Cemex, the third largest global producer and marketer of cement, demonstrates how a company from a developing economy can become a global leader even in a low growth industry like cement. Cemex combines a deep knowledge of the local markets with its global network and information technology systems to provide world-class products and services to its customers, from individual homebuilders to large industrial contractors.
In 2002, Cemex was the third largest player in the global cement industry with a worldwide capacity of 80 mtpa2, sales of $6.54 bn and net income of $520 mn. 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
Cement is a fine mineral powder. A blend of limestone when burnt with smaller quantities of aluminum, silicon and iron yields marble sized pellets called clinker. Clinker is then ground with gypsum and other minerals to yield cement. Cement is the most preferred construction material in the world. Most of the infrastructure facilities like roads, houses, dams, schools and hospitals uses cement.
The cement industry is highly fragmented. The raw materials used in the manufacturing of cement like limestone and gypsum are widely available throughout the world. There has been no major technological improvements since 1980s. The major costs of production are energy (30%), materials (15%) and transportation (15%). Cement's low density made land transportation expensive. Generally, a limited area within 300 km was served by any one plant. |
