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Lafarge's Moroccan unit H1 net profit jumps 56 pct

Fri 21 Sep 2007, 8:50 GMT
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CASABLANCA (Reuters) - The Moroccan affiliate of French building materials producer Lafarge SA grabbed a bigger share of a fast-growing market in the first six months of the year, helping it achieve a 56 percent gain in net income.

Lafarge Ciments made net profit of 710 million dirhams and turnover rose 25 percent to 2.19 billion dirhams, said the company, which competes with Holcim Maroc and Italcementi's local unit Ciments du Maroc.

Sales by volume grew 21.6 percent, outpacing 18.5 percent market growth.

"Despite an expected slowdown in the fourth quarter, because of Ramadan and the Aid holidays, we expect sales growth ... of over 12 percent (this year)," the company said in a statement issued late on Thursday.

Lafarge Ciments managed to outperform its local rivals because of a strong presence in the north of the country, the site of big road, port and tourism projects and cities where the government is trying to replace slums with new low-cost housing.

Lafarge has allocated 190 million euros for investments in the north, paid for initially using company funds, although it said it could resort to some borrowing.

After adding a new production line near Morocco's economic capital Casablanca, Lafarge plans to add new capacity at a crushing factory in Tangier by April 2008.

A year later a new clinker production line should begin operating at a plant nearby in Tetouan, accompanied by a new crushing unit.

"There is a reflection taking place over a project for a new factory," Managing Director Jean-Marie Schmitz told reporters and analysts in Casablanca late on Thursday. "Our goal is that before 2011 we have new operational capacity."

The company's biggest challenge is the cost of fuel for its furnaces after petroleum coke prices soared to $128 per tonne in the second half of 2007 from $67 a year earlier.

To limit the effect, Lafarge Ciments aims to double the proportion of waste materials such as old tyres used in its furnaces.

Parent company Lafarge and SNI -- an investment firm in which Morocco's royal family holds a stake -- each own 50 percent of Lafarge Maroc, which in turn controls 69 percent of Lafarge Ciments, part of which is listed in Casablanca.

The company's shares, which closed on Thursday at 5,810 dirhams, have risen 49 percent this year, while the benchmark MASI index is up 36 percent.

 
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