6 - Vicat

4Risk factors4.1. RISKS RELATING TO THE GROUP’S BUSINESSthe Group operates, and even nationalizations andexpropriations of private property that could affectcompanies operating in these markets.Although the Group carefully selects the countriesin which it operates, the materialization of some ofthese risks could affect the continuity of its businessesin the countries concerned and have a materialadverse effect on its business, its financial condition,its results of operations, its prospects or its capacityto achieve its objectives.4.1.4. Industrial and environmental risks4.1.4.1. Risks related to production facilitiesThe Group’s factories were built in compliance withapplicable standards and were designed so as to afforda significant degree of resistance to natural riskssuch as wind, snow and earthquakes. The choice ofsites for the factories also considers natural floodingrisks.The Group’s production facilities are equipped withmonitoring and control systems incorporating automaticdevices and software, whose dysfunctioncould affect the factories’ daily operations.Heavy production facilities are protected againstrisks of breakage and machine failure by permanentmaintenance programs and by reserves of spareparts (such as engines, reducers and bearings etc.)for the most important systems and those with longlead times. Due to their remoteness, which lengthenslead times, the Group ensures that its factorieslocated in emerging markets rigorously apply thispolicy of maintaining reserves of spare parts.However, the Group cannot exclude the occurrenceof such events, which could have a material adverseeffect on its business, its financial condition, itsresults, its prospects or its capacity to achieve itsobjectives.4.1.4.2. Risks related to industrial investmentsThe Group’s development relies, in particular, on industrialinvestments intended to modernize its existingequipment and increase production capacity ordevelop new production capacity (“greenfield” plantsin Kazakhstan and in India). Regardless of the qualityof the service providers used, any delay or difficultyin meeting the required performances may have amaterial adverse effect on the Group’s business, itsfinancial condition, its results of operations, its prospectsor its capacity to achieve its objectives.4.1.4.3. Environmental risksThe Group’s principal environmental risks are the resultof its activities which are governed by laws andregulations imposing a large number of obligations,restrictions and rigorous protective measures. TheGroup is constantly taking measures to address andlimit these risks, paying particular attention to thefollowing areas : inserting quarries in their environment,optimizing choices of energy sources, withan increasing share of alternative fuels and waste,controlling greenhouse gas emissions, managing andrecycling water needed for production. These measuresare developed in Section 8.2. “Environmentalpolicy” of this Registration Document.4.1.4.4. Risks related to product defectsProducts manufactured by the Group are monitoredthroughout the production process. The Group alsoverifies the compliance of its products with thestandards applicable in the markets where they aresold. However, despite these controls, it cannot excludethe possibility that malfunctions or accidentsmay result in product quality defects.Such defects could have a material adverse effecton the Group’s reputation, its activities, its financialcondition, its results, its prospects or its capacity toachieve its objectives.4.1.4.5. Availability of certain raw materialsThe Group has its own reserves of limestone, clayand aggregates, which are used for its industrial activities.It also buys some of these raw materials oncertain markets from third-party suppliers, as wellas additives such as blast furnace slag (from steelworks), fly ash (a by-product of coal combustion inpower stations) and synthetic gypsum. If the quarriesoperated directly by the Group or its supplierssuddenly ceased trading or were forced to cease orreduce production of these raw materials, the Groupmay be required to obtain its supplies at a higher costand may not be able to recover such increased coststhrough price increases, or seek replacement rawmaterials, which could have a material adverse effecton its business, its financial condition, its results, itsprospects or its capacity to achieve its objectives.14 VICAT - 2009 registration document