building a STRONGER foundation - Cemex

Our Trading Operations
In 2010, we traded approximately 8.7 million tons of cementitious materials, including 7.9 million tons of cement and clinker.
Approximately 82% of the cement and clinker trading volume in 2010 consisted of exports from our operations in Colombia, Costa
Rica, Croatia, the Dominican Republic, Germany, Guatemala, Latvia, Mexico, Philippines, Poland, Puerto Rico, Spain and the U.S.
The remaining approximately 18% was purchased from third parties in countries such as Belgium, China, Colombia, Croatia, Greece,
Lithuania, Pakistan, Slovakia, South Korea, Taiwan, Thailand and Turkey. As of December 31, 2010, we had trading activities in 101
countries. In 2010, we traded approximately 0.8 million metric tons of granulated blast furnace slag, a non-clinker cementitious
material.
Our trading network enables us to maximize the capacity utilization of our facilities worldwide while reducing our exposure to
the inherent cyclicality of the cement industry. We are able to distribute excess capacity to regions around the world where there is
demand. In addition, our worldwide network of strategically located marine terminals allows us to coordinate maritime logistics on a
global basis and minimize transportation expenses. Our trading operations also enable us to explore new markets without significant
initial capital expenditure.
Freight rates, which account for a large share of the total import supply cost, have been subject to significant volatility in recent
years. Our trading operations, however, have obtained significant savings by contracting maritime transportation in due time and by
using our own and chartered fleet, which transported approximately 18% of our cement and clinker import volume during 2010.
In addition, based on our spare fleet capacity, we provide freight service to third parties, thus providing us with valuable
shipping market information and generating additional revenues.
Regulatory Matters and Legal Proceedings
A description of material regulatory and legal matters affecting us is provided below.
Anti-Dumping
Jamaica Anti-dumping Investigation. On September 9, 2010, Jamaica’s Anti-Dumping and Subsidies Commission (the “Jamaica
Commission”) issued a preliminary affirmative anti-dumping determination in its investigation of cement from the Dominican
Republic. The Jamaica Commission based its determination on a preliminary finding of a “threat” of material injury to the sole
domestic cement company (Caribbean Cement Company Limited, or CCCL). A majority of the Jamaica Commission preliminarily
found that the case concerning present material injury was “inconclusive.” Significantly, the Jamaica Commission was “not
persuaded” that “provisional tariffs” were necessary to prevent material injury to CCCL during the period between the preliminary
determination and the final determination. Therefore, even though the Jamaica Commission preliminarily calculated an anti-dumping
margin of 84.69% against the Dominican Republic, no duties were imposed. On December 8, 2010, the Jamaica Commission issued a
negative ruling in the case brought by CCCL against imports of cement from the Dominican Republic. The Jamaica Commission
found no evidence of material injury to the domestic industry and has closed the investigation. However, CCCL may file an appeal to
this ruling.
As of April 30, 2011, there was no accrued liability for dumping duties. All liabilities accrued for past anti-dumping duties have
been eliminated.
Antitrust Proceedings
Polish Antitrust Investigation. Between May 31, 2006 and June 2, 2006, officers of the Polish Competition and Consumer
Protection Office, or the Protection Office, assisted by police officers, conducted a search of the Warsaw office of CEMEX Polska,
one of our indirect subsidiaries in Poland, and of the offices of other cement producers in Poland. These searches took place as a part
of the exploratory investigation that the head of the Protection Office started on April 26, 2006. On January 2, 2007, CEMEX Polska
received a notification from the Protection Office informing it of the formal initiation of an antitrust proceeding against all cement
producers in Poland, including CEMEX Polska and another of our indirect subsidiaries in Poland. The notification alleged that there
was an agreement between all cement producers in Poland regarding prices and other sales conditions of cement, an agreed division of
the market with respect to the sale and production of cement, and the exchange of confidential information, all of which limited
competition in the Polish market with respect to the production and sale of cement. On December 9, 2009, the Protection Office
delivered to CEMEX Polska its decision against Polish cement producers related to an investigation which covered a period from
1998 to 2006. The decision imposes fines on a number of Polish cement producers, including CEMEX Polska. The fine imposed on
CEMEX Polska is approximately Polish Zloty 115.56 million (approximately U.S.$43.51 million as of April 30, 2011, based on an
exchange rate of Polish Zloty 2.6559 to U.S.$1.00), which is approximately 10% of CEMEX Polska’s total revenue in 2008. CEMEX
Polska disagrees with the decision, denies that it committed the practices alleged by the Protection Office and filed an appeal before
the Polish Court of Competition and Consumer Protection on December 23, 2009. The Polish Court of Competition and Consumer
Protection confirmed that CEMEX Polska’s appeal met preliminary formal requirements and that it would conduct the case. On
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