Cement Industry Profile - South America

MarketLine Industry Profile
Cement in South
America
October 2012
Reference Code: 0206-2031
Publication Date: October 2012
WWW.MARKETLINE.COM
MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED
South America - Cement 0206 - 2031 - 2011
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EXECUTIVE SUMMARY
Market value
The South American cement market shrank by 5.3% in 2011 to reach a value of $9,294.1 million.
Market value forecast

In 2016, the South American cement market is forecast to have a value of $15,789.8 million, an increase of 69.9% since
2011.
Market volume
The South American cement market grew by 5.2% in 2011 to reach a volume of 100.8 million tonnes.
Market volume forecast

In 2016, the South American cement market is forecast to have a volume of 158.1 million tonnes, an increase of 56.8%
since 2011.
Geography segmentation
Brazil accounts for 59.1% of the South American cement market value.
Market rivalry
The size of leading incumbents in this market increases rivalry, which is assessed as strong overall.

TABLE OF CONTENTS
Executive Summary ....................................................................................................................................................... 2
Market value............................................................................................................................................................... 2
Market value forecast ................................................................................................................................................. 2
Market volume............................................................................................................................................................ 2
Market volume forecast .............................................................................................................................................. 2
Geography segmentation ........................................................................................................................................... 2
Market rivalry.............................................................................................................................................................. 2
Market Overview ............................................................................................................................................................ 7
Market definition ......................................................................................................................................................... 7
Market analysis .......................................................................................................................................................... 7
Market Data ................................................................................................................................................................... 8
Market value............................................................................................................................................................... 8
Market volume............................................................................................................................................................ 9
Market Segmentation ................................................................................................................................................... 10
Geography segmentation ......................................................................................................................................... 10
Market Outlook ............................................................................................................................................................. 11
Market value forecast ............................................................................................................................................... 11
Market volume forecast ............................................................................................................................................ 12
Five Forces Analysis .................................................................................................................................................... 13
Summary .................................................................................................................................................................. 13
Buyer power ............................................................................................................................................................. 14
Supplier power ......................................................................................................................................................... 15
New entrants ............................................................................................................................................................ 16
Threat of substitutes................................................................................................................................................. 17
Degree of rivalry ....................................................................................................................................................... 18
Leading Companies ..................................................................................................................................................... 19
CEMEX, S.A.B. de C.V. ........................................................................................................................................... 19
Holcim Ltd. ............................................................................................................................................................... 22
Lafarge S.A. ............................................................................................................................................................. 25
Votorantim Group ..................................................................................................................................................... 29
Appendix ...................................................................................................................................................................... 32

Methodology............................................................................................................................................................. 32
Industry associations ................................................................................................................................................ 33
Related MarketLine research ................................................................................................................................... 33

LIST OF TABLES
Table 1: South America cement market value: $ million, 2007–11................................................................................. 8
Table 2: South America cement market volume: million tonnes, 2007–11 ..................................................................... 9
Table 3: South America cement market geography segmentation: $ million, 2011 ...................................................... 10
Table 4: South America cement market value forecast: $ million, 2011–16 ................................................................. 11
Table 5: South America cement market volume forecast: million tonnes, 2011–16 ..................................................... 12
Table 6: CEMEX, S.A.B. de C.V.: key facts ................................................................................................................. 19
Table 7: CEMEX, S.A.B. de C.V.: key financials ($)..................................................................................................... 20
Table 8: CEMEX, S.A.B. de C.V.: key financials (MXN) ............................................................................................... 20
Table 9: CEMEX, S.A.B. de C.V.: key financial ratios .................................................................................................. 20
Table 10: Holcim Ltd.: key facts ................................................................................................................................... 22
Table 11: Holcim Ltd.: key financials ($) ...................................................................................................................... 23
Table 12: Holcim Ltd.: key financials (CHF) ................................................................................................................. 23
Table 13: Holcim Ltd.: key financial ratios .................................................................................................................... 23
Table 14: Lafarge S.A.: key facts ................................................................................................................................. 25
Table 15: Lafarge S.A.: key financials ($) .................................................................................................................... 26
Table 16: Lafarge S.A.: key financials (€) .................................................................................................................... 26
Table 17: Lafarge S.A.: key financial ratios .................................................................................................................. 27
Table 18: Votorantim Group: key facts ......................................................................................................................... 29
Table 19: Votorantim Group: key financials ($) ............................................................................................................ 30
Table 20: Votorantim Group: key financials (BRL) ....................................................................................................... 30
Table 21: Votorantim Group: key financial ratios ......................................................................................................... 30

LIST OF FIGURES
Figure 1: South America cement market value: $ million, 2007–11 ............................................................................... 8
Figure 2: South America cement market volume: million tonnes, 2007–11.................................................................... 9
Figure 3: South America cement market geography segmentation: % share, by value, 2011 ..................................... 10
Figure 4: South America cement market value forecast: $ million, 2011–16................................................................ 11
Figure 5: South America cement market volume forecast: million tonnes, 2011–16 .................................................... 12
Figure 6: Forces driving competition in the cement market in South America, 2011 .................................................... 13
Figure 7: Drivers of buyer power in the cement market in South America, 2011 ......................................................... 14
Figure 8: Drivers of supplier power in the cement market in South America, 2011 ...................................................... 15
Figure 9: Factors influencing the likelihood of new entrants in the cement market in South America, 2011 ................ 16
Figure 10: Factors influencing the threat of substitutes in the cement market in South America, 2011 ....................... 17
Figure 11: Drivers of degree of rivalry in the cement market in South America, 2011 .................................................. 18
Figure 12: CEMEX, S.A.B. de C.V.: revenues & profitability ........................................................................................ 21
Figure 13: CEMEX, S.A.B. de C.V.: assets & liabilities ................................................................................................ 21
Figure 14: Holcim Ltd.: revenues & profitability ............................................................................................................ 24
Figure 15: Holcim Ltd.: assets & liabilities .................................................................................................................... 24
Figure 16: Lafarge S.A.: revenues & profitability .......................................................................................................... 27
Figure 17: Lafarge S.A.: assets & liabilities .................................................................................................................. 28
Figure 18: Votorantim Group: revenues & profitability .................................................................................................. 31
Figure 19: Votorantim Group: assets & liabilities.......................................................................................................... 31

MARKET OVERVIEW
Market definition
For the purposes of this Profile, cement is taken to be hydraulic cement (e.g. Portland cement) used for construction and
similar purposes. Volumes are for the annual consumption of cement within the specified geography, whether produced
domestically or imported. The profile focuses on manufacturers, so volumes include cement sold by them in dry form,
cement sold as a component of ready-mix concrete slurry, and so on. Values are calculated by multiplying total volumes
by the average annual bulk price of dry cement per tonne. All currency conversions were carried out using constant
average annual 2011 exchange rates.
For the purposes of this report, the Americas consists of North America and South America.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Venezuela.
Market analysis
Despite weak demand in 2009, the South American market has maintained positive growth in value and volume. It is set
to accelerate going forward.
The South American cement market had total revenues of $9,294.1 million in 2011, representing a compound annual
growth rate (CAGR) of 8.5% between 2007 and 2011. In comparison, the Argentinian and Chilean markets grew with
CAGRs of 22.6% and 5.7% respectively, over the same period, to reach respective values of $1,371.2 million and $527.1
million in 2011.
Market consumption volumes increased with a CAGR of 6.2% between 2007 and 2011, to reach a total of 100.8 million
tonnes in 2011. The market's volume is expected to rise to 158.1 million tonnes by the end of 2016, representing a
CAGR of 9.4% for the 2011-2016 period.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 11.2% for the five-year period
2011 - 2016, which is expected to drive the market to a value of $15,789.8 million by the end of 2016. Comparatively, the
Argentinian and Chilean markets will grow with CAGRs of 9.6% and 6.9% respectively, over the same period, to reach
respective values of $2,170.2 million and $735.7 million in 2016.

MARKET DATA
Market value
The South American cement market shrank by 5.3% in 2011 to reach a value of $9,294.1 million.
The compound annual growth rate of the market in the period 2007–11 was 8.5%.
Table 1: South America cement market value: $ million, 2007–11
Year $ million € million % Growth

2007 6,694.9 4,812.3
2008 6,910.2 4,967.1 3.2%
2009 9,051.8 6,506.5 31.0%
2010 9,810.0 7,051.5 8.4%
2011 9,294.1 6,680.7 (5.3%)
CAGR: 2007–11 8.5%
SOURCE: MARKETLINE MARKETLINE
Figure 1: South America cement market value: $ million, 2007–11

Market volume
The South American cement market grew by 5.2% in 2011 to reach a volume of 100.8 million tonnes.
The compound annual growth rate of the market in the period 2007–11 was 6.2%.
Table 2: South America cement market volume: million tonnes, 2007–11
Year million tonnes % Growth

2007 79.3
2008 86.5 9.1%
2009 86.6 0.1%
2010 95.8 10.7%
2011 100.8 5.2%
CAGR: 2007–11 6.2%
Figure 2: South America cement market volume: million tonnes, 2007–11

MARKET SEGMENTATION
Geography segmentation
Brazil accounts for 59.1% of the South American cement market value.
Argentina accounts for a further 14.8% of the South American market.
Table 3: South America cement market geography segmentation: $ million, 2011
Geography 2011 %
Brazil 5,493.9 59.1
Argentina 1,371.2 14.8
Chile 527.1 5.7
Rest of South America 1,902.0 20.5
Total 9,294.2 100%
Figure 3: South America cement market geography segmentation: % share, by value, 2011

MARKET OUTLOOK
Market value forecast
In 2016, the South American cement market is forecast to have a value of $15,789.8 million, an increase of 69.9% since
2011.
The compound annual growth rate of the market in the period 2011–16 is predicted to be 11.2%.
Table 4: South America cement market value forecast: $ million, 2011–16
Year $ million € million % Growth

2011 9,294.1 6,680.7 (5.3%)
2012 10,704.2 7,694.2 15.2%
2013 11,528.5 8,286.7 7.7%
2014 12,756.2 9,169.2 10.6%
2015 14,154.5 10,174.3 11.0%
2016 15,789.8 11,349.8 11.6%
CAGR: 2011–16 11.2%
Figure 4: South America cement market value forecast: $ million, 2011–16

Market volume forecast
In 2016, the South American cement market is forecast to have a volume of 158.1 million tonnes, an increase of 56.8%
since 2011.
The compound annual growth rate of the market in the period 2011–16 is predicted to be 9.4%.
Table 5: South America cement market volume forecast: million tonnes, 2011–16
Year million tonnes % Growth

2011 100.8 5.2%
2012 111.5 10.6%
2013 120.9 8.4%
2014 131.5 8.8%
2015 143.8 9.4%
2016 158.1 10.0%
CAGR: 2011–16 9.4%
Figure 5: South America cement market volume forecast: million tonnes, 2011–16

FIVE FORCES ANALYSIS
The cement market will be analyzed taking cement manufacturers as players. The key buyers will be taken as
construction companies, and suppliers of energy and raw materials as the key suppliers.
Summary
Figure 6: Forces driving competition in the cement market in South America, 2011
The size of leading incumbents in this market increases rivalry, which is assessed as strong overall.
Cement is a highly commoditized product, which is hard to differentiate. Its production is only economical on a large
scale, and as long-distance transportation costs for this high-volume, low-price material can be significant, it is preferable
to manufacture it close to its end-markets. These factors mean that market entry often requires manufacturing plants to
be built within the country of interest, and the capital required for this constitutes a high barrier to entry. Cement
companies based in South America tend to be strongly focused on the construction materials market. This means that
should construction output fall, as it has in many countries over the past few years, these companies experience
heightened rivalry as they aim to protect their own revenues in a situation of steeply-declining demand. However, this is
less of an issue in South America, where construction output growth has remained strong.

Buyer power
Figure 7: Drivers of buyer power in the cement market in South America, 2011
Key buyers in this market are construction companies. Most cement companies offer both bulk cement and ready-mix
concrete slurry to the large homebuilding, non-residential construction and civil engineering sectors, as well as bagged
cement to distributors that sell to smaller contractors, tradespeople, and individual consumers. The construction industry
is fairly fragmented and, with many potential customers available to players, buyer power is weakened.
Cement and concrete are highly commoditized products. Differentiation is difficult; although there are various types of
cement appropriate for different end-uses, it is common for these to be sold by several cement companies. This makes it
difficult to retain buyers, who can obtain almost identical products from competing players. Competition in this market is
primarily on price and service levels.
It is not common for vertical integration either forwards or backwards to occur between the cement and construction
industry. Also, companies in the two sectors are dependent on each other, as it is difficult for construction companies to
operate without this important raw material but, equally, there are few uses for cement other than in construction. Buyer
power is assessed as moderate overall.

Supplier power
Figure 8: Drivers of supplier power in the cement market in South America, 2011
Cement production requires large quantities of limestone, sand, clay, and iron ore, to be ground up, mixed, and fired at
high temperatures (around 2,700 F / 1,500 C). Key inputs are the mineral raw materials, and fuel such as coal to power
kilns.
Industry wide, there is some freedom to source substitute inputs. For example, it is common for waste products, such as
old vehicle tires to be used as a fuel in cement production. This reduces dependence on coal, gas, and oil, the prices of
which can be volatile.
It is common for cement manufacturers to integrate backwards into the domain of its suppliers. Many large cement
companies offer both cement and also aggregates (sand, gravel, etc.), which require quarrying. For example, Lafarge's
aggregates segment supplies a substantial volume of aggregates required for the company's concrete and asphalt
operations. This reduces supplier power. Overall, supplier power in this market is moderate.

New entrants
Figure 9: Factors influencing the likelihood of new entrants in the cement market in South
America, 2011
Cement production is an industry where scale economies are important. Cement must be made in large volumes in order
to be economical: a typical plant has an annual capacity of one million tonnes or more. Furthermore, because cement is
a bulk commodity, long distance transportation costs per tonne might be significant in comparison with its market price.
Thus, although it is possible to enter the market in one country by exporting production from existing facilities elsewhere,
a new entrant would typically need to set up a large-scale manufacturing plant within the region. The capital required for
this creates a high barrier to entry, protecting incumbent players.
Regulation and intellectual property are less important issues in this market, and the technology of cement production is
mature. Environmental regulation may, however, become more stringent in the future.
Driven by the large Brazilian market, recent growth rates have been buoyant in the South American market, with the
exception of 2011, and this is set to continue going forward, attracting new players. Overall, the threat of new entrants to
the cement market is strong.

Threat of substitutes
Figure 10: Factors influencing the threat of substitutes in the cement market in South America,
2011
Customers will tend to purchase cement on a project-by-project basis. Within a project, there is little opportunity to use
substitutes: if the design of a shopping mall or highway specifies cement, builders cannot simply replace it with bricks.
Thus, switching costs for buyers will in effect be very high, which reduces the threat of indirect competition from
substitutes. Should construction companies consider that cement prices are too high, and are set to remain so, it is
possible that architects and developers will start to favor alternative construction materials in a longer-term trend.
Switching to an alternative from one project to the next will incur much lower construction costs.
It is difficult to assess how beneficial the alternatives would be to buyers. Reinforced concrete and other cement-based
building techniques are very common, especially for infrastructure projects. This is likely to be because the inherent
characteristics of these materials are not easy to replicate with substitutes. In this situation, regardless of relative prices,
substitutes remain a moderate threat to cement manufacturers.

Degree of rivalry
Figure 11: Drivers of degree of rivalry in the cement market in South America, 2011
Rivalry within this market is boosted by several factors. Firstly, weak product differentiation and low switching costs for
buyers make it easy for buyers to change from one player to another. The high sunk costs of establishing huge cement
plants becomes a barrier to exit. If demand goes into free fall, cement companies must struggle hard to remain profitable
rather than exiting the market.
Typically, companies making cement in South America are not very diversified in terms of products, with a strong focus
on construction materials. When the construction industry is hit by recession, this focus means that all revenue streams
tend to decline simultaneously. An exception is Votorantim, which operates in chemicals, steel, aluminum, highway and
energy concession and other areas of business, and is therefore somewhat protected from the vagaries of the cement
market. Additionally, strong overall growth in recent years means that this is less of an issue in the South American
market than in regions, such as Western Europe. Overall rivalry is strong in this market.

LEADING COMPANIES
CEMEX, S.A.B. de C.V.
Table 6: CEMEX, S.A.B. de C.V.: key facts
Av Ricardo Margain Zozaya 325, 66265 San Pedro Garza Garcia, Nuevo
Head office:
Leon, MEX
Telephone: 52 81 8888 8888
Fax: 52 81 8888 4417
Website: www.cemex.com
Financial year-end: December
Ticker: CEMEXCPO
Stock exchange: Mexico City
SOURCE: COMPANY WEBSITE MARKETLINE
CEMEX, S.A.B. de C.V. (Cemex or ‘the company’), through a number of subsidiaries, is engaged in the production,
distribution, and marketing of cement, ready-mix concrete, aggregates, and related construction materials. The company
has presence in more than 50 countries throughout the world.
The company has an annual production capacity of approximately 96.1 million metric tonnes of cement, 51 million cubic
meters of ready-mix concrete, and 158 million metric tonnes of aggregates. The company’s infrastructure includes 62
cement plants (excluding 12 cement plants with which the company has minority participation), 1,997 ready-mix concrete
facilities, 376 aggregate quarries, 223 land-distribution centers, and 71 marine terminals.
Cemex operates through three segments: cement, ready-mix concrete, and aggregates.
The cement segment produces a range of products such as gray Portland cement, white Portland cement, masonry and
mortar, oil-well cement, and blended cement.
The ready-mix segment develops and produces a number of concrete products for specific requirements such as
building structures, stamping designs, textures, facilities with germ-free environment, insulating, fire-resistance, acid
resistance, and crack-resistant construction. CEMEX offers a special concrete portfolio, comprised of such products as
ultra-rapid hardening concrete, crack-resistant/low shrinkage concrete, self-consolidating concrete (SCC), architectural
concrete, pervious concrete, and others.
The company is also engaged in selling aggregates which are used to produce different types of ready-mix concrete and
related construction materials.
Cemex has a Global Center for Technology and Innovation in Switzerland, which designs new and enhanced
construction materials. It designs and develops specialty ready-mix concretes that fulfill its customers' demanding
performance requirements. The Global Center for Technology and Innovation also evaluates and develops sustainable
methods of construction to meet the demand for high performance and low carbon building solutions.
Key Metrics
The company recorded revenues of $15,291 million in the fiscal year ending December 2011, an increase of 6.9%
compared to fiscal 2010. Its net loss was $1,994 million in fiscal 2011, compared to a net loss of $1,082 million in the
preceding year.

Table 7: CEMEX, S.A.B. de C.V.: key financials ($)
$ million 2007 2008 2009 2010 2011

Revenues 18,372.2 18,172.0 15,928.2 14,304.8 15,290.9
Net income (loss) 2,102.4 18.2 477.1 (1,082.0) (1,994.4)
Total assets 43,670.6 50,218.0 46,889.3 40,656.2 43,617.2
Total liabilities 29,802.5 36,350.0 33,559.1 25,904.8 29,790.6
Employees 67,000 57,000 47,000 46,533 44,104
SOURCE: COMPANY FILINGS MARKETLINE
Table 8: CEMEX, S.A.B. de C.V.: key financials (MXN)
MXN million 2007 2008 2009 2010 2011

Revenues 228,152.0 225,665.0 197,801.0 177,641.0 189,887.0
Net income (loss) 26,108.0 226.0 5,925.0 (13,436.0) (24,767.0)
Total assets 542,314.0 623,622.0 582,286.0 504,881.0 541,652.0
Table 9: CEMEX, S.A.B. de C.V.: key financial ratios
Ratio 2007 2008 2009 2010 2011

Profit margin 11.4% 0.1% 3.0% (7.6%) (13.0%)
Revenue growth 6.7% (1.1%) (12.3%) (10.2%) 6.9%
Asset growth 54.5% 15.0% (6.6%) (13.3%) 7.3%
Liabilities growth 87.2% 22.0% (7.7%) (22.8%) 15.0%
Debt/asset ratio 68.2% 72.4% 71.6% 63.7% 68.3%
Return on assets 5.8% 0.0% 1.0% (2.5%) (4.7%)
Revenue per employee $274,213 $318,807 $338,898 $307,411 $346,701
Profit per employee $31,379 $319 $10,151 ($23,251) ($45,220)

Figure 12: CEMEX, S.A.B. de C.V.: revenues & profitability
Figure 13: CEMEX, S.A.B. de C.V.: assets & liabilities

Holcim Ltd.
Table 10: Holcim Ltd.: key facts
Head office: Zürcherstrasse 156, CH 8645 Jona, CHE

Telephone: 41 58 858 86 00
Holcim (Brasil) S.A., Rua Verbo Divino. 1488, Chácara Santo Antônio,
Local office:
04719.904 São Paulo, BRA
Telephone: 55 11 5180 8600
Fax: 55 11 5180 8825
Website: www.holcim.com
Ticker: HOLN
Stock exchange: SWX Swiss Exchange
Holcim Ltd. (Holcim or ‘the group’) is engaged in the manufacture, distribution and marketing of building materials. Its
primary product lines include cement, aggregates, ready-mix concrete and asphalt, but the group also offers value added
services. The group operates in 70 countries spanning Asia Pacific, Europe, Latin America, North America, Africa and
the Middle East.
The group operates through three segments: cement, other construction materials and services, and aggregates.
The cement segment manufactures and sells cement and other related materials. Additionally, Holcim offers a wide
range of cement-based materials and also develops product lines with customized blends. As of FY2011, the group's
production capacity for cement was 216 million tonnes, and it had a total of 149 cement and grinding plants across the
globe.
The other construction materials and services segment is mainly focused on the production and distribution of concrete
and asphalt. This segment encompasses construction services, international trading services and other environmental
services, such as waste management, which are offered to customers. As of FY2011, Holcim had 1,435 ready-mix
concrete plants and 105 asphalt plants.
The aggregates segment includes crushed stone, gravel and sand. These form the main components for concrete, and
are also used in other applications such as building roads and railways. The activities conducted under this segment are
quarrying, preparing and sorting raw material. The group also recycles aggregates from concrete demolition material. At
the end of FY2011, Holcim had 492 aggregate plants.
Holcim has an annual cement production capacity of 5.3 million tonnes in Brazil, 2.5 million tonnes in Chile, 4.3 million
tonnes in Argentina, and 2.1 million tonnes in Colombia.
Key Metrics
The company recorded revenues of $23,397 million in the fiscal year ending December 2011, a decrease of 4.2%
compared to fiscal 2010. Its net income was $769 million in fiscal 2011, compared to a net income of $1,333 million in
the preceding year.

Table 11: Holcim Ltd.: key financials ($)
$ million 2007 2008 2009 2010 2011

Revenues 30,512.1 28,374.7 23,834.9 24,422.5 23,397.2
Net income (loss) 5,126.3 2,510.7 1,659.1 1,333.2 769.2
Total assets 54,377.4 50,973.4 55,499.7 49,919.9 47,996.8
Employees 89,364 86,713 81,498 80,310 80,967
Table 12: Holcim Ltd.: key financials (CHF)
CHF million 2007 2008 2009 2010 2011

Revenues 27,052.0 25,157.0 21,132.0 21,653.0 20,744.0
Net income (loss) 4,545.0 2,226.0 1,471.0 1,182.0 682.0
Total assets 48,211.0 45,193.0 49,206.0 44,259.0 42,554.0
Table 13: Holcim Ltd.: key financial ratios
Ratio 2007 2008 2009 2010 2011

Profit margin 16.8% 8.8% 7.0% 5.5% 3.3%
Revenue growth 12.9% (7.0%) (16.0%) 2.5% (4.2%)
Asset growth 7.8% (6.3%) 8.9% (10.1%) (3.9%)
Liabilities growth 1.1% 3.6% (0.2%) (14.8%) (1.0%)
Debt/asset ratio 54.5% 60.2% 55.2% 52.3% 53.8%
Return on assets 9.8% 4.8% 3.1% 2.5% 1.6%
Profit per employee $57,365 $28,954 $20,358 $16,600 $9,501

Figure 14: Holcim Ltd.: revenues & profitability
Figure 15: Holcim Ltd.: assets & liabilities

Lafarge S.A.
Table 14: Lafarge S.A.: key facts
Head office: 61 rue des Belles Feuilles, 75116 Paris, FRA

Telephone: 33 1 44 34 11 11
Fax: 33 1 44 34 12 00
Website: www.lafarge.com
Ticker: LG
Stock exchange: Paris
Lafarge (or ‘the company’) is a French manufacturer of construction materials. The company is present across 64
countries directly or through subsidiaries and joint ventures.
The company operates through three business segments: cement, aggregates and concrete, and gypsum.
At year-end 2011, Lafarge operated 124 cement, 36 clinker-grinding and 6 slag-grinding plants, with an annual
production capacity of 225 million tonnes (on an equity basis in the case of joint ventures). This segment operated
production facilities in 58 countries as of 2011. The segment produces and sells a range of cements and hydraulic
binders for the construction industry, including basic portland and masonry cements and a variety of other blended and
specialty cements and binders. It sold 145 million tonnes of cement in 2011.
Lafarge also offers several services, such as technical support in connection with the use of cements, ordering and
logistical assistance to ensure timely delivery to customers, as well as documentation, demonstrations and training
relating to the properties and appropriate use of different cements. Its customers primarily include concrete producers,
precast concrete product manufacturers, contractors, builders and masons, as well as building materials wholesalers.
The cement is used in three major segments of the construction industry: residential, non-residential construction and
infrastructure projects. The company also engages in cement trading activities worldwide, which help it to meet
fluctuations in demand in certain countries without building plants that result in excess capacity. Trading activities are
mainly conducted through the company’s subsidiary, Cementia Trading. Another subsidiary, Marine Cement, acts as an
importer and distributor of cement in Indian Ocean and Red Sea countries.
As of FY2010, the aggregates and concretes segment had production facilities and sales offices in 36 countries. In
FY2011, the business operated 392 aggregates quarries, which sold approximately 193 million tonnes of aggregates,
and 1,046 concrete plants, which sold approximately 34 million cubic meters of ready-mix concrete. The company also
produces asphalt and pre-cast concrete products and provides asphalt contracting and surfacing services. The
aggregates and concrete segment is vertically integrated with the cement segment, supplying substantial volumes of
cement to concrete operations in several markets. Also, aggregates operations supply a substantial volume of
aggregates required for the company's concrete and asphalt operations. Aggregates are mainly used as raw materials
for concrete, masonry, asphalt and other industrial processes, and as base materials for roads, landfills and buildings.
The primary aggregates Lafarge produces and sells include hard rock, natural sand and gravel. The company processes
and sells recycled asphalt and concrete in certain markets.

Aggregates and concrete products are sold under the brands: Agilia, Extensia, Chronolia and Artevia. In North America
and the UK, Lafarge produces and sells asphalt for road surfacing and paving. Customers for concrete are mainly
construction and road contractors ranging from major international construction companies to small residential builders,
farmers and do-it-yourself customers. The company sells asphalt to road contractors for the construction of roads,
driveways and parking lots, as well as directly to state and local authorities.
The gypsum segment produces wallboard and other gypsum-based products to offer gypsum-based building solutions
for constructing, finishing or decorating interior walls and ceilings in residential, commercial and institutional construction
projects throughout the world. Additionally, these products are also used for sound and thermal insulating partitions.
Other gypsum-based products include industrial plaster, medical plasters, and self-leveling floor-screeds.
After divesting some of its gypsum operations, Lafarge operated production facilities in seven countries at year-end
2011. The company also operates wallboard and other plants which produce plaster, plaster blocks, joint compounds or
metal studs, as well as paper. Gypsum wallboard products are primarily sold to general building materials distributors,
plasterboard installers wallboard specialty dealers, do-it-yourself home centers and transforming industries.
Key Metrics
The company recorded revenues of $21,263 million in the fiscal year ending December 2011, a decrease of 5.5%
compared to fiscal 2010. Its net income was $1,024 million in fiscal 2011, compared to a net income of $1,151 million in
the preceding year.
Table 15: Lafarge S.A.: key financials ($)
$ million 2007 2008 2009 2010 2011

Revenues 24,504.7 26,478.9 22,097.9 22,494.4 21,263.2
Net income (loss) 2,999.4 2,697.6 1,023.9 1,150.5 1,023.9
Total assets 39,382.3 56,494.2 54,948.5 59,118.0 56,648.6
Employees 77,721 84,000 78,000 76,000 68,000
Table 16: Lafarge S.A.: key financials (€)
€ million 2007 2008 2009 2010 2011

Revenues 17,614.0 19,033.0 15,884.0 16,169.0 15,284.0
Net income (loss) 2,156.0 1,939.0 736.0 827.0 736.0
Total assets 28,308.0 40,608.0 39,497.0 42,494.0 40,719.0

Table 17: Lafarge S.A.: key financial ratios
Ratio 2007 2008 2009 2010 2011

Profit margin 12.2% 10.2% 4.6% 5.1% 4.8%
Revenue growth 4.2% 8.1% (16.5%) 1.8% (5.5%)
Asset growth (5.1%) 43.5% (2.7%) 7.6% (4.2%)
Liabilities growth (10.8%) 50.0% (12.6%) 6.9% 1.8%
Debt/asset ratio 61.1% 64.0% 57.5% 57.1% 60.7%
Return on assets 7.4% 5.6% 1.8% 2.0% 1.8%
Profit per employee $38,592 $32,114 $13,127 $15,139 $15,058
Figure 16: Lafarge S.A.: revenues & profitability

Figure 17: Lafarge S.A.: assets & liabilities

Votorantim Group
Table 18: Votorantim Group: key facts
Praça Professor José Llanes 40, Edificio Berrini 500, Brooklin Novo, São
Head office:
Paulo, 04571 000, BRA
Telephone: 55 11 2162 06 00
Website: www.votorantim.com.br
Ticker: BBVCJCT
Stock exchange: Sao Paulo
Votorantim Cimentos is one of the leading global cement, concrete and mortar producers. Founded in 1936, the
company is part of the Votorantim Group, one of the largest national capital corporations, operating in the sectors of
cement, mining and metallurgy, pulp and paper, chemistry, agro industry and finances. The group has operations in 272
Brazilian municipalities and in eight countries (United States, Canada, Argentina, Chile, Colombia, Peru, Bolivia and
China). It also has commercial and logistics operations in another seven countries: Switzerland, England, Belgium,
Austria, Australia, Mexico and the Bahamas.
The company markets more than 40 products in Brazil in the areas of construction solutions. Among its main brands,
there are: Votoran, Itau, Poty, Tocantins and Aratu. In the mortar market, it operates under the brand name Votomassa,
and it markets the brands Itau and Votoran within the lime market. In the cement and concrete markets, the company
operates through Engemix.
Votorantim Cimentos supplies large scale construction projects, such as office buildings, bridges, and hydroelectric
dams. Its other products include building materials, such as concrete blocks, paving stones, and roof tiles. The company
has an annual cement capacity of approximately 33 million tonnes.
Votorantim Cimentos took the first step toward internationalization by acquiring St. Marys Cement in Ontario, Canada, in
2001, creating Votorantim Cimentos North America (VCNA) which, two years later, acquired 50% of Suwannee
American Cement of Branford, Florida (USA). It later acquired new cement factories, central concrete plants, aggregate
units, and distribution terminals in the Great Lakes region of the United States and in Florida. In 2008, it acquired Prairie,
one of the leading concrete and aggregate producers in the US Midwest with a presence in Illinois, Indiana, Michigan
and Wisconsin in the Great Lakes region.
Key Metrics
The company recorded revenues of $14,267 million in the fiscal year ending December 2011, an increase of 8.7%
compared to fiscal 2010. Its net income was $516 million in fiscal 2011, compared to a net income of $2,713 million in
the preceding year.

Table 19: Votorantim Group: key financials ($)
$ million 2007 2008 2009 2010 2011

Revenues 21,174.3 24,445.4 19,749.1 13,128.5 14,267.0
Net income (loss) 2,877.7 8.4 2,790.8 2,713.5 515.6
Total assets 69,449.3 79,648.5 61,139.7 75,691.7 80,448.0
Employees 55,046 61,834 64,200 42,361 38,700
Table 20: Votorantim Group: key financials (BRL)
BRL million 2007 2008 2009 2010 2011

Revenues 35,356.9 40,819.0 32,977.0 21,922.0 23,823.0
Net income (loss) 4,805.2 14.0 4,660.0 4,531.0 861.0
Total assets 115,966.5 132,997.0 102,091.0 126,390.0 134,332.0
Table 21: Votorantim Group: key financial ratios
Ratio 2007 2008 2009 2010 2011

Profit margin 13.6% 0.0% 14.1% 20.7% 3.6%
Revenue growth 6.2% 15.4% (19.2%) (33.5%) 8.7%
Asset growth 16.5% 14.7% (23.2%) 23.8% 6.3%
Liabilities growth 15.2% 23.9% (32.7%) 27.1% 7.8%
Debt/asset ratio 74.5% 80.4% 70.6% 72.5% 73.5%
Return on assets 4.5% 0.0% 4.0% 4.0% 0.7%
Profit per employee $52,278 $136 $43,470 $64,057 $13,324

Figure 18: Votorantim Group: revenues & profitability
Figure 19: Votorantim Group: assets & liabilities

APPENDIX
Methodology
MarketLine Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-
checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by
analysis from industry experts using highly complex modeling & forecasting tools, MarketLine’s in-house databases
provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company
profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market
overview
Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each
definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the
market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and
trends
MarketLine aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – MarketLine has developed powerful tools that allow quantitative and qualitative data to
be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can
then be refined according to specific competitive, regulatory and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

Industry associations
Asociacion de Fabricantes de Cemento Portland (AFCP)
Tel.: 0054 11 4576 7695
afcp.org.ar
Associaçao Brasileira de Cimento de Cimento Portland (ABCP)
www.abcp.org.br/
Instituto del Cemento y del Hormigon de Chile
Josué Smith Solar Nº 360 Providencia, Santiago - Chile
Tel.: 0056 2 726 03 00
Fax: 0056 2 726 03 23
www.ich.cl/
Related MarketLine research

Industry Profile
Cement in North America
Cement in Western Europe
Global Cement
Cement in Europe

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MarketLine Industry Profile

Reference Code: 0206-2031

Publication Date: October 2012

South America - Cement 0206 - 2031 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

Market value forecast

Market volume forecast

South America - Cement 0206 - 2031 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

Market value forecast ................................................................................................................................................. 2

Market volume forecast .............................................................................................................................................. 2

Geography segmentation ........................................................................................................................................... 2

Market Overview ............................................................................................................................................................ 7

Market definition ......................................................................................................................................................... 7

Market analysis .......................................................................................................................................................... 7

Market Data ................................................................................................................................................................... 8

Market Segmentation ................................................................................................................................................... 10

Geography segmentation ......................................................................................................................................... 10

Market Outlook ............................................................................................................................................................. 11

Market value forecast ............................................................................................................................................... 11

Market volume forecast ............................................................................................................................................ 12

Five Forces Analysis .................................................................................................................................................... 13

Buyer power ............................................................................................................................................................. 14

Supplier power ......................................................................................................................................................... 15

New entrants ............................................................................................................................................................ 16

Degree of rivalry ....................................................................................................................................................... 18

Leading Companies ..................................................................................................................................................... 19

CEMEX, S.A.B. de C.V. ........................................................................................................................................... 19

Holcim Ltd. ............................................................................................................................................................... 22

Lafarge S.A. ............................................................................................................................................................. 25

Votorantim Group ..................................................................................................................................................... 29

South America - Cement 0206 - 2031 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

Industry associations ................................................................................................................................................ 33

Related MarketLine research ................................................................................................................................... 33

South America - Cement 0206 - 2031 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

Table 6: CEMEX, S.A.B. de C.V.: key facts ................................................................................................................. 19

Table 7: CEMEX, S.A.B. de C.V.: key financials ($)..................................................................................................... 20

Table 8: CEMEX, S.A.B. de C.V.: key financials (MXN) ............................................................................................... 20

Table 9: CEMEX, S.A.B. de C.V.: key financial ratios .................................................................................................. 20

Table 10: Holcim Ltd.: key facts ................................................................................................................................... 22

Table 11: Holcim Ltd.: key financials ($) ...................................................................................................................... 23

Table 12: Holcim Ltd.: key financials (CHF) ................................................................................................................. 23

Table 13: Holcim Ltd.: key financial ratios .................................................................................................................... 23

Table 14: Lafarge S.A.: key facts ................................................................................................................................. 25

Table 15: Lafarge S.A.: key financials ($) .................................................................................................................... 26

Table 16: Lafarge S.A.: key financials (€) .................................................................................................................... 26

Table 17: Lafarge S.A.: key financial ratios .................................................................................................................. 27

Table 18: Votorantim Group: key facts ......................................................................................................................... 29

Table 19: Votorantim Group: key financials ($) ............................................................................................................ 30

Table 20: Votorantim Group: key financials (BRL) ....................................................................................................... 30

Table 21: Votorantim Group: key financial ratios ......................................................................................................... 30

South America - Cement 0206 - 2031 - 2011

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

Figure 2: South America cement market volume: million tonnes, 2007–11.................................................................... 9

Figure 4: South America cement market value forecast: $ million, 2011–16................................................................ 11

Figure 12: CEMEX, S.A.B. de C.V.: revenues & profitability ........................................................................................ 21

Figure 13: CEMEX, S.A.B. de C.V.: assets & liabilities ................................................................................................ 21

Figure 14: Holcim Ltd.: revenues & profitability ............................................................................................................ 24

Figure 15: Holcim Ltd.: assets & liabilities .................................................................................................................... 24

Figure 16: Lafarge S.A.: revenues & profitability .......................................................................................................... 27

Figure 17: Lafarge S.A.: assets & liabilities .................................................................................................................. 28

Figure 18: Votorantim Group: revenues & profitability .................................................................................................. 31