Lorenzo Zambrano, chief executive of Cemex SA, the world’s third-largest cement maker, is shopping for acquisitions after a rebound in US and Mexican construction sparked record sales in the second quarter. Speaking to Bloomberg reporters in Monterrey, Mexico, Zambrano said: “One thing that I’ve learned is that you have to be ready for opportunities when they come,’’ If you’re not ready, they slip by you in the night.’’
The company’s growing cash earnings, spurred by rising sales and lower debt, will be used for acquisitions aimed at boosting sales growth to as much as 14 per cent annually, up from two per cent in the past two years, Zambrano said. For the last 15 years, Cemex sustained average annual growth of 18 per cent, expanding from its base in northern Mexico to operations in 30 countries with sales of US$7.2bn last year.
Cemex held off from acquisitions for more than three years while economic growth sputtered in the US and Mexico. During that time, Zambrano maintained free cash flow of about US$1 billion or more by cutting corporate expenses and reducing energy costs. With the US and Mexican economies poised to grow at least 4 per cent this year, Cemex forecasts free cash flow of $1.35 billion in 2004, an 18 percent gain from last year.
Construction spending in the US, Cemex’s second-largest market, rose more than 8 per cent on average for the first five months of the year from the same period last year. In Mexico, the company’s largest market, construction output climbed almost 5 per cent on average each month from January through May.