Cemex 1999 Annual Report Download - page 35

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CEMEX’s WORLDWIDE OPERATIONS
Mexico’s GDP grew 3.7% in 1999 due to increased exports, foreign
direct investment, and domestic consumption. CEMEX Mexico’s 1999
domestic gray cement volume grew 5% due to solid demand from
the self-construction sector. This sector accounts for approximately
40% of Mexico’s total cement consumption. For the coming years,
the company expects increased growth for the Mexican economy as
well as a rise in domestic cement consumption due to higher levels
of self-construction and the potential modest expansion in public
investment.
Caribbean Remains Strong; South America Expected to Improve
The Caribbean basin showed solid economic growth in 1999. The
economies of Panama, Costa Rica, the Dominican Republic, and
Haiti grew significantly, with increases in GDP ranging from 3% to
8% for the year.
In South America, the economic downturn, together with prevailing
political uncertainty, negatively impacted CEMEX’s markets. The
economies of Venezuela and Colombia fell 7% and 5%, respectively,
versus 1998. CEMEX Venezuela’s domestic cement and concrete
volumes dropped 17% and 20%, respectively, while the company’s
Colombian operations reported a decline in domestic cement and
concrete volumes of 38% and 48%, respectively.
South America’s economic situation, along with cement and con-
crete consumption, is expected to recover once the internal political
situations improve. CEMEX’s Venezuelan and Colombian markets
should record marked improvement. The countries of the Caribbean
show important signs of continuity in governmental policy and public
and private investment. Thus, the company expects strong results in
the coming years.
60%
21%
19%
65%
17%
18%
47%
21%
32%
Distribution of sales by region
percentage
Distribution of EBITDA by region
percentage
Distribution of assets by region
percentage
Europe Shows Sustained Improvement;
Southeast Asia Signals Initial Recovery
Despite the Euro’s relative weakness, the Spanish economy contin-
ued to perform very well and is one of the most solid economies in
the European Union. In 1999, Spain’s GDP increased 3.7%, unem-
ployment was very low, and the public deficit remained in check.
The construction sector was strong, driven primarily by housing,
industrial construction, and government spending on infrastructure
projects.
Southeast Asia’s economic downturn eased during 1999, and the
region is showing initial signs of recovery. In the Philippines construc-
tion sector, demand fell by 2.8%, an improvement over the decline
of 8.5% in 1998. Cement demand in the Philippines decreased 6%
versus 1998, due to a difficult macroeconomic environment and a
lack of consumer confidence. Government spending was the primary
driver of construction activity, while private sector activity continued
to lag.
Cement consumption in the Philippines is expected to pick up in the
coming years, based on economic growth, fueled by increasing private
investment. Investments in infrastructure and housing are expected to
increase, supported by a strong performance from the services, agri-
culture, and export sectors.
North America
South America & Caribbean
Europe & Asia