Cemex's aggressive global expansion through acquisitions led to a cash crunch as the company struggled with high debt from its acquisitions. The document discusses Cemex's history of acquisitions from the 1980s onwards that transformed it from a Mexican company into a global cement producer. However, the strategy of rapid expansion through acquisitions left the company highly leveraged, which caused financial difficulties when the economic recession hit in 2008.
CEMEX is baed out of Mexico and is one of the top ten producers of cement in world. This presentation is study of cement industry illustrating some frameworks used in Strategy Management.
- CEMEX began as two separate cement companies in Mexico in 1906 and 1920, merging in 1931 to form Cementos Mexicanos, now known as CEMEX
- Through acquisitions in Mexico, the US, Europe, Asia, Latin America and the Caribbean, CEMEX became one of the largest cement producers in the world by 2000, with production capacity of over 65 million metric tons across four continents
CEMEX has benefited from globalization through risk mitigation, access to local resources and capital accumulation, no need for local product adaptation, increased market share, improved plant efficiency, and better management practices. Globalization allows CEMEX to achieve economies of scale, reach new customer segments, and increase research and development. Going forward, CEMEX should focus on establishing a global culture, expanding through mergers and acquisitions, entering new markets to avoid hostile takeovers, investing in R&D and quality, leveraging IT, targeting emerging markets like BRICS nations, and considering factors like EBITDA, culture, geography, and stability when selecting new countries.
CEMEX globalized its operations through a series of acquisitions between 1989 and 1999, expanding from Mexico into Spain, Venezuela, Colombia, the Philippines, Indonesia, and Egypt. This allowed it to mitigate risk through diversification and benefit from economies of scale. CEMEX used a transnational strategy, treating the world as a single market while allowing local responsiveness. It followed a rigorous process for identifying acquisition targets, conducting due diligence, and integrating new operations through post-merger teams. This helped CEMEX outperform competitors on metrics like EBIT and leverage its low-cost production globally.
CEMEX is a global cement company founded in Mexico in 1906. Through acquisitions starting in the 1960s, CEMEX became the largest cement producer in Mexico. In the following decades, CEMEX pursued an aggressive globalization strategy, making acquisitions in the US, Europe, and other markets. This allowed CEMEX to mitigate risk, access new resources and markets, and improve management practices. CEMEX outperformed competitors by focusing on growth markets through strategic acquisitions and implementing performance-based strategies. The presentation recommends CEMEX further expand into high-growth countries in Asia and emerging markets to continue its globalization.
CEMEX began as a small regional cement firm in Mexico in 1906 and has since grown to be a global conglomerate providing building materials in over 50 countries. The document discusses CEMEX's financial performance globally and in its home country of Mexico, where it maintains a dominant market position. It also covers CEMEX's strategy of first strengthening its core competencies before expanding internationally through exports and acquisitions, with its first major move being the purchase of cement companies in Spain in 1992.
CEMEX is baed out of Mexico and is one of the top ten producers of cement in world. This presentation is study of cement industry illustrating some frameworks used in Strategy Management.
- CEMEX began as two separate cement companies in Mexico in 1906 and 1920, merging in 1931 to form Cementos Mexicanos, now known as CEMEX
- Through acquisitions in Mexico, the US, Europe, Asia, Latin America and the Caribbean, CEMEX became one of the largest cement producers in the world by 2000, with production capacity of over 65 million metric tons across four continents
CEMEX has benefited from globalization through risk mitigation, access to local resources and capital accumulation, no need for local product adaptation, increased market share, improved plant efficiency, and better management practices. Globalization allows CEMEX to achieve economies of scale, reach new customer segments, and increase research and development. Going forward, CEMEX should focus on establishing a global culture, expanding through mergers and acquisitions, entering new markets to avoid hostile takeovers, investing in R&D and quality, leveraging IT, targeting emerging markets like BRICS nations, and considering factors like EBITDA, culture, geography, and stability when selecting new countries.
CEMEX globalized its operations through a series of acquisitions between 1989 and 1999, expanding from Mexico into Spain, Venezuela, Colombia, the Philippines, Indonesia, and Egypt. This allowed it to mitigate risk through diversification and benefit from economies of scale. CEMEX used a transnational strategy, treating the world as a single market while allowing local responsiveness. It followed a rigorous process for identifying acquisition targets, conducting due diligence, and integrating new operations through post-merger teams. This helped CEMEX outperform competitors on metrics like EBIT and leverage its low-cost production globally.
CEMEX is a global cement company founded in Mexico in 1906. Through acquisitions starting in the 1960s, CEMEX became the largest cement producer in Mexico. In the following decades, CEMEX pursued an aggressive globalization strategy, making acquisitions in the US, Europe, and other markets. This allowed CEMEX to mitigate risk, access new resources and markets, and improve management practices. CEMEX outperformed competitors by focusing on growth markets through strategic acquisitions and implementing performance-based strategies. The presentation recommends CEMEX further expand into high-growth countries in Asia and emerging markets to continue its globalization.
CEMEX began as a small regional cement firm in Mexico in 1906 and has since grown to be a global conglomerate providing building materials in over 50 countries. The document discusses CEMEX's financial performance globally and in its home country of Mexico, where it maintains a dominant market position. It also covers CEMEX's strategy of first strengthening its core competencies before expanding internationally through exports and acquisitions, with its first major move being the purchase of cement companies in Spain in 1992.
- CEMEX is one of the largest cement companies in the world founded in 1906 and headquartered in Mexico.
- It has grown significantly over the decades through acquisitions within Mexico in the 1960s and overseas acquisitions starting in the 1980s, expanding into the US, Canada, and Latin America.
- CEMEX has been able to outperform competitors by making successful acquisitions, focusing on emerging markets, implementing strategies, and improving performance indicators.
- Accor is a global hotel group founded in France in 1967 with 27 brands and over 4,900 hotels worldwide.
- New digital entrants like Airbnb have disrupted the hospitality industry with a more agile, customer-centric approach.
- Accor is undergoing a digital transformation, shifting from an asset-heavy model to a more dynamic, mobile-first organization. This includes streamlining the customer experience, implementing an agile IT structure, and creating an ecosystem of partners.
Acquisition and restructuring strategies - Yolanda WilliamsYolanda Williams
An acquisition occurs when one firm purchases a controlling interest in another firm to make it a subsidiary. Mergers are a type of acquisition where two firms of roughly equal size agree to combine to form an entirely new joint company. Restructuring is when a firm changes its business or financial structure, such as through downsizing or divesting interests, to adapt to internal or external environmental changes. Walmart uses acquisitions to enter new markets, participates in joint ventures like Bharti Walmart, and has restructured by divesting interests that failed due to high competition or cultural issues.
Presentation at On The Edge Reading, 24th September 2014.
The reinvention of Marketing with Jamie Brighton, Head of Strategic Marketing EMEA, Adobe
- How to understand, measure and optimise Big Data
- Analysing the audience: How they are using current trends in digital marketing and solutions and what you should be doing
- Comparing and Competing: How to use “Digital Index Reports” to benchmark sectors and companies for awesome results!
This document discusses Ingersoll Rand (India) Ltd's air compressor business, which accounts for 25% of its total revenue in India. It faces increasing competition and commoditization in the air compressor market. The document analyzes Porter's 5 forces and a SWOT analysis of the business. It also discusses a potential deal with Deccan Textiles, where IRL could adopt a solutions-based "cost of use" approach rather than a traditional "cost of buy" model to differentiate itself and strengthen customer relationships.
CSX has offered to acquire Conrail through a two-tier merger agreement. The front-end offer is for 40% of shares at $92.50 per share, while the back-end offer values each Conrail share at $86.78 through an exchange of CSX stock. This values Conrail at an effective price of $89.06 per share. Analysts value Conrail using multiples and DCF valuations to compare to CSX's offer price. The multiples valuation ranges from $90.48 to $126.98 per share based on comparable railroad transactions. The DCF valuation ranges from $93.24 to $93.54 per share when incorporating the estimated synergies of $370 million
The document discusses Walmart's efforts to compete with Amazon in online retail. It provides an overview of Walmart and Amazon's business models, Porter's five forces analysis, strategic acquisitions timeline, SWOT analysis, value chains, change processes, modular architecture, multi-sided platforms, and financial analysis. It analyzes how Walmart can leverage its strengths in grocery retail and supply chain to grow its online business and diversify beyond grocery to maintain competitive advantage against Amazon.
Mergers and Acquisitions Case: Kraft hostile takeover on Cadbury.
After reviewing operations, finance, marketing, supply chain management, this practical example supported my learning within the legal international frame.
Penultimate presentation carried out within a mostly French group, interesting :)
1. The document provides an analysis of Eastman Kodak Company and the digital imaging industry. It includes a brief history of Kodak, an external analysis of the industry and competitive environment, and an internal analysis of Kodak's financials, resources, and strategies.
2. Kodak struggled to transition from film to digital as demand for digital cameras and smartphone cameras grew. While Kodak had strengths in brand recognition and research, it failed to effectively transition its business model.
3. By 2012, Kodak filed for bankruptcy as it had billions in losses over the previous decade from its inability to adapt. However, the document notes that Kodak remained one of the largest brand
Maersk, the world's largest shipping company, is collaborating with IBM to use blockchain technology to digitize and streamline the global shipping industry. Currently, most shipping information is on paper and the process is inefficient, but blockchain allows different parties to securely share data and track shipments in real-time. This new system aims to reduce costs for Maersk and create a more transparent and trusted process for shipping goods globally.
AT&T: Twenty Years of Change Case AnalysisMotaz Agamawi
This document provides an analysis of AT&T over 135 years from 1875 to 2012, focusing on key milestones and changes in strategy. It discusses AT&T's beginnings as a monopoly in 1875, the start of competition in 1894 when patents expired, the divestiture into regional Baby Bells in 1984, and acquisitions in the 1990s and 2000s to expand into new technologies and markets under CEO Armstrong's vision of an "any distance" global telecommunications provider.
Detailed analysis of implication of merger between Cooper Industries and Nicholson File Company
The DCF valuation excel can viewed at:
https://drive.google.com/file/d/0B6nSS-YiZgneVEpVWVA2QWpyX28/view?usp=sharing
Nucor is considering building a new steel mill. The CEO is concerned about committing to the project given resource constraints and whether CSP technology will remain viable long-term. An analysis of Nucor's strengths in administration, employee relations and operations was presented. Weaknesses, opportunities, and threats in the US steel market were also reviewed. Nucor will decide on the project based on criteria requiring 100% commitment of previous capital, 25% ROA within 5 years, and maintaining debt-equity below 30%.
CASE STUDY : The Treadway Tire CompanyTanya Taneja
The Treadway Tire company plant in Lima, Ohio is the companys one of the biggest plants and most important. It has been plagued with high employee turnover at the foreman level resulting in low productivity. Ashley Wall, the HR Director of the plant is faced with the task of investigating the problems and presenting her recommendations to Brandon Bellingham, the plant manager.
Study of Super League Australia- Media Nexus, An under-represented /studied subject in management but a huge business potential.Applicable to all Sports Leagues Industry in US, Europe, or Asia.
Group 10 presented on Alphabet Inc. Key points include:
- Alphabet was created in 2015 through the restructuring of Google.
- The restructuring allowed Google to own diverse subsidiaries under one corporate structure to create more value.
- Alphabet uses a decentralized structure to improve productivity but it can lose control and create different agendas.
- Alphabet's corporate governance, including dual class shares, is controversial as it gives insiders disproportionate voting power but protects entrepreneurial management.
MBA 622 - Strategy I - Growth by Acquisition Strategymarhenbun
This case was presented in Fall 2010 and revolves around a critical point in the international cement market in 2000. In this presentation, CEMEX's competitive advantage and global acquisition strategy are examined in the cutthroat competitive cement market.
Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. It was formed through the merger of C.L. Best and Holt Caterpillar in 1925. Caterpillar markets its products to construction, mining, forestry, transportation, oil and gas, government, and power generation industries. It has manufacturing facilities worldwide and distributes its products through an extensive dealer network in over 200 countries. Some of Caterpillar's main competitors include Deere & Co., Komatsu, Joy Mining, CNH Global, and International Harvester.
1. LinkedIn - As a B2B-focused platform, LinkedIn allows Lafarge to connect with industry professionals and highlight their innovations, expertise, and projects.
2. YouTube - Posting videos about Lafarge's products and sustainability efforts on YouTube can help increase their visibility and position them as a leader in these areas.
Toyota's production system evolved over time through innovations like just-in-time manufacturing and kanban scheduling. This allowed Toyota to achieve flexible production, high quality, and increased worker productivity. While early weaknesses included high costs and lack of capital for expansion, Toyota was able to leverage opportunities like growing markets, government support, and innovative work practices. Strategies like joint ventures and adapting products to new markets helped Toyota address threats from competitors and market saturation.
- CEMEX is one of the largest cement companies in the world founded in 1906 and headquartered in Mexico.
- It has grown significantly over the decades through acquisitions within Mexico in the 1960s and overseas acquisitions starting in the 1980s, expanding into the US, Canada, and Latin America.
- CEMEX has been able to outperform competitors by making successful acquisitions, focusing on emerging markets, implementing strategies, and improving performance indicators.
- Accor is a global hotel group founded in France in 1967 with 27 brands and over 4,900 hotels worldwide.
- New digital entrants like Airbnb have disrupted the hospitality industry with a more agile, customer-centric approach.
- Accor is undergoing a digital transformation, shifting from an asset-heavy model to a more dynamic, mobile-first organization. This includes streamlining the customer experience, implementing an agile IT structure, and creating an ecosystem of partners.
Acquisition and restructuring strategies - Yolanda WilliamsYolanda Williams
An acquisition occurs when one firm purchases a controlling interest in another firm to make it a subsidiary. Mergers are a type of acquisition where two firms of roughly equal size agree to combine to form an entirely new joint company. Restructuring is when a firm changes its business or financial structure, such as through downsizing or divesting interests, to adapt to internal or external environmental changes. Walmart uses acquisitions to enter new markets, participates in joint ventures like Bharti Walmart, and has restructured by divesting interests that failed due to high competition or cultural issues.
Presentation at On The Edge Reading, 24th September 2014.
The reinvention of Marketing with Jamie Brighton, Head of Strategic Marketing EMEA, Adobe
- How to understand, measure and optimise Big Data
- Analysing the audience: How they are using current trends in digital marketing and solutions and what you should be doing
- Comparing and Competing: How to use “Digital Index Reports” to benchmark sectors and companies for awesome results!
This document discusses Ingersoll Rand (India) Ltd's air compressor business, which accounts for 25% of its total revenue in India. It faces increasing competition and commoditization in the air compressor market. The document analyzes Porter's 5 forces and a SWOT analysis of the business. It also discusses a potential deal with Deccan Textiles, where IRL could adopt a solutions-based "cost of use" approach rather than a traditional "cost of buy" model to differentiate itself and strengthen customer relationships.
CSX has offered to acquire Conrail through a two-tier merger agreement. The front-end offer is for 40% of shares at $92.50 per share, while the back-end offer values each Conrail share at $86.78 through an exchange of CSX stock. This values Conrail at an effective price of $89.06 per share. Analysts value Conrail using multiples and DCF valuations to compare to CSX's offer price. The multiples valuation ranges from $90.48 to $126.98 per share based on comparable railroad transactions. The DCF valuation ranges from $93.24 to $93.54 per share when incorporating the estimated synergies of $370 million
The document discusses Walmart's efforts to compete with Amazon in online retail. It provides an overview of Walmart and Amazon's business models, Porter's five forces analysis, strategic acquisitions timeline, SWOT analysis, value chains, change processes, modular architecture, multi-sided platforms, and financial analysis. It analyzes how Walmart can leverage its strengths in grocery retail and supply chain to grow its online business and diversify beyond grocery to maintain competitive advantage against Amazon.
Mergers and Acquisitions Case: Kraft hostile takeover on Cadbury.
After reviewing operations, finance, marketing, supply chain management, this practical example supported my learning within the legal international frame.
Penultimate presentation carried out within a mostly French group, interesting :)
1. The document provides an analysis of Eastman Kodak Company and the digital imaging industry. It includes a brief history of Kodak, an external analysis of the industry and competitive environment, and an internal analysis of Kodak's financials, resources, and strategies.
2. Kodak struggled to transition from film to digital as demand for digital cameras and smartphone cameras grew. While Kodak had strengths in brand recognition and research, it failed to effectively transition its business model.
3. By 2012, Kodak filed for bankruptcy as it had billions in losses over the previous decade from its inability to adapt. However, the document notes that Kodak remained one of the largest brand
Maersk, the world's largest shipping company, is collaborating with IBM to use blockchain technology to digitize and streamline the global shipping industry. Currently, most shipping information is on paper and the process is inefficient, but blockchain allows different parties to securely share data and track shipments in real-time. This new system aims to reduce costs for Maersk and create a more transparent and trusted process for shipping goods globally.
AT&T: Twenty Years of Change Case AnalysisMotaz Agamawi
This document provides an analysis of AT&T over 135 years from 1875 to 2012, focusing on key milestones and changes in strategy. It discusses AT&T's beginnings as a monopoly in 1875, the start of competition in 1894 when patents expired, the divestiture into regional Baby Bells in 1984, and acquisitions in the 1990s and 2000s to expand into new technologies and markets under CEO Armstrong's vision of an "any distance" global telecommunications provider.
Detailed analysis of implication of merger between Cooper Industries and Nicholson File Company
The DCF valuation excel can viewed at:
https://drive.google.com/file/d/0B6nSS-YiZgneVEpVWVA2QWpyX28/view?usp=sharing
Nucor is considering building a new steel mill. The CEO is concerned about committing to the project given resource constraints and whether CSP technology will remain viable long-term. An analysis of Nucor's strengths in administration, employee relations and operations was presented. Weaknesses, opportunities, and threats in the US steel market were also reviewed. Nucor will decide on the project based on criteria requiring 100% commitment of previous capital, 25% ROA within 5 years, and maintaining debt-equity below 30%.
CASE STUDY : The Treadway Tire CompanyTanya Taneja
The Treadway Tire company plant in Lima, Ohio is the companys one of the biggest plants and most important. It has been plagued with high employee turnover at the foreman level resulting in low productivity. Ashley Wall, the HR Director of the plant is faced with the task of investigating the problems and presenting her recommendations to Brandon Bellingham, the plant manager.
Study of Super League Australia- Media Nexus, An under-represented /studied subject in management but a huge business potential.Applicable to all Sports Leagues Industry in US, Europe, or Asia.
Group 10 presented on Alphabet Inc. Key points include:
- Alphabet was created in 2015 through the restructuring of Google.
- The restructuring allowed Google to own diverse subsidiaries under one corporate structure to create more value.
- Alphabet uses a decentralized structure to improve productivity but it can lose control and create different agendas.
- Alphabet's corporate governance, including dual class shares, is controversial as it gives insiders disproportionate voting power but protects entrepreneurial management.
MBA 622 - Strategy I - Growth by Acquisition Strategymarhenbun
This case was presented in Fall 2010 and revolves around a critical point in the international cement market in 2000. In this presentation, CEMEX's competitive advantage and global acquisition strategy are examined in the cutthroat competitive cement market.
Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. It was formed through the merger of C.L. Best and Holt Caterpillar in 1925. Caterpillar markets its products to construction, mining, forestry, transportation, oil and gas, government, and power generation industries. It has manufacturing facilities worldwide and distributes its products through an extensive dealer network in over 200 countries. Some of Caterpillar's main competitors include Deere & Co., Komatsu, Joy Mining, CNH Global, and International Harvester.
1. LinkedIn - As a B2B-focused platform, LinkedIn allows Lafarge to connect with industry professionals and highlight their innovations, expertise, and projects.
2. YouTube - Posting videos about Lafarge's products and sustainability efforts on YouTube can help increase their visibility and position them as a leader in these areas.
Toyota's production system evolved over time through innovations like just-in-time manufacturing and kanban scheduling. This allowed Toyota to achieve flexible production, high quality, and increased worker productivity. While early weaknesses included high costs and lack of capital for expansion, Toyota was able to leverage opportunities like growing markets, government support, and innovative work practices. Strategies like joint ventures and adapting products to new markets helped Toyota address threats from competitors and market saturation.
The document discusses the adhesives and sealants industry in India. It provides details on market size, growth rate, applications, and challenges. Specifically:
- The current market size of the adhesives and sealants industry in India is Rs. 250-300 crores and growing at 20% annually.
- Adhesives and sealants have diverse applications across construction, automotive, aerospace and other industries for sealing joints, cracks, enhancing life of structures and reducing vulnerability.
- Rising raw material costs from increasing petroleum prices puts pressure on suppliers and manufacturers are looking to bio-polymers and alternatives.
- Future prospects for the industry are seen as lucrative with increased infrastructure development
This presentation provides an overview of Energold, a global specialty drilling contractor. Energold operates 234 rigs across 22 countries, focusing on frontier drilling in remote locations with limited infrastructure or sensitive environmental and social issues. The company has experienced strong growth due to increasing demand for mining exploration driven by commodity price increases. Energold aims to continue its aggressive expansion strategy through organic growth, acquisitions, and offering additional services to clients.
Energold is a global specialty drilling contractor providing socially and environmentally sensitive drilling services to the international mining and energy sectors. The presentation discusses Energold's business, the positive outlook for the mining industry, its frontier drilling market opportunities, technology, operations, and financial performance. Energold aims to aggressively expand its mineral drilling fleet and pursue additional acquisitions to solidify its position as a leading global specialty driller.
Ford and the world Automobile Industry 2012Mohit Garg
Ford has faced many crises throughout its history but has survived through strategic shifts. The global auto industry faces challenges to profitability from overcapacity, resistance to new plants, and rising costs of development. Factors that could increase future profitability include industry consolidation and revival in global demand. However, continued investment in new capacity, more industry entrants, and increasing buyer and supplier power may reduce profitability. The key to success is having a globally competitive cost structure, flexible manufacturing, outsourcing technologies, strong design aesthetics, environmentally friendly technologies, and good government relations. Choosing attractive industry segments based on products and markets is important for strategic decisions.
Thin Film Semiconductor Deposition Market, Size, Share 2022Radhika Patil
Thin Film Semiconductor Deposition Market is segmented by deposition technology and industry verticals. Thin film market is expected to get $22 bn by 2022
The document provides an overview of the Indian cement industry. It discusses the industry structure, characteristics, types of cement, history and key players. The cement industry is a core sector in India accounting for 1.3% of GDP. It has seen strong growth in recent years driven by infrastructure development. Some of the largest cement companies in India are Ultratech Cement, Gujarat Ambuja Cement Limited, JK Cements and ACC Cement. The industry is concentrated in certain regions due to the location of limestone deposits and faces economic and environmental challenges.
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This document provides information about a project report submitted by Kumar Prashirsh for their Post Graduate Diploma in Management. It includes a bona fide certificate signed by the principal director and project guide, acknowledging the report. It also includes an acknowledgements section thanking various mentors and faculty for their guidance and support during the project. The report then provides background information on the history and growth of the cement industry in India as well as details on Ambuja Cements, one of the leading cement manufacturers in the country.
This document discusses trends in aluminum usage for light vehicles, including:
- Global shipments of aluminum for light vehicles are projected to increase from 16.8 million tons in 2011 to 25 million tons in 2025.
- Factors that will influence future aluminum usage are global emission mandates, regional shifts in vehicle segments, changes in vehicle footprint and curb weight, and types of vehicle propulsion and transmissions.
- Global emissions regulations are driving automakers to reduce vehicle weight through increased use of aluminum to meet future fuel economy and emissions targets.
Complete analysis of Indian Cement Industry with latest data including PEST Analysis, PORTER's Five Force Analysis and Future Prospects of the Industry
Policies and Best Practices for Industry Transition: Tareq Emtairah, UNIDOOECD Environment
"Challenges and best practices in financing to accelerate industry decarbonisation", OECD Series of Webinars on low carbon hydrogen and industry decarbonisation, 14 June 2023
This document is a research project report on assessing the market performance of Birla White cement and designing strategies for enhancement by Grasim Industries. It includes sections on the objectives, scope, limitations of the study, introduction to the cement industry, industry profile, and current scenario. The key points are that it examines Birla White's strengths and future prospects in the cement sector through fundamental analysis and aims to recommend strategies to retain customers and increase goodwill.
A. The document discusses the cement industry, providing an introduction and overview of its history, products, factors affecting it, constraints, leading companies, and more.
B. It describes cement as an inorganic material with adhesive properties used to bind materials together, and discusses the two main types of cement: hydraulic and non-hydraulic.
C. India has a large and important cement industry, ranking as the second largest cement producer globally behind China, providing many jobs and contributing significantly to the country's GDP.
The document provides an overview of the Indian cement industry, including its structure, key players, production levels, demand drivers, major projects, pricing, and costs. Some of the key points summarized are:
- The Indian cement industry is dominated by large private players and is one of the largest in the world. Production has grown significantly from 50 MT/year in 1992 to over 320 MT/year currently.
- Demand is driven by infrastructure development, the housing sector, and economic growth. The government plans to invest $1 trillion in infrastructure over the next five years.
- Major projects underway include roads, ports, airports, railways, and power. The 2013-14 budget also aims to boost infrastructure
Introduction of the company ,Market structure ,Cost structure, Substitutes and complement goods , Major current and past reasons for variation in demand and supply,Regression analysis for past 10 years ,Forecast variable ‘sales’
3. HISTORY
Year Event
1906 Cementos Hidalgo established, begins operating cement plant.
1920 Lorenzo Zambrano open cement plan named Cementos Portland
1931 Cementos Hidalgo & Xcementos Portland merged into Cemex
1976 Cemex goes public, become largest cement maker in Mexico and acquire
Cementos Guadalajara
1985 Grandson founder name Lorenzo Zambrano as a CEO and have ambitious
program expansion.
1989 Acquisition of Cementos Tolteca, give Cemex 65% Mexican market
1992 Buys 2 largest cement company in Spain, Valenciana and Sanson
1994 Controlling stake in Vencemos (Large cement company in Venezuela)
4. HISTORY
Year Event
1995 Expand to Dominican Republic and Caribbean market
1996 Expand to Colombia and Panama to consolidate Caribbean market
1997 Take its first direct investment in Asia, purchasing 30% stake in Rizal Cement
Company, Inc. of the Philippines
1999 Majority stake in Assiut Cement Company, leading cement market in Egypt.
2000 Houston Based Inc. (Second Largest U.S. Cement producer acquired
2002 Write-down from currency-hedging operations foreshadow company loss,
Expand Puerto Rico.
2005 Acquisitation RMC that enhaced its position to world 3rd producer of sement
2007 Acquires Rinker, Australian company with major operation in US
2008 Stocks crumble as cement sales decline, company in huge debt crises trying to
refinance.
5. PESTEL
POLITICS ECONOMY SOCIAL
• Different countries • Economic Recession in • Different culture and
policy about FDI US and Europe language
• Trade barriers • High growth Emerging • Community
market BRIC contribution
• Different market • Social Media
demand between
developed and
developing country
6. PESTEL
TECHNOLOGY ENVIRONMENT LEGAL
• ICT innovation and development • Climate change (rehabilitation, air • CSI (Cement Sustainability
• Real time and direct pollution, waste mgt) Initiative) for audit global carbon
communication • Alternative fuels and renewable emissions
energy energy • Health and safety work
• Regulatory by national and
regional trade associations such as
the European Cement Association
(CEMBUREAU) and industry
forums such as the World Business
Council for Sustainable
Development (WBCSD) and the
Portland Cement Association
7. INDUSTRY ANALYSIS
• Low barriers entry, • Decrease the use of
capital intense cement in construction
Threat of
• Limited FDI by Threat of New • Proportion to use other
Entrants Substitutes
government material in construction
• Highly regulated but more expensive
MODERATE LOW
• Company can own
raw materials • Consumer is
• Concentrate supplier price taker
especially in China because the
demand of
cement is high
ATTRACTIVE
INDUSTRY • Strong multinational company, and many
regional and national company
• Pace of acquisition
• Pace to entry potential emerging market
9. Market Needs By Construction
Stages Development
• High demand for Cement, low
BASIC demand for aggregates and ready
mix concrete
• Demand for cement and ready mix
INTERMEDIATE concrete is balance but low
demand for aggregates
• More high demand for aggregates,
ADVANCE and moderate demand for cement
and ready mix concrete
10. World Cement Production And Consumption
Source: Global Research: Egypt Cement Sector, Global Investment Hose, July 2009
11. World Cement 2008 by Region
Source: Global Research: Egypt Cement Sector, Global Investment Hose, July 2009
12. World Expected Cement Demand by Region
Source: Global Research: Egypt Cement Sector, Global Investment Hose, July 2009
13. Current Share Of Capacity Of The Multinational
Cement Majors By Region
Opportunity
To Entry
Source: FINANCIAL COMPETITIVENESS OF CEMENT COMPARED WITH OTHER BUILDING MATERIALS,
Cementing the foundations of growth, J.P. Morgan, Estimates, Michel Folliet
14. Growth in World Cement Consumption
Source: Global Research: Egypt Cement Sector, Global Investment Hose, July 2009
15. Cost Of Cement
The cost of imported cement
may be considered low, but
the operating expenses make
the final price 50% more
costly. This follows from the
cost of fuel, freight,
manpower, the dependence
on transport (logistics) and
the electric power used in the
operational process.
Source: Philippe Lasserre-
Globalisation Cement Industry-2007
16. Financial Competitiveness Of Cement Compared
With Other Building Materials
“cement remaining the
most profitable
compare to different
building material
segments”
Source: FINANCIAL COMPETITIVENESS OF CEMENT COMPARED
WITH OTHER BUILDING MATERIALS, Cementing the foundations
of growth, J.P. Morgan, Estimates, Michel Folliet
17. Financial Statistics for The Leading Global Cement
Companies For 2009
Source: Cementing the foundations of growth, International Finance Corporation, Michel Folliet
18. CORE COMPETENCY
Competence Category Lafarge Cemex
Core Competence • Low Cost Production and Better • Low Cost Production
Product • IT leadership
Distinctive Competence • Personalized product according • Relationship with clients
region • Delivery Time
• Research based on sustainable • Client Satisfaction assessment
development system
Organizatioal Competence • Investment in HR • Logistic
R&D in products and processes • People
• IT and Knowledge Management
Supportive Competence • Financial Management for • Post-Acquisition integration team
Investment • Frequent trainings
• Firm Acquistion • Standardization of proesses
through IT
Dynamic Capability • Develop the capability to • Multi cultural adaptability
research aligned with centers of Global mindset and the
excellence centers of education comprehension that cemment is
and research not a commodity but a dream
HR management focus on High
mobility, Allowing a dynamic
sharing of experience and Best
Practices
Source: http://www.scielo.oces.mctes.pt/scielo.php?pid=S0873-74442009000100005&script=sci_arttext
19. CEMEX
SUSTAINABLE COMPETITIVE
ADVANTAGE
Resources Valuable Rare Costly to Nonsubstituable Competitive
Attribute Immitate Consequences
Learning Yes Yes Yes/No Yes SCA
Organization
Expansion Strategy Yes No Yes Yes TCA
IT Leadership Yes No Yes Yes TCA
20. Lorenzo Zambrano
Biography
• Educational Background:
– Bachelor in mechanical enginering from Tecnologico de Monterrery
(ITESM) 1966
– MBA from Stanford Business School in 1968
• Career:
– Joined CEMEX in 1968
– CEMEX CEO in 1985
– CEMEX Chairman Board since 1995
• Others:
– Member of IBM BOD and the Citigroup International Advisory Board
– Chairman of the Board of Sistema Tecnológico de Monterrey
– Council of Daimler Chrysler AG until July 2005
Mexico (1945 -Present ) • Honor:
– Woodrow Wilson Award for Corporate Citizenship
The CEMEX
– the Americas Society's Gold Medal for Distinguished Service
Founder’s – the Excellence in Leadership Award from the Stanford Graduate
Grandson Business School,
– Ernest C. Arbuckle Award for Managerial Excellence from the Stanford
Business School's Alumni Association.]
21. Lorenzo Zambrano
Leadership Style
Visionary Leader
"He's a very sweet man. He has a rare combination of
abilities to lead and mobilize and has a clear, long-term
vision.“ Peter Schwartz, founder and chairman of Global
Business Network
Agresive
"If there's an opportunity, either you grab it or you let go,“
he says. "If you let go, you don't grow.“ Zambrano
Coach (Situational Leadership Theory)
CEMEX came to rely less on command-and-control and
more on senior management's setting goals and then
letting employees figure out the best ways to reach them.
22. Lorenzo Zambrano in ACTION
• Going Global..
• He imposed worldwide standards on
business practices
• He shed subsidiaries to concentrate on
cement
• He made English the company's official
language
• Hire Cyber Visionary : Gelacio Liguez
(1987)
• Launch CEMEX Way
23. Lorenzo Zambrano
Step Of CHANGE
• The company's Create a sense of urgency
prime resource
was its people
• To reach its Working with a team of Arthur D. Little
goals, the consultants
company
Basic would have to
Assu convince its
employees that CEMEX asked employees to identify barriers
mpti they had to to change and improvement
on improve their
performance
constantly, and Employees at all levels were asked to
they'd have to undertake a "visioning exercise."
be equipped
with the means
to do that Employees looked at external benchmarks,
but they also identified particularly effective
practices inside the company
24. CEMEX Remuneration
Remuneration package1
• Median salary : $70,924
Life and health
• Average salary : $68,649
• Salary Range : $40,000 -
insurance
$141,918
Cafeteria System,
World business travel • Hot Meal Voucher
insurance is offered for • Holiday Voucher
those who travel. • BKV Pass
• Internet Contribution, etc.
(1) http://www.salarydom.com/company-cemex-salaries-view-5.htm (USA Based)
(2) http://www.cemexssc.eu/culture/benefits
26. CEMEX
Organizational Structure
Chairman of the
Board and Chief
Executive Officer
Chairman of CEMEX Latin
Executive Advisor to
American Advisory Board and
the Chairman and
Advisor to the CEO on
CEO
Institutional Relations
Executive Vice
Executive Vice
President of
President of Finance
Organization and
and Administration
Human Resources
Executive Vice President
of Strategic Planning and
New Business
Development
President CEMEX
South, Central President CEMEX President CEMEX President CEMEX President CEMEX President CEMEX
America and the Asia Northern Europe Mediterranean Mexico USA
Caribbean
27. CEMEX Executive
Lorenzo H.Zambrano CEO/Chairman of the Board/Director
Rafael Garza Chief Accounting Officer
Juan Romero President, Geographical
Fransisco Garza President, Geographical
Ramiro G. Vilarreal General Counsel/secretary
Rodrigo Trevino CFO
Fernando Gonzalez Executive VP, Divisional
Roberto Zambrano Villarreal Director
Dionisio Garza Medina Director
Rodolfo Garcia Muriel Director
28. • Mr. Zambrano is a first cousin of
Lorenzo Milmo Zambrano and
Rogelio Zambrano Lozano
• Both members of our board of
directors, as well as of Rodrigo
Trevi, our Chief Financial Officer.
He is also a second cousin of
Roberto Zambrano Villarreal
and second uncle of Tomas
Milmo Santos, both members of
our board of directors
30. Rafael Garza (47 Years Old)
•Joined CEMEX in 1985 and has served as chief accounting officer since 1999.
•certified public accountant and
•master degree in administration and finance from ITESM.
•attended executive programs at ITAM, IPADE and Harvard University
Francisco Garza (55 Years Old)
•graduate in business administration from ITESM
•M.B.A. from the Johnson School of Management at Cornell University in 1982.
Ramiro G. Villarreal (62 Years Old)
•He is a graduate of the Universidad Autnoma de Nuevo Len with a degree in law.
•Master of Science degree in finance from the University of Wisconsin
Ramiro G. Villarrea (65 Years Old)
•Member of our board of directors since 1987
•President of finance committee since 2009.
•Cousin of Lorenzo H. Zambrano and our chief executive officer, a first cousin of Lorenzo Milmo Zambrano, a member of
CEMEX board of directors and uncle of Tom’s Milmo Santos, a member of our board of directors
Dionisio Garza Medina (56 Years Old)
•Member of the advisory board of the Mexican Minister of Economy
•the advisory committee of the David Rockefeller Center for Latin American Studies at Harvard.
•Chairman of the Harvard Business School Latin American advisory board
• the Advisory Council of Stanford Engineering School
Family connections didn't assure him a fast rise, however. He toiled 18 years in all aspects of
the company. Then in 1985, at age 41, he was named chairman and CEO.
31. BUSINESS STRATEGY
Focus on core business
Provide customers Strengthen capital
of cement, ready-mix
with the best value structure and regain
concrete, and
proposition. financial flexibility.
aggregates.
Recruit, retain, and
Maximize operating Foster sustainable
cultivate world-class
efficiency. development.
managers.
32. Porter Generic Strategies
Advantage
Uniqueness Low Cost Position
Strategic
Broad Differentiation Cost Leadership
Target
Narrow Focus Differentiation Focus Low Cost
Cemex business strategy is a combination of DIFFERENTIATION
and COST LEADERSHIP strategy.
Differentiation Cost Leadership
• By providing customer • Implementing Operating
with the best value Efficiency :
proposition. • Through IT
• Initiating program that
give value to the
customer.
33. Treacy & Wiersema Value Discipline
Operational Excellence
• Through IT Implementation, Epod, GPS
system in delivery truck.
Customer Intimacy
• Through IT Implementation, GPS system in
delivery truck, construmex, track shipment
online.
34. INDUSTRY LIFE CYCLE &
MARKET TURBULANCE IN CEMEX
CEMEX Net Sales Growth Cemex is in the mature
100% stages due because the
50% sales are stagnant.
Growth
0%
The type of market
-50%
turbulance that Cemex
face is equilibrium
CEMEX Net Sales where the environment
30000000
is characterized by long
20000000
10000000 periods of competence-
Net Sales
0 destroying turbulance.
2000
2001
2002
2003
2004
2005
2006
2007
1999
37. ACQUISITION STEP
Post Merger
Pra-Merger Integration Superior
Integration (Cemex Value
Way)
38. PRA-Merger Integration
Provide ROI well above the Cost of
Capital
Enable to Maintain its financial
strength and credit quality
Able to Increase acquired company’s
value
39. Post Merger Integration
System and process standardization
A new Governance Model
e-Enabling Process
40. CEMEX WAY
Manage Our Global Knowledge Base More Efficiently
Identify and disseminate best practices
Standardize our business processes
Implement key information and Internet based
technologies, and foster innovation
Source: www.cemex.com/MediaCenter/Files/Winning_Globally.pd
41. CULTURE INTEGRATION
ACQUIRED
COMPANY
CORPORATE 20%
PARENT Retained
E- groups practices
CORPORATE
80%
“CEMEX WAY”
Parenting Proposition PARENT
Best practice
(benchmarked
again local
practices)
42. LEARNING ORGANIZATION (CULTURE)
A culture that embraces constant change and is enthusiastic about
incorporating the latest information technology in all aspects of business
GLOBAL LEADERSHIP PROGRAM
Strategic Alliance with Instituto Tecnológico y de Estudios Superiores de
Monterrey (ITESM)
CEMEX’S TECHNOLOGY CENTER, located in Monterrey, Mexico
43. CEMEX INTERNATIONAL STRATEGY
International Cemex
Global Transnational
Strategy Strategy Strategy
Organizational Factor
• The role of senior
management team. International Multidomesti
• Firm Specific Factors Strategy c Strategy
Environmental Factor
• The ‘Bandwagon’ Effect • Export
• Acquisition
• Wholy-owned subsidiary
Entry Mode Strategy
45. DIAMOND MODEL OF NATIONAL ADVANTAGE
Related & Supporting Firm Strategy
Factor Condition Demand Condition
Industry Structure & Rivalry
• Capital • In Cemex Annual • Industries in Mexico • The rivalry for Cemex
• GDP : 872.088 Report for year 2009, provide support in in Mexico is relatively
Million US$ Mexico still hold 21 Cemex operation, low since Cemex
• Labour percent of Cemex especially to fulfill already dominate the
sales. This data show resources that Mexico market for
• Population in 2009,
that Mexico still have needed for the 66%.
109.610 people.1
a high demand in company operation.
• High participation Cemex product.
of labour force
come from men.
• Mexico only
produce 3500 to
6000 per year
student from
institute.
• Technology
• Technological
readiness in Mexico
is rank of 71 from
the whole country.2
46. GEOGRAPHIC LOCATION
• L 6
• H 6 • L 8
• C 6 • H 9
• L 2 • C 5
• H 2
• L 9
• C 1
• L 15 • H 10
• H 6 • C 2
• C 2
• L 5
• H 9
• C 6
L : Lafarge
H: Holcim
C: Cemex
47. The Cash Crunch
• Issues : (external issues)
– Recession in 2008 US financial crisis
economic slow down distressed market
decreasing demand …..
• Issues : (internal issues)
– ….. decreasing sales + higher cost
– Wrong in Rinker Acquisition overvalued
– Foreign Exchange Loss due to Falling Dollar &
Mexican peso devaluation
• Huge currency swaps and related devaluation
hedging
49. Financial Highlights
Financing What did
Agreement happen
with Major Highlights of CEMEX
Financial here ? What did implications
25,000 Creditors had lay there ? What Cemex
How can net extended term should do ?
debt increase20,000 maturity Net Sales
significantly ?
15,000
million USD
Consolidated Net
Rinker’s 10,000 Income
Acquisition CEMEX sales still not
Net Debt
were 5,000 enough to pay the debt
overvalued therefore CEMEX
EBITDA
and CEMEX - should increase sales
2006 2007 2008 2009 2010 2011 2012 significantly
get excessive-5,000
debt Year
Why were net
income going
Source: Analysis, 2012 decrease ?
50. The biggest areas which
generated cash are from
Europe and US (more than
58%), both of regions affected
by Recession so that CEMEX
decrease in sales significantly
Source: Cemex 2009 SUSTAINABLE DEVELOPMENT REPORT
6% Europe
34% North
29% America
Latin
America
Asia Pasific
15% 16%
Africa &
Middle East
Source: Holcim AR 2009 Source: Lafarge AR 2009
51. Rinker Acquisitionby Lafarge-French
Influence
and Holcim-Swiss which are
Affect by Southdown-
not focus in Aggregate
US and RMC-UK
industry
Rinker’s Acquisition Rinker acquisition
CEMEX + Rinker penetrate
were overvalued and increase cost due to
market in US and Europe
CEMEX get excessive higher energy, electricity
while Financial Crisis
debt and transportation
Source: Cemex 2006 SUSTAINABLE DEVELOPMENT REPORT
52. BENCHMARKING BY
PRODUCT
DIVERSIFICATION
Source: Cemex 2009 SUSTAINABLE DEVELOPMENT REPORT
Source: Holcim AR 2009 Source: Lafarge AR 2009
53. Rinker Acquisition
Influence by Lafarge-French
and Holcim-Swiss which are
not focus in Aggregate
industry
Source: Cemex 2006 SUSTAINABLE DEVELOPMENT REPORT
CEMEX diversified in aggregate industry by Rinker aquisition, in
the other hand CEMEX became not focus and
STUCK IN THE MIDDLE
54. Financial Highlights
Net-Debt-to-EBITDA ratio of CEMEX
9
8 7.7474
7.6616
7
6 Too High !!
5.6654
5
4 4.1221 4.1234
3
2
1.4043
1
0
2006 2007 2008 2009 2010 2011 2012
year
Source: Analysis, 2012
Net debt to EBITDA company’s ability The net debt to EBITDA ratio is a debt
to decrease its debt ratio that shows how many years it
would take for a company to pay back its
Ratio > 4 company less likely handling debt if net debt and EBITDA are held
its debt burden less likely taking constant. If a company has more cash
additional debt than debt, the ratio can be negative
Source: www.investopedia.com
55. Financial Highlights
Financial Highlights of CEMEX
60,000
50,000
million USD
40,000
Total Assets
30,000
Debt
20,000 Total Stockholders' Equity
10,000 Net Debt
-
2006 2007 2008 2009 2010 2011 2012
year
Source: Analysis, 2012
56. LOSS IN FOREIGN EXCHANGE
AND FINANCIAL INSTRUMENT
• Incurred a US$386 million foreign-
exchange loss
– Depreciation of MXN, EUR and GBP
• Loss in financial instrument of
US$1,35 billion
– MXN/USD cross-currency swaps and
equity forward derivatives
Source: Cemex 2009 Annual Report
57. Restructurisation
• Close Davenport Plan in California due to sharp decline
in new home construction
• November 2008, Cemex’s Spanish unit offloaded
operations in the Canary Islands for $211 million,
(grossly undervalued according to industry analysts)
• November 2008, sold assets in Hungary and Austria for
$100 million
• Nasionalisation in Venezuela, government seized
Cemex’ assets
• 2009, sell some Australian operations to competitor
Holcim for $1,62 billion (consideration to serve its
payment till mid 2011)
58. Credit Restructuring
• Refinancing large debt nearly $2,2 billion in debt
maturing in 2009 to through 2010
– Citi group Inc., Banco Bilbao Vizcaya Argentaria SA,
Banco Santander SA, HSBC Holdings and Royal Bank of
Scotland Group
• CEMEX get extent $1,5 billion of the total $3
billion due in December 2009
• Restructure the debt of $4 billion in January 2009
and further $15,5 billion on August 2009
• CEMEX would still require additional refinancing
in near future
60. FINANCIAL STATISTICS FOR THE LEADING GLOBAL
CEMENT COMPANIES FOR 2009
Source: Cementing the foundations of growth, International Finance Corporation, Michel Folliet
61. World expected cement demand by region
Market
Market
Development
Development
Source: Global Research: Egypt Cement Sector, Global Investment Hose, July 2009
62. Recommendation
Questions
• Would banks allow it to come to negotiations or
would it be forced to offload some of its acquired
assets in distressed?
• The cash crunch?
In order to solve crash crunch and win-win negotiation
with bank, CEMEX should to :
• Focus in Cement and Ready Mix industry
• Develop Asian and Middle-East market Acquire
Asia company
• Prepare Global Leader especially for Asian market
development
• Improve Credit Rating by execute Good Corporate
Governance in supervising risk management
conducted by Victor Romo, especially in hedging
strategies
• Penetrate existing market