In spite of globally weak markets, news on the CEMATRIX – Lafarge agreement has been well received with the stock climbing 20% from Friday’s $0.39 close. Amidst a sea of global negative news and uncertainty, there was a positive embrace of the announcement that CEMATRIX has entered into a five-year Joint Marketing Agreement with Lafarge Canada for the development of cellular concrete markets across Canada. The plan is to increase sales to the benefit of CEMATRIX and Lafarge by heightening awareness of the construction challenges which can be solved with cellular concrete solutions.
The obvious question is, why would a company the size of Lafarge be interested in a formal agreement that ties the companies at the hip? From CEMATRIX’s perspective, CEMATRIX has been a large customer of Lafarge for many years and the companies have successfully collaborated on many past projects. More importantly, every cubic metre of cellular concrete that CEMATRIX places is a win for Lafarge as it brings new business to the cement giant that may have been previously unavailable.
Lafarge is a major player in the aggregates, cement and concrete industries, and is a world leader that operates in 64 countries and employs 65,000 people. The most recent numbers on the Lafarge website states sales were 15.8 billion Euros in 2012. Lafarge’s recent merger with Holcim in 2015 makes the combined companies the largest cement company in the world.
CEMATRIX has developed and acquired technologies, proprietary formulations and specialized processes that ensure product consistency with endless capabilities. Lafarge has a massive marketing team that could have a material impact on CEMATRIX’s revenues by driving sales and awareness of the innovative product to the next level.
CEMATRIX must be expecting a large increase in sales. It was noted in the news release that in order to meet the expected demand with the new working relationship, CEMATRIX plans to invest approximately $2.5 million to build two new dry mix units and have them up and running by the start of the busy season in spring of 2017. Other equipment requirements may follow.
CVX’s current North American pipeline of potential projects now exceeds $120 million in total, of which 88% is infrastructure related.
To view news release, please click here.