Merger of Holcim Indonesia and Lafarge Cement Indonesia - Daily Pack 8 April 2014

Merger of Holcim Indonesia and Lafarge Cement Indonesia

Lafarge SA and Holcim Ltd have agreed to merge and create the world’s biggest cement maker. Hence, Holcim Indonesia (SMCB IJ, NR) and Lafarge Cement Indonesia should be merged, following the merger of its holding company, although according to newspaper, SMCB can not confirm for the merger possibility with Lafarge Cement Indonesia. Holcim Ltd via its subsidiary Holdervin BV Netherland is the owner of 80.7% stakes in SMCB, while Lafarge Cement Indonesia owns majority stakes in Semen Andalas Indonesia. (Kontan, The Indonesia Cement Association)

Comment: We see that the Indonesia cement competition will not change significantly after the above merger. Semen Andalas Indonesia’s markets are in Aceh, North Sumatra, and Riau with the company’s FY13 sales were 1.9m tons, around 3.3% of domestic cement sales. The combined SMCB and Lafarge’s FY13 market shares will be 17.7% as SMCB’s domestic cement market  share was 14.4% in 2013. (Andrey Wijaya)

FROM TRADING DESK: JCI today is expected to be traded at 4,947.03 and 4,876.65

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Best regards,

RHB OSK Indonesia Research Institute