Cemex and Cement Industry Background Cemex Cemex, the world’s fifth biggest cement manufacturer, is a Mexico-based multinational company that was…

Cemex and Cement Industry BackgroundCemex

Cemex, the world’s fifth biggest cement manufacturer, is a Mexico-based multinational company that was founded in in 1906. The company has a total capacity of 87 million tons, and 56 production facilities worldwide (Global Cement, 2017a). In 2016, Cemex had a worldwide workforce of 41,357 employees, and net sales of $13.4 billion (a 3 percent decrease over 2015). Also, Cemex’s 2016 operating EBITDA (earnings before interest, tax, depreciation, and amortization) as percentage of net sales was 20.5 percent versus 18.8 percent in 2015 (Cemex, 2017).

In 1994, Cemex entered the US market with the acquisition of Lafarge’s Balcones plant in Texas, which is close to the Mexican border (Global Cement, 2017b). This was followed by other major acquisitions, and today Cemex owns 11 plants, 43 terminals, and 270 ready-mix concrete plants across the United States (Cemex USA, 2017).

US Cement Industry

The US cement industry is third largest in the world, with an estimated active and mothballed capacity of more than 113 Mt/year, behind China (more than 1400Mt/year) and India (more than 230Mt/year). In the United States, 40 percent of cement production, and about 50 percent of production capacity, is controlled by four major multinational companies; namely Lafarge, Cemex, Holcim, and HeidelbergCement (Global Cement, 2017a).

An increasing number of limestone discoveries in the east, as well as the ability to efficiently move freight along the Mississippi River system in the midwest have led to the rapid creation of a cement industry in the United States. Today, much of the cement (25 percent) industry is still concentrated in this area. In the early 1900s, the introduction of the rotary kiln helped US cement production take off. The Association of American Portland Cement Manufacturers (AAPCM) was established in 1902 to safeguard the interests of the industry. In 1916, the AAPCM was renamed the Portland Cement Association, or PCA (Global Cement, 2017a).

References

Cemex. (2017). Investor center: 2016 Q4 report. Retrieved from www.cemex.com

Cemex USA. (2017). About us. Retrieved on March 12, 2017 from www.cemexusa.com

Global Cement. (2017a). Cement in the USA. Retrieved on March 12, 2017 from http://www.globalcement.com/magazine/articles/698-cement-in-the-usa

Global Cement. (2017b). The top 100 global cement companies and global per capita capacity trends. Retrieved on March 12, 2017 from http://www.globalcement.com/magazine/articles/964-preview-the-top-100-global-cement-companies-and-global-per-capita-capacity-trends

  • Where are the company’s production facilities located?
  • What is Cemex’s annual turnover in dollars and what is its annual production in tons?
  • How does Cemex differentiate its offering in a market where cement is a commodity?

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