A broad decline in prices for gypsum drywall and costs associated with the start-up of the company's new drywall manufacturing plant in Kentucky will have a negative impact on third-quarter and second-half profits for Lafarge Corp.

"Our new drywall facility in Kentucky began operating at the end of June. We anticipated that prices would fall this year, but the decline has been faster than we projected - down 40% since the beginning of the year," said John Piecuch, president and CEO of Lafarge.

Lafarge's gypsum division reported an operating loss of $8.5 million in the most recent quarter, compared with an operating profit of $12.1 in the third quarter of last year. Sales volumes from the new Kentucky plant are expected to increase substantially in the fourth quarter, Piecuch said.

For the three-month period ended Sept. 30, Lafarge Corp. posted net income of $127.3 million, compared with net income of $139 million in the third quarter of 1999. Net sales for the quarter increased 2% to $892.3 million from $872.4 million in 1999.

Lafarge's other principal product lines - cement, aggregates, and concrete - are basically tracking in line with the overall pace of construction activity and backlogs remain at healthy levels. However, housing has exhibited some weakness, and in certain markets spending related to TEA-21 has lagged because of delays at the state level or poor weather conditions. As a result, some shipments may be shifted to the fourth quarter or possibly into 2001.

In related news, Decker Industries, a supplier of bulk material handling systems, received an order from Lafarge Gypsum for its Palatka, Fla. wallboard plant.

The plant will produce as much as 900 million sq ft of wallboard a year, increasing Lafarge's total wallboard capacity to more than 2.6 billion sq ft annually. It should be in full operation by Jan. 1.

The Seminole Electric Cooperative Power Plant in Palatka, Fla. agreed to provide Lafarge Gypsum with an annual supply of FGD Gypsum for wallboard production.

Decker Industries is contracted to supply and install the covered slick belt conveyor, which will transport the material from the power plant to the wallboard plant. The conveyor is more than 2,400 ft long and designed specifically for FGD Gypsum including the belt scale, permanent magnet, and moisture analyzer.

Cemex continues e-business expansion plans Cemex and i2 Technologies announced that they agreed to collaborate on the implementation of a global supply chain initiative that will transform Cemex's supply chain and logistics processes. This initiative, which is scheduled to be implemented by the end of 2001, will contribute to the process of e-enabling Cemex, which was announced in September by Cemex Chairman and CEO Lorenzo Zambrano.

The agreement includes the deployment of i2's Supply Chain Management solution, which will allow Cemex to improve the management of its growing supply chain. The i2 solution reduces inventories at distribution centers via an integrated forecasting and master planning process. According to i2, the program will reduce freight expense by supplying inventory from optimally located plants, as well as through strategic collaborative bidding processes, through load consolidation and effective mode and carrier selections.

"We expect savings of around US$20 million annually once the solution is fully implemented," said Francisco Garza, president of Cemex North America.

Cemex also launched ConstruMix, a CxNetworks company, offering a full-service online marketplace for Mexican producers, distributors, construction firms, and contractors. ConstruMix is scheduled to expand its reach soon into the Colombian, Venezuelan, and Central American markets.

Powered by the Ariba B2B Commerce Platform, and supported by Mircrosoft technology, ConstruMix will allow construction industry professionals to conduct online transactions, access updated industry information, and participate in an online construction community.

The site allows for online purchases and auctions; access to a catalog of suppliers' products and services with photographs, prices, technical specifications, and delivery terms; user reviews; and links to suppliers' homepages. In addition, participants have access to a directory of suppliers, government agencies, industry chambers, and universities.

Aalborg Portland boosts U.S. white cement sales Aalborg Portland A/S signed a 10-year joint venture agreement that will maintain and increase the Danish cement producer's sales of white cement to the growing American market.

The agreement which comprises production, sales, and distribution was signed following a year's negotiations between Aalborg Portland, Lehigh, and Cemex. The three partners jointly control Lehigh White Cement Co.

The deal will give Aalborg Portland annual sales in excess of 200,000 tons white cement, about 35,000 tons more than the former agreement. The total contract value amounts to approximately US$15.9 million per year.

Following the renewal of the joint venture agreement, Aalborg Portland has acquired 4.5% of Cemex's shares in Lehigh White Cement Co., making the two equal partners each holding 24.5% of shares in the company.