Holcim chief executive officer Bernard Fontana said the Swiss cement maker may need to further streamline its business in Europe to stem falling demand, as it announced a management shake-up. Holcim will introduce a “leaner and more efficient” structure, including a new head of Europe, from 1 September, and it may also cut its outlook for the region as it reported second-quarter earnings, predicting a contraction for 2012 after previously anticipating a stable development.
Holcim chief executive officer Bernard Fontana said the Swiss cement maker may need to further streamline its business in Europe to stem falling demand, as it announced a management shake-up.
Holcim will introduce a “leaner and more efficient” structure, including a new head of Europe, from 1 September, and it may also cut its outlook for the region as it reported second-quarter earnings, predicting a contraction for 2012 after previously anticipating a stable development.
“When the market goes so low you need to adapt your cost,” Fontana, who took over in February, said on a conference call. Spain, Italy and Bulgaria suffered the steepest volume declines, he said.
Holcim cut almost a third of employees in Spain in July, as it battles overcapacity in southern Europe.
A building slump in Europe, which accounted for 29% of Holcim’s sales in 2011, means cement makers are in the midst of restructuring their units in that region, including headcount reductions and plant closures.
As part of the changes, three managers will leave the executive committee and Urs Bleisch has been promoted to head Fontana’s Holcim Leadership Journey.
Holcim will bundle several European divisions into one unit led by Roland Koehler, who is now CEO of Holcim Group Support.
Bernard Terver, who leads Holcim’s US businesses, will join the executive committee.
Executive committee members Benoit-H. Koch, responsible for North America, the U.K., Norway and the Mediterranean, and Patrick Dolberg, responsible for Western and Central Europe, will leave the company.
Urs Boehlen, member of the executive committee and currently responsible for Eastern and South-eastern Europe, CIS, will step down and act as an adviser to Fontana until his retirement in 2013.
Holcim will increase operating profit by at least 1.5 billion Swiss francs by the end of 2014 by cutting energy consumption, supply chain costs, and introducing measures to improve customer loyalty, Fontana said in May.
The company said it expects better than previously forecast growth in North America and reiterated its target of overall organic growth in operating earnings before interest, taxes, depreciation and amortisation this year.
