Cemex 1997 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 1997 Cemex annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 80

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80

26
consulting services to Rizal. The two cement
plants for which CEMEX will provide techni-
cal assistance have an installed production
capacity of 2.8 million metric tons per year.
This acquisition is consistent with CEMEX’
long-term geographic diversification strategy.
It leverages the company’s operational exper-
tise, enhances the stability of its consolidated
operating cash flow and creates greater finan-
cial flexibility.
As the second-largest cement producer in
the Philippines, Rizal enjoys a leading market
share in Central Luzon, the main consump-
tion region that includes Manila. Rizal is also
strategically located just outside of this
region, allowing it to benefit from low trans-
portation costs and easy market penetration.
Consistent with CEMEX’ practice, we are
evaluating Rizal to improve its efficiency and
profitability. Soon after the acquisition, we
deployed our multinational PMI team of engi-
neers, technicians and managers to analyze
the company’s operations, human resources
and capital expenditures. Based on this
analysis, we will recommend ways for the
company to reduce costs and increase pro-
ductivity. For 1998, we expect to achieve
almost US$37 million in annual cost savings.
TRADING OPERATIONAL REVIEW
The world’s
largest cement
trader
"[T]he company has become the
darling on international markets
by following a strategy of selec-
tively buying companies, then
increasing their efficiency with
company-wide computerization
and a program to share operat-
ing tips. This approach has
allowed it to become one of the
most profitable enterprises in
Latin America."
Cristina Adams,
The Houston Chronicle, 12/26/97