Cemex Way

Cement consumption was largely driven by local socio-economic conditions. As GDP per capita increased above $3,000, cement consumption tended to increase substantially in response to growing need for improved infrastructure and housing. However, once GDP per capita exceeded $15,000, consumption tended to level off.32 Weather—heavy rainfall was a deterrent—and population growth rates and density — higher densities usually demanded taller buildings—were other variables that affected consumption.33 In 2003, China accounted for 44% of global cement consumption and industry observers expected the country’s share to increase to 53% by 2020.34

The way in which cement was consumed differed among developing and developed countries. Developing markets tended to be dominated by individual homebuilders who purchased bag cement instead of bulk. CEMEX believed that as much as 80% of cement sales in developed countries were bulk cement compared to the same percentage of bagged cement in developing countries.35 Thus in these markets companies like CEMEX had to brand their product through packaging and getting the company name out in front of their customer base.36 In contrast, cement consumers in developed countries tended to be large construction companies that bought in bulk and required timeliness to their cement deliveries. State of the art logistics and technology platforms were paramount to compete. Additionally, cement companies had to be prepared to meet local preferences. Consumers in Egypt preferred darker cement believing it was of higher quality whereas Mexicans preferred light colored cement.

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