When Sergo Faifman first stepped through the doors of Argentinian cement manufacturer Loma Negra, he was just an intern still in his first year of college. Little did he know then that 23 years later, he would oversee one of the biggest Argentine initial public offerings in history.
Having risen through the ranks, traveled the world and added a Master of Business Administration to his resume in the process, he was appointed to the position of CEO in 2016 – a critical time for the company. A big decision was being mulled over with Brazil’s second-largest cement producer, InterCement, which had acquired a majority stake in Loma Negra in 2005. “When I took over, we had the idea of looking for either a financial partner or doing an IPO and we actually ended up going the IPO route,” he recalls.
As a result, on 1 November 2017, Sergio oversaw the simultaneous IPO of Loma Negra on both the New York and Buenos Aires stock exchanges, a momentous event that he describes as a huge “learning experience”. “It was starting on a whole new path for me, for the company and for the group, as it was the first time we had experienced a company dictated in New York,” he tells The CEO Magazine.
“So throughout this part of the process, it was about learning – not only as CEO but also about being a public company and listed in New York, which is not something that is so easy. There are not so many companies in Argentina that are listed on the US stock exchange.”
Proceeds from the IPO helped Loma Negra fund an expansion of its L’Amali plant located in the Buenos Aires region, a project that was completed last year, representing an investment of around US$350 million and expanding the plant’s capacity.
Sergio highlights its completion as a “milestone” in the company’s history, but one that brings with it new challenges. “So the main challenge is to be able to stabilize that factory on the basis that the Argentinian market is going to continue growing and to be able to use that factory effectively,” he explains.
The COVID-19 pandemic slowed the progress of that project but, ultimately, did little to slow Loma Negra’s momentum, according to Sergio. “The truth is that we are a company that, despite being associated with cement, is very adaptable to change,” he reveals, adding the factory only had one closure during the total lockdown that was put in place across Argentina to slow the spread of the virus.
”The lockdown in Argentina was very long, but in our industry in particular, we only stopped for 15 days before we started operating again. But that meant that we had to adapt quickly in those 15 days, swiftly adhering to all the safety protocols to avoid contagions, especially when everything was still very unknown in the factory. We had to adapt very quickly while others had more time to react.”
It was starting on a whole new path for me, for the company and for the group, as it was the first time we had experienced a company dictated in New York.
Once the new way of working was put in place, Loma Negra was immediately back in action mode. “In the case of what we had to do with all the staff and central administration areas, we’d already been creating a remote working policy, which allowed us from one day to the next to go to a 100 per cent home office and not feel the impact so much, thanks to the many tools that we’d been developing and working with already.”
Because of all the safety protocols put in place, there has been no outbreak of the virus recorded in the factory in the two years since it first became a reality, Sergio reveals. This achievement is also a reflection of the company’s strong focus on safety, which has been top of its agenda for many years, he adds.
These are just some of the company characteristics that give Loma Negra its strong position within the industry. “Many things differentiate us from our competitors,” he says. “The value of the Loma Negra brand is very strong. We are the only cement company in Argentina that has a local, regional presence throughout the country, so we can reach the whole country in a very efficient way.”
For Sergio, three areas stand out when measuring the company’s success: its stance on the environment, safety issues and innovation. “This has allowed us to continue developing the company in an environment of permanent challenge that motivates people and always challenges them to keep growing as well,” he says.
He believes this motivational culture is also one of the company’s great strengths. “We have a work culture focused on results, on initiative, on innovation, on permanently challenging ourselves, which makes us keep looking for better results in every sense – economically, environmentally and safety-wise – despite the good results we have achieved,” he reflects.
“The company has a way of working as a team that allows very good communication at all levels and discussion of the issues at hand, and that allows us to continuously generate innovative ideas from the factory to improve productivity, cost, how to serve customers, suppliers and so on.”
Going forward, Loma Negra is thinking strategically. “The other thing we are looking at is the possible future use of the company’s resources,” Sergio shares. It is this goal that prompted the company to sell its 51 per cent stake in Paraguayan operation Yguazú Cementos in 2020, with the proceeds of the sale going towards paying off the company’s debts.
The other challenge is how to continue to grow, whether it is with vertical integration, horizontal integration and so on, for the next few years.
“Loma Negra today is a company with a low level of indebtedness, practically zero. Our business is consolidated, with a very strong investment just finished, so no strong investment requirements for the next few years and a reasonably good cash generation. The other challenge is how to continue to grow, whether it is with vertical integration, horizontal integration and so on, for the next few years – that’s what we are working on.”
While extensive opportunities are open to Sergio within the InterCement Group in Brazil, he remains committed to Loma Negra. After all, over his 27 years with the company, he says he has grown and developed beyond recognition. ”I was fortunate to have many bosses in the company who also coached me on the things I was good at, to continue doing them well, and the things I had to improve – I think that’s what it’s all about,” he shares.
Sergio has carried this over to his own leadership style, along with instilling the confidence in his team members to say what they think and share ideas. “Building trust with people, being able to contribute, to be able to dialogue, to be able to give opinions – these are all so important,” he insists. “After all, an idea from four or five heads is much better than from one head.
“The truth is that I feel that I still have a lot to learn and contribute to Loma Negra.”