LafargeHolcim’s aggregate production halted for two weeks
A ministry probe committee found that the company was crushing aggregates at an unapproved facility in Sunamganj
LafargeHolcim Bangladesh Ltd has halted its business of crushing and selling aggregates derived from imported lime stones coming from its Meghalaya mines for two weeks.
On 23 November, the Appellate Division stayed a High Court order on the matter for two weeks.
Earlier, on 16 November, the High Court issued a one-month stay order on a Ministry of Industries letter, issued on 16 September, that asked the cement maker to stop crushing aggregates.
Prior to the ministry's order, a government committee found that the company was crushing aggregates at an unapproved facility in Chhatak, Sunamganj.
The ministry launched its investigation based on complaints from local aggregates crushers and merchants, alleging that LafargeHolcim is taking unfair advantage in taxes and duties.
The listed cement company began crushing and selling aggregates in January and following that, its profits began to increase.
Analysts said the aggregates business contributed to around one-fifth of the company's revenue for the first nine months of 2020 and at least one-third of the company's profits over the same period.
Following the news regarding the closure of LafargeHolcim's most profitable aggregates business, it stopped rallying in the Dhaka Stock Exchange (DSE) and saw a sharp market correction.
In five weeks, its stock price dropped below Tk75 each from a six-year high of Tk107. On Wednesday, its share closed at Tk76.10 at the DSE.
The company posted Tk0.81 in earnings per share for the July-September quarter, which was Tk0.56 in the same quarter last year, excluding earnings from the profitable business of aggregates.
Now, analysts are curious to see if LafargeHolcim's cement business can offset the lost aggregates revenue in the ongoing quarter.
