Building materials and mining group Afrimat says it is satisfied with the steady progress being made in respect of the Lafarge integration.
“The team’s successful mitigation of losses in certain operations is a testament to our confidence in this strategic acquisition, an essential component of Afrimat’s ongoing diversification,” it said in a business update on Tuesday.
Afrimat, which recently paid $6m to acquire Lafarge, is confident it can turn the ailing cement company around.
The loss-making cement component in the Lafarge business has been reduced but remains loss-making at this point, Afrimat said.
“At the time of the acquisition, the cement kilns were extremely unreliable, and a highly experienced team is working on the turnaround. Though an improvement is already visible, this business component is expected to remain loss-making by the end of the second quarter,” it said.
Innovative strategic initiatives are expected to turn this business unit into a good contributor in future.
Turning to business conditions, Lafarge said the first half of the 2025 financial year is characterised by two distinct quarters. In the first quarter (March-May), the bulk commodity market was lacklustre.
The continued underperformance of the iron ore export corridor, together with ArcelorMittal SA’s issues, specifically the force majeure being declared at the Vanderbijlpark facilities due to the freeze of two furnaces, affected Afrimat’s volumes in the first quarter.
By the second quarter, volume increases were evident, as domestic customers with furnaces started up again, and tender activity increased in road, rail and small infrastructure projects. However, the increase in volumes in the second quarter is not sufficient to make up for the volume decline in the first quarter.
In the construction materials segment, volume levels were maintained in the first quarter and by the second quarter, the integrated Lafarge quarries increased volumes.
The suspension of load-shedding is positive for both the industrial minerals segment and its customers. Starting from a low baseline, the volume increase is encouraging and was further supplemented through strategic marketing initiatives into new markets, Afrimat said.
The limited availability of locomotives, derailments and maintenance downtime at Transnet continue to constrain the performance of export iron ore.
The first half of 2025 volumes are down by 20% year on year. The international iron ore price, which has remained in a low trading band, remains attractive to Afrimat, which has positioned itself as a low-cost operator.
Local iron ore volumes suffered a 70% retraction in the first quarter due to significantly reduced volumes taken by ArcelorMittal. Volumes for the second quarter began increasing and are tracking at normal levels. Afrimat expects volumes to ArcelorMittal to return to normal ranges for the remainder of the financial year.
With the single super phosphate plant commissioned, sales volumes for fertiliser are coming through and were ramped up to achieve the planned volumes of 30,000 tonnes by 2025, which will contribute positively to the 2026 financial year.
Afrimat continues to engage with Transnet and participates in the Ore User’s Forum. In the second half, Afrimat is expecting to dispatch at least three shipments of export anthracite in addition to normal local sales.
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