Cemex

CEMEX S.A.B. de C.V., known as Cemex, is a Mexican multinational building materials company headquartered in San Pedro, near Monterrey, Mexico. It manufactures and distributes cement, ready-mix concrete and aggregates in more than 50 countries. It is the second largest building materials company worldwide, only after LafargeHolcim.

CEMEX S.A.B. de C.V.
TypeSociedad Anónima Bursátil de Capital Variable
BMV: CEMEX
NYSE: CX
BVC: CLH
PSE: CHP
IndustryBuilding materials
Founded1906 (1906)
FounderLorenzo Zambrano Gutierrez
HeadquartersMonterrey, Mexico
Area served
Worldwide
Key people
Rogelio Zambrano Lozano
(Executive Chairman)
Fernando A. González
(CEO)
ProductsCement, ready-mix concrete, and construction aggregates
Revenue US$ 18 billion (2016)
US$ 800 million (2016)
Total assets US$ 34.9 billion (2014)
Number of employees
42,000+
Websitewww.cemex.com

Lorenzo Zambrano was the chairman and chief executive officer until his death on May 21, 2014. About one-third of the company's sales come from its Mexico operations, a quarter from its plants in the U.S., 15% from Spain, and smaller percentages from its plants around the world.

Cemex ready-mix truck departing jobsite after dispensing concrete for a multi-storey residential project. The location is Villahermosa, Mexico.

CEMEX currently operates on four continents, with 66 cement plants, 2,000 ready-mix-concrete facilities, 400 quarries, 260 distribution centers and 80 marine terminals.[1] In the 2020 Forbes Global 2000, Cemex was ranked as the 1327th -largest public company in the world.[2] The company's world headquarters are in San Pedro Garza García, a city that is part of the Monterrey metropolitan area in the northeastern Mexican state of Nuevo León. [3][4][5][6]

History

CEMEX was founded with the opening of Cementos Hidalgo, in 1906. Meanwhile, Cementos Portland Monterrey began operations in 1920, and in 1931, the two companies merged, becoming Cementos Mexicanos, now CEMEX. In the 1960s, CEMEX grew significantly when it acquired several more plants throughout Mexico. In 1976, the company went public on the Mexican stock exchange, and that same year, became the largest cement producer in Mexico with the purchase of three plants from Cementos Guadalajara. In 1982, the company made significant progress in overseas markets, doubling its exports. Further acquisitions of Mexican cement companies were made in 1987 and 1989, making CEMEX one of the ten largest cement companies in the world.

In 2004, CEMEX received the Wharton Infosys Business Transformation Award for their creative and efficient use of information technology.[7]

Internationalization, 1990–2006

In 1992, CEMEX began its push into the international landscape with the purchase of Spain's two largest cement companies, Valenciana de Cementos (Valcem, currently head of CEMEX Spain) and Cementos SANSON. Venezuela's largest cement company, VENCEMOS, was acquired by CEMEX in 1994, and plants were purchased the same year in the United States and in Panama. In 1995 CEMEX acquired a cement company in the Dominican Republic, and with the purchase of a majority stake in a Colombian cement company in 1996, CEMEX became the third largest cement company in the world. In 1997–1999, the company expanded its scope to include Asia and Africa, making major purchases in the Philippines, Indonesia and Egypt, as well as Costa Rica. The acquisition of U.S. based Southdown made CEMEX the largest cement company in North America, and further international purchases were made in the following two years—a Thai company in 2001, and in 2002, a Puerto Rican company.[8]

On March 1, 2005, CEMEX completed its $5.8 billion acquisition of the London-based RMC Group, which made CEMEX the worldwide leader in ready-mix concrete production and increased its exposure to European markets. With the acquisition, the company expected its annual cement production to increase to 97 million tons. Also they had hoped to see its annual sales grow to $15 billion, just shy of the market leader, Lafarge NYSE: LR, which had sales of $17 billion. As none of these targets was met, CEMEX started looking for another suitor in its M&A push.

On October 27, 2006, CEMEX announced a US$12.8 billion offer to acquire all of the outstanding shares of Rinker Group, Limited. Seven months later, on April 10, 2007, the Rinker board of directors approved an upgraded offer of USD 14.2 billion, and on June 7, 2007, CEMEX secured the commitment from the holders of more than 50% of the shares to complete the acquisition.

Recent history (2006–)

In November 2006, an American embassy cable released via WikiLeaks listed Cemex among "Mexico's monopolists", with a market share of 87.6%; its competitor Holcim Apasco was listed with a market share of 12.4%.[9]

Shortly after the apparent finalization of the Rinker deal in 2007, the United States Department of Justice brought an antitrust lawsuit against CEMEX, blocking the acquisition.[10] After a lengthy process, CEMEX complied with regulators by divesting (selling) 40+ cement and concrete plants formerly part of itself or Rinker, essentially devaluing the initial deal.[11]

In April 2008, the President of Venezuela, Hugo Chávez, announced the nationalization of "the whole cement industry" in that country, in response to the belief that the industry was exporting its products in order to receive prices above those it was allowed within the country.[12] In mid-2008 the Venezuelan government took over the Venezuelan operations of CEMEX, the largest Venezuelan producer with around a 50% market share; a deal on compensation was still to be reached in March 2009,[13] despite agreements being reached in mid-2008 with the other two major cement producers.[14] In December 2011, an agreement was reached, with Cemex receiving $600m in compensation, and benefiting from the cancellation of $154m in debt.[15]

After having problems with the Mexican peso devaluation of 2008, including problems with derivatives,[16][17] CEMEX had to rethink its international standings to decrease debt and avoid a default. In June 2009, CEMEX sold its Australian operations to Holcim for A$ 2.2 billion (US$1.75 billion) helping refinance its US$14 billion debt, which partly was due to the acquisition, two years earlier, of the Rinker Group.[18]

In December 2010, DOL Resolves Employee Back Wage Case With CEMEX – The U.S. Department of Labor announced the filing of a consent judgment in a case against CEMEX Inc. and the recovery of $1,514,449 in overtime back wages for 1,705 current and former ready-mix drivers who worked in eight states.[19]

In February 2018, the company reported record earnings of $750 million for all of 2016, the highest in a decade. Lowering company debt after recent acquisitions were a main cause of the company's financial performance.[20]

CEMEX worldwide
Cemex United States offices in Memorial City, Houston

CEMEX World Corporate Headquarters is in Monterrey, Mexico[3] and its U.S. operations headquarters is in Memorial City, Houston, Texas.[4][5][6]

The company operates in over 50 countries/territories around the world including:

Subsidiaries
Cement mixer.

Social responsibility

CEMEX has developed a number of educational and social responsibility initiatives. For example, it instituted the Premio CEMEX, an annual award that recognizes works in the fields of sustainability, accessibility, construction and architecture. Also, it funds the Catedra Blanca, and honors architecture courses in three universities: the ITESM, in Monterrey, the Universidad Iberoamericana, in Mexico City, and the Barcelona School of Architecture. Also, CEMEX has created the Centro CEMEX-Tecnológico de Monterrey, which is a research and development program for sustainable communities across Mexico thru the Premio CEMEX-TEC.

In 2007, the Organization of American States (OAS), through their Trust for the Americas, awarded the company The Corporate Citizen of the Americas Award 2007, for the social benefits of their program "Patrimonio Hoy", in Mexico, that according to José Miguel Insulza, President of the OAS, has a positive effect in low-income families. This initiative, conceived in 1998, aims to reduce the Mexican housing deficit, which leaves more than 20 million people with inadequate shelter. Patrimonio Hoy organizes low-income families into self-financing cells that facilitate and expedite the typical homebuilding process. CEMEX and its network provide the products needed but also the technical assistance, including an architect who helps design homes to optimize space and reduce waste. To date, more than 150,000 Mexican families have realized their dreams of home ownership [21]

Environmental record

CEMEX has been accused of violating environmental laws in the United States. Environmental watchdog groups and the United States Environmental Protection Agency are threatening to file suit claiming the company has committed numerous violations of the Clean Air Act in Lyons, Colorado.[22] The United States Environmental Protection Agency has also filed suit against CEMEX in Victorville, California, claiming the company failed to install modern air pollution controls, despite spending millions in renovations.[23]

In the United Kingdom, CEMEX was originally fined £400,000 in October 2006 after hazardous dust was deposited up to three miles (5 km) away from its Rugby works. The fine was the highest ever given under the Integrated Pollution Prevention and Control regulations, and was also the highest for an Environment Agency prosecution for six years.[24] The fine was, however, judged excessive by the Court of Appeal and so reduced to £50,000.[25] In April 2007, CEMEX announced that it had installed a £6.5 million dust abatement system at the same works in Rugby, which had cut particulate emissions by 80%. The site comes under the auspices of the EU Waste Incineration Directive as it burns waste tyres for fuel. There are concerns over the impact on both the environment and human health from this practice, although it is common practice in many cement works.[26]

During tests conducted from June 10 to August 5, 2008, the Monterey Bay (California) Unified Air Pollution Control District reported high levels of chromium VI, also known as hexavalent chromium, a cancer causing chemical agent, at an elementary school and fire department in Davenport, California. Chromium VI is the contaminant that inspired the movie, Erin Brockovich. The toxic substance apparently originated from dust emitted by the Cemex Cement plant in Davenport, as the levels of Chromium VI measured eight times the air district's acceptable level at Pacific Elementary School and 10 times at the Davenport Fire Department. Both are located less than a half-mile from CEMEX.[27] Chromium VI may have been unwittingly produced at the CEMEX plant in Davenport for the last seven years. According to Ed Kendig, the executive director of the Monterey Bay Unified Air Pollution Control District, it's "highly possible" that Chromium VI continues to be produced across the country as an accidental, previously unknown byproduct of the cement-making process.[28]

In 2007, the EPA filed a complaint against CEMEX for violating federal air regulations at its Victorville plant, and in 2006, CEMEX was cited for violations at plants in Santa Barbara and Michigan.[28]

Environmentalists and scientists are concerned for the Monterey Bay coastline where Cemex has a sand mining operation in the city of Marina, California. The California Coastal Commission in March 2016 issued a Cease and Desist order asking for "administration civil penalties" stating that "the operation is narrowing beaches and impacting environmentally sensitive habitat." Cemex denies the allegations and as of May 2017 continues to operate.[29]

Competitors

Main CEMEX competitors / global cement players are:[30](dead link)

See also

References
  1. Sirkin, Harold L.; James W. Hemerling, and Arindam K. Bhattacharya (11-06-2008). GLOBALITY: Competing with Everyone from Everywhere for Everything Archived September 23, 2008, at the Wayback Machine. New York: Business Plus, 304. ISBN 0-446-17829-2.
  2. "Forbes Global 2000". Retrieved 31 October 2020.
  3. Corporate World Headquarters - Company's website Archived February 20, 2009, at the Wayback Machine Retrieved February 10, 2009.
  4. Corporate Headquarters according to Company's Website world locations map Archived February 7, 2009, at the Wayback Machine Retrieved February 10, 2009.
  5. The headquarters remain in the bustling Mexican industrial city of Monterrey, Mexico, 140 miles south of the Texas border Retrieved February 10, 2009.
  6. Cemex Corporate World Headquarters situated in San Pedro Garza Garcia, Mexico, per Linkedin Retrieved February 10, 2009.
  7. https://www.infosys.com/newsroom/press-releases/Pages/business-transformation-awards.aspx
  8. "Mexico's Cemex to Buy Southdown of Houston". Los Angeles Times. Reuters. 2000-09-30. ISSN 0458-3035. Retrieved 2016-03-28.
  9. "cable 06MEXICO6413, WHO ARE MEXICO'S MONOPOLISTS?". WikiLeaks. (see also Archived 2014-04-02 at the Wayback Machine)
  10. Source: http://www.fromthedoj.com/2009/03/us-doj-blocks-cemex-acquisition-of-rinker/
  11. https://www.justice.gov/atr/cases/f243500/243560.htm
  12. Hugo Chavez Nationalizes Cement Industry, CBS News, April 4, 2008.
  13. "FACTBOX: Venezuela's nationalizations under Hugo Chavez". Reuters. March 5, 2009.
  14. "Venezuela Is Set to Take Control of Cemex Plants". The New York Times. August 19, 2008. Retrieved April 28, 2010.
  15. Cemex, CEMEX and Venezuela sign agreement on compensation for nationalization of CEMEX Venezuela Archived January 22, 2012, at the Wayback Machine
  16. "UPDATE 2-Mexico's Cemex tumbles on peso, derivatives". Reuters. October 9, 2008.
  17. http://www.fool.com/investing/international/2008/10/10/precarious-peso-pounds-cemex.aspx
  18. Battersby, Lucy. "Mexican sell-off puts Australian concrete operations in Swiss hands". The Sydney Morning Herald. Retrieved 2009-07-07.
  19. "DOL Resolves Employee Back Wage Case With CEMEX". nessaccess.com. Archived from the original on 2016-03-04. Retrieved 2016-12-22.
  20. DeFotis, Dimitra. "Cemex Jumps On Record Earnings". Retrieved 2018-03-02.
  21. Recibe Cemex reconocimiento, by El Norte, in Spanish, requires subscription (original text: "Cemex México recibió el reconocimiento internacional por los beneficios sociales de su programa Patrimonio Hoy, durante la entrega de "The Corporate Citizen of the Americas Award 2007" que organiza The Trust for the Americas y la Organización de Estados Americanos (OEA). El secretario general del organismo interamericano, José Miguel Insulza, destacó que conoce el programa Patrimonio Hoy y sabe de su positivo impacto social en favor de familias de escasos recursos."
  22. cemex Archived September 27, 2007, at the Wayback Machine
  23. Epa Sues Cemex Over Air Quality Victorville Plant Controls Cited. - Free Online Library
  24. ENDS Report 381, October 2006, pp 4-5
  25. ENDS Report 391, August 2007
  26. ENDS Report 388, May 2007, p 29
  27. Source: http://www.santacruzsentinel.com/localnews/ci_10630621 Archived 2008-12-07 at the Wayback Machine
  28. Source: http://www.metrosantacruz.com/metro-santa-cruz/10.15.08/nuz-0842.html Archived 2008-11-09 at the Wayback Machine
  29. Olney, Jennifer. "MEXICAN CORPORATION ACCUSED OF DAMAGING MONTEREY BAY COAST". ABC 7. Retrieved 10 May 2017.
  30. The Global Cement Industry Archived 2012-03-09 at the Wayback Machine, Global Strategic Management Mini Cases Series, Philippe Lasserre- Globalisation Cement Industry, 2007

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