LafargeHolcim has poached the boss of chemicals group Sika to become its new chief executive as the Swiss-French cement group recovers from controversy over its past activities in Syria.
Jan Jenisch will join LafargeHolcim after the departure of Eric Olsen was announced last month. Mr Olsen became the highest profile casualty of an internal investigation into a Lafarge cement plant that the company kept running as Syria descended into civil war.
Human rights groups have alleged that Lafarge helped to finance terrorism in the war-torn country. LafargeHolcim admitted earlier this year that “unacceptable measures” were taken to keep the Syria plant running and that “selected members of group management” were aware of possible violations of business conduct standards. It has published a six-page summary of an extensive internal investigation prepared with law firms Baker McKenzie in Washington and Darrois Villey in Paris.
The group said its departing chief executive “was not responsible for, nor thought to be aware of, any wrongdoings”. But at the time the Syria plant was operating, Mr Olsen was a senior manager at Lafarge and he said he would resign to “bring back serenity” to the company.
Mr Olsen refused earlier this month to provide any additional information, including on whether LafargeHolcim believed funds ended up ultimately with militant group Isis. But chairman Beat Hess later confirmed to journalists that payments had been made to secure the release of kidnapped staff in Syria. “Kidnappings occurred . . . certain payments have been made,” he said. Such payments were “not material”, he added.
Shareholders registered their concern when the formal “discharge” of the board and management for 2016 was approved by just 60.78 per cent of those voting at the company’s annual meeting. Mr Hess said he understood shareholder “displeasure” and said the board had taken remedial action.
LafargeHolcim was created in 2015 following a €41bn merger between the French company Lafarge and its Swiss rival Holcim. Mr Olsen said earlier this month that despite investor scepticism the merger had proved a “great success . . . we’re going to be leaving the group in great shape”.
Weak global economic conditions, a global cement “glut” and difficulties in combining two different corporate cultures all caused problems for Mr Olsen. But he slashed capital expenditure and pushed through a substantial disposal programme and appeared to win over many investors. Last year, adjusted earnings before interest, tax, depreciation and amortisation rose almost 9 per cent on a like-for-like basis to SFr5.8bn, in line with its target.
Earlier this month the company said its results for the year would be boosted by its operations in the US, India, Nigeria and some countries in Europe, offsetting weaknesses in Malaysia and Indonesia.
Mr Jenisch, 50, will take over at LafargeHolcim in October and will be succeeded at Sika by Paul Schuler, currently regional manager for Europe.
Mr Jenisch had “a good track record of outperforming market and improving margins” at the Swiss group, said an analyst at Vontobel in Zurich. It was “very good news” for LafargeHolcim that the company has been able to announce a successor to Mr Olsen relatively quickly.
Shares in Lafarge rose almost 6 per cent on the news, while Sika shares lost 2 per cent.
As chief executive since 2012, Mr Jenisch has run Sika during a period of uncertainty caused by the controlling family’s attempt to sell its stake to French group Saint-Gobain. Saint-Gobain’s plans are opposed by Sika’s board as well as its top managers. Despite this the group has grown strongly; last year revenues rose 5 per cent to SFr5.8bn and pre-tax profits rose 22 per cent to SFr567m.
