Cemex (a): Building the Global Framework (1985–
In September 2004, Lorenzo Zambrano, the chairman and CEO of Mexican cement maker CEMEX, sat in his gleaming modern office in the IBM Tower in New York City, an office suite similar in look and feel to CEMEX’s international headquarters in Monterrey, Mexico. He was feeling both exhilarated and nervous. His successful company, widely admired in its region and a recipient of major international awards for sustainable development, had just offered $5.8 billion to acquire the largest producer of Ready Mix concrete in the world: UK headquartered RMC. If under-performing
RMC, with sales of $7.9 billion in 2003, accepted the offer, CEMEX would more than double its business, which up to that point had been based primarily on the production and sales of cement. It would also for the first time be extending its presence deep into Europe and well into the Ready Mix concrete market segment, its most complicated acquisition yet.1
Having pursued an aggressive acquisition strategy since the late 1980s, the company had transformed itself from a regional firm into the third largest cement maker in the world with operations in more than 30 countries.2 Ever since Zambrano took CEMEX’s helm in 1985, the company had developed methodologies, infrastructure, human capabilities, and culture necessary to operate successfully on a global scale. But was that enough to integrate RMC smoothly into its worldwide operations and cement CEMEX’s reputation as a new global leader?
Cement Industry Background
History credited the ancient Romans, builders of the Coliseum and the Parthenon, with making the world’s first cement-like substance from crushed rock and burnt lime.3 In modern times, workers set off explosives and bored into rock to blast limestone and clay from quarries. The boulders were broken up and then transported in dump trucks or by conveyor belt to a plant where crushing machines pulverized the rock into one to two inch chunks. Machines separated out raw materials,
RMC, with sales of $7.9 billion in 2003, accepted the offer, CEMEX would more than double its business, which up to that point had been based primarily on the production and sales of cement. It would also for the first time be extending its presence deep into Europe and well into the Ready Mix concrete market segment, its most complicated acquisition yet.1
Having pursued an aggressive acquisition strategy since the late 1980s, the company had transformed itself from a regional firm into the third largest cement maker in the world with operations in more than 30 countries.2 Ever since Zambrano took CEMEX’s helm in 1985, the company had developed methodologies, infrastructure, human capabilities, and culture necessary to operate successfully on a global scale. But was that enough to integrate RMC smoothly into its worldwide operations and cement CEMEX’s reputation as a new global leader?
Cement Industry Background
History credited the ancient Romans, builders of the Coliseum and the Parthenon, with making the world’s first cement-like substance from crushed rock and burnt lime.3 In modern times, workers set off explosives and bored into rock to blast limestone and clay from quarries. The boulders were broken up and then transported in dump trucks or by conveyor belt to a plant where crushing machines pulverized the rock into one to two inch chunks. Machines separated out raw materials,