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OCTOBER 2013
Focus on Germany
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against local companies, like for example the German Aldi chain without success. The German Mittelstand is a powerful part of our national economy and a lot of these businesses are family-owned. They are typically not looking at financial metrics like return on capital employed like stock listed companies do but have a very good feeling about risks and rewards.
I see that the company’s revenue has increased during q2 2013; to what do you attribute this?
We increased revenue in the second quarter despite lower sales volumes and negative exchange rate effects. This was only possible because of the successful implementation of price increases in large markets of ours. This has been and continues to be a focus area for us during 2013 and also for the next two years.
How do you see the rest of the year faring for the company?
We expect an improvement of our business compared to the first half which was impacted by a long and cold winter and a very wet spring.
What are the most common legal implications to arise in your day to day role?
I see two areas of increasing relevance: Globalisation in a world with different local laws and public resistance against companies mining mineral resources.
Different local jurisdictions with different legal rules can pose a major hurdle for efficient cross-border business. Lawyers are required to find suitable answers
to mitigate this
impediment. The harmonisation of national laws as performed by the European legislator has proven to be helpful for many years. However, unreflected harmonisation bears the risk of
collateral damage. To neglect a natural balance between parties with different interests through an unbalanced adoption of US law tools may shift the legal risk balance against industry. Examples can be seen in the litigation rights, class actions and punitive damages. These have the potential to dramatically increase the cost of doing business which in return will definitely back-fire to consumers via a risk premium. I hope the politicians will carefully weigh out such risks.
Secondly, our industry depends very much on mining natural resources like limestone or aggregates (sand and gravel). Quarries often are located in the proximity of residential areas. In developed markets it is a common fact that obtaining quarry permits is a complex and lengthy process that requires an ever-increasing effort in cost and time. Moreover, public resistance against all kinds of industry activities has recently reached a new dimension. Almost no new permit or permit extension in Germany can be obtained without resistance of NGOs and local initiatives. In my eyes people living in developed markets have all but forgotten the role and benefits companies contribute to the public good. Industrial companies, politicians and local authorities need to co-operate and align their arguments to gain back the trust of the public opinion in companies committed to sustainable and responsible business. In the recent past HeidelbergCement has invested a great deal to demonstrate its sustainable business model and has
simultaneously
increased its efforts in good corporate citizenship.
Has Heidelbergcement been involved in any mergers or acquisitions recently? If so, could you please tell me about it/them?
In the recent past we took advantage of the market development and did some smaller scale acquisitions. First we increased our stake
in the leading Australian cement producer Cement Australia from 25% to 50%. In addition, we bought the remaining stake of Midland Quarry Products, which is a very well positioned asphalt and aggregates producer in mid- England. The last large scale acquisition dates back to 2007 when we took over Hanson and became the world’s largest aggregates producer.
Is there anything else you would like to add?
At HeidelbergCement, we are celebrating our 140th anniversary this year. This means that our company is among the oldest industrial groups in Germany. We are very proud of our long and successful history. For us this is a clear proof of the sustainable nature of the way we conduct our business. LM
Contact Details:
dr. Bernd Scheifele HeidelbergCement AG Berliner Strasse 6 69120 Heidelberg Germany