CEMEX Foreign direct investment

1. Foreign direct investment CEMEX's FDI Case Fateh ROUIDJALI Dawood ABBASI Singh SUKHDEV Gurwinder SRAN

2. Contents What is FDI? History of Cemex Review of Cemex FDI Question Answer Session

3. FDI - Concept Long term investment by a foreign direct investor FDI relationship: a parent enterprise and a foreign affiliate which together a Transnational Corporation (TNC) FDI relationship:Parent enterprise investment must afford the parent enterprise control over its foreign affiliate The IMF defines control in this case as owning 10% or more of the ordinary shares or voting power of an incorporated firm or its equivalent for an unincorporated firm; lower ownership shares are known as portfolio investment.

4. AdvantagesDisadvantages Inflow of equipment and technology Competitive advantage and innovation Financial resources for expansion Employment generation Contributions to export growth Access to global marketplace for domestic players Access to low cost resources for investor Access to new market/ distribution channel for products Improved consumer welfare through reduced costs , wider choice and improved quality. Crowding of local industry Loss of control Repatriation of profits/dividends by investor Conflicts of codes/laws Possible exploitation resources-material/ wages Effect on local culture/sentiments – socio cultural effect Effect on natural environment

6. Focus on customer service = superior customer service

8. A lot of demand for cement in many developing countries

9. Cemex believed that it understood the needs of construction businesses in developing countries

11. Cemex realized there were tremendous demand for cement in many developing countries