CRH may sell stake in controversial Israeli company

The infamous wall dividing the West Bank from Israel helped inspire dramatic scenes in the recent Brad Pitt film World War Z, where zombies attacked a giant wall protecting Israel.

CRH owns a 25 per cent stake in Israel's only cement maker, Mashav, and for years has drawn fire from some shareholders and international pressure groups for retaining its holding in the company. It bought the stake in 2001.

Mashav is the holding company for a firm called Nesher, whose cement has ultimately been used to make huge concrete slabs that were used to construct the wall dividing the West Bank from Israel.

Over a decade ago, the Israeli government began building what will eventually be a 700km-long security fence. About 10 per cent of it comprises a concrete wall that's about 25 feet high.

The Ireland Palestine Solidarity Campaign is among the groups that has for years put pressure on CRH to divest its stake in Mashav. The group has previously staged protests at CRH annual general meetings.

CRH has previously pointed out that, while it owns a 25 per cent stake in Mashav, the group isn't directly involved in the production of concrete products in Israel. The company has also insisted that Mashav can't discriminate against who it sells concrete to and that the Israeli firm's concrete has also been sold to the Palestinian Authority.

But the new chief executive of CRH, Albert Manifold, has been spearheading a sweeping review of CRH's businesses that could see a number of them, including its stake in Mashav, being put up for sale.

Last month, Mr Manifold said that CRH has so far identified 45 businesses that will be put on the block. CRH finance director Maeve Carton said that the units have been singled out for not meeting "those criteria we have of being able to deliver improved margins and growth into the future".

CRH has impaired those businesses to the tune of €755m.

In a detailed annual report recently filed in the US, CRH said that 34 of the 45 businesses that it's planning to sell are in Europe and another 11 in the United States.

CRH also said it wrote off a total of €105m from the value of a 50 per cent stake in Turkey's Denizli Cement and its 25 per cent stake in Mashav.

That has fuelled speculation that CRH may also seek to offload its holding in Mashav.

A spokesman for the company declined to comment. CRH has not identified any specific businesses that it plans to sell as part of its review.

Mr Manifold has conceded that CRH bought businesses in the past decade that may not have fulfilled expectations.

"It was a period of easy credit," he told investors last month. "In some specific situations we bought into the bubble that that easy credit created," he said. "We bought into some of the unsustainable trends. As the crisis evolved, it exposed some of those businesses and the original investment thesis for them no longer existed."

CRH is currently reviewing another 45 businesses within the group, many of which might be retained rather than sold if they can be fixed and generate decent enough returns