LafargeHolcim gets nod to resume aggregate business
After six months of legal battle, the industries ministry has allowed LafargeHolcim Bangladesh to resume its business of crushing and selling aggregates derived from limestones coming from its mines in the north-eastern Indian state of Meghalaya.
On Sunday, the ministry issued a letter to the multinational cement manufacturer, allowing it to produce and sell aggregates in the open market.
According to the letter, the permission will remain valid until the government finalises a policy on producing aggregates by crushing limestone.
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After that, the company will need fresh permission under the policy, it added.
On this news, LafargeHolcim share prices surged 7.12% and grabbed the fifth position on the gainer table and secured the second position on the daily turnover chart as investors regained hopes for the company's sustainable growth.
On Monday, its shares closed at Tk76.70 on the Dhaka Stock Exchange (DSE), which was Tk71.60 in the previous session.
In September last year, the ministry asked LafargeHolcim to stop the aggregates business as its inquiry committee had found the company crushing aggregates at an unapproved facility in Chhatak, Sunamganj.
The ministry launched its investigation based on complaints from local aggregates crushers and merchants arguing that LafargeHolcim was doing this business with an unfair advantage in taxes and duties.
In these circumstances, the company had filed a petition with the High Court against the ministry's order.
LafargeHolcim began crushing and selling aggregates in January 2021, and its profits began to soar with high margins in the construction commodity.
Analysts earlier told The Business Standard that their aggregates business was contributing to around one-fifth of LafargeHolcim's revenue and making up at least one-third of its profits for the first nine months of 2021.
In 2021, the cement maker's sales jumped by 27% year-on-year to Tk2,053 crore and the profit by 64% to Tk388 crore thanks to its aggregates business.
Riding on this growth, it had paid a 25% cash dividend for 2021, the highest since its inception in Bangladesh.
Rajesh K Surana had earlier said in a press release that 2021 had been an unprecedented year for everyone with so many external challenges.
"We are happy to deliver another year with record top-line improvement by 27% and net profit improvement by a staggering 64%," he added.
"We are moving into 2022 with the continued strong motivation and firmly on focus to achieve sustainable growth by further expanding our footprints in the building materials space as a unique solution and service provider," he added.
