A railroad trestle leads from the Oklahoma Portland Cement Co. plant in Ada, Okla., in the 1940s.
Tough times

Lafarge, Holcim, Cemex, and HeidelbergCement have all announced divestment plans for 2009. It has been just a little more than two years since Heidelberg, in one of the biggest deals in the industry's history, bought Hanson Inc. for more than $13 billion. And the economy already has forced it to sell the company off in parts. In August, Heidelberg put Hanson's UK building products division up for sale. This news came only days after Heidelberg sold Hanson-Israeli to Israel's IDB Holding Corp. for $120 million.

All of the major cement producers lost money in the first quarter of 2009. “ e decline that we're seeing is global,” Ed Sullivan, the Portland Cement Association's chief economist, says of the current industry.

Lafarge, not only the world's leading cement producer but also a leading producer of gypsum, aggregate and concrete, and North America's largest producer of cement, announced a $1 billion divestment plan in 2009. That has resulted in the sale of interests in Turkey and Italy. Divestments already total more than $200 million.

Until 2007, Cemex was the fastest growing cement company in the world. But since its $15.3 billion purchase that year of the Australian cement company Rinker, Cemex has been selling assets to pay down the $14.5 billion debt it owes to the banks over the next three years. This year, Cemex has $5.7 billion worth of debt coming due.

Cemex was trying to strengthen its presence in the U.S. But the acquisition came shortly before the collapse of the U.S. housing market. Florida, home to many of the former Rinker concrete plants, was ground zero in the housing collapse.

Holcim Ltd., the world's second largest cement producer, introduced a “cost-cutting program” and a “rapid-reduction in [production] capacity,” according to its 2009 first quarter report. This included shutting down two mills in the U.S.—one in Dundee, Mich., and the other in Clarksville, Mo.—and cutting 1500 American jobs.

In 2006, Lafarge moved to acquire all of Lafarge North America, and thus own 100% of the company. Like Cemex's Rinker purchase, the move was meant to bolster the company's position in the burgeoning U.S. housing market. Lafarge was hurt by the collapse of the residential market, but because of its relative lack of debt, the company was able to, at least momentarily, weather the downturn.

Lafarge spokeswoman Serene Jweied says that its pre-emptive cost-cutting and divestment have satisfied investors. This has helped Lafarge avoid a plunge in profits and allowed it to acquire companies in developing nations, according to Jweied. In early 2008, Lafarge bought Egypt's Orascom for $12.8 billion.

Just two years after Cemex aggressively sought to increase its share of the American market, North America seems to have fallen out of favor.

All of the major companies' first quarter reports highlight growth in Latin America, Pacific Asia, and the Middle East as strengthening areas of the globe as the decade nears an end. Conversely, all except Heidelberg reported losses in North America.