Cemex 1997 Annual Report Download - page 17

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CEMEX MEXICO
Mexican Construction Exceeds Expectations
Mexico’s 1997 construction sector activity sig-
nificantly exceeded our original projections,
growing 10.2% over the preceding year. This
increase was driven by reduced unemployment
and increased purchasing power that, along
with enhanced public infrastructure spending,
fueled across-the-board construction activity,
including new hotels, resorts, shopping centers
and housing.
For 1998, we estimate that Mexico’s cement
and ready-mix consumption will continue to
increase at a rate of 8% and 25%, respectively.
Sales Soar 15%
In 1997, the Mexican market showed strong
improvement versus the last two years. CEMEX
Mexico’s sales rose 15% (in dollar terms) due
to higher and more stable prices, increased
domestic sales volumes and new product
development.
Because of increasing local demand and
declining cement and clinker prices in South-
east Asian markets, CEMEX Mexico’s exports
decreased 25% versus 1996. Forty-eight per-
cent of these exports went to Central, South
America and the Caribbean, with the remainder
going to Southeast Asia, the United States and
Africa. Growing domestic consumption should
further reduce our exports by 35% this year.
To provide more value to our customers, we
introduced three new ready-mix products to the
market during 1997. By the same token, we
opened a state-of-the-art laboratory in Mexico
City. This facility is designed to develop new
cement and concrete products, as well as new
ways of pouring ready-mix. Our objective is to
introduce at least one new product each year
and use this laboratory as a technical support
center for our customers.
Mixing complexity with chaos
SDO terminal in ready-mix truck in
Mexico City.
Delivering cement is not an easy business
anywhere, especially in Guadalajara,
Mexico. In 1995, CEMEX Mexico could
promise delivery no more precisely than
within three hours. Wild weather, traffic
gridlock and labor disruptions at the con-
struction site caused contractors to re-
schedule, cancel or otherwise change half
the orders that were received (compared
with a 5% change rate at CEMEX USA).
Today, profitability and market share are
surging. If a load fails to arrive within 20
minutes of schedule, the buyer receives a
discount. The difference is CEMEXÕ Dynamic
Synchronization of Operations (SDO) pro-
gram, which the company recently
expanded to Mexico City, Monterrey,
Mexico and Caracas, Venezuela. The foun-
dation for this program is an adaptive
system of proprietary business-process
software and expert programs which gets
smarter the longer it receives data (i.e.,
orders, traffic problems, changing weath-
er systems, etc.).
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