CEMEX S.A.B. de C.V. is a powerful cement multinational from Latin America. A colossus in its own right, the company traces its roots to two small cement operations in the city of Monterrey, capital of the state of Nuevo León, one of Mexico’s wealthiest and home to one of its finest institutions of higher learning consisting of the Monterrey Institute of Technology. These operations were Cementos Hidalgo S.A. and Cementos Portland Monterrey S.A. de C.V. The latter was founded by Lorenzo Zambrano Gutiérrez in 1920 whose descendants still control the voting power of the company to this day whereas the former was founded by the Brittingham family in 1906. The two companies eventually merged in 1931 and renamed as CEMEX with Lorenzo Zambrano Gutiérrez retaining full ownership of the newly established cement operation while increasing its initial installed cement capacity of 20 thousand metric tons a year. Moreover, the company underwent an aggressive expansion thereafter acquiring several domestic cement players in Mexico including Cementos Maya S.A. de C.V. in 1966, Cementos Guadalajara S.A. de C.V. in 1976, Cementos Anáhuac S.A. de C.V. in 1987 and Cementos Tolteca S.A. de C.V. in 1989 for a price tag of $ 663 million. Having gone public in the local stock market back in 1976, the acquisition of Cementos Tolteca catapulted CEMEX among the ten biggest cement operations globally of their kind with a total installed capacity of cement annually of 15 million metric tons reaching a market share in Mexico of roughly two thirds of the pie. In fact, other smaller acquisitions included Cementos del Yaqui S.A. de C.V. and Cementos Portland del Bajío S.A. de C.V. Today, leading an oligopoly in Mexico comprising four competitors including Holcim Apasco S.A. de C.V., Fortaleza Materiales S.A.P.I. de C.V., Corporación Moctezuma S.A.B. de C.V. and Grupo Cementos de Chihuaha S.A.B. de C.V., CEMEX is a Mexican blue chip after reporting solid profits from over $ 15 billion a year in total consolidated sales and fetching a market value of over $ 10 billion. Accordingly, CEMEX is a constituent member of the Mexican stock market index known as the IPC and the broader S&P 40 Latin America as well. The maverick responsible for this feat is the late Lorenzo Zambrano Treviño, grandson of the original founder and graduate of the Monterrey Institute of Technology after obtaining an undergraduate degree there in Mechanical Engineering, having completed also an MBA from Stanford University right after his studies in Mexico.
Moreover, Lorenzo Zambrano Treviño joins the management of the company immediately after completing his MBA at Stanford University in 1968 and becomes CEO in 1985 after a 17 years tenure. Under his leadership, CEMEX engaged in an aggressive international expansion becoming a full-fledged cement multinational in 1995 when foreign operations accounted for at least half of total reported consolidated sales. Among the major acquisitions the company undertook, it is worth noting the major ones beginning with the first incursion overseas in Spain. Accordingly, CEMEX bought Valenciana de Cementos S.A. and Cementos Sansón S.A. for a combined price tag of $ 1.84 billion in 1992. Other transactions included buying control of Vencemos S.A. of Venezuela for $ 360 million in 1994, Cementos Samper S.A. and Cementos Diamante S.A. of Colombia for a combined price tag of $ 700 million in 1995 and a spree of further hefty acquisitions upon entering the new millennium in the US, the UK and Australia. In the US, for instance, CEMEX bought Southdown Corporation disbursing $ 2.63 billion for the entire company in question in the year 2000 and the Puerto Rican Cement Company Corporation for a price tag of $ 180 million in 2002. The acquisition of Southdown alone by itself added 11 million metric tons of installed capacity of cement annually. Likewise, in the UK, CEMEX bought the biggest ready-mix concrete operation throughout Europe known as RMC Group PLC for a price tag of $ 5.8 billion in 2005. In Australia, on the other hand, CEMEX undertook its most aggressive takeover using leverage paying $ 14.2 billion for Rinker Group Limited in 2007. Having undertaken also a stock exchange listing on the NYSE back in 1999 just before entering the millennium while trading there as an ADR under the ticker symbol (CX), CEMEX is today a true champion of cement in Latin America and a shining star from Mexico.
Altogether, the vast operations of the company span cement, ready-mix concrete, clinker and aggregates. The lineup of aggregates includes crushed limestone, manufactured sand, natural sand, gravel, mortar and recycled concrete. These operations enable the company to sustain a heavy level of indebtedness from acquisitions abroad while letting it compete with multinationals ahead of it like Holcim Limited of Switzerland, Heidelberg Materials A.G. of Germany and the Siam Cement Public Company Limited of Thailand. Currently, CEMEX is the sixth biggest operation of its kind worldwide in terms of output with an installed capacity of 83.6 million metric tons of cement annually as of December 2022 according to Statista. Similarly, the company is the seventh biggest operation globally of its kind in terms of total reported consolidated sales at $ 15.58 billion for the year ending in December 2023 according to Statista as well. CEMEX actually competes neck and neck with the Siam Cement Public Company after the two of them being roughly of the same size because CEMEX actually has a small higher installed capacity of cement annually and the lower total reported consolidated sales in American dollars most likely come from unfavorable currency translations under US GAAP or General Accepted Accounting Principles. There are, however, three unaccounted Chinese cement players not being mentioned because although they are bigger than CEMEX, they concentrate their entire operations on Chinese soil and consequently, they are not multinationals proper and do not compete with CEMEX.
Furthermore, CEMEX has undergone a streamlining of its operations after expanding rapidly swallowing a very heavy debt load in the process. In 2009, for instance, the company sold its domestic operations in Australia of Rinker Group Limited for a price tag of $ 1.75 billion in cash including several more billion dollars’ worth of liabilities that were assumed by the buyer. In similar fashion, the company sold its 24.9% shareholding in a leading Indonesian cement maker known as PT Semen Gresik (Persero) T.b.K. under pressure from the Indonesian governmental authorities who considered the overture as a somewhat takeover attempt hostile in nature, the price tag of the transaction was $ 337 million. In addition, CEMEX also sold off its economic interest controlling Venezuela’s largest cement maker known as Vencemos S.A. in 2008 because the entire cement industry in Venezuela was suddenly nationalized by the regime of the late Hugo Chávez, the price tag of the transaction was $ 600 million representing the estimated book value of the ownership stake in the Venezuelan cement maker at the time back then. Overall, after these divestures and realignment, CEMEX has total assets of $ 28.433 billion including $ 624 million in ending cash on hand for the year closing 2023. Current liabilities are $ 6.786 billion while non-current liabilities on its books stand at $ 9.521 billion giving the company a positive total equity position of $ 9.531 billion including the assumption of minority interests. The company maintains a fair indebtedness of $ 8.164 billion on its balance sheet as well, all these figures come from Yahoo!Finance. On the other hand, the PPE of CEMEX today comprises 64 cements plants, 1,348 ready-mix concrete facilities, 246 quarries, 269 distribution centers and 68 marine terminals with active presence in over 30 countries and a payroll of over 40,000 employees of various nations globally. The company also owns a retail store chain containing around 2,300 hardware stores across Latin America in countries where it operates under the banner “Construrama”, the biggest retail operation of its type regionwide.
To conclude, CEMEX is at the forefront of innovation embracing and fostering technology. Accordingly, the company has a digital platform tracking operations in its entirety along with performance known as “CEMEX Go” where workers at management levels of the corporate hierarchy can access resources including entering real time data at the cement plants and on construction sites. Another digital tool is “CEMEX Net”, a satellite positioning system where ready-mix concrete trucks can get to construction sites with utmost precision, efficiency and on time making deliveries of vital inputs such as ready-mix concrete. Moreover, Lorenzo Zambrano Treviño passed the reins of the company upon his passing to his first cousin Rogelio Zambrano Lozano who remains Chairman of the corporation to this day. The former, who was single, childless and never married, died unexpectedly in Madrid, Spain while on a business trip there from a heart attack in 2014, he was found dead in his hotel suite after missing a morning business meeting. Nevertheless, his accomplishments and legacy from a marvelous career growing the cement colossus endures. Today, the extended Zambrano clan retains voting control of the Mexican multinational while delegating authority with cleverness contributing to society at large after embracing ethics, corporate social responsibility and low impact environmental concerns.