Court ruling sends Lafarge into tailspin
Lafarge Surma Cement Ltd suffered a 7 percent decline in share trade yesterday on news that the Indian Supreme Court restrained the cement giant from mining limestone in Meghalaya.
Each share of Lafarge, which is wholly dependent on the limestone extracted from the Indian state, plummeted by Tk 39.25, finishing the day at Tk 521 on Dhaka Stock Exchange (DSE).
Investors were apparently nervous over business operations by Lafarge, which brings in limestone through its subsidiary Lafarge Umiam Mining Pvt Ltd from the quarry across the border in East Khasi Hills in Meghalaya by a 17-kilometre long conveyer.
Lafarge, a French company, runs an integrated cement plant at Chhatak in Sunamganj in northeast Bangladesh. The plant started production in 2006.
“The stock was mainly affected by yesterday's [Saturday's] news concerning the Indian Supreme Court's order on the extraction of limestone from Meghalaya, which will eventually halt the production of the company," Argus Research, a stockmarket research division of Race Asset Management, said in an analysis.
Lafarge, however, said its operations are unaffected.
"The Indian court has allowed us to bring in the already mined limestone to continue our operations," Shuvashish Priya Barua, director of corporate affairs for Lafarge Surma Cement, told The Daily Star.
In a web posting to the DSE, the company said some questions had been raised over a few aspects of the operations, to which the Indian Supreme Court directed Lafarge Umiam Mining to file its responses at the next hearing on March 19.
In an order on Friday, the Indian court said mining cannot be allowed in the eco-fragile area.
According to media reports, a special forest bench of the court stayed the mining activities on the basis of a report from the Indian Ministry of Environment and Forest, which said the company had been extracting minerals from the land in the forest area.
The company markets Supercrete cement brand in Bangladesh. Building Technology and Ideas Ltd, Dom-Inno, Metro Developers, Sumona and Aristocrat are some companies that use Lafarge's Supercrete cement.