Fear of Job Cuts Grip Lafarge Staff Following Holcim-Huaxin Buyout Deal
On December 1, Swiss cement maker Holcim, which holds an 83.8 percent stake in Lafarge Africa, announced an agreement to sell its share to the Chinese cement company Huaxin Cement. The deal, when completed, will grant Lafarge Africa a total equity value of $1 billion.
In a disclosure to the Shanghai and Hong Kong Stock Exchanges, Huaxin indicated that the acquisition could trigger a mandatory takeover, potentially leading to Lafarge Africa’s delisting from the Nigerian Exchange Limited (NGX) and granting Huaxin full ownership of the company.
Holcim’s decision to divest its stake to Huaxin has stirred concerns and heightened uncertainty among Lafarge employees. With little clarity on their future under new ownership, staff are anxious about potential negative impacts, recalling the experience of Lafarge Zambia employees after a similar divestment by Holcim.
In 2021, Holcim sold its Zambian operations, which were formerly under its 75 percent ownership, to Huaxin for $75 million. After this transfer, former employees reported to the Lafarge Africa union that they received new employment contracts with less favorable terms compared to their previous agreements. They claimed that human resource policies were ignored, contract terms were violated, and prior lengths of service were overlooked.
As a result, many employees resigned, forfeiting their employment benefits. Allegations suggest that although there were no official plans for job cuts or downsizing, the company imposed working conditions and labor practices that indirectly pressured employees to leave, leading to sudden departures. Eyewitnesses estimated that around 80 employees resigned within three months of Huaxin’s takeover, while a local news report by the Zambian Observer indicated that 65 employees had resigned within the first 10 months under the new management.
Approximately 10 months after Huaxin acquired Lafarge Zambia, Brenda Tambatamba, the country’s Labour Minister, visited the company in response to widespread complaints about deteriorating working conditions. Workers alleged significant changes to their terms of service and expressed concerns over the exclusion of Zambian senior managers from key management meetings.
In defense of Huaxin Cement’s policies, the company’s Chinese CEO stated that the state of the plant at the time of the takeover was below expectations. He attributed the reliance on expatriates to a wave of resignations among Zambian staff seeking “greener pastures.”
However, concerns over the acquisition emerged even before the sale was finalized. In July 2021, the Mine Workers Union of Zambia announced that they were negotiating with Lafarge Zambia’s previous owner, Holcim, to ensure employees received their terminal benefits. Union secretary general George Mumba expressed fears among employees that the new ownership might impose unfavorable service conditions.
“There is fear that the new owners’ conditions of service will be materially different. Some long-serving employees worry they may lose out on their benefits as new measures could be introduced to frustrate them into resigning,” the secretary-general remarked.
To gain a proper perspective of the situation in Zambia, BusinessDay spoke to the employees of Chilanga Cement. One of the engineers noted that some of the allegations were ‘not true.’
He said, “When the takeover happened, we maintained our contracts and conditions of service. It’s not true that we were offered new contracts with less remuneration.
“Yes, the Chinese have their own issues, but no contract was renegotiated. At least Lafarge made sure that our salaries and other conditions of service remained intact.”
Despite the clarification provided by some Chilanga Cement employees, Lafarge Africa staff are still raising concerns, calling on Holcim to compensate workers unwilling to transition to Huaxin, in line with international best practices.
The staff also expressed disappointment with the manner of approach utilised by Holcim in announcing the planned sale.
According to them, the International Labour Organization recommended that workers or their representatives should be provided with relevant information on a particular issue before making decisions on matters of major interest such as mergers and acquisitions.
The employees note that since the December 1 announcement, they have been scrambling for information about their future. After the town hall, employees noted that management offered no concrete details about the plans for staff post-divestment, urging employees instead to “remain calm and continue work.”
However, this reassurance has done little to quell growing apprehensions. According to insiders, no engagement with the staff union has occurred since the announcement, leaving workers feeling abandoned.
Contrary to assurances provided to employees and union representatives that Holcim’s sale of its entire shareholding to Huaxin would not impact employment, result in redundancy, or lead to downsizing, union representatives remain sceptical.
They argue that similar commitments were made during the divestment of Lafarge Zambia, yet workers faced adverse conditions and job losses.
Drawing from the experiences of former Lafarge Zambia employees, the union has expressed deep concern over the potential lack of respect for human rights and international labour principles under the new management.
The company’s staff union has appealed to regulators and government authorities to intervene and ensure employee rights are protected.
“Holcim cannot force employees to work under a new employer through the guise of a share sale. Employees have the right to choose whether to continue with the new company or not. Nigerians are not assets to be sold,” a staff member said.
According to a Lafarge staff member, “Treating employees with dignity is a fundamental human right. Holcim must engage in dialogue with employee representatives to discuss available options and ensure that contracts are severed properly. Anything less is unacceptable.”
The employees argue that Holcim’s adherence to international labour norms should not be selective but applied consistently, regardless of the region.
Citing Section 10 of the Nigerian Labour Act, the staff member noted that the transfer of employment from one employer to another requires the employee’s consent and the endorsement of an authorised labour officer.
As the proposed divestment looms, Lafarge Africa employees remain in limbo, with no clear answers about their future. The union’s call for regulatory oversight has intensified as staff brace for potential fallout from the sale.
Efforts to get Holcim to respond to the issues were abortive as the company’s media team did not respond to email inquiries. Read More
