Strategy

Very positive conclusions can be drawn from the Excellence 2008 plan. In terms of cost reduction, for example, Lafarge has already exceeded its ambitions, with 420 million euros achieved between 2006 and 2008, instead of the 340 million euros initially forecast.
Overall, Lafarge is reporting the best performance in the sector in the last 3 years, while maintaining a solid financial structure.

The Group strategy can be broken down into clear and ambitious priorities:

• 2 strategic priorities:
  • continuing development on emerging markets
  • accelerating innovation to reach sales of €3bn with innovative products by 2012
• 3 operational priorities:
  • ensuring the safety of our employees and targeting 0 accidents
  • continuing with cost reduction
  • developing the potential of the men and women in the Group.

In a more difficult economic context linked to the economic consequences of the financial crisis, Lafarge is committed to a number of actions:

• Cost reduction by €200 million by the end of 2009, as part of a new €400 million cost cutting program to be achieved over a 3 year period from 2009 to 2011. This follows Lafarge's successful cost reduction program carried out from 2006 to 2008 that will exceed €400 million at the end of 2008.
• Total capital expenditure limitation in 2009 to approximately €2 billion.
• Divestment program expansion beyond the €1 billion target set for 2008-2009, in order to provide additional financial flexibility.

Our success is driven by the need to achieve excellence – in product, customer service and stakeholder relationships. In pursuit of this, the company has a priority project - a two years repositioning programme, which is an improvement on the Excellence 2008 programme. It aims at encouraging Cash Management (Sowona) and identifying Increase in Productivity as a major priority area in Lafarge Cement WAPCO Nigeria.

Our key priorities are to:

• Improve our safety performances and results
• Improve our results through performance
• Improve our image and brand value

Lafarge WAPCO has developed a cash management project to reflect the Group’s focus on effective cash management to optimize cash flow. The project “Sowona”, which means “Prudence” in Yoruba, was launched in March 2009 to implement the strategy of cost reduction and improved needs in terms of operating capital. It will ensure:

• Reduction on spare parts’ inventory: reduction of stock levels, identification of obsolete and unnecessary stock, etc.
• Optimization of cash out flow: renegotiation of payment terms with suppliers, optimisation of the purchasing budget and reduction in commitments.