Cemex: Mexico's Global Giant

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Excerpts

Cement was a fine mineral powder. A blend of limestone when burnt with smaller quantities of aluminum, silicon and iron yielded marble sized pellets called clinker. Clinker was then ground with gypsum and other minerals to yield cement. Cement was the most preferred construction material in the world...

Cemex began as Cementos Hidalgo in 1906 near Monterrey, Northern Mexico with a capacity of 5,000 tons per annum. When it merged with Cementos Portland Monterrey founded by Lorenzo Zambrano in 1931, it became Cementos Mexicanos. Later the company's name changed to Cemex...

In 1985, when Lorenzo Zambrano (grandson as well as namesake of the company's founder) took over as CEO, Cemex started looking seriously at global expansion. The Stanford alumnus realized that, in an increasingly open world, where competition could come from any quarter, it was necessary to learn and improve faster than existing and potential competitors...

Cemex believed its ideal acquisition target had to be based in a country having a large, growing population, with a relatively low per capita consumption of cement.

Cemex aimed at controlling at least 25% of the markets it entered. Before going ahead with the acquisition, Cemex examined the potential for restructuring both the target company and the market structure in the region.

Restructuring the target company meant increasing its efficiency and optimizing capacity utilization...