Posted on 11/15/2004 9:43:30 AM PST by Willie Green
For education and discussion only. Not for commercial use.
Mexican cement company Cemex SA said Monday it has signed a letter of intent to sell two cement plants in the U.S. to Brazil's Grupo Votorantim for US$400 million (euro308 million.)
In a news release, Cemex said it began evaluating options for the Charlevoix and Dixon-Marquette cement plants at the beginning of the year, after reviewing its strategic position in the United States.
Votorantim presented a non-binding offer for the cement plants as well as related operating assets in the Great Lakes area. The deal was expected to close in the first quarter of 2005.
Cemex said it will use proceeds to either pay down debt or reduce the level of debt required for its US$5.8-billion (euro4.5-billion) acquisition of Britain's RMC Group PLC in September.
The company said production capacity of the two cement plants totaled close to 2 million metric tons a year, or about 10 percent of the operating cash flow generation of its U.S. business.
The deal marks Cemex's first major divestment after the RMC deal and comes at a time when the global cement industry appears to be entering a new phase of consolidation.
Cemex has been under pressure to reduce its debt. On Nov. 10, Standard & Poor's left the company's credit rating untouched, but left open the possibility of a downgrade.
For Votorantim, Brazil's largest diversified industrial conglomerate, the deal will be the latest in a series of acquisitions by its cement unit. The transaction will also be the latest in a growing trend of Brazilian companies buying assets in North America.
But, in general, the protective system of our day is conservative, while the free trade system is destructive. It breaks up old nationalities and pushes the antagonism of the proletariat and the bourgeoisie to the extreme point. In a word, the free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favor of free trade.
~Karl Marx, "On the Question of Free Trade" - January 9, 1848
ping
I think this is a good sign. We need better trade relations with Brazil.
"There's no reason anyone would want to hire American workers when they'll work for a tenth as much in Mexico. "
You're right. They bring in illegals to work in America. But it's okay, because soon they will get full SS benefits when they return back to Mexico. Check out the new Totalization agreement that the State Dept. and SSA just signed with Mexico.
Actually, yes, one of these Mexican Cemex plants is located in my hometown, Santa Clarita, CA. This city is located in Los Angeles County, so you might be wondering why the Mexican gov't would be willing to spend so much more in labor than if their plants were located domestically. I am too, especially considering that a vote was just held on whether or not the plant should legally be allowed to expand to 400% of what it is currently. They hire American workers and drive American trucks with American drivers, so who knows? Only they do. My guess is that it is cheaper overall to use existing plants and ship the product than to open entire new plants in places where cement may not be as bountiful. That, or they are following the US policy with oil and depleting the rest of the world's oil supply while conserving their own in case of emergency...
Is this another evil plot to reduce production?
Perhaps, when the timing is right.
Afterall, that IS the risk when our productive industries are controlled by hostile foreign nations.
I wonder if any cement plant in the US is US-owned anymore. Seems like they're all owned by German, Dutch, or Mexican companies.
Another way to siphon our tax dollars by overcharging on highway construction projects?
Cement is only one of the ingredients in concrete. ;O)
just because he was "for the worker" doesn't mean that being "for the worker" is a bad thing. ditto, free trade.
his conclusions are not Writ, are very apt to be fanciful, and we all know that his key premises were incorrect.
Those rascally foreigners. Aren't they worried we might nationalize those plants to thwart their plot?
Are you ever going to produce any facts to support your theory that globalism reduces productive capacity and drives up prices for commodities? Or is that just another Willie pipe dream, like your train fantasies?
Cement is an infrastructure industry in any developed nation.
Without it, you're back to living in mud huts and traveling on dirt paths.
Yep, we've got a Cemex plant right down the road here in Longmont, Colorado. They're always in trouble for pollution violations.
Same company owns a cement plant in South Dakota. The plant was long owned by the state, but was sold in a very hasty manner by a former Governor and railroaded through a special session of the legislature with only 4 legislators hand picked by the governor being allowed to see the contract.
Anybody calling itself "the invisib1e hand" should already know that Marx's analysis of the economic consequences of free trade was in complete agreement with other classical economists like Adam Smith and David Ricardo. It is only his proposal to construct a utopian collectivist alternative that was in dismal error.
My bad. I missed this in Smith. Perhaps I had the revisionist edition.
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