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Cemex

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8 años en el mercado desde hace 8 años 1998 via trading CEMEX started operations 12 years ago in El Salvador market via trading (importing cement from Mexico) from its plant in Merida, Yucatan. The El Salvador market was a potential market with only one competitor, Cementos del Salvador, which eventually was acquired by Holcim ( Second world largest cement producer). This market was worth annually 100 million dollars and only one company was supplying cement in this country. During these first years, CEMEX provided cement from Mexico by sea and train maintaining its presence in the market which represented about 6% of market. Holcim keeps the leadership with 90% of the market. In the beginning CEMEX started operations building 3 warehouses and administrative offices managed by Mexican employees having the additional responsibility of implementing the CEMEX Way. In this time CEMEX sold directly to the end customers without using dealers. This business structure made company costs higher than its competitor. By the year 2000 it analyzed the option to find dealers responsible of distributing its cement using their warehouses. CEMEX infrastructure was sold to a selected dealer (CME). At the same time given some imposed taxes to cement imports, CEMEX changed it shipment from Mexico to Nicaragua.CME started selling cement under this model unsuccessfully for the 3 following years. This was caused mainly the quality of cement produced in Nicaragua which did not fill the consumer requirements. This change impacted directly to CEMEX sales. In order to overcome this negative impact, CEMEX returned to import its cement from Mexico, regardless the import taxes. Later CEMEX incorporated shipments from Costa Rica when a plant was acquired in this country. The organization opted to pay taxes against to lose market share. During these years (2000 – 2008) the company was affected by organizational and external factors, experiencing a sales decline down to a 3% market share in 2008. By 2009 CEMEX went back to the basics (direct sales with its own sales team and infrastructure) in addition to CME distribution. The operations in this year were profitable and start to introduce new products like concrete, other types of cement for the market of transformers (products made from cement like concrete blocks). With this new administration the company increased its market share to a 5.6% representing $44 MUSD annually. Proposed Strategy Keep the dual model (CME and direct selling) Maintaining lower costs with a flat structure (not full infrastructure) Knowing the local market offers new products (concrete, aggregates) and value added sales. Local responsiveness Leveraging from global integration Lesson learned from past experience (market sensitive to product quality) {text:list-item} Replicate Mexican government relationship and practices to incentive social , Patrimonio Hoy (self construction), training to block manufacturers, Construmex (remittances from US to construction needs) Development new dealers (Construrama model) Play the constructor role in large projects

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