Displaying items by tag: Mexico

President Trump said he was going to do it… and he did. The US announced tariffs on most imports on 2 April 2025 that took effect from 5 April 2025. So, once again, we ask what the consequences of this might be upon the cement sector.

Table 1: Estimated burden of US tariffs on selected countries importing cement based on 2024 data. Source: Based on USGS data.

Global Cement Magazine Editorial Director Robert McCaffrey posted a similar table to the one above on LinkedIn on 4 April 2025. It applies the new import tariffs to the value of imported hydraulic cement and clinker to the US in 2024 as reported by the United States Geological Survey (USGS). As such it gives us a starting idea of how the new tariffs might change what happens in 2025. For an idea of the volumes of cement imported to the US in recent years refer to the graph in GCW695.

However, a couple of key caveats were pointed out by commentators to that LinkedIn post. Marty Ozinga noted that the values from the USGS are customs values. Crucially, he said that the tariffs will be charged upon the FOB value of cement at the point of origin and not on the transport costs. This is significant because the cost of moving the cement can sometimes be more than half the total values reported in the table for certain countries. Another commentator wanted to make it clear that tariffs on imports are imposed upon the supply chain and are paid somewhere along it, typically by end users, rather than the originating country. Elsewhere, the feeling was very much one of waiting to see what would happen next and how markets would reorder.

Taken at face value, the first takeaway from Table 1 is that the variable tariffs disrupt the competitiveness of the importers. Any importer from a country with the lowest rate, 10%, now has an advantage over those with higher ones. Türkiye seems to be the obvious winner here as it was both the largest importer of cement in 2024 and it has the lowest rate. Vietnam appears to be a loser with a massive 46% rate. Canada and Mexico may have problems with a 25% tariff but how their cement gets to the US market may make a big difference as Ozinga mentions above. And so it goes down the list. What may be significant is how the order of the importers further down the list changes. For example, Algeria has a 30% rate compared to Egypt’s 10%. Both nations exported a similar volume of cement to the US in 2024.

The first casualty of the last week has been market certainty. The US announced the tariffs and stock markets slumped around the world. They started to revive on 8 April 2025 as the US government made more reassuring noises about trade talks but this was dampened by renewed fears of a US - China trade war. The orthodox economic view is that the US tariffs are increasingly likely to cause a recession in the US in the short term regardless of whether they have a more positive effect on the longer one. This view can be detected in former PCA economist Ed Sullivan’s latest independent report on the US economy. He acknowledged the fairness argument the US government has made, but warned of stagflation.

On the US construction market, prices look set to rise in areas that previously relied on imports or are near to them. Cement companies in the US should be able to sell higher volumes as some level of domestic production outcompetes imports. The sector produced 86Mt in 2024 and has a capacity of 120Mt/yr giving it a utilisation rate of 72%. It imported 20 - 25Mt of cement in 2024. One sign of this happening might be renewed investment in local capacity through upgrades, new lines and even new plants. However, a recession would reduce overall consumption. On the equipment side, there is likely to be a similar readjustment between local and foreign suppliers. Certainly, if the tariffs stick around then more non-US companies may be tempted to set up local subsidiaries and /or manufacturing bases if conditions permit. For example, note JCB’s doubling in size this week of a plant it is building in Texas. One interesting situation might occur if a US cement company wants to build a new production line. All the likely suppliers, at present at least, appear to be based outside of the US.

Finally, despite everything, Holcim declared this week that it had completed a $3.4bn bond offering ahead of the impending spin-off of Amrize in the US noting “strong investor interest in the future company.” It wants to shore-up confidence ahead of the creation of the new company at some point in the first half of the year. Holcim’s CEO said previously that he didn’t expect any blowback from tariffs as the company was a local business in the US. What may be worth watching for is whether the current disruption to stock markets causes any delays to the creation of Amrize.

The current situation with the tariffs is prompting a rapid-revaluation of the US construction market and the wider economy. US-based building materials companies look set to benefit but there may be disruption along the way. Foreign companies supplying the sector may well experience sharp changes in circumstances depending on how tariffs reorder supply chains. Prices for end-users look set to rise. We live in interesting times.

For Ed Sullivan’s take on the US cement sector read his article in the May 2025 issue of Global Cement Magazine

Mexico: Changes to Cemex’s regional management started on 1 April 2025 following the appointment of Jaime Muguiro as new group CEO. Jesus Gonzalez has been appointed as president of Cemex USA, Sergio Menendez as president of Cemex Mexico, Jose Antonio Cabrera as president of Cemex Europe, Middle East, and Africa and Alejandro Ramirez as president of Cemex South, Central America, and the Caribbean.

Jesús González joined Cemex in 1998 and has held several management positions, including Corporate Director of Strategic Planning, Vice President of Strategic Planning in Cemex USA, President of Cemex Central America, President of Cemex UK, Executive Vice President of Sustainability and Operations Development and, most recently, President of Cemex South, Central America and the Caribbean. He holds a master’s degree in naval engineering from the Polytechnic University of Madrid and a master’s of business administration (MBA) from IESE - University of Navarra, Barcelona.

Sergio Menéndez has worked for Cemex since 1993. Prominent roles he has held include Director of Planning and Logistics in Asia, Corporate Director of Commercial Development, President of Cemex Philippines, Vice President of Strategic Planning for the Europe, Middle East, Africa, and Asia region, President of Cemex Egypt, Vice President of Infrastructure Segment and Government Sales in Mexico, Vice President of Distribution Segment Sales in Mexico and most recently, President of Cemex Europe, Middle East, Africa and Asia. He holds an undergraduate degree in industrial engineering from the Instituto Tecnológico y de Estudios Superiores de Monterrey and an MBA from Stanford University.

José Antonio Cabrera joined Cemex in 2000 and started in cement operation roles. He has since worked as President for Cemex in Dominican Republic, Puerto Rico and Haiti, as well as Vice President of Strategic Planning for Cemex in the Asia, Middle East and Africa region. He holds an undergraduate degree in physics from La Laguna University in Spain and an MBA from the IE Business School.

Alejandro Ramírez has worked for Cemex since 2000 starting in strategic planning roles. He later became President for Cemex in Colombia & Peru, Dominican Republic, Caribbean, Costa Rica, TCL Group, Puerto Rico, Argentina and Thailand. He holds a degree in Industrial Engineering from the Tecnológico de Monterrey and an MBA from Wharton business school.

US: Cement shipments fell by 6% year-on-year to 103Mt in 2024 from 109Mt in 2023. Data from the United States Geological Survey (USGS) shows that domestic shipments of Portland and blended cement decreased by 6% to 82.9Mt from 88.2Mt. However, imports only dipped slightly to 19.8Mt. Particular declines in shipments were recorded in the north-east and Texas. Türkiye remained the biggest source of imports in 2024 (7.16Mt), followed by Canada (4.85Mt), Vietnam (4.17Mt), Greece (1.82Mt) and Mexico (1.32Mt). Clinker production dropped by 7% to 71.6Mt from 76.8Mt.

Mexico: Holcim México has mitigated 1.7Mt of CO₂ emissions in housing and infrastructure projects throughout the country in 2024, according to a press release, through its ECOPact, ECOPlanet and ECOCycle sustainable products.

Holcim’s ECOPact low-carbon concrete reduces CO₂ emissions by at least 30% and represents 15% of its concrete sales, with a target of 27% by 2027. Its ECOPlanet cement range reduces CO₂ emissions by 35-65% relative to traditional blends and accounts for 56% of cement sales, with a target of 77% by 2027. ECOCycle technology incorporates recycled construction and demolition materials into concrete for non-structural applications like pavements.

Mexico: Cemex has announced that its CEO, Fernando Gonzalez, will retire after 35 years with the company. The company’s board of directors has appointed Jaime Muguiro, current head of US operations, to succeed him. The changes will be effective on 1 April 2025.

Mexico: Cemex has embarked upon a cost cutting exercise following a drop of sales volumes in 2024. Sales volumes of cement, ready-mixed concrete (RMX) and aggregates all fell in 2024. This in turn reduced sales revenue, despite higher prices and earnings. The group’s sales volumes of cement decreased by 2% year-on-year to 44.3Mt in 2024 from 45.2Mt in 2023. RMX sales volumes dropped by 6% to 44Mm³ from 46.8Mm³. Sales revenue and operating earnings before interest, taxation, depreciation and amortisation (EBITDA) dipped by 2% to US$16.2Bn and by 2% to US$3.08Bn respectively.

Sales and earnings rose on a like-for-like basis in Mexico and South, Central America and the Caribbean but fell elsewhere. In Mexico the group noted a strong first half of 2024 followed by a poor second half. In the US it reported a number of ‘extreme’ weather events. In Europe, Middle East, and Africa it said a recovery trend in earnings was observed in the second half of the year.

In response the company has launched ‘Project Cutting Edge,’ a three-year, US$350m saving programme intended to streamline operations, improve efficiency and further use of digital technology throughout the business. The initiative is anticipated to deliver US$150m in incremental EBITDA in 2025 and expected to reach a run-rate of US$350m by 2027.

Fernando A González, CEO of Cemex, said “With the recovery of our investment grade ratings, improved free cash flow generation and the execution of US$2.2bn in asset divestments, we can now pursue more aggressively our capital allocation priorities of growth through small to medium-sized acquisitions, primarily in the US, additional deleveraging, and building further on our shareholder return programs.”

US President Donald Trump threatened tariffs on imports from Canada, China, Mexico and the European Union this week. Tariffs to Canada and Mexico were announced on 1 February 2025 and then paused for a month to allow for negotiations. Ones to China have been implemented. Tariffs to the European Union have been proposed but nothing has happened yet. What does this mean for the cement sector?

Graph 1: Imports of cement and clinker to the US. Source: USGS. Estimated data for 2024.

The data suggests that whacking 25% tariffs on cement imports from Canada and Mexico would have an impact. The US imported 26.5Mt of cement and clinker in 2023. Based on United States Geological Survey (USGS) data from January to October 2024, imports in 2024 have fallen by 8% year-on-year but they still represent a large chunk of consumption. Türkiye has been the biggest source of imports over the last five years but Canada has been the second biggest supplier. Together with Mexico, it provided over a quarter of imports in 2023. A similar share is expected in 2024. Greece, a country in the EU, has also been present in the top five importing countries to the US during this time.

The Portland Cement Association (PCA) reinforced this view. In a carefully worded statement it took pains to point out alignment with the intentions behind the tariffs, such as appreciating that the administration was open to negotiation and appeared to be flexible. However, it warned that the moves could adversely affect energy and national security, delay infrastructure projects and raise costs. It pointed out the import share from Canada and Mexico, adding that this represented nearly 7% of the US’ cement consumption. It noted which states were the main entry points for cement imports from the two countries. Finally, it highlighted the high level of consumption (36%) that imports from Canada might account for in northern states such as New York, Washington and so on. Meanwhile, Mexico’s National Chamber of Cement (CANACEM) warned that the proposed actions might trigger a ‘competitiveness crisis’ in the US.

Holcim’s CEO, by contrast, nonchalantly told Reuters that he didn’t expect any impact by tariffs on his business. Miljan Gutovic described the group’s US operations as a local business with production happening in the country and equipment and spare parts all being sourced locally. This optimistic view is likely to be influenced by the company’s impending spin-off of its US business. The listing in the US remains scheduled for the first half of 2025 with no complications expected from tariffs.

Clearly, implementing tariffs on imports of cement and clinker from Canada and Mexico could cause a shortage in the US in the short term. This, in turn, could lead to higher prices for consumers in the US. This potential effect would be pronounced in border regions that are reliant on imports. It is worth noting that a number of production lines in both Mexico and Canada have previously been mobilised to meet the export market to the US. These lines would likely be mothballed if tariffs were to be implemented, unless they could find other markets. In the medium term though, as the World Cement Association (WCA) pointed out this week, the world produces too much cement. So it looks likely that the US cement market would adjust to a new equilibrium. Taxing imports from the EU would have a similar effect. Although it seems like it would be less pronounced for the US cement market unless it was in conjunction with tariffs to Canada and Mexico. It would certainly be bad news for cement producers in Greece.

Cement producers in the US look set to benefit from tariffs as demand for their products and prices could increase. There is a risk that too sudden a change to the import market could cause adverse market effects through shortages. Many of these companies are multinational groups with headquarters in foreign countries. However, the strength of the US market compared to elsewhere has prompted some of these businesses to become more ‘American’ through listing in the US or focusing merger and acquisition activity in North America.

At this point we’re stuck in a half-way house place where import tariffs have been threatened and negotiations are pending. The relatively muted stock market reaction to the tariffs and Trump’s swiftness in enacting pauses suggest that it is brinkmanship by the US administration. If this situation continues for any length of time then it will likely have an effect all of its own. In which case don’t expect any export-focused investment by cement companies in Canada and Mexico any time soon.

US: The Portland Cement Association (PCA) has issued a statement following the US government’s announcement of proposed 25% tariffs on imports of cement from Canada and Mexico. The association lauded President Donald Trump’s stated goal of protecting the US cement industry, while also calling for careful consideration of measures to be taken.

President and CEO Mike Ireland said “While the US cement industry agrees with the President’s objectives of bolstering American manufacturing, increasing border security, and advancing the country’s energy independence, the industry believes 25% tariffs on cement imported from Canada and Mexico could adversely affect energy and national security while delaying infrastructure projects and raising their costs.” Ireland continued “The availability of affordable cement and concrete is vital to meet our country’s infrastructure needs and for the oil and gas sector’s expansion. Mexico and Canada play a crucial role in stabilizing US supply, so we appreciate that the administration is open to negotiations and taking a flexible approach to implementing trade policy.”

Mexico: The Mexican National Chamber of Cement (CANACEM) has warned that the US government’s proposed reimposition of a 25% tariff on imports of cement from Mexico may trigger a ‘competitiveness crisis’ in the US, with dire consequences for North America as a whole. Mexico exported 1.5Mt of cement to the US in 2024. This corresponds to 7% of US cement imports and 1.4% of the country’s total consumption. The El Norte newspaper has reported that CANACEM sees the current situation as an opportunity for Mexican and US policymakers and stakeholders to increase their mutually beneficial initiatives, citing the example of a proposed Carbon Border Adjustment Mechanism (CBAM) on a region-wide scale.

CANACEM president José María Barroso said "In addition to incentivising more sustainable production, this would promote greater integration and strengthen the regional market. The Mexican cement industry is ready to work with our government and our trade partners to find solutions that promote greater regional integration."

US: Holcim’s CEO Miljan Gutovic says he does not expect any effects of proposed US tariffs upon his company. "I don't really see any impact, because our business is a local business (in the US)," said Gutovic in an interview with Reuters. "We are producing locally, we are sourcing the equipment, the spare parts locally, so how is this going to affect us? I do not see it." He added that the proposed tariffs were also unlikely to pose any problems to the group’s planned spin-off of its business in the US. The listing of its North America-based business is remains scheduled for the first half of 2025.

The US government proposed tariffs upon imported goods from Canada and Mexico in early February 2025 but these have been paused for one month. Tariffs on China are set to start on 4 February 2025. US President Donald Trump has also spoken about implementing tariffs on the EU.