CEMEXX
After securing the Mexican market by acquiring the two largest cement companies in Mexico, CEMEX started its internationalization process through exports, mainly targeting the United States. After the 1990 rupture when the US government imposed trade sanctions (58% countervailing duty on CEMEX’s exports), CEMEX changed its internationalization process and looked for opportunities to conduct successful FDI. Foreign Direct Investments are synonymous for a high degree of international involvement and take part to to the 4th degree of internationalization in the Korth Model. Indeed, CEMEX implements direct and active contracts with its international markets and acts as a true multinational growing in a global structure.
Let us look back to the drivers for the company’s globalization. In case of CEMEX there are several globalization drivers to distinguish:
Supply drivers:
Moving abroad is a way for CEMEX to secure its key supplies (limestone, clay and other raw material as well as quarries) while scanning and learning from the environment in order to find low-cost production sources and gain a huge informational advantage.
Competitive Drivers
In 1999 there were six major international competitors within the cement industry – Holderbank, Lafarge, CEMEX, Heidelberger, Italcementi and Blue Circle. CEMEX’ chosen strategy of growth was geographic diversification through acquisition.
Government Drivers
Trade barriers in the Unites States, where the U.S. International Trade Commission imposed a 31% countervailing duty on CEMEX’s exports from Mexico to the United States. Since the USA was still an interesting market for CEMEX, the company invested in a cement plant in Texas.
Market and Economic Drivers
Demand for cement is directly related to a country’s GDP. Demand growth is expected to be the highest in developing Asian economies, Central America, the Caribbean and Sub-Saharan Africa (approaching or exceeding 5%) and the lowest in Western Europe and
Let us look back to the drivers for the company’s globalization. In case of CEMEX there are several globalization drivers to distinguish:
Supply drivers:
Moving abroad is a way for CEMEX to secure its key supplies (limestone, clay and other raw material as well as quarries) while scanning and learning from the environment in order to find low-cost production sources and gain a huge informational advantage.
Competitive Drivers
In 1999 there were six major international competitors within the cement industry – Holderbank, Lafarge, CEMEX, Heidelberger, Italcementi and Blue Circle. CEMEX’ chosen strategy of growth was geographic diversification through acquisition.
Government Drivers
Trade barriers in the Unites States, where the U.S. International Trade Commission imposed a 31% countervailing duty on CEMEX’s exports from Mexico to the United States. Since the USA was still an interesting market for CEMEX, the company invested in a cement plant in Texas.
Market and Economic Drivers
Demand for cement is directly related to a country’s GDP. Demand growth is expected to be the highest in developing Asian economies, Central America, the Caribbean and Sub-Saharan Africa (approaching or exceeding 5%) and the lowest in Western Europe and