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Cemex

Cemex. The Globalization of CEMEX. History. F ounded with the opening of Cementos Hidalgo, in 1906 Cementos Portland Monterrey began operations in 1920, and in 1931, the two companies merged, becoming Cementos Mexicanos , now CEMEX

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Cemex

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  1. Cemex The Globalization of CEMEX

  2. History • Founded with the opening of Cementos Hidalgo, in 1906 • Cementos Portland Monterrey began operations in 1920, and in 1931, the two companies merged, becoming CementosMexicanos, now CEMEX • In the 1960s, CEMEX grew significantly when it acquired several more plants throughout Mexico • In 1976, became the largest cement producer in Mexico with the purchase of three plants from Cementos Guadalajara • Further acquisitions of Mexican cement companies were made in 1987 and 1989, making CEMEX one of the ten largest cement companies in the world

  3. How Cemex Makes Cement

  4. Imperatives to Globalise • Growth Imperative • Globalisation of Competitors

  5. A framework of choice of markets High Strategic Importance of Market Phased in Entry Rapid Entry Low Ignore for now Opportunistic entry Low High Firm’s Ability to Exploit Market

  6. Alternative Modes of Entry 100 % Degree of ownership control over activities performed in foreign market CEMEX 0 % 100 % Local Production 100 % Exports

  7. Greenfield versus cross border acquisition High Growth Greenfield Operations or Cross-Border Acquisition Greenfield Operations Market Growth Rate Mature or Declining Greenfield operations or cross-border acquisition Cross-Border Acquisition Low High Uniqueness of Corporate Culture

  8. Cost Structure of Asian Exports to US

  9. Expansion Process • Opportunity Identification • Country had to have large population • High Population growth as well as relatively low level of current consumption • Want to lead market, or atleast 25% of it • Emerging countries • Quantitative – 65% • Qualitative – 35% (for example Political Risks)

  10. Expansion Process • Due Deligence • Target Identification • Formation of Team, was briefed the target company & standards were set for assesment • Negotiations with the Govt. continued through Due diligence. • Meeting with competitors • Final Output from the due diligence process was a standardised report.

  11. Expansion Process • Post – Merger Integration (PMI) process • Formation of PMI team. • Improve efficiency of the newly obtained & multinational over time.

  12. Framework of Acquisition Analyses

  13. CEMEX’s International Expansion

  14. Outlook • Faced numerous issues in 2000, the major was the competition. • Entry in Indonesia & Egypt, stirred some concerns about the Language barrier • Lafarge’s hostile bid for Blue Circle appeared to have failed which resulted in consolidation at a new level of international competitors.

  15. Thanks 

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