During the time of the pandemic, the cement in Mexico it has suffered important challenges ranging from higher prices to conflicts in groups, which create a complex scenario for builders and developers, the main consumers of the input.
During the first three months of the year, input inflation has reached levels not seen since August 2017, when the rise in prices began to slow down, even reaching negative rates.
According to data from the National Institute of Statistics and Geography (Inegi), in the first three months of the year the increase at the annual rate of the prices of cement exceeded 12% each month, thus accumulating inflation of 13% in the first quarter, compared to the same period last year.
Since 2017, the price of cement it did not register increases in prices at rates such as those reported at the start of 2022, since in almost five years it did not exceed double-digit increases.
An industry concentrated in a few
In Mexico, the producers of cement They are concentrated in six main groups:
- Blue Cross Cements
- Fortress Cements
- Moctezuma Cements
- Cemex, Grupo Cementos Chihuahua (GCC)
- Holcim
The six companies as a whole make up the National Chamber of Cement (Canacem).
Among the companies, Cemex is the one with the largest number of plants, with 14 units distributed throughout the country, according to information available at Canacem.
In the first quarter of this year, the company reduced its production of cement consolidated, with 15,776 metric tons, according to its recently published financial results; however, revenues from net sales grew 13% annually.
In the case of GCC, another company with public information, informed its investors that in the first three months of this year the production of cement and specified moderated with respect to the results of 2021, but the increase in prices allowed to improve sales.
“In Mexico, sales represented 35% of consolidated net sales and increased 7.5% to 71.4 million (dollars) in the first quarter of 2022. This result was derived from a 9.2% increase in ready-mix volumes and a increase of 11.7% and 8.1% in the prices of cement and concrete, respectively.
“This was partially offset by a 4.7% decline in sales volumes. cement”, detailed the company in its financial results.
Lawsuit in Cruz Azul, an old conflict
The Blue Cross, which has cements Cruz Azul, as well as Concretos y Cementos Nacionales (CYCNA) and CYCNA de Oriente, carries the weight of being part of the history of the first cement companies in the country, specifically for its plant in Hidalgo.
However, its problems were accentuated by the recent riots at the Tula plant, which left eight people dead and at least 11 injured. The problems began a couple of years ago, still under the reins of Guillermo “Billy” Álvarez Cuevas, a former director, who in August 2020 was booked by Interpol for organized crime and resources of illicit origin.
In April 2020, after spending more than 32 years in the general directorate, Álvarez Cuevas filed an amparo against any arrest warrant against him; However, at the end of May of that same year, his accounts, along with those of Víctor Garcés, former vice president of the Cooperative’s sports team, were blocked by the Financial Intelligence Unit for alleged money laundering.
In August of that same year, Guillermo Álvarez presented his resignation as head of the general management and that same month members of a dissident group, led by José Antonio Marín and Víctor Manuel Velázquez, tried to take over cement plants in Hidalgo.
That same year, Federico Sarabia was appointed general director of the cooperative, in a meeting held outside the central offices in Mexico City, which, according to the dissident group, was invalid as it did not comply with the statutes established by the cooperative. law.
Cooperativism, a scheme regulated by law
Most of the producers of cement in Mexico they have been consolidated as companies, most of them public; however, La Cruz Azul, which has four plants distributed in Hidalgo, Oaxaca, Puebla and Aguascalientes, operates under the cooperative society scheme.
In accordance with current law, cooperatives are production companies, constituted with a general assembly, a board of directors and a supervisory board. Each of the members are partners and distribute the annual returns according to the contribution of each one.
The general assembly is the highest authority of this scheme and its agreements reached by majority must be followed by the rest of the partners.
This type of organization, in addition to having the support of the state and municipal governments for educational institutions that establish these movements, will also be exempt from the payment of certain federal taxes and support will be channeled to the extent possible.
“The federal governments, the federal entities, the municipal governments and the territorial demarcations of Mexico City, will support, in the territorial scope in their charge and to the extent of their possibilities, the development of cooperativism”, according to article 93 of the General Law of Cooperative Societies.
“The Ministry of Finance and Public Credit must, in common agreement with the Superior Council of Cooperatives, with the confederations, federations and unions, set up guarantee funds of federal origin that will support cooperative societies in their access to credit, by granting of guarantees that cover the risk of investment projects”, details article 94 of the aforementioned legislation.