January 20, 2022 4:07 pm

Christian Dedeu: “This year there will be more traction from public works in construction”

hristian Dedeu, CEO of Holcim Argentina, believes that the construction industry, of which his company is a supplier, will have a similar evolution this year to that exhibited in 2021, but with a difference that is far from minor: a greater state boost. “We expect the same figures as last year, that is, a growth of 5%, but with more traction from public works,” said the executive.

proud that ihis company has made one of its largest investments in recent decades in 2021, disbursing US$120 million to double the capacity of its plant in Córdoba, Dedeu also highlighted the horizontal expansion of the company, driven by acquisitions and launches that allow it to expand its portfolio. “We include mortars, glues, lime, waterproofing, and the idea is to continue growing,” he said.

With 90 years of presence in Argentina, Grupo Holcim fully entered the waterproofing market by purchasing Firestone Building, a company specializing in roof coatings, with which it presented GacoFlex TechoProtect, the brand of liquid membranes. In addition, it opened 80 Disensa stores, its own network of corralones and hardware stores, while launching a cement and concrete product, which have a 20% and 35% lower carbon footprint, respectively. “We want to be carbon neutral by 2050,” Dedeu commented.

–How is the sector in general and your business in particular?

–The sector rebounded in 2021 compared to 2020, the year in which, as a result of the pandemic and the fact that there were many months in which it could not be dispatched, cement fell 12%, compared to 2019. Last year it ended 25% above 2020. This was mainly driven by private work; at the beginning of the pandemic, due to the renovations derived from the need to stay at home, but later with larger ventures.

-What do you expect from now on?

–The expectation in terms of the construction industry is that 2022 will be similar to 2021, but more driven by public works, that last year did not look so strong. Therefore, we expect the same figures as last year, but with more strength from public works. So I estimate a growth of 5%, compared to 2021.

– So the greatest traction this year is going to come from public works?

-Yes, there is a lot of public work that has been announced and that is in the process of bidding and projects that will be carried out in the future and boost the sector. In our case, the largest works come from the road infrastructure part. Those are intensive in what they are concrete, that’s why I think the growth is going to come from there.

–What investments did Holcim make in the country and what others do you have in mind?

–In 2018 we began an investment that we finished this year, due to the delay caused by the pandemic, which was one of Holcim’s largest investments in recent decades: US$120 million, we doubled the production capacity of our plant in Córdoba , which is the largest we have (the other three are in Jujuy, Mendoza and Campana, in Buenos Aires). As of May, in Córdoba we have a comprehensive production line, with which we have the capacity to absorb a 40% growth in the market.

–Do you estimate that the Holcim market will grow at that rate?

If one analyzes Argentina in the last 15 years, it can be seen that it was one of the countries that has grown the most in terms of construction, with a lot of volatility, but with an average growth higher than the rest of Latin America. This has a lot to do with the country’s housing and infrastructure deficit. We believe that this growth of the last 15 years, which was 3% per year on average (with very high figures in some years and very low in others), is going to materialize in the long term.

-You have made purchases recently. Do you have other acquisitions in mind?

–We acquired the business unit of the Firestone company, which is called Firestone Building, whose specialty is roof coatings. Along these lines, we launched two months ago in Argentina the first waterproofing products for roofs, from the Techo Protect line. It is a new line for us, which historically has been dedicated to the production and marketing of cement, stone aggregates and concrete, but for two years we have been diversifying the portfolio: we include mortars, glues, lime, waterproofing.

–Is Holcim’s core business going to continue to be cement?

-The core business ours is to provide construction materials. Today, clearly within our sales package, cement takes the largest share, but the intention, both globally and locally, is that by 2025, 30% of sales come from products other than cement.

-How is the issue of hiring employees?

–During the pandemic we grew in number of employees, because we opened new lines of business in the last two years. At Holcim today more than 1,100 people work directly and our perspective is to continue hiring, due to the growth of the cement business and the rest of the units.

–What worries you most about the Argentine macroeconomy?

–Something that has both sides: the instability of the exchange rate. On the one hand, it is favorable in construction, because many people have nowhere to invest their money, and between inflation and devaluation, and bet heavily on bricks that in historical terms retain their value; but the other side is the uncertainty and financial volatility that delays the decision of investors in medium and long-term projects.

– And inflation?

-We have a price policy adjusted to the market. Clearly, our cost structure is influenced by inflation: half is in pesos and the other is in dollars. Today we support the Government and work with Precious Care, notwithstanding this, we seek to maintain the profitability of the company and, although this year we are below the CPI, the intention is at some point to accompany that index.

–How much do you invest in sustainability?

-In Argentina for this year the largest investment will be carried out by the company Geocycle, dedicated to co-processing through the use of waste or by-products from other industries, such as the oil industry. In 2022 we will make investments in Jujuy and Córdoba. Last year we already made alliances at the provincial and municipal levels, to co-process household waste from various cities, and the idea is to expand. These co-processed products are then used for the production of cement, which helps us reduce our carbon footprint. We are also investing this year in a plastic recycling factory. In Argentina, our carbon footprint is lower than in the rest of the world and by 2050, in line with the group’s goal at a global level, we hope to be carbon neutral.

– Do you have sustainable products?

-Yes, this year we launched two product lines. One in the cement channel, which has a 20% lower carbon footprint. And another one that is a sustainable concrete that has a 35% lower carbon footprint, which today is being used in the work of Uña Cuá, which is part of Yacyretá.

–How do you deal with the importation of inputs and with the transfer of foreign currency abroad?

-The issue of imports has normalized in recent months. Yes, there were other complicated months, which in fact slowed down the investment that I mentioned, because it prevented us from bringing in some spare parts for the factories, but that is now behind us.. Regarding the transfer of foreign currency, today we cannot transfer dividends to our parent company, so we are using part of it to reinvest and grow our operations in the country.

– Robotization advances in all sectors. How does it impact construction?

–In a house, almost 50% of the cost is labor; so it is difficult in the short term to replace that with technology. However, in Japan or Europe one sees the growth of construction with 3D printers. This gives you speed. Holcim has a global research center in Lyon, France. We are working in several countries with this technology and we are analyzing in a few years to bring it to Argentina as well.


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