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A Plus

Concrete results

November 2017

The cement industry has been buffeted by recent scandals involving price-fixing, corruption, pollution and even alleged links to terrorism. LafargeHolcim, the biggest cement maker in the world, hasn’t been immune to controversy, but, as Regional Head of Internal Audit Edward Coultrup explains to A Plus, the company is moving steadily towards instilling best practices

Photography by Juliana Tan

Edward Coultrup worked previously as an auditor at KPMG. After five years at the Big Four firm, he moved to mid-tier firm Moore Stephens, working in both its Monaco and Hong Kong offices.


Edward Coultrup was destined to become an engineer. That was his father’s profession, and his brother’s. It seemed inevitable once he had acquired a degree in mechanical engineering from the University of Sheffield in the United Kingdom.

He had even applied for what many would consider a dream job in the field: an engineering position with a Formula 1 racing team. Then he had second thoughts. “When I graduated I wanted to do something different,” he tells A Plus. “I wanted to learn about business and do something broader.”

Coultrup decided that accountancy hit the spot. “Motor racing engineering would have been a great job,” he says reflectively. “But, you know, I would have been looking at finite element analysis and aerodynamics and it would have been all very technical. I wanted to do something broader.”

Today, 17 years later, Coultrup is Regional Head of Internal Audit at LafargeHolcim, the world’s biggest cement maker, and a Hong Kong Institute of CPAs member. In the company’s Singapore offices, he looks out from a 31st floor conference room with a view over the skyscrapers of Downtown and the Straits of Singapore beyond.

While Singapore’s 5.6 million people constitute a relatively small market for the global giant, the company has made a considerable imprint on the built environment of the island nation’s skyline. Local landmarks made with its products include the Supertree Grove at Gardens by the Bay, a vertical botanical installation; Reflections at Keppel Bay, a residential complex designed by “starchitect” Daniel Libeskind; and the undulating Henderson Waves Bridge across the island’s Southern Ridges.

More importantly for the company, Singapore serves as one of three regional headquarters. From his Beach Road office, Coultrup oversees the company’s internal audit for South Asia, South East Asia, China and Australasia. Counterparts in Miami and Zurich oversee the company’s operations in the Americas and Europe, Middle East and Africa, respectively.

The regional system had been set up by a former KPMG partner, with whom Coultrup had worked in Hong Kong. “He had just taken the group head of internal audit role and called me up to open the office in Singapore.” For Coultrup it was a chance to work in an organization where internal audit was highly regarded. “We audit the key risks that the organization faces,” he says.



Concrete jungle

In return, LafargeHolcim’s management expects the Singapore team, including Coultrup, to be on top of the issues. “We’re a regional office and the idea is that we bring specialist support to the region,” he says. “We have internal audit, regional procurement and industrial functions to support the countries, and other regional heads such as human resources, legal and compliance.”

In his internal audit role, Coultrup says there are three main lines of responsibility. “We have the ‘standard’ role to provide assurance over the significant risks and controls. We are also here to be a change agent within the context of the merger of Lafarge and Holcim, which took place in 2015 and guide the legacy companies to become LafargeHolcim.”

The team’s third role is talent development. “The idea is that we don’t just recruit people like me, with an accountancy background. Instead, we hire top talent from operations and put them in internal audit for three years, and send them out, hopefully, at a more senior level such as a country executive committee member, given the exposure a stint in internal audit gives them.”

The new talent will be needed. The €42 billion (HK$380 billion) Lafarge-Holcim merger, creating a company with €26 billion in 2016 sales and about 90,000 employees at more than 2,000 plants worldwide, is part of a continuing transformation in the global cement sector. “This industry is changing, especially in this part of the world, where we see China bringing on capacity,” says Coultrup.

Traditionally, most of the Asia-Pacific market has been cement sold in bags, for the construction of buildings, which involves a massive transport enterprise. “We have a relatively low-price material that is heavy, so logistics is a significant cost for us,” says Coultrup.

The company has sought to optimize its logistics network, but, “it’s a challenge,” as Coultrup acknowledges. “Generally a cement plant is built near limestone reserves and within driving distance of a big population. When we have hundreds of truckers outside the plant and they’re all tiny subcontractors it brings its own set of risks and challenges.”

That could mean concentrating more on higher-value niche products. “We produce special cement to be used in oil wells, and for high rises, and special solutions like quick-drying cement for applications such as airport runways.”



Hard decisions

The global cement industry has something of an image problem. The production process contributes about 5 percent of total anthropogenic carbon dioxide emissions, according to a 2017 report by the Centre for International Climate Research (CICERO).

There are other environmental effects, from the deposit of waste concrete in landfills to the huge amounts of energy required for its production. “To make cement we have to heat a kiln to 1,400 degrees Celsius, so it’s hugely energy intensive and we consume significant amounts of energy – mainly fossil fuels,” says Coultrup. “So it’s a big cost for us, and, more importantly, it brings sustainability challenges.”

Coultrup says the company is taking industry leading initiatives to be more sustainable. “We have a big business called Geocycle, which is where we put waste in our kilns that either has calorific value or that cannot be destroyed by other means.”

Novel substances with high calorific value – i.e. the amount of energy produced through burning that helps the cement production process – include biomass. “We started using biomass – rice husk is a great source of energy for us and we are moving more into the use of municipal waste.”

Other substances impede the production process but are used for the public good. For example, in South East Asia soil contaminated by the oil industry is fed into the company’s kilns where the toxins are removed. “We also have regulated businesses where we destroy counterfeit currency, hospital waste or drugs in our kilns,” Coultrup says.

“We have to look at the risks,” he says. “There’s an equation in there. The more non-cement-making materials we put in the kiln, the worse it is for the cement. We have to compensate for it – it affects the temperature of the kiln, it affects the output, so it’s a balance.”

In addition, there are compliance risks in the countries LafargeHolcim operates, Coultrup points out. “We are a multinational and must maintain the highest standards of compliance – the risks of not doing so are huge in the modern business environment.”

To be sure, LafargeHolcim has faced some controversy in recent months – the company faces a French judicial inquiry into whether it paid armed militias to protect its business in Syria, the Financial Times reported in June. Coultrup says: “The group maintains a very high level of compliance and internal audit plays an important role. We perform audit procedures designed to assess the effectiveness of the group’s compliance programme, providing an independent opinion as to whether the expected high standards are being maintained.”

“We’ve moved from the days of digging out invoices to see if they were approved. We extract data from the group’s systems, and see out of the whole population of thousands of invoices how many were approved.”


Distant horizons

Such issues are part of the attraction of Coultrup’s role as a professional accountant in business. “In a job like this, you’re more in the details of an industry,” he says, contrasting his present job as a business partner with his earlier positions in auditing.

After graduation, Coultrup began his career with BDO in Chelmsford, in the southeast of England. “I was there for three years until I qualified and then I joined PKF.” But with a brother who had worked for a non-government organization in the Philippines, the wider world beckoned. “I’d come to Asia a couple of times on holiday and always enjoyed it.”

In those early-Internet days, Coultrup could not rely on the job sites popular today. Instead, he flicked through an accounting magazine and saw advertisements from the Big Four firms for positions in Hong Kong. “I had an interview with KPMG and they hired me. I spent five years with them, which was really a great time and where I learned a huge amount as a young professional. However, I’d come from the mid-tier and I’d just got married and my daughter was born and thought I’d aim for a more balanced life.”

But as any young auditor knows, the hours are tough. “I was a senior manager working on a major account and on Valentine’s Day I didn’t go home. I worked through the night and through the next day,” Coultrup recalls. He moved to Moore Stephens, working in the mid-tier firm’s Monaco office for the first eight months before moving back to Hong Kong for personal reasons. After two years there, he was contacted by what was then Holcim, which he joined in May 2014. He worked between Singapore and Hong Kong for the first few months, and in August that same year, he and his family relocated to the Lion City.

Coultrup became an Institute member in 2011. “I pursued it as I could convert my U.K. qualification to the Hong Kong Institute of CPAs qualification. Also, being based in Hong Kong for so many years, it keeps me close to what is happening with the profession in Hong Kong and gives me credibility in Hong Kong, and Asia as well,” he says.

Looking to the future, Coultrup sees data analytics as the future. “Firstly there’s the analytics tools that the business uses: what’s up and what’s down in budgets, sales, logistics, volumes, prices, all in real time. We can click into the tool and it’s quite powerful.”

More relevant to Coultrup, the data has an internal audit role. “We’ve moved from the days of digging out invoices to see if they were approved. We extract data from the group’s systems, and see out of the whole population of thousands of invoices how many were approved. It means we will have time for other things – less time pulling individual invoices and delivery notes – it’s more interrogating the system.”

Given the relative lack of regulation compared with external auditing, Coultrup sees internal audit as a more flexible role giving advisory and business partnering opportunities. “It’s nice that we can be flexible in the engagements we perform and deliver controls based audits as well as work of a more consulting and advisory nature. We have that freedom. At the end of the day our customers are internal, so it’s nice to have flexibility to really add value to the business.”


LafargeHolcim was founded in July 2015, following the merger of French industrial company Lafarge and Switzerland-based cement and aggregates company Holcim.