French Cement Company Sells Promise of Greener Future in IPO
French Cement Company Sells Promise of Greener Future in IPO
(Bloomberg) -- A tiny French cement company sold shares on the Paris exchange with a big promise: to shake up global production and reduce carbon emissions.
Hoffmann Green Cement Technologies pitched to investors a “disruptive” manufacturing process based on changing the composition of cement so that it no longer contains clinker, the main source of carbon-dioxide emissions. This helps to lower the carbon footprint by a factor of five, the company says. The stock rose on its trading debut on Monday.
Hoffmann’s climate-focused business model is a response to the concern raised by policy makers and investors about greenhouse gases coming out of the building and construction industry. Cement makers are responsible for about 7% of world carbon emissions, more than all the trucks on the road, and some industry giants like LafargeHolcim Ltd. have also pledged to lower their output of polluting gases.
Hoffmann’s market capitalization of 236 million euros ($263 million) is tiny compared with LafargeHolcim’s 30 billion francs ($30 billion).
Hoffmann plans to use the IPO proceeds to accelerate development, notably with the construction of two new production sites in France. The company aims to raise annual capacity 11-fold to 550,000 tons by 2024, which would generate sales of about 120 million euros and give it 3% of the local market.
The stock rose as much as 2.4% from its listing price of 18 euros and traded 2% higher at 11:42 a.m. in Paris.
LafargeHolcim, Europe’s largest cement maker, is spending 160 million Swiss francs on 80 projects across Europe to cut annual emissions from its cement manufacturing processes, Marcel Cobuz, the company’s head of Europe, has said.
LafargeHolcim also plans to use materials other than clinker to make cement. Clinker comes from baking limestone until carbon is released, leaving a material chemically known as calcium oxide. Substitutes can include fly-ash, which comes from the chimneys of factories that burn coal, or slag from steel-making blast furnaces.
Cement is a focus because its carbon footprint is so big -- and use of the material is rising along with development, especially in Asia and Africa.
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker, Andrew Noël
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