Strategic pillars
Cost leadership – Egypt
Asset light – Mexico
Sustainability – Malawi
Commercial transformation – Philippines / USA
Tarlac, Philippines

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“I am confident that my home will stand the test of time because I used quality materials to build it,” says Nida Santa Romana, customer of one of LafargeHolcim’s Helps U Build, or HUB, franchise stores in the Philippines. The LafargeHolcim retail model goes beyond simply selling cement by offering individual homeowners and home improvers advice, a wide range of quality products at reasonable prices, logistics and partnership with a trusted brand.

The pull of a better product

Santa Romana is in the finishing stages of building her home where she now lives with her family. When she first started construction, she was using cement and supplies from a LafargeHolcim competitor. During that time she met an account executive of one of the HUB stores, who introduced her to the benefits of using LafargeHolcim products. “My husband and I are in the electrical business,” says Santa Romana, “so we know the value of choosing products that will last.” Santa Romana decided to make a trial purchase of cement and steel bars from her local HUB store in Tarlac.

Her contractor tried out LafargeHolcim’s Wallright masonry cement and was pleased at how easy it was to apply and how it didn’t crack upon drying. He was also impressed with the quality of the steel bars sold at the HUB. The quality is what first brought her over to the HUB store – the additional advice she received helped her finish her home, using building materials from the store.

Nida Santa Romana built her home with cement and other materials from the local HUB store

Nida Santa Romana receives advice on construction materials from HUB associate Michael Beltran

Ed Pineda, who runs the Tarlac City HUB store, acquired two HUB franchises in 2016 and is planning to open two more

Nida Santa Romana's house is in the finishing stages

I am confident that my home will stand the test of time because I used quality materials to build it.

Nida Santa Romana’s house is in the finishing stages

A win-win franchise model

LafargeHolcim officially started franchising retail outlets in the Philippines in 2015 and now has 22 stores spread across key cities of Luzon, the largest and most populous island. Ed Pineda acquired two HUB franchises in 2016 – Tarlac in April and Cabanatuan in October. Pineda, a former contractor, knows the construction industry well and has a large network of contacts working on government projects in the Tarlac and Cabanatuan areas. In the future, he is looking to further expand by opening franchise stores in Dagupan and Aurora, where he also has wide networks.

Since most HUB stores are strategically located in areas where LafargeHolcim is not the leading cement player, franchisees like Pineda help build market share by educating small contractors and homeowners about the advantages of LafargeHolcim products. This is exactly what happened when Pineda’s account executives first met Santa Romana. Because Pineda’s stores are part of a network of branches serviced by the HUB’s supply chain group, Pineda is able to offer reasonable prices and service a wider area than most competitor stores. He is able to share these efficiencies with his contractor customers who have widespread project sites. For individual homeowners like Santa Romana, he offers the convenience of small-scale deliveries. “In our business, there is a lot of competition. We offer a high standard of quality and our associates are experts on construction materials – we deliver what the customer wants, within the day,” Pineda says.

Commercial Transformation

Summary

  • Getting closer to our customers allows us to meet their needs with increased speed, precision and creativity.
  • Our goal is to be leaders, recognized as the partner of choice in construction, whether for an individual home, a commercial building or the largest infrastructure project.
  • We will use our scale and expertise to continue to innovate, co-creating solutions with our customers and nurturing long-term relationships.

Objectives

  • We will deliver our growth targets thanks to our focus on providing innovative and sustainable solutions to our customers and capturing the full value of our differentiated products and services in our pricing.

Commercial excellence begins with differentiated products and services. With our industry-leading expertise and R&D resources, we expect to maintain our position as the leading innovator in our industry. We have an extensive innovation pipeline, and are working on a number of significant and distinctive developments focusing on sustainable construction.

To successfully differentiate and create a competitive advantage, we are strengthening collaboration with our partners. This is particularly relevant in infrastructure where we are building partner ships using our sectoral expertise, access to innovative solutions and world-class execution.

With retail representing more than 60 percent of our volumes, a critical additional differentiating factor is our ability to promote innovative retail models, leveraging digital solutions, the strength of our brands and the quality of our products and services.

Realizing the benefits of differentiation

The benefits of our focus on commercial transformation, which differentiates our products and services in a competitive market, are increasingly evident across our business.

In retail, we are building on our existing knowledge to define new models, evidenced by our retail transformation across 30 – 50 countries by 2020. We are also pioneering digital marketplaces – our e-commerce platform for the Disensa brand (www.disensa.com) was launched in October 2016 in Ecuador. Further countries will go live using a common technology platform.

In the small to mid-sized building segment, we are increasing our presence in affordable housing, addressing the acute need in Asia Pacific, Middle East & Africa and Latin America. Globally, it is estimated that four billion people live without adequate housing.

In infrastructure, we have worked with external experts to co-develop an integrated business approach to road construction that can be delivered in a wide range of countries. In the past 12 months we have increased our pipeline of work in this segment by 25 percent, leveraging significant incremental earnings potential that is hard for our competitors to access.

In our growing specialties segment, the establishment of an international key account management capability is enabling us to work with the largest global contractors whose requirements and models are quite different to local or regional players. One example is our partnership with Chinese company CCCC which is already delivering results, not least because of our ability to provide Mandarin-speaking account managers on the ground.

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On time and within budget

What did Santa Romana like best about buying her building materials at Pineda’s HUB? “Their personnel were very helpful. And doing business with them was so convenient and easy.” Because she was working on a budget, her building material requirements came in small quantities over the course of a year, allowing her to manage her funds. The small, mixed-merchandise deliveries were no problem for her HUB store, which has the logistical support to service small-scale deliveries.

Pineda’s account executives were able to help Santa Romana in planning delivery schedules. This gave her peace of mind in being able to place the orders and not worry about the rest. And the store’s proximity made it easy for her to make those last-minute purchases needed by her contractor.

Santa Romana sleeps easy now knowing, “all of the products I bought were of good quality.” Though starting a new project is the last thing on her mind now, she did say, “If I ever build another house, there’s no doubt I’d use LafargeHolcim products and my local HUB store.”

If I ever build another house, there’s no doubt I’d use LafargeHolcim products and my local HUB store.

Nida Santa Romana, HUB store customer

LafargeHolcim’s retail strategy

The HUB franchise model in the Philippines is an example of LafargeHolcim’s ­ambition of getting closer to the end user by developing its presence in the retail market. The Group is currently exploring different retail concepts to find the best solution for each market, and is also looking at breakthrough digital solutions to better serve end users. The objective is to implement successful retail models in 30 – 50 countries by 2020.