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Message from CEO

Sustainability is central to our business strategy and one of the keys to our future growth. As the largest concrete producer in the world, we have both a responsibility and a great opportunity to help lead the transition to a truly sustainable construction industry. That, in turn, would be a critical element of a low carbon economy.

The challenges of building the sustainable housing and infrastructure required by a growing global population are immense. Society needs innovations not only in design, materials, and construction processes, but also in creating access to green housing and infrastructure, especially for those who are in most need. CEMEX is committed to helping stimulate those innovations, while improving the sustainability of our own operations and increasing our social investment.

I am pleased to report that we made progress on all those fronts last year.

For example, although concrete is the most inherently sustainable building material, we intensified our work to improve its characteristics. This included developing concretes that improve structural strength, provide extra insulation or allow water to filter through.

We also introduced a carbon footprint tool- the first of its kind in the building materials industry- that allows us to measure the greenhouse gas emissions of our cement, ready-mix, and aggregates products. The tool has already been implemented in all of CEMEX’s operating cement plants, and is now being extended across our ready-mix and aggregates operations worldwide. As a result, we will begin to roll out carbon content information for our products during 2011.

We significantly increased the use of lower-carbon alternative fuels in our kilns. In 2010 our alternative-fuel use rose to 20.3 percent of our total fuel mix, almost doubling from the 10.3 percent recorded in 2008. Partly as a result, we are on course to avoid 25 percent of specific net CO2 emissions related to manufacture of cementitious products by 2015 compared to our 1990 baseline.

CEMEX has a longstanding and well-documented commitment to biodiversity and wilderness preservation. In concert with this tradition, last year we and our partners at BirdLife International completed a multi-year scoping study on the biodiversity status of our worldwide cement and aggregates operations. We assessed 543 sites and identified 131 sites that overlap with areas of high biodiversity value. We are using this study to develop biodiversity action plans.

During 2010, we continued our initiatives to build affordable housing and infrastructure in developing markets. Last year alone, more than 45,000 families were able to improve their homes through our Patrimonio Hoy program, bringing the total to more than 300,000 since we started the program in 1998. The World Business and Development Awards organized by the United Nations Development Program, the International Chamber of Commerce, and the International Business Leader Fund, recognized our contributions towards achieving the Millennium Development Goals through programs such as Centros Productivos de Autoempleo, which we expanded to Colombia in 2010.

Last year witnessed a number of extreme weather events and natural disasters that severely affected countries and communities where CEMEX operates. In response, we intensified our disaster relief efforts, providing emergency humanitarian aid and supporting long-term reconstruction efforts.

After the 2010 Haiti earthquake, CEMEX raised US$750,000 in company and employee contributions, with donations from more than 2,500 employees in 29 countries, to help support both emergency relief and reconstruction efforts. Additionally, we provided direct assistance in Haiti itself. After June’s catastrophic flooding in Central Europe, CEMEX focused on Poland and northeastern Hungary, where the damage was greatest. We provided machinery to help drain the water and clear roads, and donated construction materials to reinforce flood banks. In Northern Mexico, Hurricane Alex produced record-breaking rainfall during early July, creating widespread flooding and leaving thousands homeless or without access to water or electricity. CEMEX and our employees responded with significant donations of time, money and equipment as part of the cleanup, relief and reconstruction efforts.

An integral part of our sustainability commitment is our continuing, company-wide effort to improve workplace and community safety. The safety and well-being of our employees, contractors, and other third parties involved in our operations is paramount. While we made significant progress in many health and safety-related areas last year, we are profoundly sorry to report that in 2010 there were 46 employee, contractor and third-party fatalities related to our operations. This is unacceptable to us: we refuse to accept even one such tragedy as inevitable.

Zero tolerance for accidents requires constant innovation. In this spirit, we have continued to roll out the LEGACY training program globally. In 2011 we will launch new health and safety policies, implement our new Health and Safety Management System, and require greater accountability for safety performance from all our managers.

At CEMEX, we know that sustainability is a fundamental—and urgent—requirement of planetary survival, and we are deeply committed to pursuing an aggressive sustainability agenda in our industry, in our communities and in the countries where we operate. We have continued to work with a broad range of stakeholders—including customers, suppliers, employees, shareholders, neighboring communities, NGOs, universities and governments—to develop and promote best practices, innovative research and positive policy solutions.

For example, at the 2010 World Economic Forum in Latin America, we proposed a new model for urban development and urged new alliances among key stakeholders to finance housing projects. And, at the end of the year, CEMEX was an official sponsor of the COP 16 meeting in Cancun, Mexico, contributing to the global climate change debate with initiatives that highlighted how existing building and energy technologies can help the transition to a low carbon world.

Every CEMEX employee recognizes that sustainability requires constant effort, innovation and commitment both as individuals and as a company. We are grateful for the input of the Sustainable Development Reporting Advisory Panel in our ongoing effort to report more transparently on our challenges as well as our successes. Their guidance is invaluable to this process. At the same time, we invite feedback from all of our stakeholders and look forward to continually improving our performance in the coming years.

Sincerely,

Lorenzo H. Zambrano
Chairman of the Board and
Chief Executive Officer