building a STRONGER foundation - Cemex

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Our Operating Network in Spain Products and Distribution Channels Cement. Our cement operations represented approximately 61% of net sales for our operations in Spain before eliminations resulting from consolidation in 2010. CEMEX España offers various types of cement, targeting specific products to specific markets and users. In 2010, approximately 15% of CEMEX España’s domestic sales volume consisted of bagged cement, and the remainder of CEMEX España’s domestic sales volume consisted of bulk cement, primarily to ready-mix concrete operators, which include CEMEX España’s own subsidiaries, as well as industrial customers that use cement in their production processes and construction companies. 50
Ready-Mix Concrete. Our ready-mix concrete operations represented approximately 21% of net sales for our operations in Spain before eliminations resulting from consolidation in 2010. Our ready-mix concrete operations in Spain in 2010 purchased almost 91% of their cement requirements from our cement operations in Spain, and approximately 75% of their aggregates requirements from our aggregates operations in Spain. Aggregates. Our aggregates operations represented approximately 8% of net sales for our operations in Spain before eliminations resulting from consolidation in 2010. Exports. Exports of cement by our operations in Spain, which represented approximately 31% of net sales for our operations in Spain before eliminations resulting from consolidation, increased substantially in 2010 compared to 2009, primarily as a result of strategically increased exports to other countries, especially those located in Africa, to mitigate local volume declines. Export prices are usually lower than domestic market prices, and costs are usually higher for export sales. Of our total export sales from Spain in 2010, 3% consisted of white cement, 47% of gray cement and 50% of clinker. In 2010, 10% of our exports from Spain were to Europe and the Middle East, 89% to Africa and 1% to other countries. Production Costs. We have improved the efficiency of our operations in Spain by introducing technological improvements that have significantly reduced our energy costs, including the use of alternative fuels, in accordance with our cost reduction efforts. In 2010, we burned organic waste, tires and plastics as fuel, achieving, in 2010, a 33% substitution rate for petcoke in our gray and white clinker kilns for the year. During 2011, we expect to increase the quantity of these alternative fuels and to reach a substitution level of around 45%. Description of Properties, Plants and Equipment. As of December 31, 2010, our operations in Spain included 8 cement plants located in Spain, with an installed cement capacity of 11 million tons, including 1.1 million tons of white cement. As of that date, we also owned two cement mills and operated one mill under a lease contract, 23 distribution centers, including eight land and 15 marine terminals, 106 ready-mix concrete plants, 27 aggregates quarries and 12 mortar plants. As of December 31, 2010, we owned eight limestone quarries located in close proximity to our cement plants and five clay quarries in our cement operations in Spain. We estimate that, as of December 31, 2010, the limestone and clay permitted proven and probable reserves of our operations in Spain had an average remaining life of approximately 41 and 18 years, respectively, assuming 2006-2010 average annual cement production levels. As part of our global cost-reduction program we have made temporary capacity adjustments and rationalizations in several cement plants in Spain. During 2010, four out of our eight cement plants have partially stopped cement production. In addition to these partial stoppages, our Villanova plant, located in Tarragona, and our Escombreras grinding mill, located in Cartagena, were closed temporarily during 2009, and will only resume production on a need basis. Moreover, the San Vicente plant, located in Alicante, and the Muel grinding mill, located in Aragón, have been permanently shutdown. Additionally, approximately 7% of our ready-mix concrete plants in Spain have been also temporarily closed. Capital Expenditures. We made capital expenditures of approximately U.S.$177 million in 2008, U.S.$74 million in 2009 and U.S.$46 million in 2010 in our operations in Spain. We currently expect to make capital expenditures of approximately U.S.$39 million in our operations in Spain during 2011, including those related to the construction of the new cement production facility in Teruel, described above. Our Operations in the U.K. Overview. Our operations in the U.K. represented approximately 8% of our net sales in Peso terms, before eliminations resulting from consolidation, and approximately 6% of our total assets, for the year ended December 31, 2010. As of December 31, 2010, we held 100% of CEMEX Investments Limited (formerly RMC), the main holding company of our operating subsidiaries in the United Kingdom. We are a leading provider of <strong>building</strong> materials in the U.K. with vertically integrated cement, ready-mix concrete, aggregates and asphalt operations. We are also an important provider of concrete and precast materials solutions such as concrete blocks, concrete block paving, roof tiles, flooring systems and sleepers for rail infrastructure. The Construction Industry in the U.K. According to the U.K.’s Office for National Statistics, the level of GDP in 2010 as a whole in the U.K. was 1.4% higher than in 2009. Total construction output rose 5% in 2010, as compared to a 11% decline in 2009 over the preceding year. Both private and public sector housing grew, as did the rest of the public construction sector and infrastructure construction. According to the British Cement Association, domestic cement demand increased approximately 3% in 2010 compared to 2009. However, activity in the industrial sector was subdued, and commercial construction activity and repair and maintenance activity both experienced a decline. 51
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CEMEX 2010 20F REPORT building a ST
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Securities registered or to be regi
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Qualitative and Quantitative Market
Page 9 and 10: INTRODUCTION CEMEX, S.A.B. de C.V.
Page 11 and 12: As a result of the foregoing transa
Page 13 and 14: In the U.S., the recession was long
Page 15 and 16: The Financing Agreement contains ev
Page 17 and 18: The Financing Agreement restricts u
Page 19 and 20: During 2009, we reduced the aggrega
Page 21 and 22: The instruments governing our debt
Page 23 and 24: On the legislative front, during th
Page 25 and 26: Our operations in South America, Ce
Page 27 and 28: the depositary to vote the CPOs und
Page 29 and 30: Beginning in 2008, MFRS B-10 has el
Page 31 and 32: (1) Cost of sales includes deprecia
Page 33 and 34: Item 4 - Information on the Company
Page 35 and 36: As a condition to closing the RMC a
Page 37 and 38: Provide our customers with the best
Page 39 and 40: In connection with the implementati
Page 41 and 42: In 2010, as a result of our efforts
Page 43 and 44: In addition, we are one of the worl
Page 45 and 46: (2) Our cement raw materials operat
Page 47 and 48: Our Corporate Structure We are a ho
Page 49 and 50: Cement in Mexico is sold principall
Page 51 and 52: Aggregates. Our aggregates operatio
Page 53 and 54: Beginning on June 30, 2008, Ready M
Page 55 and 56: Products and Distribution Channels
Page 57: On December 26, 2008, we sold our C
Page 61 and 62: Aggregates. In 2010, we reduced fix
Page 63 and 64: Our Operating Network in France Des
Page 65 and 66: In April 2006, we initiated an expa
Page 67 and 68: Our Operating Network in Colombia P
Page 69 and 70: Our Operations in Nicaragua Overvie
Page 71 and 72: Our Operations in the United Arab E
Page 73 and 74: Our Trading Operations In 2010, we
Page 75 and 76: On December 10, 2010, after receivi
Page 77 and 78: To prevent, control and remediate e
Page 79 and 80: As required by the directive, each
Page 81 and 82: For the 2010 fiscal year, CEMEX wil
Page 83 and 84: Separately, the government of Venez
Page 85 and 86: and CEMEX was required by August 11
Page 87 and 88: January 1, 2008, however, under MFR
Page 89 and 90: foreign subsidiaries. These instrum
Page 91 and 92: Valuation reserves on accounts rece
Page 93 and 94: Stage 1. Communication to the organ
Page 95 and 96: Year Ended December 31, 2010 Compar
Page 97 and 98: Geographic Segment 89 Variations in
Page 99 and 100: United Kingdom Our domestic cement
Page 101 and 102: ended December 31, 2010, Africa and
Page 103 and 104: Operating Income. For the reasons m
Page 105 and 106: Our comprehensive financing result
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Mexico Our domestic cement sales vo
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As a result of the decreases in dom
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For the year ended December 31, 200
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South America, Central America and
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On August 14, 2009, we entered into
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As of December 31, 2010, we had U.S
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Our Perpetual Debentures As of Dece
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The Financing Agreement, as amended
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In 1999, CEMEX entered into an agre
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Our Equity Derivative Forward Contr
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As of December 31, 2009 and 2010, C
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In addition, we have entered into f
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Private Cash Tender Offer to Holder
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Name, Position (Age) Experience Jai
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Name, Position (Age) Experience Ram
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Tomás Milmo Santos (46) Has been a
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Set forth below are the names of th
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Consolidated ESOP Information Stock
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Item 7 - Major Shareholders and Rel
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The following table sets forth the
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Item 10 - Additional Information Ar
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exempt from registration pursuant t
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Our board of directors shall prepar
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Under our by-laws, shareholders rep
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On June 2, 2008, CEMEX, through one
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Exchange Controls See “Item 3 —
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The gross amount of any dividends p
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We have agreed to pay some of the o
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Item 16G - Corporate Governance Sec
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Item 17 - Financial Statements Not
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4.17 Debenture Purchase Agreement,
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4.27.3 Amendment No. 1 to U.S.$525,
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4.41.4 Accession Letter, dated Janu
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4.57 Amended and Restated Dealer Ma
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SIGNATURES CEMEX, S.A.B. de C.V. he
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The Board of Directors and Stockhol
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CEMEX, S.A.B. DE C.V. AND SUBSIDIAR
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1. DESCRIPTION OF BUSINESS CEMEX, S
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C) USE OF ESTIMATES CEMEX, S.A.B. D
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J) IMPAIRMENT OF LONG LIVED ASSETS
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Contingencies and commitments (note
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V) CONCENTRATION OF CREDIT CEMEX, S
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Net sales by product and geographic
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4. CASH AND INVESTMENTS CEMEX, S.A.
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II. Equity forwards in third party
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14. EMPLOYEE BENEFITS Defined contr
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17. EXECUTIVE STOCK-BASED COMPENSAT
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18. EARNINGS (LOSS) PER SHARE CEMEX
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D) CONTRACTUAL OBLIGATIONS CEMEX, S
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Reconciliation of stockholders’ e
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(k) Other U.S. GAAP Adjustments Def
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building a STRONGER foundation - Cemex

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