Holcim CEO flies austerity style
Bernard Fontana, chief executive of the worlds largest cement maker Holcim, is leading by example in terms of cost-cutting by flying economy class on short-hall flights.
In an interview at Holcim headquarters in Zurich Fontana said:
I respect the policy which we set, which is (a flight of) more than five hours is business, less than five hours is economy, and I apply the same policy to myself as to everybody.
Last year, Holcim launched a cost-cutting program with the intention to boost its return on capital investment to 8 per cent and operating profits to over £1bn by 2014.
The Swiss company with a presence in 70 countries and 90,000 employees has suffered declining sales due to the slowdown in global economic growth. Slower growth in the first half of 2013 combined with severe weather conditions led to a fall in construction, with Holcim seeing consolidated sales down 3.7 per cent and consolidated net sales down 5.1 per cent.
However analysts at HSBC have estimated Holcim's return on investment capital may be as much as 8.7 per cent in 2014. The company has improved its financial situation, reporting in August a reduction in financial debt of £820,000 compared to the same period last year. The company compares favourably with rivals such as HeidelbergCement in term of the health of its balance sheet.
In terms of growth markets Fontana still expects significant sales in India despite a decline in the country's growth rate to 5.3 per cent. Fontana told Reuters in September:
Even with five percent GDP growth, you can have significant growth of cement. We believe that the need will be higher to meet the demands of the population.