We have the support of one the world’s leading building materials companies.
CEMEX is one of the largest cement companies in the world, based on annual installed cement production capacity as of June 30, 2012 of approximately 94.8 million metric tons. CEMEX is the largest ready-mix concrete company in the world with annual sales volumes of approximately 55 million cubic meters and one of the largest aggregates companies in the world with annual sales volumes of approximately 160 million metric tons, in each case based on its annual sales volumes in 2011. CEMEX is also one of the world's largest traders of cement and clinker, having traded approximately 8.4 million metric tons of cement and clinker in 2011.
Access to CEMEX's breadth of experience and exposure to multiple sectors allows us to benefit from best practices, technologies and know-how in production techniques, marketing and sales strategies. These benefits not only let us implement programs aimed at increasing sales but also reduce production costs by adopting new techniques such as our use of alternative fuel sources.
We also capitalize on our relationship with CEMEX to capture synergies and exploit cross-selling opportunities, resulting, for example, from CEMEX's global building materials trading network, or the strong brand recognition it has in the relevant industries. Our relationship with CEMEX is documented in the Framework Agreement, a management services agreement and a license and trademark agreement.
With an average of 18 years of experience at CEMEX, we have a highly experienced senior management team that has been working together for many years. This continuity has helped establish long-standing relationships and loyalty with customers. Our management team has substantial industry experience and has a proven track record of successfully steering the company through different economic environment cycles and of acquiring and integrating related businesses and assets.
CEMEX's research and development efforts, which are concentrated at CEMEX's research and development center in Switzerland, help us in achieving our goal of increasing market share in the markets in which we operate. They have developed new products for our cement and ready-mix concrete businesses that respond to our customers' needs and have developed new processes, equipment and methods to optimize operational efficiencies and reduce our costs.
For example, CEMEX has developed processes and products that allow us to reduce heat consumption in our kilns, which in turn reduces our energy costs. Other products have also been developed to provide our customers a better and broader offering of products in a sustainable manner.
We believe CEMEX's research and development efforts have helped us to maintain or increase our market share in many of the countries where we operate. For example, CEMEX Panama was selected as the supplier of cement for the construction of the third set of locks of the Panama Canal expansion project because, among other attributes, it had the ability to provide specially designed products and engineering services required for the project that had been developed by CEMEX. Our access to CEMEX's research and development should continue to allow us to be selected as the supplier for other projects in the future.
We also benefit from CEMEX's initiatives and innovation in the field of sustainable development. In June 2012, CEMEX introduced the "Ecoperating" seal that will identify the products and services from CEMEX's portfolio of building solutions that have an outstanding sustainability performance. Ecoperating was developed through a rigorous internal process that measures the environmental or social impact of a wide range of building solutions that CEMEX offers—from products like low CO2 cement or concrete, to services such as paperless invoicing, to construction solutions like concrete pavements with smart LED lighting, to initiatives to build affordable housing and to increase the use of alternative fuels derived from industrial, agricultural and residential waste. Among the most relevant criteria for a product or service to qualify for the Ecoperating seal are sustainable attributes, like thermal insulation, use of recycled raw material and contribution to a reduction in CO2 footprint. The Ecoperating seal will help customers identify CEMEX's initiative to foster sustainable development through the building solutions CEMEX provides to the markets it serves. CEMEX Colombia and CEMEX Costa Rica will introduce the Ecoperating seal during the third quarter of 2012, with further expansion planned during the fourth quarter of 2012 and the first half of 2013.
Through CEMEX LatAm’s relationship with CEMEX, we will have access to their work in cutting-edge technologies to improve the energy efficiency of our operations and the thermal energy efficiency of clinker production. In particular, their efforts to improve the thermal energy efficiency of clinker production. For example, CEMEX’s new dry kiln at their plant in Broceni, Latvia, requires almost half of the thermal energy to produce clinker compared to the previous technology. Through this relationship, we will have access to this and many other best practices in energy reduction.
Through our relationship with CEMEX we seek to generate strategic value by consolidating procurement volume, attaining the best cost possible for CEMEX LatAm, using the best products and services to sustain our leadership position and the region and adding value to the supply chain.
The benefits we obtain by leveraging CEMEX’s Global Sourcing strategy include:
- Obtain cost reductions in the procurement of products and services
- Identify best practices that can be repeated and standardized across CEMEX LatAm
- Establish the supplier relationships necessary to support CEMEX LatAm’s goals
- Give CEMEX LatAm a competitive advantage by reducing the total cost of ownership of the family or line of products and services negotiated
Due to our relationship with CEMEX, we will have access to their best-in-class corporate services such as treasury, legal, and tax planning.
We will also reap the full benefits of CEMEX’s recently signed US$1 billion agreement for IBM to provide finance and accounting, and human resource back-office services, as well as IT infrastructure, application development and maintenance services. This relationship will help us improve the quality of service given to CEMEX LatAm; enhance business agility and scalability; maximize internal efficiencies; and allow the company to better serve its customers.
CEMEX is one of the world’s most prestigious names in the building materials industry. Through our relationship with CEMEX, we will have the backing of its globally recognized brand and its image as a global leader in the building materials industry that provides high-quality products and reliable service to customers and communities worldwide.