|CEMEX selling assets, demands CARB surcharge|
|Thursday, 13 September 2012 08:16|
Monterrey, Mexico headquartered cement and materials manufacturer CEMEX, the third largest cement producer in the world announced on August 22 that the company plans to sell a minority stake in Latin American assets. The company noted in a regulatory filing that its Latam Holdings unit is seeking to sell a minority stake in its Latin American assets through a listing on Colombia’s stock exchange.
Cemex’s debt load surged following its $15 billion purchase of Australian building-materials company Rinker Group Ltd. five years ago. CEMEX has also been hurt by a stubborn housing-market downturn in the U.S. and Europe and unflinching competition on public works projects.
In related news, on August 20, CEMEX announced to its California customers that it can’t absorb the nearly $18.5 million in compliance costs of the CARB’s diesel truck rule and will be adding a surcharge to every load of aggregate and ready-mix starting in January.
The announcement came in a letter mailed to each of their customers (See letter on right) that explained the costs associated with the new diesel particulate filters and new engines required to meet the rule.
These same rules apply, of course, to every business in California that operates diesel trucks or construction equipment. CARB advised industry to raise their prices to meet the compliance costs when the rule was passed...and now the regulatory costs are driving up prices.
Unfortunately for the construction industry, still mired in a market that is down 50 to 60 percent from where it was six years ago, the competitive bidding environment doesn’t allow for pricing to recover CARB compliance costs. Unable to recoup these costs, many more contractors will close or move out of state, taking their jobs with them.
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