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The last interview given by Lorenzo Zambrano

Rogelio Cárdenas Estandía| El Universal
07:41Tuesday 13 May 2014

Lorenzo Zambrano, chairman and CEO of Cemex (1944-2014). (Photo: LEO MORALES / EL UNIVERSAL )

Lorenzo Zambrano, chairman and CEO of Cemex, died in Madrid yesterday at age 70. This is the last interview he gave to a media outlet.

"All people search their happiness. I hope to die satisfied with what I did, in peace, grateful to society and for what I have received," said Lorenzo Zambrano.

These were the last words of the chairman and CEO of the biggest cement producer of Mexico and one of the five largest cement suppliers in the world. He died yesterday in Madrid, Spain of natural causes. His body will be repatriated to Mexico.

In an interview with EL UNIVERSAL on May 8 at his Monterrey office, Zambrano said: "we operate in fifty countries and have commercial relations with many more. We are ambassadors of Mexico to many places and I am very proud of what we have shown to the world, our competitors and to Mexico itself: that Mexicans can compete wherever we want, this is very important and we are very proud of that.

What do you want from all this in the end, Mr. Zambrano?

One of my favorite books is "Built to Last" and that is what we seek, that the company continues improving. When they tell me that Lorenzo Zambrano and Cemex are one, I tell them they are wrong. Success is that the company carries on, on its own.  

What do you expect as a Mexican?

I expect that the prophecy that Mexico will become a world power comes true. We have everything to achieve it. In his book "The next 100 years", George Friedman predicted that would happen by the third third of the 21st. century, i.e. in 56 or 60 years.

I am sick that everyone talks bad of Mexico, that they only see the bad aspects, especially insecurity. In Mexico there are really good news too. Mexicans have a lot to show to the world. Even though it is true that we have to improve many things, there are more good things than bad things.

What will be the next industrial revolution? 

It will be in the area of biomedicine: the replacement of organs by others created by ourselves.  

What do you think about the tax reform, that will stay unchanged until 2018?

We all knew that a tax reform was necessary. I agree that those who have more should pay more. However, the reform has not been popular and many people feel affected. We all know that we have to contribute more, but I think many industries were unnecessarily affected. It is necessary to help small and middle companies more, because those are the ones that create more jobs.

What is the main challenge faced by Mexico?

There are several: economy, security. The economic challenge is making the country grow through an increased productivity; I think this is starting to happen. I feel optimist that growth will pick up, especially due to the structural reforms that have been approved.

Do you think that the reforms coupled with the macro-economy will help the internal market and bolster growth in Mexico?

Growth is achieved through investment, that creates jobs and makes people spend more. The structural reforms, with good secondary laws, will make us grow. However, if the secondary laws are "more of the same", then it will be a brutal legislative wastage with no results.

How do you evaluate the administration of president Enrique Peña Nieto?

It has been successful because he has promoted Constitutional changes that made reforms possible. No president has changed so many things for the better in such a short time. He has even sacrificed political capital to get things approved, and this speaks well of him. One of the challenges he faces is making the economy grow more. We are building a new Mexico and it has to be done brick by brick. That is what Peña Nieto is doing.

What about security?

Nuevo León is better now. We have a new police corps called "civil force" that has been very successful. The local government and the public and private sector joined forces to recruit and train a lot of people in a short time. We had serious security problems, but that is not the case any more. The solution that Nuevo León found for this problem could be replicated in other states, but all the society needs to participate.

Analysts think that over the next years the Chinese economy will surpass the United States. What do you think about this?

China's importance is growing, first because it is a richer country and it supplies many of the things we use. Plus, its internal market is also growing fast. China will continue to grow for a long time and that will clearly change the geo-political balance. It is a very ancient society, they are very proud, not as much as Mexicans, but they are proud of their country and they are a world power.

When that happens, what will happen with Mexico?

One thing is that China becomes bigger in economic terms and another thing is that the United States will become irrelevant. This will not happen. The U.S. will continue to grow, it has a very agile economic structure that enables them to change direction really fast. We operate in the United States and the consumption of our products has happily grown.

As the CEO of a multinational company, what are the main challenges faced by this type of firms?

The lack of legal certainty and the civil wars among countries. We managed to get through what happened in Egypt, but you have to be careful while selecting the countries you operate in.

What options does Cemex have after the merger of Holcim-Lafarge and Lafarge with Elementia in Mexico? 

What Lafarge and Holcim did was a result of the consumption crisis registered over the last years. They wanted to achieve very ambitious synergies and I wish they do, but it will not be easy. They thought they could create value by merging, because their main markets were not growing. They also wanted to cut costs. They will be in less places and will have to sell assets, and this is very favorable for us. We are interested in some of them, we could buy them.

Would that be an option for Cemex to hang on?

We can hang on with our without that, but we would like to buy and grow that way. The battle is won with productivity and a good management. However, we would do a little better if we purchased assets, and it can be done.

Was the decision of buying Rinker right?

Yes, I am very happy with what we bought. What we did wrong was financing it with debt, we should have financed it with capital too, but we were very aggressive in our financing strategy. The purchase was good and it will help us take advantage of the positive trend in the U.S. economy.

What markets does Cemex consider have a greater potential?

All Latin America is very attractive, because of the prevailing rule of law. The Southeast of Asia too, we would like to increase our presence in Asia, but we would like those countries to have solid and stable political institutions. And also some Eastern European countries.

Does the energy reform open some opportunities for Cemex?

We are already producing wind energy and have a considerable investment in Nuevo León. We have several interesting projects that we will announce as time progresses, but yes, we will take advantage of it.  

What do you think of neoliberalism?

I have always believed in free market, but markets can not be totally unregulated. The lack of regulations worsens financial crisis. I worry about the income gap too, not only in Mexico but all over the world. In the U.S. this has become a political problem, because the income of a certain percentage of the population has grown while the rest has stagnated. People resent that.