Heidelberg Cement has shut down factories in Italy and imposed a freeze on hiring and non-essential spending as the world’s second-biggest cement maker grapples with a coronavirus pandemic it says has hit the world “like a wave.”
The German company, which competes with larger rival LafargeHolcim, joined businesses across the world in warning it was unable to predict its prospects for 2020 as the crisis brings economies to a standstill.
“You can see it’s hitting the world like a wave,” Chief Executive Dominik von Achten said on Thursday. “It’s a tough test for the company but also probably for German society.”
Von Achten told reporters the group was holding a crisis call at 0800 CET (0700 GMT) every day to get an overview over how the virus was affecting staff. So far, seven employees have tested positive, he said.
After a particularly strong start to the business year, von Achten said construction projects were now being delayed in the United States, while activity in France and Spain was also starting to weaken.
In Italy, the group has shut down three plants in the region of Lombardy, where Bergamo – the worst-hit province with more than 4,000 coronavirus cases – is located, after local authorities urged it to do so.
Shares in the group fell as much as 9.6% and were at the bottom of Germany’s benchmark DAX index. The stock has more than halved this year, compared with a 36% fall in the DAX.
“At the moment, we are not able to predict how long the precautionary measures will last, and which impact is to be expected on the construction activities in each country,” von Achten said.
Apart from the hiring freeze, the group is considering shortened working hours and will urge employees to cut overtime, take vacation days or take unpaid leave, it said.
Heidelberg Cement, which confirmed preliminary results released last month, also postponed its annual general meeting, which was scheduled for May 7, due to the spread of the virus.
Von Achten, who took over as CEO last month, tried to allay fears there would be weeks with little or no revenue, a prospect apparently looming at German airline Lufthansa, which said on Thursday the crisis had forced it to ground 700 planes and slash passenger capacity by 95%.
“Could we be hit like Lufthansa, which means three or four weeks where there are no sales? We are clearly trying to avoid that and we do not assume it’s going to happen,” von Achten said, adding the group was stockpiling cement amid disruptions.
He still said output could be cut to zero for 1-3 weeks in some regions.