Divestment talk of LafargeHolcim's Australian and New Zealand divisions resurface

LafargeHolcim is reported to be considering exiting Australia and New Zealand, according to The Australian.

The AUS$2-3bn (US$1.37-1bn) division has been identified as a means for the group to potentially drive down its debt levels. LafargeHolcim was created through a US$50bn merger of Lafarge and Holcim in 2014 and considered an exit from Australia and New Zealand the following year to cut debt.

Lafarge sold its Australian gypsum operations in 2011 for EUR120m to Knauf, but Holcim has remained one of the most dominant suppliers in the Australian and NZ market of aggregates, concrete, and concrete pipe and products.

Adelaide Brighton was previously thought to be an interested buyer, but it is suggesting a merger with the operations of its major shareholder, Barro Group. An acquisition by Adelaide Brighton is also likely to face opposition from the competition watchdog Australian Competition & Consumer Commission (ACCC).

HeidelbergCement has a 50 per cent shareholding in Cement Australia Pty Ltd and Cement Australia Partnership (CACAP), which is the company that LafargeHolcim operates as in Australia. Therefore, HeidelbergCement is in a ideal position to buy out LafargeHolcim.

CACAP has two integrated plants at Railton and Gladstone and two grinding plants at Bulwer Island and Port Kembla with an overall cement capacity of 5.2Mta. In New Zealand LafargeHolcim has a closed integrated plant at Westport.

Other international building material operators possibly interested in CACAP, according to The Australian, are Brazil's largest cement company, Votorantim, and CRH of Ireland, which purchased US$3.5bn of assets from Lafarge and Holcim following their merger.