Cemex 1997 Annual Report Download - page 31

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25
The Philippines experienced 5.1% GDP growth
for 1997. This year-end increase resulted
from the marked divergence between the
economy’s performance during the first and
second half of the year. Following a strong
first half, the country settled into a “wait and
see” mode on the heels of the Thai baht’s
July devaluation.
This year, the Philippine economy should
experience less dynamic GDP growth, from 2 to
3%, because of the recent turbulence in Asia.
However, we anticipate that the Philippines
will emerge as one of the region’s less-affected
countries. Its relative resiliency primarily
stems from the government’s commitment to
economic reform and privatization.
CEMEX PHILIPPINES
SE Asian Foothold
The Philippines is the third largest cement
market in Southeast Asia, after Thailand and
Indonesia. It accounts for approximately 12%
of the region’s total market.
Historically, Philippine cement consump-
tion has grown at a compound average rate
of 15% over the last ten years. With a low
per capita consumption of only 182 kg, the
Philippine market shows strong long-term
growth potential.
CEMEX Makes Strategic Philippine
Acquisition
In October, we completed the acquisition of a
30% interest in Rizal Cement Inc. We also
signed an agreement to provide technical and
SOUTHEAST ASIA OPERATIONAL REVIEW
Higher returns
Solid Cement plant in Philippines.
Our October investment in Rizal Cement
exemplifies our ability to capitalize on
arising opportunities at much higher
returns than in the past. In addition to
our 30% equity stake, we receive techni-
cal assistance and consulting fees for the
know-how and expertise that we bring to
the company.