Mexico’s Cemex confronts US cement crunch

Mexico’s Cemex confronts US cement crunch
Published: 11 June 2004

Cemex  is expanding its infrastructure in the US, and hoping soon to step up exports to the country where demand is outpacing supply.  On Wednesday, Cemex’s US subsidiary said it plans to build an import terminal in Richmond, CA that can handle 1Mta of cement to meet growing demand in the region.  Monterrey-based Cemex, the world’s third largest cement producer, said phase one of the new project consists of a 500,000tpa rail terminal expected to go into operation early in 2005. Phase two involves construction of the new terminal.  Cemex has 13 cement plants and 52 land and marine terminals in the US, where cement shortages are slowing construction work in some areas, particularly in the southeast.

Cemex is pushing for the US to lift anti-dumping tariffs that have been the subject of controversy for more than a decade, and recently submitted a proposal to the US Department of Commerce to resolve the issue.  Carlos Perezalonso, an analyst at BBVA-Bancomer, doubted the new terminal is tied to Cemex’s hopes that the tariff controversy could be resolved as early as August or September.

John Bloom, chief economist for Cemex in US, said last month in an interview that Mexican cement producers could probably solve the US supply problem.  But with an anti-dumping tariff of $52 a ton, and prices in the low $70s a ton, even with the shortages exports are difficult, he said.

With its $2.8 billion acquisition of Southdown, Cemex increased its capacity in the US to 14.2Mta, making that market the company’s second largest after Mexico. It also removed one of the main US opponents of Mexican imports.  The Mexican government has contested the anti-dumping tariffs ever since they were imposed, and the case has gone before the World Trade Organization and several Nafta panels.