreign companies are following this trend. Could you talk something about this phenomenon? In addition, Lafarge is the largest cement company in Southwest of China, so you can impact the price setting in certain degree. Then what’s your idea about price competition?
 
Mr. Ragoucy: it’s the necessity that international companies such as Lafarge, Holcim and Heidelberg enter China. No matter where, strategetic consolidation has played an irreplaceable role in the developing progress of companies. This time, it is a chance for both of us combined with SOCAM, which is the main cement producer in southwest region and has rich experience in marketing, while we have advanced technology and manage conception. Then we could go further together.
 
On price, I think free competition could drive the social economy to go ahead, and promote the economic efficiency. But I also think that the competition could be in many aspects, such as quality, technology, product innovation, etc.. Price is just one aspect. Environmental concern is one of uppermost promises of Lafarge Group. So is it in Lafarge Shui On Cement. We hope that competition is taken fairly, and then companies reduce cost without changing quality standard and environmental standard.
 
Mr. Shao: I heard that Lafarge would apply Chinese technology and devices to set up new plant, may I ask why? In addition, what are the advantages of Lafarge, when it competes with Chinese cement companies, and what’s your idea about the cement industrial policies?
 
Mr. Ragoucy: these years, China’s cement devices have improved quickly, and have strong competition in world market. We trust in your cement devices, and our new plants all applied the devices made in China. Additionally, we entitled the Chinese companies to be responsible for all projects including designing, construction, installation, and debugging. Now, everything goes well. We are very satisfied and set to entitle the Chinese companies to do the new oversea projects.
 
To the cement industrial policies in China, I have some opinions
1, it is more appropriate for large cities to build 2000t/d and above clinker production lines.
 
2, in small cities, especially in southwestern region, it is not advisable to build 2000t/d and above clinker production lines, as there are small cement demands and traffic is inconvenient.
 
3, it is more reasonable to build 1000t/d clinker production lines in small cities in southwestern region, which could also reduce pollution in certain degree.
 
Mr. Shao: Lafarge has made great efforts on sustainable development and environmental protection. Do you have some special ideas?
 
Mr. Ragoucy: it is very difficult to imagine the world without cement. Every place needs cement which is like a kind of bond. However, cement industry also face the problem of sustainable development, such as how to make use of nature resource and energy in reason, how to control the noise and exhaust gas of cement plants, and how to ensure our labors’ health and security, etc. Then you can find the importance of sustainable development in cement industry.
 
To Lafarge, we should consider the environmental and social factors when we make decisions, to pursue the best benefits in three aspects, economic profit, social contribution, and environment quality. Lafarge promises that it will reduce the emission of carbon dioxide by 20% per ton, decrease the emission of dust according to the relative standards, and apply other new kinds of fuels. We will actively do our best to push the strategy of sustainable development.