Cement Giant Lafarge Building New Ukraine Plant

LVIV, Ukraine -- French cement and construction materials giant Lafarge has launched the building of a 30-million-euro ($38 million) plasterboard and dry construction mixes factory in Artemivsk, Donetsk Region.


Lafarge, which has a strong presence on Ukraine’s cement market through its majority holding in a cement factory in Lviv Region, hopes the new factory, scheduled to begin operations in early 2007, will help the group boost its presence on Ukraine’s promising construction materials market.

The French company, which claims to rank among the top three world players in the cement, roofing, concrete and gypsum businesses, has had to import plasterboard and dry construction materials, mostly from production factories in Poland, a company official said.

In a statement, Lafarge explained that its plasterboard and construction mix business in Ukraine took off in 2000, after the acquisition of a construction materials company called Stromhips, in Artemivsk.

Construction of the new factory, located at the same site, was officially launched at a ceremony on March 27. The company expects the new factory to have an initial annual capacity to produce 15 million square meters of plasterboard and 40,000 tons of construction mix. Capacity will later be doubled.

Natalia Bilyk, a spokesperson at Lafarge Gips’ office in Kyiv, said her company sold about 6 million tons of materials last year, adding that the leader on the Ukrainian market has been German competitor Knauf. Bilyk estimated that Knauf controls about 60 percent of the plasterboard and construction materials mix market in Ukraine.

Knauf has a plasterboard and construction mix factory in Kyiv region and is currently building a 50-million-euro factory in Donetsk Region, too.

Knauf bought the Kyiv-based Budmak plant in 1998, revamping it into Ukraine’s largest producer of plasterboard. The factory has the capacity to produce more than 22-24 million square meters of plasterboard.

About 150 Ukrainians will be employed at Lafarge’s new factory in Donetsk.

Lafarge employs a total of 80,000 people in 76 countries and posted 16 billion euros in sales last year.

Lafarge already has a strong foothold on Ukraine’s cement market through its ownership of the Mykolayiv Cement Factory, located in Mykolayiv, Lviv Region.

Analysts say Ukraine has 16 cement factories capable of producing a total of about 24 million tons of cement per year, but they are currently operating at only a fraction of this capacity.

Several foreign cement conglomerates are active on the Ukrainian cement market.

Germany’s Dyckerhoff Zement International holds controlling shares in three local cement manufacturers: Kyivcement and Pivdencement, based in Mykolayiv

Region, and Volyncement, based in Rivne Region.

Heidelbergcement Group, also from Germany, controls Kryvy Rih Cement and Dniprocement.

Russia’s Eurocement controls Ukraine’s Baltsem And Pushka factories.

Source: Kyiv Post