Displaying items by tag: Cruz Azul

Mexican: Cooperativa La Cruz Azul has relocated back to its historic head office in Mexico City, according to the El Universal newspaper. The producer says that the move is another step forward in its restoration of normality and its institutional refoundation after ‘three decades of struggle.’

Mexico: 200 police officers in 80 police cars arrived outside the gates of Cooperativa La Cruz Azul’s Cruz Azul cement plant in Tula, Hidalgo, on 15 December 2021, but failed to enter the plant. The El Financiero newspaper has reported that the police were following a court order to remove the company from the plant. Supervisory board president Alberto Lopez reasserted the company’s right to occupy the property in line with federal government ordinances. Lopez suggested an alleged collusion between cooperativists and Omar Fayad’s Institutional Revolutionary Party (PRI) Hidalgo state government to decieve the courts.

Authorities have frozen Cooperativa La Cruz Azul’s accounts with outstanding bills of US$800,000 in electricity, gas, equipment and services bills, as well as the payroll of its 1100 workers.

Coopertiva La Cruz Azul chair Federico Sarabia said that the developments threaten the existence of the Cruz Azul plant. He said "In terms of quality, Cruz Azul’s cement exceeds the standard. At the time that Cruz Azul disappears as a cement producer, prices will increase.”

Mexico: A fire at Cruz Azul’s Tula cement plant in Hidalgo has been reported as being started intentionally by sources quoted by the Excélsior newspaper. A fire on a 500m conveyor belt at the unit was reported in the early morning on 28 November 2021. Production at the plant will not be affected. Repair work on the conveyor is expected to take up to 20 days. An official cause for the fire has yet to be disclosed.

Mexico: Nearly 500 cement and concrete plants in the northern Mexican states of Chihuahua, Coahuila, Nuevo León and Sonora have partly or fully suspended production due to an on-going regional shortage of natural gas. The El Financiero newspaper reports that plants run by Grupo Cementos Chihuahua (GCC), Cemex, Holcim and Cruz Azul operate in this region.

GCC said that a lack of electricity and natural gas had affected production at three of its plants in Chihuahua, Samalayuca and Juárez. Mexican Association of the Ready-mix Concrete Industry (AMIC) president Ana Laura Burciaga said that the situation has caused a 50% drop in the cement supply to concrete plants.

The cause of the shortage is reported to be the suspension of natural gas exports from Texas, US. Mexican steel and automotive manufacturers have also been affected.

Mexico: Police have received arrest warrants for three leaders of an alleged criminal network which stole 10,000t of cement from Cooperativa La Cruz Azul. The El Universal newspaper has reported that the accused stole the cement by running a parallel accounting system from within the company. They sold the stolen cement via the company Azul Concretos y Premezclados.

Mexico: 18 people have been injured after representatives of Cemento Cruz Azul and police took control of the integrated 2.2Mt/yr Oaxaca plant in Lagunas. The La Jornada newspaper has reported that Cruz Azul’s directors José Antonio Marín and Víctor Manuel Velázquez entered the plant accompanied by security personnel in fulfilment of a court order before fighting broke out with cooperativist members of the organisation. Police arrested five members of the group, allegedly linked to a criminal organisation, while the Cruz Azul representatives successfully retook control of the plant.

Cooperativists restricted access to the plant in August 2020. The board of directors of Cruz Azul also asserted legal control of its Cementos y Concretos Nacionales (CYCNA) subsidiary cement plants in Puebla and Aguascalientes in September 2020.

Mexico: The board of directors of Cemento Cruz Azul has asserted legal control of its Cementos y Concretos Nacionales (CYCNA) subsidiary cement plants in Puebla and Aguascalientes following accusations of ‘looting’ by partners in the company. In a video statement José Antonio Marín, president of the board of directors, said that the move would give the producer greater control over its operations since all cement would be registered in an internal audit programme, according to the Milenio newspaper. He alleged that some partners of the company had sold cement manufactured at the units independently.

José Antonio Cárdenas has been appointed manager of the CYCNA plants to replace Benito Rodríguez Fayad. Fayad allegedly had links to Cruz Azul’s former director Guillermo ‘Billy’ Álvarez, a former director of the company who is currently being investigated by law enforcement for links to organised crime and money laundering.

Mexico: Two workers died after falling in a crane basket from a height of 35m at Cooperativa La Cruz Azul’s integrated Oaxaca cement plant in El Barrio de Soledad Municipality. Noticias Financieras newspaper has reported that the victims died on impact and that the causes are under investigation.

Mexico: A ship carrying cement from Cooperativa La Cruz Azul’s 2.2Mt/yr Oaxaca plant in Lagunas, Oaxaca state has sunk with 1500t of cement. Maritime Bulletin has reported that the Togo-registered vessel, Duban, had been delivering cement to Manzanillo, Colima state.

With president-elect Trump due to take office this week we wonder what this means for the cement industry in Mexico. In 2016 this column looked a couple of times at the implications of Trump upon the US cement industry. First, we looked at who might benefit if he builds his wall along the Mexican border and then we wondered what his policies might mean for the US industry. To answer the latter first, the main issues for the US industry are infrastructure, changes to the Environment Protection Agency (EPA) and the repercussions if Trumps serious about a trade war with China. So long as a trade war doesn’t happen then Trump is probably good news for the US cement industry. As for Mexico, the joke has been that Trump will be good for the construction business ever since market analysts Bernstein’s passed a note around in the summer of 2016 about that wall.

Graph 1: Breakdown of Mexican cement industry by production capacity. Source: Global Cement Directory 2017.

The makeup of the domestic Mexican cement industry hasn’t changed too much in the last decade, even with the merger between Lafarge and Holcim, preserving the same market share in production capacity between the companies. Most of the producers have reported growth in 2016. Cemex reported that its cement sales volumes rose by 3% for the first nine months of 2016 and by 10% in the third quarter of that year. Overall though, its net sales fell slightly to US$2.16bn in the first nine months, alongside a fall in ready-mix concrete sales volumes. Cemex, crucially, also seems to have taken charge of its debts in 2016, saying that it was on track to meet its targets and that it had announced nearly US$2bn worth of divestments in that year. Currently the company is trying to buy out Trinidad Cement in the Caribbean, which may be a sign that it has turned a corner.

Grupo Cementos de Chihuahua’s (GCC) cement sales volumes rose in the first three quarters of 2016, in its case by 4%. Its overall net sales in Mexico rose by 4.2% in Mexican Pesos for the same period but fell when calculated in US Dollars due to currency variations. GCC attributed its sales growth to better pricing environment and increased cement volumes, mainly for projects in the commercial and industrial sectors that compensated for a decline in the public sector, following the culmination of two major urban paving and highway construction projects in 2015. At the smaller end of the market, Elementia reported that its cement sales skyrocketed by 30% to US$104m in the first nine months of the year aided by higher prices and volumes.

The major Mexican cement producers all have a presence in the US with the exception of Cruz Azul. Cemex has held assets north of the border for years, Cemento Portland Moctezuma has links to Buzzi Unicem, GCC bought US assets from Cemex in 2016 and Elementia completed its purchase of Giant Cement also in 2016. These companies have clinker in their kilns in plants on US soil manned by US citizens. This represents investment in local industry and it is exactly the kind of thing that appeals to the rhetoric of Trump’s approach so far. If the new president builds his wall then Mexican producers will probably be producing much of the cement that builds it. Even the Mexican Peso’s slow decline since 2014 could help the local cement industry, as it will cut the cost of moving exports and materials north of the border. Indeed, Enrique Escalante, the chief executive officer of GCC said in late 2016 that his company was ‘ready to build’ Trump’s wall.

However, the sheer uncertainty factor of an incoming president with as little experience of public office as Donald Trump must be giving chief executives pause for thought. After all, Trump's tweets before he has assumed office have forced car manufacturers to change policy. If he manages to disrupt the North American Free-Trade Agreement (NAFTA) in order to protect US jobs then the repercussions for the Mexican economy will be profound. It sends nearly three quarters of its exports to the US. Local cement producers would surely suffer in the resulting economic disruption.

So, currency devaluations aside, Mexican producers are making money from their cement operations at home and they are increasingly hedging their bets by operating or buying units in the US. Some, like GCC, are even being ebullient about the benefits that might come their way. It may be a bumpy ride but the Mexican industry is ready. However, it may wish to avoid appearing in any of Donald Trump’s tweets anytime soon.