CEMEX begin RMC integration process
CEMEX of Mexico are now some five weeks into the post-merger integration (PMI) of the RMC Group, following completion of their £2.3 billion acquisition of the UK-based firm on 1 March.
Taking charge of the PMI process in the UK is Jesus Saenz, who has been seconded to the task from his usual role as CEMEX’s vice-president of strategic planning in Egypt. Mr Saenz says he expects this phase to last six to eight months, by which time most of the major organizational changes will have taken place.
‘It is my job to see that the PMI runs smoothly, delivers its objectives and completes on time,’ said Mr Saenz. ‘I will be responsible for defining and managing the integration, while RMC’s UK management, reporting to Fernando Gonzalez, head of CEMEX’s new European region, will manage the day-to-day-business of the company.’
Based on lessons learned during the company’s rapid growth since the early 1990s, CEMEX say they have developed a PMI process that is fast, fair and focused. The process will prepare RMC for adoption of CEMEX’s business method as well as identifying cost savings and ensuring talent retention at all levels of the operation. To achieve this, CEMEX say there will be a clearly defined decision process backed up by dedicated resources from both companies.
About 50 CEMEX personnel from around the world will be coming to the UK for the PMI. They will be joined by a number of former RMC staff who will also be directly involved the in the process. A further team will be involved in the second phase of the PMI to implement a common business platform.
‘After PMI, the UK business will be stronger and more efficient, with a shared culture and values, common processes and a unified strategy,’ said Mr Saenz. ‘There is no doubt that achieving this, at the same time as keeping the business running efficiently and profitably, will be a challenge. But the result, I believe, will be well worth the effort.’
Following the integration of RMC, CEMEX will have operations in over 50 countries and will be the world’s second largest integrated heavy building materials group. The company will produce an estimated 97 million tonnes of cement annually, enhancing their position as the third largest cement company in the world. They will also become the largest ready-mixed concrete company in the world, with a production capacity of 77 million cubic metres. Additionally, the combined company will become the world’s fourth largest aggregates company.
CEMEX say they expect to achieve approximately US$200 million (£112 million) of annual synergies by 2007 by standardizing some management processes, capitalizing on trading network benefits, consolidating logistics and improving global procurement and energy efficiency. The acquisition is also expected to be immediately accretive to free cash flow and cash earnings per share.
