Cemex a travez del tiempo

Value Creation in CEMEX
New York, July 2nd 2003

Hector Medina

www.cemex.com

1

Introduction

CEMEX aims to create value through the complete value chain
Maximize Total Business Return Maximize Total Business Return

Operations
Within our production walls

Service
Our distribution channels

Brand

Network
End users

Growth
Global acquisitions

Scope dimension
CostPrice Premium through service Price Premium through branding Optimization of network Profitable growth

Financial dimension
2

Operation O S B N G

Serious efforts in all countries to continue driving down production cost
Example of initiatives
Impact on cost reduction
SG&A SG&A Reduction Reduction Total Total Productive Productive Maintenance Maintenance Inventory Inventory ManagementManagement Improved Improved Operation Operation Technology Technology Continuous Continuous Improvement Improvement Fuel Fuel Structure Structure Optimization Optimization

Alternative Alternative products products

Impact on environment or customers
3

Service O S B N G

Maximizing relationships with our day-to-day customers, day-to-day distribution channel members and supplierseSelling Mobile Selling Construrama Vendor Inventory Mgt

Service center

Customer Experience Management
ePayment

Customer Value Management
Rewards 24 Hrs

Account Manager

SERVICE MANAGEMENT
Customer Customer Satisfaction & Satisfaction & Loyalty Loyalty

Process Process efficiency efficiency

Profitability Profitability
4

Brand O S B N G

The corporate and product brands playa critical role in the relationships with our stakeholders

5

Brand O S B N G

Branding is very important in bags oriented markets….

Bad mixture results in cracks and eventually in the rusting of the steel bars and a reduction of the life of the building

The ideal mixture and the excellent blain as well as the even development result in crack avoidance and increasing the life of thebuilding

6

Brand O S B N G

And in all of our markets

7

Brand O S B N G

Building our corporate brand… sometimes we get lucky

Feb 3rd, 2003 Real Madrid vs. Atletico de Madrid Last minute goal (2-2) aired all over the world
8

Network O S B N G

Trading creates value through four strategies

Strategic support

Global commercial network

Establish relationshipsTRADING

Balance Operations

Connect excess of supply with demand Capacity optimization Cost efficient allocation

Open New Markets
Market Intelligence New commercial relationships
9

Network O S B N G

Optimization of our network is achieved through our trading arm
• Leading cement trader, serving around 70 countries • Maritime fleet consisting of 15 vessels and 2 floating silos •More than 50 marine terminals strategically located worldwide
Trading presence
10

• Serve customers in dynamic cement markets • Flexibility to maximize our worldwide production capacity • Constitutes a critical competitive advantage for CEMEX • In 2002, CEMEX Trading sold 9.7 Mln tons of gray cement

Growth O S B N G

How is the industry evolving
• The consolidation process will continue• Regions will matter more than only countries – Guarantee synergies and economies of scale – Optimize supply and demand at a regional level • Regulatory environment becoming more critical • Consolidation in China and India will take longer than expected and some new players will emerge
11

Growth O S B N G

Sources of Growth
Others

2nd Tier

Top 4

1 Organic growth Total CEMEX Sales‘02 US$6.5 Billion

2

M&A Growth

3 Higher Penetration Growth Construction GDP US$3,974 Billion

Cement + Ready Mix Market Revenue Size US$121.3 Billion

12

Growth O S B N G

CEMEX has successfully improved the financial performance of its acquisitions

14 12

TEV/EBITDA

Times

10 8 6 4 2 0 0 1 2 3 4

Costa Rica

Dominican Republic Panama

Years After Acquisition...