Lafarge sweats as embargo glides into boardroom
ZIMBABWE’s second biggest cement maker, Lafarge on Thursday said it was exploring “various courses of action” to defend its interests after multiple sanctions were slapped on firms linked to Fossil Group, the empire that controls its major shareholder, Fossil Mines.
Ahead of Thursday’s announcement, Lafarge had halted trading on the Zimbabwe Stock Exchange (ZSE), as its board evaluated how the US embargo would impact the firm, which has been a part of Zimbabwe’s construction environment for almost seven decades.
Lafarge was established in 1954 and listed on the ZSE in 1983.
The US government recently added Fossil Agro and Fossil Contracting — part of the Fossil Group — on a list of firms and individuals that have been sanctioned at various stages in the past two decades.
Major shareholder, Obey Chimuka was also placed on the sanctions list.
The US measures came only weeks after Fossil Mining concluded its US$29,7 million takeover of Lafarge, giving it 76,45% shareholding.
In a statement released on Thursday, acting company secretary Arnold Chikazhe hinted that the US government’s action was already being felt at the operation.
“Certain persons and companies linked to the majority shareholder Fossil Mines were placed under targeted economic sanctions by the United States of America’s Office of Foreign Assets Control,” Chikazhe said.
“These have impacted some processes within Lafarge Cement Zimbabwe. The company is considering various courses of action with the view to protecting the business and the interests of all stakeholders. The company does not anticipate any disruptions in the supply of its much-needed products to the construction and infrastructure sectors of Zimbabwe’s economy.”
Early this month, the US department of the Treasury’s Office of Foreign Assets Control said the companies and individuals placed under sanctions had ties to persons already on the embargo.
“The government of Zimbabwe awarded Fossil Contracting nearly US$40 million in contracts in 2021, the US State Department’s statement read.
“Fossil Agro and Fossil Contracting were designated pursuant to EO 13469 for providing material, logistical, or technical support to the government of Zimbabwe,” the statement added.
Fossil, a relatively unknown outfit with interests spanning from construction to mining, clinched a deal to buy Associated International Cement Limited (AICL)’s 76,5% stake in the business early this year.
AICL is member of Swiss-based cement giant Holcim Group which has been divesting out of several markets.
Chinese outfit, Huaxin had been seen as a front runner in the race to takeover Lafarge after executing similar deals in neighbouring Zambia and Malawi.
But Fossil lined up a string of local lenders and pension funds to back its takeover, and promised that it would maintain Lafarge’s listing on ZSE.-newsday
