Cemex 1997 Annual Report Download - page 27

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21
CENTRAL AND SOUTH AMERICA OPERATIONAL REVIEW
CEMEX Colombia
Operating cash flow
millions of dollars
Technological turnaround
Buacaramanga plant
ColombiaÕs cement, concrete
and sales points are now linked
through CEMEXÕ information
management system.
CEMEX PANAMA
Freer Trade Fuels Growth
In 1997, Panama’s public sector construction
activity increased 45%, while private sector
activity declined 11% versus the preceding
year. Highway, mining and low-cost housing
construction were primarily responsible for
public sector growth.
Panama’s aggressive infrastructure spend-
ing was partly rescheduled to 1998. The gov-
ernment originally planned a number of major
public works projects, including the Corredor
Norte, the Corredor Sur and the Autopista
Panamá-Colón. Of these projects, the Corre-
dor Norte was substantially completed and
the Corredor Sur began initial construction.
Cement consumption on the latter project
should kick in during the first quarter of this
year.
The present administration continues to
encourage low-cost housing, industry tax incen-
tives and reduced import tariffs on all raw
building materials, including cement and steel.
These lower tariffs (currently 10%), however,
have not impacted domestic cement supply or
demand because of Panama’s economic and
physical barriers to entry and the quality of the
local product. The new laws also contain differ-
ent methods to contest unfair practices, includ-
ing anti-dumping and suspension provisions.
This year, public sector activity should more
than offset the projected decrease in private
sector construction. The government’s infra-
structure development, coupled with increased
spending on tourism and low-cost housing,
should increase cement consumption by 4.9%.
Rapid Growth
Our comprehensive reorganiza-
tion program yielded $32 mil-
lion of our anticipated $50 mil-
lion in annual cost savings.
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