Cemex: Mexico's Global Giant

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We suddenly found ourselves competing with the very large international companies at a time of consolidation in the world cement industry. There were few independent players left. Either we became large and international or we would end up being purchased by a bigger player.

-Lorenzo Zambrano, Chairman, Cemex¹

In 2002, Cemex was the third largest player in the global cement industry with a worldwide capacity of 80 mtpa2, sales of $6.54 billion and net income of $520 million. It had outperformed several competitors in the slow growing industry. Cemex had achieved a compounded annual growth rate of 26% in operating cash flow, which was double the industry average for each of the years between 1991 and 2001. The company operated 68 plants and 400 ready-mix concrete facilities with 24,000 employees in 30 countries. Cemex was also the world's largest trader of cement handling 11% of global cement trading volume.

Till the early 1990s, Cemex had been a relatively unknown Mexican cement company. But its $1.8 billion acquisition of Spain's biggest cement plants, Valenciana and LACSA (Sanson) in 1992 catapulted it into the big league of global cement players led by Holcim (Switzerland) and Lafarge (France).

Since then, Cemex had aggressively acquired cement companies in high growth markets around the world like Spain, Venezuela, Indonesia, Costa Rica, Philippines, Panama, Dominican Republic, Egypt, Colombia and Indonesia. Cemex's major competitors had 56% of their capacity in emerging markets while Cemex had 71%. Cemex also had a strong presence in the US...

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1] Speaking on Mexico's liberalization in the early 1990s in the Financial Times, 7th November 1997.

2] Million tonnes per annum

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