On the Construction Market and North American Business Trends

Holcim CEO Talks Construction Market Leadership for North American Business

Holcim is a global building and materials company based in Switzerland. It merged with a company based in France called Lafarge, which was primarily a producer and distributor of cement products. But through the merger with Holcim, not only is the company an industry leader in cement, the company has also transformed itself into a full-on buildings and materials company focused on sustainability solutions.

Holcim’s current CEO Jan Jenisch spoke to both CNBC and Bloomberg about the prospects for the company’s separate listing in North America. He got the media’s attention with this comment to Bloomberg reporters:

“This is foremost a very strategic decision. We have developed the most successful company in the buildings space over the last years. And especially in North America we doubled the company in the past four years to over $11 billion, with leading margins, and now our plan is to take that to $20 billion.”

The big numbers are what investors like to hear about — and $20 billion in market cap is quite big! — but I was more intrigued by the CEO’s comments about why the company is taking such a big part of its portfolio exposure into the US market, particularly the opportunities from the Biden Administration’s Inflation Reduction Act (IRA).

He even called the company’s North America business a “rock star business” which generated a couple of headlines in the media as well. What the CEO means by this is that the company will be able to draw on capital markets in the US, primarily revolving around access and exposure to the US dollar. Here brushed off the impact from US interest rates. Here’s what he said:

“I know there’s a lot of talk about short-term trends in the US, or interest rates, but we have to see the bigger picture — and the bigger picture is huge! We have the onshoring going on, the re-industrialization of the US, we have many companies from Asia, from Europe, building up manufacturing capacities again…then on top of that we have the re-build of the infrastructure.”

For more about the global market trends facing the construction and materials industry, read this edition of [Industry Talk Time] by Areas & Producers.