Topics: United Kingdom, United Arab Emirates, United States Pages: 3 (969 words) Published: January 22, 2013
1. Explain the benefits that CEMEX and the other global competitors in cement have derived from globalization - how can cross-border activities add value in an industry as apparently localized as cement? CEMEX had just exported cement to the United States in low prices than Mexico. After time goes by, The United States’ producers had banded together to lodge an antidumping petition to protect their industry from Mexico’s dumping prices. After all, the U.S. International Trade Commission (ITC) imposed a countervailing duty on CEMEX’s exports from Mexico to the United States. After that, CEMEX started to focus on globalization especially Foreign Direct Investment (FDI). So they acquired The United States’ cement plant in Texas. This was the start to focus on cross-border activities. And it has given many benefits to them. The one of the reasons was avoiding traffic barriers. On the other side, CEMEX and the other global competitors are handling cement which is bulky and heavy. So one of the big concerns is transportation cost. If they export the cement, they should pay enormous transportation costs. And it also should be involved in cost which is paid by customer. Therefore, they will lose their price competitiveness or margin by reducing the cost. So reducing the transportation costs is the one of the reasons to do FDI. They could also save the time to deliver by placing the plants in each country. Especially in case of the CEMEX, they’re even using satellites to link dispatchers, truckers, and customers in a system so that utilizing delivery system. So they guarantee delivery within 20 minutes as well. This is also the reason they do FDI. And another one, Cement industry is very sensitive to GDP growth, interest rates, and other macroeconomic factors, and etcetera. They’re not only concentrating on their home country, but also doing FDI to reduce the risks by diversification to get stable revenues as well. The last one is that cement plants have to be closed to...
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