Update on the situation in Indonesia

2 June 2006

Of the 274 houses Lafarge has committed itself to building in the village of Lamkruet, Indonesia, 60 were completed and given to new homeowners during a “key handing” ceremony. Another 60 houses are under construction. The Lafarge Aceh Volunteer Program (LAVP) was developed to bring Lafarge employees to the area and help build houses. Over 50 employees volunteered from Lafarge Malaysia, England, Kenya, France, Germany, Ireland, Japan, Brazil and Indonesia itself.

The seven mosques needing renovation are now complete. The largest of the seven, Ulee Lheu, is an ancient mosque and required special care and government involvement to respect its heritage.

Lafarge's mobile clinic's 2 rounds per week schedule have been increased to 3 with the support of a local clinic. More than 3,000 people have benefited from these rounds. The mobile clinic also provides now monthly educational meetings for local villagers to learn about health issues including the improvement of health conditions.

4,500 sets of stationery, books, backpacks and other materials have been delivered to elementary and high school students. A mobile cinema is in the final preparation to conduct tours to 10 elementary schools regularly to show educational videos.

Eighty percent of the 300 participants in Lafarge's training are currently employed and working mainly in construction, on plantations or with NGOs. Another 100 villagers were trained in May with a focus on entrepreneurial skills and guidance on building their own business. Special focus was given to empower women through sewing and food processing skill trainings.

The Lafarge Aceh facilities are now under reconstruction. The Lhoknga Packing Terminal is scheduled to be finished by June 2006, while the harbor is now ready for ships to dock. When this packing terminal is ready, cement bulk will be shipped directly from Langkawi (Lafarge Malayan Cement) to distribute to the Aceh Market.

193 Lafarge employees and subcontractors working at our Aceh cement plant, as well as numerous members of their families perished following the tsunami last December. The Group responded immediately to provide emergency care as as well as assistance for survivors. It then turned to more long-term projects to assist local communities in their return to a normal life. Lafarge likewise confirmed its plans to rebuild the Banda Aceh plant.

Bernard Kasriel, Lafarge's'Chief Executive Officer, announced on July 7, to invest $ 90 million to rebuild the plant in Aceh, Northern Sumatra, Indonesia, providing the final reconstruction costs are in line with those detailed estimates. This plant was destroyed during the tsunami on December 26, 2004.

The new plant will be equipped with state-of-the-art technological standards and have a production capacity of approximately 1.6 million tonnes. It is expected to be operational by mid-2007. It will help economic recovery in the island's northern regions which greatly suffered after the tsunami, as part of the Group's aid plan for its employees, sub-contractors, and local communities.

“We have long been present in Indonesia, and today, beyond from the emergency situation, we would like to support affected populations and help contribute to economic development in this country, which is very needy in terms of reconstruction,” explained Bernard Kasriel, on site, on July 7, 2005.

Today, at the port of Lhoknga, Bernard Kasriel will launch a floating terminal used to unload cement imported by Lafarge from its Malaysian subsidiary to meet the high demand for cement in the region of Banda Aceh. This terminal will allow the delivery of up to 1,600 tons of cement daily until the plant's activity starts back up.

The Lafarge Group has also launched numerous other projects as the program to rebuild 500 homes, a school, and a mosque in Lamkruet, a nearby village about a mile away from the factory. (see here-after)

Six months have now passed since the disaster on 26 December, and the Lafarge teams in Indonesia, with the support of the Group, are still working to restore life and business activity.

Because life is getting back on track and reconstruction is underway… At the PT Semen Andalas cement works, unstinting efforts by staff have brought about a real transformation. The site cleaning phase is nearly complete, and the teams are now concentrating on the port and preparing for use of the floating terminal which will supply the market of the province of Aceh.

Projects financed by donations from staff and other companies in the Group (650,000 euros has been raised) are beginning to take shape:

  • The construction training centre has already attracted 192 people who are now working on various reconstruction projects in the region.
  • The mosques in the villages of Lhoknga, Lampuuk and Lampaya are being renovated and the restoration of three other neighbouring mosques is to begin soon.
  • The mobile clinic is ready to start up again: the ambulance, equipment and doctors are in place. First aid will be given to displaced mothers and children who are being temporarily housed in camps.
  • 2500 pupils from the province of Aceh will soon be given schoolbags and teaching materials. These have been purchased in partnership with Jakarta International School and the American Women's Association in Jakarta.

The Group is also involved in a larger humanitarian programme to rebuild 500 homes in two villages close to its plant. The Aceh region was badly hit by the tsunami and saw its coastal areas completely devastated. Establishing safe, permanent housing is a priority need. Lafarge, as a member of the local economy, but also as a company fully aware of its social responsibility towards the communities surrounding it, decided to make a direct contribution to this reconstruction effort. The programme that has been put in place aims to rehouse the original owners displaced after the tsunami, to provide them with safe housing. To implement this programme, Lafarge has just signed an agreement with three NGOs having complementary skills: Dompet Dhuafa, a local NGO that is close to the villagers and the local authorities, Atlas Logistique, a French NGO specializing in logistics, and Habitat For Humanity, an international NGO recognized for its experience in the construction of low-cost homes for people with modest incomes. The local communities have been consulted on the structure and design of these 36 m2 houses, in compliance with government standards and anti-earthquake specifications. The first home, started on 6 June this year, will be finished by the end of June. The construction of 300 homes in Lamkruet, which constitutes the first phase of the project, should be completed in May 2006. The villagers and local bodies are heavily involved: they will be paid for their work and gain practical training in construction.

An 8.7 magnitude new earthquake affecting western Indonesia, Sri Lanka and the coast of India occurred on Monday night at about 12 p.m. local time.
We have received reassuring news of our colleagues and their families in Sumatra who were left unscathed by last night's earthquake.

It is now almost three months since the tsunami devastated Aceh and Lafarge's cement plant in Indonesia, PT Semen Andalas. Following the initial phase of emergency relief, teams working at the site are now working to restore life and activities to the locality. This entails assisting employees, cleaning up the site of the plant, re-starting the supply of cement to the region of Aceh, and identifying projects for reconstruction community amenities and homes.

Of the 625 members of the plant's personnel, 424 have been reported safe and well to date, but 201 are confirmed dead or are missing. 326 families have had their homes completely or partially destroyed, and 160 children have been orphaned. The consequences of the disaster are tragic, needs are enormous, and, beyond the immediate financial and psychological help it has provided, the Group's mobilization is now entirely focused on much awaited reconstruction projects.

An unprecedented surge of support and sympathy from the Group's employees and Business Units has enabled approximately €600,000 to be raised already (which includes €300,000 donated by individual employees). These donations will help finance the various reconstruction projects that the team in the field – in conjunction with the Group – is responsible for identifying and supervising. These include:

  • Projects concentrating on facilities and amenities required by neighboring communities in a radius of 5 to 10 km of the plant:
    • - aid with renovating four mosques;
      - purchase of furniture and teaching resources for several schools;
      - restarting the mobile clinic set up by the plant for the needs of local communities, and purchase of an ambulance;
      - agreements with the Labor Department for the organization, logistics and partial funding of rapid training programs (construction, surveillance, etc.);
      - A project to create a training center for the building trades.
  • A reconstruction project on a larger scale of a village of several hundred homes, along with communal facilities. Discussions are under way with NGOs to define a joint project and to benefit from their expertise in reconstruction. It is taking time because we are striving to build up a project which will meet the populations' needs as closely as possible.

Cleaning up the site of the cement plant has begun, we remain mobilized more than ever in order to ensure the recovery of the activity.

However, the Group has not halted its business in Indonesia. Thanks to the efforts of our teams in Malaysia, who supply the province of Aceh from their sites and by boat.

Our Lafarge's local teams are working alongside local communities and NGOs and continuing to identify the major needs for Aceh area: rebuilding houses, schools, clinics and orphanages. Ten other projects are under examination, including the creation of a training center for the building trades with the aim to help regenerating economic activity, before the re-start of our activities in the zone.

It is clear that the aid required for reconstruction must be based on long-term, all the donations already made and those that will be made in the future will be very beneficial in helping a return to normal life and business activity in the area surrounding the Banda Aceh plant and in North Sumatra.

After responding to the initial emergency, Lafarge's local teams in Indonesia are now planning for the medium term.
The 450 employees and their families who had been housed at the Medan reception center have now returned to Banda Aceh, where Lafarge has made another accommodation facility available.
The new office set up in Aceh is organizing a gradual return to commercial activities and is planning for the reconstruction of the cement plant.
Contacts have established with the local authorities and several NGOs to identify reconstruction projects. The Group's donation of $1 million has been used to finance emergency aid.
Contributions from Group companies and individual employees, which now total €130,000, will serve for the rebuilding of homes for employees and will provide aid for local communities.

To date, of the 625 employees of our Lafarge Aceh cement plant, 416 have been accounted for, among them 8 are injured, 13 have been confirmed dead and 196 people are unfortunately still unaccounted for despite our immediate mobilisation and our constant support in Sumatra.

To date, of the 625 employees of our Aceh cement plant, 362 have been found safe and well, 8 are injured, 3 have been confirmed dead and we are still without news of 252 people. After providing emergency aid, the team working at the site is now actively seeking more lasting housing solutions for employees and their families.

The Medan reception center, which now houses almost 450 employees and family members, was rented to provide urgent accommodation. It is located 600 km from Aceh, which means it is a long way from the employees' former homes, and must progressively be returned to its owners. The local Lafarge team is actively looking for solutions and has now localized a new accommodation center in Aceh with capacity for roughly 500 people.

Access to the site of the cement plant remains difficult because of the destruction of the major infrastructures and the conflicts which are rife in this region. In spite of this, a process of technical evaluation of the site is programmed for the next few weeks.

Bernard Kasriel, Chief Executive Officer of Lafarge, made a visit to Medan and the Aceh cement plant site last week as a demonstration of the Group's support. On his return, he expressed the state of utter distress and desolation, and said how highly impressed he was by the devotion and exceptional work of the local team.

A return to normal life will require a great deal of time and effort.
The local emergency unit has been strengthened and in Paris, a VP, Group Career Management in the HR Department, has been appointed coordinator of the support offered to the Business Units concerned.

Donations made to the accounts opened by Lafarge throughout the world have not yet been centralized, but the early indications received by the Group HR Department reflects the generosity of the Group's employees and their desire to show their solidarity.


 The devastating earthquake and tsunami that hit Southern Asia on Sunday, December, 26 2004 made a lot of victims among Lafarge employees in Indonesia. The Group immediately released $ 1 million and set up a global facility for collecting donations from employees all over the world who wish to contribute.

Lafarge has operations in Sri Lanka, the Maldives, India, Bangladesh, Thailand, Malaysia and Indonesia. We were not affected at all in India, Thailand and Bangladesh; we were slightly affected in the Maldives but all our employees and contractors are safe. We were affected in Sri Lanka: we did not suffer any death, but the district where we operate was severely damaged. In Indonesia, our roofing and gypsum facilities were not affected, but employees and their families at the Lafarge cement plant in Aceh were severely affected by the disaster.

The plant housing complex of 35 buildings, which lies 0.5 km from the plant on the seashore and which accommodated around a hundred employees and family members, was completely destroyed.
Out of 625 employees based at the plant, we have so far been able to locate 280 thanks to the rescue teams immediately mobilized. Ten of them were injured and are receiving medical treatment in Medan. A total of 341 employees remain missing and unaccounted for.

Preliminary surveys have also confirmed significant damage to all parts of the plant and port.

Lafarge team in Indonesia deployed internal rescue efforts as soon as news of the catastrophe was announced on Sunday, December 26.

  • The Indonesian team mobilized a search and rescue team and medical personnel, flying immediately to Banda Aceh. From Monday, December, 27 and in spite of the difficulties to reach the site, this team was present on the plant site and could determine the most effective methods to put into operation. They could provide very early medical care, shelter, food and water to the survivors. Two Lafarge operational teams are now on the plant site. The first is concentrating exclusively on searching for survivors in the hills surrounding the site, which remains the first priority, while the second team is searching in the vicinity of the plant and the employees' homes.
  • Almost 450 people (employees and their families) have already been accommodated in an emergency relief center in Medan.
  • Medical and paramedical teams are at work in all locations where our rescue teams are operating. Supplies of water, food, medicine and other essentials are provided by trucks and by two daily flights chartered by the Lafarge Unit in Indonesia 48 hours after the disaster. Since Friday, supplies have been arriving in the immediate vicinity of the plant.

Management of the crisis is carried out from Medan and Jakarta in coordination with the teams at the site.
Lafarge Paris head office established a crisis management team to coordinate global support, and made an initial donation of US$1 million for immediate assistance to the countries affected by this emergency. In addition, the Group has set up a global facility for collecting donations from employees all over the world who wish to contribute. Offers of assistance have flooded in from Lafarge employees from around the world and many Business Units have started to organize local solidarity initiatives.

In sympathy with the victims, especially those from Lafarge, and with the survivors who are in so much distress, meetings are organized on each site of the Group.

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