Lafarge Surma Cement Ltd (LSC) has reportedly started talks with Lafarge Holcim Group to merge with Holcim Bangladesh Ltd (HBL).

Lafarge Surma Cement, in a notice to Dhaka Stock Exchange last week, informed that the company is exploring the opportunity of combining LSC's business with HBL. A merger has the potential to create significant synergies as well as further position both HBL and LSC brands for future growth in Bangladesh. However, at this stage the Board of Directors of LSC emphasises that no decision has been taken and that there can be no certainty or guarantee that a transaction will occur.

Furthermore, any potential transaction will be subject to due diligence, assessment of synergy potential, as well as necessary regulatory and other approvals. The company made the announcement more than one year after completion of global merger of two cement giants, Lafarge SA of France and Holcim Ltd of Switzerland.

Lafarge Surma Cement Ltd is a joint venture of LafargeHolcim and Cementos Molins. The plant, which is located in Chhatak Sunamganj, is the only fully-integrated dry-process cement plant in Bangladesh with a capacity of 1.6Mta.

Holcim established its presence in Bangladesh in 2000 through the acquisition of Hyundai Cement Bangladesh. Later Holcim acquired two more grinding plants, United Cement Industries and Saiham Cement Industries, as part of its expansion strategy. Currently, Holcim Bangladesh has seven operating mills, producing nearly 2Mta of cement.