(PHOTO: PHIL SANGWELL / WIKIMEDIA.ORG)

In April 2014, Lafarge and Holcim stated that a merger of equals built on the strengths and identities of the two companies was under consideration. The world’s two largest cement makers as regards production capacity and the number of production plants, given the strong complementary of their portfolios and the cultural proximity between the two companies, believed that there was a rationale in considering a potential merger that could deliver significant benefits to customers, employees and shareholders. The two companies also committed to local communities and to setting the benchmark on corporate social responsibility including sustainability and climate change mitigation.

About one year later, after the two companies had received all relevant anti-trust approvals within the expected timeframe, the global launch of the new company was celebrated. Over the media conference, it was announced that operations in Europe, North America, Brazil, India and the Philippines were being divested within the coming months.

The new entity LafargeHolcim, with a presence in 90 countries and a focus on cement, aggregates and concrete, became the world leader in the building materials industry with 115,000 employees around the world and combined net sales of EUR 27 billion. LafargeHolcim claimed to be the industry benchmark in R&D and to serve to the individual homebuilder with the largest and most complex projects the widest range of value-adding products, innovative services and comprehensive building solutions. With a global production capacity in excess of 400 million tons per year, the new organization also committed to driving sustainable solutions for better building and infrastructure and to contributing to a higher quality of life.

A few weeks later, the boards of directors of Lafarge and Holcim approved the appointment of Eric Olsen as future Chief Executive Officer of LafargeHolcim. He was to be in office for the closing of the merger project to meet changing market needs and, presumably, to fulfill its social responsibility to local communities. Eric Olsen, 51 years old, American and French citizen, was Executive Vice President Operations of Lafarge, responsible for a large number of countries including some in the Middle East.

Eric Olsen inherited a deal, which had been dogged – and nearly derailed – by culture clashes between the management of France’s Lafarge, run by Bruno Lafont, and that of Holcim of Switzerland, chaired by Wolfgang Reitzle. With such a big deal, it can happen that some skeletons are kept hidden or left in the closet.

In June 2016, the French newspaper Le Monde reported that Lafarge paid taxes to middlemen in Northeastern Syria in 2013-2014 to keep using their factory regardless the war fought in the region. France and the United States were also involved against those same people Lafarge had been dealing with for its own interests.

Sometimes the call to make a profit first may be stronger than being seen to be consistent with what they had morally stated.

In March 2017, French Foreign Minister Jean-Marc Ayrault criticized LafargeHolcim for competing to build the wall on the Mexico-United States border promised by President Donald Trump. Meanwhile, the city of Paris discontinued their contract with LafargeHolcim to build Paris-Plages, temporary artificial beaches created each summer along the river Seine due to Trump Wall Proposal. The company had been building these beaches for free since 2002.

In April 2017, because of the strong tensions facing the Swiss-French company following the admission that it had made deals with unspecified groups in Syria, the CEO, effective Eric Olsen, announced his departure from July 15. However an internal investigation concluded that Olsen was not responsible for or aware of any wrongdoing linked to now-discontinued Syria operations. A French online investigative and opinion journal suggested that the director of security for Lafarge and a former candidate for a French political party was aware of the payments. Meanwhile, a French law association filed a lawsuit against Lafarge over the payments.

A Few days ago, cement maker LafargeHolcim announced that Jan Jenisch, the CEO of Swiss building materials company Sika, would become its new CEO as of October 16 following the departure of Eric Olsen amid fallout from its admission that it had struck deals with armed groups in Syria.

Chairman Beat Hess said the 50-year-old Jan Jenisch has a deep understanding of the building materials sector and praised his agile leadership style, but in the end, no note of the moral principles of the new CEO as nothing wrong had happened with the Swiss-based giant.

Regardless of the values that companies in other world regions may believe in, Western companies must stick with what they announce or state, particularly when it concerns the ethical and social sphere.

References: Global Cement, 2012; Financial Times, 2016; LafargeHolcim, 2016; The Telegraph, 2017