French-Swiss firm Lafarge ready to sell cement for Trump's wall

Luc OLINGA
 

French-Swiss group LafargeHolcim (LSE: 0QKY.L - news) is ready to sell its cement to build US President Donald Trump's controversial border wall, the company's CEO said in an interview.

The wall Trump promised to erect along the US-Mexico border, valued at tens of billions of dollars, is at the center of a diplomatic crisis between Mexico City and Washington and is provoking criticism around the world.

"We are prepared to supply our materials to all types of infrastructure projects in the United States," LafargeHolcim chief Eric Olsen told AFP.

"We are the leader in cement, so we supply all our customers," he said. "We are here to support the building and development of the United States."

Asked about possible consequences for the company's reputation, Olsen stressed that LafargeHolcim is not a political entity.

"We are here to supply our customers' needs," he said. "We don't have a political view on things."

He refused to comment on a possible victory for the extreme right-wing candidate Marine Le Pen (Other OTC: PENC - news) in the French presidential election, a prospect increasingly worrying international business and financial circles.

Olsen also declined to comment on the indirect financing by Lafarge (Xetra: 504482.DE - news) in 2013 and 2014 of armed groups in Syria, a country torn by civil war, to keep one of its cement plants active.

French President Francois Hollande warned the company to "be cautious before bidding" on the project.

There are certain businesses in which "one must be careful before declaring" participation, Hollande said at a press conference in Brussels.

The US government late last month posted a preliminary solicitation for companies interested in participating in the wall project, and LaFargeHolcim is on the list, along with nearly 600 other companies.

- Boycott risk? -

While this apolitical stance risks causing the firm bad publicity, especially in Europe, the material impact on sales likely would be negligible because LafargeHolcim does not sell cement directly to ordinary consumers.

The company is therefore shielded from a potential boycott like the one targeting Uber, which was criticized for its slow reaction to the first travel ban by the Trump administration, blocking travelers from several Muslim-majority countries. Thousands of customers deleted the app from their phones.

In contrast to LafargeHolcim, Irish cement manufacturer CRH (EUREX: 558474.EX - news) , also with a presence in the US market, already announced it will not supply its materials for the border wall.

- US jobs -

The stakes are high for LafargeHolcim, a group created in 2015 by the merger of French cement manufacturer Lafarge and its Swiss counterpart Holcim.

The company hopes to be one of the big winners of the $1 trillion infrastructure investment program Trump has promised to renovate bridges, tunnels, roads and airports.

Olsen noted "there is going to be a significant increase in infrastructure spending," although the benefits are not likely to be felt this year "because it takes time for these infrastructure projects to get going."

But "it will partially affect our business in 2018 and certainly in 2019, 2020 and 2021."

The company is "very well positioned to serve that demand," he said.

The cement maker, which returned to profitability last year after losses in 2015, is expected to announce the creation of new US jobs in the coming weeks, a topic central to Trump's agenda.

"I don't have a specific number," Olsen said, but "we will be creating jobs."

Another element that could appeal to Trump, who has been hammering for weeks on his strategy of giving priority to US employees, merchandise and companies: LafargeHolcim has production sites in Texas and operations in New Mexico and Arizona, three of the four US states bordering Mexico.

The group has also built two new plants in Maryland and Oklahoma and opened new facilities in New York and Missouri in anticipation of the ongoing recovery in the US construction sector.

This strong presence on US soil could tip the balance in favor of LafargeHolcim against Mexican cement maker Cemex.

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