Pursuing asset light strategy with new franchised ready-mix concrete plant in Georgia

Pursuing asset light strategy with new franchised ready-mix concrete plant in Georgia

Today LafargeHolcim is inaugurating its latest ready-mix concrete plant with a partner in Georgia, extending the Group’s geographical footprint. To cover new opportunities in this promising market, LafargeHolcim adopted an agile and asset light approach: franchising.


Asset-light in action: LafargeHolcim franchises

Franchises are an illustration of the Group’s systematic drive for an asset light approach across our business. We see franchising as a means of leveraging our know-how to create valuable new relationships with customers and cover new markets.

We have franchise and license agreements with local partners in 14 countries, such as France, Morocco, Zambia, India, Mexico, Indonesia, Poland, Serbia and Spain.

A LafargeHolcim strategic pillar: asset light

Who isn’t familiar with the world’s most famous fast food franchise, whose golden arches are now ubiquitous in every corner of the globe? But did you know that franchising can also be applied to the construction sector? LafargeHolcim has embraced franchising as part of the Group’s asset light strategy, as presented by CEO Eric Olsen during our 2016 Capital Markets Day.

Discover CEO Eric Olsen's presentation

How does franchising work?

We partner with local, independent actors who operate under LafargeHolcim brands to produce and distribute our building materials. Industrial Segment ReadyMix Manager François Bosc explains: "Franchising enables the Group to enter new markets while optimizing current assets, increase our brand value and promote our international expertise and innovative solutions."

The Group’s Head of Industrial Channel Antoine Carnot adds: "Franchises reinforce our position as an industrial solutions provider rather than a simple materials channel."

The other faces of asset-light

In addition to franchises, LafargeHolcim adopts other asset-light approaches to growing our business and boosting the value of our brand: licenses allow independent players to sell our international concrete brands alongside their own products, whereas alliances enable them to benefit from LafargeHolcim endorsement and operational support.


Seizing new market opportunities in Georgia 

The ready-mix concrete plant Georgia is the latest example of our Industrial team’s franchising offer. The Georgian partner already owned a grinding station and had a franchising agreement with LafargeHolcim Trading to produce and sell cement. Wanting to increase his stake in the country’s growing infrastructure market, the customer decided to launch a ready-mix concrete activity. The franchise contract was the perfect answer to his needs: partner with a strong, reliable brand like LafargeHolcim with a reputation of quality and acquire best-in-class technical and operational expertise.

That’s why the Georgian partner signed a LafargeHolcim franchise agreement in October 2016 for his ready-mix plant in Tbilisi. The contract gives him access to the Group’s operational know-how in the ready-mix segment, which can be adapted to the local market. After helping to design and construct the plant, our teams provided training and tools based on ready mix operating best practices for topics like concrete production software, sales and marketing and quality control.

The benefits of the franchise are a game-changer for the customer: “The Georgian cement market is becoming increasingly sophisticated. Infrastructure project investors are more likely to work with us thanks to our connection with the LafargeHolcim brands and the standards it guarantees. This was also a great opportunity to gain specific knowledge required for operation and benefit from best practices.”