Company Lafarge in Malaysia
Best in Malaysia Case Study
By: Ms. COLIN, Mr. CROUŸ, Mr. DURUPT, Mr.
JARRY, Mr. LAHRICHI and Mr. RABAIN
• What's your business • Constraints in France
• Company products • Adaptation to France
and clients • Key Constraint Costs
• Why did you come to • Key Benefit Numbers
France • Essential Advice
• Do company values fit
the French culture?
Dear "Best in France" Participants
This presentation is a sample for you to use as a guideline for your own case
studies. It outlines some of the key points of the "Four Seasons goes to
Paris" case study by Hallowell, Bowen, and Knoop.
While you will probably need to adapt some of these questions to your
specific company try to cover about the same topics.
There is no need to attach a separate report but please explain each slide
with enough depth to resolve any questions by using the "notes page" feature
of Powerpoint. Please follow normal bibliographic rules by citing your
references (books, company website pages, interview sources (name,
function, contact details), articles, company reports, etc.)
It imperative that you include the full contact details (title, address, phone,
and email) of each manager that you interview.
The Lafarge Company
• When did it come to Malaysia?
– In 2001 with the acquisition of the Blue Circle Group
• What's its business?
– Four Divisions
• Readymix and Aggregates
• What are its key figures (world sales, Malaysian sales, profits,
market share etc. etc.)?
– World sales 15 BEuros
– Malaysian Sales 500 MEuros
– Operating profit worldwide 2 BEuros
– Market share worldwide 7%
• What products are produced in Malaysia?
– Gypsum wallboards
– Roofing tiles
• Why are these products produced in Malaysia (and not
elsewhere for example)?
– Lafarge’s businesses are local and transportation costs
would make it economical not to produce locally
• Are there expansion/reduction plans for these product lines?
– For Readymix and Aggregates only, apart from following
the natural growth of the Malaysian market
• Who are the company's clients?
– Other readymix companies
– Construction companies
• What are their expectations?
– Competitive and consistent products, reliable services
• How will a Malaysian presence help or hurt the company's
ability to satisfy client demands?
– The markets for our products are local and must be
produced locally, mostly at least
Why it came to Malaysia
• Company approach to international growth?
– Partly through internal growth
– Partly through acquisitions
• Where else did it consider?
• Why was Malaysia a key target location?
– Malaysia was part of the Blue Circle Group, not a target as
• What are the core values of the company that may or may not fit
with perceived Malaysian values?
– Some core values of Lafarge are dedication to customers,
employees, shareholders and communities and a participative
management style. Sustainable development and, particularly,
corporate social responsibility are part of them.
– No particular problem between those values and the Malaysian
• How did company manage to instill its values in the Malaysian
– By communicating them in a participative and transparent way and
“translating” them (not only in the language but also in the way to
present them) into the values of the local Business Units
Constraints in Malaysia
• What are the principle constraints the company foresaw before
coming to Malaysia?
– Nothing specific, Lafarge has numerous experiences of operations in
foreign countries including in Asia
• Did they discover any others?
– Top management, if from another country, must be very open to the local
culture and take it into account in the management style it adopts
• Which are the worst constraints?
– The lack of high level engineers and managers
• How do these constraints differ with their other locations?
– Every country is a different case, there are no clear cut rule
• Did the local subsidiary lose projects to other countries because of
– N/A. Business is local
Adaptation to Malaysia
• What kind of adaptations did/is the company making to its
people management systems?
– Recruitment/Selection, Compensation, Management
Development, Workforce Planning, Performance Appraisal,
Motivation , Job Design, Job Assignment, Communication
Policies, International Transfers, Use of Expatriates,
• No major adaptation is generally necessary. Most systems can
be copied with some sensitivity and diplomacy. Differences can
be limited to details. Good practices can be copied from other
Key Constraint Costs
• What are the key costs to coming to Malaysia that are more or
less than operating in other locations?
– Any or all HR type costs (hiring, paying, training, dismissing,
• Lower in Malaysia than in developed countries
– Other organisation structure costs (real estate, travel, taxes,
"cultural consultants", etc.)
• Lower as well
– Communication constraints (language, infrastructure
communication costs, etc.)
• The business language in Malaysia is English, no problem there
– Integration of Malaysian managers into global organisation
(does it cost more to use Malaysian managers than managers
from other cultures)
• Malaysian managers cost less (cf above)
Key Benefit Numbers
• What are the key benefits of being in Malaysia?
– Product quality (defect rate, product cost, productivity, design, customer
• Costs are lower in Malaysia than in developed countries. Industrial efficiency
was at first lower but should get to “normal” level soon
– Revenue/profit (revenue/profit per Malaysian employee)
• Headcount productivity is lower than in developed countries, more than
compensated by the bigger size of the plants and the cost of manpower
– Location benefits (transport, time zone, quality of life, employee
satisfaction with Malaysia, etc.)
• Quality of life is good in Malaysia and cost of living low. Communications are
quite good also
– Government assistance
• Malaysia is a country where there are laws which are respected and where the
efficiency of the Government is good
– Market Potential (product penetration or growth potential, customer
demands for cultural adaptation of product(s), launch platform for other
Asian countries, etc.)
• Malaysia as a developing country has growth potential for building materials
• What advice do you offer to other companies in this sector
concerning use of Malaysia as a location?
– Before coming to Malaysia
• Malaysia is a country which welcomes business but not for a
quick buck, any installation has to be for the long term and
competition is strong. There must be good strategic reasons to
– Adaptation while in Malaysia
• One must be open to multi cultural management. Malaysia is
itself multi racial with 60% of Malays, 25% of Chinese and 15%
– Future investments in Asia
• Malaysia is a good base to enter Asia. Longer term, China is
• Alain CROUŸ
Lafarge Malayan Cement
President and CEO
• Anne-Sophie COLIN
• Antoine CROUŸ
1, rue Lambrechts
• Xavier DURUPT
8, “Les Hats de Dommartemont”
• Olivier JARRY
15, route de Montlignon
• Othmane LAHRICHI
4, rue des Gallois Appt 403
• Antoine RABAIN
7, rue de Lyon