Interview: Janusz Miluch, Lafarge Cement

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How is Lafarge Group experiencing the business environment in Slovenia (efficiency investments, procedures, bureaucracy and administration for foreigners …)?

Lafarge Group entered the Slovenian market in 2002. We followed the same Group policy as in all markets, showing our long term commitment with the cement plant. Therefore, we have invested over EUR 32m into the modernisation of the plant in the past few years. 78% of these investments were directed toward environmental protection. The cement plant in Trbovlje is thus one of the most advanced factories within the Lafarge Group.
During our 10 year presence in Slovenia, Lafarge has experienced what we could call “typical challenges” for foreign investors in this country. I am referring particularly to the administrative procedures which could be done much faster and with far less complications when one is trying to make an investment; the lack of long-term tax incentives for foreign investors and also the sometimes less than clear legislation. For example, after more than seven years, our plant still hasn’t received a valid environmental permit for cement production and use of alternative fuels, which we haven’t faced in the neighbouring countries, including those with very high environmental standards – like Austria. This is definitely not a positive signal for potential foreign investors willing to invest in the region.

What are the reasons then that Lafarge is still in Slovenia?

Slovenia also has a lot to offer to investors. For instance, your geographical position is one of your big advantages. Lafarge’s cement plant is located near three major cities – Maribor, Ljubljana and Zagreb. Furthermore, Slovenia has a skilled and educated workforce. For us it was very important to be able to count on a good, reliable workforce with technical skills and knowledge.
As I already said, our investments are always strategic and long-term. To that end we are continuously investing in the plant to improve its environmental performance and efficiency. Based on that, we are certain we meet all the requirements to obtain the environmental permit which would enable us to remain competitive and offer high-quality products in this market. Lafarge Cement is operating in a very challenging environment but, despite that, we believe that in the long run there is still a lot of potential for growth and development of the plant, including the positive impact for the local community.
In my opinion, in Central Europe, we will now face strong competition between countries and even local communities, to attract investors to keep or to place new factories or service centres in their area.
And this is a big question in front of authorities and local decision makers – how to make it happen because to be just “good enough” will not be sufficient in a very competitive environment.

What are Lafarge’s plans at the Group level and in Slovenia for the near future?

The whole construction industry is affected by the economic downturn. In order to respond to these challenges, Lafarge Group started a reorganisation process which included the Trbovlje’s plant. The aim of the reorganisation was to optimise production and enable the company to tackle the changing market conditions more efficiently. The financial results of the Group for Q1,2012 prove that the reorganisation was successful. Nevertheless, our long-term plans for Slovenia depend mainly on the environmental permit and on the construction market situation in the region and Slovenia.
Lafarge Cement sees the potential of operating in Slovenia but need fair and equal treatment with other plants in Slovenia and abroad. We continue investing in the company. In 2011, we invested EUR 1.2m in the plant, once again focusing on environmental protection.

How does the transfer of a multinational’s company’s good practices reflect at the local level?

Every Lafarge’s company has to strive to implement as many corporate good practices as possible. And I can proudly say that Trbovlje plant is very successful at it. One of the practices we are especially proud of is the high environmental standards of the company, one of the best in the Group. Another thing that is very important in our company is health and safety at work. On 7 August, we celebrated two years without a work related injury in the factory.
One very relevant aspect of Lafarge’s corporate practices is also cooperation with the local community. In all markets we try to contract local services and providers whenever possible. In this respect, I believe that Lafarge Cement is an important partner of Zasavje’s local industry. In the last 3 years, we worked with 93 companies from Trbovlje, in numbers that means EUR 19.5m of turnover. In the past 5 years we created EUR 41.1m of turnover with companies from Zasavje.

What is your policy in the area of social responsibility and relationships with the local community?

Lafarge is globally well known for its sustainability policy. The global guidelines are also implemented in Slovenia. We are committed to constant improvement in our environmental practices. Furthermore, we are active in many projects that foster cooperation with the local community. Together with the Faculty of Architecture we are developing a project for renovating the entry info Trbovlje to make it visually more appealing. In cooperation with professionals and local schools we started a project of quarry rehabilitation. Last year, we inaugurated an industrial path around the cement plant. It offers visitors the chance to learn more about the nature of cement production and also to get to know details about the factory. Anybody can visit it and we are happy with the response – last year we had 935 visitors, this year over 575 already. And last but not least, Lafarge Cement has been supporting local organisations with donations and sponsorships throughout the years, helping them to further improve the quality of life in the region.