One CEMEX – Stronger Together

Fernando Gonzalez launched the Stronger CEMEX initiative in July and CEMEX Europe is moving rapidly to realign into a single business to enable us to maximise safety, to act as one CEMEX and maximise our returns.   

Jaime Elizondo, CEMEX Europe President presented the new structure to colleagues in The European Consultative Committee in Windsor, UK in September and then immediately embarked on a 10-day tour of the European businesses to explain the concept to other co-workers. The picture above is from his meeting in Rugby.

The main features of the new business are:

The role of Country and Country management is no longer part of the CEMEX Europe management model. Instead Jaime Elizondo will lead the European business directly and be closely supported by a senior team of direct reports who will be based in every Country in the region but be aligned functionally.

Jaime Elizondo remains as Europe Region President with a management team as shown below:

Jaime Elizondo used the above chart to illustrate how the business will now function. His headline messages were that safety remains our top priority and the business will be managed with a much more purposeful commercial focus.  There are three businesses which will be managed directly by Jaime Elizondo through the management team and these comprise:

  1. Cement – comprised of the three areas of Cement Commercial, Supply Chain now including Procurement and Cement operations.
  2. Materials – comprising Aggregates and Readymix will be managed by Western and Central management teams who will bring focus to their respective areas of UK, France and Spain for West, and Germany Czech , Poland and Latvia and Croatia for Central.
  3. Related Businesses – including Asphalt and Paving, Building Products and Admixtures will focus on the management of the existing businesses in these areas with a view to optimising growth opportunities in these areas in the region.

Jaime Elizondo will also be supported by several staff functions with region wide responsibility and these include Health and Safety, Planning, Communication and CSR, Sustainability, Public Affairs and Human Resources.

The meetings with our colleagues went well with people being excited by the opportunities that the new model will bring for CEMEX Europe. As a Region we will be closer to the customers and much more focused on value added. The new structure will help us to improve interaction through Europe and Globally. The President stressed that Europe has a clear vision of how it can deliver financial and organisational benefits, but it takes time to adapt to the new reality.

Why Is there a New Europe Structure?

Jaime Elizondo emphasised during meetings that we have made good progress in most of our company’s top priorities: Health & Safety, Customer Centricity and One Global CEMEX. In the future our processes need to be more dynamic and effective. Additionally, long term project planning is needed in CEMEX to strengthen our market position. To fully exploit market opportunities, we need to speed up processes and activities, to become closer to our customers and to act as ONE CEMEX.

As part of the initiative to accelerate our path to investment grade, the Board of Directors and Management Team decided to implement a new organisational model region of CEMEX Europe, in which business divisions responsible for the area will be operating instead of national structures. This change is to improve efficiency and effectiveness of our organization and speed up decision-making.

What Is the New Europe Structure?

The region will be managed as one business unit, with one Executive Management Team. There will be no Country Presidents or Country Management Boards as before. It is a leaner business with reduced layers and wider spans of control, and some roles will change.

When will the New Europe Structure be in place?

The new Europe structure was officially announced Tuesday September 11th, 2018 and became effective in October 2018. Definitions of roles and reporting lines are now being worked on by the management team above and there will be further announcements as soon as these are clear.

During the meetings many questions were asked by our managers – please see a summary of these below:

Is this change happening because CEMEX is in financial difficulty?

No, we are not in financial problems, but originally expected results have not been achieved because of significant headwinds in some of our business units, as well as important increases in energy and transportation costs. As our CEO commented, we want to resume our growth as soon as possible, and to accelerate our path to regain our investment grade. Our management team is committed to proactively manage the business to create long-term value. We remain confident in our long-term outlook for our portfolio and CEMEX’s ability to grow organically.

Has our digital transformation resulted in increased expenses that need to be offset with cost reduction initiatives?

No – they are a result of an extensive review by the company to optimise margins and position CEMEX for future growth. CEMEX Go has dramatically improved the way that CEMEX interacts with our customers and has been a driving factor in our ability to retain and grow our customer base which will further improve our capacity to generate resilient and sustainable earnings.

Where will the Senior Management Team members be based?

They will be based in a number of our Europe office locations including Madrid, Warsaw, Paris, Rugby and Berlin.

How long will it take for the new Europe Structure to be in place?

As the changes are implemented through the levels of the business, larger numbers of roles are affected so it will take some months to complete the new structure.