building a STRONGER foundation - Cemex

The construction industry has recently experienced the worst downturn in over 70 years as the fallout from the collapse of the
housing sector caused massive losses in the financial sector, which resulted in extremely tight credit conditions and a deep U.S.
recession that started in December 2007 and ended in June 2009. Under these conditions, cement demand declined 44% from 2006 to
2009. Expansionary monetary and fiscal policies resulted in more stable conditions in 2010, with real GDP growth of 2.9%. As a
result, cement demand stabilized in 2010, declining, however, 1% from 2009. After a 73% decline in housing starts from 2005 to
2009, the housing sector stabilized in the second half of 2009 and improved slightly in 2010, with housing starts up 6%. Nominal
construction spending for the industrial and commercial sector lagged the decline in the economy by a year, with declines of 26% in
2009 and 33% in 2010. Industrial and commercial contract awards, which drive future spending for this segment, declined 19% in
2010, but the pace of its year-over-year decline moderated to 10% in the final quarter of 2010 when compared to 40% in the first
quarter of 2010. Nominal construction spending for the public sector remained more resilient during the recession, increasing 9% in
2008 and 1% in 2009 before declining 6% in 2010. Overall, we believe that cement demand should start growing again as the
economic recovery leads to more job creation and better credit conditions.
Competition. The cement industry in the U.S. is highly competitive. We compete with national and regional cement producers in
the U.S. Our principal competitors in the United States are Holcim, Lafarge, Buzzi-Unicem, Heidelberg Cement and Ash Grove
Cement.
The independent U.S. ready-mix concrete industry is highly fragmented. According to the National Ready Mixed Concrete
Association (“NRMCA”), it is estimated that there are about 6,000 ready-mix concrete plants that produce ready-mix concrete in the
U.S. and about 70,000 ready-mix concrete mixer trucks that deliver the concrete to the point of placement. The NRMCA estimates
that the value of ready-mix concrete produced by the industry is approximately U.S.$30 billion per year. Given that the concrete
industry has historically consumed approximately 75% of all cement produced annually in the U.S., many cement companies choose
to develop concrete plant capabilities.
Aggregates are widely used throughout the U.S. for all types of construction because they are the most basic materials for
building activity. The U.S. aggregates industry is highly fragmented and geographically dispersed. According to the U.S. Geological
Survey, during 2010 an estimated 3,900 companies operated approximately 6,000 sand and gravel sites and 1,600 companies operated
4,000 crushed stone quarries and 91 underground mines in the 50 U.S. states.
Our Operating Network in the United States. The maps below reflect the location of our operating assets, including our cement
plants and cement terminals in the United States (including the assets held through the Ready Mix USA LLC joint venture) as of
December 31, 2010.
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