In 2012, the world will focus on London as athletes from around the globe gather to participate in the Olympic Games and Paralympic Games. But long before the Olympic torch is ignited and the crowds amass, contractors will begin the enormous challenge of constructing the venues in which Olympians will compete.

For Cemex, the world’s third-largest cement manufacturing company, this means focusing on the Thames Gateway regeneration project. The task is not easy. The project, the largest of its kind in Europe, extends from the Isle of Dogs in London to Southend-on-Sea in Essex and the Isle of Sheppey in Kent. While the project was expected to be spread over 10 years, the 2012 Games is speeding up regeneration plans for the Lower Lea Valley segment.

Not only does the project call for a massive programme of transport, infrastructure and environmental improvements that include the construction of 250,000 new homes, but also an 80,000-seat Olympic stadium that will be constructed along with other sports venues in a 500-acre landscaped park – the largest urban park built in Europe for 150 years.

The project requires that all contractors give careful consideration to the environment, while maintaining a platform that improves productivity, delivery and quality of materials. For Cemex, this means developing effective partnerships at all levels during design and construction phases, and improving logistics to provide for high-volume deliveries in a short period of time.

Seasoned player

Cemex has been involved in major construction projects in more than 50 countries across the Americas, Europe, Africa, the Middle East and Asia. Its annual sales reach more than $15bn.

At London Heathrow Airport, Cemex has provided fly ash (an additive in concrete and cement products), Lytag (lightweight aggregate produced from pulverised fuel ash) and logistics solutions. Its five-year, £4m ($7.8m) contract with airport company BAA called for supplying 130,000 tons of fly ash.

“We had very exacting requirements when searching for a supplier for this project,” says John Harden, head of construction at BAA. “The materials and expertise needed for constructions such as airport terminal buildings and aircraft standing areas are very specific. The combination of Cemex’s technical expertise along with its proven track record in projects of this size made it the ideal choice.”

Cemex’s intermodal bulk transport system was used to supply pulverised fly ash to the Heathrow Terminal 5 development – the project required all of the bulk materials to be transported to site by rail.

Cemex’s work on the Millennium Stadium in Cardiff, Wales, involved using Lytag aggregate to replace the stadium’s turf. For the Channel Tunnel Rail Link (CTRL) tunnels, Cemex produced 85 miles (137 kilometres) – or 275,000 units – for troughing, lids and accessories used for vital signalling and communications alongside the CTRL tracks. It worked in partnership with the contractor for London Tunnels West to develop a dry mix using certified fly ash to make the concrete cohesive.

“Our industry is very competitive in that it is connected to the construction industry, which is strong worldwide,” says Hector Medina, executive vice-president of planning and finance at Cemex. “We are constantly striving to create best solutions.”

This means offering customers an integrated mix of products and services that are designed to help them to complete their projects more effectively. Other projects around the globe include the Turner Field Stadium in Atlanta, Georgia; Spain’s Olympic Stadium in Seville; Ericsson NFL Stadium in Charlotte, North Carolina; Charlety Stadium in Paris,; Sondika Airport in Bilbao, Spain; and Oceanographic Park in Valencia, Spain.

Market opportunities result in Cemex expanding its own facilities. In September, the company announced plans to construct a $460m kiln at its Tepeaca Cement Plant in Puebla, Mexico. Construction is expected to be complete in 2009, at which time production will increase by about 4.4 million to 7.6 million cement tons per year. The new kiln will be the largest in the world, thereby making the Tepeaca Plant the largest and most modern cement production facility in the Americas.

“This investment reflects our confidence in the strength of the Mexican economy and in the continued high growth of the housing and infrastructure markets in the country,” says Lorenzo H Zambrano, chairman of the board and CEO of Cemex.

Logistics is key

Worldwide, Cemex produces about 70 million cubic metres and 160 million metric tons of ready-mix concrete and aggregates annually through its 66 cement plants and more than 1900 ready-mix concrete facilities. It has a minority participation in 15 cement plants, 390 aggregates quarries, more than 200 land distribution centres and 89 marine terminals.

Mr Medina stresses: “One of the major issues in our industry is logistics.”

With transportation costs accelerating and the need to have building materials on site as needed paramount, Cemex has established a unique, highly capable and flexible logistics team. In the UK, the company owns a fleet of more than 1000 vehicles and has access to a substantial pool of reliable subcontract haulers, thereby placing it among the UK’s top 20 logistics organisations.

Transport factors

Cemex was the first company to introduce major freight transport on the UK’s River Severn in more than 30 years. Over 10 years, nearly three million tons of aggregate will be carried by barge on the river, saving 34,000 lorry journeys in the counties of Gloucestershire and Worcestershire each year.

“Having facilities near ports is very important for transportation,” says Mr Medina. “We need to be close to market because our industry is based on transporting products. We have to recognise logistics costs and therefore must carefully manage our logistics in an efficient way.”

To meet demand for the cement required for the Thames Gateway project and the sustainable construction challenges of the 2012 Olympic Games, Cemex announced plans in September to construct a new grinding and blending facility at the Port of Tilbury near London. The facility, which would have an annual capacity of 1.2 million tons, represents a £27m investment and could become operational during the first half of 2008.

Although Cemex already has facilities along the River Thames, the Tilbury facility is part of its wider commitment to sustainable development and could reduce CO2 emissions by 50% for each ton of blended cement produced, thereby saving 600,000 tons a year.

“The facility is exactly the type of company we are looking to encourage and develop within the Port of Tilbury,” says Port of Tilbury managing director Perry Glading.

Organic growth

Cemex continues to expand worldwide. In October, corporate officials announced intentions to acquire all outstanding shares of Rinker Group to create one of the world’s largest and most profitable building materials companies. Rinker is one of the world’s top 10 construction materials companies. It has operations in the US and Australia.

Overall, Cemex’s strategy for growth centres on finding opportunities where the company can add value. “It’s hardly a concentrated effort,” says Mr Medina. “We talk about our interests but we do not have any preferred spots.

“We believe we have a very efficient management process that allows us to add value from acquisitions and grow organically. We should be able to return to our target company structure as soon as possible and keep our financial stability.”

That is because Cemex has developed an efficient management platform based on centralised business models. “We run our companies as a single company worldwide. This allows us to integrate and share our best practices with the new platform quickly,” says Mr Medina. “We believe this creates value and synergies. We believe that when we apply our platform to a new venture, we are able to make that project more efficient.”