SOLID GROWTH

Colombia 2015 | CONSTRUCTION & REAL ESTATE | COLUMN

TBY talks to Carlos Jacks, CEO of CEMEX Latam Holdings, on cement sector.

Carlos Jacks

What regional dynamics explain your growth?

Over the past three years, we have doubled our business. Regionally, the Caribbean Coast is the most dynamic market, largely due to the free trade agreements (FTAs) and the condition of its infrastructure. It's clearly an advantage for exporters to be located on the coast. Three years ago, we had limited participation on the Caribbean Coast, but since then we have tripled our market share. The Caribbean is experiencing strong growth. In terms of sectors, housing has been the main driver of demand of our products, although going forward we expect a higher contribution from the infrastructure sector. To provide some context, the fourth generation of concessions, which represents an investment of about $26 billion, is expected to be deployed over a period of five years, starting in around 2016. If we assume an average of $5 billion dollars per year, and given that cement intensity for large-scale infrastructure projects stands at around 10%, this translates into about $500 million dollars per year invested in cement. At current cement prices this results in more than 2 million tons per year in a market that consumes around 12 million tons of cement. Even with conservative assumptions, this program could have a significant impact on consumption. And in addition, we would need to consider demand from the housing sector, PPPs projects, and regional infrastructure works, among others.