By Divya Chowdhury and Nishara Karuvalli Pathikkal
DAVOS, Switzerland (Reuters) – Holcim expects the U.S. Inflation Reduction Act (IRA) to provide strong momentum for its business in North America which is outperforming other regions, the company’s head of Europe said on the sidelines of the World Economic Forum’s annual meeting at Davos.
The world’s biggest cement maker expects its North American sales to represent half its business in the next few years, from around 40% currently, Miljan Gutovic told the Reuters Global Markets Forum.
“I expect that Europe will be softer in comparison to the U.S., but with the latest Inflation Reduction Act we have, we believe that in the U.S., especially in the second-half, we will have a strong momentum.”
“To us this (North America) is still the most attractive market,” said Gutovic, who is also Holcim’s global head of decarbonisation.
IRA, seen as the biggest climate package in U.S. history, aims to benefit decarbonisation efforts, cut greenhouse gas emissions and create major tax incentives for clean energy.
Holcim has set itself sustainabilty goals and two years ago launched a low carbon range of products including cement. “We have cements now where there is up to 90% lower CO2 content versus traditional segment. These products are making momentum in the market,” Gutovic said.
In addition the company has several decarbonisation efforts through carbon capture utilisation and storage projects under development.
The Swiss company reported stronger than expected third-quarter results in October last year, recording a bumper performance in North America that offset a slight downturn in Europe.
Gutovic expects continued softer volumes in Europe, but sees a recovery in its German and French businesses in the second half of 2023.
He was also optimistic about the company’s Eastern European business as order books looked “healthy”.
“To our surprise, in the neighboring countries of Ukraine we have not seen any significant drop in the volumes. In fact, we have seen strong performance in volumes in countries like Romania,” Gutovic said.
Gutovic expects a similar level of activity in the company’s mergers and acquisitions this year as it sees more opportunities for consolidation.
“When it comes to emerging markets, we will stay in some of them while the others, depending on what we see in the future, there might be some additional divestments, especially in Africa and some other parts of the world,” he said.
(Reporting by Reporting by Divya Chowdhury in Davos, Savio Shetty in Mumbai and Nishara Karuvalli Pathikkal in Bengaluru;Editing by Elaine Hardcastle)
