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 Cementos Mexicanos, 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 Phased in Entry Ignore for now Rapid Entry Opportunistic entry Strategic Importance of Market Firm’s Ability to Exploit Market HighLow High Low

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

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

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 YearEvents 1985GATT Signed; Cemex began to concentrate on Cement and divests other business lines 1987Acquired Cementos Anahuac in Mexico 1989 Acquired Cementos Tolteca; become Mexico largest producer and one of ten largest worldwide 1992Acquired Valenciana and Sanson in Spain; become world’s 5 th largest cement producer 1993-1994Acquired 0.7 mt of capacity in Jamaica, 0.4 mt in Barbados, 0.7 mt in Trinidad & Tobago 1994Acquired Vencemos in Venezuela, Cemento Bayano in Panama and Balcones plant in texas 1995Acquired Cementos Nacionales in Dominician Republic 1996 Acquired a majority stake in Colombia’s cementos Diamante; become 3 rd Largest Cement Company 1997Acquired 30% stake in Rizal Cement Company in the Philippines 1998-1999 Acquired a 20% interest in PT Semen Gresik in Indonesia; acquired an additional 40% of Rizal, and 99.9% of APO cement corp, also in the Philippines 1999Acquired Assiut in Egypt, a 12% stake in Bio Bio in Chile, and cement del Pacifico in Costa Rica 2000Announced availability of $1.175 billion for global acquisitions during the course of the year (39% more than 1999 spending)

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