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			Research and development CEMEX Mexico's research laboratory is introducing more than one new product each year.


		NORTH AMERICA Market Highlights Mexico – Nineteen ninety-nine was once again a record year for CEMEX Mexico. The company experienced continuing high demand from the self-construction sector, which comprises 40% of the domestic market. Human Resource Development – CEMEX Mexico’s record performance is testament to its talented people and ongoing employee development programs. It implements programs at all levels of the organization, from basic educational training (elementary and high school) to customized executive management programs. For example, the Developing Professionals Program complements the recruiting process by teaching CEMEX’s operating fundamentals to high-potential college graduates to ensure their smooth transition into the company. In 1999, more than 50 new hires participated in this program. United States – The booming U.S. economy, which has fueled seven consecutive years of construction growth, led to significant new building projects for CEMEX USA. Noteworthy construction projects include the: Enron building and Highway 59 expansion in Houston, Texas; Federal courthouse, Mayo hospital, and Phase II of the Squaw Peak freeway in Phoenix, Arizona; Williams Gateway runway expansion in Queen Creek, Arizona; Temecula mall in Inland Empire, California; and Camp Pendleton military base in Oceanside, California.

		Value Opportunities Research and Development – CEMEX Mexico’s state-of-the-art laboratory continues to exceed its goal of introducing at least one new product every year. Since its 1997 opening, it has developed five new ready-mix products, accounting for over 20% of 1999 concrete sales. The facility is on track to launch two new products in 2000. Energy Efficiency – To increase cost effectiveness, CEMEX Mexico continuously tests alternative sources of fuel for its plants. Over the last three years, it has greatly diversified its energy sources to obtain the lowest-cost energy for its plants and to minimize periods of energy market volatility. United States – The American Concrete Pavement Association estimates that the Transportation Equity Act for the 21st Century (TEA-21) could increase government outlays for highways and bridges by more than 40% over the next six years. The major impact of TEA-21 on cement and aggregates demand should begin to be seen during the first half of 2000, and the bottom-line contributions to CEMEX USA should start to appear during the second half of the year. Strategic Position – CEMEX’s position as the largest cement and clinker trader in the world gives CEMEX USA a distinct competitive advantage. By working closely with CEMEX’s trading operations and utilizing its strategically positioned cement terminals, CEMEX USA has the flexibility to import cement from virtually any country in the world – a key profitability driver.
Preferred brand CEMEX's ready-mix concrete is the brand used at construction sites across Houston, Texas, and the southwestern United States.	.
By increasing capacity in diverse high-growth markets, CEMEX has become an active player in the world’s cement industry consolidation.		. SOUTH AMERICA & CARIBBEAN Market highlights Central America and the Caribbean – CEMEX consolidated its presence in Central America and the Caribbean by acquiring a 95% stake in Cementos del Pacifico, Costa Rica’s largest cement producer. Its 850,000-metric-ton cement plant is located near the Nicaraguan border and exports about 100,000 metric tons of cement annually to that market. CEMEX also acquired two terminals in Haiti, which supply almost 70% of the local market. Regional Integration – Using Venezuela as a base for shared services in the South America and Caribbean region, CEMEX fully integrated the administrative and financial functions in the six countries in which it has majority control and management. For example, CEMEX centralized the six regional IT centers into one megacenter, which provides more powerful and versatile hardware, standardized software, and a more agile and efficient computer system. Likewise, CEMEX has transformed the administrative areas – such as finance, tax, planning, and supply – to increase efficiency, quality, depth, and timeliness in the control and management of information. Quality Improvement – During 1999, CEMEX’s regional subsidiaries implemented several initiatives to cut costs, enhance employee safety, and improve life quality. Developments include ISO-9002 certification for the three-million-metric-ton Ibague plant in Colombia and zero-accident, operations, and sales records in Panama.
		.	Consolidation in Central America Costa Rica is the most recent addition to CEMEX's strong network in Central America and the Caribbean.
		Value Opportunities Rapid Turnaround – CEMEX continues to improve upon its PMI process to achieve immediate bottom-line results. For example, the PMI team installed the systems, indicators, and controls used in all CEMEX plants in Costa Rica in less than 90 days. Customer Service – The company uses a personalized platform that informs customers of the status of their orders, delivers invoices, and directly channels customer feedback to the appropriate CEMEX personnel. It also offers clients a growing array of new products and services, such as five-kilogram bags of white cement, toll-free telephone service, and points programs to reward customer loyalty. Shared Practices – CEMEX’s regional commercial strategy capitalizes on the best practices in each country of operation. The company is cementing the value chain by strengthening its ties with prefabricated concrete manufacturers, retailers, and small suppliers. It also offers alternative containers for storing cement on construction sites.
It’s just that easy Now, CEMEX Spain’s customers can take their own trucks to the plant and buy cement directly from the manufacturer.
CEMEX employs more than 20,000 people in 4 different continents. *Does not include Egypt operations.			EUROPE & ASIA Market highlights Spain – CEMEX’s domestic cement sales volume increased 17%, and domestic ready-mix concrete sales volume grew 19%, compared to the same period in 1998 (excluding sales attributable to the Andalusian assets sold in November 1998). This increase was primarily attributable to strong demand in the housing and nonresidential sectors and increased public works spending. Egypt – After three years of increasing cement exports to the expanding Egyptian market, CEMEX acquired a 77% stake of Assiut Cement Co., the nation’s largest cement producer. Demand well exceeds domestic supply in Egypt, one of Africa’s fastest-growing cement markets. The Philippines – In February 1999, we consolidated our position as one of the Philippines’ top cement producers by acquiring a 99.9% economic interest in APO Cement Corporation. This, coupled with the company’s controlling stake in Rizal Cement Company, gives CEMEX nationwide coverage and access to the Philippines’ main markets of Manila, Visayas, and Mindanao. Value Opportunities Indonesia – The Indonesian cement industry is one of the two largest in Southeast Asia, accounting for around one-fourth of the region’s consumption. In September 1999, CEMEX further increased its interest in PT Semen Gresik, Indonesia’s largest producer, to 25%. Because of its strategic location, size, significant growth potential, and role as an anchor for the company’s Southeast Asian trading network, Indonesia is an important element of CEMEX’s Asia strategy. PMI – CEMEX’s multinational PMI team, comprising executives from Colombia, Mexico, the Philippines, Spain, and Venezuela, cut the time of APO Cement’s PMI by almost two-thirds. As a result of these efforts, APO will enjoy significant recurring cost savings. Self-service Cement – CEMEX Spain introduced a self-service system for customers at its cement facilities. Now, individual consumers can pull up their trucks, fill them up, and pay with a credit card. It’s just that easy.

			Increasing presence CEMEX’s trading network allows it to diversifyinto growing markets.
			TRADING Market highlights Record Volume – Our 1999 total trading volume was more than 13 million metric tons of cement and clinker. Almost 60% of CEMEX’s trading volume came from third parties, including suppliers in China, England, Korea, Morocco, Romania, Russia, Thailand, Tunisia, Turkey, and Ukraine. Partners – We market cement to over 60 countries worldwide. Our major international trading partners are located in Bangladesh, the Canary Islands, the Caribbean, Egypt, the Ivory Coast, Mauritius, Morocco, Nigeria, Portugal, Singapore, Taiwan, and the United States. Exports – In 1999, roughly 5.7 million metric tons of our total trading volume came from the company’s operations in Costa Rica, Indonesia, Mexico, the Philippines, Spain, and Venezuela. This figure includes 493,000 metric tons of white cement exported from Mexico and Spain. Floating Silo – CEMEX’s floating silo, Corregidora, began operating in the port of Adabya, Egypt, in the beginning of 1999. This state-of-the-art facility has a bagging capacity of 5,000 metric tons per day and a discharge capacity of 250 metric tons per hour. Value Opportunities Global Reach – This year, the company’s international trading operations will allow it to trade more than 2.6 million metric tons of cement from Indonesia and the Philippines. Due to lagging demand in those markets, Southeast Asian producers are increasingly interested in CEMEX’s ability to trade and export large volumes of cement and clinker to other markets. Infrastructure Development – CEMEX continues to expand its trading infrastructure to meet global demand. Specifically, it began construction of a grinding mill in Bangladesh to facilitate imports from Indonesia.